Home Telephone Co. v. Granby & Neosho Telephone Co.

• Decision Date: 08 March 1910
• Citation: 126 S.W. 773,147 Mo. App. 216
• Court: Missouri Court of Appeals
• Parties: HOME TELEPHONE CO. v. GRANBY & NEOSHO TELEPHONE CO.

126 S.W. 773

147 Mo. App. 216

HOME TELEPHONE CO. v. GRANBY & NEOSHO TELEPHONE CO.

St. Louis Court of Appeals. Missouri.

March 8, 1910.

Rehearing Denied March 22, 1910.

1. TELEGRAPHS AND TELEPHONES (§ 34) — OPERATION — DISCRIMINATION.

While telephone companies are not common carriers so as to make them liable as insurers, they must furnish impartial service and equal facilities for communication without unjust discrimination to all offering to comply with their reasonable rules.

2. TELEGRAPHS AND TELEPHONES (§ 16) — CONTRACTS BETWEEN COMPANIES — CONNECTING EXCHANGES — EXCLUSIVE CONNECTION — VALIDITY.

Rev. St. 1899, § 1255 (Ann. St. 1906, p. 1029), requires every telephone company, incorporated or unincorporated, to receive dispatches from and for other telephone lines or individuals, and, on tender of their usual charges, to transmit promptly, impartially, and in good faith, under a penalty. Section 1256 provides that, where a sender desires to have the dispatch forwarded over the lines of other companies whose termini are, respectively, within the limits of the usual delivery of such companies, to the place of final destination, and tenders the amount of the usual charges for delivery to the final destination, the receiving company shall pay to the succeeding line the necessary charges for the remaining distance, and the latter shall accept the same and forward the message in the same manner as if the sender had applied to it. Section 1254 authorizes any telephone company to join with any other corporation in constructing, leasing, owning, using, or maintaining their lines upon terms to be agreed upon. Plaintiff and defendant telephone companies executed a contract, by which each granted a license to the other to connect with their respective exchanges, and each agreed to transmit all messages destined to points on the lines of the other not reached by its own wires over the lines of the other party, and further agreed not to enter into any contract with any other person or corporation whereby any of the rights or advantages therein acquired by either party might be impaired. Held, in view of the public necessity which is impressed upon either an incorporated or unincorporated telephone business, that both at common law and under the statute, a telephone company must impartially furnish equal facilities to all for communication over its lines, and, if it voluntarily gives facilities to one company by permitting connection with its exchange, it must grant like facilities to all other companies of the same class, though they may be competitors, and the contract was void for granting an exclusive right of physical connection with the respective exchanges of the parties thereto; section 1254 only permitting telephone companies to join in using their lines in a manner not in violation of the other sections.

3. TELEGRAPHS AND TELEPHONES (§ 16) — CONTRACTS BETWEEN COMPANIES — VALIDITY.

The provision of the contract providing that all messages arriving on the lines of either party destined to points on the lines of the other, not reached by the lines of the initial company, can be transmitted over the lines of the other, is void as violating both section 1256, Rev. St. 1899 (page 1030, Ann. St. 1906), and the common-law right of the sender to secure the route and connecting agency by which the message is to be transmitted.

4. CARRIERS (§ 170) — DUTIES — CONTROL OF INSTRUMENTALITIES.

As a rule, in absence of contract or statute, a common carrier is only required to receive and transport to the end of its line and deliver to the connecting carrier with reasonable promptness, and is not under a primary duty to surrender the physical use of its instrumentalities to another carrier; such rule being based largely upon the danger which would result from permitting its instrumentalities to be controlled by another.

5. INJUNCTION (§ 59) — VIOLATION OF CONTRACT.

The violation of a void contract cannot be enjoined.

6. CARRIERS (§ 170) — UNJUST DISCRIMINATION.

At common law one carrier cannot grant to a connecting carrier an exclusive privilege which is an unjust discrimination against other carriers of the same class as to facilities for exchanging business.

7. STATUTES (§ 225) — CONSTRUCTION — RELATED PROVISIONS.

Statutes in pari materia must be construed together.

8. MONOPOLIES (§ 12) — COMBINATION IN RESTRAINT OF TRADE — TRANSPORTATION — TELEPHONE SERVICE — BUYING "CONVENIENCE OR COMMODITY."

