ance of cost to be raised by second mortgage bonds guaranteed by the
Grand Trunk By. Co. By a 'supplemental contract in 19O4 (confirmed by
4 Edw. YTL e. 241 the Government agreed to implement their gnarantee
w as to make the proceeds of the guaranteed bonds which had proved to
be jfffirmt equal to the said 75 per cent of the cost of construction. The
Supreme Court held that under this contract the appellants were bound
to issue additional first mortgage bonds to the extent of the deficit and
that the Government should gnarantee them: Held, by the Privy Coun-
cil, reversing the derision of the Supreme Court of Canada on a reference
made by Order-in-CounciL. that the appellants had no power to issue
bonds other than those authorized by the original contract, and that it
would be a breach of faith with the second mortgagee to do so if they
could. The Government were bound to implement their gnarantee by cash
or its equivalent so as to discharge their liability as denned by the first
contract and confirmed by the second, without imposing any further lia-
bility on the company.
Grand Trunk Pacific By. T. The King, [1912 1 A.C. 2O4.
Acnox OF CBOWX OFFICEBS COMPROMISE AXD PACT PATMKST or STBSIBT
- PEfTTlOX OF KI6HT.
(1) The grant by a statute of a subsidy ~to aid in completing and
equipping a railway, throughout its whole length for the part not com-
menced and that not finished, about eighty miles going to or near Gmm
Basin, 1 * with a proviso that it shall he payable to a person or persons,
etc., establishing that they are in a position to carry out the work, ap-
plies exclusively to the eighty miles of the road ending at or near Gaspe
Basin. (2) A different eoR^trnetion of the statute by officers of the
Crown, the effecting of a compromise in consequence and even a part pay-
ment of the subsidy, afford no grounds to recover the balance from the
Crown by petition of right.
De Gaiindez v. The King, 15 Qne. K.B. 329.
[Affirmed in 39 Can. 8LCJL 682,]
LA*D CKATT WHFJHEB MISEZALS ixcxrara.
[33 Can. S.C.B. 673, affirming S Can. Ex. S3, vanned.]
Calgary 4 Edmonton By. Co. v. The King, [19O4J A.C. 765.
The legislative intent of the Railway Aid Act IB.C.) was, that the in-
terest of the Crown in lands (already located as mineral claims), whieh
C14 RAILWAY SUBSIDY.
are comprised in a greater block of lands granted as a subsidy to a
railwayy company under the Act, may pass to the railway company, sub-
ject to existing and future rights of the persons who prior to the subsidy
had made such locations.
Farrell v. Fitch, 7 D.L.R. 657, 22 W.L.R. 517, 17 B.C.R. 507.
[Railway Aid Act, B.C. Statutes, 1890, c. 40, construed; Osborne v.
Morgan (1888), 13 A.C. 227: Nelson & Fort Sheppard Ry. Co. v. Jerry
(1897), 5 B.C.R. 390; Re Demers, 1 B.C.R., pt. 2, 334; Staffordshire
Banking Co. v. Emmott, L.R. 2 Ex. 208, referred to.]
LANDS GRANTED FOR RIGHT-OF-WAY TRANSFER TRACK.
There is a marked distinction between lands granted for right-of-way
and other railway purposes and those granted as subsidies; the latter are
in the same position as a cash bonus, and part of the remuneration for
the building of the railway. The respondent should be ordered to pay
their proportion of the cost of the land required for the construction of a
transfer track. [Montreal Tramway and Montreal Park & Island Ry. Co.
v. Lachine Jacques Cartier, etc., Ry. Co., 50 Can. S.C.R. 84, at p. 92, 18
Can. Ry. Cas. 122; South Ontario Pacific Ry. Co. v. Grand Trunk Ry. Co.
(Junction Cut case), 20 Can. Ry. Cas. 152, followed.]
Can. Pac. Ry. Co. v. Grand Trunk Pacific Ry. (Subsidy Lands Case), 21
Can. Ry. Cas. 95.
RIGHTS OF TRANSFEREE COMPLETING WORK.
A statute authorizing the payment of a subsidy for completing the con-
struction of a line of railway, entitles a company, as the successor of an-
other company who had commenced the work, to receive subsidy in re-
spect of that portion of the road forming part of the subsidized line which
had been constructed by the other company. [Quebec, Montreal & South-
ern Ry. Co. v. The King, 15 Can. Ex. 237, reversed.]
