Oklahoma-Arkansas Tel. Co. v. Southwestern Bell Tel. Co.

• Decision Date: 01 June 1929
• Docket Number: No. 3416.,3416.
• Citation: 33 F.2d 770
• Parties: OKLAHOMA-ARKANSAS TELEPHONE CO. v. SOUTHWESTERN BELL TELEPHONE CO.
• Court: New York District Court

33 F.2d 770 (1929)

OKLAHOMA-ARKANSAS TELEPHONE CO. v. SOUTHWESTERN BELL TELEPHONE CO.

No. 3416.

District Court, W. D. Arkansas. Ft. Smith Division.

June 1, 1929.

Robinson, House & Moses and Harry E. Meek, all of Little Rock, Ark., and Jas. B. McDonough, of Ft. Smith, Ark., for plaintiff.

Downie & Schoggen, of Little Rock, Ark., and Claude Nowlin, of Oklahoma City, Okl., for defendant.

MARTINEAU, District Judge.

The plaintiff is the Oklahoma-Arkansas Telephone Company, hereinafter referred to as the Poteau Company. The defendant is the Southwestern Bell Telephone Company, hereinafter referred to as the Bell Company. The Poteau Company owns and operates local telephone exchanges at Heavener, Howe, Wister, and Poteau, in Oklahoma, with toll lines connecting these exchanges. It also has a long distance or toll line from Poteau, Okl., to Ft. Smith, Ark.,

The Bell Company owns and operates the local telephone exchange at Ft. Smith, together with many other exchanges in Oklahoma, Arkansas, Texas, and Missouri. These exchanges are all connected by long-distance lines owned by the defendant, and by connections with other long-distance lines telephonic communication is afforded to practically all parts of the United States and some foreign countries. One of the defendant's toll lines runs from Ft. Smith to Poteau.

It will thus be seen that there are two long-distance lines from Ft. Smith to Poteau, one belonging to the plaintiff, and the other to the defendant.

Prior to January 22, 1928, the Poteau Company's long-distance line was connected with the Bell Company's local exchange at Ft. Smith, and the Bell Company's long-distance line from Ft. Smith was connected with the Poteau Company's exchange at Poteau, under the terms of a working agreement, by which calls originating in plaintiff's system for Ft. Smith and points east were to be routed over plaintiff's line to Ft. Smith, and calls originating in Ft. Smith and points east for points in plaintiff's system were to be routed over defendant's line to Poteau. This agreement between plaintiff and defendant was entered into November 30, 1923, and superseded a traffic agreement between the two companies or their predecessors which had existed for many years. This agreement fixed the compensation that each company was to receive for services performed in connection with the transmission of calls, and also provided that it should remain in effect for one year "and thereafter until the expiration of thirty days after written notice of determination to terminate same is given by either party to the other."

Instead of figuring literally the amount of compensation due each party under the terms of the contract, the Bell Company adopted what is known as a composite, which is a method of computing a division of the revenues between the companies based, not upon the actual number of calls over a certain period, but upon an average for a given period, determined from a study of previous business for a like period.

The Poteau Company says that it became dissatisfied with the composite method of settlement, because it was not authorized by the terms of the contract, and refused to pay the amounts demanded by defendant. As a matter of fact, however, it felt that the terms of its contract did not provide a fair compensation for its services rendered, and, as a consequence, some time in 1927 commenced withholding 25 per cent. as commissions, instead of the commissions fixed by its contract. The excess amount thus withheld by the plaintiff amounted to between four and five thousand dollars in December, 1927. The Bell Company attempted to adjust these differences amicably with the plaintiff, but was unsuccessful. In December, 1927, it gave notice that it would terminate the contract of 1923 with the plaintiff in 30 days, and on January 22, 1928, it terminated its physical connection with the plaintiff's system, both at Poteau and Ft. Smith. It then established its long-distance toll station at Poteau, and all in and out calls from Poteau to points in the Bell system had to be handled at this toll station. This required the inhabitants of Poteau to go to this station to transmit or receive long-distance messages. This condition continued for a few days, when the Poteau Company voluntarily permitted long-distance messages to be delivered and received over its local exchange. At the present time, a physical connection of the two telephone systems at Poteau exists under the rules, regulations, and requirements of the Oklahoma Corporation Commission, fixing the terms of said connection and the compensation to be received by each party. Under this arrangement, the facilities for long-distance telephone conversations between Poteau Company points and Ft. Smith, Ark., and all other Bell Company points are the same as existed prior to January 22, 1928, except that all calls both in and out, between Poteau and Ft. Smith, and other points beyond in the Bell system, must pass over the Bell Company's lines from Poteau to Ft. Smith. This, in effect, prevented the use of the Poteau Company's long distance line between these two points.

All telephone calls originating in Arkansas to points on the Poteau system are handled now exactly as they were prior to January 22, 1928, but persons calling from points in the Poteau system to Ft. Smith and to points...