a general meeting.14 But the resolution of a board of directors, of which the creditor is a member, acknowledging the existence of a debt barred by the statute of limitations, will not operate to remove such bar, if indeed any resolution of the board will bind the company to that extent.15

13. Although it is the unquestionable right of every member of the company to restrain the unlawful acts of the directors, still when it appears that the plaintiff is a mere puppet in the hands of others not members of the company, who indemnify him against the costs of the suit, the court will not interfere by interlocutory injunction.16

SECTION VII.

Right to dismiss Employees. - Rule of Damages, when done

wrongfully.

1. Some cases hold, that if wrongfully dis-14. Where the contract provides for a term of

wages, after dismissal, it is to be regarded as liquidated damages.

Statute remedy, in favor of laborers of contractors, extends to laborers of sub

contractors.

§ 141. 1. Where a railway company dismiss a servant, superintendent, or other employee, without just cause, it seems to be considered, in some cases, that they are prima facie liable for the salary, for the full term of the employment.1 This proposition has been often made by judges, and seems to have been acquiesced in, by the profession, to a very great extent, but in a late English case,2 * where the subject is examined with great thor14 Lead Mining Co. v. Merryweather, 10 Jur. N. S. 1231; s. c. 2 H. & M. 254. 15 Gold Mining Co., ex parte, 10 L. T. N. S. 229.

16 Filder v. L. Brighton & South Coast Railw. Co., 1 H. & M. 489.

1 Costigan v. The Mohawk & Hudson Railw., 2 Denio, 609.

2 Goodman v. Pocock, 15 Q. B. 576. This is the case where a clerk, dismissed in the middle of the quarter, brought an action for the wrongful dismissal, on the special contract, and, in the trial of the action, the jury were instructed that they should not, in assessing damages, take into account the services rendered by plaintiff in the broken quarter, for which he had received no pay. The plaintiff then brought this action for those services, and here the court held, that those

oughness, the opinion of the judges certainly seems to incline to a different result. Patteson, J., said:

2. "I am not aware that this precise point has been raised in any case." "Mr. Smith, 2 L. Cases, 20 says, 'that a clerk, servant, or agent, wrongfully dismissed, has his election of three remedies. 1. He may bring a special action for his master's breach of contract, in dismissing him. 2. He may wait till the termination of the period for which he was hired, and may then perhaps sue for his whole wages, in indebitatus assumpsit, relying on the doctrine of constructive service. Gandell v. Pontigny, 4 Camp. 375. 3. He may treat the contract as rescinded, and may immediately sue upon a quantum meruit, for the work he actually performed. Planché v. Colburn, 8 Bing. 14.' I think Mr. Smith has very properly expressed himself with hesitation, as to the second of the above propositions; it seems to me a doubtful point."

Lord Campbell, Ch. J., and Coleridge, J., both agree that the party, dismissed without cause, may bring indebitatus assumpsit, for the service actually performed, or may sue for the breach of the contract in dismissing plaintiff, but cannot do both.

And Erle, J., lays down the rule very distinctly, and, as it seems to us, upon the only sound and sensible basis. "The plaintiff had the option, either to treat the contract as rescinded, and to sue for his actual service, or to sue on the contract for the wrongful dismissal. . . . . As to the other option, referred to by Mr. Smith, I think that the servant cannot wait till the expiration of the period for which he was hired, and then sue for his whole wages, on the ground of a constructive service, after dismissal. I think the true measure of damages is the loss sustained at the time of dismissal. The servant after dismissal may and ought to make the best of his time, and he may have an opportunity of turning it to advantage. I should not say anything that might seem to doubt Mr. Smith's very learned note, if my opinion on this point were not fortified by the authority of the Court of Exchequer Chamber, in Elderton v. Emmens, 6 Com. B. 160.”

services should have been taken into account in assessing damages in the former action, and that no recovery could be had in this action, on account of the former recovery.

*3. The cases in this country have sometimes taken a similar view of the rule of damages, in such cases, and the rule must, we think, ultimately prevail everywhere.4

4. Where the contract specifies the time for which the party employed shall be entitled to wages after notice of dismissal, that is to be regarded as stipulated damages for the breach of the contract.5 But even this cannot be recovered under the indebitatus count, for work and labor.6

5. Where the statute provides, that the laborers of contractors upon a railway may give notice to the company of their wages remaining unpaid, in certain contingencies, and thus charge the company, the provision was held to extend to laborers and workmen of sub-contractors.7

3

Algeo v. Algeo, 10 Serg. & Rawle, 235; Donaldson v. Fuller, 3 Id. 505; Perkins v. Hart, 11 Wheaton, 237.

