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Opinion of the Court.
or debar the Government of the United States from granting from time to time, similar franchises and privileges to other parties." 12 Stat. 41.
If, however, it be contended that this is not the correct interpretation of the Idaho act, upon what ground can it be claimed that any arrangement could be made under the Idaho act, after the passage of the act of July 24, 1866, that was inconsistent with the latter act? Can it be said that, after the passage of the act of 1866, and while it was in force, a railway company, operating a post road of the United States, could, by any form of agreement, exclude from its roadway a telegraph company which had accepted the provisions of that act? These questions can be answered only in one way, namely, that every railroad company operating a post road of the United States, over which commerce among the States is carried on, was inhibited, after the act of July 24, 1866, took effect, from making any agreement inconsistent with its provisions or that tended to defeat its operation. The object of that act was not only to promote and secure the interests of the Government, but to obtain, for the benefit of the people of the entire country, every advantage, in the matter of communication by telegraph, which might come from competition between corporations of different States. It was very far from the intention of Congress, by any legislation, to so exert its power as to enable one telegraph corporation, Federal or state, to acquire exclusive rights over any post road, especially one for the construction of which the aid of the United States had been given, and the use of which was, to some extent, under the control of the National Government.
We are, consequently, of opinion that the agreement of October 1, 1866, was, in its essential provisions, invalid and not binding upon the railway company.
In reference to the agreements of 1869 and 1871 between the Union Pacific Railroad Company and the Atlantic and Pacific Telegraph Company, but little need be said to show that they were void. By those agreements the former corporation demised and leased to the telegraph company, to whose rights, it may be assumed, the Western Union Telegraph Company suc
Opinion of the Court.
ceeded, all the telegraph lines, wires, poles, instruments, offices, and other property appertaining to telegraph business, that were possessed by the railroad company. These agreements were annulled by the Circuit Court, and it was likewise so adjudged by the Circuit Court of Appeals. The same conclusion had been previously announced by Judge McCrary in Atlantic and Pacific Telegraph Co. v. Union Pacific Railway Co., 1 McCrary, 541, 547. That able judge well said: “I conclude that the charter of the Union Pacific Railroad Company devolved upon it the duty of constructing, operating and maintaining a line of telegraph for commercial and other purposes, and that this is in its nature a public duty. I am further of the opinion that, by the provisions of the contract of September 1, 1869, and of December 20, 1871, the railroad company undertook to lease or alienate property which was necessary to the performance of this duty. The consideration for these contracts is declared to be 'the demise of their telegraph lines, property and good will, and of the rights and privileges, in the manner hereinafter specified,' etc.; and the property demised by the railroad company is 'all its telegraphic lines, wires, poles, instruments, offices, and all other property by it possessed, appertaining to the business of telegraphing, for the purpose of sending messages and doing a general telegraph business.' The lessee was to hold during the whole term of the charter of the railroad company and any renewal thereof. There is inserted a stipulation that the lessee shall perform all the duties imposed or that may be imposed upon the railroad company by their charter or by the laws of the United States. But, as already intimated, I do not think this latter clause makes the contract good. The railroad company was not at liberty to transfer to others those important duties and trusts which it, for a large consideration and for a great public purpose, had undertaken to perform. It certainly could not divest itself of these powers and duties, and devolve them upon the plaintiff, without express authority from Congress." Again: "But if the contracts in question are not ultra vires by reason of the transfer of property necessary to the performance, by the railroad company, of its public duties, they are so because
Opinion of the Court.
they attempt to transfer certain franchises of the said company. The right to operate a telegraph line, and to fix and to collect tolls for the use of the same, is, to say the least, the most valuable part of the franchise conferred by Congress upon railroad company, as a telegraph company. This right is alienated by a clear and unequivocal assignment or transfer from the railroad company to the plaintiff. Without discussing other features of the contracts, I am compelled to hold that this feature is alone sufficient to render them in excess of the corporate power of the company."
We now come to the important contract of July 1, 1881, between the Western Union Telegraph Company and the Union Pacific Railway Company. As that contract is too lengthy to be inserted at large in the body of this opinion, we have, in our statement of the case, given such of its provisions as appear to relate directly to the issues presented by the pleadings.
