Consolidated Television Service, Inc. v. Leary

• Decision Date: 12 June 1964
• Citation: 382 S.W.2d 78
• Court: United States State Supreme Court — District of Kentucky
• Parties: CONSOLIDATED TELEVISION SERVICE, INC., Appellant, v. Joseph J. LEARY et al., Appellees.

Page 78

382 S.W.2d 78

CONSOLIDATED TELEVISION SERVICE, INC., Appellant, v. Joseph J. LEARY et al., Appellees.

Court of Appeals of Kentucky.

June 12, 1964.

Rehearing Denied Oct. 9, 1964.

William E. Johnson, Darnell, Johnson & Burton, Frankfort, for appellant.

Marion Rider, Frankfort, for appellee.

STEWART, Judge.

Appellant, Consolidated Television Service, Inc., is a privately owned corporation engaged in the business of furnishing coaxial cable television service for profit to the residents of Frankfort and to persons in certain outlying areas. Appellees are the members of the Electric and Water Plant Board of Frankfort, a public corporation owned and operated for the benefit of the people of Frankfort. We shall refer to appellees as 'the Board.'

Appellant does not own any easements or utility poles. It uses poles owned by local utilities to string its wires for furnishing the cable service in question. Appellant began business about 12 years ago, initially confining its operation to East Frankfort. Meeting with success, it attempted to expand and sought the right to use the utility poles of the Board in all portions of Frankfort. This right had previously been granted to appellant's only competitor, Community Service, Inc., hereinafter called 'Community.' The Board refused general use of its poles but granted such a privilege in specified places, with the stipulation that appellant would not interfere with the operation of Community.

Appellant filed this action, asking for a mandatory injunction requiring the Board to permit it to use any and all poles owned by the Board in Frankfort and in the outlying areas where such are located. The Board then filed a motion for summary judgment supported by affidavits. After a hearing on the motion, the trial court sustained the motion. This appeal is from that ruling.

Appellant's contention is that the Board's action in refusing the use of its poles by appellant is arbitrary, discriminatory and unreasonable, since the Board permits its competitor to use the poles for the same purpose sought by appellant.

The record includes selected minutes of various meetings of the Board, detailing the inception of Community and the continuance of its relation to the Board. Two contracts with Community and a contract between the Board and appellant were filed herein. Certain affidavits were also made a part of the record. A summary of the pertinent facts taken from these writings follows.

When television began to be a popular form of entertainment in the late 1940's, Frankfort, due to its topography and geography, was at a serious disadvantage in the reception of programs of all types. In 1951, the Board, seeking to make available a facility that would bring in clear visual images accompanied by acceptable audio, obtained the services of Radio Corporation of America to accomplish this end. The latter, after two years of experiment and the expenditure of much time and money in Frankfort, perfected a method by which multiple signals could be received through a single high antenna and distributed to individual users by means of coaxial cable.

The Board, induced by additional potential revenue that might be derived therefrom, determined to avail itself of the plan. However, it deemed it impracticable to engage in the actual operation and, for the attainment of this purpose and in order to take care of the maintenance problem and the management details, caused to be created a self-perpetuating, nonprofit corporation, known as Community Service, Inc.

On August 11, 1952, the Board entered into a written contract with Community, with respect to the completion, extension and operation of the proposed television distribution service. The Board undertook to complete and extend, at its expense, the project, and Community assumed the obligation of the actual operation and of later extensions of the system. It was further provided Community out of its receipts should reimburse the Board for its investment; and that title to the facility, including any additions thereto made by Community, should be and remain at all times in the Board.

The initial agreement was for a period of one year, with the right to an automatic renewal of it from year to year and with the power to terminate it on the part of either party on written notice. On September 30, 1955, the Board entered into a new contract with Community for a period of ten years. In addition to the terms and conditions heretofore recited, the new contract provided that no person, officer, member or director of Community should receive any dividends or profits from its operation, and that all sums realized, after...