Doty v. American Telephone & Telegraph Co.

• Decision Date: 08 October 1910
• Citation: 130 S.W. 1053
• Parties: DOTY v. AMERICAN TELEPHONE & TELEGRAPH CO.
• Court: Tennessee Supreme Court

Page 1053

130 S.W. 1053

DOTY v. AMERICAN TELEPHONE & TELEGRAPH CO.

Supreme Court of Tennessee.

October 8, 1910.

Error to Circuit Court, Hamilton County; M. M. Allison, Judge.

Ejectment by D. M. Doty against the American Telephone & Telegraph Company. From a judgment for defendant, plaintiff brings error. Affirmed.

W. A. Schoolfield and Pritchard & Sizer, for plaintiff in error. Watkins & Thompson, for defendant in error.

GREEN, J.

This is an ejectment suit, brought by plaintiff in error to recover from the American Telephone & Telegraph Company, a New York corporation, certain land taken by the American Telephone & Telegraph Company, a Tennessee corporation, and afterward conveyed by the Tennessee company to the New York company, a portion of which land it was alleged the latter company unlawfully held and detained; the reference being to that portion of the land occupied by the poles, wires, cross-arms, etc., of defendant company. Pleas were filed, including a plea of the statute of 12 months limiting actions brought against corporations authorized to take lands for works of internal improvement. Shannon's Code, § 1867. There was a judgment for the defendant below.

Plaintiff in error relies on two propositions in this court.

First. It is said that under the provisions of Shannon's Code, § 1832, it is a condition precedent to the taking and holding of lands by a telephone company, under the laws of eminent domain, that it should first fail, upon application to the landowner, to secure a right of way by consent contract, or agreement; that, unless such condition was complied with, the landowner was entitled to all the remedies against such corporation which he would have against any other trespasser.

Second. It is said that at the time of the organization of the American Telephone & Telegraph Company of Tennessee, in 1895, there was no law authorizing the incorporation of a telephone company with power either to construct or operate a telephone line, and that, as such corporations could not be legally chartered, they could not, of course, assert the rights of eminent domain.

We will consider the last proposition of plaintiff in error first.

Chapter 232 of the Acts of 1883, an act to amend the general incorporation act of 1875, is as follows:

"Section 1. Be it enacted by the General Assembly of the State of Tennessee, that chapter 142 of the Acts of 1875, entitled `An act to provide for the organization of corporations,' approved March 23, 1875, be and the same is hereby amended so as to embrace electric light companies, electric light and power companies, telephone companies, telephone and power companies.

"Sec. 2. Be it further enacted that the charter for any of the above companies shall be as follows:

"Be it known that (here insert the names of five or more persons above the age of twenty-one years) are hereby constituted a body politic and corporate by the name and style (here insert the name of the corporation), for the purpose of manufacturing electric light, or for the purpose of manufacturing electric light motive power, electrotyping, etc., or for the purpose of manufacturing electricity for telephoning purposes, etc. (State fully the objects of the company, whether one or more of the above purposes.) The general powers of said corporation are (here insert the powers as contained in section 5 of the Acts of 1875, chapter 142).

"Sec. 3. Be it further enacted, that all companies of the character designated in this act, or similar ones now incorporated in substantial compliance with this act or the act of 1875 aforesaid, shall be and are hereby declared to be legal corporations and it shall be lawful for telephone or electric light companies now or hereafter incorporated to consolidate into one corporation, or partially consolidate or co-operate in such manner as the respective corporations may determine, with the concurrence of the stockholders of each, in full meeting assembled;

"But it is provided that all rights and privileges conferred by this act shall be subject to revocation and repeal."

It is argued that under the provisions of this act a telephone company can be chartered only for the purpose of manufacturing electricity for telephoning purposes, and that said act confers no power to construct lines, operate exchanges, or to do other things of like character incidental to the telephone business.

In support of this argument, plaintiff in error quotes certain language from the opinion of a former member of this court in the case of Home Telephone Company v. Nashville, 118 Tenn. 1, 101 S. W. 770.

