over the titles of Mr. Pomeroy's great work on Equity Jurisprudence recently published. The era of equity was still an era of judge-made law; but there were new elements in play, which wrought decisive changes. For instance, procedure was liberalized; pleadings came into vogue which were free and natural, instead of strained and technical; practice was moulded to the changing necessities of a litigation; and above all, remedies were adapted to the emergencies of each case. These were all points of advantage of the new system over the old, altogether apart from any difference in the intrinsic quality of equity as compared with the common law. They have a deep significance, for evidently there were influences at work drawing the legal mind toward a more truly proportioned appreciation of the office of procedure, and setting out in clearer distinction the rights and duties which it is the object of law to define and guard, and the mere machinery of their enforcement. It would be a difficult task to give a complete explanation of these tendencies of Equity; but the main fact in any such explanation may be readily seized upon. We know it to be an indisputable fact that equity openly avowed its aim and purpose of equity to supplement and supersede the common law in the advancement of a higher conception of justice and right. It distinctly asserted the superiority of its rules and principles, and constantly enlarged its sphere of action on the strength of this claim. Thus it was the source not only of new law; but of new law of an explicitly recognized higher type. This high claim of equity must have impressed itself upon the legal mind, and led it by degrees to the direct contemplation of legal rights and duties in their relations to their real grounds, dissociated from every thing else. It fixed attention upon them, and tended to emphasize them as the main consideration. In other words, whilst the tendency in the common-law era was to lay stress on the legal action, its essentials and requirements, the tendency in the equity era was more and more to lay stress on the rights and duties of parties, their essentials and requirements; and the moment this latter tendency set in, procedure dwindled in importance. Equity had its time of robust energy and expansion, and then it waned. In making for the liberation of the idea of rights and duties from a false identification with the machinery for their enforcement, it laid an axe at its own roots. This liberation was immensely accelerated if not completed by the analysis of Bentham and Austin. The effect of it, united with the ripening ideas of popular government, was to start gradually into systematic operation a law-making power, more efficient because more direct and comprehensive in its action. This was legislation. Long intermittent only in its law-making, it was by degrees stimulated by a number of co-operating causes, to take upon itself this most legitimate of its functions, until finally it has assumed it to the practical exclusion of all other agencies. Judges have ceased to make law, with rare exceptions; as they often tell us, and sometimes inconveniently, their sole duty is to declare it. The well-spring of equity is dry. Legislation has taken their place, and it is a vast engine of unlimited and unrestrained capacity. In this fact we have the deepest and most far-reaching legal tendency at the present time. It overshadows all others; it is the dominant influence; conformity to it, with all the readjustments that it involves is the necessary requirement, if there is to be harmony and order in the coexistent legal system. It witnesses in full play the separation of the conception of legal rights and duties from the fact of procedure; the essence from the machinery; substantive law from adjective law. It responds to the behests of reason by authentically stating the rules of human right and duty in a rational and coherent form. And observe how the revolutions of time have reversed the order of things and the legal action with its connected apparatus, which stood at the front in the infancy of society, is now simply an adjunct. It is a sweeping change; but it has been gradual and unbroken, and its incidents are imbedded in the history of English law. The last and most significant phases of it are still quite recent, and it remains for us to see whether the readjustments which should follow them are yet made, in whole or in part, or their necessity even realized. The question arises, what are those readjustments? I say firstly, the utmost simplification of procedure, and secondly, the re-expression of the entire body of the law to secure unity of form and a fair maintenance of that unity. Enough has been said about the tendency of procedure to simplicity and naturalness, and surely no argument is necessary in favor of the desirableness of zealously conforming to it and 'carrying it into execution. But the other need-that of the re-statement of the law in statutory form-is in grave controversy and the battle is not yet decided. It is the old struggle between innovation and conservatism, always more a matter of temperament than logic. The ordinary arguments on both sides are wellthreshed straw, and it would be vain to once more set them up against each other. If any new light is to be shed on the subject that is to win both feeling and conviction to the same side, it must be from an altered