The objects which Congress sought to accomplish by the Act of
July 1, 1862, c. 120, 12 Stat. 489, granting a subsidy to aid in
the construction of both a railroad and a telegraph line from the
Missouri River to the Pacific Ocean, and by the Act of July 2,
1864, c. 216, 13 Stat. 356, amendatory thereof, were the
construction, the maintenance, and the operation of both a railroad
and a telegraph line between those two points; the governmental aid
was extended for the purpose of accomplishing all these important
results, and there is nothing in subsequent legislation to indicate
a change of this purpose.
The provisions in those acts permitting the railroad company to
arrange with certain telegraph companies for placing their lines
upon and along the route of the railroad and its branches did not
affect the authority of Congress, under its reserved power, to
require the maintenance and operation by the railroad company
itself, through its own officers and employees, of a telegraph line
over and along its main line and branches.
Page 160 U. S. 2
An arrangement between the railroad company and the telegraph
company, such as was permitted by the 19th section of the Act of
July 1, 1862, and by the fourth section of the Act of July 2, 1864,
c. 220, known as the Idaho Act, could have no other effect than to
relieve the railroad company from any present duty itself to
construct a telegraph line to be used under the franchises granted
and for the purposes indicated by Congress. No arrangement of the
character indicated by Congress could have been made except in view
of the possibility of the exercise by Congress of the power
reserved to add to, or amend the act that permitted such
arrangement.
It was not competent for Congress under its reserved power to
add to, alter, or amend these acts to impose upon the railroad
company duties wholly foreign to the objects for which it was
created or for which governmental aid was given, nor, by any
alteration or amendment of those acts, destroy rights actually
vested, nor disturb transactions fully consummated. With the policy
of such legislation the courts have noting to do.
The provision in the Act of August 7, 1888, c. 772, 26 Stat.
382, requiring all railroad and telegraph companies to which the
United States have granted subsidies to
"forthwith and henceforward, by and through their own respective
corporate officers and employees, maintain and operate, for
railroad, governmental, commercial and all other purposes,
telegraph lines, and exercise by themselves alone all the telegraph
franchises conferred upon them and obligations assumed by them
under the acts making the grants,"
is a valid exercise of the power reserved by Congress.
Since the passage of the Act of July 24, 1866, c. 230, the
provisions of which were embodied in the Revised Statutes Title
LXV, Telegraphs, no railroad company operating a post road of the
United States, over which interstate commerce is carried on, can
bind itself, by agreement, to exclude from its roadway any
telegraph company, incorporated under the laws of a state, that has
accepted the provisions of that act and desires to use such roadway
for its line in such manner as will not interfere with the ordinary
travel thereon.
The agreement of October 1, 1866, between the Union Pacific
Railway Company, Eastern Division, and the Western Union Telegraph
Company gave the telegraph company the absolute control of all
telegraphic business on the routes of the railway company, and
consequently tended to make the Act of July 24, 1866, c. 230, 14
Stat. 221, ineffectual and was hostile to the object contemplated
by Congress; and, being thus in its essential provisions invalid,
it was not binding upon the railway company.
The agreements of September 1, 1869, and December 14, 1871,
between the Union Pacific Railroad Company and the Atlantic and
Pacific Telegraph Company were void.
The agreement of July 1, 1887, between the Union Pacific Railway
Company and the Western Union Telegraph Company is illegal not only
to the extent it assumes to give to the telegraph company exclusive
rights and advantages in respect of the use of the way of the
railroad company for
Page 160 U. S. 3
telegraph purposes, but also because, in effect, it transfers to
the telegraph company the telegraphic franchise granted it by the
United States, which was not permitted by the acts of Congress
defining the obligations of railroad companies that had accepted
the bounty of the government. While the United States might proceed
by mandamus against the railway company to compel it to perform the
duties imposed by its charter, it has the further right, in this
suit, to ask the interposition of a court of equity to compel a
cancellation of the agreements under which the telegraph company
asserts rights inconsistent with the several acts of Congress, and
the final decree in such a suit may require the railway company to
obey the directions of Congress as given in those acts.
This suit was commenced by the United States in the Circuit
Court for the District of Nebraska. A decree was there made giving
the plaintiff the relief it asked for. 50 F. 28. An appeal was
taken to the Circuit Court of Appeals for the Eighth Circuit, where
the decree of the circuit court was reversed. 19. U.S.App. 531.
From that decree the United States took this appeal. The case is
stated in the opinion of the Court.
MR. JUSTICE HARLAN delivered the opinion of the court.
This suit was brought by the United States against the Union
Pacific Railway Company and the Western Union Telegraph Company,
under the authority of the Act of Congress of August 7, 1888, 25
Stat. 382, c. 772, supplementary to the Act, commonly known as the
"Pacific Railroad Act," of July 1, 1862, 12 Stat. 489, c. 120, and
to the Act of July 2, 1864, 13 Stat. 356, c. 216, and other acts
amendatory of the act of 1862.
By the first section of the above act of 1888, it is provided
that all railroad and telegraph companies to which the United
States have granted any subsidy in lands or bonds or loan of
Page 160 U. S. 4
credit for the construction of either railroad or telegraph
lines, and which, by the acts incorporating them or by any
amendatory or supplementary act, were required to construct,
maintain, or operate telegraph lines, and all companies engaged in
operating such railroad or telegraph lines
"shall forthwith and henceforward, by and through their own
respective corporate officers and employees, maintain and operate
for railroad, governmental, commercial, and all other purposes,
telegraph lines, and exercise by themselves alone all the telegraph
franchises conferred upon them and obligations assumed by them
under the acts making the grants as aforesaid."
The second section declares that any telegraph company, having
accepted the provisions of Title LXV, Telegraphs, of the Revised
Statutes, which should extend its line to any station or office of
a telegraph line belonging to anyone of the railroad or telegraph
companies referred to in the first section shall have the right and
shall be allowed
"to connect with the telegraph line of said railroad or
telegraph company to which it is extended at the place where their
lines may meet for the prompt and convenient interchange of
telegraph business between said companies, and such railroad and
telegraph companies, referred to in the first section of this act,
shall so operate their respective telegraph lines as to afford
equal facilities to all, without discrimination in favor of or
against any person, company, or corporation whatever, and shall
receive, deliver, and exchange business with connecting telegraph
lines on equal terms, and affording equal facilities, and without
discrimination for or against anyone of such connecting lines, and
such exchange of business shall be on terms just and
equitable."
If any railroad or telegraph company referred to in the first
section, or any company operating such railroad or telegraph line,
refuses or fails, in whole or in part, to maintain and operate a
telegraph line as provided in the act of 1888 and the acts to which
it is supplementary, "for the use of the government or the public,
for commercial and other purposes, without discrimination," or
refuses or fails to make or continue such arrangements for the
interchange of business with any connecting telegraph company,
then, by the third section, application for
Page 160 U. S. 5
relief may be made to the Interstate Commerce Commission, whose
duty it shall be to ascertain the facts and prescribe such
arrangement as will be proper in the particular case.
The fourth section is in these words:
"In order to secure and preserve to the United States the full
value and benefit of its liens upon all the telegraph lines
required to be constructed by and lawfully belonging to said
railroad and telegraph companies referred to in the first section
of this act, and to have the same possessed, used, and operated in
conformity with the provisions of this act and of the several acts
to which this act is supplementary, it is hereby made the duty of
the Attorney General of the United States, by proper proceedings,
to prevent any unlawful interference with the rights and equities
of the United States under this act and under the acts hereinbefore
mentioned and under all acts of Congress relating to such railroads
and telegraph lines, and to have legally ascertained and finally
adjudicated all alleged rights of all persons and corporations
whatever claiming in any manner any control or interest of any kind
in any telegraph lines or property, or exclusive rights of way upon
the lands of said railroad companies, or any of them, and to have
all contracts and provisions of contracts set aside and annulled
which have been unlawfully and beyond their powers entered into by
said railroad or telegraph companies, or any of them, with any
other person, company, or corporation."
The fifth section subjects to fine and imprisonment any officer
or agent of a company operating its railroads and telegraph lines
who refuses or fails, in such operation and use, to afford and
secure equal facilities to the government and the public, or to
secure to each of said connecting telegraph lines equal advantages
and facilities in the interchange of business, as provided for,
without any discrimination whatever for or adverse to the telegraph
line of any or either of said connecting companies, or refuses to
abide by or perform and carry out within a reasonable time the
order or orders of the Interstate Commerce Commission. The party
aggrieved may also sue the company whose officer or agent violates
the provisions of the act for any damages thereby sustained.
Page 160 U. S. 6
The sixth section makes it the duty of all railroads and
telegraph companies to report to the Interstate Commerce Commission
in relation to certain matters and to file with that body copies of
all contracts and agreements of every description between it and
every other person or corporation in reference to the ownership,
possession, maintenance, control, use, or operation of any
telegraph lines or property over or upon its rights of way.
The defendant, the Union Pacific Railway Company, is a
corporation formed by the consolidation, under the authority of the
above Acts of Congress of July 1, 1862, 12 Stat. 489, c. 120, and
July 2, 1864, 13 Stat. 356, c. 216, of the following companies: the
Union Pacific Railroad Company, incorporated by the Act of July 1,
1862; the Kansas Pacific Railway Company, formerly known as the
Union Pacific Railway Company, Eastern Division, which latter
company succeeded to the rights and powers of the Leavenworth,
Pawnee & Western Railroad Company, a Kansas corporation, that
accepted the aid provided by the Act of July 1, 1862, and the
Denver Pacific Railway & Telegraph Company, a corporation of
Colorado.
The present suit proceeds on the ground that the Union Pacific
Railway Company is conducting its business under certain contracts
and agreements with the Western Union Telegraph Company that are
not only repugnant to the provisions of the above act of 1888, but
are inconsistent with the rights of the United States and in
violation of the obligations imposed upon the railway company by
other acts of Congress. The relief asked was a decree annulling
those contracts and agreements and compelling the railway company
to maintain and operate telegraph lines on its roadways, as
required by the act of 1888.
By the final decree of the circuit court, it was adjudged, among
other things, that the following agreements be annulled and held
for naught:
An agreement of October 1, 1866, between the Union Pacific
Railway Company, Eastern Division, and the Western Union Telegraph
Company.
