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to admit of one more complete being adopted.'

In 1843, when it was proposed to include the name
of Sir Henry Pottinger, plenipotentiary and envoy-extra-
ordinary to China, in a vote of thanks for successful
operations during the war with that country, Sir E.
Peel said, ' there is no instance in which a diplomatic
agent of the government has received the thanks of
Parliament for the successful completion of any nego-
tiation however important, or of any treaty however
advantageous to the interests of the country ; ' adding,
' I think it of great importance to adhere in these
matters strictly to precedents .... which, I think,
have been founded upon good sense ; otherwise, every
omission that we happened to make in a vote of this
nature would imply a censure.' 3 This principle was
afterwards explained and enforced by Lord Palmerston,
who said that "* Parliament seemed to have systemati-
cally avoided votes of thanks to negotiators, and most
properly, because a negotiator was a person acting
under the instructions of his government. The govern-
ment had a majority in Parliament, and a vote of thanks
to their negotiator was, in fact, a vote of thanks to
themselves.' k

But, in the same year, Lord Brougham proposed in the House
of Lords, 1 and Mr. Hume in the House of Commons," 1 a vote of
thanks to Lord Ashburton, envoy- extraordinary to Washington,
for the manner in which he had conducted the negotiations which



' Hans. D. v. 136, p. 326. Hans. D. v. 66, pp. 572, 573.

h Mir. Parl. 1840, pp. 814, 1137. k Ib. v. 08, p. 1237.

76. 1841, p. 499. Hans. D. v. 136, Ib. p. 641.

p. 424. m Ib. p. 1159.

1 Mir. Parl. 1840, pp. 1100, 1362.



IN GRANTING HONOUES AND REWARDS. 697

resulted in the Treaty of Washington. Sir Robert Peel, on the Votes of
part of the government, acquiesced in this motion, viewing it as an an B '
exception to the general rule, on the distinct ground that such
strong censure had been cast upon Lord Ashburton and the treaty,
by leading public men, that it was due to his lordship to take the
sense of Parliament upon his conduct. He said, moreover, that
unprecedented as the proposed vote undoubtedly was, many pre-
cedents existed for insisting upon a distinct expression of opinion
on the part of the House, in cases where, as in the present instance,
a motion of condemnation had been made." His views, however, as
to ' the danger of establishing, or rather continuing such a pre-
cedent,' in other cases, remained unchanged. The vote was agreed
to in both Houses. It was acknowledged, in the House of Lords,
by Lord Ashburton, from his seat in the House. P



n Hans. D. v. 68, p. 1217. House, from his seat, proceeded to
Ib. p. 1241. See also Ib. v. 80, comment at length, and with severity,
p. 1387. upon errors in the speech of the
p On one occasion General De Lacy mover of the vote of thanks, de-
Evans, a member of the H. of C., scribing the services of the army,
in acknowledging the thanks of the Hans. D. v. 136, p. 1265.



598 THE ROYAL PREROGATIVE



CHAPTEE XIV.

KOYAL PREROGATIVE IN GRANTING CHARTERS.

granting of charters to corporations, conferring
granting upon them certain exclusive rights, privileges, and im-

charters. . , ' r , 6 . . ,

mumties, is also a matter ol prerogative, and is exercised
by order in council. In former times, this prerogative
was of very wide extent, and implied an absolute legis-
lative power on the part of the crown, by virtue
whereof charters of liberties were granted to the peo-
ple, both at home and abroad ; which were all, more
or less, in the nature of public laws. The growth and
progress of our political institutions, however, have
gradually restrained the authority of the crown in this
particular within recognised limits, and now no charter
conferring political power or franchise in Great Britain
or her colonies can be granted by the crown, without
the concurrence of Parliament.

Power to And the crown cannot create corporations with
corpo- powers which transcend the law. Thus, it may not
rations. crea t e a corporation to enjoy a monopoly, nor with
power to tax the rest of the community. When a cor-
poration is to be created with privileges of this descrip-
tion, the authority of the legislature must be invoked
to supply the deficiencies of the royal prerogative.* The
House of Commons in 1693 resolved ' that it is the
right of all Englishmen to trade to the East Indies or
any part of the world, unless prohibited by Act of



Bowyer, Const. Law, p. 412,



IN GRANTING CHARTERS. 599

Parliament.' This resolution destroyed the monopoly
granted by royal charter to the East India Company ; it
has ever since been held that no power but that of the
whole legislature can give to any person or to any
society an exclusive privilege of trading to any part
of the world. b The ' Statute of Monopolies,' passed in
21 James I. c. 3, put an end to a number of mono-
polies ; but an exception was made therein of the pre-
rogative right to grant certain exclusive rights, or
letters patent, to inventions of new manufactures. But
in 1852 the exercise of this prerogative came to be
wholly regulated by Act of Parliament.

