Western Union Telegraph Co. v. Union Pac. Ry. Co.

• Decision Date: 27 July 1880
• Citation: 3 F. 423
• Court: U.S. District Court — District of Kansas
• Parties: THE WESTERN UNION TELEGRAPH COMPANY v. THE UNION PACIFIC RAILWAY COMPANY and others.

3 F. 423

THE WESTERN UNION TELEGRAPH COMPANY v. THE UNION PACIFIC RAILWAY COMPANY and others.

United States Circuit Court, D. Kansas.

July 27, 1880

C Beckwith, Williams & Thompson and Geo. R. Peck, for complainants.

I. P Usher, A. C. Williams and Everest & Waggener, for respondents.

McCRARY C.J.

The demurrer to the original bill having been sustained on the ground of the immorality of a material part of the contract ^[1] set out and made the sole basis of the relief sought, the plaintiff filed an amended bill, which is now before me for consideration; counsel having agreed that the motion to dissolve the injunction shall be regarded as a general demurrer to the amended bill. The part of the contract held vicious is the clause providing for the transmission free of charge of private, social, and family messages of the executive officers of the railway company.

The amended bill makes certain averments, intended to show the right of plaintiff to recover, notwithstanding the insertion of this vicious clause in the original contract.

The question to be determined is the sufficiency of these averments, or of any of them, to entitle plaintiff to the relief sought.

1. The plaintiff now claims that it is rightfully in possession of the right of way, and of the telegraph line in question, by virtue of the provisions of the act of congress of July 2, 1864, entitled 'An act for increased facilities of telegraph communication between the Atlantic and Pacific states, and the territory of Idaho. ' I had occasion to comment upon this act in my opinion upon the demurrer to the original bill, and the conclusion reached was that the act was intended to authorize the United States Telegraph Company, either with or without the consent of the railway company, to construct and operate a line of telegraph along and upon the right of way of the railway company. Whether this right was assigned and transferred to the present plaintiff by a valid contract, was not considered, and that question is now to be determined. The allegations of the amended bill, being admitted, sufficiently show that the United States Telegraph Company had, by virtue of the laws of New York, by which it was created, a right to make an assignment and transfer of all its franchises and property to another telegraph company.

Counsel for respondents insist, however, that this right was not recognized by the above-mentioned act of congress, of July 2, 1864, and that by that act the United States Telegraph Company, and that company only, was authorized to construct its telegraph along the line of the railway. It is said that this was a personal privilege granted to that company, and that, therefore, it could not assign it. Ordinarily, when property, or rights of any kind, are acquired by a corporation, they are to be enjoyed or disposed of in any manner not inconsistent with the law of its being. Unless, therefore, there is something in the act of congress to indicate a different purpose, it must be presumed that the right to remove its line to the railway, and to operate it there, was given to the United States Telegraph Company, to be enjoyed or disposed of under its charter as its other property and rights. Bu reference to the act of congress it will be seen that nothing is said about the assignment of the rights conferred upon the United States Telegraph Company. The transfer of those rights is neither authorized nor prohibited in terms. We must, therefore, consider the spirit and the purpose of the act to ascertain whether it was the intent of congress to confine the privilege to that company, and to prohibit its transfer. There is nothing to indicate any intent to require the construction of the telegraph line by the United States Company. The evident purpose of the act was to save that company from pecuniary loss by reason of the construction of a rival line by the railway company. It was intended to confer a favor upon the telegraph company by placing it in a position to protect itself from the ruinous competition likely to be established by the construction of another line of telegraph under the Pacific Railway acts. This purpose was more effectually accomplished by leaving its charter right to assign its franchises and transfer its property unrepealed. I am, therefore, of the opinion that the United States Telegraph Company was authorized to assign the rights conferred upon it by the act of July 2, 1864.

I am also of the opinion that the amended bill, taken as true shows a transfer of those rights to the plaintiff. It follows from this that the plaintiff has rights in respect to the lines in controversy which a court of equity should protect, independently of the contract of October 1, 1866. It was not a trespasser upon the right of way of the railway company. Without a contract it had a right to go there and construct its lines; and, having expended its means with the consent of the railway company in constructing the existing line, the defendants must not take possession of it by force, and without making compensation. It is not material to determine whether the right of way along the railway, and over its right of way, was also granted by the act of July 24, 1866, for if so no additional rights were conferred. As to a part of the line, the right of the plaintiff outside of the contract is, according to the allegations of the amended bill, very clear. It is averred that prior to 1865 the United States Telegraph Company, with the assent of the railway company, entered upon the right of way of the last-named company west of Lawrence, as it had a right to do under the act of Congress of July 2, 1864, and that in the year 1865, under said right to enter upon said right of way, and construct and operate such line of telegraph, it had constructed a line of telegraph from Lawrence to Fort Riley, a distance of 97 miles, and had also entered into a contract for the construction and delivery to it of a line of telegraph from Leavenworth to Lawrence, and for the residue of the line between Fort Riley and Denver; such lines to be constructed and ready for operation...