St. Paul, M. & M. Ry. Co. v. Western Union Tel. Co.

118 F. 497, 55 C.C.A. 263, 1902 U.S. App. LEXIS 4550

Opinions

THAYER, Circuit Judge,

after stating the case as above, delivered the opinion of the court.

The circuit court decided, in substance, that the seventh and eleventh paragraphs of the Smith & Simmons contract, quoted above in the statement, when considered together, granted to Smith & Simmons “a perpetual easement or right to establish, construct, and continue in the operation of a line of telegraph along the line [of railroad] specified in the contract [to wit, from St. Paul to Watab, Minn.], and along such further lines of railroad as should be constructed by the St. Paul & Pacific Railroad Company, and that it became a vested property right” from the date of that contract or grant, which could not be extinguished save by a reconveyance; that the grant of the easement aforesaid was “a then present and vested-grant, covering not only the line particularly described” in the Smith & Simmons contract, “but equally the right of way along railways thereafter built by” the St. Paul & Pacific Railroad Company and its successors in interest, although such rights of way had not then been acquired, and their location was at the time unknown; that this perpetual easement, so termed, was undisturbed and continued to exist, notwithstanding the execution of the three subsequent telegraphic contracts mentioned in the foregoing statement; that these subse quent agreements, to wit, the Farley contract and contracts A and B, contained a further assurance of the right or easement theretofore granted; and that, at most, such subsequent contracts only abrogated those executory provisions of the Smith & Simmons contract which determined how the lines of telegraph, as between the telegraph company and the railroad company, should be operated and maintained. The circuit court further held that the easement thus imposed upon the right of way of the St. Paul & Pacific Railroad Company by the Smith & Simmons contract was not extinguished by the foreclosure of the mortgages under which the Manitoba Company, the present appellant, acquired the property, rights, and franchises of the St. Paul & Pacific Railroad Company, but that the property in question passed into the custody of the appellant burdened with the easement, which easement also became attached to all the lines of railroad subsequently constructed or acquired by the Manitoba Company. The decree from which the appeal is taken rests upon these fundamental propositions, which were decided by the learned judge of the trial court; and it depends mainly upon the proposition that the Smith & Simmons contract granted a perpetual easement of the kind above described, which could not be released or extinguished save by a formal written conveyance. In view of the important consequences deduced from this premise, it is the first proposition which deserves consideration.

It will be seen that the stipulations contained in the Smith & Simmons contract are generally of an executory character, and that they consist principally of personal covenants on the part of the contracting parties, all of which they could modify or discharge at their mere pleasure by an oral agreement to that effect, or by making another contract covering the same subject-matter, or by acts in pais clearly evidencing an intent to modify or discharge them. The only provision found within the four corners of the instrument which lends any color to the claim that the St. Paul & Pacific Railroad Company intended to grant a perpetual easement to erect and maintain, lines of telegraph on rights of way which it then owned or might thereafter at any time acquire is found in the seventh paragraph, where it is said:

“The said party of the second part [the railroad company] does hereby grant to the said parties of the first part [Smith & Simmons], for the uses and purposes of this contract, and to keep off competing lines, the exclusive right of way for the lines of the telegraph along and upon the lands of the said party of the second part, as far as can be legally done.”

It will be observed that there is here an express declaration that the right of way in question is granted for the uses and purposes of the contract, and to keep off competing lines, which, when fairly interpreted, means, we think, that the right granted was to be exercised during the existence of the contract, and would terminate whenever the contract was terminated by express agreement of the parties or otherwise. It was not intended, apparently, as a present grant of an interest or estate in the railroad right of way, to be held and enjoyed by the grantees for all time, independently of the provisions of the agreement, for, if such had been its purpose, it is not probable that language would have been employed which qualifies the grant, and clearly implies that it was to be limited in its duration by the life of'the contract in aid of which it was made. It seems most probable that this seventh paragraph was framed, not with a view of granting an estate in the right of way, which could not be extinguished save by a reconveyance, but, rather, with a view of preventing competing lines of telegraph from' occupying it, and insuring to Smith & Simmons, as far as could be legally done, an exclusive right of occupancy for telegraphic purposes during the existence of the contract, and no longer. This was the dominant thought in the mind of the draftsman, and, such being the object which the contracting parties seem to have had in view, the provision in question is entitled to no greater force or effect than an agreement on the part of the railroad company that no other lines of telegraph should be erected on,its right of way during the existence of the contract.

