State ex rel. Fletcher v. Nw. Bell Tel. Co.

• Decision Date: 12 January 1932
• Docket Number: No. 41070.,41070.
• Citation: 240 N.W. 252,214 Iowa 1100
• Parties: STATE EX REL. FLETCHER, ATTY. GEN., v. NORTHWESTERN BELL TEL. CO.
• Court: Iowa Supreme Court

214 Iowa 1100

240 N.W. 252

STATE EX REL. FLETCHER, ATTY. GEN.,

v.NORTHWESTERN BELL TEL. CO.

No. 41070.

Supreme Court of Iowa.

Jan. 12, 1932.

Appeal from District Court, Wayne County; H. H. Carter, Judge.

Mandamus by the State of Iowa, on the relation of the Attorney General, against the Northwestern Bell Telephone Company. The case is fully stated in the opinion. Decree as prayed, and the defendant appeals.

Reversed.Parrish, Cohen, Guthrie & Watters, of Des Moines, Bracewell, Murrow & Poston, of Corydon, A. J. McBean, of Omaha, Neb., and H. A. Poley, of Des Moines, for appellant.

John Fletcher, Atty. Gen., and Oral Swift, Asst. Atty. Gen., for appellee.

STEVENS, J.

The Northwestern Bell Telephone Company, Incorporated, appellant herein, owns and operates a large number of exchanges in this and other states, together with a system of toll lines extending generally throughout such territory, and is also connected with the long distance lines of the American Telephone and Telegraph Company and associated companies. The Middle States Utilities Company and the Incorporated Telephone Company of Allerton, both incorporated, each own and operate independent local exchanges at Allerton, Iowa. Physical connection between the facilities of appellant and those of the Middle States Company has been maintained for many years. The Incorporated Telephone Company of Allerton, which was organized and began business about July 1, 1930, is without physical connection with appellant at Allerton or with any other system doing a toll or long distance business at that point.

The refusal of appellant to permit the Incorporated Telephone Company to make physical connection with its switchboard and lines at Allerton upon the same terms and conditions as those accorded the Middle States Company was followed by this action in mandamus in the name of the state, on the relation of the Attorney General, to compel appellant to permit such physical connection to be made. There is no substantial or material conflict in the evidence. The written contract under and by virtue of which physical connection of the Middle States Company was effected with appellant furnishes to subscribers and patrons long distance service over appellant's lines and their connecting systems. There is no controversy between appellant and the Middle States Company. So far as the record discloses, the contract and mutual arrangement between them is satisfactory, and neither desires its termination.

It should further be stated that there is nothing in the terms or conditions of the aforesaid contract which in any way limits the right of appellant to permit physical connection to be made by the Incorporated Telephone Company, with its switchboard at Allerton. The sole controversy in this case is between the Incorporated Telephone Company and appellant.

Parallel situations have been the subject of litigation in other jurisdictions, but not previously in this state, with the result that we have at least two lines of clearly irreconcilable decisions as to numerous phases of the questions involved. An examination of all of the cases hereinafter cited which discuss the question will disclose that at common law public utilities were and are required to furnish equal facilities to the public, but that no duty rested thereon to make physical connection with any other like organization.

The minority rule announced and ably defended by the Supreme Court of Indiana in State v. Cadwallader, 172 Ind. 619, 87 N. E. 644, 89 N. E. 319, will first be given consideration. The Indiana case involved a controversy between two telephone companies which at the time of the trial and long prior thereto had effected and maintained physical connection and mutual use of their respective facilities. There is some uncertainty as to the exact terms and nature of the contract between them, but that is immaterial so far as the present discussion is concerned. The defendant in that case threatened to terminate the contract with the other party thereto and to sever physical connection therewith. The action which was on the relation of a public officer was in mandamus to compel the observance and continuance of the arrangement voluntarily entered into between them. The court upheld the contentions of the relator, and declined to permit the threatened severance of their facilities.