point of view. We know that the victory will eventually be with the right reason of the matter, but it may be long and injuriously deferred. Can we not lift ourselves out of the clouds of disputation and search for this right reason of the matter, with the single desire to find it? If we were to do this there would soon be but one persuasion one way or the other. Assuming that attitude we should face these questions: Is it reasonable to have one large section of the law scattered through thousands of volumes of reports, so that it has to be gathered from them by a difficult and laborious process of sifting relevant from irrelevant facts, and actual grounds of decision, which are evidence of the law from general disquisitions, which are not? Is it reasonable that one part of the law should be in that shape, and the remaining part supplementing and modifying the other in the form of detached statutes, incomplete in themselves by reason of being supplementary or amendatory? Is it reasonable that law which affects every member of society should be largely inaccessible because nowhere authentically stated in the form of rules? Is it consistent with the spirit of an era of legislation to resist its extension to the improvement of the form of that part of the law which has to be constantly detached from the confusion of decided cases? Does not the right reason of the matter stand out quite clearly if this is a correct statement of the points of dispute? Is it not that every part of the law should be authoritatively expressed in the form of definite rules, and the whole arranged in a system according to the most logical principles of legal classification? If the present unstatutory part of the common and equity law did as a result lose its elasticity that is no defect when legislation is the process of law-making in vogue. When judges were making the law through actual decisions, restricted to particular facts, and thus unfitted for the enunciation of general principles, it would have been highly disastrous to encrust the rulings of those decisions at any time in an inflexible form. It was necessary when those conditions existed that these rulings should be nnconfined and elastic, for they were but the germs and seeds in which lay all the possibilities of legal growth. But now that the law no longer grows in that way, or from such germs, and that all of it which has so grown in the past is fixed and stationary, this elasticity is of far less importance than the definiteness and precision which would be attained by a re-statement of the entire mass of judge-made law in the form of rules. There is really no room for controversy if the true conditions of the problem were resolutely forced and all irrelevancies excluded. With these essentials to the perfecting of the law as a practical art before us, I ask again the question I put at the outstart. What is the measure of our achieve ment? Let us glance first at procedure. The ideal A would be on the lines laid down, a brief precedure act delineating the main features of the various legal proceedings, leaving the details to be supplied in rules of practice drawn up by the judges. Amongst these rules should be one to be sacredly observed to the effect that every error or mistake as to matters of practice covered by rules should be disregarded if no injustice were done. On this plan the essentials of procedure would be matters of strict rule, and the details invariably under control and unobstructive. If this be a true ideal I leave it to you whether we are making toward it, or even an intelligent perception of it. Our own code of procedure laying hold of every detail of practice and thus making its observance absolute, is direct evidence to the contrary. It has erected procedure into a vast and complicated system which has to be traversed without serious deviation to reach the seat of justice. It entirely lacks the flexibility which rules would have and which must pervade procedure if it is not to be an unwarranted and illogical obstruction. The condition of things which prevails in other States may be subjected to the same or equally valid criticism on other grounds. Nowhere in this country that I know of, is there a consistent effort being made to mould the existing system of practice to the true theory of the office of procedure. England alone, 80 far as my knowledge extends, has seen the true course and taken steps to follow it. Glancing now at the form in which the law is expressed, the view is blacker still. The ideal on the same lines would be a complete codification of the law with periodical revision by experts to incorporate the new with the old. The original codification should be on a plan radical enough to permit of whatever changes of substance are necessary to bring the body of the law into correspondence with existing ideas, needs and conditions. On the other hand, subsequent revisions when required should be revisions pure and simple, reaching only to matters of form, and securing order, arrangement and clearness. In this way the voice of the Legislature, as to what the law should be would always be supreme and revision would do away with the defects of form in legislation incident to its conduct by a mixed body. Judged by any such ideal it is chaos which exists. Our system of law is a wilderness enshrouded in the darkest of night. Case law and statute law stand together unblended