It is customary in the colonies, possessing repre- chartered
sentative institutions, for Acts to be passed by the local
legislatures, constituting and incorporating colleges and ties -
universities therein. It has heretofore been deemed to
be necessary to invoke the exercise of the royal pre-
rogative for the grant of letters patent to such institu-
tions, for the purpose of enabling them to confer degrees,
which shall be recognised as equivalent to degrees
.granted by universities in the mother country. In the
grant of such powers the crown will exercise discre-
tion to ensure that no degrees shall be sanctioned
other than those conferred by similar institutions, and
particularly by the great English universities, on
which these new institutions are professedly modelled,
in order that uniformity in procedure might exist
among universities having the sanction of royal letters

J

patent. d

But, by an Act passed in Victoria in 1881, the University of
Melbourne was empowered to confer ' any degree, diploma, certifr-



b Macaulay, Hist, of Eng. v. 4, p. Gov. Normanby of N. Zealand,

475. Forsyth, Const. Law, p. 434. dated Jan. 22, 1875. Canada Acts

Am. Law Rev. v. 7, p. 737. of 1843 and 1852. Quebec Stat. 1870,

c Hans. D. v. 222, p. 245. for Bishop's College, Lennoxville,

d Earl of Carnarvon's Desp, to



600



THE EOYAL PKEROGAT1VE



Queen's
College
Univer-
sity.



Mel-
bourne
Univer-
sity.



Laval
Univer-
sity.



Adelaide
Univer-
sity.



cate or license, -which can now be conferred by any university in the
British dominions.'

In 1839-40, the Upper Canada Parliament passed an Act to
establish ' the university at Kingston.' This Act was assented to,
but afterwards disallowed, and a royal charter issued instead, incor-
porating ' Queen's College ' at Kingston. The law officers of the
crown were of opinion that it belongs to the crown by its prero-
gative to incorporate a college or establish a university. And in
order to secure the royal name to such an institution, certain forms
must be observed, which appropriately should be gone through at
the seat of royalty. The Act was considered an objectionable
precedent, and as disabling the crown to meet the wishes of the
trustees. It was therefore disallowed. 6

The Melbourne (Victoria) university was established under a
colonial statute, which received the royal assent on January 22,
1853.'

The University of the Cape of Good Hope was incorporated by
local Act of 1873 ; but it received a grant of royal letters patent
on August 8, 1877.

In 1881, an Act respecting Laval University was passed by the
Quebec Legislature.^ It was nevertheless protested against, and its
disallowance asked for by certain members, as ultra vires of a pro-
vincial legislature. 11 It merely empowered the university 'to in-
crease the number of its chairs of arts and other faculties, within
the limits of the province of Quebec.' The imperial government
refused to interfere as it was a local question, to be disposed of by
the governor-general in Council. And the Dominion Government
decided, under the British North America Act of 1867, 93,
the question was in the exclusive jurisdiction of the provincial
legislature.

The university of Adelaide, in South Australia, was incorporated
by local statute, and power to confer degrees granted by letters
patent, from the crown. Subsequently the university applied for
permission to confer degrees on women, and also degrees in science
(Bachelor, and Doctor of Science). At first the secretary of state
for the colonies refused to advise her Majesty to recognise these
degrees. But, after obtaining the sanction of the local legislature,
the colonial secretary was requested in 1879 to reconsider his
refusal. He agreed to do so, and to advise the issue of the neces-
sary letters patent, provided a local Act was first passed, giving



" Toronto British Colonist, Dec. Quebec Acts 44-45 Viet. c. 46.

29, 1841, p. 3. h See reasons in I^eg. Com. Jour.

' See Rep. on Colonies for 1879. 1881, pp. 135-139.
Com. Pap. 1881, v. 64, p. 1.