_ The foregoing view concerning the nature and purpose of the provision in question is confirmed by the subsequent acts of the parties in interest, and especially by the conduct of the Northwestern Company, in whose behalf the Smith & Simmons contract seems to .have been negotiated, which are wholly inconsistent with the theory that the contract was intended to be a grant, or that it was supposed to. contain a grant, of such an easement in the railroad right of way as is now asserted. The agreement which the Northwestern Company subsequently made with J. P. Farley in his capacity as receiver contains no reference to the Smith & Simmons contract, or to any interest in the right of way that had been thereby acquired. The same remark is true as respects contract A, which was subsequently entered into by the Northwestern Company with the Manitoba Company. The relations of the two companies were fully and carefully considered on the latter occasion, and an agreement was signed covering the manner of constructing and reconstructing lines of telegraph and the mode of operation, and granting permission to occupy the right of way, without a reference to any prior agreement, or an intimation that the Northwestern Company had before that time acquired any rights therein. Moreover, when the Northwestern Company transferred its lines of telegraph to the Western Union Company, on May 7, 1881, and professed to schedule and assign to the latter company all of its telegraphic contracts then in force, it did not schedule or otherwise refer to the Smith & Simmons contract as an existing agreement, upon which any rights could at that time be predicated. It is furthermore noteworthy that the last-mentioned contract was not pleaded in the answer of either of .the defendants, or invoked as a defense or as the foundation of any right, in any form, until seven years after this action was instituted, when it was pleaded and attached as an exhibit to an amended cross-bill of the Northwestern Company. The Smith & Simmons contract appears to have been treated as functus officio by all persons and corporations concerned in the erection and maintenance of the telegraph lines now in controversy for many years before this action was instituted, and it is inconceivable that a contract of such moment could have been so effectually forgotten and so long ignored if the parties immediately concerned in its execution, or if the Northwestern Company, ever supposed that it was intended as a present grant of such extensive rights in the railroad right of way as are now claimed by virtue of its provisions. When the Smith & Simmons contract was executed, it was doubtless assumed by the parties thereto that it conferred no rights as respects the railroad right of way, except such as could be released or modified by parol; that all the agreements contained therein were of an executory character, which could be annulled at the pleasure of the contracting parties; and that the contract would cease to have any vitality whenever a new contract was entered into, covering the same subject-matter, and containing other and different stipulations regulating the rights of the parties. We are of opinion that this is a correct view of the nature and effect of the Smith & Simmons contract; that it did not, on its delivery, burden the railroad right of way—even the one therein particularly described, between St. Paul and Watab—with an easement which could only be discharged by a formal conveyance, and that, notwithstanding the provisions contained in the seventh paragraph of the contract, the parties thereto and their successors in interest retained the power to otherwise define, settle, and establish their respective rights and interests in the telegraph line, and in the right of way upon which it was erected, by such future parol agreements on the subject as they saw fit to make.

It should be observed in this connection that the further proposition which appears to have been affirmed by the trial court, namely, that the Smith & Simmons contract granted a present and vested right, in the nature of an easement, in those rights of way which had not at the time been .acquired by the St. Paul & Pacific Railroad Company, and had not even been located, has much less weight than the claim that such was the effect of the contract as respects the right of way between St. Paul and Watab, that had been located. The grant of an easement, if such a grant had been intended, as respects property which had not at the time been acquired by the grantor, and whose location was at the time unknown, had nothing to operate upon, and could not, in any event, have greater effect than an agreement to convey when the property was located and acquired. It created, at most, a mere equitable right to have the grant perfected when the property to which it appertained had been acquired, but until that time it was a right which could be relinquished orally or by acts in pais. Holroyd v. Marshall, 10 H. L. Cas. 191, 210, 211. Any equitable right is susceptible of extinguishment by an oral agreement unless the agreement runs counter to the statute of frauds. It is manifest, therefore, that the Smith & Simmons contract, whatever may have been its purpose, created no present estate or vested interest in rights of way that had not been acquired, which was of such a nature that it could not be released or extinguished save by a formal conveyance. Until such rights of way were located and acquired, and the alleged grant with respect thereto was perfected, it was competent for the parties to the contract, or their successors in interest, by an oral agreement, to relinquish whatever rights they had secured. We are likewise of the opinion, as already stated, that, while the claim to an easement in the right of way between St. Paul and Watab may rest upon a somewhat better foundation, yet it cannot be sustained, and that such rights therein as were acquired by the Smith & Simmons contract were susceptible of relinquishment by the agreements which were subsequently made, although they were not, in form, conveyances.

Without stopping to inquire whether the Smith & Simmons contract was ever legally assigned to the Northwestern Company (a question that has been somewhat discussed), and assuming, without deciding, that the evidence relied upon to establish an assignment was adequate for that purpose, we pass to a ’consideration of the subsequent telegraphic contracts,—especially contracts A and B. The Farley.contract of 1878 has little bearing, we think, on the present controversy, except as it forms a part of the history of the transaction ¿ and any discussion of the questions which have also' been mooted— whether that contract was one which Farley, as receiver, could lawfully make, and whether it was ever authorized or approved by the court which appointed the receiver—seems to be unnecessary.