Two agreements, one of September 1, 1869, and one of
Page 160 U. S. 7
December 14, 1871, between the Union Pacific Railroad Company
and the Atlantic & Pacific Telegraph Company, the rights of the
latter company having been acquired, as is claimed, by the Western
Union Telegraph Company, and --
An agreement of July 1, 1881, between the Union Pacific Railway
Company and the Western Union Telegraph Company. 50 F. 28.
It will be well at this point to refer to the principal parts of
the several agreements that were set aside and annulled by the
final decree of the circuit court.
By the agreement of October 1, 1866, between the Union Pacific
Railway Company, Eastern Division, and the Western Union Telegraph
Company, the railway company agreed to pay to the telegraph company
the cost of the telegraph poles that had been erected by the latter
company along the railroad between Wyandotte and Fort Riley, except
for such as have been already furnished and erected by said railway
company, and also the cost of the wire and insulators for a
telegraph line with one wire, between those points, except for such
distance as the railroad company had already provided wires and
insulators; to furnish and distribute along their road west of Fort
Riley, as fast as the same was completed, suitable poles for a
first-class telegraph line, and wires and insulators for a
telegraph line with one wire; to supply and distribute suitable
telegraph poles, as required from time to time; to repair and renew
the line as might be necessary; to transport, free of charge, for
the telegraph company, all persons engaged in and material required
for the construction, reconstruction, working, repairing, and
maintaining said telegraph line, and to furnish a suitable
telegraph office in the depot at Wyandotte, Kansas, free of charge,
and pay one-half of the salary of the operator in such office, or
so much thereof as was necessary to save the telegraph company from
loss at that office, such operator to be fully qualified to do the
business of the railway company and to be appointed and his salary
fixed by the parties to the contract.
The railway company further stipulated
"not to transport any persons engaged in or property intended
for the construction or repair of any other line of telegraph along
their railway
Page 160 U. S. 8
except at the usual and regular rates charged by said railway
company for passengers and freight, nor give permission to nor make
any agreement with any other telegraph company to construct or
operate any telegraph line upon the lands or roadway of said
railway company, without the consent in writing of the telegraph
company. The above agreed to by said railway company so far as it
has the right to do so."
The telegraph company agreed, upon its part, that it would erect
poles, attach the insulators, and string the wire to be furnished
or paid for by the railway company, as provided, as fast as each
section of twenty miles of railroad was completed; that the first
wire should belong to the railway company, and be for their use
exclusively after the second wire was put up,
"but no commercial or paid business shall be transmitted by the
railway company from any station where the telegraph company shall
have an office without the consent of the latter;"
that if the business of the railway company should in its
opinion require more than one wire, they might appropriate another
wire, upon paying to the telegraph company the cost of such wire on
the poles, the telegraph company to attach such other wire for the
use of the company; that the business of the railway company of
every kind, and the family, private, and social messages of its
executive officers, should be transmitted without charge between
all telegraph stations on the line of said roadway and between all
such stations and St. Louis, and over all other lines in Missouri,
Kansas, Colorado, and New Mexico then owned or controlled or which
might thereafter be owned or controlled by the telegraph company,
provided, so far as said lines in Colorado and New Mexico were
concerned, and the road or roads of the Union Pacific Railway
Company, Eastern Division, were at the time in process of
construction towards Santa Fe or Denver, or both, all such business
should be transmitted free of charge over all other lines then or
thereafter to be owned or controlled by the telegraph company
within the United States, to an amount not exceeding $4,000 per
annum, with a rebate of one-half of regular tariff charges for all
in excess of that amount; that, until a second wire was put up,
Page 160 U. S. 9
both parties could use the first wire, the business of the
railway company having preference, and if either wire was
interrupted or required by the United States, both parties might
use the other one as far as practicable, but without delay or
charge to the railway company; that the telegraph company should
furnish all main batteries required for the efficient working of
the telegraph line provided for, and keep the line in good working
order, without expense to the railway company, except for the
materials which the latter had agreed to supply.
Again, that
"the railway company may establish, at their own expense, as
many offices as they require, and at all places where the telegraph
company has no separate office, the employees of the railway
company shall, so long as it may not interfere with the business of
said railway company, receive, transmit, and deliver such
commercial or paid business as may be offered at the tariff rates
of the telegraph company, provided such paid business does not
amount to enough to pay the expenses of a separate telegraph
office, and shall account for and pay over to the latter, monthly,
the amount thereof at such rates, and, concerning such business,
all rules, regulations, and orders of the telegraph company
applicable thereto shall be observed, but said railway company
shall not be amenable in any way to said telegraph company for the
acts or operations of said agents otherwise than to remedy the
difficulty in future;"
that each party at its own expense, should have the right to add
as many lines as its business required; that it would perform
without charge for the railway company what should be decided by
competent authority to be its telegraph obligations to the
government of the United States, and that a telegraph line should
be constructed on the road of the railway company from Leavenworth
to Lawrence at such time between May 31, 1867, and September 1,
1868, as that company might decide, and upon the same terms and
conditions as that west of Fort Riley.
By the agreement of September 1, 1869, between the Atlantic
& Pacific Telegraph Company and the Union Pacific Railroad
Company, the railroad company, in consideration of 33,000 shares of
the stock of the telegraph
Page 160 U. S. 10
company (for an increase of whose stock the agreement made
provision), demised and leased to that telegraph company
"all its telegraph line, wires, poles, instruments, offices, and
other property by it possessed appertaining to the business of
telegraphing, for the purpose of sending messages and doing a
general telegraphic business,"
to have and to hold during the whole term of the charter of the
telegraph company and any renewals thereof, subject to the rights
of the United States, as set forth in the charter of the railroad
company, and on condition that the telegraph company should fully
perform all duties that were or might be imposed upon the railroad
company by its charter or by the laws of the United States.
It was further stipulated in that agreement that the telegraph
company should proceed at once, as soon as arrangements were
perfected for extending its line to San Francisco, to put two
additional wires, fully equipped and furnished, on the poles
demised along the whole length of its line, the railroad company to
maintain and keep in repair such poles, wires, and equipments at
its expense during the period of such demise, until, from age or
other cause, they were required to be renewed, in which case the
telegraph company should meet the cost of renewal; that the
railroad company should at its own expense employ, during a period
of twenty-five years, suitable persons to operate said telegraph at
its own stations, other than at Omaha and such other stations as
required, for the business of both parties, operators in addition
to those needed by the railroad company; that the railroad company
should have the right, free of expense, to the constant and
perpetual use of two of the wires when required for its business,
and the free use for its business of the whole line of telegraph,
which should then or thereafter belong to or be controlled or
operated by the telegraph company, to and from all parts of the
United States, for all purposes connected with the management of
the road or its business; that the telegraph company should have
such preferential privileges and facilities for its business as are
usually granted by railroad companies in contracts of connection
with telegraph companies, and that the railroad company should
"afford all other telegraph companies
Page 160 U. S. 11
only such facilities as by law they now are or may hereafter be
required to afford as common carriers or otherwise, in which shall
not be included the privilege of using handcars or of stopping
trains except at regular stations, or transporting the officers or
servants of such companies, except on regular passenger trains at
regular rates of fare, or of transporting material for such
companies or persons (other than the parties of the first part),
except on regular freight trains, and at the usual rates of
freight, unless the facilities aforesaid, or some of them, shall be
required by law to be afforded such companies or persons."
These companies entered into a supplementary agreement on the
14th day of December, 1871, by which the original contract was
modified in certain particulars that need not be set out, and which
provided that, for all the purposes of both the original and
supplementary contract, the road of the railroad company
"demised by said original contract shall be deemed and taken to
terminate at the junction of the Union Pacific Railroad Company
with the Central Pacific Railroad Company, as now established,
which junction is at a point about five miles west of Ogden, and
all the rights of the parties under said contract and supplement
shall be made to conform to this modification."
The agreement between the Western Union Telegraph Company and
the Union Pacific Railway Company of July 1, 1881, recites that the
former corporation had acquired all of the property, rights, and
franchises of the Atlantic & Pacific Telegraph Company, and was
in possession of and operating a separate line of poles and wires
along the main line of the Union Pacific Railway Company between
Omaha and Ogden; that the parties were then, and for some time past
had been, operating lines of telegraph along various roads of the
railway company under sundry contracts, thirteen in number,
including the above agreements of 1866, 1869, and 1871, and made
between the railway company or companies formerly in possession of
lines of railroad then controlled by and forming part of that
company and the Western Union Telegraph Company or other telegraph
companies that had become
Page 160 U. S. 12
merged into the latter company, and that it was desirable to
terminate existing disputes and embody the agreement of the parties
in one new contract in lieu of said existing contract.
The expressed purpose of this agreement was to provide telegraph
facilities for the parties, and to maintain and operate the lines
of telegraph along all the railway company's roads in the most
economical manner in the interest of both parties, as well as to
fulfill the obligations of the railway company to the government of
the United States and the public in respect to the telegraphic
service required by the Act of July 1, 1862, and its
amendments.
Among other provisions of the above agreement are the
following:
"Third. The railway company, so far as it legally may, hereby
grants and agrees to assure to the telegraph company the exclusive
right of way on, along, upon, and under the line, lands, and
bridges of the railway company and any extensions and branches
thereof, for the construction, maintenance, operation, and use of
lines of poles and wires, or either of them, or underground or
other system of communication for commercial or public uses or
business, with the right to put up from time to time, or cause to
be put up or constructed, under the provisions of this agreement,
such additional wires on its own or the railway company's poles, or
such additional lines of poles and wires, or either, as well on its
bridges as on its right of way, or to construct such underground
lines as the telegraph company may deem expedient, doing as little
damage and causing as little inconvenience to the railway company
as is practicable, and the railway company will not transport men
or material for the construction or operation of a line of poles
and wire or wires or underground or other system of communication
in competition with the lines of the telegraph company, party
hereto, except at and for the railway company's regular local
rates, nor will it furnish for any competing line 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 rights
Page 160 U. S. 13
given by this contract, the telegraph company may use and
proceed in the name of the railway company, but shall indemnify and
save harmless the railway company from any and all damages, costs,
charges, and legal expenses incurred therein or thereby."
