City of New Britain v. New Britain Tel. Co.
| Decision Date | 06 January 1902 |
| Citation | 50 A. 881,74 Conn. 326 |
| Court | Connecticut Supreme Court |
| Parties | CITY OF NEW BRITAIN v. NEW BRITAIN TEL. CO. |
Appeal from superior court, Hartford county; Alberto T. Roraback, Judge.
Action by the city of New Britain against the New Britain Telephone Company and others. From a judgment in favor of plaintiff, defendant appeals. Affirmed.
The plaintiff is a municipal corporation of this state, and the New Britain Telephone Company, one of the defendants, is a joint-stock corporation located in New Britain, engaged in carrying on the telephone business. In September, 1890, the plaintiff and said defendant entered into a written agreement under seal, in which the city agreed to permit said defendant "to use all poles belonging to said city," subject to the rights of all parties then using the poles and the right of the city to use the top arm on each pole; and said defendant agreed (1) to permit the city to use "the top arm of all poles owned by said company or which may be hereafter erected by it"; (2) to furnish and set new poles whenever and wherever the city may wish to extend its lines, free of charge; and (3) "to furnish all city departments all telephones they may order put in, at the agreed price of thirteen dollars and fifty cents ($13.50) net, each per year." The contract was to remain in force for 20 years from date. At the time the foregoing agreement was made, the defendant, as principal, and certain individuals, who are made defendants, as sureties, made and delivered to said city a penal bond in the sum of $2,500, the condition of which, after reciting that the obligor and the city had entered into the foregoing agreement, which was by reference made a part of the bond, among other things provided as follows: "If the said obligor shall sell its property, or its control shall go into the hands of other parties, or its competition with the Southern New England Telephone Company, its assigns or successors, shall not be kept up, or if the control of said obligor shall pass either directly or indirectly into the handsof said Southern New England Telephone Company, its assigns or successors, then this bond shall be in full force and effect, and in case of the said obligor ceasing its competition with or coming under the control of the Southern New England Telephone Company, its assigns or successors, then, and in that event, said sum of twenty-five hundred dollars shall be considered as liquidated damages, and the full amount thereof shall be paid to the city; but otherwise to be void and of no effect." The breach of the bond alleged in the complaint is the fact that the defendant has ceased to compete with the Southern New England Telephone Company, and has come under its control. The defendants in a single answer set up, in effect, two special defenses, in substance as follows: (1) The provision in the bond relating to competition in the telephone business was inserted "for the sole and exclusive purpose of creating, continuing, and securing" competition for twenty years between the defendant and the Southern New England Telephone Company, in favor of the general public; (2) the city has, since the agreement and bond were made, cut down some of the poles the use of which the defendant the New Britain Telephone Company was to have under the agreement. The plaintiff demurred to the answer, and the court overruled the demurrer to the first, and sustained it as to the second, of these defenses. The plaintiff then, in its reply, in effect denied the first defense, and the case was tried to the court. The issues were found for the plaintiff. The material facts found are, in substance, the following: At the date of the contract and bond the defendant telephone company and the Southern New England Telephone Company were competitors in the public telephone service in New Britain. The defendant telephone company did not come under the control of nor cease its competition with the Southern New England Telephone Company prior to April 1, 1899, and since said competition ceased there has been no change or diminution of the service, or increase in the price thereof up to and after the commencement of this action. The plaintiff did not prove, nor has it suffered, any actual damage, because of the breach of the condition of said bond. From September, 1896, to November 21, 1899, the defendant telephone company was using continuously for its business the poles of the plaintiff according to the agreement, except such poles as are alleged in the answer to have been cut down. On the trial the defendants offered evidence to prove that at a hearing before the court of common council of the plaintiff, prior to the passage of a resolution authorizing its authorities to enter into the agreement and to accept the bond here in question, the counsel of the defendant telephone company urged the passage of said resolution on the ground that it and the action to be taken under it would be beneficial to the general public, by creating and continuing competition in the telephone service between the defendant telephone company and the Southern New England Telephone Company. The court excluded the evidence. On the trial the defendants made certain claims, which the court overruled. The court rendered judgment for the plaintiff for the amount specified in the bond as liquidated damages. The case is otherwise sufficiently stated in the opinion.
Henry Stoddard, for appellants.
Frank L. Hungerford, for appellee.
TORRANCE, C. J. (after stating the facts). The agreement and the bond here in question for most purposes may fairly be regarded and construed as a single instrument They were made at the same time, as part of the same transaction, and the one, the agreement, is by express reference made a part of the other, as much so as if it were written out in full therein. The bond thus contains the agreement and something more. In addition to this agreement and the usual conditions of defeasance, the condition of the bond contains, by clear implication, certain engagements not contained in the embodied agreement which the defendant telephone company agrees to keep, and among them is the one described in the complaint for the breach of which this suit was brought. An enforceable agreement may be contained in that part of a bond called the condition. Tomlinson v. Water Co., 44 Conn. 99. By the bond, then, the defendant telephone company, among other things, agreed, in substance,...
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