and in the greatest confusion. It has neither plan nor coherency in any part of it. The keenest eye is not sure of its way. Is it a surprise that justice often misses her mark and brings reproach upon herself? Her mission will always be in complicated conditions of society an intricate one, but now it is unnecessarily so and the sum of human suffering is thereby increased. We cannot shift the responsibility for this from our shoulders, and I have done the task I set myself if I have seriously raised a question of duty and in however slight a degree enlisted conscience in the work of reform. PENNSYLVANIA SUPREME COURT, MAY 25, 1883. LONG V. SEAVERS. A sale upon an execution against a landlord of a farm let on shares of his share of growing grain does not pass his title to it as against a subsequent purchaser of the land. CTION to recover the value of certain wheat. The facts were these: One Cyrus Allison owned a farm which he leased on shares to his son. One Meales, who held a judgment against said Cyrus Allison, issued an execution thereon, under which a levy was made upon wheat growing upon the farm, and the interest therein of Cyrus Allison was sold to the plaintiff below, Jacob Seavers. Thereafter under an execution upon another judgment the farm was sold to one Long. The grain was harvested by the tenant and delivered to defendant below, Ira L. Long, and other persons. This action was brought to recover the value of the wheat delivered. A verdict was rendered for the plaintiff below, and defendants took a writ of error to review the judgment thereon. John Hayes, for plaintiffs in error. J. A. C. McCune, for defendant in error. GREEN, J. It is true that grain growing in the ground is personal property, and may be seized and sold upon execution. Hershey v. Metzyar, 9 Norr. 218. But that proposition in its generality relates to the interest in the grain of the person in possession. Where land is leased by the owner to a tenant upou shares, the landlord is entitled to his share of the grain when it is harvested. Lamberton v. Stouffer, 5 P. F. Smith, 284. Before that the landlord cannot enter upon the land demised to take his share, or do any other act inconsistent with the tenant's right of possession. Under the act of June 16, 1836 (Hurd. 663, pl. 149), it is undoubted that the purchaser of the landlord's title under execution against him is entitled to the rent falling due after the acknowledgment of the sheriff's deed whether it is payable in money or grain. Where however there has been a severance of the landlord's share of the grain before the sheriff's sale of the land, that share does not pass by the sale. All this was ruled in Hershey v. Metzgar, supra. The test is the severance. In Hershey v. Metzgar there was a levy under a fi. fa. upon the owner's interest in his growing grain, and he elected to take the grain under the exemption law, and it was appraised and set apart to him, with the knowledge and without the objection of the plaintiffs in the judgment, who subsequently purchased the land. This was held to be a severance. In Fullerton v. Shauffer, 2 Jones, 220, it was held that when by the terms of the lease the tenant was to retain the rent, and apply it to the payment of a debt of the lessor for which the tenant was surety, this was such an appropriation of the rent in advance, that no rent was due after the subsequent sheriff's sale of the land, and hence none passed to the purchaser. In the present case the question is whether a sale upon a fi. fa. of the landlord's share of the growing grain before actual severance, works of itself such a severance as passes his title to it, as against a subsequent purchaser of the land. If the share were a subject of levy and sale upon a fi. fa., of course this result would be accomplished. But we think it is not. The landlord has no title to his share of the grain until it has been harvested. Lamberton v. Stouffer, supra. The whole of the grain while it is growing belongs to the tenant, and he must deliver to the landlord his share of it after severance. This of course is in the absence of special contract to the contrary. Olwine, 5 W. & S. 163: Thus we said in Rinehart v. "Then as to the title of a ten ston, 1 P. & W. 471, was erroneously decided. In Cobel v. Cobel, 8 Barr, 346, Coulter, J., said: There have been conflicting decisions by this court upon the question whether grain growing is personal property or not. In Stambaugh v. Yeates, and subsequently in Johnston v. Smith, it was held that it was personal property and did not pass with a conveyance of the land. But in the case of Bank v. Wise, 3 Watts, 394, where the point incidentally arose, it was ruled that grain growing on the land did pass by the conveyance of the fee unless specially reserved." Judge Coulter evidently referred to Smith v. Johnston, and not to Johnston v. Smith, as the latter case holds the opposite doctrine, and the error is repeated a few sentences further on in his opinion. In the case of Bittinger v. Baker, 5 Cas. 68, Lowrie, J., referring to Stambaugh v. Yeates, Smith v. Johnston, and also to Myers v. White, 1 R. 353, said: "But we can make no use of them for they are all erroneous, and have all been corrected by the decisions declaring that all rent in grain or in money falling due after a private sale of the land, or after a judicial sale with the deed acknowledged, and all grain of the vendor