IN GRANTING CHARTERS. 601

power to the university to confer these degrees. This was accord-
ingly done in 1880. Whereupon the royal charter was granted,
which not only recognised degrees in science, but also authorised the
conferring of degrees on women. 1

In 1870, an Act was passed founding a university in New New
Zealand, to which a charter was subsequently granted by the Queen,
The Act was amended in 1874, and letters patent of a late date 8 it y .
gave rank and precedence to degrees conferred by this university,
equal to that of degrees granted in the imperial universities.^

By an Act passed in 1871, it is provided that a copy Procedure
of any application for the foundation of any college j^a
or university, which may hereafter be referred for the college, or
consideration and report of any committee of the Privy
Council, shall, together with a draft of the proposed
charter, be laid before both Houses of Parliament for
not less than thirty days before any report thereon shall
be submitted to the crown. k

Corporations for local and municipal purposes must Creating a
be created in the mode prescribed by law for the exer-
cise of that portion of the royal prerogative, and with
the incidents legally essential to their nature. 1 For
example, her Majesty has been expressly empowered by
^statute, on petition of the inhabitant householders, to
grant, with the advice of her Privy Council, a charter
of incorporation, according to the provisions of the
Municipal Corporation Act, to any town or district, and
to create the same a municipal borough. m

The crown is also at liberty to give royal charters to Royal
private associations, a prerogative which is exercised chart ers.
upon the advice of the Board of Trade ; but this prac-
tice has long been regarded as of doubtful propriety.
One of the objects of the Companies Act of 1862 was

1 S. Aust. Parl. Proc. 1881, App. k 34 & 35 Viet. c. 63. Hans. D.

No. 37. Ib. 1882, App. 37. v. 220, p. 1348 ; v. 221, pp. 762,

J Rusden, Hist. N. Zealand, v. .% 1373.

p. 52. By London Gaz. Dec. 11, l See stat. cited in Bowyer, Const.

1883, this University was empowered Law. Hans. D. v. 189, p. 597.

by Supp y . Letters Patent to grant m Bowyer, Const. Law, p. 399, n.

degrees of Bachelor and Doctor in New Municipal Corp. Act, 1882, pt.

Science. Colonies, Dec. 14, p. 11. xi.



602



THE ROYAL PREROGATIVE



to substitute a general law for an exceptional privi-
lege.
charters The crown has ever exercised, and still retains, the

and cor- . . . ... ,,

porations. prerogative of incorporating universities, colleges, com-
panies, and other public bodies, and of granting to them,
by charter, powers and privileges not inconsistent with
the law of the land, while, at the same time, similar
powers are now conferred by Act of Parliament. But
public associations for commercial purposes ordinarily
require powers which can only be conferred by legisla-
tion. Even long-established institutions, such as the
Bank of England, which were originally created by
royal charter, have of late years derived their extra-
ordinary privileges, like other public companies, from
legislative enactments. 15

All charters or grants of the crown may be repealed
or revoked when they are contrary to law, or uncertain
or injurious to the rights and interests of third persons ;
and the appropriate process for the purpose is by writ
of scire facias. To every crown grant there is annexed
by the common law an implied condition that it may be
repealed by scire facias by the crown, or by a subject
grieved, using the prerogative of the crown upon the
fiat of the attorney-general.* 1

Moreover, all private corporations are subject to the
control of the law, and may be proceeded against for
illegal acts or abuse of powers, either by a special
action on the case, or by writ of mandamus or of quo
warranto, according to the nature of the alleged offence
or misdemeanour. Where the legal remedy against a
corporation is inadequate a court of equity will inter-



Private
Corpo-
rations.



n Hans. D. v. 189, p. 861. But the
abstract right of issuing such charters
still remains in the crown. Ib, v.
196, p. 356.

See proceedings in H.of C. in re-
ference to granting of a royal charter
to the Univ. of London. Mir. Parl.
1833, pp. 1842, 2740. In 1869 the



royal charter granted in 1836 to
Univ. College, London, was annulled,
and the Univ. incorporated by 32 &
33 Viet. c. 23.

p Amos, Fifty Years Eng. Const.
p. 126.

> Forsyth, Const. Law, p. 387.



IN GEANTING CHAETEES. 003

fere and restrain unlawful proceedings by the issue of
an injunction.'

