Pioneer Tel. & Tel. Co. v. State

• Decision Date: 22 October 1912
• Docket Number: Case Number: 1827
• Parties: PIONEER TELEPHONE & TELEGRAPH CO. v. STATE et al.
• Court: Oklahoma Supreme Court

1912 OK 667

127 P. 1073

33 Okla. 724

PIONEER TELEPHONE & TELEGRAPH CO. v. STATE et al.

Case Number: 1827

Supreme Court of Oklahoma

Decided: October 22, 1912

Syllabus

¶0 1. TELEGRAPHS AND TELEPHONES--Police Regulations--Telephone Rates. Power on the part of an incorporated city or town to fix municipal telephone rates can only be derived from the Legislature by express grant or by necessary implication from powers expressly granted. (a) The Legislature did not, by subdivision 20 of section 512 of Wilson's Rev. & Ann. St. 1903, grant to the city of Oklahoma City the power of fixing those rates.

2. SAME. Where a municipality with no power to fix municipal telephone rates, by ordinance pursuant to subdivision 20 of section 512 of Wilson's Rev. & Ann. St. 1903, granted to a telephone company the right to occupy and use its streets and public ways, subject to certain police regulations, and by section 9 of said ordinance fixed municipal telephone rates, held, that said section to that extent is void, although accepted and acted upon between the parties in interest, and is not protected by article 9, sec. 18, of the Constitution, so as to prevent the Corporation Commission from establishing another or different rate pursuant to the same article and section.

S. H. Harris and J. R. Spielman, for plaintiff in error.

Chas. West, Chas. L. Moore, and Jas. S. Twyford, for defendants in error.

TURNER, C. J.

¶1 On July 16, 1906, there was passed by the city council of the city of Oklahoma City, and approved by the mayor the next day, ordinance No. 625. Section 1 provided:

"That the right of way be and the same is hereby granted to the Pioneer Telephone & Telegraph Company, its successors and assigns, to erect and maintain lines of poles and posts, mains and manholes and wires along, in, and through, under and across the public streets, alleys, avenues, bridges and viaducts in the city of Oklahoma City, for the purpose of supplying citizens of said city and the public with communication by telephone or other improved electrical devices and for the purpose of operating a telephone exchange and telephone lines, such use to be and continue upon the terms and conditions hereinafter provided."

¶2 Section 2, after providing for the location of the poles, stipulated:

"This grant is made and is to be enjoyed subject to any proper and reasonable rules, regulations and ordinances of a public nature, as the mayor and city council are authorized to make, not destructive to the rights herein granted."

¶3 And it was further provided that the telephone company within one year from the date thereof should inclose all wires, with certain exceptions, within and without the fire limits. Section 3 provided that the right of use granted should not be exclusive, etc. Section 4 provided additional restrictions with reference to the placing of wires so as to have them least interfere with other public use of the streets, etc., and that they should not be unnecessarily obstructed. It was also provided that the grantee would hold the city harmless for any liability arising out of any act of negligence or omission of the grantee. Section 5 provided that in consideration thereof the telephone company would allow the city certain uses of their property for municipal purposes. Section 6 recited that, in further consideration of the city's patronage, the telephone company agreed to furnish to the city ten free telephones and certain other connections with exchange for city purposes at $ 1 per month per telephone, to be located by order of the city, and further provided that the city might have free use of the system in case of fire, riot, etc. In section 7 it was agreed on the part of the city that the use of the poles of the company, as stated, and the free reduced rate telephones offered shall be given by said company in place and instead of any city income, license tax, or unusual levy which the city might otherwise demand, etc. Section 8 provided that the company shall remove its wires after receipt of request from the mayor to permit the moving of houses, etc. Section 9 of said ordinance, among other things, provided:

"The maximum rate to be charged by the grantee for exchange service shall be dependent upon the total number of telephones within the city limits, and platted additions thereto connected with the local Oklahoma City exchange to which exchange service is given, as follows: (setting them forth)."

