of negligence, that it was not rebutted simply by shewing that it was rendered necessary to save the life of a person who had attempted to cross in front of the train but that the company must go further and shew that the cause which led to the necessity of stopping the train was not brought about by any negligence on their part: Angus v. London, Tilbury & South End R.W. Co. (1906), 22 Times L.R. 222.

Street Railway-Assumption of Ownership by Municipality-Award of Arbitrators-Principle of Valuation-Allowance for Value of FranchiseAllowance for Compulsory Taking-Street Railway Act, sec. 41.

Arbitrators were appointed under the Street Railway Act, R.S.O. 1897, ch. 208, to determine the value of the appellants' railway and all real and personal property in connection with the working thereof, the ownership of which had been assumed, under the provisions of sec. 41 (1) of the Act,* by a town corporation, part of the railway being laid within the town. The arbitrators in their award fixed on a certain sum as "the actual present value of the railway and of the real and personal property in connection with the working thereof," and stated that in arriving at that value they had "valued the railway as being a railway in use and capable of being used and operated as a street railway," and that they had "not allowed anything for the value of any privilege or franchise whatsoever," in either of the municipalities in which the railway was laid. They further stated that they had not been able to assent to the contention of the company that the proper mode of valuation should be to capitalize the amount of the permanent net earning power of the railway, and that they had not reached their valuation in any way on that basis, but had "considered only the actual present value:"

* R. S. O. 1897, ch. 208, sec. 41.-(1) No municipal council shall grant to a street railway company any privilege under this Act for a longer period than twenty years, but at the expiration of twenty years from the time of passing the first by-law which is acted upon, conferring the right of laying rails upon any street, or at such earlier date as may be fixed by agreement, the municipal corporation may, after giving six months' notice prior to the expiration of the period limited, assume the ownership of the railway, and all real and personal property in connection with the working thereof, on payment of the value thereof, to be determined by arbitration.

Held, Moss, C.J.O., dissenting, that the arbitrators had erred in their method of valuation, and that in the case of a railway producing, as the appellants' railway did, a considerable permanent profit, the proper method of valuation was to take its net permanent revenue and capitalize that, the result representing its real value.

Stockton and Middlesbrough Water Board v. Kirkleatham Local Board, [1893] A. C. 444, distinguished.

Right of owner to allowance of 10 per cent. as for compulsory taking discussed.

Judgment of BRITTON, J., reversed, and award remitted to the arbitrators for reconsideration.

THIS was an appeal by the company from the judgment of BRITTON, J., dismissing their appeal from the award of arbitrators appointed to determine the value of their railway and of all the real and personal property in connection with the working thereof, under sec. 41 of the Street Railway Act, R.S.O. 1897, ch. 208. The arbitrators made their award on the 29th December, 1906, fixing the value of the railway and the said real and personal property at the sum of $75,200.

The portion of the award which is material in respect of the appeal is as follows:

"In arriving at the above value, we have valued the railway as being a railway in use and capable of being used and operated as a street railway, and have not allowed anything for the value of any privilege or franchise whatsoever, either in the town of Berlin or in the town of Waterloo.

"It was argued before us, on behalf of the street railway company, that the mode and principle of valuation should be to ascertain the amount of the present net earning power of the railway and to capitalize this amount, so as to reach the correct value of the railway and the real and personal property in connection therewith. We have not been able to assent to that contention, and have not reached our valuation as above in any way on that basis, but have considered only the actual present value.

"It was argued, on behalf of the Berlin and Waterloo Street R.W. Co., that if our valuation was upon actual present value, we should add to the amount found by us as such present value ten per cent. of that value as for compulsory taking. We have not been able to accede to this contention, and have not added anything on that account."

From this award the company appealed, and the appeal was argued before BRITTON, J., in Weekly Court, on the 13th February, 1907.

H. J. Scott, K.C., for the appellants.

H. L. Drayton and J. A. Scellen, for the respondents.

March 8, 1907. BRITTON, J.: This is an appeal by the Berlin and Waterloo Street R.W. Co. from an award of three arbitrators, dated the 29th December, 1906, awarding to the railway company $75,200 for their railway and property.

The application is to set aside the award, or to increase the amount, or to revoke the submission, or for some order by way of relief, upon grounds stated in the notice of motion. of the questions raised have already been determined.