It was there said that not until the passage of the Talbert bill (chapter 134 of the Acts of 1907) was there any authority under our statutes to incorporate a telephone company, whose purpose it was to transmit messages as the complainant in that case proposed to do. "It is true," said the learned justice, "that the act of 1883 authorized charters for telephone companies; but that act simply gave such companies the power to manufacture electricity for telephone purposes — that is, to erect and install power houses — but gave no authority to erect a pole, or string a wire, or to install a plant for the transmission of messages."

It will be seen from an examination of the case referred to that the question before the court and the question decided by the court was the right of a telephone company to operate under a charter provided for telegraph companies. It was held that a telephone company had no such right. The complainant there had not attempted to incorporate as a telephone company, and the question as to whether there was authority for the incorporation of telephone companies, with power to construct lines and transmit messages, was not before the court. So the expressions above quoted were obiter, and we may consider this question an open one, in so far as any holding of this court is concerned.

The act of 1883 undoubtedly and in express terms authorized the incorporation of telephone companies and telephone and power companies. Is it reasonable to suppose that, after providing for the creation of telephone companies, it was the intention of the Legislature to restrict their powers to such an insignificant detail of the business as the manufacture of the necessary electricity? The electricity for telephone purposes is made by small batteries, not in power houses, and it requires but little of their equipment and a trivial portion of their attention and activities for telephone companies to manufacture all needed electricity.

The general rule undoubtedly is that the powers of a corporation are only such as its charter confers, and that, when the charter undertakes to enumerate the powers thereby given to the corporation, it is to be construed as withholding from it other powers not mentioned. This rule is usually qualified, however, by the statement that the failure to enumerate them in the charter does not deprive a corporation of such incidental powers as are reasonably necessary to accomplish the purposes for which it was organized.

Certainly, when a corporation is created for a particular purpose, by implication it is vested with such powers as are absolutely necessary for it to effect the purposes of its creation.

It is not necessary that any powers at all be expressed in the charter in order to endow it with many rights. The mere creation of a corporation carries with it certain powers, which are regarded as incidents of corporate existence.

It was long since held in this state that, while "a corporation is the creature of the charter that institutes and gives it being, yet it is equally true that some things by common law are incident to a corporation, which it may do without any express provision in the charter of incorporation, as to sue and be sued, purchase and sell, make by-laws, and have a common seal." Jonesboro v. McKee, 2 Yerg. 167, 170.

For other powers impliedly conferred on corporations, see 1 Clark & Marshall on Corporations, p. 385.

In addition to these general powers, imputed to all corporations, whether expressly conferred or not, there are other implied powers, peculiar to each corporation, and dependent on the nature of the particular corporation.

As said by this court in an early case: "The creation of a corporation for a specific purpose implies a power to use the necessary and usual means to effectuate that purpose." Union Bank v. Jacobs, 6 Humph. 515, 521.

This case has since been followed in Tennessee by many others, holding that, regardless of their enumeration in the charter, corporations had such implied powers as were necessary for them to accomplish the objects for which they were created. Memphis v. Memphis Gayoso Gas Co., 9 Heisk. 531; Memphis v. Adams, 9 Heisk. 518, 24 Am. Rep. 331; Miller v. Andrews, 3 Cold. 380, and others.

The rule, otherwise stated, is that a corporation has such implied powers as are necessarily implied from those granted. Herring v. Ruskin Co-op. Ass'n (Ch. App.) 52 S. W. 327, affirmed by this court.

This doctrine of implied powers is recognized in the later cases of Turnpike Co. v. Davidson County, 106 Tenn. 258, 61 S. W. 68, and Turnpike Co. v. Montgomery County, 100 Tenn. 417, 45 S. W. 345, 58 L. R. A. 155, in which cases the holding is that any powers asserted must be given in unmistakable terms or by an implication equally clear.

When the Legislature, therefore, authorized the incorporation of telephone companies, the intention...