Cumberland Telephone & Telegraph Co. v. State

• Decision Date: 27 February 1911
• Docket Number: 14,868
• Citation: Cumberland Telephone & Telegraph Co. v. State, 99 Miss. 1, 54 So. 446 (Miss. 1911)
• Parties: CUMBERLAND TELEPHONE & TELEGRAPH CO. v. STATE ON RELATION OF ATTORNEY-GENERAL
• Court: Mississippi Supreme Court

54 So. 446

99 Miss. 1

CUMBERLAND TELEPHONE & TELEGRAPH CO. v. STATE ON RELATION OF ATTORNEY-GENERAL

No. 14,868

Supreme Court of Mississippi

February 27, 1911

APPEAL from the chancery court of Quitman county, HON. J. Q ROBBINS, Chancellor.

Bill by state of Mississippi on the relation of the attorney-general against the Cumberland Telegraph & Telephone Company, to enjoin it from doing business in alleged violation of the anti-trust law and to recover penalties. Demurrer overruled and defendant appeals.

The facts are fully stated in the opinion of the court.

Reversed and remanded.

Harris & Potter, for appellants, filed an elaborate brief contending that this case is one which falls exclusively under the jurisdiction of the railroad commission. That there is no phase of it which is not provided for and protected by the Railroad Commission Act; that it was created for the purpose of preventing such discrimination as this, if discrimination in fact, exists and is unlawful, and that it is not a matter embraced in, or intended to be embraced in the Anti-Trust Act. Citing: Lewis' Sutherland Stat. Con., vol. 2, § 363; Eskridge v. McGruder, 45 Miss. 294; Barnes v. Greer, 65 Miss. 710; Wood v. Mitchell, 47 Miss. 231; Witherspoon v. Lewis, 47 Miss. 570; Logan v. State, 53 Miss. 431; Board of Education v. Railroad Co., 72 Miss. 236; Lemonius v Mayer, 71 Miss. 514; Lewis' Sutherland, vol. 2, §§ 369, 370, and 471; Railroad Co. v. State, 46 Miss. 157; Kimball v. Alcorn, 45 Miss. 145; Lewis' Sutherland Stat. Con., vol. 2, § 499, p. 931; 26 Am. and Eng. Ency. Law, 645 (f) N. S., 36 Am. and Eng. Ency. Law, p. 731 (2) N. S., Lewis' Sutherland Stat. Con., § 581, p. 1072, and § 390; Peeler v. Peeler, 68 Miss. 141; 26 Am. and Eng. Ency. Law, 505; Green v. Weller, 32 Miss. 650; Searles v. R. R. Company, 85 Miss. 560; Lewis' Sutherland Stat. Cons., pp. 965-966.

S. S. Hudson, attorney-general, for appellee.

The state legislatures have powers to deal with the subject-matter and prevent unlawful combinations to prevent competition and in restraint of trade and prohibit and punish monopolies--this is no longer an open question. The above is the language of Mr. Justice Day in 212 U.S. 105, 177 U.S. 28; 20th Supreme Court Rep. 518; 194th U.S. 445.

The legislature of the state of Mississippi has passed such law.

That law is held constitutional.

The railroad commission law is not in conflict with nor antagonistic to the anti-trust laws.

Equity has jurisdiction as determined by supreme court in Hall v. LaFayette County, 70 Miss., also 72 Miss. 76-77, and authorities there cited, and the L. & N. R. R. case.

The constitutionality is determined by the Retail Lumbers Dealers' Association, 48 So. 1026; Judge Lurton's opinion, in May, 1910; Waters-Pierce case, 212 U.S. 86. The Hammond Packing Co. case, 212 U.S. 322, and numerous authorities cited in these cases.

As to due process of law, see 2 L. R. A. 655.

Excessive fines, 27 U. S. S.Ct. 305.

Equal protection of the laws, 197 U.S. 115; 25 U. S. S.Ct. 379-289.

We submit that the facts show a flagrant disregard of the law; that the court exercised great indulgence in rendering his decree and the cause should be affirmed.

Sharp & McIntyre, for appellee, filed a brief fully covering case and contending that the Cumberland Telephone Company cannot discriminate against certain persons and localities and utterly disregard the provisions of chapter 145, Code of Mississippi, 1906, and the amendments thereto. Citing: Chesapeake & P. Tel. Co. v. B. & O. Co., 59 Am. Rep. 167; State ex rel. Baltimore & Ohio Tel. Co. v. Bell Tel. Co., 23 F. 535; 25 Am. and Eng. Ency. Law, p. 750; 25 Am. and Eng. Ency. Law, pp. 775-776; State ex rel. American Union Tel. Co. v. Bell Tel. Co., 38 Am. Rep. 583; State, etc., v. Citizens Tel. Co., 55 L. R. A. 139; 14 Am. and Eng. Ency. Law, 1st Ed., p. 163; Transfer Co. v. Telephone Co., 24 Albany Law J. 283; State v. Telephone Co., 23 F. 539; Nebraska Telephone Co. v. State ex rel., 45 L. R. A. 113; Railroad Commission v. G. & S. I. R. Co., 78 Miss. 750; State, etc., v. Telephone Co., 55 L. R. A. 139; State, etc., v. Telephone Co., 38 Am. Rep. 583.

