Northwestern Telephone Exchange Company v. City of Minneapolis

• Decision Date: 06 August 1900
• Docket Number: 12,223 - (266)
• Citation: 83 N.W. 527,81 Minn. 140
• Parties: NORTHWESTERN TELEPHONE EXCHANGE COMPANY v. CITY OF MINNEAPOLIS and Others
• Court: Minnesota Supreme Court

83 N.W. 527

81 Minn. 140

NORTHWESTERN TELEPHONE EXCHANGE COMPANY v. CITY OF MINNEAPOLIS and Others

Nos. 12,223 - (266)

Supreme Court of Minnesota

August 6, 1900

Petition on Rehearing Filed May 10, 1901

Appeal by plaintiff from an order of the district court for Hennepin county, McGee, J., sustaining a demurrer to the complaint. Reversed.

SYLLABUS

Municipal Corporation -- Telephone Wires.

The city council or governing body of a municipality has the undoubted right in the exercise of the police power to order the placing of telegraph and telephone wires under ground whenever, in the exercise of a fair discretion, it decides that public interests require it to be done; but it cannot act arbitrarily in the premises.

Municipal Corporation -- City Ordinance a Contract with Company.

An ordinance of a municipal corporation granting a telephone company the right to use its streets for the erection of poles and over-head lines, under conditions as to permits and directions as to where the same shall be placed, when accepted and acted upon by the company, is a contract which the municipality cannot unreasonably or arbitrarily repeal or amend so as to impair rights acquired under it.

Municipal Corporation -- Unreasonable Regulations.

When such an ordinance has invited investments and expenditures made in good faith and in reliance upon it, the city authorities cannot arbitrarily impose by subsequent regulations, without necessity, or the demands of public convenience, additional burdens upon the company which are clearly beyond the reasonable exercise of the police power.

City Ordinance Construed.

In this case an ordinance of the city of Minneapolis construed and held, upon the facts set forth in the complaint and admitted by the demurrer, to constitute a contract with the plaintiff authorizing its use of streets, subject only to the reasonable and necessary restrictions of its exercise of the police power.

On Reargument.

May 10 1901.

G.S. 1894, § 2641 -- Erection of Poles in Cities.

Held, that under Laws 1860, c. 12 (G.S. 1866, c. 34, § 28), as amended by Laws 1881, c. 73 (G.S. 1894, § 2641), telephone companies are given the right to erect poles and wires within the urban ways and streets of this state as well as upon rural highways.

City of Minneapolis -- Authority Given by Charter.

That the provisions of the charter of Minneapolis confer upon that city no authority to arbitrarily order a removal of such poles and wires, but only the right to regulate the placing of the same in its streets, and to compel the telephone companies to put their wires in subsurface conduits when reason, convenience, or the good government of the municipality requires.

F. D. Morgan, A. H. Noyes and Geo. D. Emery, for appellant.

Billson, Congdon & Dickinson, filed a brief on the part of parties similarly interested with appellant.

Frank Healy, for respondents.

Oscar Mitchell, Attorney for the City of Duluth, filed a brief in reply to that filed on behalf of parties similarly situated with appellant.

OPINION

LOVELY, J.

This action was brought to restrain the city of Minneapolis, its mayor, chief of police, and city engineer, from the threatened enforcement of certain ordinances, as illegal interferences with the rights of the plaintiff in the use of its telephone system and exchanges in that city. A demurrer was interposed by the defendants denying the sufficiency of the complaint to state a cause of action. The court below sustained the demurrer, from which order plaintiff appeals.

The complaint sets forth at length the grievances of which plaintiff complains, and facts which justify its fears that the defendants will, by the enforcement of two recent ordinances, practically destroy, as it insists, the value of its property, and asks for an injunction to restrain the threatened invasion of its vested rights. It is not necessary to set forth the complaint in full, but we shall call attention briefly to the facts pleaded, which have led us to the conclusion that the demurrer should have been overruled.