Quebec, Montreal & Southern Ry. Co. v. The King, 29 D.L.R. 46(i.
EXTENT OF GOVERNMENT'S POWER TO RETAIN PROCEEDS IN PAYMENT OF IN-
The preceding part of s. 18 of the Railway Subsidy Act (N.B. ), 4 Geo.
V. c. 10, as it stood prior to its repeal by s. 6 of Act, 5 Geo. V. c. 0. and
substituted by s. 12 of the latter Act, providing for the retention by the
government, out of the proceeds of bonds authorized thereunder, amounts
sufficient to cover "all outstanding indebtedness due contractors or others
employed in the actual work of constructing the railway, and for mate-
rials, wages and supplies, that have gone into the construction," refers
only in respect of indebtedness by the company itself and does not cover
indebtedness of subcontractor or others.
St. John & Quebec Ry. Co. v. Hibbard Co., 26 D.L.R. 519.
B. Municipal Bonus.
BONUS GRANT TO RAILWAY IN AID OF CONSTRUCTION MANDAMUS TO EN-
By 18 Viet. c. 33, the Grand Junction Ry. Co. was amalgamated with
the Grand Trunk Ry. Co. The former railway, not having been built
within the time directed, its charter expired. In May, 1870, an Act was
passed by the Dominion Parliament to revive the charter of the Grand
Junction Ry. Co., but gave it a slightly different name, and made some
changes in the charter. After this, in 1870, a by-law to aid the com-
pany by $75,000 was introduced into the county council of Peterborough.
This by-law was read twice only, and, although in the by-law it was set
RAILWAY SUBSIDY. 615
out and declared thai the ratepayers should vote on said proposed by-
law on the 16th November, it was on the 23rd November that the rate-
payers Toted on a by-law to grant a bonus to the appellant company, con-
struction of the road to be commenced before the 1st May, 1872. At the
time when the voting took place on the by-law, there was no power in
the municipality to grant a bonus. On the loth February, 1871. the
Act 34 Viet, c. 48 (Ont.) was passed, which declared the by-law as valid
as if it had been read a third time, and that it should be legal and bind-
ing on all persons as if it had been passed after the Ac%. On the same
day of the same year. c. 30 was passed, giving power to municipalities to
aid railways by granting bonuses. In 1874 the Act 37 Viet. c. 43 (Ont.
was passed, amending and consolidating the Acts relating to the com-
pany. In 1S71 the company notified the council to send the debentures
to the trustees who had been appointed under 34 Viet. c. 48 (Ont. i. In
1872 the council served formal notice on the company, repudiating all
liability under the alleged by-law. Work had been commenced in 1872.
and time for completion was extended by 39 Viet. c. 71 (Ont.). Xo sum
for interest or sinking fund had been collected by the corporation of the
county of Peterborough, and no demand was made for the debentures
until 1879, when the company applied for a mandamus to issue and
deliver them to the trustees: Held, affirming the decision of the Court
below, that the effect of the statute 34 Viet. c. 48 (Ont-i, apart from any
effect it might have of recognizing the existence of the railway company,
was not to legalize the by-law in favour of the company, but was merely
to make the by-law as valid as if it had been read a third time, and as
if the municipality had had power to give a bonus to the company, and.
there being certain other defects in the said by-law not cured by th-
said statute, the appellants could not recover the bonus from the defend-
ants. Per Gwynne. J-. Fournier and Tasehereau, JJ.. concurring: As the
undertaking entered into by the municipal corporation contained in by-
law for granting bonuses to railway companies, is in the nature of a eon-
tract entered into with the company for the delivery to it of debentures
upon conditions stated in the by-law, the only way in Ontario in which
delivery to trustees on behalf of the company can be enforced, before the
company shall have acquired a right to the actual receipt and benefit of
them by fulfilment of the conditions prescribed in the by-law, Is by an
action under the provisions of the statutes in force then regulating the
proceedings in actions, and not by summary process by motion for the
old prerogative writ of mandamus which the writ of the mandamus ob-
tainable on motion without action still is. Per Henry. J.: That if ap-
pellants had made out a right to file a bin to enforce the performance
of a contract ratified by the Legislature, they would not have the right
to ask for the present writ of mandamus. 45 U.C.R. 302. reversed.