Contract A deserves greater attention. That contract was entered1 into after the Manitoba Company had acquired all the property and franchises of the St. Paul & Pacific Railroad Company at the various foreclosure sales, and was the first agreement concerning telegraphic lines along its right of way to which it gave its express assent. The stipulations contained in that contract are plainly of an executory character, and no provision is found which can be construed as a grant of a common-law easement. It is a significant fact, already mentioned, that this contract contains no allusion to any prior agreement, or to rights previously acquired by either party. It deals with the relations thereafter to exist between the contracting parties, and with their rights and liabilities as a new subject-matter, upon the manifest assumption that neither party was embarrassed by prior agreements, and that the contract which was being made would necessarily displace and supersede all prior agreements between their predecessors in interest, if there were any. This contract was not limited as to its duration, but the twelfth and concluding paragraph secured' to each party the right to a reconsideration and modification of its provisions upon an equitable basis after the expiration of 10 years, and at intervals of 5 years thereafter. It also, in express terms, bound the Northwestern Company to construct a line of telegraph “along and upon the right of way of any railroad now constructed or * * * hereafter * * * constructed, owned, leased, or operated by the railroad company.” But in view of the fact that lines of telegraph then existed along most, if not all, of the roads then constructed, some of which had been erected recently, it would doubtless be a reasonable and proper interpretation of this clause, and it is an interpretation to which we incline, that it only required the Northwestern Company to go over the existing lines of telegraph, and make them as good as new, without constructing absolutely new lines where they were not needed. We conclude, however, that contract A superseded all prior agreements between the predecessors in interest of the contracting parties, as they evidently intended that it should do. We also think that it placed all the lines of telegraph theretofore constructed upon a plane of equality, so far as the rights of the parties therein or thereto were concerned, and that from the date of the execution and delivery of contract A, and until it was changed or modified, it became the measure of their rights and liabilities under and subject to those general rules of law in the light of which it must be considered and construed.

Turning next to contract B, which, though executed on August 23, 1882, was to take effect as of July 1, 1882, it will be seen that it differs from contract A, in that it not only recites a desire on the part of the contracting parties to cancel contract A, but expressly provides that it shall supersede that contract, “and all other agreements between the parties hereto or their respective predecessors”; thereby making plain a purpose which was left to be deduced by inference by the earlier agreement. In this contract, also, the attention of the contracting parties was directed to the ownership of the existing lines of telegraph then standing on the right of way of the railway company, and at the very commencement of the contract it was recited, in substance, that the parties (that is to say, the Manitoba Company and the Western Union Company), jointly owned all the lines of telegraph then in operation that were being operated under contract A. This seems to us to have been a very just and equitable view of their respective property rights in the lines of telegraph in question, in view of the manner in which they and their predecessors in interest had severally contributed to the erection and maintenance of said lines, and most likely it is the conclusion to which a court of justice would have arrived if it had been called upon at that time to determine the question of ownership. But be this as it may, the recital so made in contract B, forming, as it does, the basis and a part of the consideration for the other stipulations contained in that agreement, plainly estops the Manitoba Company and the Western Union Company from controverting the fact so recited and admitted. This proposition is so obvious that learned counsel for the Western Union Company, in the course of the oral argument, admitted that the Manitoba Company had a proprietary interest in, and was a joint owner of, all the lines of telegraph that had been erected, when contract B was executed, on the 853 miles of right of way then owned by the railway company.

It is urged, however, by the Northwestern Company, that the agreement entered into by itself with the Western Union Company on May 7, 1881, referred to in the foregoing statement, by virtue of which the Western Union Company acquired the possession and control of all the then existing lines of telegraph, did not empower the Western Union Company to put an end to contract A, and to substitute contract B in its place; or, to state its contention more accurately, it says that, while it had no interest in any modifications of contract A which might be made, yet that the Western Union Company had no power to consent to alterations therein “such as should affect its [the Northwestern Company’s] vested rights.” The Western Union Company joins in this contention, although it exercised, without any apparent doubt of its authority to do so, the right to negotiate and execute contract B, and recited in that contract that contract A had been “duly transferred” to it, and that its interest in the lines of telegraph to which the agreement related was that of a joint owner with the Manitoba Company, on whose right of way they were erected.