While a corporation may be dissolved by a forfeiture Power of
of its charter by ordinary legal process, Parliament men tto
itself may also interfere, and by an Act of its own put dissol j e
an end to the existence of a body which has misused or ration,
abused the powers entrusted to it. [It is a principle of
American law that the charter of a private corporation,
whether civil or eleemosynary, is an executed con-
tract between the government and the corporators, and
that the legislature cannot repeal, impair, or alter it,
against the consent or without the default of the cor-
poration judicially ascertained and declared. 8 ] Under
the British constitution, Parliament is omnipotent, and
may at any time dissolve a corporation created by the
crown or by Act of Parliament. But such is the respect
which is shown by British law to private property and
private rights that there have been very few instances,
and those mainly determined upon grounds of public
policy, wherein Parliament has thought proper to dis-
solve any corporate body, or to interfere without their
consent with the exercise of powers originally conferred
upon them. As a rule, it is left to the courts of law to
regulate and restrain the proceedings of all corporations
within the limits of their original charters.*

On March 18, 1862, a petition was presented to the House of Prece-
Commons, charging the directors of the West Hartlepool Railway dents.
and Dock Company with having made certain fraudulent state-
ments of accounts, and with having borrowed money largely in
excess of the powers conferred upon them by Parliament. On
March 25 it was moved to appoint a committee to enquire into the
truth of these charges ; but as they were about to be investigated



r Angell and Ames, Corporations, * Angell and Ames, Corporations,

c. 11, 20, 21. 766, 767. Brice, Ultra Vires, ed.

5 Ib. 767. Green, Am. ed. of 1880, p. 786. Dwarris on Statutes,

Brice, Ultra Vires, ed. 1880, p. 96, n. 2nd ed. p. 650. Hans. D. v. 198, pp.

Abbott, Corporations, 1869, verbe 1127-1134, 1338. Am. L. Rev. v.

' Legislation.' 8, pp. 222-229.



604 THE ROYAL PREROGATIVE

Prece- by a court of law, ministers opposed the motion, and it was accord-
lts - ingly negatived. 11

Next session (1863) the company applied to Parliament for
further powers. On June 1, the select committee, to whom their
Bill was referred by the House of Lords, made a special report that
it was not expedient to proceed further with the Bill, inasmuch as it
appears the directors 'have for a series of years wilfully contra-
vened the provisions of the Acts of Parliament relating to the said
company, by largely exceeding the limits of their borrowing powers,
and by the application of the company's funds to purposes other
than those of the undertaking, and have concealed their illegal acts
from the shareholders and creditors of the company, and from the
public, by the continued and systematic publication of false ac-
counts.' The committee further recommended that a searching
enquiry should be made into the facts of the case, and if the parties
concerned should prove to have been guilty of the alleged offences,
' that the authority of the House should be exercised to ensure
their prosecution and punishment.' They were also of opinion ' that
it would be expedient to devise further legislative measures to
restrain boards of directors within the legal limits of their Acts
of Parliament, and for the protection of the interests of innocent
creditors and shareholders.' v

On June 23 the chairman of the above-mentioned committee
(the Earl of Donoughmore) moved that the report and evidence be
referred to the attorney -general, with directions to enquire into the
alleged illegal conduct of the late directors and auditors of the said
company, and to institute a prosecution against such persons as
might be justifiably accused of illegality or fraud. But the lord
chancellor stated that the government held it to be their duty to
make immediate enquiry into the alleged frauds ; and if it appeared
that an indictment could be sustained, would themselves institute
a prosecution. Whereupon the motion was withdrawn. w On Febru-
ary 26, 1864, the lord chancellor, in reply to a question from
Lord Donoughmore, informed the House that, after full enquiry, the
attorney-general had advised that no prosecution should be under-
taken against the parties complained of, as he did not think a con-
viction could be obtained/

So much of the report of the committee aforesaid as related to
further legislative measures to restrain unlawful acts by railway
directors was endorsed by the House of Lords, by the appointment,
on June 23, 1863 (on motion of Lord Donoughmore), of a select
committee to consider what measures might be necessary to restrain
directors of railway companies from exceeding their borrowing

u Hans. D. v. 166, pp. 107-110. - Hans. D. v. 171, pp. 1294-1302.

Lords' Pap. 1863, v. 34, p. 463. Ib. v. 173, p. 1179.



IX GRANTIXG CHARTERS. 605

powers, and from an unauthorised use of their funds, and to enquire Prece-
into the means of affording additional security to the holders of dents,
debentures. The West Hartlepool Harbour and Railway Bill was
referred to this committee, to consider whether it should be allowed
to proceed, for the benefit of the innocent shareholders, and without
exempting the guilty parties from their responsibility.? On June
30, the committee reported in favour of the Bill, with certain
amendments. It accordingly became law. 2 On July 21, the com-
mittee reported the evidence they had taken, together with various
recommendations.* In the following session (1864) the committee
was reappointed. They reported on July 15 several recommenda-
tions for the prevention of frauds by railway companies ; b which
led to the passing of a general Act, making new regulations and
restrictions in regard to the borrowing of money by railway com-
panies, in excess of the amount allowed by their Acts of Incorpora-
tion.

