Michigan Tel. Co. v. City of St. Joseph

• Decision Date: 17 October 1899
• Citation: 121 Mich. 502,80 N.W. 383
• Court: Michigan Supreme Court
• Parties: MICHIGAN TEL. CO. v. CITY OF ST. JOSEPH.

80 N.W. 383

121 Mich. 502

MICHIGAN TEL. CO. v. CITY OF ST. JOSEPH.

Supreme Court of Michigan

October 17, 1899

Cross appeal from circuit court, Berrien county, in chancery Orville W. Coolidge, Judge.

Bill by the Michigan Telephone Company against the city of St. Joseph to restrain it from interfering with complainant's poles and wires. From a decree, both parties appeal. Affirmed.

The averments of the bill of complaint are substantially as follows: Complainant is a corporation organized under Act No 129, Pub. Acts 1883 (3 How. Ann. St. c. 102a, � 3718a). Its principal office is in Detroit. It carries on in the city of St. Joseph and other cities and towns in the state the construction, maintenance, and operation of telephone lines and exchanges, and connects with the lines of other companies without the state. It has in this state about 460 toll stations and exchanges, 3,660 miles of lines, and 6,550 miles of telephone wire, besides several hundreds of miles of pole lines and wires used in the operation of local exchanges. April 4, 1881, the Telephone & Telegraph Construction Company, a corporation engaged in the telephone business in this state, presented a petition to the common council of the village of St. Joseph for permission to construct, maintain and operate such a system in said village. Permission was duly granted, and that company proceeded at large expense to erect poles and stretch wires within the lines of the streets and alleys of said village until June 5, 1891, when said village became incorporated as a city. Complainant duly acquired by purchase all the property, rights, and privileges of said construction company. It has since continued to do business in said city, and has furnished to said city two telephones free of charge, and four others at rates below the usual charges. It has permitted said city to occupy certain poles with its fire-alarm wires without charge. August 3 1897, complainant erected in a good and workmanlike manner, and in accordance with the terms of the statute, certain poles in said city for the purpose of connecting with its central office the premises of persons who had subscribed for telephone service. August 3, 1897, the common council passed a resolution declaring said poles and wires a nuisance, and instructed the street commissioner to forthwith remove them; and they adopted a resolution providing that if complainant thereafter should place any telephone poles in any streets or alleys of the city without first having obtained permission, said commissioner should forthwith remove them. The commissioner did remove the poles and wires so erected. After this action was taken, complainant, on August 10th and 18th, presented two petitions to the common council, asking permission to erect poles in certain specified streets and alleys. The council refused to grant permission, and permitted a rival company, known as the Twin City Telephone Company, engaged in the same business, to set up poles and string its wires in the streets and alleys of the city. Complainant was willing and anxious to conform to all reasonable and valid regulations with reference to the placing of its poles and stringing of its wires, and so stated in said petitions. The erection of these poles and wires is essential to enable complainant to do its business and meet the requirements of its subscribers. There is ample space on the streets, and no public necessity justifies the refusal. Under the act authorizing its incorporation, complainant has power to construct and maintain lines of wire, with the necessary erections and fixtures for use in transmitting messages, along, over, across, or under any public places, streets, and highways in the state. Alleges its duties to receive and transmit messages without discrimination, and to furnish service without unreasonable delay. By the acceptance of the resolution of 1881, and the construction and maintenance of its telephone system, and by the granting of special rates and privileges to the city, a valid contract has been created between the parties, by virtue of which the city is estopped from denying the complainant's right to maintain and use existing poles and wires, and to continue to set poles and string wires over, on, and in the streets and alleys of the city. It alleges that the action of the council (1) deprives complainant of its vested rights; (2) impairs the obligation of a contract; (3) deprives it of property without due process of law, and denies to it the equal protection of the laws; (4) operates as a regulation of commerce among the states; (5) will produce irreparable injury. The relief asked is an injunction to restrain defendant from removing or interfering with complainant's poles and wires, and from interfering with the replacing of the poles already removed and with the erection of new ones. The answer denies some of the allegations of the bill, and sets up new matter in defense. It does not, however, dispute the substantial and material allegations of the bill. It admits the removal of the poles, and the refusal to act upon the petitions of August 10th and 16th. It defends under an ordinance passed June 8, 1897, by which it was enacted that 'no telegraph or telephone poles shall be located or erected on any street, alley, or public place in said city, and any such pole now erected shall not be taken up and again erected, without the consent of the city council.' It sets up ordinance granting a franchise to the Twin City Telephone Company, and states 'that it has no doubt whatever that, if the complainant should ask for a similar franchise at the hands of the city council, the same would be granted.' Issue was duly framed, and the case heard in open court. September 21, 1898, the court made an order holding that the common council had the right to provide reasonable rules and regulations by which the complainant should be governed in the extension of its lines; that the council had no authority to arbitrarily porhibit complainant from erecting poles and wires upon the streets and alleys; that the reasonableness of such rules or regulations was subject to the review of the court; that, unless said council should within 30 days pass and enact rules and regulations by which complainant was to be governed in the extension of its lines, the writ of injunction should issue, prohibiting the defendant from interfering with the complainant in erecting its poles or placing its wires. The order further required that, before extending its liens, complainant should present to the court a statement of the manner in which it proposed to proceed with such extension, and prohibited complainant from proceeding except under such reasonable rules and regulations as the court shall deem necessary for the public safety and convenience. On November 11th following, a formal decree was entered substantially the same as the order above recited. From this decree both parties appeal. Complainant attacks only so much of the decree as provides that the court shall establish the reasonable rules and regulations. The defendant attacks the decree in its entirety.

Wells, Angell, Boynton & McMillan (N. A. Hamilton, of counsel), for complainant.

James O'Hara (Lawrence C. Fyfe and O'Hara & O'Hara, of counsel), for defendant.

GRANT C.J. (after stating the facts).

1. It is conceded by the learned counsel for both parties that that part of the decree by which the court assumed the right to establish reasonable rules and regulations is void. This is a legislative or administrative function, and not a judicial one. The court has power to put the proper authorities in the defendant city in motion to adopt reasonable rules and regulations, and to pass upon the validity of such action when taken. This is the extent of its authority. Houseman v. Judge, 58 Mich. 364, 25 N.W. 369; City of Manistee v. Harley, 79 Mich. 238, 44 N.W. 603. Other courts recognize the same rule. Reagan v. Trust Co., 154 U.S. 362, 14 S.Ct. 1047; Appeal of Norwalk St. Ry. Co., 69 Conn. 576, 37 A. 1080, and 38 A. 708; Nebraska Tel. Co. v. State (Neb.) 76 N.W. 171.

2. It is urged that the permission granted to the Telephone &amp Telegraph Construction Company was personal to that company, and could not be alienated without the consent of the city. That Company was organized under a general law of the state, and derived its powers and obligations from that law. The only power which a city could have exercised over it was that of regulation. This is also true of the complainant. The transfer was made August 31, 1895, was recognized as valid by the city, and has been acted upon by both the city and the complainant since that time; the latter having expended large sums of money upon its business and improvements. Whether the city is now in position to question the validity of this transfer is at least debatable, but, as it is not argued by counsel, we refrain from discussing it. Counsel for the defendant cite in support of their contention ...