The telephone exchange system of plaintiff has a central station in Minneapolis, with substations, switch boards, appliances, and many thousand miles of wire in subsurface conduits, as well as one hundred ten miles of lines stretched on poles throughout the city, connected, through the central station, with each other and with similar exchanges in other cities in the state of Minnesota, as well as the adjacent states of North and South Dakota, Iowa, and Wisconsin. Its general system includes numerous toll lines extending into those states, and comprising more than thirty-five hundred miles of pole lines and twenty-seven thousand miles of wire, with public stations to the number of six hundred or more, all of which exchanges and toll stations are connected with the central office at Minneapolis and with each other, affording intercommunication with more than twelve thousand individual subscribers, and is of great beneficial use to the public generally. This system was completed and has been extended from time to time since 1883, in reliance upon an ordinance of the city wherein the municipality authorized the use and occupation of its streets for such purpose, and prescribed the conditions governing the same. Section 1, page 634, of this ordinance provides that plaintiff

"Is hereby authorized to erect, establish and maintain within the limits of the city of Minneapolis telephone poles, and to stretch and maintain thereon the necessary wires for a telephone exchange system, according to the conditions hereinafter stated."

Section 2 provides that the plaintiff

"Shall file in the office of the city engineer a statement of the streets and alleys of the said city which it has already occupied under permission of the committee on streets."

Section 3 provides that the plaintiff

"Shall file with the city engineer written application for all streets or alleys it may hereafter wish to occupy with its poles and wires," and, further, that "if such application shall be approved by the city engineer and the chief engineer of the fire department, such approval shall be deemed a permission of the city to so occupy said streets and alleys for the purpose above stated."

Section 5 provides that

"In case of a change of grade of any street or pavement so occupied by said company, it shall reset its poles so as to conform to the grade of such street or pavement so changed, and in such manner as the city engineer shall direct, and said poles and wires shall be removed whenever in the opinion of the city council the public interest shall so require."

After the plaintiff had accepted this ordinance, and had established a large part of its system, the city, by an ordinance approved December 10, 1886, required the company to remove its poles throughout a certain district defined therein, embracing the business portions thereof, and including a total area of 88/100 of a square mile, and to place its wires throughout this district in cables laid in conduits beneath the surface of the streets, which requirement the plaintiff complied with at an additional cost of $300,000. In May, 1899, a further ordinance was adopted, amending the last ordinance, whereby the original underground conduit district was enlarged to ten times its former area by the addition of one hundred eighty-six miles of streets not previously included therein, in which the plaintiff then maintained seventy miles of its pole line system, carrying over three thousand miles of wire, costing $125,000, and supplying its service to more than two thousand subscribers residing in that territory.

The complaint sets forth specifically that in the district included in the last ordinance the lines of plaintiff are so located and constructed as not to interfere with or obstruct the safety or convenience of ordinary travel upon such streets in any way, and that the whole of plaintiff's system as now extended and located thereon is safe and convenient for the public use; also that the new district includes a large area of the city, very much of which is sparsely populated and settled, wherein many of the streets are not opened or graded, and that the expense of complying with such ordinance is so great that the plaintiff cannot conform thereto, but must abandon the maintenance of its system, and will, by the enforcement of the ordinance, be prohibited from the occupation of the streets within such district, except in accordance with the plan or mode prescribed, which is not required or demanded by public safety or convenience, and will be so expensive that it cannot be adopted, to the loss of that portion of its system and the value of the business it now conducts therein, to the injury of the entire system and the public by largely curtailing its extent and service. The complaint also alleged that in October, 1899, the city again amended the underground ordinance of 1886, wherein, with reference to this subject, it in terms provided

"That until the 1st of December, 1903, the city council of the city of Minneapolis may permit the erection of such electrical poles, brackets, wires and fixtures within the new territory above described, subject to the right of the city council to cause the removal of such poles, brackets, wires and fixtures * * * at any time it may order and direct the same to be removed."

Which is claimed to be an unreasonable and arbitrary discrimination in the granting and refusing of privileges before granted and provided for, without regard to the places or persons affected, or the public requirement, or the circumstances upon which the same may be desirable. It is alleged further that repairs, extensions, and renewals of lines throughout the...