"Fourth. It is mutually understood and agreed that all of the
telegraph lines and wires covered by this contract, whether
belonging to or used by the telegraph company or the railway
company for the purpose of this contract, as herein provided, shall
form part of the general system of the telegraph company. The
railway company further agrees that its employees shall transmit
over the lines owned, controlled, or operated by the parties hereto
all commercial telegraph business offered at the railway company's
offices, and shall account to the telegraph company exclusively for
all of such business and the receipts thereon as provided herein.
No employee of the railway company shall, while in its service, be
employed by or have any connection with any other telegraph company
than the telegraph company, party hereto, and the telegraph company
shall have the exclusive right to the occupancy of and connection
with the railway company's depots or stationhouses for commercial
or public telegraph purposes as against any other telegraph
company,
provided that if any person or party, or any
officer of the government, tender a message for transmission over
the railway telegraph lines between Council Bluffs and Ogden at any
railway telegraph station between those points, and require that
the service be rendered by the railway company, the operator to
whom the same is tendered shall receive and forward the same,
accordingly at rates to be fixed by the railway company, to the
point of destination, if not beyond its own lines. If the
destination of said message be beyond said railway company's lines,
the telegraph company, when receiving the same at the point at
which it leaves the said railway lines, may demand the prepayment
of tolls for the service of forwarding the message on its own
lines,
provided however that the local receipts of the
railway company on such messages shall be divided between the
parties hereto in the same manner and subject to
Page 160 U. S. 14
the same conditions as provided in the tenth clause of this
agreement. . . ."
"Sixth. Each party hereto shall pay one-half of the entire cost
of all poles, wires, insulators, tools, and other material used for
the maintenance, repair, and renewal or reconstruction of existing
lines and wires along all of the railway company's railroads, and
for the construction, maintenance, repair, and renewal or
reconstruction of such additional wires or lines of poles and wires
as may be required for commercial or railroad telegraph purposes
along said railroads, and along future branches or extensions
thereof, and along new railroads constructed or acquired by the
railway company, until the total number of wires shall amount to
three for the exclusive use of each party hereto between Council
Bluffs and Ogden, two for the exclusive use of each party hereto
between Kansas City and Denver, and one for the exclusive use of
each party hereto on all other portions of the railway company's
railroads, branches, and extensions. Each party hereto shall pay
the entire cost of the construction, maintenance, repair, and
renewal or reconstruction of wires for its exclusive use in excess
of the number hereinbefore mentioned, the material of the telegraph
company for additional wires to be transported free of charge by
the railway company over its own lines, as hereinafter provided.
The telegraph company agrees to furnish at its own expense all
blanks and stationery for commercial or other public telegraph
business and all instruments, main and local batteries, and battery
material for the operation of its own and the railway company's
wires and offices. . . ."
"Seventh. . . . The telegraph company agrees to furnish, free of
charge, for the railroad business of the railway company, a direct
wire connecting the railway company's office in Omaha, Nebraska,
with its office in Kansas City, Missouri, and with the railway
company's offices at intermediate railroad stations of the railway
company along the Missouri River, including Council Bluffs, and the
telegraph company will receive, transmit, and deliver, free of
charge at and from its offices at said intermediate stations of the
railway company, such messages on the railroad business of the
railway company
Page 160 U. S. 15
as may be offered by its agents and officers for points on the
railway company's roads,
provided that the telegraph
company may use said wire for the transaction of commercial or
public telegraph business when not in use for railroad business. .
. ."
"Eighth. All messages of the officers and agents of the railway
company pertaining to its railroad business may be transmitted free
of charge between all telegraph stations on the lines of its
various railroads over wires set apart for railroad business. . . .
It is understood and agreed that the free telegraphic service
herein provided for is for the transmission of messages concerning
the operation and business of the railway company's railroads, and
shall not be extended to messages ordering sleeping car, parlor
car, or steamer berths or other accommodations for customers of the
railway company, the tolls on which messages should properly be
chargeable to such customers."
"Ninth. The railway company agrees to transport free of charge
over its railroads, upon application of the superintendent or other
officer of the telegraph company, all officers of the telegraph
company when traveling on its business and all employees of the
telegraph company when traveling on the telegraph company's
business connecting with or pertaining to the lines or wires and
offices along any of the railroad company's railroads. And the
railroad company further agrees to transport and distribute free of
charge along the line of any and all its railroads all poles and
other materials for the construction, maintenance, operation,
repair, or reconstruction of the lines and wires covered by this
agreement, and of such additional wires or lines of poles and wires
as may be erected under and in pursuance of the provisions of this
agreement; also, all material and supplies for the establishment,
maintenance, and operation of the offices along said railroads, it
being understood that no charge shall be made for the
transportation of poles or other materials over any of the railway
company's railroads for use on any other of its railroads."
"Tenth. The telegraph company agrees to supply instruments and
local batteries and blanks and stationery for commercial telegraph
business, as hereinbefore provided at offices
Page 160 U. S. 16
established and maintained by the railway company. At all
telegraph stations of the railway company, its employees shall
receive, transmit, and deliver such commercial or public messages
as may be offered, and shall render to the telegraph company
monthly statements of such business, and full accounts of all
receipts therefrom, and the railway company shall cause all of such
receipts to be paid over to the telegraph company monthly."
"As compensation to the railway company for the services herein
provided for, the telegraph company agrees to pay or return to the
railway company monthly one-half of the cash receipts at telegraph
stations maintained and operated by and at the expense of the
railway company, tolls on ocean cable messages, and tolls for lines
of other companies excepted, all of which shall be retained by the
telegraph company, it being understood that the railway company
shall not be entitled to any portion of the tolls on ocean cable
messages or tolls belonging to lines of other companies or to any
portion of amounts checked against other offices. . . ."
"The railway company agrees that its employees shall not compete
with the telegraph company's offices in the transaction of
commercial telegraph business at any point where the telegraph
company may now or hereafter have an office separate from the
railway company's office, by cutting rates or by active efforts to
divert business from the telegraph company. . . ."
"Twelfth. It is further agreed that the management of the wires,
the repairs of all the lines along the railway company's railroads,
and the distribution of all materials for use on said lines shall
be under the supervision and control of a competent superintendent,
who shall be appointed and paid jointly by the parties hereto and
whose salary shall be fixed by mutual agreement, and said
superintendent shall be equally the servant of each of the parties
hereto, and shall, as far as practicable, protect and harmonize the
interest of both parties hereto in the transaction of the railroad
and commercial telegraph business along the railway company's
railroads. . . ."
"Thirteenth. The railway company shall have the right to the
free use of any telegraphic patent rights or new discoveries or
inventions that the telegraph company now owns
Page 160 U. S. 17
and uses in its general telegraph business or which it may
hereafter own and use as aforesaid so far as the same may be
necessary to properly carry on the business of railroad
telegraphing on the line of said railroads as provided for
herein."
"Fourteenth. The telegraph company hereby promises and agrees to
assume and protect the railway company from the payment of all
taxes levied and assessed upon the telegraph property belonging to
either of the parties to this agreement."
"Fifteenth. The provisions of this agreement shall extend to all
railroads and branches or extensions thereof now or hereafter owned
or controlled by the railroad company,
provided, however,
that in case the railway company shall hereafter acquire the
ownership or control of any railroad upon which the telegraph
company may already have a line of telegraph in operation, the
provisions of this contract shall not apply to such railroad and
telegraph line without the mutual consent of the parties hereto at
the time of such acquisition."
The contract of 1881 was, by its terms, to continue in force for
twenty-five years, and existing contracts with other companies, and
in respect to other roads, were to be deemed superseded so long as
the last contract was fully observed on the part of the railway
company, but to be again in force, for the protection of the
Western Union Telegraph Company, in case this contract should not
be kept in good faith by the railroad company for the full term of
twenty-five years.
By the decree of the circuit court, it was further adjudged that
the Union Pacific Railway Company
"at once put an end to all relations between it and the
defendant the Western Union Telegraph Company not equally allowed
to all other persons or corporations operating, owning, or using
the telegraph as a means of communication, and also at once resume
possession of its offices, poles, wires, instruments, and all its
other property belonging or appertaining to the business of
telegraphy along such of its main and branch lines as were aided by
the government under the Act of July 1, 1862, and acts amendatory
and supplemental thereto, and henceforth, by and through its own
corporate officers and employees, maintain and operate, for
railroad, governmental, commercial, and
Page 160 U. S. 18
other purposes such telegraph lines and instruments, and in all
ways exercise by itself alone all the telegraph franchises
conferred upon it and obligations assumed by it under the several
acts granting subsidies in land or bonds or loan of credit to it
and to its constituent companies, or the acts amendatory of or
supplemental thereto, and in all cases where the said defendant
company has not now adequate facilities to enable it to thus
conduct the telegraph business and afford equal facilities to all
without discrimination in favor of or against any person, company,
or corporation whatever, and to receive, deliver, and exchange
business with connecting telegraph lines and all companies desiring
to make such connections on equal terms and afford equal facilities
to all, and without discrimination for or against anyone of such
connecting lines, and upon just and equitable terms (all of which
said defendant is required and directed to at once proceed to do),
then said defendant shall at once construct and provide such
facilities as are necessary to carry out the provisions of this
decree and the several acts of Congress creating or aiding said
defendant company or its constituent parts and all acts amendatory
and supplemental thereto."
It was further adjudged that the Western Union Telegraph
Company
"at once vacate all the offices of said railway company without
interference or damage to the same, and without removing, until the
further order of this court, any property therefrom or from the
line of said railway company which has heretofore been jointly used
by the two companies, or the ownership of which is in dispute or is
so connected with or mixed with the property of the railway company
as to make it difficult of identification, or the removal of which
will interrupt or interfere with the discharge of the duties of the
defendant railway company, as herein set forth and enjoined,"
this decree, however, not to be construed as preventing the
railroad company from leasing to the telegraph company
"the right to occupy with its wires, instruments, batteries, and
operators, upon reasonable and proper terms, any of its poles along
the right of way and space in the depots or stations of the said
the Union Pacific Railway Company not required by the railway
company for the transaction of its business. "
Page 160 U. S. 19
Sixty days after the entry of the decree were given to make such
necessary arrangements, adjustments, and changes as might become
necessary by reason of the annulling the above agreements, and in
order that the provisions of the decree might be carried into
effect. And the right was reserved to the telegraph company to
apply for and have stated an account between the defendants in
respect of the value of the telegraph property along the line of
the railway company, the cost of maintenance and profits of the
telegraph lines, the amounts contributed thereto by the respective
defendants or their assignors or predecessors in title, and all
matters affecting the equities of the defendants, the United States
to have the right to intervene on such accounting for the
protection of its interests and those of the public. 50 F. 28.
