Western Union Tel. Co. v. Ann Arbor R. Co.

• Decision Date: 09 November 1898
• Docket Number: 524.
• Parties: WESTERN UNION TEL. CO. v. ANN ARBOR R. CO.
• Court: U.S. Court of Appeals — Sixth Circuit

90 F. 379

WESTERN UNION TEL. CO. v. ANN ARBOR R. CO.

No. 524.

United States Court of Appeals, Sixth Circuit.

November 9, 1898

This was a bill in equity by the Western Union Telegraph Company--First, to restrain the defendant, the Ann Arbor Railroad Company, from interfering with the telegraph wires and poles of the complainant, running from Thompsonville to Frankfort, on the line of the defendant's railroad second, to compel the defendant to allow the complainant to reconnect the wires to the complainant's main line on the Chicago & Western Michigan Railroad, and to use the wires for its telegraph business as they were used before they were disconnected by the defendant; and, third, to require the defendant to carry out the contract under which said poles and wires were erected, made by the Western Union Telegraph Company with the Frankfort & Southeastern Railroad Company, a former owner of this part of defendant's line of railway. The complainant relies, in its bill, not only upon the contract made with the Frankfort & Southeastern Railroad Company, as binding upon the defendant, but also upon the provisions of the act of congress passed July 24, 1866, the provisions of which the complainant company accepted, and which, the bill avers, confer a right upon the complainant to maintain its telegraph line on the railroad as a post road of the United States.

The defendant answered, setting forth the circumstances under which it acquired title; and, after replication, the case was heard on the following agreed statement of facts: That on March 1, 1889, the said the Frankfort & Southeastern Railroad Company executed a mortgage upon all its property and assets of every kind and description, whether then owned or thereafter to be acquired by said company, to Henry Day and Albert C. Hall, as trustees, which mortgage was thereupon, to wit, on the 11th day of May, 1889, duly recorded in the counties through which the road passed; that the road was sold by the mortgagor to the Toledo, Ann Arbor & North Michigan Railway Company; that subsequent mortgages were issued by the grantee company, and there was a default upon all the mortgages, including the one first above mentioned and foreclosure proceedings were begun upon all of them; that the railroad here in question was sold at foreclosure sale under the mortgage of March 1, 1889, to the trustees under said mortgage, from whom, by mesne conveyance, the title was transferred to the defendant, the Ann Arbor Railroad Company that the complainant was not a party to these foreclosure suits; that the contract between the complainant and the Frankfort & Southeastern Railroad Company was entered into on the 25th day of September, 1890, more than a year after the execution of the mortgage, to Day and Hall, trustees; that Day and Hall, trustees, knew of the contract and complainant's claim of right under it before foreclosure; that the Ann Arbor Railroad Company was delivered possession of the railroad by the order of the court in the foreclosure proceedings; and that, after notice to the complainant, it declined to recognize any obligation upon it arising from complainant's contract with the Frankfort & Southeastern Railroad Company, and disconnected the wires, as averred in the bill. By complainant's contract with the Frankfort & Southeastern Railroad Company, the latter agreed to furnish and distribute for the telegraph company, free of cost, along the line of the railroad, cedar poles, 30 to a mile, to furnish all the labor to dig the holes in which to set the poles, to place the wires and insulators thereon, under the direction of a foreman of the telegraph company, to maintain the poles and wires at its own expense in good order and repair, and to reconstruct them when required by the telegraph company. The telegraph company agreed to furnish the wires and insulators for the entire line, and the necessary batteries. The railroad company agreed to furnish, free of charge, in its station houses, suitable space for batteries. The telegraph company agreed to set apart the first wire erected along said railroad for the joint use of the parties to the contract for the transmission of railroad and commercial telegraph business. By the fourth section it was agreed that either party might establish telegraph stations at such places as it might deem necessary; that the telegraph company should furnish the instruments; that the railroad company should furnish the operators, and all messages pertaining to the railroad business should be transmitted free. The railroad company agreed to transport, free of charge, all officers and employes and all material for the use of the telegraph company, and, if the telegraph company elected to establish an independent office at a station of the railroad company, the railroad company agreed to furnish office room, light, and fuel free of charge in such station. The eighth section was as follows: 'Eighth. The railroad company, so far as it legally may, hereby grants and agrees to assure to the telegraph company the exclusive right of way on, along, and under the line, lands, and bridges of the railroad company, and any extensions and branches thereof, for the construction, maintenance, operation, and use of lines of poles and wires and underground or other lines for commercial or public uses or business, with the right to put up or construct, or cause to be put up or constructed, from time to time, such additional lines of poles and wires and underground or other lines as the telegraph company may deem expedient; and the railroad company agreed to clear, and keep clear, said right of way of all trees, undergrowth, and other obstructions to the constructions to the construction and maintenance of the lines and wires provided for herein; and the railroad company will not transport men or material for the construction, maintenance, or operation of a line of poles and wire or wires or underground or other lines in competition with the lines of the telegraph company, party hereto, except at and for the railroad company's regular local rates, nor will it furnish for any competing lines any facilities or assistance that it may lawfully withhold, nor stop its trains, nor distribute material therefor at other than regular stations: Provided always that, in protecting and defending the exclusive grants conveyed by this contract, the telegraph company may use and proceed in the name of the railroad company, but shall indemnify, and save harmless the railroad company from any and all damages, costs, charges, and legal expenses incurred therein or thereby. ' By the eleventh section it was 'mutually understood and agreed that the telegraph line, poles, wires, and fixtures covered by the contract shall be the property of the telegraph company, and shall form part of its general telegraph system, and shall be controlled and regulated by the telegraph company, which shall fix and determine all tariffs for the transmission of messages and all connections with other lines and interests. ' By the twelfth section the provisions of the agreement were extended to all railroads then owned, leased, controlled, or operated by the Frankfort & Southeastern Company, and to all railroads thereafter owned, leased, controlled, or operated by that company, or by any company or corporation in which that company might own a majority of the stock, or whose action it might be able to control by ownership of stock or otherwise. The provisions of the contract, it was stipulated, should be and continue in force for and during the term of 25 years from the 25th day of September, 1890, and should continue after the close of the term, until the expiration of one year after written notice should have been given after the close of the term, by either party to the other, of an intention to terminate the same.

The circuit court held that the contract was in all respects, except in so far as it purported to create an easement in the real estate in the nature of a right of way, a contract personal to the Frankfort & Southeastern Railroad Company; that the burden of that contract did not pass to and become a charge upon the defendant in this case upon its purchase under the foreclosure of the mortgage or mortgages upon the Frankfort & Southeastern Railroad Company's lands and property, unless by some conduct the Ann Arbor Railroad could be held to have adopted the contract as its own, and that no such conduct was proven in the case; that, in respect of the right of way,-- a supposed easement affecting the real estate, and which, it was claimed created rights outlasting the continuance of the personal covenants in the contract,-- the right to the easement ceased with the continuance of the personal covenants, and had no foundation upon which it could last independently of the personal covenants; and, further, that, this being so, the parties, in the making of the original contract, knowing, as they must be presumed to know, that this would be the natural consequence, must be held to have intended that the easement should not continue for the term stated, unless the principal things contemplated by the contract should continue to endure, and require, in order to give them effect, that the easement should also continue; that no foreclosure was necessary; that the easement had ceased; that the telegraph company had the right to remove the personal property, which, by the terms of the contract, were to inure to and belong to it; and that it had, under the circumstances attending the entry of the present railroad company upon the lands and property of the Frankfort & Southeastern Railroad Company, an implied license to enter upon the property, and remove the same. The bill of the complainant was accordingly dismissed.

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