Western Union Telegraph Company v. Pennsylvania Railroad Company

Messrs.

This is a bill in equity filed in the circuit court of the District of New Jersey by the appellant against the appellee, the Pennsylvania Railroad Company, to prevent the latter from removing from various railroad companies' rights of way the telegraph lines of the appellant. The bill was filed in aid of a petition on the law side of the court, praying the court to issue its process or take such modes of procedure as might be agreeable to the principles and usages of law, to determine the amount of compensation to be paid by appellant to appellee for the use of the right of way of the appellee, and its branches and connecting lines, to construct, maintain, and operate a line of telegraph over and along such railways, subject to the conditions and provisions named in the act of Congress of July 24, 1866. 14 Stat. at L. 221, chap. 230, Rev. Stat. §§ 5263 et seq. U.S.C.omp. Stat. 1901, p. 3579.

The construction of this act of Congress is the main question in the case.

The appellant, which we shall designate the telegraph company, contends that under certain acts of Congress the roads of the railroad company and all other railroads in the United States are made post roads, and that by the act of July 24, 1866, the telegraph company has the right to construct, maintain, and operate lines of telegraph along said roads upon the payment of compensation to the railroad company. In other words, the contention is that by the act of 1866 the telegraph company is given the power of eminent domain to acquire the right to occupy with its telegraph lines the rights of way of the railroad company.

A summary of the bill is as follows: The telegraph company is a New York corporation; the railroad company is a Pennsylvania corporation. The New Jersey Railroad & Canal Company was incorporated under the laws of New Jersey, and is the owner of a railroad extending from Jersey City, in the state of New Jersey, to the Delaware river at the city of Trenton, in said state, with certain branches, which the bill describes. The railroad company is the owner of a line of railroad extending from the city of Philadelphia to the city of Pittsburg, in the state of Pennsylvania, and in possession and control of the railroads of the New Jersey Railroad & Canal Company in New Jersey, under a lease or leases for a period of 999 years from the 1st of July, 1871. By the laws of New Jersey the said railroads were created and made and are now public highways, and hence are subject to occupation and use of telegraph companies under the provisions and conditions of the act of Congress of July 24, 1866.

The telegraph company was organized in 1851, and began then to construct and has constructed and acquired a continuous system of telegraph lines, which extends through all of the states and territories of the United States, and connects with telegraph lines in the Dominion of Canada, and with lines also in the Republic of Mexico and South American Republics, and with and by submarine cables with the systems of all telegraph lines of foreign countries.

The system operated directly by the telegraph company consists of over 192,000 miles of poles and cables, and over 900,000 miles of wire; and an important part of the system and connected with its main office in New York city, and with other lines leading to the important cities of the West, is the lines of telegraph over and along the lines of railway operated by the railroad company, connecting Jersey City with Philadelphia, and connecting with other lines of the system.

The lines of telegraph along the railways in New Jersey were originally constructed by the American Telegraph Company, a corporation of the state of New Jersey, with the consent of, or under contracts and arrangement with the railway company then owning the said lines of railway, and were constructed more than forty years ago; and since the 20th of September, 1881, the telegraph lines over the right of way of said railroads have been maintained and operated and compensation paid therefor under the provisions of a contract between the telegraph company and the railroad company. The contract granted to the telegraph company the right to place, maintain, and use upon the line of the right of way of the railroad company, and of the railroads owned, operated, or leased by it, a single line of telegraph poles (in certain cases two were authorized), with the privilege of erecting and maintaining thereon such number of wires as the telegraph company might from time to time elect, said lines to be located and placed under the direction of an officer of the railroad company.

The telegraph company agreed to pay annually for the privileges granted the sum of $75,000, in monthly instalments of $6,250, and to deliver to the railroad company certain poles and wire, which were then on certain of their roads. The telegraph company also agreed to transmit the messages of the railroad company at a compensation which was stated.

The provisions for the termination of the agreement and in the event of its termination are as follows:

'Thirteenth. This agreement is to continue in force for and during the term of twenty years from its date, and shall be binding upon the respective companies, their successors and assigns, and neither party shall have the right to assign the whole, or any part hereof, without the consent of the other, given in writing.



'Fifteenth. If any monthly payment herein provided for be not made within sixty days after it shall have become due, and shall have been demanded by written notice, delivered to the treasurer, or an executive officer of the party in default, or if any other covenant herein made shall not, after sixty days' written notice of default and demand made by either party in the manner herein provided, be fulfilled by the other party, the contract may, at the option of the party demanding such fulfilment, be rescinded, and such rescission shall not relieve the party in default from liability for any amount due, or for damages for nonfulfilment of such covenant or of any other covenant.

'Sixteenth. If no new agreement be made by the parties hereto, the telegraph company shall, at the termination of this contract, or at any time hereafter, upon receiving written notice from the railroad company, remove, within six months from the receipt of said notice, all of its poles and wires, and leave the property of the railroad company in good condition and free from the encumbrance thereof to the satisfaction of the general manager or other proper officer of the railroad company, and if not so removed the railroad company may remove them at the expense of the telegraph company: Provided, however, That the payment agreed to be made by the telegraph company to the railroad company in the sixth clause hereof, and by the railroad company in the eighth clause, shall not apply to the said six months, the companies respectively hereby expressly agreeing to waive the same.'