Upon appeal by the defendants to the United States circuit court
of appeals, the decree of the circuit court was reversed and the
cause remanded with directions to enter a modified decree
adjudging, among other things, that the agreement of October 1,
1866, was a lawful and binding contract, and continued in force
until it was superseded by the agreement of July 1, 1881; that the
agreements of September 1, 1869, and December 14, 1871, were beyond
the powers of the Union Pacific Railroad Company, and must be
annulled; that the equities arising out of the two last-named
agreements were adjusted and settled by the parties interested when
they made the contract of July 1, 1881, and that the last-named
agreement was valid and binding in all respects except that the
third and fourth paragraphs were null and void to the extent, and
only to the extent, that they secured or granted or were intended
to secure and grant to the Western Union Telegraph Company any
exclusive rights, privileges, or advantages whatsoever. 59 F.
813.
Before examining the provisions of the agreements that were
annulled by the decree of the circuit court, it is necessary to
ascertain the nature and extent of the obligations imposed upon the
Union Pacific Railroad Company and the other constituent companies
of the Union Pacific Railway
Page 160 U. S. 20
Company in respect of the construction, maintenance, and
operation of telegraph lines along the routes of their respective
roads. If it be found that the Union Pacific Railway Company, in
the exercise of the rights and powers of its constituent companies,
was not, prior to the passage of the Act of August 7, 1888, under
any legal duty, in addition to the construction of a railroad on
the routes prescribed, to maintain or operate telegraph lines on or
along its roadways, the question will arise whether it was
competent for Congress to require that company, through its own
officers and employees exclusively, to maintain or operate
telegraph lines on or over its roadways, to be used for railroad,
governmental, commercial, and other purposes, and itself alone
exercise the telegraph franchises conferred by the acts of
Congress.
The Union Pacific Railroad Company was created by the above act
of Congress of July 1, 1862, 12 Stat. 489, c. 120. Its title
indicated that the subsidy granted was to aid in the construction
of both a railroad and telegraph line from the Missouri River to
the Pacific Ocean, and to secure to the government the use of the
same for postal, military, and other purposes.
Proceeding under that act, the company began in 1865, and in
1869 completed, the construction of a railroad from Omaha to Ogden,
making connection at the latter place with the Central Pacific
Railway, extending from Ogden to San Francisco. It also
constructed, on the north side of its right of way, a telegraph
line between Omaha and Ogden.
By the first section of the above Act of July 1, 1862, the Union
Pacific Railroad Company was authorized and empowered "to lay out,
locate, construct, furnish, maintain, and enjoy a continuous
railroad and telegraph" from a named point in the then Territory of
Nebraska to the western boundary of Nevada territory; by the second
section, a right of way through the public lands was given "for the
construction of said railroad and telegraph line;" by the third
section, a grant of public lands was made "for the purpose of
aiding in the construction of said railroad and telegraph line;" by
the fourth section, patents for lands granted were to be issued
Page 160 U. S. 21
upon the certificate of commissioners appointed by the
President, when it appeared that forty consecutive miles of the
"railroad and telegraph line" had been completed and equipped in
all respects as required, and were ready for the service
contemplated by the act; by the fifth section, provision was made
for issuing to the company bonds of the United States that should
constitute a first mortgage on the whole line of "the railroad and
telegraph, together with the rolling stock," such bonds to be
issued when the commissioners certified to the completion and
equipment of forty consecutive miles of "railroad and telegraph,"
in accordance with the provisions of the act; by the sixth section,
the grants of lands were declared to be 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,"
etc.; by the seventh section, the company was required, within
one year after the passage of the act, to file its assent to its
provisions, and complete said "railroad and telegraph" from the
point of beginning, as provided, to the western boundary of Nevada
Territory, before the first day of July, 1874; and, by the eighth
section, "the line of said railroad and telegraph" was
prescribed.
The ninth section authorized the Leavenworth, Pawnee &
Western Railroad Company (which, prior to January 1, 1862, had
located its line of road from Leavenworth to Fort Riley) to
construct a railroad and telegraph line from the Missouri River at
the mouth of the Kansas River, on the south side thereof, so as to
connect with the Pacific Railroad of Missouri at the aforesaid
point, on the hundredth meridian of longitude west of Greenwich,
upon "the same terms and conditions in all respects" as were
provided in the act for the construction of the railroad and
telegraph line first mentioned, and to meet and connect with the
same at the meridian of longitude named. The same section
authorized the Central Pacific Railroad Company, a California
corporation, to construct "a railroad and telegraph line" from the
Pacific coast at or near San Francisco or the navigable waters of
the Sacramento River, to the eastern boundary of that state,
"upon the same
Page 160 U. S. 22
terms and conditions in all respects as are contained in this
act for the construction of said railroad and telegraph line first
mentioned, and to meet and connect with the first-mentioned
railroad and telegraph line on the eastern boundary of
California."
The tenth section authorized the Kansas and California
companies, or either of them, after completing their roads, to
unite upon equal terms with the first-named company in constructing
so much of said "railroad and telegraph line and branch railroads
and telegraph lines" in the act mentioned, through the territories
from the State of California to the Missouri River, as shall then
remain to be constructed, on the same terms and conditions as
provided in relation to the said Union Pacific Railroad Company.
And the Hannibal and St. Joseph Railroad, the Pacific Railroad
Company of Missouri, and the first-named company, or either of
them, on filing their assent to the act, were authorized to unite
upon equal terms with the said Kansas company in constructing said
railroad and telegraph, to said meridian of longitude, with the
consent of the said State of Kansas,
"and, in case said first-named company shall complete its line
to the eastern boundary of California before it is completed across
said state by the Central Pacific Railroad Company of California,
said first-named company is hereby authorized to continue in
constructing the same through California, with the consent of said
state, upon the terms mentioned in this act, until said roads shall
meet and connect, and the whole line of said railroad and telegraph
is completed, and the Central Pacific Railroad Company of
California, after completing its road across said state, is
authorized to continue the construction of said railroad and
telegraph through the territories of the United States to the
Missouri River, including the branch roads specified in this act,
upon the routes hereinbefore and hereinafter indicated, on the
terms and conditions provided in this act in relation to the said
Union Pacific Railroad Company, until said roads shall meet and
connect, and the whole line of said railroad and branches and
telegraph is completed."
By the eleventh section, it was provided, in respect of
bonds
Page 160 U. S. 23
issued in aid of the construction of the most mountainous and
difficult parts of the road, that "no more than fifty thousand of
said bonds shall be issued under this act to aid in constructing
the main line of said railroad and telegraph;" by the twelfth
section, that
"the whole line of said railroad and branches and telegraph
shall be operated and used for all purposes of communication,
travel, and transportation, so far as the public and government are
concerned, as one connected, continuous line;"
and by the fourteenth section that the Union Pacific Railroad
Company should construct a single line of railroad and telegraph
from the western boundary of Iowa at a point to be designated by
the President, so as to form a connection with that company's line
on the said hundredth meridian of longitude upon the same terms and
conditions prescribed "for the construction of said railroad and
telegraph first mentioned," and, whenever a railroad was
constructed through Minnesota or Iowa to Sioux City, then the above
company should construct a railroad and telegraph line from Sioux
City to connect with the Union Pacific Railroad.
The fifteenth section declared that any company then or
thereafter incorporated should have the right to connect its road
with the road and branches provided by the act at such places and
upon such terms as the President might prescribe. But by an Act of
Congress passed June 20, 1874, 18 Stat. 111, c. 331, the following
addition was made to this section of the Act of July 1, 1862, 12
Stat. 489, 496, c. 120:
"And any officer or agent of the companies authorized to
construct the aforesaid roads, or of any company engaged in
operating either of said roads, who shall refuse to operate and use
the road or telegraph under his control, or which he is engaged in
operating for all purposes of communication, travel, and
transportation, so far as the public and the government are
concerned, as one continuous line, or shall refuse, in such
operation and use, to afford and secure to each of said roads equal
advantages and facilities as to rates, time, or transportation,
without any discrimination of any kind in favor of, or adverse to,
the road or business of any or either of said companies, shall be
deemed guilty of a misdemeanor, and, upon conviction thereof,
Page 160 U. S. 24
shall be fined in any sum not exceeding one thousand dollars,
and may be imprisoned not less than six months, . . . and it is
hereby provided that for all the purposes of said act and of the
acts amendatory thereof, the railway of the Denver Pacific Railway
and Telegraph Company shall be deemed and taken to be a part and
extension of the road of the Kansas Pacific Railroad to the point
of junction thereof with the road of the Union Pacific Railroad
Company at Cheyenne, as provided in the Act of March third,
eighteen hundred and sixty-nine."
The sixteenth section of the act of 1862 further provided that
all of the railroad companies mentioned in the act, or any two or
more of them, might form themselves into one consolidated company,
the latter company to proceed thereafter "to construct said
railroad and branches and telegraph line upon the terms and
conditions provided in this act." The seventeenth section provided
that in case said company or companies failed to comply with the
terms and conditions of the act
"by not completing the said road and telegraph and branches
within a reasonable time, or by not keeping the same in repair and
use, but shall permit the same, for an unreasonable time, to remain
unfinished, or out of repair, and unfit for use, Congress may pass
any act to insure the speedy completion of said road and branches,
or put the same in repair and use, and may direct the income of
said railroad and telegraph line to be thereafter devoted to the
use of the United States, to repay all such expenditures caused by
the default and neglect of such company or companies."
The eighteenth section provided that whenever it appeared that
"the net earnings of the entire road and telegraph," including the
amount allowed for services rendered for the United States, after
deducting all expenditures, including repairs, and the furnishing,
running, and managing of said road, shall exceed ten percentum upon
its cost, exclusive of the five percentum to the United States,
Congress could reduce the rates of fare thereon, if unreasonable in
amount, and fix and establish the same by law. And
"the better to accomplish the object of this act, namely, to
promote the public interest and welfare by the construction of said
railroad and
Page 160 U. S. 25
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."
