WESTERN UNION TELEGRAPH CO. OF ILLINOIS v. LOUISVILLE & N. R. CO., 201 F. 919

SEAMAN, Circuit Judge (after stating .the facts as above). The appellee Railroad Company, a Kentucky corporation, filed its bill against the appellant, an Illinois corporation and other defendants, to restrain proceedings instituted by the appellant, in a state court, for condemnation of a right of way for a telegraph line to be placed upon and along the right of way owned and used by the appellee, in Illinois, for its lines of railroad; and this appeal is from an order (in effect) continuing a temporary injunction granted thereunder against the appellant, upon due hearing.

The bill avers, among other matters, that the appellee owns and operates railroads extending through various states, and-is engaged in interstate, transportation of freight, passengers, and mail; that it is .authorized to erect and operate telegraph lines upon and along its right of way for the transaction of its own business as a railroad and for the general public; that its right of way is now devoted to public use, and that it is necessary to have use of the entire right of way for its present tracks and- proposed double tracks and the necessary provisions for telegraph systems; that the proposed condemnation and use for the benefit of the appellant would interfere with performance of appellee’s duties under its charter, and would be dangerous to employés and passengers in operation of the railroad; that the appellee’s lines have been designated as mail routes, under

an act' of Congress, for transportation of United States mail and troops; and that the suit involves a controversy, for an amount exceeding $3,000, between citizens of different states, and also a controversy arising under the Constitution and laws of the United States, because the attempted condemnation and use would obstruct and interfere with interstate transportation, as specified.

It is further averred, in substance, that the defendant Western Union Telegraph Company, a New York corporation, had long theretofore operated a telegraph line upon the right of way under contract with the appellee, which had served its requirements, but had canceled such contract and refused to arrange for continuance of the service; that such foreign corporation had caused its employés to organize the appellant as an Illinois corporation, and furnished all the money invested therein, for the purpose of obtaining the proposed right of way for ownership and operation of these telegraph lines, as independent lines “free of any rights of appellee”; and that in pursuance thereof the appellant had commenced condemnation proceedings, under assumed authority of a state enactment, averred to contravene the federal rights .and powers.

The chief contention for reversal of the temporary injunction rests on the twofold assumption:

(1) That

section 265 of the Judicial Code (Act March 3, 1911, c. 231, 36 Stat. U. pp. 1087, 1162 [U. S. Comp. St. Supp. 1911, p. 236]), prohibiting stay of proceedings in a state court, is applicable thereto; and (2), in substance, that the statutory purpose'is violated notwithstanding the limitations expressed in the terms of the injunction. We believe, however, that the record establishes the first-mentioned assumption to be untenable, so that the contention is without force on this appeal from the order containing the injunction.

It appears of record (and is uncontroverted) that prior to the entry of this order on May 23, 1912, the condemnation proceedings, referred to in the bill as pending in the state court, were removed to the United States District Court by the filing of petition and bond for removal pursuant to statute; and presumptively no jiirisdiction over the cause remained in the state court, as the jurisdiction of the District Court immediately attached (Steamship Co. v. Tugman, 106 U. S. 118, 122, 1 Sup. Ct. 58, 27 L. Ed. 87; Traction Co. v. Mining Co., 196 U. S. 239, 244, 25 Sup. Ct. 251, 49 L.

Ed. 462), and became operative for all purposes involved in the injunctional decree. Furthermore, prior to the taking of this appeal, an amended (or supplemental) bill had been filed and allowed showing that the state court had granted the removal, after a hearing, and caused a transcript of the record to be filed thereupon in the District Court, placing the proceedings beyond question within its cognizance.

The inquiry, therefore, which is raised and discussed in the arguments of counsel, whether the original injunction, in any sense, disturbed the jurisdiction of the state court over the proceedings when it was entered, is not open for consideration, as that jurisdiction had terminated when the order was made from which the appeal is brought.

The subject-matter of the order was then within the control of the District Court, and the contentions in reference to the prior status of those proceedings involve mere abstract or moot questions, not reviewable on this appeal, and the various assignments of error for want of jurisdiction, are overruled. All further propositions of error relate alone to the issues tendered by the bill upon the merits of the controversy, which require hearing in conformity with the rules of equity for determination of all issues both of fact and law.

The bill states, as we believe, entertainable cause for a hearing in equity, so that the appeal from the interlocutory order raises this single question: Was judicial discretion exceeded in staying the condemnation proceedings pending such hearing? Under the impressions of fact stated in the ruling of the trial court, founded on the preliminary affidavits, we believe the discretion was rightly exercised, and the order accordingly is affirmed.