City of Brookings v. Brookings Lake Tel. Co.

• Decision Date: 26 May 1970
• Docket Number: No. 10650,10650
• Citation: 177 N.W.2d 489,85 S.D. 96
• Parties: , 84 P.U.R.3d 315 CITY OF BROOKINGS, Forest G. Frie, Mayor, George Little, William Gamble, Edwin Fuller, Paul Prussman, Commissioners, Plaintiffs and Appellants, v. BROOKINGS LAKE TELEPHONE COMPANY, Wilmer Davis, President and Director, Ray Barnett, Vice President and Director, Jerry Jefferis, Secretary-Treasurer and Director; Glen Langum, E. K. Christensen, Kennis Wheller, Arvin Stratton, Martin Geinapp, Homer Ponto, Directors, Defendants and Respondents.
• Court: South Dakota Supreme Court

Page 489

177 N.W.2d 489

85 S.D. 96, 84 P.U.R.3d 315

CITY OF BROOKINGS, Forest G. Frie, Mayor, George Little, William Gamble, Edwin Fuller, Paul Prussman, Commissioners, Plaintiffs and Appellants, v. BROOKINGS LAKE TELEPHONE COMPANY, Wilmer Davis, President and Director, Ray Barnett, Vice President and Director, Jerry Jefferis, Secretary-Treasurer and Director; Glen

Langum, E. K. Christensen, Kennis Wheller, Arvin Stratton,

Martin Geinapp, Homer Ponto, Directors, Defendants and

Respondents.

No. 10650.

Supreme Court of South Dakota.

May 26, 1970.

Rehearing Denied July 15, 1970.

McCann & Martin, George S. Mickelson, Brookings, David E. Morrill, Sturgis, for plaintiffs and appellants.

Lammers & Lammers, Madison, for defendants and respondents.

HANSON, Judge.

This declaratory judgment action brought by the City of Brookings against the Brookings Lake Telephone Company involves the right to render telephone service in an area recently annexed to the City. The trial court refused to enjoin the defendant company from continuing to serve the area and declared any attempt by the City to extend its municipal telephone system into this and any other surrounding areas of the City would be an illegal and unlawful infringement upon the vested rights of the Brookings Lake Telephone Company. The City appeals.

Every city in this state is authorized 'to establish, maintain, operate, and regulate a telephone system for its inhabitants.' SDCL 9--41--1. Pursuant to this power the City of Brookings has owned and operated a municipal telephone system for many years. On October 2, 1967 the City extended its corporate limits by annexing adjoining land known as Telkamp Addition.

By virtue of a certificate of convenience and necessity issued by the Public Utilities Commission on April 12, 1956 the Brookings Lake Company is authorized to construct, maintain, and operate a telephone system in certain areas of Brookings and Moody counties. The certificates territory is primarily rural in character and completely surrounds the City of Brookings. This included all of the area in Telkamp Addition. Prior to annexation the rural cooperative was furnishing telephone service to four or five ratrons therein.

In December 1967 the City objected to the construction of new lines in Telkamp Addition by the Company and demanded their removal. The City also canceled an extended service agreement between the City and the Company by giving the required notice of cancelation. The Brookings Lake Company refused to remove any of its telephone cables and lines and claims an exclusive right to serve Telkamp Addition and any other contiguous territory which the City of Brookings may annex in the future. It claims a vested right to continue serving the area by virtue of the franchise granted to it, and its predecessors, by the Public Utilities Commission. The City of Brookings, on the other hand, contends the Company cannot extend or expand any of its facilities within the annexed territory without first obtaining a franchise from the City.

According to Art. X, § 3 of our State Constitution 'No * * * telephone line shall be constructed within the limits of any village, town or city without the consent of its local authorities.' This constitutional grant of authority is supplemented by the following statutory provisions:

SDCL 9--35--1. 'Every municipality shall have power * * * to regulate or prohibit the erection of poles for telegraph, telephone, or electric wires in the public grounds, streets, or alleys, and the placing of wire thereon, and to require the removal thereof from such places and to require the placing of such wires under ground; and to grant and regulate rights and franchises for such purposes.'

SDCL 9--35--3. 'The governing body shall grant no franchise to any public utility authorizing it to occupy any of the streets, alleys, or public places of the...