We have seen that the contract of July 1, 1881, was annulled by the original decree of the Circuit Court, but was upheld by the Circuit Court of Appeals, except as to the third and fourth paragraphs, which were adjudged by that court to be null and void to the extent that they secured and granted, or were intended to secure or grant, to the Western Union Telegraph Company any exclusive rights, privileges, or advantages whatsoever.
Much said in this opinion touching the agreements of 1866, 1869, and 1871, is applicable to that of 1881, and need not be here repeated. We have no difficulty in holding that the latter was invalid in the particulars named in the final decree of the Circuit Court of Appeals. But that agreement is illegal, not simply to the extent that it assumes to give to the Western Union Telegraph Company exclusive rights and advantages in respect of the use of the way of the railroad company for telegraph business; but it is also illegal because, in effect, it transfers to the Western Union Telegraph Company the telegraphic franchise granted it by the Government of the United States. The duty to maintain and operate a telegraph line between the points specified in the act of 1862 was committed by Congress to certain corporations which it named, and neither they, nor any corporation into which they were
Opinion of the Court.
merged, could, without the consent of Congress, invest a state corporation with exclusive telegraphic privileges on the line of the roads it then owned or thereafter acquired. The United States was not bound to look to the Western Union Telegraph Company for the discharge of the duties the performance of which, in consideration of the aid received from the Government, the Union Pacific Railroad Company, and other named companies, undertook to discharge for the bene fit of the United States and of the public. No agreement with the telegraph company, to which the assent of the Government was not given, could take from the railroad company its right at any time to itself maintain and operate the telegraph line required by the act of 1862 for the use of the Government and of the public, nor impair the power of Congress to require the performance by the railroad company itself of the duties imposed by that act. As to the object of the provisions of the agreement of 1881, the Circuit Court, speaking by Mr. Justice Brewer, properly said: "They mean that the telegraphic business and the telegraphic franchise, in the sense we have defined it, should be exercised by the Western Union Telegraph Company, and that no other company, railway or telegraph, should touch it. The purpose was a purpose disclosed by every section and line of the contract- that the public and commercial use of the telegraph wires should be long to the Western Union Company, leaving to the railroad company only so much of the telegraph wires as was necessary for its own business." Again: "So it is that the lessons. of experience support and establish the construction placed upon the contract of 1881, to the effect that the telegraphic franchise, as a franchise of independent, public, and commercial transportation, was intended to be and was transferred by the railway company to the Western Union Company, leaving only to the former so much use of telegraph wire as would facilitate and further its own railroad business."
That the purpose of the agreement of 1881 was to transfer to the Western Union Telegraph Company the telegraphic franchises granted by the United States, was asserted by that company in a bill filed by it (a copy of which is made a part
Opinion of the Court.
of the present record) to prevent the Union Pacific Railway Company from complying with the mandate of the act of August 7, 1888. In that bill it was claimed that the parties stipulated in the contract of 1881 that the telegraph company "might render to the Government and to the public such telegraph service as by the law of its creation it was bound to perform." And the telegraph company stated, in the same bill, that it had come about under that agreement, and through the growth of the railroad business, that the railroad company had "no wires on which it can do a general telegraph business, all those devoted to its railroad business being overburdened therewith." Again, in the same bill: "The said wires used by the defendant in the operation of its road are not equal to its necessities in that behalf, and it is impossible for it to do any business for the public or other companies on said wires without seriously interfering with and impeding the operation of its engines, cars, and trains, and if it undertake to do so it will be under the necessity of using your orator's five wires, or some of them. Upon your orator's said wires is carried on almost the entire transcontinental business of the Union; nor can your orator submit to any interference therewith by the defendant or any other party without seriously impeding and disarranging that business to its great loss and the public inconvenience." In addition to this, it may be stated that the telegraph superintendent of the railway company testified in this case that it would not be practicable to operate the wires used by the railroad company "for general commercial business without seriously interfering with the railroad business, and the railroad company's wires would be inadequate to carry any additional business." This inquiry need not be further extended, except to observe that there would be no occasion to make the Western Union Telegraph Company a defendant in this suit, and it would not have any standing in court to complain of the act of August 7, 1888, if it did not claim that the construction, or the maintenance and operation by the railway company, through its own employés, of a distinct telegraph line on the route of its road, for the use of the Government and of the public, was in violation of the contract it had made with the railroad company.