Western Union Tel. Co. v. Western & Atlantic R. Co., 91 U.S. 283 (1875)

U.S. Supreme Court

Western Union Tel. Co. v. Western & Atlantic R. Co., 91 U.S. 283 (1875) Western Union Telegraph Company v. Western & Atlantic Railroad Company

91 U.S. 283

APPEAL FROM THE CIRCUIT COURT OF THE UNITED

STATES FOR THE NORTHERN DISTRICT OF GEORGIA

Syllabus

1. An agreement between a telegraph company and the State of Georgia, sole owner of a railroad, which provides that the company shall put up and set apart on its poles along said railroad a telegraph wire for the exclusive use of the railroad, equip it with as many instruments, batteries, and other necessary fixtures as may be required for use in the railroad stations, run the wire into all the offices along the line of road, and put the same in complete working order, fixes the terms upon which officers of the road may transmit and receive messages through the connecting lines of the company, recognizes the right of way of the company along the line of road, regulates the use of the wire, and the compensation for it, and binds the state to pay the cost of constructing the wire and equipping the same at railroad stations not already supplied with instruments, batteries, and other necessary fixtures does not constitute a sale of such wire, batteries, and other instruments to the state, but is merely a contract for her exclusive use thereof.

2. As the ownership of such wire and instruments is in the telegraph company, a lease of the railroad by the state confers upon her lessees only such rights as she acquired under her contract with the company.

The State of Georgia, sole owner of the Western & Atlantic Railroad, desiring the use of a telegraph for the purposes of

Page 91 U. S. 284

the road along its line, an instrument of writing providing therefor, bearing date Aug. 18, 1870, signed by William Orton, president, on behalf of the Western Union Telegraph Company and by Foster Blodgett, superintendent of the railroad, was approved by Rufus B. Bullock, governor, and countersigned by H. C. Carsen, secretary of the executive department.

The substance of this agreement was that the company should put up and set apart on its poles already there along said railroad a telegraph line for the exclusive use of the railroad, equip it with as many instruments, batteries, and other necessary fixtures, as might be required for use in the railroad stations, run the wire into all the offices along the line of the road, and put the same in complete working order. Other provisions related to the terms on which the officers of the road might transmit and receive messages through the connecting lines of the company, to the right of way of the company along the line of the road, and to other matters regulating the use of the wire, and compensation for it. The sixth article bound the state to pay, as soon as it could be ascertained, the cost of constructing the wire and of equipping it at railroad stations not already supplied with instruments, batteries, and other necessary fixtures. Shortly after the wires were set up and the instruments put in working order, the governor of the state, under authority of an act of the legislature, granted, conveyed, and leased

"the Western & Atlantic Railroad, which is the property of the State of Georgia, together with all its houses, workshops, depots, rolling stock, and appurtenances of every character, for the full term of twenty years,"

to certain persons who became a body corporate by the name of "The Western & Atlantic Railroad Company."

The railroad company took possession of the road and its appurtenances under the lease, including the wire and batteries and instruments put on the road and in its offices by the telegraph company under the contract with the state, but, having this possession, refused to pay for the transmission of messages over connecting lines according to the terms of the contract, and claimed that it was not bound thereby and that in fact the true construction of that agreement being that the state had bought and paid for the wire and instruments, and owned

Page 91 U. S. 285

them, it, as lessee of the state, had the right to control and use them without any liability to the telegraph company.

The telegraph company, in its bill of complaint, states the refusal of the railroad company to recognize its rights in any respect, while insisting on using the wire and apparatus and withholding from the complainant any use of them in the offices and depots of the road; alleges that these considerations induced the complainant to treat as revoked and withdrawn all power and privilege on the part of the defendant to use said wire and apparatus, or to receive compensation therefor and that the complainant, seeking to recover possession of them, had been hindered and obstructed by the defendant in so doing. The bill prays that the defendant be enjoined from using said wire, from hindering or obstructing the complainant in the use of it or in severing it from all the offices of the defendant, and for such other and further relief as the nature of the case requires.

The railroad company, in its answer, denies that the contract between the telegraph company and the state is valid, being without authority of law; asserts that if valid, it, as lessee of the railroad, is not bound by the terms thereof and that, by the true construction of that contract, the state became the purchaser and owner of the wire and instruments, and that the company succeeded to this ownership without being bound by the other terms of the agreement.

