United States v. Northern Pac. R. Co.
| Decision Date | 04 January 1905 |
| Docket Number | 1,961. |
| Citation | 134 F. 715 |
| Parties | UNITED STATES v. NORTHERN PAC. R. CO. et al. |
| Court | U.S. Court of Appeals — Eighth Circuit |
On July 21, 1890, the United States of America filed its bill of complaint in the Circuit Court of the United States for the District of Minnesota against the Northern Pacific Railroad Company, the Northwestern Telegraph Company, and the Western Union Telegraph Company, the averments of which were substantially as follows: The Northern Pacific Railroad Company was incorporated by an act of Congress approved July 2, 1864 (13 Stat. 365, c. 217), for the purpose of building and maintaining a continuous railroad and telegraph line from a point on Lake Superior in Minnesota or Wisconsin to Puget Sound and Portland in the state of Oregon. A subsidy in lands and also a right of way through the public domain were granted to it by the act as an aid to the construction of the railroad and telegraph lines. The act required, among other things, the construction of 'a telegraph line of the most substantial and approved description, to be operated along the entire line. ' The better to accomplish the object of the act, which was declared to be the promotion of the public interest and welfare, by the construction of the railroad and telegraph line and keeping the same in working order, power was reserved by Congress to add to, alter, amend, or repeal the same at any time. Pursuant to this reservation of power Congress passed an act which was approved August 7, 1888, 25 Stat. 382, c. 772 (U.S. Comp. St. 1901, p. 3582). The first and fourth sections of this act are as follows:
'That all railroad and telegraph companies to which the United States has granted any subsidy in lands or bonds, or loan of credit for the construction of either railroad or telegraph lines, which, by the acts incorporating them, or by any act amendatory or supplementary thereto, are required to construct, maintain, or operate telegraph lines, and all companies engaged in operating said railroad or telegraph lines shall forthwith and henceforward, by and through their own respective corporate officers and employees, maintain and operate, for railroad, governmental, commercial, and all other purposes, telegraph lines, and exercise by themselves alone all the telegraph franchises conferred upon them and obligations assumed by them under the acts making the grants as aforesaid.'
'That in order to secure and preserve to the United States the full value and benefit of its liens upon all the telegraph lines required to be constructed by and lawfully belonging to said railroad and telegraph companies referred to in the first section of this act, and to have the same possessed, used and operated in conformity with the provisions of this act and of the several acts to which this act is supplementary it is hereby made the duty of the Attorney General of the United States, by proper proceedings, to prevent any unlawful interference with the rights and equities of the United States under this act, and under the acts hereinbefore mentioned, and under all acts of Congress relating to such railroads and telegraph lines, and to have legally ascertained and finally adjudicated all alleged rights of all persons and corporations whatever claiming in any manner any control or interest of any kind in any telegraph lines or property, or exclusive rights of way upon the lands of said railroad companies, or any of them, and to have all contracts and provisions of contracts set aside and annulled which have been unlawfully and beyond their powers entered into by said railroad or telegraph companies, or any of them, with any other person, company, or corporation.'
The railroad company completed its railroad in 1883. At the time the bill was filed it was engaged in operating about 2,200 miles of railroad, had received and was in the enjoyment of the lands and right of way granted to it, but had wholly ceased to maintain or operate any line of telegraph. On May 1, 1880, a contract was entered into between the Northwestern Telegraph Company and the Western Union Telegraph Company and the railroad company which recited that under a prior contract between them the telegraph companies had constructed the telegraph lines along the railroads of the railroad company and that they were jointly and equally owned by the contracting parties. The truthfulness of this recital in the contract was challenged by the government. It was claimed that on the contrary the railroad company had built its own lines of telegraph as it was required to do by the act of its incorporation, but, if it should be discovered that such recital was true, then that the arrangement so entered into was beyond the corporate powers of the railroad company, was a gross breach of public trust and should be relief against in that suit. The terms of the contract of May 1, 1880, which were then being observed by the parties, effected an abandonment by the railroad company of the exercise of the telegraph franchises conferred upon it by the act of July 2, 1864. The telegraph companies claimed to be the owners of a large part of the telegraph properties and instrumentalities, and had in fact unlawfully supplanted the railroad company, with its consent, in the conduct of the public and commercial telegraph business. The railroad company, notwithstanding the requirements of the acts of Congress and its obligations to the government and to the public, persisted in protesting the telegraph companies in the possession and enjoyment of the monopoly of such business which was reserved to them by the contract. Since the passage of the act of August 7, 1888, which particularized the duties imposed upon the railroad company, it had not abrogated or annulled the unlawful contract entered into with the telegraph companies, but continued to disregard the commands of that act. The Western Union Telegraph Company was organized as a corporation under a statute of the state of New York, and it claimed to have succeeded by purchase or lease to all of the rights and franchises of its codefendant the Northwestern Telegraph Company. The legality of the incorporation of the Western Union Telegraph Company was challenged, as was also its power to acquire the rights and franchises of its said codefendant. The prayer of the bill was, in substance, that the contracts between the railroad company and the telegraph companies be set aside, annulled and canceled; that the court, by proper order and under certain penalties to be prescribed, direct the railroad company to thenceforth and through its own corporate officers and employes maintain and operate telegraph lines along its entire main line and branches for all purposes, and exercise by itself alone all the telegraph franchises conferred upon it; and that the rights of the government, the defendants, and all other persons and corporations claiming any control or interest of any kind in the telegraph lines or property on or along the railroad, or exclusive rights of way, be legally ascertained and finally adjudicated.
On July 13, 1900, the Northern Pacific Railway Company which, through foreclosure...
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