Bickford vs, The Grand Junction Railway Company. In concluding, Respondent submits that the moment the case was referred to the Master on a consent decree, he is not confined to the facts in the Bill. The case of Kerby v. Kerby (7) supports this view. Whether the objection that the mortgage was ultra vires, not having been raised in the Master's office, could be taken on appeal, is, in fact, a point of practice decided by the Court of Appeal, and this Court is generally supposed not to reverse the finding of the Court of Appeal on a question of procedure and practice, and should not declare the matter not to be properly before the Master. Mr. Cameron, Q. C., in reply: This is not merely a question of practice in the Master's office, but one of pleading and legal principle. It is said the effect of endorsement was to limit the Company's liability to what they might owe Brooks. If so construed, it would actually destroy the value of the mortgage, whilst, in fact, the consideration was for the iron Appellant would deliver at Belleville for the use of the Company. Bickford never guaranteed that the iron would be laid on the track. JUNE 4th, 1878. The Court ordered a re-hearing on the following points : 1st. As to the effect of the provision in the agreement between Brooks and Bickford that the vendors should retain their lien and ownership of the iron until laid on the track. (1) 5 Grant, 587. Bickford vs. The Grand Junction Railway Company. 2nd. Supposing the mortgage valid, what was its effect upon the property of a Railway never a going concern? Mr. Hector Cameron, Q.C. : When the The contract was an executory contract. iron was delivered on the wharf at Belleville, it became an executed contract on the part of the vendor, and when vendee gave his notes it was an executed contract on the part of the vendee. The Bank, however, had a perfect right to retain the jus disponendi, and, as stated in Benjamin on Sales, sec. 794, the Bank had a special property analagous to that of a pawnee, and when the purchaser was and continued in default the Bank had a perfect right to sell the property. See Ogg v. Shuter (1). It was never intended the property should pass to Brooks, so that it might be seized for Brooks' debt. It was, moreover, at the Company's express demand that all the iron was delivered; and the moment a loss was incurred by Brooks' default, the Company became liable, under their mortgage, for the damages suffered, that is the difference between the contract price and the market value on a re-sale (2). As to the effect of the mortgage, when the Legislature gives the right to a Company to mortgage for a special purpose, there is no reason why their land and property should not pass. Our Courts and Legislature have sanctioned the entire foreclosure of a railway under a mortgage. In any case this mortgage is certainly valid as to lands not compulsorily taken, and there is no (1) L. R. 1 C. P. Div., 47; (2) Benjamin on Sales, secs. 382, 399 & 794. Bickford vs. The Grand Junction Railway Company. evidence that any lands were so taken. Brice on Ultra Vires, (1). Mr. Bethune, Q.C. :— The property never passed, and the intention was to always give to the Bank an independent ownership which cannot be said to have ever been transferred to Brooks. See Benjamin on Sales (2); Hilliard on Sales (3); Parson on Promissory Notes, (4); Stevens v. Wilkinson (5). Brooks' notes were given for property which never passed, and the Company cannot be said to have ever intended to become responsible for damages. This is clearly shown by the words of the proviso. As to the second point, the clear intention of the Legislature was that a company might execute a mortgage for the purpose of completing, working and maintaining, not or maintaining the railway. The mortgage only seems incident to the mere issuing of the debentures. If you can treat this mortgage as a mortgage of so much land, the result would be that the road would be stopped by getting a specific mortgage on one part of the road. The object of the charter was to have a perpetual running road, and the power of mortgaging is only given by Statute in a modified way, for there is no power of winding up given to the Company. Mr. Cameron, Q C., in reply: How the mortgage may be enforced is not in dispute (1) p. 110. (Edition 1877.) 2 DeG. & J., 453; (2) Secs. 210, 319, 320, 353, 399; (3) 404; (4) Vol. 1 p. 206; (5) 2 B. & Ad., 320. Bickford vs. The Grand Junction Railway Company. here. If the power of mortgaging were not given, no Railroad Company in Canada could ever build a railway. There are many reasons why Railroad Companies in this country should be given the power to mortgage what in England it would be illegal to mortgage. In this country railways are often built by the aid of large tracts of land, and surely the power to mortgage them must have been intended to be given by the Legislature. JANUARY 28th, 1878. STRONG, J., delivered the Judgment of the Court. The judgment of the learned Vice-Chancellor, on the appeal from the Master's Report, proceeded upon the ground that the liability of the Railway Company under their mortgage was to be subject to the state of the accounts between Brooks and the Company, and that they were not to be liable to the Bank to any greater amount than that in which they should be found indebted to Brooks under the contract of the 25th of March, 1872. This restriction of the mortgage to a mere subrogation to the rights of Brooks against the Company was, in the opinion of the Vice-Chancellor, the proper construction of the agreement, power of attorney. mortgage and memorandum endorsed, all read together. We are unable to concur in this view, and, we think, the true answer to it has been given by the learned Chief Justice of the Court of Appeal in his judgment. The memorandum endorsed is not to be construed as cutting down the terms of the proviso in the mortgage deed, by the stipulation that the contract was not to be varied, but was intended to conserve written evidence of Bickford vs. The Grand Junction Railway Company. Brooks' consent to the mortgage and to the loss of priority in respect of the mortgage bonds to be delivered to him under the contract, which the mortgage would, of course, have taken precedence of. All the surrounding circumstances point to this as the natural construction, and it is no strain upon the words of the memorandum itself so to interpret it. This reading makes the memorandum consistent with the sealed agreement; the restrictive interpretation adopted by the Vice-Chancellor would give rise to a conflict of meaning between the memorandum and the agreement, both executed on the same day. It is needless to dwell further on this point, for we entirely adopt the reasoning of the learned Chief Justice on this part of the case. The objection that promissory notes, secured by the mortgage, were only to be given by Brooks and Bickford, under the agreement, as the iron was delivered into Brooks' possession, to be laid on the railway, and not when the iron was delivered at Belleville, is also, in our opinion, correctly answered by the judgment delivered in the Court of Appeal. The first informal memorandum of agreement, that of the 9th of June, 1874, made between Brooks and Bickford and Cameron, makes it clear that what was then intended was that the notes should be given on the delivery on the wharf at Belleville, for it contains these words "all delivered on the wharf at Belleville free "of duties, the said Brooks to pay wharfage and harbour "dues (if any), a credit of six months to be allowed, but "the notes of the said Brooks at three months to be given "and to be renewed for three months, interest being "added to all such notes, at 7 per cent per annum, to be "given from time to time as delivered." This was the agreement of which the contract under seal of the |