Southern Bell Tel. & Tel. Co. v. City of Meridian, No. 41885

CourtUnited States State Supreme Court of Mississippi
Writing for the CourtETHRIDGE
Citation241 Miss. 678,131 So.2d 666
PartiesSOUTHERN BELL TELEPHONE & TELEGRAPH COMPANY v. CITY OF MERIDIAN, Mississippi.
Docket NumberNo. 41885
Decision Date12 June 1961

Page 666

131 So.2d 666
241 Miss. 678
SOUTHERN BELL TELEPHONE & TELEGRAPH COMPANY
v.
CITY OF MERIDIAN, Mississippi.
No. 41885.
Supreme Court of Mississippi.
June 12, 1961.

Page 667

[241 MISS 680] Butler, Snow, O'Mara, Stevens & Cannada, Jackson, Floyd, Cameron & Deen, Meridian, John A. Boykin, Jr., Atlanta, Ga., A. A. Kitchings, Jr., Jackson, for appellant.

[241 MISS 682] Ethridge, Minniece & Bourdeaux, Meridian, for appellee.

ETHRIDGE, Justice.

This case deals with the application and validity of a charge or rent required by a 1956 Mississippi statute to be paid a municipality for the use by a telephone company of public streets. The principal question is whether the charge, as sought to be imposed by the City of Meridian upon Southern Bell Telephone and Telegraph Company (called Southern Bell), violates the contract clause (Sec. 16) of the Miss. Constitution of 1890, which states that 'laws impairing the obligation of contracts, shall not be passed.' We hold that it does.

[241 MISS 688] I.

Miss.Laws 1956, Chapter 372, reorganized and expanded the authority of the Public Service Commission to regulate certain public utilities and their rates, including telephone companies. See Southern Bell Tel. & Tel. Co. v. Mississippi Public Service Commission, 1959, 237 Miss. 157, 113 So.2d 622; Mississippi Public Service Commission v. Home Telephone Co., Inc., 1959, 236 Miss. 444, 110 So.2d 618; United Gas Corporation v. Mississippi Public Service Commission, Miss.1961, 127 So.2d 404. Section 5 of that Act contained provisions defining when a certificate of public convenience and necessity is required of a public utility.

Sec. 5(e) is the statute in question. Although in some respects it is ambiguous, its manifest intention is to impose upon appellant, as a telephone utility, a charge or rent for the use of the streets, alleys and public places in a municipality. It provides that, in the case of a public utility rendering telephone service, 'the said utility shall pay two per cent (2%) of the monthly service charges in said municipality whether said utility has a franchise to operate therein or not.' This is for the privilege to 'continue to use the streets, alleys and public places therein situated.'

This particular case developed under extended circumstances. After the statute was enacted, Southern Bell filed an action against the City of Meridian, in the U. S. District Court of the Southern District of Mississippi, Eastern Division. Its purpose was to obtain a declaratory judgment as to whether Southern Bell and its predecessors had been granted by the State, under an 1886 statute, an irrevocable franchise to

Page 668

use the streets of the City for its poles and other facilities, and whether acceptance by Southern Bell of that statutory grant constituted a contract protected Art. 1, Sec. 10, of the U. S. Constitution, which prohibits states from passing laws impairing the obligations of contracts. On the other [241 MISS 689] hand, the City contended in its answer and cross-bill, seeking to recover the charge laid by the act, that the 1886 statute did not create an irrevocable, perpetual right but only a revocable license.

The Company's contention is based upon Chap. 38, Miss.Laws 1886, whose title and Section 1 state: 'AN ACT to encourage and facilitate the construction of Telegraph, Telephone and other like lines in the State of Mississippi.

'Section 1. Be it enacted by the Legislature of the State of Mississippi, That any telegraph or telephone company, chartered or incorporated by the laws of this or any other State of the United States, shall, upon making due compensation, as hereinafter provided, have the right to construct, maintain and operate telegraph or telephone lines through any public lands of this State, and on, across and along all highways, streets and roads, and across and under any navigable waters, and on, along upon the right of way and structures of any railroad, and, in case of necessity, on, under, or over any private lands in this State; provided, that the posts, arms, insulators and other fixtures of such telegraph or telephone lines be so erected, placed and maintained as not to obstruct or interfere with the ordinary use of such highways, railroads, streets or water, or with the convenience of any land owner, more than may be unavoidable.'