The first observation to be made concerning this contention is that no provision found in the agreement of May 7, 1881, between the two telegraph companies, expressly- conferred upon the Western Union Company the power to make any change in contract A without the consent of the Northwestern Company. The concession which is in effect made, therefore, that the Western Union Company could modify it if it thought proper to do so, is an admission that this power of modification was conferred by a clear implication from other provisions of the agreement. And this admission, we think, is a necessary one, when it is considered that by the eighth article of the agreement of May 7, 1881, the Northwestern Company covenanted that for 99 years it would not “engage in the business of telegraphy, nor build nor own any lines of telegraph, or hold the same by lease or otherwise.” This was a covenant to suspend the exercise of all its vital functions, and to devolve upon the Western Union Company the performance of all the duties which, by the acceptance of its charter, it had' engaged to perform. It must have been foreseen when it transferred all of its visible property and assigned all of its telegraphic contracts to the Western Union Company that in the course of a century it would be necessary to make repeated changes in these contracts; that it would likewise be found expedient in some instances, at least, to exchange certain contractual rights for others of greater value and importance; and as some of the contracts mentioned in the schedule of telegraphic contracts, which is attached to the agreement of May 7, 1881, expired by express limitation before the lapse of 99 years, it was known, of course, that, in the natural order of events, new contracts would have to be negotiated to take the place of those that had expired. In view of these considerations, and the fact that no limitation was placed upon the power of the Western Union Company to deal with these assigned contracts, or provision made requiring the assent of the Northwestern Company to proposed modifications, it must be inferred, we think, that it was the intention to leave the Western Union Company at full liberty to deal with them as it thought best. If it be conceded, as we think it is and must be, that the Western Union Company had the power to agree upon alterations in contract A and in- the other assigned contracts, the inquiry arises, naturally, where is there any limitation upon the power in this respect ? Why could it not consent to the cancellation of a particular contract, and the substitution of another in its place, as well as to a modification of one or more of its provisions ? It is obvious that any change in the provisions of one of these contracts altered to that extent some right which the Northwestern Company had thereby secured when it was executed, and we are unable to draw any distinction between the rights so secured, or to say that one is any more sacred or vested than another. All of them were rights growing out of personal covenants made by the respective parties, which, as we have heretofore held, were capable of modification or extinguishment by parol. In other words, none of the contracts—not even the Smith & Simmons contract—contained a present grant of an interest in the railroad right of way, which could only be relinquished by a conveyance.

There are other considerations which lead us to conclude that the Western Union Company had power to supersede contract A by contract B. By the agreement between the telegraph companies, the Northwestern Company, as before stated, abandoned the exercise of all its corporate functions for the long period of 99 years. It reserved to itself no power to resume the possession of its property and to reengage in the business of telegraphy for any breach of the agreement between itself and the Western Union Company, save for a failure of the latter company to pay the taxes on the property which it had acquired, the interest on the bonds of the Northwestern Company, and the promised dividends to the stockholders of that company. Even these promised dividends were not to be paid to the Northwestern "Company for distribution by it in the ordinary way, but were to be paid directly to the individual stockholders; and, since the agreement was entered into, the Northwestern Company, according to the evidence, has not kept a record of the transfers of its own stock, but has intrusted that duty to the Western Union Company, and, as it seems, does not know at the present time who are its shareholders, except as it may be advised by the last-named company. Obviously, therefore, it was understood by both of the contracting parties that the Northwestern Company should remain in a comatose condition during the life of the agreement, and the fact that it was left in this condition by the express provisions of that instrument may account for the alleged fact, if it be a fact, that it was not consulted when contract B was executed, and remained ignorant of its provisions until the commencement of the present litigation. In view of considerations such as these, we are. constrained to believe that the provision contained in the agreement of May 7, 1881, whereby the Western Union Company covenanted to restore the lines of telegraph to the Northwestern Company at the expiration of 99 years, affords no evidence of an intention to so restore them, or of an expectation on the part of either company that they would be restored, and that the Northwestern Company would at that remote period resume the exercise of its corporate functions. This provision, we think, was merely colorable; the real purpose of the agreement being to effect a merger of the business of the two companies, and to place it under the sole direction and control of the Western Union Company. The purpose so apparent on the face of the instrument, of effecting a practical consolidation of telegraph lines by means of an agreement which has some resemblance to a lease, although neither the word “lease” nor the word “demise” is found therein, is of much importance, and entitled to great weight in determining what power was intended to be devolved upon the Western Union Company with respect to dealing with the assigned telegraphic contracts. It has sufficient weight, we think, to justify the conclusion that it was the intention of both of the telegraph companies to vest the Western Union Company with authority to modify the assigned contracts, or to supplant them by new agreements,—in other words, to deal with them as it thought best. The Northwestern Company intended, we think, to intrust the protection of its interest in the matter of the negotiation of new contracts with railroad companies to the Western Union Company, upon the assumption, no doubt, that the interests of the two companies in this respect were practically identical. And this seems to have been the view which was prevalent about the time the agreement of May 7, 1881, was made, for in a letter written by the assistant general manager of the Mani-' toba Company to the President of the Northwestern Company on September 9, 1881, the agreement in question is spoken of as a “sale” of the Northwestern Company’s interest, while in a letter written by the president of the Northwestern Company to the Manitoba Company on March 13, 1882, he informed the Manitoba Company that he was advised that the Western Union Company was ready to meet it in the negotiation of a “new contract,” if it so desired; evidently believing that it was within the power of the Western Union Company to make a new contract if it thought proper to do so.

