United States v. Southern Pac. R. Co.

• Decision Date: 14 February 1892
• Citation: 49 F. 297
• Parties: UNITED STATES v. SOUTHERN PAC. R. CO. et al.
• Court: U.S. District Court — Northern District of California

49 F. 297

UNITED STATES v. SOUTHERN PAC. R. CO. et al.

United States Circuit Court, N.D. California.

February 14, 1892

Atty Gen. Miller and Charles H. Aldrich, for the United States.

Charles H. Tweed, J. Hubley Ashton, and Harvey S. Brown, for the Southern Pacific Railroad Company and the Southern Pacific Company.

Pillsbury Blanding & Hayne, Wm. C. Hazledine, and John J. McCook, for the Atlantic & Pacific Railroad Company.

Wager Swayne and Rush Taggart, for the Western Union Telegraph Company.

HARLAN Circuit Justice. ^[1]

This case is under submission on pleas and motions to dismiss which contest the jurisdiction of this court to proceed in personam against such of the defendants, not corporations of California, as are not before the court otherwise than by service of process upon their agents in this district. On this question there is such conflict in the decisions of the circuit courts that it is proper to examine it as if now for the first time presented. It depends upon the interpretation that may be given to the act of March 3, 1887, defining the jurisdiction of the circuit courts of the United States. 24 St.p. 552, c. 373; 25 St.p. 433, c. 866. Before looking at the provisions of that act, it will be well to inquire as to the nature of this suit

By the act of congress of August 7, 1888, known as the 'Telegraph Act,' it is provided that all railroad and telegraph companies to which the United States has granted any subsidy in lands, bonds, or loan of credit, for the construction of either railroad or telegraph lines, and which are required to construct, maintain, or operate telegraph lines, and all companies engaged in operating such railroad telegraph lines--

'Shall forthwith and henceforward, by and through their own respective corporate officers and employes, 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. ' 25 St.p.882,c.772, Sec. 1; 12 St.p. 489, c. 120; 13 St.p. 356, c. 216.

This suit was brought pursuant to that act, its fourth section declaring:

'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 Southern Pacific Railroad Company is a corporation organized under the laws of California, entitled, it is alleged, in respect to its railroad, to all the rights and privileges granted, and subject to all the conditions prescribed, by the acts of congress relating to the Atlantic & Pacific Railroad Company, and to be treated as if its railroad and telegraph line had been constructed as a part of the main line of that company.

The Southern Pacific Company is a corporation of Kentucky, but it has no property or business in that state, nor any officer or agent there, except an assistant clerk, holding a subordinate position, and maintained for the purpose of preserving the charter of the company under the laws of that commonwealth. The company has a large amount of property in California, and is operating lines of railroad in this district. Its general offices are, and for many years have been, in San Francisco, where its principal executive officers reside. The bill alleges that the Southern Pacific Railroad Company claims to have transferred to this company all its property, real, personal, and mixed.

The Atlantic & Pacific Railroad Company is a corporation organized under an act of congress approved July 27, 1866, with authority to construct a line of railroad and telegraph, and to carry on its business, in this state and elsewhere. 14 St.p. 292. Its general officers reside here, and at the commencement of this suit it was operating its railroad and maintaining offices in California.

The Western Union Telegraph Company is a New York corporation, owning a large amount of property and engaged in operating lines of telegraph in this district, where it maintains general offices for the transaction of business. The bill alleges that it has an agreement with the Southern Pacific Railroad Company, under which the latter corporation has ceased to maintain and operate a telegraph line for public or commercial purposes, and under which the former company has acquired a monopoly of all such business on the lines of railroad in question.

The relief sought is a decree annulling, not only the lease, if such there be, by which the Southern Pacific Railroad Company assigned all its property to the Southern Pacific Company, but certain contracts of lease and sale by the former to the Atlantic & Pacific Railroad Company, as well as the above contract between the Southern Pacific Railroad Company and the Western Union Telegraph Company; and requiring the Southern Pacific Railroad Company henceforth, and through its own officers and employes, to maintain and operate telegraph lines along its entire main road and branches for railroad, governmental, commercial, and all other purposes, itself exercising all the telegraph franchises conferred upon it, and performing all the obligations assumed by it under the grants from congress.

The subpoena in this case was served on the secretaries, respectively, of the Southern Pacific Railroad Company and the Southern Pacific Company, on the general passenger and freight agent of the Atlantic & Pacific Railroad Company, and on the general superintendent of the Western Union Telegraph Company for the Pacific coast. The officers and agents on whom service was made were at the time located in San Francisco.

Among the suits of a civil nature, at common law or in equity, of which the circuit courts of the United States have original jurisdiction, under the act of March 3, 1887, amending that of March 3, 1875, are those involving the sum or value of more than $2,000, exclusive of interest and costs, and arising under the constitution or laws of the United States, or treaties made under their authority, or in which the United States are plaintiffs or petitioners; those involving the above sum in which there is a controversy between citizens of a state and foreign states, citizens, and subjects, or a controversy between citizens of different states. The same act provides:

'But no person shall be arrested in one district for trial in another in any civil action before a circuit or district court, and no civil suit shall be brought before either of said courts against any person, by any original process or proceeding, in any other district than that whereof he is an inhabitant; but where the jurisdiction is founded only on the fact that the action is between citizens of different states, suit shall be brought only in the district of the residence of either the plaintiff or the defendant. * * * ' 25 St.p. 434, c. 866; 24 St.p. 552, c. 373.

The provision in the original act of 1875, in respect to the district in which suits must be brought, was as follows:

'No person shall be arrested in one district for trial in another in any civil action before a circuit or district court. And no civil suit shall be brought before either of said courts against any person, by any original process or proceeding, in any other district than that whereof he is an inhabitant, or in which he shall be found at the time of serving such process or commencing such proceeding.' 18 St.p. 470, c. 137.

The Judiciary Act of 1789 contained substantially the same provision. 1 St.p. 79, c. 20.

It thus appears that the provision in the act of 1875 permitting suit-- the plaintiff and the defendant being citizens of different states-- to be brought in the district where the defendant was 'found' was stricken out by the act of 1887, and that the right to bring a civil suit by original process in the district of which the defendant is an 'inhabitant' is now subject to the condition that, where jurisdiction is acquired only by reason of diverse citizenship, the suit must be brought in the district of the residence of either the plaintiff or the defendant.

The first point made by the defendants is that the circuit courts of the United States possess no powers except such as the constitution and the acts of congress concur in conferring upon them, and that the legal presumption is that every cause is without their jurisdiction until and unless the contrary affirmatively appears. No doubt can exist as to the correctness of this principle. Sheldon v. Sill, 8 How. 441, 449; Steam-Ship Co. v. Tugman, 106 U.S. 118, 1 S.Ct. 58; Bors v. Preston, 111 U.S. 252 4 S.Ct. 407; ...