The remaining thirteen sections of the 1886 laws granted to telegraph and telephone companies the power to contract with owners of property for easements and the power of eminent domain. Chap. 38 was repealed by Miss.Code 1892. That act was omitted, probably by inadvertence, from the 1892 Code, which instead carried forward the rovisions of the Code of 1880, Secs. 1065-1067, as Code 1892, Secs. 854-856, pertaining only to telegraph companies. Hence in Alabama & V. Ry. Co. v. Cumberland Tel. & Tel. Co., 1906, 88 Miss. 438, 41 So. 258, [241 MISS 690] it was held that the 1886 law was repealed and a telephone company could not condemn an easement along a railroad right of way. However, Sec. 4 of Code of 1892 preserved all rights previously accrued.

The federal district court held that the 1886 statute constituted an offer to grant telephone companies the right to an irrevocable, perpetual franchise to use the streets and public places in the state without charge, and acceptance of that offer by Southern Bell's prodecessors and subsequently by Southern Bell vested it with an irrevocable franchise for those purposes, beyond the power of the legislature to change. The additional charge imposed by the 1956 act conflicted with the contract clause of the U. S. Constitution. Southern Bell Tel. & Tel. Co. v. City of Meridian, D.C.Miss.1957, 154 F.Supp. 736. The district court stated the authorities are unanimous in holding that such a statute and its acceptance by a utility constitutes a binding contract, and to change its terms would be to impair the obligations of a contract. Citing a number of cases in support of its decision, the court further said the fact that appellant's predecessor, Cumberland Telephone & Telegraph Company, obtained from the city in 1899 a franchise and agreed to furnish the city a few free telephones did not estop it from asserting the franchise. The conduct of the company in taking advantage of general laws as to eminent domain and accepting benefits under Sec. 179 of Miss. Constitution of 1890 did not estop appellant. The court rejected application of the doctrines of laches, estoppel and adverse possession. It concluded the city was without power to impose the charge, and entered a declaratory judgment denying that right.

Page 669

The U. S. Court of Appeals, 5th Circuit, affirmed the district court. City of Meridian v. Southern Bell Tel. & Tel. Co., 1958, 256 F.2d 83, 88. It adopted substantially the opinion of the district judge. The court [241 MISS 691] of appeals further held the statement in Hodges v. Western Union Tel. Co., 1895, 72 Miss. 910, 18 So. 84, 29 L.R.A. 770, that the 1886 act is a permissive statute granting a mere revocable license, was dicta, and, if decisional, nevertheless the offer by the statute when accepted became a contract beyond the reach of impairment by either legislative or judicial action. That court noted that it was not deciding anyting beyond that issue. 'Particularly is it not intended to deal in any way here with questions relating to the exercise of the taxing and police powers of the state or city.' The judgment of the district court was affirmed.

The City of Meridian appealed to the U. S. Supreme Court. City of Meridian v. Southern Bell Tel. & Tel. Co., 1959, 358 U.S. 639, 79 S.Ct. 455, 3 L.Ed.2d 562. That court applied the doctrine of abstention, which signifies that a federal court may either decline to exercise or postpone the exercise of its jurisdiction where a case involves a controlling question of state law. Annotations, Discretion of Federal Court to Remit Relevant State Issues to State Court in Which No Action Is Pending, 94 L.Ed. 879 (1950), 3 L.Ed.2d 1827 (1959). It vacated the judgment of the Court of Appeals and directed the district court to hold the case pending an authoritative declaration of applicable state law on the issues, apparently whether the 1956 act imposed the charge and whether the 1886 act as accepted constituted an irrevocable franchise which could not be impaired under the contract clause of the Miss. Constitution, Sec. 16. The U. S. Supreme Court stated: '* * * we vacate the judgment of the Court of Appeals and remand the case to the District Court with directions to hold the cause while the parties repair to a state tribunal for an authoritative declaration of applicable state law.

'Proper exercise of federal jurisdiction requires that controversies involving unsettled questions of state law be decided in the state tribunals preliminary to a federal[241 MISS 692] court's consideration of the underlying federal constitutional questions. See Railroad Commission of Texas v. Pullman Company, 312 U.S. 496, 61 S.Ct. 643, 85 L.Ed. 971. That is especially desirable where the questions of state law are enmeshed with federal questions. * * * Here the state law problems are delicate ones, the resolution of which is not without substantial difficulty--certainly for a federal court. * * * In such a case, when the state court's interpretation of the statute or evaluation of its validity under the state constitution may obviate any need to consider its validity under the Federal Constitution, the federal court should hold its hand, lest it render a constitutional decision unnecessarily. * * *' [358 U.S. 639, 79 S.Ct. 456.]

