Pensacola Telegraph Company v. Western Union Telegraph Company

Page 2 APPEAL from the Circuit Court of the United States for the Northern District of Florida.

In 1859, an association of persons, known as the Pensacola Telegraph Company, erected a line of electric telegraph upon the right of way of the Alabama and Florida railroad, from Pensacola, in Florida, to Pollard, in Alabama, about six miles north of the Florida line. The company operated the whole line until 1862, when, upon the evacuation of Pensacola by the Confederate forces, the wire was taken down for twenty-three miles, and Cooper's Station made the southern terminus. In 1864, the whole was abandoned, as the section of the country in which it was situated had fallen into the possession of the United States troops.

On the 1st of December, 1865, the stockholders met; and it appearing that the assets of the company were insufficient to rebuild the line, a new association was formed for that purpose, with the old name, and new stock to the amount of $5,000 subscribed. A resolution was adopted by the new company to purchase the property of the old, at a valuation put upon it in a report submitted to the meeting, and a new board of directors was elected.

A meeting of the directors was held on the 2d of January, 1866, at which the president reported the completion of the line to Pensacola, and a resolution was adopted, authorizing the purchase of wire for its extension to the navy-yard. The attorneys of the company were also instructed to prepare a draft of a charter, to be presented to the legislature for enactment.

On the 24th of July, 1866, Congress passed the following act: -

'AN ACT to aid in the construction of telegraph lines, and to secure to the government the use of the same for postal, military, and other purposes.

'Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, that any telegraph company now organized, or which may hereafter be organized, under the laws of any State in this Union, shall have the right to construct, maintain, and operate lines of telegraph through and over any portion of the public domain of the United States, over and along any of the military or post roads of the United States which have been or may hereafter be declared such by act of Congress, and over, under, or across the navigable streams or waters of the United States: Provided, that such lines of telegraph shall be so constructed and maintained as not to obstruct the navigation of such streams and waters, or interfere with the ordinary travel on such military or post roads. And any of said companies shall have the right to take and use from such public lands the necessary stone, timber, and other materials for its posts, piers, stations, and other needful uses in the construction, maintenance, and operation of said lines of telegraph, and may pre-empt and use such portion of the unoccupied public lands subject to pre-emption through which its said lines of telegraph may be located as may be necessary for its stations, not exceeding forty acres for each station; but such stations shall not be within fifteen miles of each other.

'SECT. 2. And be it further enacted, that telegraphic communications between the several departments of the government of the United States and their officers and agents shall, in their transmission over the lines of any of said companies, have priority over all other business, and shall be sent at rates to be annually fixed by the Postmaster-General.

'SECT. 3. And be it further enacted, that the rights and privileges hereby granted shall not be transferred by any company acting under this act to any other corporation, association, or person: Provided, however, that the United States may at any time after the expiration of five years from the date of the passage of this act, for postal, military, or other purposes, purchase all the telegraph lines, property, and effects of any or all of said companies at an appraised value, to be ascertained by five competent disinterested persons, two of whom shall be selected by the Postmaster-General of the United States, two by the company interested, and one by the four so previously selected.

'SECT. 4. And be it further enacted, that before any telegraph company shall exercise any of the powers or privileges conferred by this act, such company shall file their written acceptance with the Postmaster-General, of the restrictions and obligations required by this act.' 14 Stat. 221; Rev. Stat., sect. 5263 et seq.

All railroads in the United States are by law post-roads. Rev. Stat., sect. 3964; 17 Stat. 308, sect. 201.

On the 11th of December, 1866, the legislature of Florida passed an act incorporating the Pensacola Telegraph Company, and granting it 'the sole and exclusive privilege and right of establishing and maintaining lines of electric telegraph in the counties of Escambia and Santa Rosa, either from different points within said counties, or connecting with lines coming into said counties, or either of them, from any point in this [Florida] or any other State.' The capital stock was fixed at $5,000, with the privilege of increasing it to such an amount as might be considered necessary. The company was authorized to locate and construct its lines within the counties named, 'along and upon any public road or highway, or across any water, or upon any railroad or private property for which permission shall first have been obtained from the proprietors thereof.' In this act all the stockholders of the new association which had rebuilt the line were named as corporators. No meeting of the directors was held until Jan. 2, 1868, when the secretary was instructed to notify the stockholders 'that the charter drawn up by Messrs. Campbell & Perry, attorneys, as per order of board, Jan. 2, 1866,' had been passed.