In 1863 the unexpired charters of four Canadian banks, incor-
porated by private Acts of the provincial Parliament, but which
had become insolvent, and had discontinued banking operations,
were repealed by a public Act. In a previous session, a committee
of enquiry into the condition of these banks had reported that it
was ' advisable to prevent their resumption of business on the terms
and conditions embodied in their several charters.' d

The solicitation of a Bill in Parliament has been regarded, by
courts of equity, as so similar to that of an ordinary suit, that in
one instance the promoters have been restrained by injunction from
proceeding with a Bill, the object of which was held to be to set
aside a covenant ; and though this injunction was afterwards set
aside, on appeal, the lord chancellor held that in a proper case the
court would not hesitate to issue an injunction ' touching proceed-
ings in Parliament for a private Bill, or a Bill respecting property.'
It is erroneous to suppose that this would be an infringement upon
the privileges of Parliament, for the Court of Chancery ' acts upon
the person, and not upon the jurisdiction.'

In fact the Irish Court of Chancery, in 1873, by a decision which
was afterwards confirmed, upon appeal, did issue an injunction to
restrain the corporation of the township of Kingstown from pro-
ceeding any further with a Bill for extending the boundary of the
township and improving its economic and sanitary arrangements,
which Bill had been read a second time in the House of Commons



y Hans. D. v. 171, pp. 1302-1305. d Canada Leg. Ass*. Jour. 1862,

x 26 & 27 Viet. c. 154. pp. 145, 228, 268. App*. No. 4. Ib.

Lords' Pap. 1863, v. 34, p. 215. 2nd Sess. 1863, p. 109. 27 Viet c

" Ib. 1864, v. 27, p- 29. 45.
c 27 & 28 Viet. c. 120, 23.



606



THE ROYAL PREROGATIVE



Corporate
vested
rights in
United
States.



and referred to a select committee. The ground of this decision was
that the corporation had not complied with certain provisions of
' The Towns' Improvement Clauses Act, 1847,' and the effect was,
that the corporation were restrained from prosecuting the Bill, in
their corporate capacity; while, as private individuals, they remained
free to act on their own responsibility, and at their own expense. 6
The judgment was delivered on May 5, and on May 7 the select
committee reported to the House of Commons that the preamble of
the Bill had not been proved to their satisfaction/

It may indeed be very difficult to conceive a proper case for the
interference of a court ; inasmuch as the ordinary province of Par-
liament in private Bills is to abrogate existing rights, and to create
new ones. An injunction, therefore, could not be granted on the
ground that the Act applied for would interfere with existing rights.
For Parliament has the power of destroying, altering, or affecting
pre-existing rights, providing, as it always does, or intends to do,
compensation to the party affected. % But parties have been re-
strained, by an injunction, from appearing as petitioners against a
private Bill pending in the House of Lords, h and the Lords, upon
complaint thereof made, have declined to interfere, on the ground
that ' the matter lay entirely between the parties themselves, and
did not in any manner affect their lordships' power of legisla-
tion.' 1

By the Imperial Act, 38 & 39 Viet. c. 64, the Guarantee by
Companies Act of 1867 is repealed, and every certificate granted by
the Treasury to a company under that Act is cancelled ; existing
rights and remedies being saved.

Much practical difficulty has been experienced in
the United States from the immunity from legislative
control enjoyed by so many corporations throughout
the country since the decision in the case of the trus-
tees of Dartmouth College v. Woodward, in 1819. j



e Irish Eq. L. R v. 7, p. 395.

r For further particulars see Brice,
Ultra Vires, ed. 1877, p. 412, n.

Heatkcote n. North Staffordshire
Rly. Co. 6 Railway and Canal
Cases, pp. 359, 368. 2 Mac. & G. p.
100. White & Tudor, Lead. Caa.
Am. ed. 1876, v. 2, p. 1324. See
35 & 36 Viet. c. 95, directing that
certain legal proceedings pending in
a matter where inParl. had legislated,



and might hereafter legislate, should
be stayed for a time.

b Stockton and Hartlepool Rly.
Co. 5 Railway and Canal Cases, p.
691.

1 Hans. D. v. 100, p. 784. May,
Parl. Prac. ed. 1883, p. 757. For
later cases, Brice, Ultra Vires, ed.
1877, pt. 3, c. x.

J 4 Wheaton, p. 518.



IN GRANTING CHARTERS. 607

As a result, it has generally become customary to insert
into the statute law of the States, as a part of the
organic law of all subsequently granted corporate



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