Some

Upon a special case stated by the arbitrators for the opinion of the Court, MacMahon, J., decided that sec. 65 of 6 Edw. VII. ch. 31 prevents the repeal of ch. 208, R.S.O. 1897, as affecting the present reference, and, further, that the parties are bound by the agreement between them dated 21st June, 1906. See Re Town of Berlin and Berlin and Waterloo Street R.W. Co. (1906), 8 O.W.R. 284.

That decision is binding upon me. Upon the argument nothing was abandoned, and every objection was formally presented.

The main question presented, as I regard it, was that the appellants were entitled, as part of the value of their railway and as part of the property used in connection therewith, to the franchises, operating agreements, and other contract privileges and benefits incidental thereto.

It was conceded upon the argument that the appellants cannot succeed unless this case is distinguished on principle, or by reason of the difference in the Acts which govern, from Stockton and Middlesbrough Water Board v. Kirkleatham Local Board, [1893] A.C. 444 (House of Lords).

In the Stockton case the special Act provided that when so required by the sanitary authority of any such outlying district

the board should sell to such sanitary authority the mains, pipes, and fittings belonging to the board within that district "at a price to be fixed, in default of agreement, by an arbitrator "; and after such sale the board should cease to supply water within the district. It was held that upon the true construction of the special Act, the word "price" meant price, and not compensation; and that in fixing the price the basis of calculation should be merely the value of the mains, pipes, and fittings regarded as plant in situ capable of earning a profit, and that the arbitrator must not include, in fixing compensation to the board, anything for the loss of the right to supply water within the outlying district.

It was argued that in the Stockton case the question was one of sale and purchase, and that by sec. 41 of ch. 208, R.S.O. 1897, there is no right given to the municipality to buy, and no obligation on the part of the railway company to sell; but it is here an assuming "the ownership of the railway, and all real and personal property in connection with the working thereof, on payment of the value thereof, to be determined by arbitration." ·

If there is any distinction between purchasing and assuming the ownership of any property, I do not think it assists in determining the question of what the municipality, upon purchasing, or upon assuming the ownership, is to pay for. The municipality is to pay the value of the railway and all real and personal property in connection with the working of it. How is this value to be ascertained?

The transaction is practically one of purchase. Section 42 of the Act (ch. 208, R.S.O. 1897), dealing with the case of where a company's line or lines is or are situated in two or more municipalities and that is the present case-gives to the municipality in which is the greater mileage "the right to exercise the power of purchase herein conferred," and declares that "the corporation purchasing shall thereafter possess all the powers and authority theretofore enjoyed by the company." Again, sec. 45 speaks of the municipal corporation purchasing, and gives power to "transfer its rights to its railway lines or any of them, and the whole or any part of the plant of the railway, to any railway com

pany authorized to operate a railway," subject again to the provisions of sec. 41 as to such railway being assumed by a municipal corporation entitled under that section.

Before the arbitrators Mr. Kappele contended that it was a sale of the railway-a sale of it as a going concern.

In Re City of Kingston and Kingston Light Heat and Power Co. (1902-3), 3 O.L.R. 637, 5 O.L.R. 348, affirmed by the Privy Council on the 20th April, 1904, the words "all the works, plant, appliances, and property of the company used for light, heat, and power purposes, both gas and electric," were held not to include anything "for the value of the earning power or franchise of the company."

In Edinburgh Street Tramways Co. v. Lord Provost, etc., of Edinburgh, [1894] A.C. 456, the decision was really upon the following words, “shall sell to them their undertaking, or so much of the same as is within such district, upon terms of paying the then value of the tramway, and all lands, buildings, works, materials, and plant of the promoters suitable to and used by them for the purposes of their undertaking within such district." As I read that case, the decision would have been the same if the words in brackets in the Act, which I have left out, were not there at all.

It was held that the word "tramway" was used in the Act as meaning the structure laid down on the highway, and nothing more; therefore the value of the tramway must be measured by what it would cost, at the date of the sale, to construct the lines, subject to a deduction for "depreciation, and that rental value must not be taken into consideration."

The elaborate judgments in that case cover the whole ground, but I do not need to make further citations therefrom. On principle I am unable to distinguish it from the present case. The arbitrators were right in valuing "the railway as being a railway in use, and capable of being used and operated as a street railway." In that sense the railway was considered as a "going concern," but, apart from that, nothing was allowed for the value of any privilege or franchise in Berlin or Waterloo. The arbi