The Act of July 1, 1862, was amended, in various particulars, by
the Act of July 2, 1864, c. 216. 13 Stat. 356. By the tenth section
of the latter act, the former was so amended that the Union Pacific
Railroad Company, the Central Pacific Railroad Company, and other
companies authorized to participate in the construction of the
proposed lines of road, could
"issue their first mortgage bonds on their respective railroad
and telegraph lines to an amount not exceeding the amount of the
bonds of the United States,"
and
"the lien of the United States shall be subordinate to that of
the bonds of any or either of said companies, hereby authorized to
be issued on their respective roads, property, and equipments,"
except as to those provisions of the act of 1862 relating to the
transmission of dispatches, and the transportation of mails,
troops, munitions of war, supplies, and public stores of the United
States.
Section fifteen of the same act was in these words:
"That the several companies authorized to construct the
aforesaid roads are hereby required to operate and use said roads
and telegraph for all purposes of communication, travel, and
transportation, so far as the public and the government are
concerned, as one continuous line, and, in such operation and use,
to afford and secure to each equal advantages and facilities as to
rates, time, and transportation, without any discrimination of any
kind in favor of the road or business of any or either of said
companies, or adverse to the road or business of any or either of
the others, and it shall not be lawful for the proprietors of any
line of telegraph, authorized by this act, or the act amended by
this act to refuse, or fail to convey for all persons requiring the
transmission of news and messages of like character, on pain of
forfeiting to the person injured for each offence, the sum of one
hundred dollars, and such other damages as he may have suffered on
account of said refusal or failure,
Page 160 U. S. 26
to be sued for and recovered in any court of the United States,
or of any state or territory of competent jurisdiction."
The sixteenth section provided that any two or more of the
companies authorized to participate in the benefits of that act
might at any time unite and consolidate upon such terms and
conditions as were not incompatible with such act or the laws of
the state or states in which the roads of such companies were, and
such consolidated company should be entitled to receive from the
government all the grants, benefits, and immunities that the
respective constituent companies were entitled to, subject to all
the restrictions imposed upon them.
By the twenty-second section, it was declared that "congress
many at any time alter, amend, or repeal this act.�
In our judgment, it is not difficult to ascertain the intention
of Congress in passing the Acts of July 1, 1862, and the Amendatory
Act of July 2, 1864, c. 216. The supreme object to be attained was
the maintenance and operation of both a railroad and telegraph line
from the Missouri River to the Pacific Ocean, and governmental aid
was extended in order to accomplish a result so important to the
whole country.
The authority given to the Union Pacific Railroad Company to lay
out, locate, construct, furnish, maintain, and enjoy a continuous
railroad
and telegraph line on that route, § 1; the grant
of public lands
for the purpose of aiding in the
construction of said railroads
and telegraph line, § 3;
the direction that patents for lands granted should be issued as
each forty consecutive miles of such railroad
and telegraph
line appeared, upon the certificate of commissioners,
appointed by the President, to have been completed and
equipped in all respects as required, § 4; the making the
bonds of the United States a first mortgage on the whole line of
the railroad
and telegraph, § 5; the explicit declaration
that the grants of public lands were made
upon the
condition, among others, that
the company should keep
said railroad
and telegraph line in repair and
use, and at all times transmit dispatches over said
telegraph line, § 6; the requirement that the company
should complete said railroad
and telegraph on the route
prescribed and within a named time, § 7; the reservation that
Congress may at any
Page 160 U. S. 27
time, having due regard to the rights of the companies named,
add to, alter, amend, or repeal the act in order that it may better
accomplish the object of the government, namely, "to promote the
public interest and welfare by the construction of" said railroad
and telegraph line, and keep 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," § 18 -- these and other provisions
are wholly inconsistent with the idea that the Union Pacific
Railroad Company could have fulfilled its obligations to the
government by simply constructing a railroad, without making any
provision whatever for the construction, maintenance, or operation
of a telegraph line, thereby leaving all communication by
telegraph, along its route to the absolute control of private
corporations deriving no corporate authority from the national
government, and whose operations would not ordinarily be subjected
to national supervision.
The same observations are applicable to the Leavenworth, Pawnee
and Great Western Railroad Company, afterwards, and successively,
as has been stated, the Union Pacific Railway Company, Eastern
Division, and the Kansas Pacific Railway Company. That corporation
was authorized to construct not simply a railroad, but a railroad
and telegraph line, between certain points upon the same
terms and conditions as were prescribed in the act for the
construction of a railroad
and telegraph line by the Union
Pacific Railroad Company.
The purpose of Congress, as indicated in the act of 1862, to
provide for the construction of telegraph lines by the companies
named in it, in connection with their respective railroads, was
unchanged at the time of the passage of the amendatory Act of July
2, 1864, c. 216. The latter act, as we have seen, gave authority to
the companies authorized to participate in the construction of the
roads that were to connect the Missouri River with the Pacific
Ocean to place a first mortgage on their respective railroads
and telegraph lines, and made the mortgage held by the
United States subordinate to it. Section 10. It did more. It
required those companies to operate and use their roads
and
telegraph for all purposes of communication,
Page 160 U. S. 28
travel, and transportation, so far as the public and government
were concerned, "as one connected, continuous line," and without
discrimination against either road -- a requirement that would not
have been made if Congress had not intended that each company
receiving aid from the government should itself maintain and
operate, or control, or should provide for the maintenance, on its
own route and under its own control, of a telegraph line for the
accommodation of both the government and the general public.
What we have said as to the objects that Congress intended to
accomplish by aiding the construction of a railroad and telegraph
line from the Missouri River to the Pacific Ocean is based upon
sections one to eighteen, inclusive, of the Act of July 1, 1862,
and upon the provisions of the Amendatory Acts of July 2, 1864, c.
216, and June 20, 1874. 18 Stat. 111, c. 331. If we look alone to
those sections and provisions, the conclusion must be that any
company named in the act of 1862, and receiving the aid therein
granted by the government, was required itself, and through its own
officers and employees, to construct, maintain, and operate both a
railroad and telegraph line, and could not assign or transfer to
any other corporation its franchises in that regard.
But there is a section in the act of 1862 showing that, for the
benefit of certain telegraph companies that had already expended
large sums in the construction of telegraph lines, Congress was
willing, in a named contingency, to relieve the railroad companies
receiving governmental aid from at least any present obligation to
construct telegraph lines on their respective rights of way. That
contingency is indicated in the nineteenth section of the act of
1862, which provides:
"That 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
Page 160 U. S. 29
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."
A similar provision relating to the Union Pacific Railroad
Company and the United States Telegraph Company and its associates
was embodied in the fourth section of the Act of Congress, commonly
known as the "Idaho Act," of July 2, 1864, c. 220, 13 Stat. 373,
entitled "An act for increased facilities of telegraph
communication between the Atlantic and Pacific states and the
Territory of Idaho."
By the latter act, the United States Telegraph Company and its
associates were authorized to erect a line or lines of magnetic
telegraph between the Missouri River and San Francisco on such
routes as they might select, to connect with its lines then
constructed and being constructed through the states of the Union.
It was given the use of such unoccupied land of the United States
as was necessary for right of way and materials, and for the
establishing of stations along said line for repairs, not exceeding
at any station one quarter-section of land, and such stations not
to exceed one in fifteen miles on the average of the whole line,
unless said lands should be required by the government of the
United States for railroad or other purposes. § 1. Under the
direction of the President of the United States, it was authorized
to erect a telegraph line from Fort Hall to Portland, Oregon, and
from Fort Hall to Bannock and Virginia City, in the Territory of
Idaho, with the same privileges as to the right of way and so forth
as provided in the first section, the United States to have
priority in the use of said lines of telegraph to Oregon and Idaho.
§ 2. It was authorized to send and receive dispatches, on payment
of the regular charges for transmission, over any line then or
thereafter to be constructed by the
Page 160 U. S. 30
authority or aid of Congress, to connect with any line or lines
authorized or erected by the Russian or English governments, and
all dispatches received by its line or lines were to be transmitted
in the order of their reception, and the answers delivered to the
United States Telegraph Company for transmission over their lines
to the office whence the original message was sent, whenever so
directed by the sender thereof. § 3. By the fourth section, it was
provided:
"The several railroad companies authorized by the Act of
Congress of July one, eighteen hundred and sixty-two, are
authorized to enter into arrangements with the United States
Telegraph Company so that the line of telegraph between the
Missouri River and San Francisco may be made upon and along the
line of said railroad and branches as fast as said roads and
branches are built, and if said arrangements be entered into and
the transfer of said telegraph line be made in accordance therewith
to the line of said railroads and branches, such transfer shall,
for all purposes of the act referred to, be held and considered a
fulfillment on the part of said railroad companies of the provision
of the act in regard to the construction of a telegraph line; and,
in case of disagreement, said telegraph company are authorized to
remove their line of telegraph along and upon the line of railroad
therein contemplated, without prejudice to the rights of said
railroad companies."
Referring to the nineteenth section of the act of 1862, Mr.
Justice Miller, in
Western Union Tel. Co. v. Union Pacific
Railway, 3 F. 721, 728, said:
"The three telegraph companies here spoken of together
constituted at the time this statute was passed, a continuous line
of telegraph from the Missouri River to San Francisco, and it was
obvious that the building of another line parallel to that, and not
far distant from it, would have a very injurious effect upon the
value of the property of those telegraph companies, and it was to
protect those companies and to prevent the injury which would
follow from the construction of another line between the same
points, over an uninhabited region of country, that Congress
provided that, by an arrangement with the railroad company, if
those companies should remove their
Page 160 U. S. 31
wires along the line of that road, so they could be used both
for railroad purposes and the use of the general public, then the
obligation of the railroad company, under the act of Congress, to
build another line should no longer exist."
In reference to the fourth section of the Idaho Act, the same
eminent Justice said:
"It does not admit, in my opinion, of any reasonable doubt that
if the United States Telegraph Company, mentioned in that statute,
or any company which had the same rights and authorities on that
subject that that company had, entered into an agreement with the
Pacific Railroad Company, or any of its branches, built under the
authority of the original act of 1862, which secures the proper
construction and operation of a line of telegraph along its road
for the benefit of the public, it is absolved from the obligation
imposed upon it by the act of 1862 to construct and operate such a
telegraph line. It was manifestly the design of this act of 1864 to
enable the United States Telegraph Company to become substituted,
by a proper arrangement with the Pacific Railroad Company and its
branches, to the right to build a telegraph line along the track
and right of way of those railroad companies, and thereby to
relieve those companies from the obligation to build and operate
such a line.