or debtor then growing on the land, go to the vendee, and no assignment of them is good against the sheriff's vendee," citing numerous authorities. Stambaugh v. Yeates has been referred to with some degree of approbation in two of our later decisions, Bear v. Bitzer, 4 Harr. 175, and Hershey v. Metzgar, 9 Norr. 217. But in both those cases it was only the abstract doctrine of the former case that was quoted and applied, to wit, that growing grain was personal property, and liable to be seized and sold as such by judicial process. Abstractly this is true and in the concrete it is true also, if the grain in question is the property of the person in possession, as was the fact in both Bear v. Bitzer, and Hershey v. Metzgar. The facts of those cases required the application of the doctrine in the terms above stated, because it was the grain of the owner of the land, who was himself in possession. But in Bear v. Bitzer the purchaser of the grain under the fi. fa., took no title because there was a prior sheriff's sale of the land, under which the title to the grain passed with the land to the purchaser. Neither of these cases however ant to the grain in the ground, where by the terms of the lease the landlord is entitled to a share of it, deliverable in the bushel. The better opinion seems to be that it is property of the tenant, and until the grain is severed and delivered to the landlord, he has no interest in the thing itself. If he sells it, it goes to his vendee, and the landlord cannot pursue it in his hands." We held the same doctrine in Ream v. Harnish, 9 Wright, 376, Thompson, J., saying, speaking of the landlord's share: " Until delivered by the tenauts the landlord had no title to any part of it." Slambaugh v. Yeates, 2 Rawle, 161, is cited by the defendant in error as ruling that a sheriff's sale upon a fi. fa. of the landlord's interest in the growing grain under a lease on shares would pass title as against a subsequent purchaser of the land at sheriff's sale. Without discussing that case at length, it is enough to say that after what has been said of it by this court on different occasions, it cannot be regarded as authority for that extreme doctrine. Judge Kennedy thus speaks of it in Bank of Pennsylvania v. Wise, 3 Watts, 405: "It has also been urged that rent comes in lieu of the emblements of the land, and that as it has been ruled by this court in the case of Stambaugh v. Yeates, 2 Rawle, 161, and recognized in Myers v. White, 1 id. 356, that the purchaser at sheriff's sale is not entitled to the emblements, he ought not for the same reason to have rent, or at least such rent as might by an apportionment be considered a proper equivalent for the enjoyment of the land up to the time of the sale. In answer to this it may be sufficient to state, that the law makes a very different disposition of the corn or grain growing on the land at the death of the owner in fee where it was sown by him, from what it does of the rent which has not become payable at the time of his heath, for land of which he dies the lessor and owner in fee. In the first case the grain growing upon the land is considered personal estate, and as such goes to the executors or administrators; but in the latter case the rent is considered as appertaining to the real estate, as incident to the reversion in fee and passes with it to the heirs." An examination of the opinion in Stambaugh v. Yeates shows that it was de-affirmed that when the land was let to a tenant on cided upon the general principle that grain growing in the ground is personal property, and therefore is subject to levy and sale upon a fi. fa. There was no attempt to distinguish between grain growing on land occupied by the owner, and that which was growing upon land leased to a tenant. The decision was followed however in the case of Smith v. Johnston, 1 P. & W. 471, in which it was held that by a sale, conveyance, and delivery of possession of land, the grain growing thereon does not pass to the vendee. Stambangh v. Yeates was decided in 1828, and Smith v. Johnston in 1830. The latter case came up again in 1832 as Johnston v. Smith, 3 P. & W. 496, and its apparent doctrine was practically reversed by holding that the landlord's right to the share reserved by the lease did pass to the purchaser, unless separated by an express reservation. Judge Kennedy described the interest of the landlord with more accuracy than had before been observed. He said on p. 501: "He parted with his right and all claim to the products of the land while growing upon it, during the continuance of Smith's interest in the possession and use of the same, under his contract with Clark as completely as if he had let the farm to Smith for a money rent. Clark therefore had no right whatever to an interest in the grain grown by Smith, and growing upon the land at the time he sold and conveyed it to Johnston." In Wilkins v. Vashbinder, 7 W. 378, it was held that a conveyance of land conveys the grain growing upon it to the purchaser, and that the case of Smith v. John shares, the interest of the landlord in the growing grain could be seized and sold upon execution before severance, so as to pass a good title thereto as against a subsequent purchaser at sheriff's sale of the land, also before severance. In other words, neither of the cases referred to held, that the judicial sale under the fi. fa. against the landlord