On the 5th of June, 1867, the directors of the defendant, the Western Union Telegraph Company, a New York corporation, passed the following resolution, which was duly filed with the Postmaster-General:--

'Resolved, that this company does hereby accept the provisions of the act of Congress, entitled 'An Act to aid in the construction of telegraph lines, and to secure to the government the use of the same for postal, military, and other purposes,' approved July 24, 1866, with all the powers, privileges, restrictions, and obligations conferred and required thereby; and that the secretary be, and he is hereby, authorized and directed to file this resolution with the Postmaster-General of the United States, duly attested by the signature of the acting president of the company and the seal of the corporation, in compliance with the fourth section of said act of Congress.'

In 1872, the property of the Alabama and Florida Railroad Company, including its right of way and railroad, was transferred to the Pensacola and Louisville Railroad Company; and on the 14th of February, 1873, the legislature of Florida passed an act, which, as amended Feb. 18, 1874, authorized the last-named company 'to construct, maintain, and operate a telegraph line from the Bay of Pensacola along the line of the said (its) road as now located, or as it may hereafter be located, and along connecting roads in said county to the boundary lines of the State of Alabama, and the said lines may connect and be consolidated with other telegraph companies within or without the State, and said company may pledge, mortgage, lease, sell, assign, and convey the property appertaining to the said telegraph lines, and the rights, privileges, and franchises conferred by this act, with full power in such assignees to construct, own, and operate such telegraph lines, and enjoy all the privileges, rights, and franchises conferred by this act; but in such case the said railroad company shall be responsible for the proper performance of the duties and obligations imposed by this act.'

This was within the territory embraced by the exclusive grant to the Pensacola Telegraph Company.

On the 24th of June, 1874, the Pensacola and Louisville Railroad Company granted to the Western Union Telegraph Company the right to erect a telegraph line upon its right of way, and also the rights and privileges conferred by the acts of February, 1873 and 1874. The Western Union Company immediately commenced the erection of the line; but before its completion, to wit, July 27, 1874, the bill in this case was filed by the Pensacola Telegraph Company to enjoin the work and the use of the line, on account of the alleged exclusive right of that company under its charter. Upon the hearing, a decree was passed dismissing the bill, and this appeal was taken.

Mr. Charles W. Jones, for the appellant.

Except when prohibited or restricted by the provisions of the State Constitution, the legislature can grant exclusive privileges and franchises within its own jurisdiction. Cooley, Const. Lim. 281; Gibbons v. Ogden, 9 Wheat. 1; West River Bridge Co. v. Dix et al., 6 How. 507; S.C.. 16 Vt. 446; The Binghamton Bridge, 3 Wall. 51; Shorter v. Smith, 9 Ga. 529; The Proprietors of the Piscataqua Bridge v. The New Hampshire Bridge et al., 7 N. H. 35; Boston Water Power Co. v. Boston & Lowell Railroad Corporation et al., 23 Pick. (Mass.) 360; Boston & Lowell Railroad Corporation v. Salem & Lowell Railroad Co. et al., 2 Gray (Mass.), 1; California Telegraph Co. v. The Atlantic Telegraph Co., 22 Cal. 398; Hazen et al. v. The Union Bank of Tennessee, 1 Sneed (Tenn.), 115; The People v. Bowen, 30 Barb. (N. Y.) 24; Livingston v. Van Ingen et al., 9 Johns. (N. Y.) 506; Ogden v. Gibbons, 4 Johns. (N. Y.) Ch. 150.

In Florida there were no such restrictions or prohibitions. On the contrary, by the express terms of sect. 3, art. 15, of her Constitution, the special statute of Dec. 11, 1866, incorporating the appellant and granting the exclusive privileges which are asserted in this suit, is valid.

That statute is not referred to in that of Feb. 14, 1873, or the amendatory act of 1874, and is, therefore, not repealed by a general repealing clause. Crane v. Rider, 22 Mich. 322; State v. Mills, 34 N. J. L. 177; State v. Brannin, 2 Zab. (N. J.) 485; Fostick v. Perrysburg, 14 Ohio St. 474.

