St. Paul, M. & M. Ry. Co. v. Western Union Telegraph Co.

• Decision Date: 03 November 1902
• Docket Number: 1,571.
• Citation: 118 F. 497
• Parties: ST. PAUL, M. & M. RY. CO. v. WESTERN UNION TEL. CO. et al.
• Court: U.S. Court of Appeals — Eighth Circuit

118 F. 497

ST. PAUL, M. & M. RY. CO. v. WESTERN UNION TEL. CO. et al.

No. 1,571.

United States Court of Appeals, Eighth Circuit.

November 3, 1902

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M. D. Grover and George B. Young, for appellant.

Rush Taggart and John F. Dillon (C. M. Ferguson and George H. Fearons, on the brief), for Western Union Tel. Co.

George C. Ripley (Burt F. Lum, on the brief), for Northwestern Tel. Co.

Before CALDWELL, SANBORN, and THAYER, Circuit Judges.

THAYER Circuit Judge, after stating the case as above, .

The circuit court decided, in substance, that the seventh and eleventh paragraphs of the Smith & Simmons contract, quoted above in the statement, when considered together, granted to Smith & Simmons 'a perpetual easement or right to establish, construct, and continue in the operation of a line of telegraph along the line (of railroad) specified in the contract (to wit, from St. Paul to Watab, Minn.), and along such further lines of railroad as should be constructed by the St. Paul & Pacific Railroad Company, and that it became a vested property right' from the date of that contract or grant, which could not be extinguished save by a reconveyance; that the grant of the easement aforesaid was 'a then present and vested grant, covering not only the line particularly described' in the Smith & Simmons contract, 'but equally the right of way along railways thereafter built by' the St. Paul & Pacific Railroad Company and its successors in interest, although such rights of way had not then been acquired, and their location was at the time unknown; that this perpetual easement, so termed, was undisturbed and continued to exist, notwithstanding the execution of the three subsequent telegraphic contracts mentioned in the foregoing statement; that these subsequent agreements, to wit, the Farley contract and contracts A and B, contained a further assurance of the right or easement theretofore granted; and that, at most, such subsequent contracts only abrogated those executory provisions of the Smith Simmons contract which determined how the lines of telegraph, as between the telegraph company and the railroad company, should be operated and maintained. The circuit court further held that the easement thus imposed upon the right of way of the St. Paul & Pacific Railroad Company by the Smith & Simmons contract was not extinguished by the foreclosure of the mortgages under which the Manitoba Company, the present appellant, acquired the property, rights, and franchises of the St. Paul & Pacific Railroad Company, but that the property in question passed into the custody of the appellant burdened with the easement, which easement also became attached to all the lines of railroad subsequently constructed or acquired by the Manitoba Company. The decree from which the appeal is taken rests upon these fundamental propositions, which were decided by the learned judge of the trial court; and it depends mainly upon the proposition that the Smith & Simmons contract granted a perpetual easement of the kind above described, which could not be released or extinguished save by a formal written conveyance. In view of the important consequences deduced from this premise, it is the first proposition which deserves consideration.

It will be seen that the stipulations contained in the Smith & Simmons contract are generally of an executory character, and that they consist principally of personal covenants on the part of the contracting parties, all of which they could modify or discharge at their mere pleasure by an oral agreement to that effect, or by making another contract covering the same subject-matter, or by acts in A is clearly evidencing an intent to modify or discharge them. The only provision found within the four corners of the instrument which lends any color to the claim that the St. Paul & Pacific Railroad Company intended to grant a perpetual easement to erect and maintain lines of telegraph on rights of way which it then owned or might thereafter at any time acquire is found in the seventh paragraph, where it is said:

'The said party of the second part (the railroad company) does hereby grant to the said parties of the first part (Smith & Simmons), for the uses and purposes of this contract, and to keep off competing lines, the exclusive right of way for the lines of the telegraph along and upon the lands of the said party of the second part, as far as can be legally done.'

