United States v. Western Union Tel. Co.
160 U.S. 53 (1895)

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U.S. Supreme Court

United States v. Western Union Tel. Co., 160 U.S. 53 (1895)

United States v. Western Union Telegraph Company

No. 19

Argued December 18, 1894

Decided November 18, 1895

160 U.S. 53

ERROR TO THE CIRCUIT COURT OF THE UNITED

STATES FOR THE SOUTHERN DISTRICT OF NEW YORK

Syllabus

Although the United States was entitled to retain and apply, as directed by Congress, all sums due from the government on account of the use by the Telegraph Company, for public business, of the telegraph line constructed

Page 160 U. S. 54

by the Union Pacific Railway Company, the entire absence of proof as to the extent to which that line was, in fact so used, renders it impossible to, ascertain the amount improperly paid to, and without right retained by, the Telegraph Company, and subsequently divided between it and the Railroad Company.

The case is stated in the opinion.

MR. JUSTICE HARLAN delivered the opinion of the Court.

This action was brought by the United States to recover from the defendants in error the sum of $12,495.62, which amount, it is alleged, was paid to the Western Union Telegraph Company on account of telegraph messages transmitted for the government after July 1, 1881, over telegraph lines operated by that company on and over the route of the Union Pacific Railway, and was wrongfully divided between the two defendants in disregard of the rights of the United States.

The general ground upon which the government rests this claim is that the sums paid by it on account of such messages were set apart for specific purposes by the acts of Congress under which the Union Pacific Railroad Company, the predecessor of the Union Pacific Railway Company, received the aid of the United States for the construction and maintenance of its railroad and telegraph lines.

Pursuant to the direction of the circuit court, a verdict was returned for the defendants, and judgment was rendered in their favor.

The relations between the United States and the defendant company are fully shown in the opinion just rendered in the case of United States v. Union Pacific Railway Company,160 U. S. 1. In order, however, that the issue in the present case may be readily understood without frequently recurring to that opinion, it is necessary to restate some of the facts disclosed in the former case.

The Union Pacific Railroad Company was incorporated by the Act of Congress of July 1, 1862, passed to aid in the construction

Page 160 U. S. 55

of a railroad and telegraph line between the Missouri River and the Pacific Ocean, and to secure to the government the use of the same for postal, military, and other purposes. 12 Stat. 489, c. 120.

That act granted to the company a right of way through the public domain for the construction of a railroad and telegraph, and in aid of such construction granted also every alternate odd-numbered section of public land, not mineral, to the amount of five alternate sections per mile, within the limits of ten miles on each side of the road, and which had not been sold, reserved, or otherwise disposed of by the United States, and to which a preemption or homestead claim had not attached. §§ 1, 2, 3, 4.

For the purposes mentioned, the Secretary of the Treasury was required, upon the written certificate, by commissioners appointed by the President, of the completion and equipment of each forty consecutive miles of railroad and telegraph, as prescribed by the act, to issue to the company bonds of the United States for a named amount. And to secure the repayment to the United States of any bonds so issued and delivered, with the interest thereon paid by the United States, such issue and delivery were declared to constitute, ipso facto, a first mortgage on the whole line of the railroad and telegraph, together with the rolling stock, fixtures, and property of every kind belonging to the company. § 5.

By the sixth section of that act, it was provided that:

"The grants aforesaid are made upon condition that said company shall pay said bonds at maturity, and shall keep said railroad and telegraph line in repair and use, and shall at all times transmit dispatches over said telegraph line, and transport miles, troops, and munitions of war, supplies, and public stores upon said railroad for the government, whenever required to do so by any department thereof, and that the government shall at all times have the preference in the use of the same for all the purposes aforesaid (at fair and reasonable rates of compensation, not to exceed the amounts paid by private parties for the same kind of service), and all compensation for services rendered for the government shall be applied to the payment

Page 160 U. S. 56

of said bonds and interest until the whole amount is fully paid. Said company may also pay the United States, wholly or in part, in the same or other bonds, Treasury notes, or other evidences of debt against the United States, to be allowed at par, and after said road is completed, until said bonds and interest are paid, at least five percentum of the net earnings of said road shall also be annually applied to the payment thereof."

The nineteenth section was in these words:

"The several railroad companies herein named are authorized to enter into an arrangement with the Pacific Telegraph Company, the Overland Telegraph Company, and the California state Telegraph Company, so that the present line of telegraph between the Missouri River and San Francisco may be moved upon or along the line of said railroad and branches as fast as said roads and branches are built, and if said arrangement be entered into, and the transfer of said telegraph line be made in accordance therewith to the line of said railroad and branches, such transfer shall, for all purposes of this act, be held and considered a fulfillment on the part of said railroad companies of the provisions of this act in regard to the construction of said line of telegraph. And in case of disagreement, said telegraph companies are authorized to remove their line of telegraph along and upon the line of railroad herein contemplated without prejudice to the rights of said railroad companies named herein."

This act also provided that, the better to accomplish its object,

"namely, to promote the public interest and welfare by the construction of said railroad and telegraph line, and keeping the same in working order, and to secure to the government at all times (but particularly in time of war) the use and benefits of the same for postal, military, and other purposes, Congress may at any time, having due regard for the rights of said companies named herein, add to, alter, amend, or repeal this act."

§ 18.

This act was amended by an Act approved July 2, 1864, 13 Stat. 356, c. 216.

The latter act contained additional grants of lands and

Page 160 U. S. 57

bonds, and by its fifth section provided that only "one-half" of the compensation for services rendered for the government by the companies named in the act "shall be required to be applied to the payment of the bonds issued by the government in aid of the construction of said roads.

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