Franklin Tel Co v. Harrison

• Decision Date: 16 May 1892
• Citation: 36 L.Ed. 776,145 U.S. 459,12 S.Ct. 900
• Parties: FRANKLIN TEL. CO. et al. v. HARRISON et al
• Court: U.S. Supreme Court

145 U.S. 459

12 S.Ct. 900

36 L.Ed. 776

FRANKLIN TEL. CO. et al. v. HARRISON et al.

May 16, 1892.

STATEMENT BY MR. JUSTICE HARLAN.

Mr. Justice HARLAN, after stating the facts in the foregoing language, delivered the opinion of the court.

This suit was brought to obtain a decree restraining the appellants, the defendants below, from terminating or in any wise interlering with the use by the appellees, the plaintiffs below, of a telegraph wire upon the poles of the defendants between Philadelphia and New York, and requiring the defendants to maintain such wire in good working order for the use of plaintiffs and their licensees.

The plaintiffs base their claim to this relief upon a written contract made in 1867 with the Franklin Telegraph Company, a Massachusetts corporation, acting for itself and other companies. As the case depends upon the construction of that contract, it is given in full, as follows:

'Memorandum of agreement made this 21st day of May, 1867, by the Franklin Telegraph Company for their own account, and on behalf of the Insulated Lines Telegraph Company, of the first part, and Thomas Harrison, M. Leib Harrison, John Harrison, George L. Harrison, Jr., and Thomas S. Harrison, trading as Harrison Brothers & Co., manufacturing chemists of Philadelphia, of the other part:

'Witnesseth, that the party of the first part, for and in consideration of the relinquishment by the parties of the second part to the party of the first part of a valuable contract made by the party of the second part with the Insulated Lines Telegraph Company, hereby grants to the party of the second part the right to put up, maintain, and use a telegraphic wire between the cities of New York and Philadelphia, upon the poles of the Franklin Telegraph Company, or of the Insulated Lines Telegraph Company, or of those persons or corporations whose property has lately been purchased by or consolidated into the stock of the party of the first part. And the party of the second part are privileged at their option to allow four other parties to use the same with them, they and the licensees aforesaid to have priority in the use of the said wire, for transmission of messages free of all expense; the party of the first part to have the use of the same when not so employed. And in consideration of allowing the use of said wire to the party of the first part when they, the said parties of the second part, and the licensees aforesaid, are not using the same, the party of the first part agrees, said wire having first been put up to the acceptance of J. G. Smithe, the superintendent of said Franklin Telegraph Company, and accepted by him, to keep and maintain at their own expense the said wire in good working order to and between the offices of the parties of the first part in New York and Philadelphia, and between said offices and the places of business of the parties of the second part and such four other persons or firms in the said cities of New York and Philadelphia, all expenses of batteries, etc., connected with the working of said wire to be paid by the parties of the first part. At the expiration of ten years the party of the second part agree that their private wire shall belong to the parties of the first part; after which time the parties of the first part agree to lease the same to the party of the second part, for the use of themselves and such other four persons or firms as the party of the second part shall suffer and permit or license to use the same, for the sum of six hundred dollars per annum, payable quarterly, and upon the same terms in all other respects as if the wire had not been given up to the parties of the first part.

'The party of the second part, however, agree that no assignment by them of their right under this contract shall give their assignees the right to demand a lease of the said wire after the expiration of the ten years, which right is to be a personal privilege of the party of the second part, or of that firm for the time being.

'It is further agreed that the right of giving the use of the wire to four other parties shall be exercised by the party of the second part or their assignees only by giving the same to any person or firm not being a telegraph company, a banker, or stock or exchange broker, or railroad company.

'And in case the party of the second part shall procure, a charter to carry on the business they are now engaged [in,] or a similar business, the privileges and rights of the party of the second part shall inure to said corporation in like manner as if such corporation had been named as the party of the second part herein.