Argued orally by J. B. Harris and W. V. Sullivan, for appellant, and S. S. Hudson, attorney-general, and W. P. Shenalt, for appellee.

OPINION

ANDERSON, J.

The state of Mississippi, appellee, on the relation of the attorney-general, filed its bill in the chancery court of Prentiss county against the appellant, the Cumberland Telephone & Telegraph Company, charging it with being a trust, in violation of the anti-trust laws of the state, and seeking to enjoin it from the further prosecution of its alleged unlawful business, and to recover the penalties denounced by the anti-trust statutes for carrying on such business. The appellant demurred to the bill, which demurrer was by the court below overruled, and the appellant granted this appeal to settle the principles of the cause.

The substantial allegations of the bill are: That about fifty per cent. of the telephone business of the state is done by the appellant and the balance by the independent companies. That Booneville and Baldwyn are towns of two thousand and twelve hundred inhabitants, respectively, in each of which appellant has less than six hundred "subscribers." That the established tariff rates for telephone service fixed by the railroad commission for towns in that class are two dollars and seventy-five cents per month for business houses, one dollar and sixty-five cents per month for residences," and for country service to points not more than one and one-half miles distant from the switchboard two dollars per annum per each phone on line, and two dollars and seventy-five cents per month per line additional." That these rates so fixed "applied to Batesville, Baldwyn, Booneville, Water Valley, Holly Springs, and sixty-four other towns" in the state, and are charged and collected by appellant at all those places, except Baldwyn and Booneville, and possibly two or three others. That at Rienzi, Booneville, and Baldwyn the appellant, for the purpose of driving its competitors from the field, and monopolizing the telephone business in that territory, is, and has been since about 1905, discriminating in its rates against sixty-odd other towns in the state, where the established rate is exacted, in this: That from Rienzi to Corinth, and from Rienzi to Booneville, it has abandoned the regular rate of twenty cents for three minutes service over its toll line, and instead gives the Rienzi Telephone Company free service to Booneville and a ten-cent rate to Corinth. That it has only sixteen patrons at Booneville, all of whom are charged less than the established rate; some paying one (dollar per month for residences, some one dollar and fifty cents for business houses, others two dollars, and three are given free service. That on country lines running out more than one and one-half miles from its switchboard at Baldwyn, a flat rate of only two dollars per annum is charged certain of its patrons (naming them), while "at other places the regular tariff rate of two dollars per annum for each phone, and two dollars and seventy-five cents per line per month additional," is charged. That appellant is doing business at a loss at Booneville and Baldwyn; its income at each of those places being largely less than its outlay. That by means of such practices the appellant has monopolized the public telephone business at Rienzi, and is attempting "to monopolize the prosecution, management, and control of the public telephone business at Booneville . . . to the great injury of the citizens of the state, and to the injury of the independent telephone companies at Booneville and Baldwyn," etc. That this suit is predicated upon chapter 145, Code of 1906, and chapter 119, p. 124, Laws 1908, amendatory thereto.

The prayer of the bill is that appellant be enjoined from further violations of law, "and be ousted from the state of Mississippi," and a decree in favor of the state for a penalty of one thousand dollars per day for each day the law has been violated, aggregating one million and five hundred thousand dollars. The grounds of demurrer raise the question whether there is any equity on the face of the bill.

The gravamen of the bill is that the appellant company, for the purpose of driving out its competitors at Rienzi, Booneville, and Baldwyn, and thereby destroying competition in the telephone business in that territory, is guilty of unlawfully discriminating in rates; such discrimination consisting of the practice of charging less at those points than the regular and lawful tariff of rates, and at Booneville and Baldwyn of charging some of its patrons less than others.

It is contended on behalf of the state that such discrimination constitutes a violation of subsections "k" and "o," § 1, c. 119, pp. 125, 126, Laws of 1908. This act, down to and including subsection "o," is a rescript of section 5002, ch. 145, Code 1906 ("Trusts and Combines"), except by amendment subsections "n" and "o" are added, and the last paragraph of section 5002 extended so as to include individuals, partnerships, and associations of persons. Subsections "k" and "o" and the last paragraph of section 1, prescribing the penalty for their violation, are as follows:

"Any corporation, domestic or foreign, or individual partnership or association of persons whatever, . . . (k) who shall monopolize or attempt to monopolize the production, control or sale of any commodity, or the prosecution, management or control of any kind, class or description of business; . . . (o) or who shall destroy or attempt to destroy competition by rendering any service or manipulating, or handling or storing any commodity...