A contract between two telephone companies having connecting exchanges gave each the exclusive right to have transmitted over its lines all messages coming from the lines of the other destined to points on the lines of the connecting company not reached by the lines of the other company, and provided that the connecting carrier should receive for its service a percentage of the charge made, to be determined on the basis of the relative number of miles the message was transmitted on their respective lines. Rev. St. 1899, § 8978 (Ann. St. 1906, p. 4157), forbids two or more corporations engaged in buying or selling any commodity, convenience, or thing whatsoever to agree to limit competition by refusing to buy from or sell to any other such article or thing for the reason that such other is not a party to such agreement or combination. Held, that telephone service was a "convenience or commodity" within the statute, and the contract was void for prohibiting the parties thereto from buying such service as to messages destined to points on the lines of the other from other companies, and attempting to create a monopoly as to such business.

For other definitions, see Words and Phrases, vol. 2, pp. 1556-1558; vol. 2, pp. 1309, 1310.]

9. MONOPOLIES (§ 10) — STATUTES — CONSTRUCTION — STATUTES IN AID OF COMMON LAW.

Rev. St. 1899, § 8978 (Ann. St. 1906, p. 4157), forbidding two or more corporations engaged in buying or selling any commodity or thing to agree to limit competition by refusing to buy from or sell to any other such article, for the reason that the other is not a party to such agreement or combination, is in aid of the common law, and should not be strictly construed.

Appeal from Circuit Court, Newton County; F. C. Johnston, Judge.

Suit by the Home Telephone Company against the Granby & Neosho Telephone Company. From a decree dismissing the bill, plaintiff appeals. Affirmed.

McReynolds & Halliburton, for appellant. O. L. Cravens, for respondent.

NORTONI, J.

This is a suit in equity. Plaintiff seeks to enjoin further breaches of a contract between it and the defendant. Upon a hearing the court dismissed the bill, and plaintiff prosecutes the appeal.

There is no question presented as to the form of the remedy pursued, and that matter will remain unnoticed. Both plaintiff and defendant are telephone companies incorporated and existing under the laws of this state. The plaintiff, Home Telephone Company, maintains offices and telephone exchanges at Joplin, Carthage, Carterville, and other points in southwest Missouri and southeast Kansas. The defendant, Granby & Neosho Telephone Company, owns and operates a telephone line from Granby to Neosho, and maintains its offices and an exchange in each of those cities. Both companies, desiring to extend their business, entered into an arrangement in writing, whereby they agreed to transmit messages over their lines destined to points in the territory occupied by the other company. Among other things therein stipulated this contract required the plaintiff company to construct a connecting line from the city of Carthage to the city of Granby, a distance of about 20 miles, and connect the same with the defendant's exchange at the latter point. Partly in consideration of this contemplated connection by the extension of plaintiff's line from Carthage to Granby, it was further provided in section 4 of the contract that each of the telephone companies agreed to transmit all messages destined to points in the territory of the other company not reached by its own system of wires to and over the lines of the other party. It was also stipulated that neither party would enter into any contract with any other person, firm, or corporation whereby any of the rights, privileges, or advantages therein assured should be impaired. By its terms the contract was to continue for a period of 25 years. It assured to each company an exclusive privilege of physical connections with the exchange of the other, and assured as well an exclusive privilege to each company to transmit over its lines all messages originating on or passing over the lines of the other destined to points not reached by the initial carrier, and which were reached by the lines of the connecting company. The companies assumed mutual obligations with respect to transmitting the messages of the other, and each agreed to at all times keep the lines and connections in proper repair for the use of the other. A further provision is made in subsequent portions of the instrument with respect to the division of the compensation received for transmitting the messages over the respective lines therein contemplated. The two sections of the contract which are relevant to this controversy are as follows:

"Second. Each party hereto grants a license to the other party to connect with the telephone exchange or system of the other party, through its switchboard at Carthage and Joplin and Granby, so that an interchange of business may at all times be carried on between said parties. Said connections to be made as soon as the lines are completed, it being understood and agreed that the lines of both parties hereto shall be so operated that service may be given from all lines owned, controlled or connected with the line or lines of either of the parties hereto over the lines of the other and its connections. And each party hereto agrees not to enter into any contract with any other person, firm or corporation whereby any of the rights,...