Grand Junction Ry. Co. v. Peterborough. 8 Can. S.CJL 76, 6 AJL (Ont.)
[Commented on in Moulton T. Haldimand. Re_ 12 AJL (Ont.) 503:
distinguished in Brussels v. Ronald. 11 AJL (Ont.) 605; followed in
Canada Atlantic Ry. Co. T. Cambridge. 14 AJL (Ont.) 299; referred to
in Re Brandon Bridge, 2 Man. LJL 17 ; Canada Atlantic Ry. Go. T. Ottawa,
8 OJL 201; Jenkins T. Central Ontario Ry. Co.. 4 O.K. 593.]
BOXTS GCABAXTEEIXC COSTS OF ESPBOPRIATJOX.
Under 44 & 45 Viet. e. 40. s. 2 (Que.t passed on a petition of the
Quebec Central Ry. Co., after notice given by them, asking for an amend-
ment of their charter, the town of Levis passed a by-law guaranteeing to
pay to the company the whole cost of expropriation for the right-of-way
C16 RAILWAY SUBSIDY.
for the extension of the railway to the deep water of the St. Lawrence
River, over and above $30,000. Appellants, ratepayers of the town of
Le'vis, obtained an injunction to stay further proceedings on this by-law,
on the ground of its illegality. The proviso in s. 2 of the Act, under which
the town of Le'vis contended that the by-law was authorized, is as fol-
lows: "Provided that within thirty days from the sanction of the pres-
ent Act, the corporation of the town of Le'vis furnishes the said company
with its valid guarantee and obligation to pay all excess over $30,000 of
the cost of expropriation for the right-of-way." By the Act of Incorpora-
tion of the town of Le'vis, no power or authority is given to the corpora-
tion to give such guarantee. The statute 44 & 45 Viet. c. 40 was passed
on the 30th June, 1881 ; and the by-law forming the guarantee was passed
on the 27th July following: Held, reversing the judgment of the Court
of Queen's Bench, and restoring the judgment of the Superior Court, that
the statute in question did not authorize the corporation of Le'vis to im-
pose burdens upon the municipality which were not authorized either
by their Acts of incorporation or other special legislative authority, and
therefore the by-law was invalid, and the injunction must be sustained.
Quebec Warehouse Co. v. Le^vis (1885), 11 Can. S.C.R. 666.
[Referred to in Pointe Gatineau v. Hanson, 10 Que. K.B. 371.]
BONUS TO RAILWAY VALIDITY OF BY-LAW.
A by-law was submitted to the council of the city of 0., under 36 Viet,
c. 48, for the purpose of granting a bonus to a railway then in course of
construction, and after consideration by the council it was ordered to be
submitted to the ratepayers for their vote. By the notice published in
accordance with the provisions of the statute such by-law was to be taken
into consideration by the council after one month from its first publica-
tion on the 24th September, 1873. The vote of the ratepayers was in
favor of the by-law, and on 20th October a motion was made in the council
that it be read a second and third time, which was carried, and by the
by-law passed. The mayor of the council, however, refused to sign it, on
the ground that its consideration was premature; and on 5th November
the same motion was made and the by-law was rejected. Nothing more
was done in the matter until April, 1874, when a motion was again made
before the council that such by-law be read a second and third time, which
motion was, on this occasion, carried. At this meeting a copy only of
the by-law -was before the council, the original having been mislaid and
it was not found until after the commencement of this suit. When it
was found it was discovered that the copy voted on by the ratepayers con-
tained, by mistake of the printers, a date for the by-law to come into
operation different from that of the original. In 1883 an action was
brought against the corporation of the city of O., for the delivery of the
debentures provided for by the by-law, in which suit the question of the
validity of the whole proceedings was raised: Held, affirming the judg-
ment of the Court below: (1) That the vote of 20th November, 1873.
