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of such bond, "under such regulations as may be provided in the by-laws of such corporation." 1 There has been a vast amount of litigation, especially in the New York courts, over mortgage bonds. The explicitness of our statute will be of great use in preventing misapprehension.

84. The constitution makes only two distinct references to railway directors. We have given the first. The second is the requirement that they shall annually make a report, under oath, to the auditor of public accounts or "some officer to be designated by law," of all their acts and doings. The quoted words are an intimation and a foreshadowing of the Railroad and Warehouse Board. This report must include "such matters relating to railroads as may be prescribed by law." To this is added, in conclusion, the direction to the general assembly to "pass laws enforcing by suitable penalty the provisions of this section." 2

$85. At the regular annual meeting of the company the president and directors are required to exhibit a full, distinct and accurate statement of the affairs of the corporation. Similar exhibits may be required at any meeting of the stockholders by a majority of those present.

$86. Such are the provisions in regard to directors of railroad companies, as found in the constitution, statutes and decisions of the state. This chapter cannot better be closed than by adopting the language of Mr. Perry in his recent and exhaustive work on trusts, that "the directors of a corporation are trustees and

1 Ibid. sec. 186; also, statutes of Illinois, 1873, page 141. 2 See chap. on Railroad and Warehouse Commissioners.

agents of the shareholders and of the corporation, and the same rules are applied to the contracts of directors with the corporation as are applied to the dealings of other parties holding a fiduciary relation to each other. The directors are intrusted with the management of the property of the corporation for the best interest of all the members, and the directors are bound to execute their trust; nor must they allow their private interests to interfere with the duties of the trust they have assumed.” 1 This states the uniform doctrine of the common law on the subject.

IV. RAILWAY INJUNCTIONS.

§ 87. High on Injunctions.

88. Breach of trust.

89. Injunctions at instance of shareholders.

90. Laches and injunctions.

91. Eminent domain and injunctions.

92. Donations of right of way.

93. Adjoining proprietors.

94. Compliance with the terms of the grant.
95. Preliminary injunctions and possession.
96. Public streets and railroads.

97. Railway extention without authority.

98. Railroad land for special uses.

99. Tree planting by railroad companies.

100. Injunctions against railroads as common carriers.

101. Railroad not in itself a nuisance.

102. Nuisance indictments triable by jury.

103. City authorities and railroad companies.
104. Private railroad construction.

105. Exclusive franchises.

106. Municipal aid and injunctions.

107. Dismissal of an injunction bill.

1 For a discussion of this subject see Perry on Trust, chap. 16.

87. This whole subject is exhaustively treated in HIGH ON INJUNCTIONS. 1 It would be irrelevant to the purpose of this treatise to do more than to give the law of injunction as it relates to railroads. The work just named has been received by the legal profession with such general and cordial endorsement for accuracy and thoroughness as to justify its use in this connection as a substitute for original investigation. It should be remarked at the outset, that while the English and American administration of the law of injunction differ somewhat, injunction law, as administered in Illinois, has no marked peculiarity, either as found in the statutes or the decisions. The only statutory provision for receivers is in connection with the transportation of grain by rail.2

§ 88. It is the fundamental and inalienable right of any member of a corporation to invoke the aid of equity, if his interests are in danger from a breach of trust on the part of the company or its officers. The courts would interfere, if equity demanded it, for the protection of any shareholder, however small his interest.3 At the same time, the courts are cautious about interfering with public enterprises in the hands of corporations. It is only as a last resort and to prevent irreparable injury that the jurisdiction of equity is invoked. The granting of an injunction and appointing of a receiver is usually called into action, either to prevent fraud, save the subject from material

1 A Treatise on the Law of Injunctions, as administered in the courts of the United States and England. By James L. High, counselor at law. Chicago: Callaghan and Company, 1873.

2 See chapter on Railroad and Warehouse Commissioners. 3 Kean v. Johnson, 1 Stocton, 403; Simpson v. Westminister, 8 H. L. 717; Mozely v. Alston, 1 Ph. 798.

injury, or to rescue it from probable destruction. This specification was given by that eminent jurist, Chief Justice BREESE, of Illinois. If a railroad company or its officers should attempt to violate the law of corporate existence and action laid down in the foregoing chapters, ground would thus be furnished for granting an injunction and appointing a receiver. But this is by no means an exhaustive statement. At common law a corporation can only do what its charter specifically contemplates. If it should attempt to go beyond its vested rights, equity would enjoin the proceeding, and, if necessary, appoint a disinterested party to take charge of the affairs of the company. For example, if an attempt were being made to make the company a stockholder in any other company, or to consolidate its stock with that of another company, without express warrant from the charter or general law.*

1

§ 89. Courts of equity rarely interfere with the exercise of discretionary powers by corporate bodies or their officers, to whom such powers are confided.3 And it is a well-established principle of equity, that where acts requiring the exercise of judgment, science and professional skill are confided to the discretion of the officers of a corporation, the exercise of that discretion will not be lightly disturbed, nor will such officers be enjoined, except when abusing their power

1 State v. Newark, 3 Dutch, 197; Foster v. Essex Bank, 16 Mass. 245; Satterlee v. Matthewson, 2 Peters, 380; Watson v. Mercer, 8 Peters, 88; Carpenter v. Pennsylvania, 7 How. 456.

2 Smith v. Bangs, 15 Ill. 399; Beman v. Rufford, 6 Eng. Law and Equity R. 106; I: Central v. Collins, 40 Georgia, 582; 3 Blatchford v. Ross, 54 Barb. 42.

Walker v. Mad River, etc. 8 Ohio, 38; Cooper v. Williams, 4 Ohio, 253.

to the injury of others. The protection of the rights of shareholders in incorporated companies against the improper or illegal action of other shareholders, or of the officers of the company, is a favorite branch of the jurisdiction of equity by injunction. And it may be asserted, as a general rule, that courts of equity will enjoin, on behalf of the stockholders of an incorporated company, any improper alienation or disposition of the corporate property for other than corporate purposes, and will restrain the commission of acts which are contrary to law and tend to the destruction of the franchise, as well as the improper management of the business of the company, or a wrongful diversion of its funds. 1

$90. Railroad companies are often confronted with injunction proceedings at the very outset of their enterprise. In its reluctance to interfere with public improvements, equity will refuse an injunction in favor of a person who has been guilty of great laches in the assertion of his rights, that laches being an implied assent to the construction of the work which he afterwards seeks to restrain. 2 Where, however, an action at law is pending to test the legal right of way of the company, an injunction may be allowed to restrain operations pending the trial. If the exercise of the rights to enter upon land for the construction of a railroad is under color of law, but without com

1 Kean v. Johnson, 1 Stockt. 401, a leading American case; Manderson v. Commercial, etc. 28 Pa. St. 379; Sears v. Hotchkiss, 25 Conn. 171; Bagshaw v. Eastern, etc. 7 Hare, 114; Colman v. Eastern, etc. 10 Beav. 1; Attorney General v. Great, etc. 1 Dr. & Sm. 154; Central, etc. v. Collins, 40 Geo. 582.

Greenhalgh v. Manchester, etc. 3 Myl. & C. 784.

3 Champlin v. Morgan, 18 Ill. 293.

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