would of itself constitute a severance. That is the question in this case, and for the reasons stated, we are of the opinion that no severance was wrought by the sale under the fi. fa. to Seavers, and hence he took no title to the landlord's share of the growing grain, as against Long, who subsequently purchased the land at sheriff's sale, and obtained his deed before the rent fell due. Judgment reversed, and venire de novo awarded. LEGISLATIVE CONRTOL AS TO CORPORATE SUPREME COURT OF THE UNITED STATES, CANADA SOUTHERN RAILWAY Co. v. GEBHARD. In the absence of constitutional provisions to the contrary the relations between a corporation and those holding its bonds as creditors are subject to legislative control, and such control when exercised may bind "ond-holders residing in another county. The C. Railway Co., a Canada corporation, issued bonds secured by mortgage upon its property in Canada, which bonds with interest were payable in New York city. Becoming financially embarrassed and unable to pay interest upon its bonds, it was authorized under an act of the Canadian Parliament to make an arrangement with its creditors, the act providing for the issue of new bonds in exchange for the existing ones which should be a first lien upon its railway, and the interest of which was to be warranted by another corporation which was solvent. Such an arrangement was sanctioned by the holders of more than two-thirds of the capital stock, aud by the holders of more than three-fourths of the bonds of the company. The new bonds did not provide for unpaid interest on the old and bore a less rate of interest. Held, that the arrangement was valid, the Canadian Parliament having authority to permit it, and that it was binding upon non-assenting holders of bonds residing in the United States. ERR RROR to the Circuit Court of the United States for the Southern District of New York. The opinion states the case. WAITE, C. J. What is now known as the Canada Southern Railway Company was originally incorporated on the 28th of February, 1868, by the Legislature of the Province of Ontario, Canada, to build and operate a railroad in that Province between the Detroit and Niagara rivers, and was given power to borrow money in the Province or elsewhere and issue negotiable coupon bonds therefor, secured by a mortgage on its property, "for completing, maintaining and working the railway." Under this authority the company, on the 2d of January, 1871, at Fort Erie, Canada, made and issued a series of negotiable bonds, falling due in the year 1906, amounting in all to $8.703.000, with coupons for semi-annual interest attached, payable, principal and interest at the Union Trust Company, in the city of New York. To secure the payment of both principal and interest as they matured, a trust mortgage was executed by the company covering "the railway of said company, its lands, tolls, revenues present and future, property and effects, franchises and appurtenances." Every bond showed on its face that it was of this kind and thus secured. Before the 31st of December, 1873, the company became satisfied that it would be unable to meet the interest on these bonds maturing in the coming January, and so it requested the holders to fund their coupons falling due January 1, 1874, July 1, 1874, and January 1, 1875, by converting them into new bonds payable on 1st of January, 1877, and by so doing only, in legal effect, extend the time for the payment of the interest, without destroying the lien of the coupons under the mortgage, or otherwise affecting the obligation of the old bonds. Some of the bond holders funded their coupons in accordance with this proposition, and accepted the extension bonds, but under the arrangement their coupons were not to be cancelled until the new bonds were paid. In this condition of affairs the Parliament of Canada, on the 26th of May, 1874, enacted that the Canada Southern Railway, which was the railway built by the Canada Southern Railway Company under its provincial act of incorporation, be declared to be a work for the general advantage of Canada," and a "body corporate and politic within the jurisdiction of Canada," for all the purposes mentioned in, and with all the franchises conferred by, the several incorporating acts of the Legislature of the Province. This, under the provisions of the British North America act, 1867, passed by the Parliament of Great Britain "for the Union of Canada, Nova Scotia and New Brunswick, and the government thereof," made the corporation a Dominion corporation and subjected it to the legislative authority of the Parliament of Canada. On the 15th of March, 1875, another series of bonds amounting in the aggregate to $2,044,000, or there abouts, was issued and secured by a second mortgage to trustees. After the issue of all the bonds the company found itself unable to pay its interest and otherwise financially embarrassed, and a joint committee. composed of three directors and three bondholders, after full consideration of all the circumstances, submitted to the company and to the bondholders "a scheme of arrangement of the affairs of the company," which was approved at a meeting of the directors ou the 28th of September, 1877. This scheme contemplated the issue of $14,000,000 of thirty-year bonds. bearing three per cent. interest for three years aud five per cent. thereafter, guaranteed as to interest for twenty