was premature, and not in conformity with the provisions of s. 231 of
the Municipal Act; that the mayor properly refused to sign it, and that
without such signature the by-law was invalid under s. 226. (2) That the
council had power to consider the by-law on 5th November, 1873, and the
matter was then disposed of. (3) That the proceedings of 7th April,
1874, were void for two reasons : One, that the by-law was not considered
by the council to which it was first submitted as provided by s. 236, which
is to be construed as meaning the council elected for the year and not the
same corporat ion ; and the other reason is, that the by-law passed in
1874 was not the same as that submitted, there being a difference in the
RAILWAY SUBSIDY. 17
dates. ffrmUr, that the faBerioas off a BBBuapafitr n
law after it has hen rated oa by tie ratepayers are aot auaisterial oaly,
bat the br4av eaa be eaaanKd or rejected irrespective of the iaiaauabh.
rate. 12 O-A-R- 2J4, 8 OJL 2H, aftwmttL
faaad* AUaatie Ry. Co. T. Ottawa, 12 Caa. S.C.R. 3*5.
(The Prrrjr Coaacil frmated leavv to appeal ia this case, bat the appeal
was aot piaauatiil to a terauaaiioa: 11 Caa. Gawtte 394; approcvd ia
T iiailna Street Ry. Co. v_ loadna. 9 O-LJL *S-. disuagaished ia Re Dewar
aad But Wffliaa^ 10 O-LJBL 4*3; followed ia Caaada AthuaUr RT. Co.
r. CaBbrid^e. 11 OR. 392, 14 A JL <tOalL)( 299; reiemd to ia Bifkfotd T.
Chatham. 14 A_R. (Otat.1 3E.]
Boxrs Jk<UBm*iAT BT MCXKITJU. ooarotinox 10 TAKE STOCK JLXB TO
PAT FOB K MBECTVBE&.
The eorporatiaa of the fammtf of Ottawa aader the aathoritj of a bjr-
hiw aadertonk to deinner to the M.O. W. Rr. Co. for stork *bwribrd
bj theat 2,09 dc4ratare$ of the corporatioa of "*190 eae*. parable tweattr-
arr wear* froai date aad beariag *ix per t iatereft, aad sb>|Beathr
vtthoat aaj valid eaane or reajoa. nfased aad aegleeted to iaflBe said
deheatans. la aa actioa broaght by the i noi|>ij agaiast the corpora-
sioa *oWy for daan^es for their ae^ert aad refvaal to issae aid debea-
tares: Held, ajffiraua* the jaJga at of the Coart below, that the eorpara-
apart froai it* liability for the aaMoat of the debeataieg aad iaterest
was liaMe aader Alfa, 10*5. 1O73. 1MO. 1*41. C.C. <Que. for
for breach of the cmneaaat. Ritchie. CJ_ aad Gwraae diatiB.
JLLJL 1 QJL 4*. 2C LCJ. 14S. afiravd.
Ottawa T. HoatreaL Ottawa 4 Wectera Ry. Gou. 14 Caa. S.C.R. 194.
[Applied ia CoghKa T. Foaderir de Joliette. M Caa. &C.R. liB;
rviemd to ia G%aar T. Woodbara. 29 Qv. S.C. 438; Zarit T. Great North-
era la*. Co, 29 Qae. &.C. 44ML]