It will be observed that there is here an express declaration that the right of way in question is granted for the uses and purposes of the contract, and to keep off competing lines, which, when fairly interpreted, means, we think, that the right granted was to be exercised during the existence of the contract, and would terminate whenever the contract was terminated by express agreement of the parties or otherwise. It was not intended, apparently, as a present grant of an interest or estate in the railroad right of way, to be held and enjoyed by the grantees for all time, independently of the provisions of the agreement, for, if such had been its purpose, it is not probable that language would have been employed which qualifies the grant, and clearly implies that it was to be limited in its duration by the life of the contract in aid of which it was made. It seems most probable that this seventh paragraph was framed, not with a view of granting an estate in the right of way, which could not be extinguished save by a reconveyance, but, rather, with a view of preventing competing lines of telegraph from occupying it, and insuring to Smith & Simmons, as far as could be legally done, an exclusive right of occupancy for telegraphic purposes during the existence of the contract, and no longer. This was the dominant though in the mind of the draftsman, and, such being the object which the contracting parties seem to have had in view, the provision in question is entitled to no greater force or effect than an agreement on the part of the railroad company that no other lines of telegraph should be erected on its right of way during the existence of the contract.

The foregoing view concerning the nature and purpose of the provision in question is confirmed by the subsequent acts of the parties in interest, and especially by the conduct of the Northwestern Company, in whose behalf the Smith & Simmons contract seems to have been negotiated, which are wholly inconsistent with the theory that the contract was intended to be a grant, or that it was supposed to contain a grant, of such an easement in the railroad right of way as is now asserted. The agreement which the Northwestern Company subsequently made with J. P. Farley in his capacity as receiver contains no reference to the Smith & Simmons contract, or to any interest in the right of way that had been thereby acquired. The same remark is true as respects contract A, which was subsequently entered into by the Northwestern Company with the Manitoba Company. The relations of the two companies were fully and carefully considered on the latter occasion, and an agreement was signed covering the manner of constructing and reconstructing lines of telegraph and the mode of operation, and grating permission to occupy the right of way, without a reference to any prior agreement or an intimation that the Northwestern Company had before that time acquired any rights therein. Moreover, when the Northwestern Company transferred its lines of telegraph to the Western Union Company, on May 7, 1881, and professed to schedule and assign to the latter company all of its telegraphic contracts then in force, it did not schedule or otherwise refer to the Smith & Simmons contract as an existing agreement, upon which any rights could at that time be predicated. It is furthermore noteworthy that the last-mentioned contract was not pleaded in the answer of either of the defendants, or invoked as a defense or as the foundation of any right, in any form, until seven years after this action was instituted, when it was pleaded and attached as an exhibit to an amended cross-bill of the Northwestern Company. The Smith & Simmons contract appears to have been treated as functus officio by all persons and corporations concerned in the erection and maintenance of the telegraph lines now in controversy for many years before this action was instituted, and it, is inconceivable that a contract of such moment could have been so effectually forgotten and so long ignored if the parties immediately concerned in its execution, or if the Northwestern Company, ever supposed that it was intended as a present grant of such extensive rights in the railroad right of way as are now claimed by virtue of its provisions. When the Smith & Simmons contract was executed, it was doubtless assumed by the parties thereto that it conferred no rights as respects the railroad right of way, except such as could be released or modified by parol; that all the agreements contained therein were of an executory character, which could be annulled at the pleasure of the contracting parties; and that the contract would cease to have any vitality whenever a new contract was entered into, covering the same subject-matter, and containing other and different stipulations regulating the rights of the parties. We are of opinion that this is a correct view of the nature and effect of the Smith & Simmons contract; that it did not, on its delivery, burden the railroad right of way-- even the one therein particularly described, between St. Paul and Watab-- with an easement which could only be discharged by a formal conveyance, and...