'In case of any disagreement on that or any other point embraced in this contract, the decision of the same shall be left to two disinterested persons mutually chosen by the parties hereto, with a right to call in a third as umpire, whose decision shall be final.

'In case those objections are held valid by the arbitrators, and not acquiesced in by the parties of the second part, the party of the first part reserves the right to purchase the said wire at a fair valuation, to be determined by referees in the same manner as any other matter in this agreement; with the above exception, the party of the second part has the right of transfer.

'No change in the firm or firm name of the party of the second part, or those interested through them, by death or retirement, or by addition of members to said firm, or from any other cause, shall vitiate the right or title of the party of the second part under this contract, or destroy its continuance in full force to such new firm, and the members thereof, as if they were named herein.

'The parties of the second part, and those interested through them, are not to do other than their own legitimate mercantile and personal business. Should they be willing to transmit any other messages, they are to charge the company's regular tolls, and hand the same over weekly to the proper officers of said companies, without discount or diminution.

'In case of a violation of this contract in this respect by the party of the second part, or their licensees, they shall respectively pay the parties of the first part four times the current rates of similar messages and the expenses of recovering the same, as liquidated damages; and if this should continue, and be found by arbitration to have been intentionally persisted in, it shall terminate this contract against the offending party, whether Harrison Bros. & Co. or either of their licensees.

'It is agreed by the Franklin and Insulated Lines Telegraph Companies that no debts at present made or hereafter contracted shall in any way affect or injure the rights of the parties of the second part under this agreement, or impair their title to the wire put up by them on the poles of said companies.

'In case the said wire shall at any time be out of order, or incapable from any cause of being used, the parties of the first part will transmit the messages of the party of the second part and their licensees from any of their offices to and from New York and Philadelphia in regular turn, with all other messages received for transmission, free of all charge and expense.'

The plaintiffs are the successors in business of Harrison Bros. & Co., parties to the above contract, and entitled to all the rights conferred, and subject to all the liabilities imposed, by its provisions.

The Franklin Telegraph Company, June 14, 1876, leased all its property and franchises to the Atlantic & Pacific Tele- graph Company, a corporation of New York, for the term of 99 years from May 1, 1876; and on the 19th day of January, 1881, the latter corporation sold and transferred all its property and franchises (except the franchise to continue its corporate existence) to the Western Union Telegraph Company.

The plaintiffs, at their own expense, put up the required wire on the poles of the Franklin Telegraph Company between New York and Philadelphia. After May 21, 1877,—10 years from the date of the above contract having expired,—they enjoyed its use, and paid to the Atlantic & Pacific Telegraph Company the stipulated sum of $600 per annum.

On the 20th of August, 1880, the plaintiffs received from the Atlantic & Pacific Telegraph Company a communication, in which it was said:

'In the contract entered into between your house and the Franklin Telegraph Company in May, 1867, it was contemplated that the telegraph company should have the use of the wire leased during a considerable portion of the time, in consideration of which the telegraph company were to maintain the line in working order and furnish battery power therefor. Your own business and that of your licensees has deprived us more an more of the use of this wire, until we find ourselves furnishing the exclusive use of a wire between New York and Philadelphia, maintaining and supplying battery for it, for the sum of $600 per annum. As this cannot be afforded and was not contemplated by the contract, and as the contract fixes no limit of continuance, we respectfully give notice that we shall consider it terminated from and after 21st of November next, being the end of the next quarter. Should you desire to continue the connection, we shall be glad to accommodate you upon as favorable terms as can be afforded, and would like to have your decision at an early day, that we may make suitable provision for you, if desired, upon our new and substantial line now in process of construction.'

To this the plaintiffs replied: 'We are sorry that you still insist on your view of our rights under the contract. We had hoped that the views that we lately presented to you would when you came to think the matter over, convince you. We see no way, however, of settling the case except by having the meaning of the contract decided. Wesuggest, therefore, that an amicable suit be instituted for this purpose, and that your notice be extended so as to cover the time necessary to...