City of Meridian v. Southern Bell Telephone & Tel. Co.

• Citation: 256 F.2d 83
• Decision Date: 05 August 1958
• Docket Number: No. 17100.,17100.
• Parties: CITY OF MERIDIAN, Appellant, v. SOUTHERN BELL TELEPHONE AND TELEGRAPH COMPANY, Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)

256 F.2d 83 (1958)

CITY OF MERIDIAN, Appellant, v. SOUTHERN BELL TELEPHONE AND TELEGRAPH COMPANY, Appellee.

No. 17100.

United States Court of Appeals Fifth Circuit.

June 9, 1958.

Petitions for Rehearing Denied August 5, 1958.

Lester E. Wills, Thos. Y. Minniece, George M. Ethridge, Jr., Meridian, Miss., for appellant.

George H. Butler, Jr., Robert C. Cannada, Charles B. Snow, Jackson, Miss., Butler, Snow, O'Mara, Stevens & Cannada, Jackson, Miss., O. Winston Cameron, Meridian, Miss., John A. Boykin, Jr., Atlanta, Ga., of counsel, for appellee.

Before HUTCHESON, Chief Judge, and TUTTLE and WISDOM, Circuit Judges.

HUTCHESON, Chief Judge.

Brought by appellee against the City of Meridian under Sec. 2201, 28 U.S.C., the suit was for a declaratory judgment that Sec. 5(e) of House Bill 123, Chapter 372, Mississippi Laws of 1956, insofar as it requires plaintiff to pay two percent of the monthly service charges within its boundaries as compensation for use of its streets, alleys, and other public places, was unconstitutional and invalid.

The claim was:

1. That the plaintiff holds a perpetual and irrevocable grant from the State of Mississippi to use and occupy all highways and streets in the City of Meridian, Mississippi, without paying compensation therefor; that this grant is a contract which is protected under the contract clauses of the State and Federal Constitutions, Const.1890, § 16; U.S. Const. art. 1, § 10, and which cannot be impaired by the imposition of additional burdens such as the exaction of compensation. We, of course, recognize the right of the City to make reasonable regulations under the police power.

2. That insofar as the statute relied upon by the City (Sec. 5(e) Chapter 372, Mississippi Laws of 1956) requires plaintiff to pay compensation to the City for the use of the streets, said statute constitutes an unconstitutional attempt to impair the obligations of the contract between plaintiff and the State of Mississippi.

Appellant filed an answer and counterclaim, admitting the enactment of Chapter 38 of the Mississippi Laws of 1886 and the construction, extension and expansion of the telephone plant and facilities of the appellee's predecessors in title subsequent to the enactment of said Chapter 38, but denying that this extension or expansion was conducted under Chapter 38 of the Mississippi Laws of 1886, and denying that Chapter 38 of the Mississippi Laws of 1886 constituted an offer of a franchise. Appellant further denied that appellee succeeded to any rights under Chapter 38 of the Mississippi Laws of 1886. It, however, admitted that it was seeking to collect two percent of appellee's monthly service charges in said municipality. Defendant's counter-claim asked that appellee be required to discover the amount of its monthly service charges in the City of Meridian for the period from March 29, 1956, through December 31, 1956, and subsequent thereto during the pendency of this action, and that judgment be rendered against appellee for two percent of the total of said service charges.

Upon the issues thus drawn by the pleadings, the case was tried to the court without a jury on stipulations of fact and documentary evidence, and at the conclusion of the trial the district judge, making and filing an opinion, Southern Bell Telephone & Telegraph Co. v. City of Meridian, D.C., 154 F.Supp. 736, in which he set out the uncontroverted facts and canvassed and discussed the applicable decisions upon which he based his determination, entered judgment¹ for plaintiff and the City appealed.