Id., 727."
We concur in these observations as to the scope and effect of
the nineteenth section of the act of 1862, and of the like section
in the Idaho Act of July 2, 1864, c. 220. But it must be observed
that the transfer to the roadway of the Union Pacific Railroad of
the lines of the telegraph companies, or either of them, named in
the nineteenth section of the act of 1862 was not in pursuance of
any "arrangement" made with those companies. On the contrary, as
stated by counsel, the lines constructed by telegraph companies
between Omaha and Ogden, and operated by the Western Union
Telegraph Company prior to the actual completion of the railroad
between those points, were transferred to the south side of the
railroad as the work of railroad construction proceeded, without
any arrangement whatever with the railroad company. This was done
under that clause in the nineteenth section of the act of
Page 160 U. S. 32
1862, providing that,
"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."
In reference to the telegraph line from Kansas City, via
Lawrence and Rossville, to Denver, the claim is that a part of it
was constructed under some arrangement between the railroad company
and Samuel Hallett, contractor; that the balance was constructed
under the contract of October 1, 1866, between the Western Union
Telegraph Company and the Kansas Pacific Railroad Company, the
latter contracting by the name it then used of the Union Pacific
Railway Company, Eastern Division, and that, after that date and
until 1880, the line of telegraph extending from Kansas City to
Denver was operated under the contract of October 1, 1866. It is
further claimed that the telegraph line so constructed was accepted
by the government as a substitute for the line which the charter of
the railroad company required it to construct, maintain, and
operate.
If it were true that the telegraph line on the Kansas Pacific
branch was constructed on the roadway of the railroad company under
such an "arrangement" with the railroad company as was contemplated
or permitted by the fourth section of the Idaho Act, and that the
government, by not declaring to the contrary, is to be deemed to
have accepted the construction by the telegraph companies of a line
on the south side of the right of way of the Union Pacific Railroad
as equivalent to an "arrangement" allowed by the nineteenth section
of the act of 1862, the question would remain whether such
arrangements, even if legal in all respects when made, so tied the
hands of the government that it could not at a subsequent date, in
execution of the purposes of Congress, require the railroad
company, by its own officers and employees exclusively, to maintain
or operate telegraph lines for railroad, governmental, and
commercial purposes, on and over its roads, for the construction of
which the aid of the United States was accepted.
We have seen that the object of giving governmental aid to the
corporations named in the act of 1862 was to promote the
Page 160 U. S. 33
public interest and welfare by the construction and operation of
a railroad and telegraph line, to the use and benefit of which the
government should be entitled at all times, particularly in time of
war, for postal, military, and other purposes, and that, "the
better to accomplish" that object, Congress reserved the power,
capable of being exercised at any time, of adding to, altering,
amending, or repealing such act, having "due regard to the rights"
of the companies named in it, and that, by the act of 1864, c. 216,
the several companies authorized to construct the roads named were
required to operate and use their roads and telegraph, for all
purposes of communication, travel, and transportation, as one
connected, continuous line, affording equal advantages and
facilities as to rates, time, and transportation, without
discrimination against other companies, or against persons
requiring the transmission of news and messages.
No express limitation is imposed upon the exercise of the power
so reserved except that the act of 1862 required that due regard be
had to the rights of the railroad companies that accepted its
provisions. But, looking at the entire act, it is clear that there
was no purpose to interfere with the authority of Congress to enact
such laws, by way of addition to or alteration of existing
legislation, as were necessary or conducive to the attainment of
the public objects sought to be attained. Indeed, the words in the
act of 1862, "due regard for the rights of said companies named
therein," suggest only such restrictions as the law, without such
words, would imply.
It would not be competent for Congress, under the guise of
altering and amending the act in question, to impose upon the
railroad company duties wholly foreign to the objects for which it
was created or for which governmental aid was given. Neither could
it, by such alteration or amendment, destroy rights actually
vested, nor disturb transactions fully consummated. We may here not
inappropriately repeat what was said in the
Sinking Fund
Cases, 99 U. S. 700,
99 U. S.
718-720, that "this power has a limit," and
"cannot be used to take away property already acquired under the
operation of the charter, or to deprive the corporation of the
fruits actually reduced to possession of contracts lawfully
made."
Again,
Page 160 U. S. 34
in the same case:
"The United States cannot, any more than a state, interfere with
private rights, except for legitimate governmental purposes. They
are not included within the constitutional prohibition which
prevents states from passing laws impairing the obligation of
contracts; but, equally with the states, they are prohibited from
depriving persons or corporations of property without due process
of law. They cannot legislate back to themselves, without making
compensation, the lands they have given this corporation to aid in
the construction of its railroad. Neither can they, by legislation,
compel the corporation to discharge its obligations in respect to
the subsidy bonds, otherwise than according to the terms of the
contract already made in that connection. The United States are as
much bound by their contracts as are individuals. If they repudiate
their obligations, it is as much repudiation, with all the wrong
and reproach that term implies, as it would be if the repudiator
had been a state or a municipality or a citizen. No change can be
made in the title created by the grant of the lands, or in the
contract for the subsidy bonds, without the consent of the
corporation. All this is indisputable."
But it cannot be doubted that the act of 1888 is within the
general scope, and consistent with the objects, of the previous
statutes relating to railroad and telegraphic communication between
the Missouri River and the Pacific Ocean. If Congress concluded --
and we must assume, from the provisions of the act of 1862, that it
did conclude -- that the public interests and the general welfare
would be promoted if the railroad company, accepting national aid,
should exercise, through its own officers and employees
exclusively, the telegraphic franchises granted to it, it is
difficult to perceive how legislation designed to enforce such a
policy can be held to be wanting in due regard to the rights of
such company.
It may be that Congress passed the act of 1888 because, in its
judgment, the rights of the government and of the public in the
matter of telegraphic communication could be fully secured or
effectively guarded only by means of telegraph lines maintained and
operated by a corporation deriving its power from the general
government, and subject, in respect
Page 160 U. S. 35
of the general conduct of its affairs, to national supervision
and control. If such considerations induced the passage of the act
of 1888, can the validity of that legislation be made to turn upon
the inquiry by the courts whether the policy inaugurated by
Congress was best for the public interests? Can it be said that the
act of 1888 is not germane or related to the objects for the
attainment of which the aid of the government was bestowed, as
indicated in the act of 1862? These questions must be answered in
the negative. We have nothing to do with the wisdom or policy of
legislation. The discretion of Congress in such matters cannot be
controlled by the judiciary, nor can the courts disregard an act of
legislation merely upon the ground that the public interests would,
in their judgment, have been best subserved by leaving telegraphic
communications along the route of railroads constructed with
national aid under the domination of private corporations organized
under state authority. We can consider only the question of
legislative power. If the power existed to enact the statute of
1888, the duty of the courts is to give full effect to the will of
Congress. No other position can be taken without attributing to the
judiciary an authority to revise the action of the legislative
branch of the government that it does not possess, and which the
established principles of our government forbid it to exercise.
The contention that the act of 1888 did not have due regard to
the rights of the railroad company is based upon that provision in
the act of 1862 (§ 19), and a similar provision in the act of 1864
(§ 4), which permitted the railroad company to make an
"arrangement" with certain telegraph companies to place their lines
upon and along the route of the railroad and branches -- such
transfer to be held and considered, for all the purposes of the
act, a
fulfillment on the part of said railroad companies
of the provisions of the act "in regard to the
construction of said lines of telegraph." But such an
arrangement, accompanied by the transfer of telegraph lines
constructed by telegraph companies to the roadway of the railroad
company, had no other effect than to relieve the railroad company
from any
present duty itself to construct a telegraph
Page 160 U. S. 36
line to be used under the franchises granted and for the
purposes indicated by Congress. It did not affect the authority of
Congress, under its reserved power, to require the railroad company
itself to maintain or operate in the future, by its officers and
employees alone, telegraph lines on its main road and branches.
Indeed, no arrangement of the character specified could have
been made except in full view of the power reserved to add to,
alter, or amend the act that permitted it. Although, as just
stated, that power could not have been exercised so as to divest
either the railroad company or the telegraph company of property
already acquired or to disturb or annul any transaction fully
consummated while such arrangement was in force, it was competent
for Congress to make such additions to, or such alterations or
amendments of, previous statutes as would secure the maintenance or
operation by the railroad company, through its own officers and
employees, of a telegraph line over and along its main line and
branches.
It is of no consequence that such legislation may defeat the
purpose contemplated by the parties to an arrangement of the
character described; for they contracted, and could only have
contracted, in view of the possible exercise by Congress of the
power expressly reserved by it. If we should hold the addition made
by the act of 1888 to the act of 1862, and the acts amendatory
thereof, to be beyond the power of Congress, it would be difficult
if not impossible to prescribe the lines within which the national
legislature must keep, and beyond which it may not pass, when
exerting its reserved power of adding to, altering, or amending
statutes and charters of incorporation.
We have therefore considered the question before us just as if a
contract or arrangement between the railroad and a telegraph
company for the construction by the latter of a telegraph line on
the route of the former expressly recited the provision of the act
of 1862, by which Congress reserved the power, to be exerted at any
time, to add to, amend, or repeal the act which authorized such
contract or arrangement.
In this view, it must be held that by its reservation of
authority to add to, alter, amend, or repeal the acts in
question
Page 160 U. S. 37
whenever it chose so to do, Congress, subject to the limitation
that rights actually vested or transactions fully consummated could
not be disturbed, intended to keep within its control the entire
subject of railroad and telegraphic communication between the
Missouri River and the Pacific Ocean through the agency of
corporations created by it or that had accepted the bounty of the
government. It was never intended that the railroad companies
accepting such bounty should be able, by any contract or
arrangement with telegraph companies, to discharge themselves, for
all time and beyond the authority of Congress otherwise to provide,
from the obligation to exercise, by their officers and agents
exclusively, the telegraphic franchises received by them from the
national government.
These principles are fully supported by former decisions in
which this Court has determined the scope and effect of
constitutional or statutory provisions that reserved to the
legislature granting charters of incorporation, or enacting
statutes under which private rights might be acquired, the power to
alter, amend, or repeal such charters or statutes.
