Cumb. Tel'P. & Tel'G. Co. v. City of Hickman

• Decision Date: 10 June 1908
• Citation: Cumb. Tel'P. & Tel'G. Co. v. City of Hickman, 129 Ky. 220, 111 S. W. 311, 33 Ky. Law Rep. 730 (Ky. Ct. App. 1908)
• Court: Kentucky Court of Appeals
• Parties: Cumb. Tel'p & Tel'g Co. v. City of Hickman.

129 Ky. 220

Cumb. Tel'p & Tel'g Co. v.City of Hickman.

Court of Appeals of Kentucky.

June 10, 1908.

Appeal from Fulton Circuit Court.

R. J. BUGG, Circuit Judge.

Judgment in first case affirmed and in the second case reversed in part.

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WHEELER, HUGHES & BERRY for appellant.

W. L. GRANBERRY of counsel.

ROBBINS & THOMAS for appellees.

OPINION OF THE COURT BY CHIEF JUSTICE O'REAR — Reversing.

Hickman, a city of the fifth class in this Commonwealth, was asked by promoters of the scheme to be permitted to install a public telephone exchange within the corporation.In order to comply with the requirements of the law, the town council was duly called in extra session on August 16, 1894, when the proposition was regularly presented to the city.The council determined to grant the franchise.It directed the city clerk to advertise for the public sale of the franchise on September 3, 1894, which was the date of the next regular meeting of the council.At this August 16th meeting there was introduced an ordinance detailing the privilege or franchise to be granted, its term, 20 years, and the conditions on which it was to be granted.The ordinance was laid over till the September 3d meeting.The terms, conditions, etc., mentioned in it, were identical with those directed to be advertised, and which were advertised by the clerk for sale.The sale was made as advertised, and the bid reported to the council for action on September 3, 1894.The bid, being acceptable, was approved by the council, which thereupon unanimously adopted the ordinance introduced on August 16th preceding, granting the franchise.Among the conditions contained in the ordinance were these two: (1) That work should be begun within six months to install the telephone plant, and be finished within one year from the passage of the ordinance; (2) that the rate charged each subscriber within the city should not exceed $2.50 per month.There were other conditions not involved in this consideration, save one clause which was relied on by the plaintiffs below as a condition of the grant, and which will be noticed more particularly in its appropriate place in this opinion.The successful and accepted bidder styled himself J. J. Downey, trustee.Subsequently he sold his holdings to Chowning & Wright, who assumed the obligations imposed upon Downey, trustee.The owners of the franchise were about to let it lapse by their failure to begin work upon the plant within the time specified in the ordinance, when they besought the city council to grant them an extension.This the council did on March 11, 1895, but on the condition that the maximum charges to subscribers to the system in the city should not exceed $1.50 a month for residences, $2.50 for business houses, and, where one subscriber had a phone in his residence and one in his business house also, the maximum charge for the two should not exceed $3.50 a month.This condition was accepted by Chowning & Wright, and the plant was thereafter duly installed and set in operation.Later on the plant was sold to appellant, and the franchise assigned to it.After running the system for some time on the basis fixed in the ordinance of September 3, 1894, as amended by the one of March 11, 1895, appellant increased its charges to its subscribers above the maximum fixed in the latter ordinance.Whereupon the city brought an action in equity against appellant, setting out the sale and the granting of the franchise, and the terms and conditions thereof, alleging the breach of the terms by appellant, to the oppression of the citizens of the plaintiff city, and couched the prayer of its petition in the following language: "Wherefore the plaintiff prays that it be adjudged that the defendant has violated its franchise, and no longer has the right to do business in the city of Hickman, and that it be required to remove its poles and wires from the streets and passways of the city, and enjoined from continuing in business in the city, if this can be done; but, if it cannot be done, then it prays that the defendant be enjoined and restrained from charging its customers more than the amounts fixed in the franchise and amendments thereto, and that it be required to fix reasonable and uniform rates for all citizens served by it, and it prays for all necessary and proper relief."The defendant failing to answer, the allegations of the petition were taken as confessed, and the case was submitted to the court for judgment.The court adjudged that, by the terms of the ordinance granting the franchise being operated by appellant, the franchise was to continue for 20 years from September 3, 1894; that appellant was restricted to a charge not exceeding $1.50 a month for residences, or $2.50 a month for business houses, or $3.50 a month where both were supplied with phones to the same subscriber; and that appellant had exceeded these charges.It was thereupon adjudged, as relief, that appellant be enjoined from charging more than the prices above named and as fixed by the amended ordinance of March 11, 1895.When this judgment was entered, appellant closed its exchange and attempted to abandon its franchise.At this juncture appellees Davidson and others filed their suits in equity, on their own behalf and on behalf of all other citizens of Hickman, setting out the foregoing facts, and asked as relief that the defendant(appellant) company be enjoined and restrained from discontinuing its service to the citizens who were subscribers and would be during the remainder of the contract period of 20 years, and that the company be required to carry out its contract in that behalf.The result of this last suit was a judgment in favor of the plaintiffs, enjoining the removal of the poles, wires etc., by the defendant, and requiring it to continue for the remainder of the 20 years' service to the citizens of Hickman at a uniform charge of not exceeding that fixed in the amended ordinance of March 11, 1895.The appellant has prosecuted appeals from each of the judgments above recited.

