Postal Telegraph Cable Co. v. City of Newport

• Decision Date: 13 October 1914
• Citation: 169 S.W. 700,160 Ky. 244
• Parties: POSTAL TELEGRAPH CABLE CO. v. CITY OF NEWPORT.
• Court: Kentucky Court of Appeals

169 S.W. 700

160 Ky. 244

POSTAL TELEGRAPH CABLE CO. v. CITY OF NEWPORT.

Court of Appeals of Kentucky.

October 13, 1914

Appeal from Circuit Court, Campbell County.

Action by the City of Newport against the Postal Telegraph Cable Company. Judgment for plaintiff for less than the relief demanded, and both parties appeal. Affirmed.

Morrison R. Waite, of Cincinnati, Ohio, T. P. Carothers, of Newport and John R. Schindel, of Cincinnati, Ohio, for appellant.

Otto Wolff, of Newport, for appellee.

CARROLL J.

In 1895 the council of the city of Newport adopted an ordinance granting to the Postal Telegraph Cable Company, and its successors, the right and privilege of erecting poles and stretching wires through the streets and alleys of the city of Newport.

The ordinance contains several sections defining the rights of the city and the company that it is not necessary to here notice, and further provided:

"Nor shall anything in this ordinance be construed as granting a franchise to the said Postal Telegraph Cable Company."

In section 7 it was provided that:

"The said Postal Telegraph Cable Company shall pay to the city of Newport a special license tax of one hundred dollars per annum."

In 1899 the city brought suit against the cable company to recover the $100 license tax for the years 1897 and 1898, and from a judgment awarding it this sum, the cable company prosecuted an appeal to this court, where the judgment of the lower court was affirmed in an opinion that may be found in 76 S.W 159, 25 Ky. Law Rep. 635. In 1897 the cable company, which it appears was a New York corporation, sold and conveyed its property in the state of Kentucky, including all rights and interests it had in the city of Newport, to the Commercial Cable Company, another New York corporation. In 1898 the Commercial Cable Company sold and conveyed all of its property, rights, and privileges to the Commercial Cable & Telegraph Company, also a New York corporation. In December, 1900, this company sold its property, rights, and privileges to the appellant, which is a Kentucky corporation; and since then it has owned, operated, and controlled the poles, wires, and other property of its predecessors in the city of Newport, and occupied the streets and public ways of the city under the ordinance referred to. In 1908 this suit was brought, seeking to recover from the original grantee under the ordinance, the Postal Telegraph Cable Company of New York, the special annual license tax of $100 for the years 1899 to 1907, inclusive, but by an amended petition the present appellant was made a defendant, and the case against the New York corporation dismissed. In this suit the appellant set up a number of defenses, and after the case had been submitted on the pleadings and exhibits, there was a judgment against it for the license tax due for the years 1903 to 1907, inclusive. As to the other years, the plea of limitation interposed by the cable company was sustained, and a recovery for the license tax for those years denied. From the judgment against it for $500 for the license tax for the years named, the cable company appeals, and from the judgment dismissing its petition seeking to recover the license tax for the preceding five years, the city prosecutes a cross-appeal.

It is first insisted that the ordinance bestowed no rights on the telegraph company, and is void. The argument in support of this proposition is that the acceptance by the Postal Telegraph Cable Company, of New York, of the congressional legislation of 1866 (Act July 24, 1866, c. 230, 14 Stat. 221), conferred upon it the right granted by the federal government to erect its poles and string its wires in the city of Newport and elsewhere in the country without asking the consent of any city it might desire to operate in. This congressional legislation, however, did not take from the city the right to charge a telegraph company for using its streets a reasonable compensation in the way of a license fee or occupation tax. It was expressly so held in City of St. Louis v. Western Union Telegraph Co., 148 U.S. 92, 13 S.Ct. 485, 37 L.Ed. 380. In that case the Western Union resisted the right of the city of St. Louis to charge it $5 per annum for each pole it erected in the city, upon the ground that its acceptance of the congressional legislation referred to entitled it to the use of the streets without compensation; but the court said that, notwithstanding this legislation, the city had authority to charge for the use of its streets and public places. To the same effect is Western Union Tel. Co. v. City of Richmond, 224 U.S. 160, 32 S.Ct. 449, 56 L.Ed. 710. It was also so ruled by this court in the Postal Telegraph Company Case, supra.

Another contention is that neither the Constitution nor the laws of the state of Kentucky require that a telegraph company shall obtain the consent of a municipality before constructing its lines in the streets of a city. But we do not find it necessary in this case to go into a discussion of this question. The city granted to the Postal Telegraph Cable Company, of New York, and its successors, one of them being the present appellant, the right to occupy with its poles and wires the streets and public ways of the city in consideration of the payment to it by the company of $100 a year. Under the authority of the ordinance, the validity or effect of which we will not now stop to consider, the grantee in the ordinance and its successors have been occupying the streets and public ways, and it will not now be heard to say, after it has had the use of the streets and public ways under these circumstances, that the city had no authority to grant it this privilege or to exact from it this tax. The city and the company entered into this arrangement. The city has complied with its part of the undertaking, and the company must comply with its part. If the appellant company were now for the first time asserting the right to occupy the streets free from the burden of any license fee or tax for its occupation, we would have before us the question it is sought to raise in this case. But it has been in the possession of the streets since the passage of the ordinance, as we must and do presume, under and by virtue of it, and should pay for its use and occupation the agreed price.

The ordinance expressly states that it is not to be construed as granting a franchise to the company, and doubtless it was well known that a franchise such as is contemplated and required by the Constitution could not be secured in this way. In accepting the use of the streets under this ordinance, the company merely obtained the right, for the stipulated compensation, to occupy the streets until such time as the city might see proper to revoke the license. But so long as the company occupies the streets under the license, it must pay the agreed price.

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