A dc beat ait bnag: a ai^iitiibh iaftraaHML a railway coaipaay that has
with afl the coaditioas prcmdcat ^ated ia the bphvw to the
aad drlirery of debeatares praated by a amnripalirr is eatitled
to said debeatare. frre froai aay deiciaratioa oa their face of coaditiaas
ia the by-law to be perfonaed ia fastare. saeh as the fatare
ap of the mad. c*e. Art. 92, Maa. Code. [lLLuR 2
St. Ccsaire T. MeFariaae I18S7), 14 Caa. S.C-R. T3&
-AdBBQOBST WTTH MTXICIPAI. COBTOBATKW-
A Bnakipal corporatioa eatered iato aa iiuaMBt with a railway
caaapaay by which the bitter was to ifteite a bowas oa certaia eoaditioax
oae of which was that the naapaay "shoald eoastrart at or Bear the
of Colborae aad William streets (ia Tomato* a freight urn
statioa with all aeceaaary anoBuaodatiaa. euaaected by switches,
or otherwise with said road" apoa the eoaacfl of the towa passiag a by-
law ^raatiajr a aurrjaary r^ht-of-way: Held, (Ik that sach ^woditkua
was aot complied with by the ereetMa' of a station buildiag aot ased. aor
iateaded to he ased, aad for waicb proper umtiri. sach as statioa aaater,
ticket aseat. ete. were aot appoiated. Scroag, J_ dinaMtiag- 2 fVr
^troag, J.: That the inaiiliiai oahr <alled for the coaractioa of a
bnUiaf with the retailed accaanaoaatioB aad eoaaeetioBS. aad did aot
BBBBat to a corraaat to raa the traias to aeh statioa or amke aay other
ase of it. (3} The words ~aU aeeeasary aecoaoBodatioa," ia the eoadi-
618 RAILWAY SUBSIDY.
tion, required that grounds and yards sufficient for freight and passenger
traffic in case the station were used should be provided.
Bickford v. Chatham, 16 Can. S.C.R. 235, 14 A.R. (Ont.) 32, 10 O.K.
[Leave to appeal in this case was refused by the Privy Council, see
Can. Gazette, A r ol. XIV., p. 153; discussed in Nottawasaga v. Hamilton,
etc., Ry. Co., 16 O.A.R. 52; followed in Georgetown v. Stimson, 23 O.R.
33; Kingston v. Kingston, etc., Ry. Co., 28 O.R. 309.]
MUNICIPAL AID TO RAILWAY COMPANY DEBENTURES.
A municipal corporation, under the authority of a by-law, issued and
handed to the treasurer of the Province of Quebec $50,000 of its deben-
tures as a subsidy to a railway company, the same to be paid over to the
company in the manner (and subject to the same conditions) in which
the Government provincial subsidy was payable under 44-45 Viet. c. 2, s.
19 (Que. ) viz., "when the road was completed and in good running order
to the satisfaction of the Lieut. Governor-in-Council." The debentures
were signed by S.M. who was elected warden and took and held posses-
sion of the office after the former warden had verbally resigned the posi-
tion. In an action brought by the railway company to recover from the
treasurer of the Province the $50,000 debentures after the Government
bonus had been paid and in which action the municipal corporation was
inise en cause as a codefendant, the provincial treasurer pleaded by de-
murrer only, which was overruled, and the County of Pontiac pleaded
general denial and that the debentures were illegally signed: Held, (1)
affirming the judgment of the Court below, that the debentures signed by
the warden de facto were perfectly legal. (2) That as the provincial
treasurer had admitted by his pleadings that the road had been completed
to the satisfaction of the Lieut. Governor-in-Council the onus was on the
municipal corporation, mise en cause, to prove that the Government had
not acted in conformity with the statute. Strong, J., dissenting.
Pontiac v. Ross, 17 Can. S.C.R. 406.
[Referred to in Re Trecothic Marsh, 38 N.S.R. 28.]
BONUS CONDITION IN BOND FOR REPAYMENT.
The county of H., in 1874, gave to the H. & N.W. Ry. Co. a bonus of
$65,000 to be used in the construction of their railway, and the company
executed a bond, one of the conditions of which was that the bonus should
be repaid "in the event of the company, during the period of twenty-one
years, ceasing to be an independent company." In 1888 the H. & N.W.
Ry. Co. became merged in the G.T. Ry. and, as was held on the facts
proved by the trial Judge and the Divisional Court, ceased to be a inde-
pendent line: Held, affirming the decision of the Court of Appeal for
Ontario, 19 A.R. (Ont.) 252, that there had been a breach of the above
condition and the county was entitled to recover from the G.T. Ry. the
whole amount of the bonus as unliquidated damages under said bond.
Appeal dismissed with costs.
Grand Trunk Ry. Co. v. Halton (1893), 21 Can. S.C.R. 716.
BONUS CONSTRUCTION OF STREET RAILWAY VALIDATING ACT.