Appellant's contentions against the judgments are that the ordinance granting the franchise was passed on September 3, 1894, was void because (a) it was not passed in conformity to section 46 of the Constitution;(b) that it was passed at the same session at which it was introduced, thereby coming in conflict with section 3636, Ky. St. 1903.It also contends that the judgment by default was not authorized by the prayer of the petition and was void, or at least erroneous.As to the last judgment, it contends, in addition, that a court of equity has not the power to compel a telephone company to exercise its franchise by operating the plant, but that the only remedy is to forfeit the franchise.These questions will be discussed in the order in which they are presented.

Appellee's first contention is based upon the analogy between ordinances of a public and political nature, enacted by municipalities in virtue of the power conferred upon them by the Legislature, and similar laws when passed by the Legislature itself.Therefore, it reasons, these precautions deemed essential to protect the public from improvident action by the Legislature, and which the Constitution has instituted as checks upon such legislation when attempted by the General Assembly, must by the force of the same public consideration be applied to town councils when they come to legislate.Section 46 of the Constitution invoked by appellant under this head provides that all bills must be printed; reported upon by a committee; read at length on three different days in each house, and shall on their final passage receive the votes of at least two-fifths of the members elected to each house, etc.The particular point sought to be applied here is that the ordinance should have had three readings, on as many different days, before it could be passed.There is no reason why, if one of the features of section 46 applies to town council proceedings, all would not.It would seem to be a sufficient answer to appellant's contention to say that the section is part of the subdivision devoted to the legislative department, the General Assembly.The section is not only inapplicable to the extent of being impossible of application to town councils, but it shows that it was not intended to apply to any legislative body, but the General Assembly of the Commonwealth.Town councils of several of the classes of cities have not two bodies.Nor does there seem to be the same ground for interposing such elaborate safeguards in the procedure of these minor bodies which are composed of but few members, sitting in public session in the midst of their constituents, also comparatively few in number.But, let that be as it may, we find no language in section 46 indicating that the convention intended it to apply to proceedings in municipal legislative bodies.Interpretations of Constitutions by rules of implication are most hazardous, and, if ever employed at all, it ought to be done in those instances only where the subject-matter and language leave no doubt that the intended meaning of the clause which may be under investigation may be reached in that way only, and be reached in that way with approximate certainty.This section has never been treated by the courts, the Legislature, or the town councils as applying to the latter.We have no doubt that it was not intended to apply to them.

The other argument of the appellant as to the regularity of the passage of the ordinance is that, as the ordinance granting the franchise was passed the same day that the franchise was sold (after it was sold), it was passed on the same day as of its introduction.To establish a basis...