The agreement contains the following provision:

'Any easement or right of way heretofore acquired by the telegraph company upon any of the roads embraced in this agreement, either directly by contract or by assignment of contracts or agreements made by other companies with the railroad company, or with any of the companies whose roads or property are embraced in the schedule hereto attached, is hereby relinquished and abandoned, and the rights and easements of the telegraph company upon the right of way of said railroad company shall be such only as are granted by this agreement, and shall cease with its termination.'

The agreement was carried out and the payments made as provided, the last being made on the 20th of June, 1902.

On the 14th of May, 1902, the railroad company notified the telegraph company in writing to remove its poles, wires, and other property from the right of way and property of the railroad company and of the other companies mentioned in the agreement, within six months from the 1st day of June, 1902. The notice stated that in default of compliance the railroad company would itself cause such poles, wires, and other property of the telegraph company to be removed from the right of way at the expense of the latter company.

It is alleged in the bill that, by reason of the facts set forth, and by reason of the receipt of payments after the 21st of September, 1901, and after the notice of removal, the agreement was continued in force, and that the railroad company had no right, notwithstanding the notice of May 14, 1902, to remove or cause to be removed from the line of its railways the poles, wires, and telegraph property of the telegraph company at the end of six months from the 1st day of June, 1902.

It is also alleged that the lines of telegraph have been maintained and operated over the lines of railway without interfering with the ordinary use and operation thereof, or the ordinary travel thereon, and, as now located, maintained, and operated, can be continued so as not to interfere with the future operation and maintenance of the said railways, or the ordinary travel upon them, subject only to such slight changes of some of the poles of said lines as may be incident to the construction of additional tracks upon said right of way, or shifting the tracks already existing on said railways.

May 20, 1902, the president and general manager of the telegraph company, in a letter addressed to the president of the railroad company, acknowledged receipt of the notice of removal of May 14, and stated that he understood that negotiations had been in progress between the officers of the respective companies for a renewal of the contract of September 20, 1881, and declared that he would be glad to take up the matter actively either in New York or in Philadelphia, at the convenience of the president of the railroad company. The following day the president of the railway company replied, stating that none of the companies named 'desires to renew or extend its contract with the Western Union Telegraph Company,' and that the contract between the companies had terminated under its terms on the 20th of September, 1901, and the notice to the telegraph company to remove its poles had been given in accordance with the provisions of the contract. A willingness to discuss any temporary arrangement which might be necessary during the time allowed for the removal of the poles of the telegraph company was expressed. A somewhat lengthy reply was made, in which the telegraph company claimed that since some of the contracts referred to by the railroad company were perpetual in their terms, or ran during the life of the parties, they could not be terminated by one party without the consent of the other; asserted a right, under the laws of Congress and the laws and Constitution of the state of Pennsylvania, to maintain and operate its lines of telegraph on the railroad company's roads, subject only, at most, to make a fair and reasonable compensation for such right, which it offered to pay, and requested, if the railroad company declined to contract further with it, a meeting for the purpose of agreeing upon the amount of such compensation, or to submit the matter to arbitration. The railroad company replied that the meeting requested would be useless, as the telegraph company asserted rights upon the lines of the railroad company which could not be conceded. It was stated in the reply that the railroad company had agreed and contracted with the Postal Telegraph Cable Company covering the railroads included in the contract with the telegraph company, and that the Postal Telegraph Cable Company would immediately commence transacting a commercial telegraph business at the stations of the railroad company. The railroad company offered to permit the telegraph company to do business at the railroad stations until September 30 next ensuing (1902); and for the purpose of avoiding unnecessary loss to the telegraph company, incident to the removal of its poles, the railroad company expressed a willingness to purchase, at a fair valuation, such of the lines as it could make use of.

It is alleged in the bill that the notice given to the telegraph company to remove its poles from the railroads, and the refusal of the railroad company to negotiate further with the telegraph company, were not induced from any compulsion or necessity to use the space occupied by the telegraph lines, but that the purpose of the railroad company is to place upon the lines of railway telegraph lines to be owned or used by another telegraph company; and it is alleged that the lines of the telegraph company will not interfere with the ordinary travel and use of the railways. The directors of the telegraph company accepted the act of July 24, 1866, and filed an acceptance with the Postmaster General of the United States June 8, 1867.

The acts of Congress hereinafter mentioned and set out are referred to in the bill, and a full compliance therewith alleged, whereby, it is further alleged, the telegraph company became and is entitled to maintain its lines on the railroads of the railroad company upon paying just compensation, the payment of which was offered. The prayer is that the court order and decree the amount of compensation to be paid by the telegraph company, or, if the court order compensation to be ascertained at law, it then be decreed that upon payment of such compensation a perpetual injunction issue.

A preliminary injunction was ordered. 120 Fed. 981. It was reversed by the circuit court of appeals. 59 C. C. A. 113, 123 Fed. 33.

A controversy ensued upon the form of the decree. The circuit court of appeals simply reversed the order of the circuit court granting a preliminary injunction. The telegraph company moved that the decree be modified so as to direct the dismissal of the bill. The motion was refused, and the telegraph company took an appeal to this court. Subsequently the circuit court sua sponte entered an order dismissing the bill, and the telegraph company appealed therefrom to the circuit court of appeals. The case was then removed to this court by certiorari.

H. D. Estabrook, Rush Taggart, John F. Dillon, and Richard Vliet Lindabury for the Western Union Telegraph Company.

[Argument of Counsel from pages 547-555 intentionally omitted]

Mr. John G. Johnson for the railroad company.

Statement by Mr. Justice McKenna:

[Argument of Counsel from pages 555-557 intentionally omitted]

Mr. Justice McKenna, after stating the case as above, delivered the opinion of the court.