The conclusion of the court, so far as this court is at present concerned, was rested upon two distinct propositions: One, that defendant having voluntarily entered into an arrangement by contract, by which the other party obtained the right to use its toll or long distance lines, so that the public thus acquired an interest in continuance, and second, that this action of the parties in making such connection was equivalent to a declaration of a purpose on its part to waive the primary right to remain independent, and imposed upon the property a public status which they might not disregard. That is, that they may not, in such circumstances, sever their connection and thus destroy the rights acquired by the public. The doctrine of the minority thus briefly stated has been approved and followed in a few jurisdictions. Campbellsville Tel. Co. v. Lebanon, L. & L. Tel. Co., 118 Ky. 277, 80 S. W. 1114, 84 S. W. 518;Railroad Commission v. Northern Ky. Tel. Co., 236 Ky. 747, 33 S.W.(2d) 676;Clinton-Dunn Tel. Co. v. Carolina Tel. & Tel. Co., 159 N. C. 9, 74 S. E. 636;McCardle v. Akron Tel. Co., 87 Ind. App. 59, 156 N. E. 469, 160 N. E. 48;United States Tel. Co. v. Central Union Tel. Co. (C. C. A.) 202 F. 66;State ex rel., etc. v. Tel. Co., 36 Ohio St. 296, 38 Am. Rep. 583. Other cases cited by relator, which it is contended are in harmony therewith, but which a careful reading will show are distinguished by the facts, are the following: Chesapeake & P. Tel. Co. v. Baltimore & O. Tel. Co., 66 Md. 399, 7 A. 809, 59 Am. Rep. 167;Williams v. Maysville Tel. Co., 119 Ky. 33, 82 S. W. 995;State of Delaware v. Del. & A. Tel. & Tel. Co. (C. C.) 47 F. 633;Delaware & A. Tel. & Tel. Co. v. Delaware (C. C. A.) 50 F. 677.

In so far as the conclusion of the Indiana case and the other cases cited recognize and hold to the doctrine above stated, they are not strictly in point in the controversy before us. As stated, there is no controversy in this case between appellant and the Middle States Utilities Company, with which physical connection is maintained. The Supreme Court of Indiana, in dealing with the other propositions involved in the Cadwallader Case, went much further in its interpretation and application of the common law than any court had previously gone.

[1] It is a rule of general recognition that where private property becomes, by the consent of the owners, invested with a public interest or privilege for the benefit of the public, the owner of such property can no longer deal with it strictly as private property, but must deal with it in its relation to the public. Allnutt v. Inglis, 12 East Reports, 527; Munn v. Illinois, 94 U. S. 113, 24 L. Ed. 77; State v. Cadwallader, supra.

Basing its argument upon this rule, the Indiana court reached the conclusion in the Cadwallader Case that, as defendant had effected physical connection at the point material in the case with other telephone companies not parties to the action, the appellant was bound to accord the same connection and service to all other telephone companies desiring the same; that is, by the dedication of the property and facilities of appellant to a public use, he was bound under the rules of the common law to furnish equal facilities to all other persons or companies similarly situated, and engaged and of the same class. None of the other cases cited above involve this particular question. What is here said in the Cadwallader Case is pertinent to the question for decision in the case before us.

[2][3] We shall deal with the majority rule only in so far as it applies to the facts and circumstances of the case before us. As previously stated, under the rules of the common law, one telephone company was under no legal duty to make or permit physical connection of its facilities with any other. In the absence of statute requiring same, it is wholly optional with public utilities, such as telephone companies, whether they will make physical connection with other similar organizations or not. The whole question in this case at this point is: Did appellant, by voluntarily entering into the written contract with the Middle States Company and permitting physical connection to be made thereby with its switchboard and facilities, dedicate its property and facilities to a public use and thereby waive its right to remain independent of all other similar organizations? The right of appellant to refuse to contract with the Incorporated Telephone Company, if it had not already entered into the relation with the Middle States Company to which we have referred, was absolute. The only contract or arrangement which the Incorporated Telephone Company could, in such circumstances, have with appellant was such as it might voluntarily consent to. The right of private contract as to such matters therefore existed. The intention of the parties which is to be determined by the terms of the contract is the first thing to be considered. The Incorporated Telephone Company came into existence long after the arrangement between appellant and the Middle States Utilities Company was entered into. There is nothing in the circumstances to indicate an intention on the part of appellant to dedicate its property and facilities to the use and benefit of the public beyond that which previously existed, or such as is indicated by the terms of the agreement. The duty of appellant to furnish equal facilities to the public, independent of statute or of some other understanding or agreement, applies only to its subscribers and persons or corporations desiring, upon usual terms, to avail themselves thereof....