years, by the New York Central and Hudson River Railroad Company, the first coupons being payable January 1, 1878. These new bonds were to be secured by a first mortgage on the property of the company and exchanged for old bonds at certain specified rates. The old bonds of 1871 were to be exchanged for the new at the rate of one dollar of principal of the old for one dollar of the new, nothing being given either for the past due coupons or the extension bouds executed under the arrangement in December, 1873. The proposed issue of bonds was large enough to take up all the old indebtedness at the rates proposed, whether bonded or otherwise, and leave a surplus to be used for acquiring further equipment and for such other purposes of the company as the directors might find necessary. This scheme was formally assented to by the holders of 108,132 shares of the capital stock out of 150,000; by the holders of the bonds of 1871 to the amount of $7,332,000 out of $8,703,000; and by the holders of $1,590,000 of the second series of bonds out of $2,029,000 then outstanding. Upon the representation of these facts to the Parliament of Canada the "Canada Southern Arrangement Act, 1878," was passed and assented to in the Queen's name on the 16th of April, 1878. The statute after reciting the scheme of arrangement with the causes that led to it, and that it had been assented to by the holders of more than two-thirds of the shares of the capital stock of the company, and by the holders of more than three-fourths of the two classes of bonds, enacted that the scheme be authorized and approved; that the new bonds be a first charge over all the undertaking, railway works, rolling stock and other plant" of the company, and that the new bonds be used for the purposes contemplated by the arrangement, including the payment of the floating debt. Section 4 is as follows: "4. The scheme, subject to the conditions and provisos in this act contained, shall be deemed to have been assented to by all the holders of the original first mortgage bonds of the company secured by the said recited indenture of the 15th day of December, one thousand eight hundred and seventy, and of all coupons and bonds for interest thereon, and also by all the holders of the second mortgage bonds of the company secured by the said recited indenture of the 15th day of March, one thousand eight hundred and seventy-five, and of all coupons thereon, and also by all the shareholders of the Canada Southern Railway Company, and the herein before recited arrangement shall be binding upon all the said holders of the first and second mortgage bonds and coupons, and bonds for interest thereon respectively, and upon all the shareholders of the company." Under the arrangement thus authorized the New York Central and Hudson River Railroad Company executed the proposed guaranty, and the scheme was otherwise carried into effect. The several defendants in error are and always have been citizens of the State of New York, and were at the time the scheme of arrangement was entered into and confirmed by the Parliament of Canada, the holders and owners of certain of the bonds of 1871, and of certain extension bonds, these last having been delivered to them respectively at the Union Trust Company in the city of New York, where the exchanges were made, in December. 1873. Neither of the defendants in error assented in fact to the scheme of arrangement, and they did not take part in the appointment of the joint committee. Their extension bonds have never been paid, neither have the coupons on their bonds of 1871, which fell due on the 1st of July, 1875, and since, though demanded. The company has been at all times ready and willing to issue and deliver to them the full number of new bonds, with the guaranty of the New York Central and Hudson River Railroad Company attached, that they would be entitled to receive under the scheme of arrangement. These suits were brought on the extension bonds and past due coupons. The company pleaded the scheme of arrangement as a defense, and at the trial tendered the new bonds in exchange for the old. The Circuit Court decided that the arrangement was not a bar to the actions, and gave judgments in each of them against the company for the full amount of extension bonds and coupons sued for. To reverse these judgments the present writs of error were brought. Two questions are presented for our consideration: 1. Whether the "Arrangement Act" is valid in Cauada, and had the effect of binding non-assenting bondholders within the Dominion by the terms of the scheme; and 2. Whether, if it did have that effect in Canada, the courts of the United States should give it the same effect as against citizens of the United States whose rights accrued before its passage. 