¶4 It is unnecessary to recite the other sections. Thereafter, while appellant was doing business under said ordinance, on October 12, 1908, the Corporation Commission entered the following order, No. 101:

"It is ordered that no person, or persons, firms, company or corporation doing a transmission business by telephone for hire in the state of Oklahoma shall charge a greater or different rate for service or similar service in effect on October 12, 1908, without first having made application to the Corporation Commission therefor, and submitting to the commission the schedule of the proposed change, which, before taking effect, shall have the approval of the commission. This order shall be in full force and effect on and after November 3, 1908."

¶5 On July 17, 1908, the Burrows Oil Company, one of the subscribers of the appellant company in said city, filed its complaint against said company, in effect:

"That the defendant, contrary to order No. 101 of the Corporation Commission of Oklahoma, have changed their rates which were in effect October 12, 1908, so that now we have to pay four dollars and ten cents monthly where we October 12, 1908, paid three dollars and seventy-five cents, all of which appears on receipted bills attached."

¶6 Later defendant appeared and filed answer, in effect an admission of the charge, and stood on its right so to do under said ordinance, which the commission, in effect, held was no defense, and fined it $ 100 and costs "for violating said order No. 101 and raising its telephone rates in Oklahoma City without first having obtained an order from the commission authorizing such raise." To reverse said order, which is No. 235, defendant brings the case here. There can be no question of our jurisdiction to review said order and determine whether the commission had the power to make the order violated. A., T. & S. F. Ry. Co. v. State et al., 31 Okla. 43, 119 P. 961; G., C. & S. F. Ry. Co. v. State, ante, 125 P. 1103. The case turns upon the question of whether the commission had such power. If by subdivision 20 of section 512 of Wilson's Rev. & Ann. St. 1903, the Legislature granted to the city the governmental power of fixing and regulating municipal telephone rates, the effect of so doing in this instance was to suspend, during the life of the ordinance relied upon, the governmental power of fixing and regulating those same rates by the Corporation Commission, and order No. 101 is void. If, however, no such power was thereby granted, section 9 of the ordinance relied on is void and order No. 101 is valid and enforceable. In Home Tel. Co. v. Los Angeles, 211 U.S. 265, 29 S. Ct. 50, 53 L. Ed. 176, the court said:

"The power to fix, subject to constitutional limits, the charges of such a business as the furnishing to the public of telephone service, is among the powers of government, is legislative in its character, continuing in its nature, and capable of being vested in a municipal corporation. * * * The surrender, by contract, of a power of government, though in certain well-defined cases it may be made by legislative authority, is a very grave act, and the surrender itself, as well as the authority to make it, must be closely scrutinized. No other body than the supreme Legislature (in this case, the Legislature of the state) has the authority to make such a surrender unless the authority is clearly delegated to it by the supreme Legislature. The general powers of a municipality or of any other political subdivision of the state are not sufficient. Specific authority for that purpose is required. This proposition is sustained by all the decisions of this court which will be referred to hereafter, and we need not delay further upon this point. It has been settled by this court that the state may authorize one of its municipal corporations to establish, by an inviolable contract, the rates to be charged by a public service corporation (or natural person) for a definite term, not grossly unreasonable in point of time, and that the effect of such a contract is to suspend, during the life of the contract, the governmental power of fixing and regulating the rates. Detroit v. Detroit Citizens' Street R. Co., 184 U.S. 368, 382 , 46 L. Ed. 592, 605; Vicksburg v. Vicksburg Waterworks Co., 206 U.S. 496, 508, 27 S. Ct. 762, 51 L. Ed. 1155, 1160. But for the very reason that such a contract has the effect of extinguishing pro tanto an undoubted power of government, both its existence and the authority to make it must clearly and unmistakably appear, and all doubts must be resolved in favor of the

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