The said statute of Dec. 11 is, however, a contract with the State, which cannot be impaired or modified without the company's consent. A subsequent statute interfering with that contract, or the rights thereunder vested, is inoperative and void. Trustees of Dartmouth College v. Woodward, 4 Wheat. 518; State Bank of Ohio v. Knoon, 16 How. 369; Dodge v. Woolsey, 18 id. 331; Jefferson Branch Bank v. Skelly, 1 Black, 436; Franklin Branch Bank v. The State of Ohio, id. 74; The Binghamton Bridge, supra; Farrington v. Tennessee, 95 U.S. 679.

The appellee is a New York corporation; and, in the absence of any legislation of Florida empowering it to exercise its corporate franchises in the latter State, can set up nothing in conflict with the exclusive rights of the appellant under its charter. It has no existence or rights beyond the limits of the State which created it, except by the comity or the enabling acts of other States. The Bank of Augusta v. Earle, 15 Pet. 519; Ohio & Mississippi Railroad Co. v. Wheeler, 1 Black, 286; Paul v. Virginia, 8 Wall. 168; Liverpool Insurance Co. v. Massachusetts, 10 id. 566; Railroad Company v. Harris, 12 id. 65.

The act of 1874, under which the appellee claims by assignment from the Louisville & Pensacola Railroad Company, must be construed with reference to this settled principle. The assignment was not effectual to transfer any franchise, because the assignee was, in this instance, incompetent to take.

The act of Congress of July 24, 1866, has no bearing upon the case. It is in substantially the same terms as that of Aug. 4, 1852, 10 Stat. 28, which grants to any railroad, plank-road, or turnpike company the right of way through the public lands, and the right to take therefrom earth, stone, or wood, for the purpose of construction, and to select sites for depots and workshops. It extends, on certain conditions, efficient aid to any telegraph company whose authorized lines are to be established over the public domain. If it can be construed as conferring upon a corporation of one State the right in another State to do certain acts and enjoy certain privileges in connection with that domain, the indispensable condition is necessarily implied, that, by an enabling statute of such other State, the requisite capacity to do the acts or enjoy the privileges within her limits has been, or will be, bestowed on the corporation. It does not, proprio vigore, enlarge the corporate powers of any company, or authorize it to exercise them in a foreign jurisdiction. If it attempted to do so, it would, to that extent, be clearly void, as an assumption of a power which has been wisely and to the fullest extent lodged with the respective States.

But if the appellee was a Florida corporation, clothed with undisputed authority to establish and work its lines within the county of Escambia, the act would give her-what is not here in issue-a right of way only over the public domain. Congress did not possess, and could not grant, more. The United States acquires no proprietary interest in any railroad by declaring it a post-road. Dickey v. Maysville & Lexington Turnpike Road Co., 7 Dana (Ky.), 113. The only objects thereby attained or sought are the security of the mail and protection of the postal service.

Mr. Perry Belmont, contra.

Telegraphing, as practised by the respondent, is a part of that intercourse which constitutes commerce.

Restrictions upon the free right to erect and maintain telegraph lines operate to regulate that intercourse.

Such restrictions, when imposed by State authority, are void, as contravening the Constitution of the United States.

The act of the legislature of Florida, approved Dec. 11, 1866, relied on by the appellant, not only trespasses upon the domain of Congress, but assumes to forbid what that body has authorized.

The question concerning the power of Congress to enable a corporation to exercise its franchises in a State other than that which created it, is not necessarily involved in determining the rights of the parties. The appellee is exercising certain franchises which the Pensacola and Louisville Railroad Company, pursuant to a statute of Florida, transferred to it by an assignment, which, except within the territory in question, it must be conceded, was as valid and effectual in vesting them as if they had been immediately derived from a legislative grant. The landed proprietors have granted to it the right of occupancy. It is, therefore, lawfully in that State, and has established connections there with its lines coming from other States. The case, therefore, turns upon the single point, whether, after complying with the conditions and regulations imposed by Congress, such a company so carrying on a commercial business may, with all its foreign and internal connections, be excluded, at the instance of another corporation, from certain portions of the State.

MR. CHIEF JUSTICE WAITE delivered the opinion of the court.