Here, stating:

"There is essentially only one question involved in this case, to-wit, whether or not Chapter 38 of the Mississippi Laws of 1886 constituted an offer by the State of Mississippi which, when accepted, resulted in a contract between the State and the telephone companies accepting the offer which cannot be impaired by subsequent legislation, and whether or not appellee is entitled to succeed to any right under said Chapter 38."

appellant assigns a single error, that the district judge erred in granting plaintiff the declaratory judgment as prayed and in denying the defendant's counter claim for a decree requiring appellant to discover the amount of its monthly service charges and to pay appellant two percent of the total of such charges. Beginning its argument with the statement:

"All of the facts in this case are stipulated and there is no dispute about such facts, although there may be differences of opinion as to the inferences to be drawn therefrom. The stipulated facts consist largely of a history of the telephone companies within the State of Mississippi from the establishment in this state to date, insofar as such history is now available."

and setting out the history in its brief, appellant, discussing under seven numbered points, each extensively argued, the claimed errors of the district judge and assailing his opinion and order as without support in fact and in law, thus concludes its lengthy and detailed brief:

"We submit that the history of the enactment of Chapter 38 of the Mississippi Laws of 1886 definitely rules out any idea that the legislature of Mississippi intended by that chapter to offer the grant of an irrevocable, perpetual franchise to telephone companies taking advantage of the act. We submit further that this history shows without any equivocation that the purpose of that act was simply to reenact legislation giving telegraph companies the right of eminent domain. That in the course of the passage of that act through the legislature telephone companies were included in the act so that they also would have the right of eminent domain. The fact that the appellee has been unable to present one shred of evidence to show that any claim was ever made to such a statewide franchise prior to 1929 — although there were two litigated cases involving such rights — indicates clearly that appellee\'s predecessors in title did not interpret this law as giving them such a statewide franchise. We submit further that, if such a franchise were intended, their right to claim such a franchise, has now been lost by the actions of appellee\'s predecessors in title. The facts in this case distinguish it from all of the reported cases holding that particular legislation was the offer of an irrevocable perpetual franchise.

"The effect of the decision of the learned district judge is not limited to the City of Meridian. It involves the birthright of all citizens of the State of Mississippi and of untold future generations. We earnestly urge the court to study carefully the history of this legislation and the actions of the parties thereunder. We sincerely believe that if that is done, the court will arrive at the same conclusion to which we have arrived — that no such irrevocable, perpetual franchise ever existed, and that, even if it did, it has been long ago lost by the actions of appellee\'s predecessors in title. Therefore, the judgment of the district court should be reversed, the complaint of appellee dismissed with prejudice and judgment awarded appellant on its counter claim."

Appellee, on its part, agreeing with appellant that there is no issue of fact in this case, and stating:

"Before taking up our particular reply to appellant\'s brief, we believe that it will clarify the issue for us to present the contentions which were submitted to and sustained by the court below."

puts forward as a basis for them, Point One of its own:

"The Mississippi Act of 1886, contained an offer which, when accepted by the plaintiff, resulted in a contract between the State and the plaintiff which cannot be impaired by subsequent legislation."

In general support of this point and of its contention that the opinion and decision of the district judge were correct and should be affirmed, appellee thus states and argues its position:

"It is our position that the offer contained in the Act of 1886 was accepted by the plaintiff\'s predecessors, and that when that offer was accepted it resulted in a contract which cannot be impaired by the imposition of additional burdens such as the exaction of compensation.

"It is admitted in the answer and stipulated in the record that both the Great Southern Telephone and Telegraph Company and the Cumberland Telephone and Telegraph Company were operating in the State of Mississippi prior to 1886, and during each and every year since 1886, those two companies and Southern Bell have continued to construct, maintain, operate and expand and extend their plant and facilities throughout the state.

"The following propositions of law, which were sustained by the lower court, have been firmly established by judicial decisions of the United States Supreme Court, other federal courts, and state courts:

"(1) The Legislature of Mississippi in 1886 had plenary control over all highways and streets of the state, whether

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