Baxter Telephone Co. v. Cherokee County Mut. Telephone Ass’n

• Decision Date: 06 February 1915
• Docket Number: 19046.[d1]
• Citation: 94 Kan. 159,146 P. 324
• Parties: BAXTER TELEPHONE CO. v. CHEROKEE COUNTY MUT. TELEPHONE ASS’N ET AL.
• Court: Kansas Supreme Court

146 P. 324

94 Kan. 159

BAXTER TELEPHONE CO. v. CHEROKEE COUNTY MUT. TELEPHONE ASS’N ET AL.

No. 19046.^[d1]

Supreme Court of Kansas

February 6, 1915

Syllabus

The assumption of a privilege not granted by state authority ordinarily can only be challenged by the state itself in a suit brought by its proper representatives.

Appeal from District Court, Cherokee County.

Action by the Baxter Telephone Company against the Cherokee County Mutual Telephone Association and others. From judgment for defendants, plaintiff appeals. Affirmed.

S. C Westcott and E. B. Morgan, both of Galena, for appellant.

J. N Dunbar, of Columbus, and Grant Waggoner, of Baxter Springs for appellees.

OPINION

DAWSON, J.

The Baxter Telephone Company is a Kansas corporation, which for several years past has enjoyed a franchise from the city of Baxter Springs, a city of the second class, in Cherokee county, Kan. This franchise authorizes it to exercise its corporate rights in the streets and alleys of the municipality, which rights include the maintenance of a telephone exchange and the proper cables, poles, wires, and other equipment pertinent to the telephone business. This company was lawfully exercising these privileges prior to the enactment of the public utilities law of 1911, and since its enactment that company has complied with its provisions and has duly and regularly made its reports to the Public Utilities Commission.

The Cherokee County Mutual Telephone Association is an unincorporated association of persons and local telephone companies for the mutual exchange of telephone messages in Cherokee county, and to some extent it provides for long distance connection and toll line service to points in Northern Kansas and to Missouri and Oklahoma.

Baxter Local No. 121 of the Cherokee County Mutual Telephone Association is a voluntary telephone association of 26 persons residing in and about Baxter Springs, and is organized for the purpose of giving mutual telephone service to its membership. It contemplates an affiliation with the Cherokee County Mutual Telephone Association upon an understanding that, when it is ready and fully equipped for business, it may become a member of the Cherokee County Mutual Telephone Association for the interchange and transmission of messages.

On July 3, 1913, the city of Baxter Springs published an ordinance granting a franchise to Baxter Local No. 121 to operate a telephone exchange and to use the streets and alleys of the city for its telephone business; and pursuant thereto, and without any license under Laws 1911, c. 238, § 31, from the Public Utilities Commission, Baxter Local No. 121 set about the establishment of its local exchange and telephone system within the city limits. Thereupon the Baxter Telephone Company, the established corporation engaged in the telephone business in Baxter Springs, brought suit against the Cherokee County Mutual Telephone Association and Baxter Local No. 121, and certain of the officers and members of those voluntary associations, as representatives of their whole memberships, alleging that the plaintiff corporation was serving the public in the city with efficient and sufficient service on reasonable and satisfactory terms, and that it had an investment in the telephone business in Baxter Springs of about $16,000 to $20,000, and that the construction of another exchange in Baxter Springs would cause the plaintiff great and irreparable injury and damage, other and different in kind from that suffered by any other person, firm, or corporation, by reason of the parallel and intersecting lines of the other associations interfering with the plaintiff’s lines and with the construction of future lines of the plaintiff as they would be required, and that the stringing of wires, cables, and the setting of poles over the streets and across the lines of the plaintiff would interfere with and impair the high class service furnished by plaintiff and cause plaintiff an increase in cost of maintenance and a loss of patronage and reduction of revenue.

On the plaintiff’s petition, summarized as above, temporary and permanent injunctions were asked against the county and local associations and against a number of officers and members of those associations to restrain them from constructing the proposed telephone system in Baxter Springs.

The district court granted a temporary injunction, and the defendants filed a demurrer and a motion to set aside the temporary injunction. Affidavits, oral testimony, and documentary evidence were introduced in support of the motion to dissolve the temporary injunction, and the motion and demurrer were heard and considered together. The motion was allowed, and the demurrer was sustained.

From these rulings of the trial court the plaintiff below submits two propositions for our consideration: (a) Has the Baxter Telephone Company such a peculiar interest in this matter, different from the general public, that it may maintain this suit in its own behalf; and, if so, (b) does the public utilities law require Baxter Local No. 121 of the Cherokee County Mutual Telephone Association to secure a license from the Public Utilities Commission before engaging in business in Baxter Springs?

Ordinarily the usurpation of a corporate privilege or public franchise can only be challenged by an action in the name of the state by its proper officer.

In Kansas that proper officer would be the county attorney. Gen. Stat. 1909, § 2226; Eble v. State, 77 Kan. 179, 93 P. 803, 127 Am. St. Rep. 412. The Attorney General is likewise frequently called upon to challenge the exercise of some unauthorized corporate power. State ex rel. Attorney General v. Kansas City Stockyards Co., 94 Kan. 96, 145 P. 831; State ex rel. Attorney General v. Garfield County, 54 Kan. 372, 38 P. 559.

The cases of Houser v. Smith, 80 Kan. 260. 101 P. 1001, and State ex rel. Attorney General v. Bentley, 80 Kan. 227, 101 P. 1073, considered together, are instructive. The former, although but briefly reported, was an injunction suit against the county treasurer of Gove county to restrain him from collecting a high school tax on the ground that "there was and is no high school in said county of Gove which has been established according to law." The plaintiffs were private citizens and were nonsuited. But a radically different result was obtained when an officer of the state challenged the legality of the organization of the high school. In the latter case the organization of the high school was declared void.

By the railroad and utilities acts the power is conferred upon the attorney for the Public Utilities Commission to challenge the exercise of unauthorized corporate acts. Gen. Stat. 1909, § 7182; Laws 1911, c. 238, § § 2, 7; State ex rel. Attorney for Public Utilities Commission v. Wyandotte County Gas Co., 88 Kan. 165, 127 P. 639. The latter case is quite pertinent. There the gas company had received the assent of the city to raise the rates for gas; but it had not received the assent of the Public Utilities Commission. In the case at bar the appellee, Baxter Local No. 121, has received the assent of the city, but that of the state commission is still wanting, if such assent is required. These illustrations show that, if there is a usurpation of powers by the appellees, the state has provided itself with officers to challenge such usurpation.

A private plaintiff, who is likely to be injured in some special manner, or whose situation is peculiarly affected by the exercise of a...