Relative to this branch of the case, it should be further observed that by contract A the Northwestern Company undertook the performance of certain active and continuous duties,—such, for example, as the construction of new lines of telegraph as the Manitoba Company extended its lines of railroad or acquired other roads. These duties it has not discharged since August 23, 1882, when contract B was executed, but has been in default for years, unless what has been done by the Western Union Company under the latter contract be accepted as a performance by the Northwestern Company of the acts which it engaged to do and perform. The Northwestern Company insists at this time that it is not, and never has been, in default, and that what has been done under contract B inures to its benefit as a full performance of its obligations under contract A. It also lays claim to all the new lines of telegraph that have been erected since August 23, 1882, irrespective of the fact that these lines were built by the Western Union Company in pursuance of the provisions of contract B, which it executed in its own name and behalf, representing itself at the time to be a joint owner of the then existing lines. Now, as one cannot adopt and claim the benefit of acts done by another in his own name, and ostensibly on his own account, unless he has previously given that other authority to do the acts in question (Hamlin v. Sears, 82 N. Y. 327, 330; Railroad Co. v. Gazzam, 32 Pa. 340, 347, 348; Mitchell v. Association, 48 Minn. 278, 284, 51 N. W. 608; Mechem, Ag. § 127), it may be that the Northwestern Company, by claiming the benefit of all that has been done by the Western Union Company under contract B, and by asserting its ownership of the new lines constructed in pursuance of its provisions, should be held to have thereby admitted the power of the Western Union Company to enter into that contract. Without reference, however, to the position so assumed by the Northwestern Company, and to the claim which it makes in the respect last mentioned, we are of opinion, for the reasons above stated, that the Western Union Company acted within the scope of its authority in consenting to the cancellation of contract A, and the substitution of contract B in its place, and that the provisions of this latter contract are binding alike upon both telegraph’ companies. Such, unquestionably, was the understanding of both con tracting parties when contract B was executed, and they have acted on that understanding for years, ignoring the provisions of all prior agreements.

This brings us to a consideration of the question, to whom do the lines of telegraph now in controversy belong ? As respects the' lines that had been constructed on July i, 1882, this question was answered by • the parties themselves, by the recital contained in contract B; the recital being, in substance, that they were owned jointly by the Western Union Company and the Manitoba Company, which we understand to be an admission that they were equal joint owners, inasmuch as they and their predecessors in interest had contributed about equally to their erection and maintenance. And as neither of the contracting parties undertook by that’agreement, or manifested an intent, to transfer or relinquish its proprietary interest in said lines to the opposite party, it must be true, we think, that they continued to. remain the joint property of the two companies at least until contract B expired by limitation.

The lines that were erected after July 1, 1882, under the provisions of contract B, were constructed at the sole cost of the Western Union Company for the labor, superintendence, tools, and materials which were employed and used in their erection. The Manitoba Company made no contribution to the erection of these lines, in the shape of money, labor, or materials, save that it distributed the materials therefor free of charge, when said materials had been delivered at any of its stations, and also transported the employés of the telegraph company, when engaged in its business, free of charge. The new lines erected after July 1, 1882, were in reality created by the Western Union Company; being almost exclusively the product of its money, time, labor, and skill. In view of this fact, and 'the further circumstance that the lines in question were erected bv consent on the railroad right of way, and on the express understanding, as evidenced by the terms of contract B, that they should “form a part of the general [telegraphic] system of the telegraph company,” we are of opinion that the lines (meaning by that the poles, wires, batteries, etc.) belonged, when completed, to the company whose money and labor had erected them, and that they remained its property at least until the expiration of contract B. W. U. Tel. Co. v. Burlington & S. W. R. Co. (C. C.) 11 Fed. 1, 5. It has been held by the highest authority that the track of a railroad company, when laid on the land of another with his consent, does not necessarily become a part of the land, and the property of the owner of the fee, although the ties are imbedded in the soil. Wiggins Ferry Co. v. Ohio & M. R. Co., 142 U. S. 396, 415, 12 Sup. Ct. 188, 35 L. Ed. 1055. And no reason is perceived why a telegraph line, when erected, necessarily becomes a part of the realty because the poles are set in the earth. Whether the poles and wires lose their character as personalty, and become the property of the owner of the fee, depends in a great measure upon whether the one who erected them and strung the wires thereon intended such a result. Railway v. Dunlap, 47 Mich. 456, 465, 11 N. W. 271; Navigation Co. v. Mosier, 14 Or. 519, 13 Pac. 300, 58 Am. St. Rep. 321. Besides, the parties to contract B assumed when they executed it that the ex isting lines ot telegraph had not become realty by attachment to the soil, or at least that the principles of natural justice required them to concede as much, for by that agreement they freely admitted that as they had contributed about equally to the erection of the then existing lines, and had constructed them for their mutual benefit and advantage, they were joint owners thereof, notwithstanding the fact that the poles stood on the railroad right of way. We but apply the same doctrine when we decide that the lines which were erected after July i, 1882, at the sole cost of the Western Union Company, after their erection remained its property.

