Western Union Telegraph Co. v. Postal Telegraph Co.

ROSS, Circuit Judge (after stating the facts as above). [1] We are of the opinion that the court below was clearly right in holding the attempted grant by the Southern Pacific Company to the Western Union Telegraph Company of the exclusive right for the construction, maintenance, and operation of a telegraph line upon the railroad company’s right of way void and of no effect. A similar question came before the Circuit Court for the Southern District of California in 1894, in the cases of Mercantile Trust Co. v. Atlantic & Pacific Railroad Co. (C. C.) 63 Fed. 513, and Mercantile Trust Co. v. Atlantic & Pacific Railroad Co. (C. C.) 63 Fed. 910. The railroad company there undertaking to make a like exclusive grant to the Western Union Telegraph Company was created under the act of Congress of July 27, 1866, entitled “An act granting lands to aid in the construction of a railroad [538] and' telegraph line from the states of Missouri and Arkansas to the Pacific coast” (14 Stat. 292, c. 276), and in addition to contending that, the attempted exclusive grant was valid, the Western Union Telegraph Company further contended that the Atlantic & Pacific Railroad Company could lawfully withhold from the Postal Telegraph Company all facilities for the transportation of its poles, wires, etc. In disposing of those contentions the writer there said, among other things: “The Atlantic & Pacific Railroad Company was thus created, and made a great highway of communication, with the declared object of promoting the public interest and welfare. There is not a syllable in the act indicating that it was intended by Congress to be used as an instrument for the building up or fostering of any monopoly of any character, or that it should be permitted to "do any act inconsistent with the objects for which it was created. If it may lawfully withhold facilities for the transportation of material and supplies for the erection of a line or lines of telegraph which may come into competition' with some other line, no reason is perceived why it may not also withhold facilities for the transportation of any other kind of freight in the interest of some one or more favored persons or corporations. The Atlantic & Pacific Railroad Company is a common carrier, and common carriage must be kept open to all alike, under like circumstances and conditions. What the considerations were that induced the Atlantic & Pacific Company to make the stipulation in question is immaterial. Its purpose plainly was to prevent competition. In the present age of progress the telegraph is as essential to the needs and comforts of the public as the railroads themselves. ‘Telegraphs,’ said Mr. Wharton in a note to the case of W. U. Telegraph Co. v. Burlington & S. Ry. Co. [C. C.] 11 Fed. 12, ‘are now essential to business, and as such are to be kept open to competition (unless the Legislature should otherwise determine), in the same way that common carriage is to be kept open to competition. An agreement to give a particular line of carriers monopoly in a state would not (without legislative aid) be enforced, nor should a contract to give a monopoly to a particular telegraph company.’ The Atlantic & Pacific Railroad Company, being a common carrier, is bound to afford every telegraph company, as well as every other company or person, equal transportation facilities under like circumstances and conditions; and its agreement to withhold from any other company or person than the Western Union Telegraph Company such facilities is, in my opinion, at variance with the declared purposes for which that company was created, against public policy, in restraint of trade, and void.” To the same effect are Pensacola Telegraph Co. v. Western Union Telegraph Co., 96 U. S. 1, 24 L. Ed. 708, and United States v. Union Pacific Railroad Co., 160 U. S. 1, 16 Sup. Ct. 190, 40 L. Ed. 319. The attempted exclusive grant to the Western Union Company by the Southern Pacific Company of the right of way in question for telegraph purposes being void, it was and is no legitimate concern of the former how many similar rights the Southern Pacific Company should grant to others, so long as the Western Union Company’s right to the existence and maintenance of its own line is unaffected. - In the absence of a valid exclusive grant to that company, there is nothing in the record tending to show that its line was or could be in any way affected by the agreement made between the Southern Pacific Railroad Company and the Postal Telegraph Company, with which agreement the Western Union Company therefore had nothing whatever to do. [2, 3] The willingness of the Southern Pacific Company, but for the objections interposed by the Western Union Telegraph Company, to execute in writing the agreement made between it and the Postal Tele [539] graph Company, sufficiently appears from the record, and we arc of the opinion that the court below was not in error in decreeing- that the defendant railroad company execute the contract. Jeremy, in his Equity Jurisdiction, says: “An injunction is a writ framed according to the circumstances of the case, commanding an act which the court regards as essential to justice, or restraining an act which it considers contrary to equity and good conscience.” The purpose of the case of In re Lennon, 166 U. S. 548, 17 Sup. Ct. 658, 41 L. Ed. 1110, was to compel certain railroad companies to afford reasonable and equal facilities for the interchange of traffic, where it was alleged that they and their employés— “had given out and threatened that they would refuse to receive from complainant cars billed over its road for transportation by complainant to their destination, for the reason that the complainant had employed as locomotive engineers in its service men who were not members of the Brotherhood of Locomotive Engineers, ‘an Irresiionsible voluntary association,’ and that the locomotive engineers in the employ of the defendant companies had refused to handle ears to be interchanged with the complainant’s road, notwithstanding that they continued to afford the other railroad companies full and free, facilities for the interchange of traffic, while refusing to transact such business with the complainant, thereby illegally discriminating against it.” In the course of its opinion the Supreme Court said, among other things: “Perhaps, to a certain extent, the injunction may be termed mandatory, although its object was to continue tbe existing state of things, and to prevent an arbitrary breaking off of the current business connections between the roads. But it was clearly not beyond tbe power of a court of equity, which is not always limited to the restraint of a contemplated or threatened action, but may even require affirmative action, where the circumstances of the case demand it. Robinson v. Lord Byron, 1 Bro. C. C. 588; Hervey v. Smith, 1 Kay & Johns. 389; Beadel v. Perry, L. R. 3 Eq. 465; Whitecar v. Michenor, 37 N. J. Eq. 6; Broome v. New York & New Jersey Telephone Co., 42 N. J. Eq. 141 [7 Atl. 851].” In the case of Pokegama Sugar-Pine Lumber Co. v. Klamath River Lumber & Improvement Co. (C. C.) 86 Fed. 528, Judge Morrow held, among other things, that where sufficient grounds exist a court of equity has the power to and will issue, on a preliminary examination, a restraining order, though mandatory in effect and requiring affirmative action, saying, among other things, at page 533: “It is contended that the injunction, although preventive in form, was mandatory in effect; its execution resulting in a change in the status of the parties. This contention assumes (hat the court will recognize the respondent as asserting, at the time the bill was filed, a claim of possession to the property under a color of right to such possession, and that the effect of the order was to oust it from that possession. But equity will not permit a mere form to conceal the real position and substantial rights of parties. Equity always attempts to get at the substance of things, and to ascertain, uphold, and enforce rights and duties which spring from the real relations of parties. It will never suffer the mere appearance and external form to conceal the true purposes, objects, and consequences of a transaction. Pom. Eq. Jur. (2d Ed.) § 378.” The judgment is affirmed.