Thereafter the district court entered an order staying further proceedings 'while the parties repair to a tribunal of the State of Mississippi for an authoritative declaration of applicable state law. This court retains jurisdiction to hear any matters that might probably arise under the mandate of the Supreme Court and for final...

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18 practice notes
  • England v. Louisiana State Board of Medical Examiners, No. 7
    • United States
    • United States Supreme Court
    • January 13, 1964
    ...challenged as unconstitutional. The state action was resolved in the telephone company's favor. Southern Bell T. & T. Co., v. Meridian, 241 Miss. 678, 131 So.2d 666. 9. Fla.Stat.Ann., 1955, § 25.031, provides: 'The supreme court of this state may, by rule of court, provide that, when it sha......
  • United Services Life Insurance Company v. Delaney, No. 19531
    • United States
    • United States Courts of Appeals. United States Court of Appeals (5th Circuit)
    • May 18, 1964
    ...in Mississippi. The parties simply switched roles. He who was pursued became the pursuer. Southern Bell T. & T. Co. v. Meridian, 1961, 241 Miss. 678, 131 So.2d 666. Even the National Sovereign may be sent to the State Courts to determine state questions such as ownership of minerals. Leiter......
  • Rice Researchers, Inc. v. Hiter, No. 56630
    • United States
    • United States State Supreme Court of Mississippi
    • September 2, 1987
    ...Such intent, Page 1268 however, must be proven by full and clear evidence. Southern Bell Telephone & Telegraph Co. v. City of Meridian, 241 Miss. 678, 703, 131 So.2d 666, 675 (1961); Dunn, 184 Miss. at 720, 185 So. at Determining whether RRI abandoned rice after closing its Mississippi rese......
  • City of Mesa v. Salt River Project Agr. Imp. and Power Dist., No. 8200
    • United States
    • Supreme Court of Arizona
    • July 1, 1966
    ...P.2d 859; cf. Traverse City v. Consumers Power Co., 340 Mich. 85, 64 N.W.2d 894; Southern Bell Telephone & Tel. Co. v. City of Meridian, 241 Miss. 678, 131 So.2d 666.' 92 Ariz. at 99, 373 P.2d at Under the interpretation which has been placed upon the contracts with the United States govern......
  • Request a trial to view additional results
18 cases
  • England v. Louisiana State Board of Medical Examiners, No. 7
    • United States
    • United States Supreme Court
    • January 13, 1964
    ...challenged as unconstitutional. The state action was resolved in the telephone company's favor. Southern Bell T. & T. Co., v. Meridian, 241 Miss. 678, 131 So.2d 666. 9. Fla.Stat.Ann., 1955, § 25.031, provides: 'The supreme court of this state may, by rule of court, provide that, when it sha......
  • United Services Life Insurance Company v. Delaney, No. 19531
    • United States
    • United States Courts of Appeals. United States Court of Appeals (5th Circuit)
    • May 18, 1964
    ...in Mississippi. The parties simply switched roles. He who was pursued became the pursuer. Southern Bell T. & T. Co. v. Meridian, 1961, 241 Miss. 678, 131 So.2d 666. Even the National Sovereign may be sent to the State Courts to determine state questions such as ownership of minerals. Leiter......
  • Rice Researchers, Inc. v. Hiter, No. 56630
    • United States
    • United States State Supreme Court of Mississippi
    • September 2, 1987
    ...Such intent, Page 1268 however, must be proven by full and clear evidence. Southern Bell Telephone & Telegraph Co. v. City of Meridian, 241 Miss. 678, 703, 131 So.2d 666, 675 (1961); Dunn, 184 Miss. at 720, 185 So. at Determining whether RRI abandoned rice after closing its Mississippi rese......
  • City of Mesa v. Salt River Project Agr. Imp. and Power Dist., No. 8200
    • United States
    • Supreme Court of Arizona
    • July 1, 1966
    ...P.2d 859; cf. Traverse City v. Consumers Power Co., 340 Mich. 85, 64 N.W.2d 894; Southern Bell Telephone & Tel. Co. v. City of Meridian, 241 Miss. 678, 131 So.2d 666.' 92 Ariz. at 99, 373 P.2d at Under the interpretation which has been placed upon the contracts with the United States govern......
  • Request a trial to view additional results

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