It is suggested, however, by the Manitoba Company, that when contract B expired by limitation on July 1, 1892, all the lines of telegraph in controversy became its property, irrespective of the question of ownership prior thereto, because they stood at the time on its right of way, and were not removed during the life of the contract. By this contention the appellant invokes in its favor the application of a rule of law which applies as between a landlord and his tenant, and between an owner of land and one who without permission permanently attaches some structure thereto, but it does not seem to us to be a rule which is at all applicable to the case in hand. No such relation as that of landlord and tenant existed between the railway company and the telegraph company, nor were the lines of telegraph now claimed by the former as its exclusive property erected upon its right of way without permission. On the contrary, they were placed there with its express sanction, and not for its accommodation'only, but also for the benefit and advantage of the Western Union Company. They were also placed there upon the express understanding that the telegraph company intended to make the lines, when erected, an integral part of a great and ever-growing telegraphic system. Again, the parties between whom the agreement for the erection of the telegraph lines was made were quasi public corporations, both of whom were engaged in interstate commerce, and both of whom were equally bound to render important public services without interruption. Neither of these companies were endowed with the large powers and franchises which they possess with the intent that they should be exercised solely or mainly for the benefit of the shareholders, but all such powers and franchises were granted upon the implied understanding that they should be exercised in a manner which would be most conducive to the public welfare and convenience. Aside from these considerations, it appears that when contract B was entered into the railway company had already extended its road into North Dakota, and had in contemplation at that time a further extension of its main line, as well as the construction of branch lines,—such an extension, in fact, as would enable it to keep pace with the development of the country and the progress of civilization. In this situation the parties entered into a contract which bound the Western Union Company to construct a substantial line of telegraph along the railroad right of way as fast as any new road was projected and built, and as new lines were acquired, and to do so substantially at its own expense. During the life of the contract the railway company carried out its purpose of extending its road from its original terminus, and actually extended it to the Pacific Ocean; thereby imposing on the telegraph company, the duty, which it faithfully performed, of constructing two or three thousand miles of telegraph line, over five hundred miles of which was built during the last three years of the contract period.

In view of these considerations, it is obvious, we think, that neither the railway company nor the telegraph company, when they entered into contract B, expected that the lines of telegraph to which the agreement related would be removed from the railroad right of way on the expiration of the agreement, or desired them to be so removed. Very likely, it would have been physically impossible to have effected a removal of the lines on the day the contract expired, if the parties had so desired, and until the very end of the contract period the right existed to maintain the lines on the right of way. Besides, as the Manitoba Company laid claim to all the lines, and asserted that it was the sole owner thereof by reason of their being on its right of way, and would doubtless have resisted the removal by legal process if the attempt had been made, it cannot at this time found any lawful claim to the telegraph lines, based upon the ground that they were not removed from its premises during the contract period. In other words, the telegraph company cannot be said to have been in default, or to have lost any of its rights as respects the lines in question, because it failed to do what the railway company asserted at the time that it had no legal right to do, and would have resisted if the act had been attempted. So long as a controversy existed as to the ownership of the lines, it had the right to wait until that controversy was determined, and did not sacrifice any of its rights by so doing.

In view of the considerations aforesaid, it is likewise manifest, we think, that the Western Union Company did not enter into contract B with the understanding that the clause found in the twelfth paragraph, declaring that it should “continue in force for the term of ten years,” would have the effect of transferring to the railway company, at the end of the contract period, all the lines,—those already existing, of which it was then a joint owner, as well as those which it might subsequently erect at its sole cost and expense. That view of the effect of the contract, involving, as it did, the relinquishment on its part of its interest in the lines jointly owned, and in other lines of telegraph, erected at its own expense, which might be two or tin ee thousand miles in length, and involving, as well, the disruption pro tanto of its telegraphic system, renders it altogether too unreasonable, not to say unconscionable and absurd, to warrant a court of justice in presuming for a moment that the telegraph company intended to enter into such an agreement, or supposed that it had done so. It is a general rule for the interpretation of contracts, as well as for the interpretation of statutes, that they should not be so construed as to lead to injustice, oppression, or absurd consequences, if such a result can be avoided. U. S. v. Kirby, 7 Wall. 482, 486, 19 L. Ed. 278; Lau Ow Bew v. U. S., 144 U. S. 47, 59, 12 Sup. Ct. 517, 36 L. Ed. 340; Holy Trinity Church v. U. S., 143 U. S. 457, 461, 12 Sup. Ct. 511, 36 L. Ed. 226. Some other interpretation of the provisions of contract B, which is more reasonable, must accordingly be adopted, if the language of the instrument and the environment of the parties will permit. Looking at the situation and relations of the parties at the time contract B was executed, we think that it is entirely reasonable to infer that the clause declaring that the contract should continue in force for io years has reference to the terms upon which lines of telegraph should be constructed, maintained, and operated during that period, and that it was not intended to have any effect Upon the ownership of the lines,—either those that were then standing, which belonged to the parties jointly, or those which might be afterwards constructed. If it had been the mutual understanding of the contracting parties that the lines were to become the sole property of the Manitoba Company at the end of the contract period, then it is wholly unaccountable that a stipulation to that effect, covering such an important subject-matter, was not inserted in the contract. And the fact that no such provision is found in the agreement raises a strong presumption that such a result was not within the contemplation of either party. They foresaw that after the expiration of io years it might be inexpedient and inequitable, owing to altered conditions, to further construct, maintain, and operate lines of telegraph on the railroad right of way on the terms specified in contract B. They accordingly agreed that the arrangement as made should continue in force io years, leaving the parties at full liberty after that time to enter into other and different arrangements if they thought proper. They did not intend, however, by this clause, to extinguish the telegraph company’s interest in the lines of telegraph at the end of the contract period, nor would it be either just or reasonable to deduce the conclusion that such was the necessary legal effect of the clause in question, or the necessary effect of any other provision of the agreement.