Tomlinson
v. Jessup, 15 Wall. 454,
82 U. S.
457-458;
Miller v.
State, 15 Wall. 478;
Holyoke
Co. v. Lyman, 15 Wall. 500;
Sinking Fund
Cases, 99 U. S. 700,
99 U. S.
720-721;
Greenwood v. Freight Co., 105 U. S.
13,
105 U. S. 21;
Close v. Glenwood Cemetery, 107 U.
S. 466,
107 U. S. 476;
Spring Valley Waterworks v. Schottler, 110 U.
S. 347,
110 U. S. 352;
Louisville Gas. Co. v. Citizens' Gas Co., 115 U.
S. 683,
115 U. S. 696;
Gibbs v. Consolidated Gas Co., 130 U.
S. 396,
130 U. S. 408;
Sioux City Street Railway v. Sioux City, 138 U. S.
98,
138 U. S. 108;
Louisville Water Co. v. Clark, 143 U. S.
1,
143 U. S. 12-14;
Hamilton Gaslight Co. v. Hamilton City, 146 U.
S. 258,
146 U. S. 270;
N.Y. and N.E. Railroad v. Bristol, 151 U.
S. 556,
151 U. S.
567.
What has been said in reference to the effect of the reservation
in the act of 1862 of the right of adding to, altering, amending,
or repealing its provisions, is applicable to the fourth section of
the Idaho Act of July 2, 1864, which permitted the several railroad
companies referred to in the act of 1862 to make an arrangement
with the United States Telegraph Company, such as was permitted by
the nineteenth section of the act of 1862 to be made with the
telegraph companies therein
Page 160 U. S. 38
named. The fourth section of the Idaho Act was, in legal effect,
nothing more than an amendment or enlargement of the nineteenth
section of the act of 1862 by adding the name of another telegraph
company to those mentioned in the latter section.
It was suggested in argument that the objects of the act of 1862
could be fully accomplished by means of a telegraph company,
incorporated by one of the states, and which, by placing its lines
on the route of the railroad, could meet all the demands, as well
of the railroad company as of the government and the general
public. But this suggestion can have no weight in the present
inquiry. For if, as intimated, the execution of the act of 1888
will result in no real good to the general public, and may even be
injurious to the pecuniary interests which the government has in
the Union Pacific Railway and its branches, that is a question of
public policy with which the judiciary is not concerned, and the
responsibility for which is with another branch of the
government.
We perceive no escape from the conclusion that it is entirely
competent for Congress to add to, alter, or amend the acts of 1862
and 1864, so as to require the Union Pacific Railway Company,
possessing the rights and powers of its constituent companies, to
maintain and operate, by and through its own officers and
employees, telegraph lines for railroad, governmental, commercial,
and other purposes, and to exercise itself and alone all the
telegraphic franchises conferred upon it. It is enjoying the bounty
of the government subject to the condition, among others, that it
will perform these duties whenever so required by Congress.
It becomes necessary now to determine in what respects the
agreements of 1866, 1869, 1871, and 1881, if kept and performed by
the defendants, are inconsistent with the rights of the United
States, and whether, by their necessary operation, they will
interfere with the performance by the Union Pacific Railway Company
of the duty imposed upon it by the act of 1888.
Looking first at the agreement of October 1, 1866, between the
Union Pacific Railway Company, Eastern Division, and the Western
Union Telegraph Company, it will be seen that the Western Union
Telegraph Company does not, in that agreement,
Page 160 U. S. 39
expressly undertake to meet the obligations imposed by the
Pacific Railroad acts upon the railroad companies named in them, of
constructing, maintaining, and operating both a railroad and
telegraph line on their respective routes for the use equally of
the government and the public. It does undertake to perform,
without charge to the railway company, what should be "decided by
competent authority" to be the telegraphic obligations of the
railroad company to the government. § 10. Whom the parties regarded
as competent to decide as to the nature and extent of such
obligations does not appear from the agreement. The effect of this
stipulation, as between the railway company and the telegraph
company, was to excuse the latter from performing any services for
the government until competent authority decided that such service
was due from the former.
But passing this point as one not controlling in the case, it is
evident that the effect, if not the object, of the agreement was to
give the telegraph company the absolute control of all telegraphic
business on the route of the Union Pacific Railway Company, Eastern
Division.
The provision that the railway company should transport for the
telegraph company, free of charge, all the persons engaged, and
material required, in the construction, repairing, and maintaining
the telegraph line for which the agreement provided, while exacting
from other telegraph companies, for persons engaged and for
property intended to be used in building a telegraph line on the
railway company's roadway, the usual rates for passengers and
freight, §§ 4, 5; the stipulation that the railway company should
not give permission to another telegraph company to construct or
operate any telegraph line upon the lands or roadway of the railway
company, without the consent in writing of the telegraph company, §
5; the provision that the railway company should not, without the
consent of the telegraph company, transmit commercial or paid
business from any station where the latter had an office, and the
provision that the railway company should account for and pay over
to the telegraph company at the tariff rates established by the
latter, all sums received by
Page 160 U. S. 40
the railway company for messages sent from points where the
telegraph company had no separate office, if such sums were not
sufficient to meet the expenses of a separate telegraph office, § 8
-- these provisions, to say nothing of others, all plainly indicate
that the object of the agreement was to grant to the Western Union
Telegraph Company, as against all other telegraph companies, the
exclusive right to control the railway company's roadway for
telegraphic purposes so far as that could be done without
interfering with the ordinary operations of the railway
company.
This agreement of October 1, 1866, enabling the Western Union
Telegraph Company to exclude all other telegraphic corporations
from the roadway of the railway company, if not void as against
public policy, independently of specific statutory provisions, was
inconsistent with the Act of Congress of July 24, 1866, 14 Stat.
221, c. 230, entitled "An act to aid in the construction of
telegraph lines and to secure to the government the use of the same
for postal, military, and other purposes." The substantial
provisions of this statute have been preserved in sections 5263 to
5268, inclusive, of the Revised Statutes.
By the Act of June 8, 1872, 17 Stat. 308, 309, c. 335,
reproduced in section 3964 of the Revised Statutes, all the waters
of the United States, during the time the mail is carried thereon,
and all railroads or parts of railroads in operation, are post
roads. And by the above statute of 1866, Congress declared that any
telegraph company then organized, or which might thereafter be
organized, under the laws of any State of the Union should have the
right to construct, maintain, and operate lines of telegraph
through or over any portion of the public domain of the United
States, over and along any of the military or post roads of the
United States which had been or might thereafter be declared such
by act of Congress, and over, under, or across the navigable
streams of the United States, the lines of telegraph to be so
constructed and maintained as not to obstruct the navigation of
streams and waters or interfere with the ordinary travel on
military or post roads. "And any of said companies," the act
declared,
"shall have the right to take and use from such public lands the
necessary
Page 160 U. S. 41
stone, timber, and other materials for its posts, piers,
stations, and other needful uses in the construction, maintenance,
and operation of said lines of telegraph, and may preempt and use
such portion of the unoccupied public lands, subject to preemption
through which its said lines of telegraph may be located as may be
necessary for its stations, not exceeding forty acres for each
station; but such stations shall not be within fifteen miles of
each other."
The remaining sections of that act were as follows:
"§ 2. That telegraphic communications between the several
departments of the government of the United States and their
officers and agents shall, in their transmission over the lines of
any of said companies, have priority over all other business, and
shall be sent at rates to be annually fixed by the Postmaster
General."
"§ 3. That the rights and privileges hereby granted shall not be
transferred by any company acting under this act to any other
corporation, association, or person,
provided, however,
the United States may at any time, after the expiration of five
years from the date of the passage of this act, for postal,
military, and other purposes, purchase all the telegraph lines,
property, and effects of any or all of said companies at an
appraised value, to be ascertained by five competent, disinterested
persons, two of whom shall be selected by the Postmaster General of
the United States, two by the company interested, and one by the
four so previously selected."
"§ 4. That before any telegraph company shall exercise any of
the powers or privileges conferred by this act, such company shall
file their written acceptance with the Postmaster General of the
United States of the restrictions and obligations required by this
act."
It is clear that the essential part of the agreement of 1866 is
prohibited by this Act of July 24, 1866. As that act gave every
telegraph company organized under state laws and accepting its
provisions the right to erect its poles and wires upon the post
roads of the United States, the agreement of the Union Pacific
Railway Company, Eastern Division, that it would not permit, except
with the consent of the Western Union Telegraph Company, other
telegraph companies to use its roadway,
Page 160 U. S. 42
directly tended to make the Act of July 24, 1866, ineffectual,
and was therefore hostile to the object contemplated by Congress.
Pensacola Tel. Co. v. Western Union Tel. Co., 96 U. S.
1,
96 U. S. 11. The
railway company, operating one of the post roads of the United
States, over which interstate commerce was carried on, could not,
at least after the passage of that act, grant to anyone or more
telegraph companies the exclusive right to use its roadway for
telegraphic purposes.
But it is contended that the agreement of 1866 was authorized by
the Idaho Act of 1864.
That act, as we have said, authorized the several railroad
companies named in the Act of July 1, 1862, to enter into an
"arrangement" with the "United States Telegraph Company" for the
transfer of its telegraph line to the roadways of the railroad
company, and declared that such transfer, when made, should, for
all the purposes of the act of 1862, "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 a telegraph
line."
We have already determined that the Idaho Act did not affect the
power that Congress reserved of adding to, altering, amending, or
repealing the original and amendatory acts. It is now to be
examined as to its bearing upon the validity of the agreement of
October 1, 1866.
If the Western Union Telegraph Company became the successor in
right and power of the United States Telegraph Company, and
entitled to make any arrangement with the railroad company that its
predecessor could legally have made -- and such is the claim of the
Western Union Telegraph Company -- the question nevertheless
remains whether the fourth section of the Idaho Act authorized any
"arrangement" to be made by the Union Pacific Railway Company,
Eastern Division, with the United States Telegraph Company, in
conflict with the previous Act of July 24, 1866. This question is
not, in our judgment, difficult of solution.