4 Spear & Carlton v. Newell, Sup. Ct. Vt., not reported. In this case the plaintiff sued for the price of rags and other materials furnished, to supply a paper-mill of defendant, under special contract. The materials were, at one time, unfit for use, on account of latent defects, for which by the contract the plaintiffs were liable. The defendant claimed the rule of damages should be the rent of the mill and the expense of supplying workmen until good materials were furnished. But the court held, that it was the duty of the defendant to make the best of the case, on his part, and that he could only recover such damages as intervened, before he had opportunity to supply himself with proper materials for use.

6

B Hartley v. Harman, 11 Ad. & Ellis, 798.

Fewings v. Tisdal, 1 Exch. 295.

Kent v. New York Central Railw., 2 Kernan, 628. Peters v. St. Louis & Iron Mountain Railw., 24 Mo. R. 586. Where the statute in such case makes the company liable for thirty days' labor of the workmen, it is not indispensable that the labor should have been performed in thirty consecutive days, to entitle them to compensation against the company. Such claims may be sued in the name of an assignee, under the new code of Missouri. Ib. Post, § 232, n. 5. * 417

*CHAPTER XXII.

ARRANGEMENTS BETWEEN DIFFERENT COMPANIES:

SECTION I.

Leases, and similar Contracts, require the Assent of Legislature.

1. By English statutes one company may pass
over road of another, but contract binding.
2. But cannot transfer duty of one company
to another, without legislative grant.
3. Original company liable to public, after
such lease. But lessee not excused.
4. Courts of equity enjoin.companies from
leasing, without legislative consent.
5. But such contracts, made by legislative
grants, are to be carried into effect.

6. Majority of company may obtain enlarged
powers, with new funds.

7. So the majority may defend against proceedings in legislature.

8. Legislative sanction will not render valid contracts ultra vires.

§ 142. 1. THE English statute gives special permission to one company to contract with other companies for the right of passage over their track. And this has been construed, to give the right to contract for the privileges ordinarily attaching to such passage, of stopping at the stations, and taking up and putting down passengers and freight.2 The parties will be bound by the terms of the contract, notwithstanding the ninetysecond section of the act, which gives all companies and persons the right to use railways upon the payment of the tolls demandable.3

1 8 and 9 Vict. ch. 20, § 87.

2

Simpson v. Denison, 16 Jurist, 828; 2 Shel., Ben. ed. 694; 13 Eng. L. & Eq. 359.

3 Great Northern Railw. v. Eastern Co. Railw., 9 Hare, 306; 2 Shel., Ben. ed. 696; 12 Eng. L. &. Eq. 224.

5

2. But an agreement between railway companies, without the authority of the legislature, transferring the powers of one company to the other, is against good policy, and a court of equity * will not lend its aid to carry such contract into effect. But it has been held, that a contract, by which one railway gives another the right of passage, upon the guaranty of a certain per cent profit upon their stock and all other investments, is a payment of tolls within the statute. It seems to be considered, by the English courts, that one railway leasing its entire use to another company does not come within this section of the general statute, and as the public thereby lose the security of the first company, for care and diligence, in the discharge of its public duties, the contract, unless made in pursuance of an act of the legislature, or ratified by such act, is illegal, as against public policy. At all events a court of equity may properly decline to lend its aid in enforcing a specific performance of such contract.7

* Same case, 12 Eng. L. & Eq. 244; South Yorkshire Railw. v. Great N. Railw., 19 Eng. L. & Eq. 513; Johnson v. Shrewsbury & B. Railw., Id. 584; Lond. B. & South Coast R. v. L. & S. W. R. & Portsm. R., 5 Jur. N. S. 801. Where the subject is extensively examined by the Lord Chancellor, and the cases commented upon.

In a recent case before the Superior Court of Cincinnati, Ohio & Miss. Railw. v. Ind. & Cin. Railw., the question of the right of a railway, chartered by one state to contract with the railways of other states for permanent privileges in running cars upon such railways, is extensively considered and denied by Storer, J. The case illustrates very forcibly the demand which obviously exists for making all lines of railway extending into different states national agencies rather than mere state institutions. For military and postal purposes railways are far more national than banks, and as means of intercommunication equally so.

5 The South Yorkshire R. & R. D. v. Great Northern Railw., 22 Eng. L. & Eq. 531; s. c. in Exchequer Ch. 25 Eng. L. & Eq. 482. One company having made a beneficial contract with another company in regard to traffic, may, with a lease of itself, transfer the benefit of this contract. London & S. W. Railw. v. South E. Railw., 20 Eng. L. & Eq. 417.

* Johnson v. The Shrewsbury & Birmingham Railw., 19 Eng. L. & Eq. 584; Troy & Rut. Railw. v. Kerr, 17 Barb. 581. This doctrine is reaffirmed in the House of Lords in Shrewsbury & B. Railw. v. L. & N. W. R., in May, 1857, 29 Law Times, 186.

▾ South Yorkshire & River Dun Co. v. Great N. Railw., 19 Eng. L. & Eq. 513; Johnson v. Shrewsbury & Birmingham R., 19 Eng. L. & Eq. 584; Shrewsbury