In conclusion, on this branch of the case, it is proper to add that we entertain no doubt that the railway company was aware when it executed contract B that the telegraph company did not construe that agreement as having the effect now contended for by the railway company,—that is to say, as amounting to a relinquishment by the telegraph company, at the end of io years, of all its interest in the existing lines, and of its interest in such new lines as it might construct in the meantime. It knew very well, we think, that the telegraph company viewed the contract in a different light, and believed that its property rights would not be irfipaired by any of its provisions. It matters not, therefore, that the railway company may have interpreted the contract differently, or that it may have entertained a secret purpose of claiming the lines as its sole property when the contract expired by limitation, for a party to an agreement will be deemed to have assented to it in the sense which he knew the opposite party intended it to have when the latter executed it, provided the language employed is fairly susceptible of the meaning which the opposite party imputed' to it. Aluminum Co. v. Lowrey, 24 C. C. A. 616, 628, 79 Fed. 331.

The result is that we reach the following conclusions: First, that the Manitoba Company and the Western Union Company on July I, 1882, were equal joint owners of all the lines of telegraph that had been erected on the railroad right of way prior thereto, and that their interests therein remain unchanged at the present time; second, that the Western Union Company is the owner of the lines erected since the latter date at its own cost and expense, subject, however, to_ a reasonable allowance to the railway company for its services in distributing the materials for their erection; and, third, that their respective interests as aforesaid were unaffected and unimpaired by the termination of contract B. These conclusions are announced, however, without prejudice to the rights of the two telegraph companies inter sese; leaving them at full liberty to litigate concerning those rights as they may be advised.

The railway company does not pray in its bill of complaint for the removal of any of the lines of telegraph from its right of way, and obviously does not desire them to be removed. It asserts, rather, that it is the sole owner of the lines, and asks that its ownership may be established by judicial decree, and that the telegraph company be enjoined from interfering with its possession and entering upon its premises for the purpose of maintaining and operating the lines. This, then, is the substantial relief which the railway company seeks, and the only relief which could be accorded to it. On the other hand, as has appeared heretofore, the telegraph companies assert that they are the sole owners of the lines, and that they have the right to maintain them perpetually on the railroad right of way. In their cross-bills, however, the telegraph companies pray, in substance, that if the court rejects the claim to a perpetual easement, and is of opinion that the lines of telegraph are erected upon any portion of the right of way which they no longer have the right to occupy for telegraphic purposes without making due compensation, it will fix the amount of compensation to be paid, and the terms upon which the lines shall be maintained and operated in future, and that upon payment of the sum so ascertained it will decree that the lines be allowed to remain where they now are. It would seem, therefore, that the substantial controversy between the parties is that concerning the ownership of the lines, and the existence of a perpetual easement, which controversy has already been determined. These questions having been decided, there is a strong probability that the parties will be able to come to an agreement relative to the future maintenance and operation of the lines upon the premises where they now stand, since neither party seems to desire their removal. A stay of further proceedings in the case for the period of six months, or more if counsel so desire, should, in any event, be ordered, to enable the parties to effect such an agreement if they are so disposed.

We are of opinion that it is competent for a court of equity, in the situation which confronts us in this case, to. fix the compensation to be paid to the railway company for the use of its right of way for the future support and maintenance of the telegraphic lines which were erected thereon subsequent to July i, 1882, under the provisions of contract B, and that this power should be exercised if it so happens that no agreement can be reached by the parties themselves with respect thereto, and the railway company shall insist in future upon their being removed from its premises. Telegraph companies are recognized everywhere as common carriers of information, and such important factors in the transaction of interstate commerce as to bring them within the protection of the federal government, and subject them to its regulation and control. Pensacola Tel. Co. v. W. U. Tel. Co., 96 U. S. 1, 9, 24 L. Ed. 708. So important are the public functions which they perform, that an act of congress passed on July 24, 1866 (Rev. St. § 5263 [U. S. Comp. St. 1901, p. 3579] ), gave to telegraph companies who accepted the provisions of the act, in broad terms, the right to construct and maintain their lines “over any portion of the public domain of the United States, * * * and along any of the military or post roads of the United States which [had] been or [might thereafter] be declared such by law,” provided they were so constructed as not to interfere with travel on such military or post roads. A subsequent act of congress (Rev. St. § 3964 [U. S. Comp. St. 1901, p. 2707] ) declared all railroads then or thereafter in operation to be post roads; and while the construction placed on the former act has been that it does not give to a foreign telegraph company in any state the right to enter upon private property and set its poles without the owner’s consent (Pensacola Tel. Co. v. W. U. Tel. Co., supra; Western Union Tel. Co. v. Ann Arbor R. Co., 178 U. S. 239, 243, 20 Sup. Ct. 867, 44 L. Ed. 1052), yet, if a telegraph company erects its poles on a railroad right of way with the consent of the owner, as in the present instance, and its poles and wires in no wise interfere with travel or the operation of the railroad, no reason is perceived why a court of equity should compel it to remove its lines from the right of way, if the telegraph company is willing to pay a reasonable compensation for its use, especially where it appears that no express agreement was made that they should be removed, when the lines were erected. Furthermore, the statutes of the state of North Dakota (Rev. Code 1899, § 5956) expressly confer upon telegraph companies the right to exercise the power of eminent domain for the location of their lines, and we presume that similar statutes have been adopted in some, if not all, of the states where other portions of the lines in controversy are located. This power, of course, cannot be exercised for the condemnation of rights of way over property already devoted to a public use, if the new use would materially interfere with the old; but it is not apparent that the existence of a telegraph line on a railroad right of way, where such lines are usually erected, would materially interfere with the operation of any railroad, and in the present instance it is conceded that there would be no such interference.