The corporation of the town of Port Arthur passed a by-law entitled
"a by-law to raise the sum of $75,000 for street railway purposes and to
authorize the issue of debentures therefor," which recited, inter alia, that
it was necessary to raise said sum for the purpose of building, etc., a
street railway connecting the municipality of Neebing with the busi-
ness centre of Port Arthur. At that time a municipality was not author-
RAILWAY SUBSIDY. 619
ind to construct a street railway beyond its territorial limits. The by-
law was Toted upon by the ratepayers and passed, bat none was submitted
ordering the construction of the work. Subsequently an Act was passed
by the Legislature of Ontario in respect to the said by-law which enacted
that the nmr "is hereby confirmed and declared to be valid, legal and
binding on the town . . . and for all purposes, etc.. relating to or
flulhaj A* said by-law, and any and all amendments of the Municipal
Act ... shall be deemed and taken as baring b?en complied with":
Held, that the said Act did not dispense with the requirements of ss.
5O4. 5O5 of the Municipal Act requiring a by-law providing for con-
struction of the railway to be passed, but only confirmed the one that was
passed as a money by-law: Held. also, that an erroneous recital in the
preamble to the Act that the town council had passed a construction by-
law had no effect on the question to be decided. 19 A,K. (Ont.) 555, re-
Dwyer T. Port Arthur. 22 Can. S.C-R. 241.
[Referred to in Bell v. Westmonnt. 15 Que. S.C. 585.]
BOXrS SCBSCMPTIOX FO* SHAKES DfcBENTTSES.
An action en reddition de eomptes does not lie against a trustee invested
with the administration of a fund, until such administration is complete
and terminated. The relation existing between a county corporation under
the provisions of the Municipal Code of Quebec and the local municipali-
ties of which it is composed, in relation to money by-laws, is not that
of agent or trustee, but the county corporation is a creditor, and the
several local municipalities are its debtors for the amount of the taxes
to be assessed upon their ratepayers respectively. Where local munici-
palities have been detached from a county, and erected into separate cor-
porations, they remain in the same position, in regard to subsisting money
by-laws, as they were before the division, and have no further rights or
obligations than if they had never been separated therefrom, and they
cannot either conjointly or individually institute actions against such
county corporation to compel the rendering of special accounts of the ad-
ministration of funds in which they have an interest, their proper method
of securing statements being through the facilities provided by Art. 164.
and other provisions of the Municipal Code. 3 Rev. de Jur. 559. affirmed.
Ascott T. Compton; Lennoxville T. Compton (18981, 29 Can. S.C.R. 228.
Boxes PERMANENT EXEMPTIONS DEBEXTCRES AXD EXEMPTION rx SAME
By-law No. 148 of the city of Winnipeg, passed in 1881. exempted for
ever the C.PJL Co. from "all municipal taxes, rates and levies and as-
sessments of every nature and kind**: Held, that the exemption includ-
ed school taxes. The by-law also provided for the issue of debentures to
the company, and by an Act of the Legislature. 46 & 47 Viet. c. 64. it
was provided that by-law 14S. authorizing the issue of debentures grant-
ing, by way of bonus to the C.P.R. Co.. the sum of $200.000 in considera-
tion of certain undertakings on the part of the said company: and by-
law 195. amending by-law No. 148 and extending the time for the
completion of the undertaking ... lie and the same are hereby declared
legal, binding and valid. . . .: Field, that notwithstanding the descrip-
tion of the by-law in the Act was confined to the portion relating to the
issue of debentures, the whole by-law, including the exemption from
taxation, was validated. [12 Man. L.R. 581. reversed.]
Can. Pac. Ry. Co. T. Winnipeg. 30 Can. S.C.R. 558.
[Considered in Balgonie Prot. School v. Can. Pac. Ry. Co.. 5 Terr L.R.
020 RAILWAY SUBSIDY.
132; Ee Toronto School Board, etc., 2 O.L.R. 727; distinguished in Pr ingle
v. Stratford, 20 O.L.R. 246; followed in North Cypress v. Can. Pac. Ry.
Co., 35 Can. S.C.R. 556; referred to in Toronto School Board v. Toronto,
4 O.L.R. 468.]
Boxus MUNICIPAL BY-LAW CONDITION PRECEDENT.
An action to annul a municipal by-law will lie although the obliga-
tion thereby incurred may be conditional and the condition has not been
and may never be accomplished.. Where a resolutory condition precedent
to the payment of a bonus under a municipal by-law in aid of the con-
struction and operation of a railway lias not been fulfilled within the
time limited on pain of forfeiture; an action will lie for the annulment
of the by-law at any time after default, notwithstanding that there may