Eastern Extension Tel. Co. v. United States
251 U.S. 355 (1920)

Annotate this Case

U.S. Supreme Court

Eastern Extension Tel. Co. v. United States, 251 U.S. 355 (1920)

Eastern Extension, Australasia & China

Telegraph Company, Limited v. United States

No. 357

Argued December 15, 1919

Decided January 12, 1920

251 U.S. 355



The Court of Claims is without jurisdiction of a claim based on an obligation of the United States growing directly out of the treaty with Spain ceding the Philippine Islands or on one imposed by principles of international law as a consequence of the cession. Pp. 251 U. S. 357, 251 U. S. 362. Eastern Extension Tel. Co. v. United States,231 U. S. 326; Jud.Code, § 153.

To create an express or, (in a strict sense) an implied contract binding the United States, some officer with express or implied power to commit the government must have intended that result. P. 251 U. S. 363.

A cable company holding Spanish concessions in the Philippines obliging it to transmit government messages, in part free and in part at reduced rates, and to pay certain taxes, and entitling it to a subsidy, claimed the subsidy from the United States upon the ground that the government, by accepting the benefits, had assumed the burdens of the concessions. Held that no such contract could be derived from the facts as found. Id.

Such a contract could not be implied from the use of the cable service in transmitting government messages when the government paid

Page 251 U. S. 356

the rates, in part reduced but all as fixed and charged by the company, and, through the Secretary of War, expressly declined free service. P. 251 U. S. 363.

Nor did any liability of the United States arise from expenditures made by the company in voluntarily extending its lines with approval of the government given without prejudice to the government's rights. P. 251 U. S. 364.

The acceptance by subordinate executive officials of the Insular government of payments tendered by the cable company in connection with statements of account assuming a recognition of its concessions and right to subsidy held no basis for implying an obligation of the United States to pay the subsidy. Id.

54 Ct.Clms. 108 affirmed.

The case is stated in the opinion.

MR. JUSTICE CLARKE delivered the opinion of the Court.

The appellant, claimant, is the grantee from the government of Spain of three concessions to lay down and operate submarine cables. The first one, in 1879, was for the exclusive privilege, for forty years, of constructing and operating a cable between the Island of Luzon and Hong Kong. It was landed at Bolinao on the northerly coast of Luzon, and dispatches were transmitted to Manila and other places by government owned land lines, which were subject to interruption. This concession required that official messages be transmitted free and be given precedence. In 1898, a second concession, supplemental to the first, empowered the claimant to extend its cable to Manila, and the term of the prior exclusive grant was extended twenty years, with the same priority for official dispatches, but with the provision that they were to be

Page 251 U. S. 357

transmitted free only for the first ten years from the date of this second grant.

In 1897, a third concession, the one with which this case is chiefly concerned, authorized the claimant to lay down and operate three submarine cables connecting the Island of Luzon with three Visayas Islands -- Panay, Negros, and Cebu. This grant required the claimant to operate the cables for twenty years, to give precedence to official dispatches and to charge for them at one-half the rates charged for private messages, to pay a tax of ten percent on receipts in excess of expenses not to exceed

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