The purpose of the fourth section of the Idaho Act is quite
apparent. Its effect was, as we have heretofore said, to relieve
each of the railroad companies named in the act of 1862 from
Page 160 U. S. 43
any present obligation to construct a telegraph line on its
roadway by means of an "arrangement" with the United States
Telegraph Company for the construction of such a line. But no
arrangement could be legally made under that act which tended in
any degree to defeat the great objects of the act of 1862, and the
act amendatory thereof, of July 2, 1864, c. 216. The act of 1862
did not authorize the railroad company to agree that it would not
itself at some future time, construct and operate a telegraph line
for the use of the government and the people. Nor did it, in terms
or by implication, repeal or modify the clause in that act by which
Congress expressly reserved the power to add to, alter, amend, or
repeal, the latter act, having due regard to the rights of the
railway companies named in it. Certainly, it could never be held
that a due regard to the rights of either the railroad company or
of any corporation claiming under it required that the government,
charged by the Constitution with the duty of regulating interstate
commerce, should permit the railroad company receiving national aid
to invest a corporation, not deriving its authority from the United
States, with the exclusive right to enjoy its roadway -- a national
highway -- for purposes of telegraphic communication between the
states.
Even if the Act of July 24, 1866, had never been passed, we
ought not to construe the Idaho Act as permitting the railway
company to bind itself by agreement to give to one telegraph
company a monopoly of the use of its roadway for telegraphic
purposes. In none of the acts of Congress having for their object
the establishing of communication by railroad and telegraph between
the Missouri River and the Pacific Ocean is there to be found
anything indicating a purpose to allow the post roads of the United
States, particularly those aided by the government, to fall, for
all the purposes of telegraphic communication, under the exclusive
control of one or more telegraph corporations. On the contrary, as
early as the Act of June 16, 1860, "to facilitate communication
between the Atlantic and Pacific states by electric telegraph," it
was declared that nothing in that act contained should confer
"any exclusive right to construct a telegraph to the
Pacific,
Page 160 U. S. 44
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 succeeded,
Page 160 U. S. 45
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 & Pacific Telegraph
Co. v. Union Pacific Railway Co., 1 F. 745. 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 goodwill, and
of the right 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
Page 160 U. S. 46
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 the
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
Page 160 U. S. 47
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 benefit 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 belong 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
Page 160 U. S. 48
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 employees, 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.
Page 160 U. S. 49
The fundamental question, therefore, is whether such a contract
was permitted by the acts of Congress defining the obligations of
railroad companies that had accepted the bounty of the government.
For the reasons we have given in the discussion of other parts of
this case, we answer this question in the negative. Such a contract
is not authorized by the fourth section of the Idaho Act, or by the
like section (nineteenth) of the act of 1862. The "arrangements"
authorized by those acts were not such as to admit of a contract
that would disable the railroad company from entering upon the
construction and maintenance itself of a telegraph line for the
accommodation of the government and of the public, or that would
prevent the United States from requiring the railroad company to
maintain and operate a telegraph line to be entirely controlled by
itself, and which would be wholly independent of any telegraph line
operated by corporations created under the laws of a state. And we
may add what has been said in reference to the prior agreements of
1866, 1869, and 1871 -- namely, that no railroad company operating
a post road of the United States over which interstate commerce is
carried on can, consistently with the Act of July 24, 1866, bind
itself by agreement to exclude from its roadway any telegraph
company incorporated under the laws of a state which accepts the
provisions of that act and desires to use such roadway for its line
in such manner as will not interfere with the ordinary travel
thereon.
On behalf of the telegraph company, it is contended that it was
beyond the power of Congress to so legislate as
"to impair the contracts -- first, that between the United
States and the several companies mentioned in the act of 1862, and
second those between the railway company and this defendant."
We perceive no ground on which this contention can properly
rest. It has already been fully examined. As we have seen,
Congress, in the act of 1862, expressly reserved the power not only
to alter, amend, or repeal that act, but to add to its provisions.
To what has already been said as to the power of Congress under
this reserved power we may add that the object of such reservation
is to enable the legislative
Page 160 U. S. 50
department to protect the public interests and
"to preserve to the state control over it contract with the
corporators, which without that provision would be irrepealable and
protected from any measure affecting its obligation."
Tomlinson v.
Jessup, 15 Wall. 454,
82 U. S.
457-458.
Another contention of the telegraph company is that, for any
failure or refusal by the railway company to comply with sections 1
and 2 of the Act of August 7, 1888, the remedy of the United States
is an action at law by mandamus, and that equity is without
jurisdiction to enforce a compliance with those sections.
It cannot be doubted that the government could lawfully proceed
by mandamus against the railway company for the purpose simply of
compelling it to perform any duty imposed by its charter or by
statute. But that remedy would not afford the United States the
full relief to which it is entitled. Here are agreements between
the railway company and the telegraph company that are wholly
inconsistent with the present claims of the government. Until
cancelled because inconsistent with the act of 1888 and prejudicial
to the rights of the government and the public by a decree to which
the telegraph company is a party, those agreements constitute an
obstacle in the way of the enforcement of that act and the
protection of those rights. In a mandamus proceeding by the
government against the railway company, the telegraph company could
not properly be made a defendant, and no judgment in mandamus, as
between the United States and the railway company, would conclude
the rights of the telegraph company. The United States is certainly
entitled to the interposition of equity for the cancellation of the
agreements under which the telegraph company asserts rights
inconsistent with the act of 1862 and the acts amendatory thereof,
as well as with the act of 1888. Jurisdiction in equity being
acquired for that purpose, the court, in order to avoid a
multiplicity of suits, can proceed to a decree that will settle all
matters in dispute between the United States, the railway company,
and the telegraph company which relate to the general subject of
telegraphic communication between the
Page 160 U. S. 51
points named by Congress. Consequently, a decree cancelling the
agreements of 1866, 1869, 1871, and 1881, by reason of their being
in the way of the full performance by the railway company of the
duties imposed by the act of 1888, may also require the railway
company to obey the directions of Congress as given in the
last-named act.
Indeed, in a proceeding by mandamus instituted against the
railway company alone, it might be objected that a court of
competent jurisdiction, in a suit brought by the telegraph company
against the railroad company, had enjoined the latter, as between
it and the telegraph company, from disregarding the agreement of
1881.
Atlantic & Pacific Tel. Co. v. Union Pacific
Railway, 1 F. 745;
Western Union Telegraph Co. v. Union
Pacific Railway, 3 F. 423;
Same v. Same, 3 F. 721. It
is true that the United States, with leave of court, might have
intervened in that suit. But it was not bound to do so. It was
entitled to institute its own suit, and bring before the court both
companies, to the end that its rights might be declared and
enforced by a comprehensive decree against both defendants.
In
Boyce v.
Grundy, 3 Pet. 210,
28 U. S. 215,
this Court said:
"It is not enough that there is a remedy at law. It must be
plain and adequate, or, in other words, as practical and efficient
to the ends of justice and its prompt administration as the remedy
in equity."
The circumstances of each case must determine the application of
the rule.
Watson v.
Sutherland, 5 Wall. 74,
72 U. S. 79. In
Oelrichs v.
Spain, 15 Wall. 211,
82 U. S. 228,
an objection was raised that the remedy at law was ample. The
Court, observing that the remedy at law was not as effectual as in
equity, said, among other things, that a "direct proceeding in
equity will save time, expense, and a multiplicity of suits, and
settle finally the rights of all concerned in one litigation." The
final order, in a proceeding by mandamus against the railway
company, would not conclude the rights of the telegraph company.
Nor would a suit in equity by the telegraph company against the
railway company conclude the rights of the United States. But a
suit in equity by the United States against both companies for the
purpose of annulling
Page 160 U. S. 52
the agreements under which the telegraph company claims rights
adverse to the United States can embrace all the matters in
controversy and authorize a comprehensive decree that will
terminate all disputes among the parties as to such matters.
Coosaw Mining Co. v. South Carolina, 144 U.
S. 550,
144 U. S.
567.
These principles are abundantly sustained by the authorities. In
1 Pomeroy's Equity Jurisprudence § 181, many adjudged cases are
cited in support of the proposition that
"if the controversy contains any equitable feature, or requires
any purely equitable relief which would belong to the exclusive
jurisdiction, or involves any matter pertaining to the concurrent
jurisdiction, by means of which a court of equity would acquire, as
it were, a partial cognizance of it, the court may go on to a
complete adjudication, and may thus establish purely legal rights
and grant legal remedies which would otherwise be beyond the scope
of its authority."
This principle was applied in
Peck v. School Dist., 21
Wis. 516, 523. That was a suit to set aside a contract made by the
officers of a municipality. The court held that the contract should
be set aside, and the question arose whether the decree might not
go further, and prevent the collection of the taxes assessed and
levied for the purposes of the contract adjudged to be illegal. It
was held that, as the taxes were levied in order to carry the
illegal contract into effect, their collection could be stayed as a
proper subsidiary ground of relief, upon the principle that, the
jurisdiction of the court having once rightfully attached, it
should be made effectual for all the purposes of complete relief.
"The court," it was said,
"will not annul the contract and at the same time permit the
officers of the district to collect the taxes, to be afterwards
recovered back by a multiplicity of suits at law."
We are of opinion that the circuit court properly adjudged that
equity had jurisdiction to give full relief in respect of all
matters in issue between the United States and the defendant
companies.
We perceive no substantial error in the decree passed by the
circuit court. There are some minor provisions in each
Page 160 U. S. 53
of the contracts annulled by it which may not be regarded as in
themselves beyond the power of the contracting parties nor
inconsistent either with the duties enjoined upon the railway
company by the act of 1888 or with the rights of the United States.
But they are of so little practical importance, and are so
interwoven with and so difficult to be separated from the
provisions found to be illegal and to stand in the way of the due
execution of the act of Congress that the circuit court properly
adjudged that the contracts referred to should be set aside and
annulled.
The decree of the circuit court of appeals of January 29,
1894, is reversed and set aside, and the decree of the circuit
court of October 11, 1892, is affirmed.
It is further adjudged by this Court that the circuit court
make a supplemental decree enlarging the period within which the
defendants may make such arrangements, adjustments, and changes as
shall become necessary be reason of the annulling of the contracts
of October 1, 1866, September 1, 1869, December 14, 1871, and July
1, 1881, and to carry out the provisions of the final decree of
that court.
Reversed.
MR. JUSTICE BREWER took no part in the hearing or decision of
this case on the present appeal.