It has been held, and the proposition seems to be well established by authority, that where a corporation which has the right to acquire property by an exercise of the power of eminent domain has taken possession of property, and has erected or is engaged in the erection of structures thereon, but has not complied with some condition precedent necessary to render its acts in all respects lawful (such, for instance, as a failure on its part to pay some person the damages necessarily incident to the maintenance of the structure), and such person appeals to a court of equity for an injunction to restrain the maintenance or to compel the removal of the structure, the court to which such appeal is made has the power to determine the amount of the unpaid damages, and to withhold an injunction, and direct that the structure be permitted to remain and be operated, provided the assessed damages are paid. Courts of equity will, as it seems, the more readily pursue such a course when important public interests are at stake, and a contrary course would be productive of much public inconvenience and annoyance. City of New York v. Pine, 185 U. S. 93, 22 Sup. Ct. 592, 46 L. Ed. 820; Pappenheim v. Railway Co., 128 N. Y. 436, 444, 28 N. E. 518, 13 L. R. A. 401, 26 Am. St. Rep. 486; Shepard v. Railway Co., 117 N. Y. 442, 448, 23 N. E. 30, and cases there cited. See, also, Osborn v. Missouri Pac. R. Co., 147 U. S. 248, 259, 13 Sup. Ct. 299, 37 L. Ed. 155; Joy v. City of St. Louis, 138 U. S. 1, 11 Sup. Ct. 243, 34 L. Ed. 843; McElroy v. Kansas City (C. C.) 21 Fed. 257.

We think, therefore, that the decree should contain a provision authorizing the Western Union Company, if it fails to come to an agreement with the railway company, and the latter company shall insist upon a removal of the lines, to apply to the court at the expiration of the aforesaid stay of proceedings for the appointment of a master and two commissioners to assess such reasonable compensation as they think ought to be paid by the Western Union Company for the privilege of maintaining the lines of telegraph erected since July 1, 1882, where they now are, and the compensation to be paid for the distribution of material when the lines were built. The lines erected prior to that day do not stand on the same footing. They are the joint property of the railway company and the telegraph company, and were placed on the former’s right of way by mutual consent of the joint owners, where they have ever since remained; and, as this is not a proceeding in partition for the severance of their joint interests, the lines in question should remain where they are, subject to joint user until the joint ownership is extinguished by agreement or •by a suit instituted for that purpose.

As it may happen that the court will have no occasion in future to fix the compensation to be paid by the telegraph company for the use of the aforesaid right of way, it is not deemed necessary at this time to consider the question whether any part of the right of way on which lines of telegraph were erected subsequent to July I, 1882, was acquired by the railway company under such circumstances as entitle the telegraph company to use it without the payment of any compensation. This question may properly be deferred until the occasion arises for its determination.

The decree below is accordingly reversed, and the case is remanded to the circuit court, with directions to vacate its former decree, and in lieu thereof to enter a decree embodying the foregoing conclusions, and containing, among others, the following provisions: That is to say, establishing the ownership of the lines of telegraph as herein-before adjudicated; directing a stay of all further proceedings in the cause for the period of six months or more from the date of entering the decree, as may be agreed by counsel, and providing that in the meantime the lines of telegraph shall be maintained, operated, and used in all respects as heretofore, unless the parties shall otherwise mutually agree; also granting permission to the Western' Union Company, as heretofore more particularly explained, Jo apply for the appointment of a master and two commissioners to fix the compen sation to be paid by the telegraph company for the use of the right of way and the distribution of materials; such application to be made on 60 days’ notice to the appellant, and reserving to the court, should such an application be made, full power and authority, on the coming in of the report of said commission, to determine, with respect to any part of the right of way, whether it was acquired by the railway company under such circumstances that the telegraph company should be permitted to use it without compensation. The costs in this court will be divided equally between the contending parties.