1. There is no constitutional prohibition in Canada against the passage of laws impairing the obligation of contrects, and the Parliament of the Dominion had in 1878, exclusive legislative authority over the corporation and the general subjects of bankruptcy and insolvency in that jurisdiction. As to all matters within its authority, the Dominion Parliament has plenary legislative powers as large and of the same nature as those of the Imperial Parliament." City of Fredericton v. The Queen, 3 Can. Sup. Ct. 259. On the 20th of August, 1867, the Parliament of Great Britain passed the Railway Companies Act, 1867," 2 Stat. 1332; 30, 31 Vict., ch. 127. This act provides among other things, for the preparation of "Schemes of Arrangement" between railway companies unable to meet their engagements and their creditors, which can be filed in the Court of Chancery, accompanied by a declaration in writing under the seal of the company, and verified by the oaths of the directors to the effect that the company is unable to meet its engagements with its creditors. Notice of the filing of such a scheme must be published in the Gazette, and the scheme is to be deemed assented to by the holders of mortgages, bonds, debenture stock, rent charges and preference shares when assented to in writing by the holders of three-fourths in value of each class of security, and by the ordinary shareholders when assented to at an extraordinary general meeting specially called for that purpose. Provision is then made for an application to the court by the company for a confirmation of the scheme. Notice of this application must be published in the Gazette, and after hearing, the court, if satisfied that no sufficient objection to the scheme has been established, may confirm it. Section 18 is as follows: The scheme when confirmed shall be enrolled in the court, and thenceforth the same shall be binding and effectual to all intents, and the provisions thereof shall against and in favor of the company and all parties assenting thereto or bound thereby, have the like effect as if they had been enacted by Parliament. This act it is apparent was not passed to provide for the first time a way in which insolvent and embarrassed railway companies might settle and adjust their affairs, but to authorize the Court of Chancery to do what had before been done by Parliament. Lord Cairns, L. J., said of it in Cambrian Railways Company's Scheme, L. R., 3 Ch. 294: "Hitherto such companies, if they desired to raise further capital to meet their engagements, have been forced to go to Parliament for a special act, enabling them to offer such advantages by way of preference or priority to persons furnishing new capital as would lead to its being obtained. And Parliament, in dealing with such applications, has been in the habit of considering how far the arrangements proposed as to such new capital were assented to or dissented from by those who might be considered as the proprietors of the existing capital of the company, either as shareholders or bondholders. The object of the present act * * * appears to be to dispense with a special application to Parliament of the kind I have described, and to give a parliamentary sanction to a scheme filed in the Court of Chancery and confirmed by the court, and assented to by certain majorities of share-holders and of holders of debentures and securities ejusdem generis." And even now in England special acts are passed whenever the provisions of the general act are not such as are needed to meet the wants of a particular company. A special act of this kind was considered in London Financial Association v. Wrexham, Mold and Connah's Quay R. Co., L. R., 18 Eq. 566. In Canada no general statute like that in England has been enacted, but the old English practice of passing a special act in each particular case prevails, and Osler, J., said in Jones v. Canada Central R. Co., 46 Up. Can., Q. B. 261, our statute books are full" of legislation of the kind. The particular question in that case was whether after the establishment of the Dominion government the provincial parliaments had authority to pass laws with reference to provincial corporations which would operate upon debentures payable in England, and held by persons residing there, but it was not suggested either by the court or counsel that a statute of the kind, passed by the Dominion Parliament in reference to a Dominion corporation, would not be valid as a law. So far as we are advised, the parliamentary authority for such legislation has never been doubted either in England or Canada. Many cases are reported in which such statutes were under consideration, but in no one of them has it been intimated that the power was even questionable. In Gilfillan v. Union Canal Co., at the present 'term, it was said that the holders of bonds and other obligations issued by large corporations for sale in the market and secured by mortgages to trustees, or otherwise, have by fair implication certain contract relations with each other. In England we infer from what was said by Lord Cairns in Cambrian Railways Company's Scheme, supra, they are considered as in a sense part proprietors of the existing capital of the company, and dealt with by Parliament and the courts accordingly. They are not there any more than here, corporators, and thus necessarily in the absence of fraud or undue influence bound by the will of the majority as to matters within the scope of the corporate powers, but they are interested in the administration of a trust which has been created for their common benefit. Ordinarily their ultimate security depends in a large degree on the success of the work in which the corporation is engaged, and it is not uncommon for differences of opinion to exist as to what ought to be done for the promotion of their mutual interests. In the absence of statutory authority or some provision in the instrument which establishes the trust, nothing can be done by a majority however large, which will bind a minority without their consent. |