Western Union Telegraph Company v. Ann Arbor Railroad Company

This was a bill filed in the circuit court of Benzie county, Michigan, by the Western Union Telegraph Company against the Ann Arbor Railroad Company, to restrain defendant from interfering with the rights of complainant in a certain telegraph line along defendant's railroad. The bill stated the Western Union Telegraph Company to be 'a corporation organized and existing under the laws of the state of New York, and a citizen of the said state of New York,' and the Ann Arbor Railroad Company to be 'a corporation organized and existing under the laws of the state of Michigan and a citizen of said state of Michigan.' The bill alleged that on the 25th day of September, 1890, the Frankfort & Southeastern Railroad Company, a corporation of the state of Michigan, owned and operated a railroad from Frankfort to near Copemish, Michigan; that on that day complainant entered into a contract with the Frankfort & Southeastern Railroad Company for the construction and maintenance of a telegraph line along the entire length of its road; that in pursuance of the contract and in May, June, and July, 1891, complainant built the telegraph lines provided for therein; that one wire was erected for the joint use of the railroad company and complainant, and a loop to Frankfort and back was put on the poles for the exclusive use of complainant. It was further alleged that the railroad of the Frankfort & Southeastern Railroad Company was sold some time in May, 1892, and transferred to the Toledo, Ann Arbor, & North Michigan Railroad Company, a corporation organized and existing under the laws of the state of Michigan; that afterwards said last-mentioned company mortgaged their entire railroad to the Farmers' Loan & Trust Company as trustee, and said mortgage being in default a bill was filed to foreclose it in September, 1893, in the circuit court of the United States for the northern district of Michigan, to which foreclosure suit complainant was not a party; that the whole road was sold under order of court and conveyed to the Ann Arbor Railroad Company, and the sale and conveyance were confirmed; that the last-mentioned company now claimed to be in possession and operating the road formerly known as the Frankfort & Southeastern Railroad. And, further, that the Ann Arbor Railroad Company purchased the road with full knowledge of complainant's rights, but that it insisted that it was not bound by the contract made with the Frankfort & Southeastern Railroad Company, and had given complainant written notice to that effect.

The sixth and seventh paragraphs of th b ill were as follows:

'6th. Your orator is now and long has been doing an extensive telegraph business in many parts of the United States. On January 7, 1867, it filed with the Postmaster General its acceptance of the provisions of the act of the United States passed July 24, 1866.

'7th. It avers that the provisions of the contract with said Frankfort & Southeastern Railroad Company are binding on said Ann Arbor Company, and that, independent of said contract, it has a right to maintain its telegraph line on what was formerly said Frankfort & Southeastern Railroad under the provisions of the statute of the United States.'

It was further averred that about October 1, 1895, the Ann Arbor Railroad Company took possession of complainant's wires between Thompsonville, near Copemish, and Frankfort, and cut off their connection with its other wires, and deprived complainant of telegraphic connection with Frankfort; that the value of the telegraph lines was at least the sum of $3,000, and the damages arising through loss of business large, but incapable of accurate calculation; that October 14, 1895, complainant reconnected the telegraph lines running from Thompsonville to Frankfort, and so again opened telegraphic communication with the latter place, and was now in full possession and use of said lines; but that complainant was justly apprehensive that, unless restrained by injunction, defendant would again seize said telegraph lines and deprive complainant of their use.

The prayer was for process and answer, 'and that an injunction, both preliminary and final, may be issued out of and under the seal of this court, commanding the said Ann Arbor Railroad Company and all its officers and agents to absolutely desist and refrain from in any way interfering with the rights of complainant as alleged in this bill, in the telegraph wires and poles running from Thompsonville to Frankfort, or its possession of the same, and that said defendant allow said complainant to reconnect said wires to its main line on the Chicago & West Michigan Railroad, and to use said wires for its telegraph business in the same way as it was accustomed to use them before its rights were disturbed by said defendant, and that defendant be required to carry out said contract in good faith and for such other and further or different relief, or both, as may be agreeable to equity and good conscience.'

Defendant filed its petition and bond for the removal of the cause into the circuit court of the United States for the eastern district of Michigan, alleging that it was a citizen of the state of Michigan, and that complainant was a citizen of New York, and then stating: 'Your petitioner further shows to the court that the matter and amount in dispute in the above-entitled cause exceeds, exclusive of interest and costs, the sum and value of two thousand dollars ($2,000); that this suit is one arising under the Constitution and laws of the United States, and especially under the act of Congress of July 24, 1866, now contained in § 5263 of the Revised Statutes of the United States and the amendments thereto.' The cause having been removed, defendant filed an answer and cross bill, setting up the existence of a mortgage prior to the alleged contract and its foreclosure, and other matters. Certain facts were stipulated, and the cause submitted. The circuit court decreed a dismissal of the bill. From this decree an appeal was taken to the circuit court of appeals, and that court affirmed the decree. 61 U.S. App. 741, 90 Fed. Rep. 379, 33 C. C. A. 113. From the decree of the circuit court of appeals the Western Union Telegraph Company appealed to this court.

Messrs. John F. Dillon, George H. Fearons, and Rush Taggart for appellant.

Mr. Alexander L. Smith submitted the case for appellee.

Mr. Chief Justice Fuller delivered the opinion of the court: