Case Name: Pensacola Telegraph Company v. Western Union Telegraph Company
Court: Supreme Court of the United States
Jurisdiction: United States
Decision Date: 1877-10
Citations: 96 U.S. 1
Docket Number: 
Parties: Pensacola Telegraph Company v. Western Union Telegraph Company.
Judges: Mr. Justice Field and Mr. Justice Hunt dissented.
Reporter: United States Reports
Volume: 96
Pages: 1–24

Head Matter:
Pensacola Telegraph Company v. Western Union Telegraph Company.
1. The powers 'conferred upon Congress to regulate commerce with foreign nations and among the several States, and to establish post-offices and post-roads, are not confined to the instrumentalities of commerce, or of the postal service known or in use when the ¡Constitution was adopted, but keep, pace with the progress of the country, and adapt themselves to the new developments of time and circumstances.
2. .They were’ intended -for the government of the business to which they relate, at all times and under' all circumstances; and it is not only the right, but the - "duty, of Congress to take care that intercourse among the States and the transmission of intelligence are not obstructed or unnecessarily encuinbered by State legislation. .
3. The act’ of Congress approved July 24,1866 (14 Stat. 221, Rev. Stat., sect. 5263 et seq.), 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,” so far as it declares that the erection,of telegraph lines shall, as against State interference, be free to all who aocept its terms and conditions, and -that a telegraph compariy of one State shall not, after accepting them, be excluded by another State from prosecuting its. business within her jurisdiction, is a legitimate regulation of commercial intercourse among the States, and-is appropriate legislation' to execute the powers of - Congress over the postal service'. " '
4. Nor is it limited .in its operation to such military and post roads as are upon the public domain. ;
5. The statute of Florida approved Dec. 11, 1866, so far as it grants to the Pensacola Telegraph Company the exclusive right of establishing and maintaining lines of electric telegraph as therein specified, is in conflict with that act, and therefore inoperative against a corporation of another State entitled to the privileges which that act confers.
6. Without deciding whether, in the absence of that act, the legislation of Florida of 1874 .would have been sufficient to authorize a foreign corporation to construct and operate a telegraph line within the counties of Escambia and Santa Rosa in that State, the court holds that a telegraph company of another State, which has secured a right of way by private arrangement with the- owner of the land, and duly accepted the restrictions and, obligations required by that act, cannot be excluded by the Pensacola Telegraph Company.
Appeal from the Circuit Court of the United States for the Northern District of Florida.
In 1859, an association of persons, known as the Pensacola Telegraph Company, erected a line of electric telegraph upon the right of way of the Alabama and Florida railroad, from Pensacola, in Florida, to Pollard, in Alabama, about six miles north of the Florida line. The company operated the whole line until 1862, when, upon the evacuation of Pensacola by the Confederate forces, the wire was taken down for twenty-three miles, and Cooper’s Station made the southern' terminus. In 1864, the whole was abandoned, as the section of the country in which it was situated had fallen into the possession of the United States troops.
On the 1st of December, 1865, the stockholders met; and it appearing that the assets of the company were insufficient to rebuild the line, a new association was formed for that purpose, with the' old name, and new stock to the amount of $5,000 subscribed. A resolution was adopted by the new company to purchase the property of the old, at a valuation put upon it in a report submitted to the meeting, and a new board of directors was elected.
A meeting of the directors was held on the 2d of January, 1866, at which the president reported the completion of the line to Pensacola, and a resolution was adopted, authorizing the purchase of wire for its extension to the navy-yard. The attorneys of the company were also instructed to- prepare a draft of a charter, to be presented to the legislature for enactment.
On the 24th of July, 1866, Congress passed the following act: —
“ 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.
“ Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, that any telegraph company now organized^ or which may hereáfter be organized, under the laws of any State in this Union, shall have the right to construct, maintain, and operate lines of telegraph through and 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 have been or may hereafter be declared such by act of Congress, and over, under, or across the navigable streams or waters of the United States: Provided, that such lines pf telegraph shall be so constructed and maintained as not to obstruct the •navigation of such streams .and waters, or interfere with the ordinary travel on such military or' post roads. And any of said companies shall have the right to take and use from such public lands ■the necessary 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 pre-empt .and use such portion of the unoccupied public lands subject to pre-emption 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.
“ Sect. 2. And be it further enacted, that telegraphic communications between the several departments of the government of the United States and their officers and agents shall, in their transmis-. sion 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.
“ Sect. 3. And be it further enacted, that the rights and privileges hereby granted shall not sbe transferred by any company acting under this act to any other corporation, association, or person: Provided, however, that 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, or 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 tbe United States, two by tbe company interested, and one by the four so previously selected.
“ Sect. 4. And be it further enacted, 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 restrictions and obligations required by this act.” 14 Stat. 221; Rev. Stat., sect. 5263 et, seq.
All railroads in the United .States áre by law .post-roads. Rev. Stat., sect. 3964; 17 Stat. 308, sect. 201.
On the 11th of December, 1866, the legislature of -Florida passed an act incorporating the Pensacola Telegraph Company, and granting it “ the sole and exclusive privilege and right of ' establishing and maintaining lines of electric telegraph .in the counties of Escambia and Santa Rosa, either from different points within said counties, or connecting with lines coming into said counties, or either of them, from any point in this [Florida] or any other State.” The capital stock was fixed at $5,000, with the privilege of increasing it to such an amount as might be considered necessary. The company was authorized to locate and construct its lines within the counties named, “ álong and upon any public road or highway, or across any water, or upon any'railroad or private property, for which permission shall first have been obtained from the proprietors thereof.” In this act all the stockholders of the new association which had rebuilt the line were named as corporators-. No meeting of the directors was held until Jan. 2, 1868, when the secretary-was instructed to notify the stockholders “ that the charter drawn up by Messrs. Campbell & Perry, attorneys, as per order ’of board, Jan. 2, 1866,” had been passed.
On'the 5th of June, 1867, the directors of the defendant, the "Western Union Telegraph Company, a New York corporation, passed the following resolution, which was duly filed with the Postmaster-General: — ■
“Resolved, that-this company does hereby accept the provisions of the act of .Congress, 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,’ approved July 24, 1866, with all the powers, privileges, restrictions, and obligations conferred and required thereby ; and that the secretary be, and he
is hereby, authorized and directed to file this resolution with the Postmaster-General of the United States, duly attested by the signature of the acting president of the company and ’the seal of the ' corporation, in compliance with the fourth "section of said act of Congress.”
. In 1872, the property of the Alabama and. Florida Railroad Company, including its right of way and railroad; was trans.ferred to the Pensacola and Louisville Railroad Company; and on the 14th of February, 1873, the legislature of Florida passed an act, which, as .amended Feb. 18, 1874, authorized the last-named company “ tos construct, maintain, and operate a telegraph line from the Bay of Pensacola along the line of the said (its) road as now located, or as it may hereafter be located, and along connecting roads in said county to the. boundary lines of the State' of Alabama, and the said lines may connect and’ be consolidated with other telegraph companies within or without the State, and said company may pledge, mortgage, lease, sell, assign, and convey the property appertaining' to the said telegraph lines, and the rights, privileges, and. franchises conferred by this act, with full power in such assignees to construct, own, ■ and operate such telegraph lines, and enjoy all the privileges, rights, and franchises conferred by this actbut in such case the said railroad'company shall be responsible for the proper performance of the duties and obligations imposed by thit act.”
This was within the territory embraced by the exclusive grant to the Pensacola Telegraph Company.
. On the 24th of June, 1874, the Pensacola and Louisville Railroad Company granted to the Western Union Telegraph Company the right to erect a telegraph line upon its right of way, and also the rights and privileges conferred by the acts of February, 1873 and 1874. The Western Union Company immediately commenced the erection of the line; but before its completion, to wit, July 27, 1874, the bill in this case was filed by the Pensacola Telegraph Company to enjoin th.e work .and the use of the line, on account of the alleged exclusive right of that company under its charter. .Upon the hearing, a decree was passed dismissing the bill, and this appeal was taken.
Mr. Charles W. Jones, for the appellant.
Except when prohibited or restricted by the provisions of the State Constitution, the legislature can grant exclusive privileges and franchises within its own jurisdiction. Cooley, Const. Lim. 281; Gibbons v. Ogden, 9 Wheat. 1; West River Bridge Co, v. Diz et al., 6 How. 507; S. c. 16 Yt. 446; The Binghamton Bridge, 3 Wall. 51; Shorter v. Smith, 9 Ga. 529; The Proprietors of the Piscataqua Bridge v. The New Hampshire Bridge et al., 7 17. H. 35; Boston Water Power Co. v. Boston Lowell Railroad Corporation et al., 23 Pick. (Mass.) 360; Boston Lowell Railroad Corporation V. Salem $ Lowell Railroad Co. et al., 2 Gray (Mass.), 1; California Telegraph Co. v. The Atlantic Telegraph Co., 22 Cal. 398; Hazen et al. v. The Union Bank of Tennessee, 1 Sneed (Tetan.), 115; The People v. Bowen, 30 Barb. (N. Y.) 24; Livingston v. Van Ingen et al., 9 Johns. (N. Y.) 506; Ogden •y. Gibbons, 4 Johns. (N. Y.) Ch. 150.
In Florida there were no such restrictions or prohibitions. On the contrary, by the express terms of sect. 3, art. 15, of her Constitution, the special statute of Dec. 11,1866, incorporating the appellant and granting the exclusive privileges which are asserted in this suit, is valid.
That statute is not referred to in that of Feb..14, 1873, or the amendatory act of 1874, and is, therefore, not repealed by a general repealing clause. Crane v. Rider,' 22 Mich. 322; State v. Mills, 34 N. J. L. 177; State v. Brannin, 2 Zab. (N. J.) 485; Fostick v. Perrysburg, 14 Ohio St. 474.
The said statute of Dec. 11 is, however, a contract with the State, which cannot be impaired or modified without the company’s consent. A subsequent statute interfering with that contract, or the rights thereunder vested, is inoperative and void. Trustees of Dartmouth College v. Woodward, 4 Wheat. 518; State■ Bank of Ohio v. Knoom, 16 How. 369; Dodge y-. 'Woolsey, 18 id. 331; Jefferson Branch Bank v. Skelly, 1 Black, 436; Franklin Branch Bank v. The State of Ohio, id. -74; The Binghamton Bridge, supra; Farrington v. Tennessee, 95 U. S. 679. .
"The appellee is a Nt w York corporation; and, in the absence M- any legislation of Florida empowering it to exercise its corporate franchises in the latter State, can set up nothing in conflict with the exclusive rights of the appellant under its charter. It has no existence or rights beyond the limits of the State which created it, except by the comity or the enabling acts of other States. The Bank of Augusta v. Earle, 15 Pet. 519; Ohio Mississippi Railroad Co. v. Wheeler, 1 Black, 286 ; .Paul v. Virginia, 8 Wall. 168; Liverpool Insurance Co. v. Massachusetts, 10 id. 566; Railroad Company v. Harris, 12 id. 65.
The act of 1874, under which the appellee claims- by assign-. ment from the Louisville & Pensacola Railroad Company, must .be construed with reference to this settled principle.' The assignment was not effectual to transfer any franchise, because the assignee was, in this instance, incompetent to take.
The act of Congress of July 24, 1866, has no bearing upon the case. -It is in substantially the same terms as that of-Aug. 4,'1852, 10 Stat. 28, which grants to any railroad, plank-road, or turnpike company the right of way through the public lands, and the right to take therefrom earth, stone, or wood, for the • purpose of construction, and to select sites for depots and workshops. It -extends, on certain' conditions, efficient aid to any telegraph company whose authorized lines are to be established .over the public domain. If it can be construed as conferring .upon a corporation of one State the right in another State to do certain acts and enjoy certain privileges in connection with that domain, the indispensable condition is necessarily implied, that, by an enabling statute of such other State, the requisite capacity to do the acts or enjoy the privileges within her limits has been, or will be, bestowed on the corporation. It does not, propria vigore, enlarge the corporate powers of any company, or authorize it to exercise them in a foreign jurisdiction.' If it attempted to do so, it would, to that extent, be clearly void, as ' an assumption of a power which has been wisely and to the fullest extent lodged with the respective States.
But if the appellee was a Florida corporation, clothed with undisputed authority to establish and work its lines within the' county of Escambia, the act would give her — what is not here in issue — a right of way only over the public domain. Congress did not possess, and could not grant, more. The United States acquires no proprietary interest in any railroad by declaring it a post-road. Dickey v- Maysville Lexington Turnpike Road Co., 7 Dana (Ky.), 118. The only objects thereby attained or sought are the security of the mail and the protection of the postal service.
Mr. Perry Belmont, contra.
Telegraphing, as practised by the respondent, is a part of that intercourse which constitutes commerce.
Restrictions upon the free right to erect and maintain telegraph lines operate to regulate that intercourse.
Such restrictions, when imposed,by State authority, are void, as contravening the Constitution of the United States.
The act of the legislature of Florida, approved Dec. 11,1866, relied on by the appellant, not only trespasses upon the domain of Congress, but assumes to forbid what that body has authorized.
The question concerning the power of Congress to enable a corporation to exercise its franchises in a State other than that which created it, is not necessarily involved in determining the rights of the parties. The appellee is exercising certain franchises which -the Pensacola and Louisville Railroad Company, pursuant to a statute of Florida, transferred to it by an assignment, which, except within the territory in question, it must be conceded, was as valid and effectual in vesting them as if they had been immediately derived from a legislative grant. The landed proprietors have granted' to it the right of occupancy. It is, therefore, lawfully in that State, and has established connections therewith its lines coming from other States. The. case, therefore, turns upon the'.single point, whether, after complying with the conditions and regulations imposed by Congress, such a company so-carrying on a commercial business may, with all its foreign and internal connections, be excluded, at the instance of another corporation, from certain-portions-of the State.

Opinion:
Mr. Chief Justice Waite
delivered the opinion of the court.
Congress has power " to regulate commerce with foreign nations and amongthe several States " (Const. art. 1, sect. 8, par. 8); and " to establish post-offices and post-roads " (id., par. 7). The Constitution of the United States and the laws made in pursuance thereof are the supreme law ocf the land. Art. 6, par. 2. A law of Congress made in pursuance of the Constitution suspends or overrides all State statutes with which it is in conflict.
Since the case of Gibbons v. Ogden (9 Wheat. 1), it has never been doubted that commercial intercourse is an element of commerce which comes within the regulating power of Congress. Post-offices and post-roads are established to facilitate the transmission of intelligence. Both commerce and the postal service are placed within the power of Congress, because, being national in their operation, they should be under the protecting care of the national government.
Tbe powers thus granted are not confined to the instrumentalities of commerce, or the postal service known or in use when the Constitution was adopted, but they keep pace with the progress of the country, and adapt themselves to the new developments of time and circumstances. They extend from the horse with its rider to the stage-coach, from the sailing-vessel to the steamboat, from the coach and the steamboat to the railroad, and from the railroad to the telegraph, as these new agencies are successively brought into use to meet the demands of increasing population and wealth. They were intended for the government of the business to which they relate, at all times and under all circumstances. As they were intrusted to the general government for the good of the nation, it is not only the right, but the duty, of Congress to see to it that intercourse among the States and the transmission of intelligence are not obstructed or unnecessarily encumbered by State legislation.
The electric telegraph marks ah epoch in the progress of time. In a little more than a quarter of a century it has changed the habits of business, and become one of the necessities of commerce. It is indispensable as a means of inter-communication, but especially is it -so in commercial transactions. The statistics of the business before the recent reduction in rates show that more than eighty per cent of all the messages sent by telegraph related to commerce. Goods are sold -and money paid upon telegraphic orders. Contracts are made by telegraphic correspondence, cargoes secured, and the movement of ships directed. The telegraphic announcement of the markets abroad regulates prices at home, and a prudent mer chant rarely enters upon an important transaction without using the telegraph freely to secure information.
It is not only important to. the people; but to the government. By means of it the heads of the departments in Washington are kept in close communication with all their various agencies at home and abroad, and can know at almost any hour, by inquiry, what is transpiring anywhere that affects the interest they have in charge. Under such circumstances, it cannot for a moment be doubted that this powerful agency of commerce and intercommunication comes within the controlling power of Congress, certainly as against hostile State legislation. In fact, from the beginning, it seems'to have been assumed that Congress might aid in developing the system; for the first telegraph line of any considerable extent ever erected was built between Washington and Baltimore,' only a little more than thirty years ago, with money appropriated by Congress for that purpose (5 Stat. 618) ; and large donations of land and money have since been made to aid in the construction of other lines (12 id. 489, 772; 13 id. 365; 14 id. 292). It is not necessary now to inquire whether Congress may assume the telegraph as part of the postal service, and exclude all others from its use. The present case is satisfied, if we find that Congress has power, by appropriate legislation, to prevent the States from placing obstructions in the way of its usefulness.
The government of the United States, within the scope of its powers, operates upon every foot of territory under its jurisdiction. It legislates for the whole nation, and is not embarrassed by State lines. Its peculiar duty is to protect one part of the •country from encroachments by another upon the national rights which belong to all.
The State of Florida has attempted to confer upon a single corporation the exclusive right of transmitting intelligence by telegraph, over a certain portion of its territory; This embraces the two westernmost counties of the State, and extends'from Alabama to the Gulf, • No telegraph' line can cidss-the State from east to west, or from north to south, within these counties, except it passes over this territory. Within it is situated an important seaport, at which-business centres, and with which those engaged in commercial pursuits have occasion more or less •to communicate. The United States have there also the necessary machinery of the national govérnment. They have .a navy-yard, forts, custom-houses, courts, post-offices, and the appropriate officers for the enforcement of the laws. The legislation of Florida, if sustained, excludes all commercial intercourse by telegraph between the citizens of the other States and those residing upon this territory, except by the employment of this corporation. The United States cannot communicate with their own officers by telegraph except in the same way. The State, therefore, clearly has attempted to regulate commercial intercourse between its citizens and those of other States, and to control the transmission of all telegraphic correspondence within its own jurisdiction.
It is unnecessary to decide how far this might have been done if Congress had not acted upon' the same subject, for it has acted. The statute of July 24, 1866, in .effect, amounts to a prohibition of all State monopolies in this particular. It substantially declares, in the interest of. commerce and the convenient transmission of intelligence from place to. place by the government of the United States and its citizens, that the erection of telegraph lines shall, so far as State interference is concerned, be free to all who will submit to the conditions imposéd by Congress; and that corporations organized under the'iaws of one State for constructing and operating telegraph lines shall not be excluded by another from prosecuting their business within its jurisdiction, if they accept the terms proposed by the national government for this national privilege. To this extent, certainly,'the statute is a legitimate regulation.óf commercial intercourse among the States, and is appropriate legislation to carry into execution the powers of Congress over the postal service. It gives no foreign corporation the right to enter upon private property without the consent of the owner and erect the necessary structure's for its business; but it does provide, that, whenever the consent of the owner is obtained, no State legislation shall.prevent the occupation of post-roads for telegraph purposes by such corporations .as are willing to avail themselves of its privileges.
It is insisted, however, that the statute extends only to such military and post roads as are upon the public domain; but this, we think, is not so. The language is, " Through and 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 have been or may hereafter be declared such by act of Congress, and over, under, or across the navigable streams or waters of the United States." There is nothing to indicate an intention of limiting the effect of the words employed, and they are, therefore, to be given their natural and ordinary signification. Read in this way, the grant evidently extends to the public domain, the military and post roads, and the navigable waters of the United States. These are all within the dominion of' the national government to the extent .of the national powers, and are, therefore, subject .to legitimate congressional regulation. No question arises as to the authority of Congress to provide for the appropriation of private property to the uses of the telegraph, for no such attempt has been" made. The use of public property alone is granted. If private property is required, it must, so far as • the present -legislation is concerned, be obtained by private arrangement with its owner. No compulsory proceedings are authorized. State sovereignty under the Constitution is not interfered with. Only national privileges are granted;
The State law in question, so far as it confers exclusive rights upon the Pensacola Company, is certainly in conflict with this legislation of Congress. To that extent it is, therefore, inoperative as against a corporation of another State entitled to the privileges of the act of Congress. Such being the case, the charter of the Pensacola^ Company does not exclude the Western Union Company from the occupancy of the right of way of the Pensacola and Louisville Railroad Company under :.the «arrangement made for that purpose.
We aré aware , that,, in' Paul v. Virginia (8 Wall. 168), this court decided that a State- might exclude a corporation of 'another. State from its jurisdiction, and that corporations are not ' within the clause of the Constitution which declares that " the citizens of each State shall be entitled'to all privileges and immunities of citizens in the several States." Art. 4, sect. 2. Tjrat was not, however, the case of a corporation engaged in inter-state commerce; and enough was said by the court to show, that, if it had been, very different questions would have been presented. The language of the opinion is: "It is undoubtedly true, as stated by counsel, that the power conferred upon Congress to regulate commerce includes as well commerce, carried on by corporations as commerce carried on by individuals. . . . This state of facts forbids,the supposition that it was intended in the grant of power to Congress to exclude from its control the commerce of corporations. The language of the grant makes no reference to the instrumentalities by which commerce may be carried on: it is general, and includes alike commerce by individuals, partnerships, associations, and corporations.....The defect of the argument lies in the character of their (insurance companies) business. Issuing a policy of insurance is not a transaction of commerce. . . . Such contracts (policies of insurance) are not inter-state transactions, though the parties are domiciled in different States."
The questions thus suggested need not be considered now, because no prohibitory legislation • is relied upon, except that which, as has already been seeii, is inoperative. Upon principles of comity, the corporations of one State are permitted to do business in another,, unless it conflicts with the law, or unjustly interferes with the rights of the citizens of the State into which they come. Under such circumstances, no citizen of a State can enjoin a foreign corporation from pursuing its busi- ness. Until the State acts in. its sovereign capacity, individual citizens cannot complain. The State must determine for itself' when the public good requires that i.ts implied assent to the admission shall be withdrawn. Here, so far from withdrawing its assent, the State, by its legislation of 1874, in effect, invited foreign telegraph- corporations to come in. Whether that legislation, in the absence of congressional action, would have. been sufficient to authorize a foreign corporation to construct an cl operate a line within the two counties named, we néed not decide; but we are clearly of the opinion, that, with such action and a-right of way secured by private arrangement with the owner of the land, this defendant corporation cannot be excluded by the present complainant.
Decree affirmed.
Mr. Justice Field and Mr. Justice Hunt dissented.