The railroad company also filed a cross-bill setting up this view of its rights and praying an injunction against the telegraph company to restrain it from interfering with the use of the wire and apparatus so acquired from the state.

The district court dismissed this cross-bill on demurrer, and on hearing the original bill of the complainant, the answer and evidence, decreed that the wire and instruments in question are the property of the State of Georgia, and are included in the lease to the railroad company, and that this company is not bound by the terms of the contract in other respects unless adopted by it, and therefore dismissed the bill.

Page 91 U. S. 289

MR. JUSTICE MILLER, after stating the case as above, delivered the opinion of the Court.

We differ with the district court as to the construction of the instrument. We do not think that the state simply bought a wire and batteries and other instruments and became absolute owners of them; on the contrary, we think that the contract was for the use of a wire and instruments of the telegraph company.

The language of the first covenant of the telegraph company is that it agrees "to set apart on its line of poles along said railroad a telegraph wire for the exclusive use of said party of the second part." The further covenants are all consistent with this. The contract for the use of this wire in connection with the others, and for the use of one of the wires already there when this shall be disabled, the fact that it is placed upon the poles of the company already in use for two other wires, the agreements regulating the offices, and, in short, the whole frame of the contract show that the wire, the poles, the instruments, were the property of the telegraph company, with exclusive use of this wire transferred to the railroad.

This view is perfectly consistent with the idea that the state should pay the cost and expense of the additional wire and instruments rendered necessary by this agreement for its exclusive use, which does not prove that anything more than this right to exclusive use passed to the state.

If this be true, the railroad company, taking possession of this wire and instrument under claim of right from the state, must use it on the terms which bound the state or not use it at all.

The ownership being in the telegraph company, the road could only have such use of it lawfully as it acquired from the state, and the right of the state to the use of it is governed by the terms of the agreement.

Page 91 U. S. 290

It is said that the contract between the state and the telegraph company is void because the superintendent and the governor had no power to make it and because it is oppressive and extortionate.

We do not decide whether this be so or not. Whenever the railroad company or the state shall cease to use the wire, shall abandon the contract and leave the instruments severely alone, and the complainant shall then seek to compel compliance with the contract, it will be time to decide that question; but so long as this company, by the use of the wire and the apparatus, gets the benefit of the contract, it must also abide by the terms in other respects.

We are embarrassed in this view of the subject by the unskillful character of the bill. The relief it seeks is the very last one would think of -- namely, to enjoin the railroad company from the use of a wire and battery and instruments running along their line, and fixtures in their offices and depots, where they may remain until it be the pleasure of the complainant to take them away. The right to compensation for what the complainant has suffered by the failure of defendant, while using the wire, to comply with the covenants of the state, can be understood, and the right of defendant, when performing the covenants of the state, to use the wire can be understood; the right to a rescission of the contract if either party prayed therefor can be understood; but this right which each claims, that it shall be let alone by the other to do as it pleases in regard to this wire, is very difficult to understand.

Complainant, in the petition, treats as revoked the power and privilege of defendant to use the wire and instruments. Is this an abandonment of the contract by complainant?

But there is in the bill a prayer for such other and general relief as the case may require. There is also the following stipulation after the pleadings are all in, which relieves us of much difficulty:

"It is agreed by counsel that if the use of the wire by the defendant is affected by the contract entered into between the complainant and the state (which contract is copied in the exhibit to the bill) in such manner as that the terms of said contract must be observed and complied with by defendant in order to retain the

Page 91 U. S. 291

right to such use, the case is one proper for reference to the master to take an account unless the court should adjudge that there is no right in complainant to relief in equity."

Now we are of opinion that the use of the wire by defendant is affected by the contract between complainant and the state in such manner that such use requires the defendant to comply with the terms of that contract.

We are also of opinion that to prevent multiplicity of suits and to have an accounting instead of bringing a suit on every specific violation of the covenants of the state, complainant has a right to relief in equity.

The decree of the circuit court is therefore reversed with directions to refer the case to a master to state an account on the terms of the contract between the state and the telegraph company, as between the complainant and defendant, for the time defendant has used the wires, batteries, and equipments put up under that contract, and to render a decree for that amount.

MR. JUSTICE FIELD dissented.