Cumberland Tel'P & Tel'G Co. v. Cartwright Tel'P Co.

• Decision Date: 12 March 1908
• Citation: 128 Ky. 395
• Parties: Cumberland Tel'p & Tel'g Co. v. Cartwright Tel'p Co
• Court: Kentucky Court of Appeals

128 Ky. 395

Cumberland Tel'p & Tel'g Co. v. Cartwright Tel'p Co

Court of Appeals of Kentucky.

March 12, 1908.

Appeal from Washington Circuit Court.

I. H. THURMAN, Circuit Judge.

Judgment for plaintiff. Defendant appeals. — Affirmed in part and reversed in part.

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FAIRLEIGH STRAUS & FAIRLEIGH and C. C. McCHORD for appellant.

W. C. McCHORD for appellee.

SCOTT MAYES of counsel.

OPINION OF THE COURT BY JUDGE SETTLE — Affirming in part and reversing in part.

Appellant owns and maintains a telephone system in the city of Springfield and upon certain public highways of Washington county, which it operated for several years without a franchise from either the city or county, but in 1905 it purchased at public sale, as the highest and best bidder, from both the city of Springfield and county of Washington, permanent franchises to operate and maintain its telephone system in the city and county, paying therefor to the city $1, and to the county $25. Appellant's purchase of the franchise from the city was made under an ordinance duly passed by the city council, and of the franchise from the county under an order, in due form, made and entered by its fiscal court. By the terms of its contracts with the city and fiscal court appellant agreed and undertook to construct and maintain an exchange in the city of Springfield, certain exchanges in Washington county outside of Springfield, and also certain designated lines in the county, on condition that it would secure rights of way, have the outside exchanges operated, and that it would in addition, and upon the terms expressed in the contracts, furnish any person or number of persons, for whom it might not construct a line or lines, telephone service over a line or lines of his or their own construction. These two contracts should be considered and construed as one contract. They provide that: "Any person or number of persons in Washington county who may not reside on any of said purchaser's lines, and for whom the purchaser may not construct lines so as to connect with any of said exchanges, shall have the right to construct and maintain their own lines to within one and one-half miles of any of said exchanges, when the purchaser will connect such lines with the nearest exchange, the owner of said lines to have telephone service over the lines of said purchaser in Washington county, Kentucky, by renting from the purchaser a transmitter and receiver at the rate of $2.00 per year. The payment of the above rate shall entitle all subscribers to use all of said purchaser's lines in Washington county, Ky."

About the time appellant's franchises were obtained appellees, J. Richard Smith and others, citizens of Washington county, residing on the Smith's Mill turnpike — one of the roads on which appellant was not required by its contracts to construct or maintain a telephone line — desiring telephone service, advised appellant of their purpose to construct their own line and connect it with appellant's exchange at Springfield, and with that object in view appellees, for convenience, organized themselves into a partnership or joint-stock company called the "Cartwright Creek Telephone Company." Appellees claimed that a contract, to be signed by the company and members composing it and by appellant, was to be written by Edwards, appellant's managing agent, who assented to the construction of the proposed line. Acting upon the assurance thus received, and upon the privilege given them by appellant's contracts with the city of Springfield and the fiscal court of Washington county, appellees constructed the contemplated line, 5 miles in length, and to within one and one-half miles of Springfield, at a cost approximating $500. Appellant refused, however, to connect the line thus constructed with its exchange at Springfield, though requested by appellees to do so, and that refusal was followed by the institution of this action by appellees to recover of appellant the damages sustained by them on account of appellant's failure to connect the newly constructed line with its Springfield exchange, and to compel it to yet make such connection, as provided by its contracts with the city of Springfield and fiscal court of Washington county.

Appellant's answer presented in separate paragraphs the following grounds of defense: (1) A traverse of the averments of the petition. (2) That it was ready and willing itself to construct a telephone line along and over Smith's Mill Turnpike and to furnish over such line telephone service to appellees at their respective residences, but that appellees refused to accept such service, and that they (appellees) have no right to construct a private telephone line and require appellant to connect it with its Springfield exchange. (3) That the alleged conditions imposed by the contracts between appellant, the city of Springfield and fiscal court and the agreement between its agent, Edwards, and appellees with reference to the connecting of their telephone line with appellant's Springfield exchange, the latter being unwritten and not to be performed within a year, and the first unsigned by appellant, were within the statute of frauds and therefore unenforceable. (4) That appellee's telephone line on the Smith's Mill Turnpike was constructed and is attempted to be maintained without authority from the fiscal court of Washington county, and without legal right. The circuit court, on appellee's motion struck from the answer the second paragraph, which was not improper, as that paragraph merely pleaded in affirmative form matters of defense put in issue by the traverse contained in the first paragraph. The court also sustained demurrers to the third and fourth paragraphs of the answer which ruling was also proper. If, as claimed by appellees, their right to have their telephone line connected with appellant's Springfield exchange was conferred by the contracts under which appellant obtained its franchises from the city of Springfield and fiscal court of Washington county, and conditioned upon the failure of appellant to build the necessary line and furnish them telephone service, and these contracts were in writing and also recorded, one in the form of an ordinance and the other as an order or judgment, the statute of frauds would not bar appellee's right to the relief sought in the action.

It is further apparent that, if the right to construct and maintain appellee's telephone line and to connect it with appellant's Springfield exchange was conferred by the contracts under which the latter's franchises to maintain and operate its lines were obtained from the city of Springfield and the fiscal court of Washington county, as appellees' telephone line is to be operated for their private and exclusive use, and not for profit or in competition with the telephone lines or service of appellant, the law imposed upon them no duty to purchase from the fiscal court a franchise or privilege to construct or maintain their single telephone line. If this conclusion proves tenable, it would necessarily follow that the plea of the fourth paragraph of the answer constituted no defense to the action, and therefore appellees' demurrer to it was well taken. Such affirmative matter as was left in the answer, after the second paragraph was stricken out and demurrers sustained to the third and fourth, was controverted of record, and on the trial that followed the jury returned a verdict in appellees' behalf for $1,000...