Sunset Tel. & Tel. Co. v. City of Pomona

• Decision Date: 07 August 1909
• Docket Number: 1,678.
• Citation: 172 F. 829
• Parties: SUNSET TELEPHONE & TELEGRAPH CO. v. CITY OF POMONA et al. [1]
• Court: U.S. Court of Appeals — Ninth Circuit

172 F. 829

SUNSET TELEPHONE & TELEGRAPH CO. v. CITY OF POMONA et al. ^[1]

No. 1,678.

United States Court of Appeals, Ninth Circuit.

August 7, 1909

Lawler Allen, Van Dyke & Jutten and Pillsbury, Madison & Sutro, for appellant.

Robert G. Loucks, for appellees.

Beverly L. Hodghead and J. P. Wood, amici curae.

Before GILBERT, ROSS, and MORROW, Circuit Judges.

ROSS Circuit Judge.

The question presented on this appeal is whether the appellant, a California corporation, has the right to maintain its telephone poles and wires in the streets of Pomona, which is a city within the state, of the fifth class, without obtaining from the city a franchise therefor. No question is presented by the record respecting the right of the city to make a charge against the company for the use of those portions of the streets actually occupied by it. A controversy between the company and the city and its officers over the question stated having arisen, and the city authorities having commenced to cut down the poles of the company, the suit was commenced by it to secure injunctive relief, resulting, on the final hearing, in a decree dismissing the appellant's bill of complaint, from which decree the present appeal comes.

While in the court below, the complainant's alleged rights were in part based upon the act of Congress of July 24, 1866 entitled 'An act to aid in the construction of telegraph lines and to secure to the government the use of the same for postal, military and other purposes' (chapter 230, 14 Stat. 221), which act entered into the consideration of the court below and is much discussed on the present appeal by counsel for the appellees, no right growing out of that act is here asserted on the part of the appellant, and hence we omit all reference to it.

The appellant here bases its alleged rights upon certain provisions of the statutes of the state of California, and upon a claimed contract between it and the city, arising out of (1) the construction, maintenance, and operation of its plant in Pomona since August 8, 1898, and, more particularly, the maintenance, operation, and additional construction of its telephone system between the years 1898 and 1902, by and with the acquiescence and consent and under the direction of the city, at a cost of more than $10,000; (2) the change and removal, in the year 1904, by the appellant, of its poles and wires from Second street, at the request of the city, and their reconstruction on others of its streets, with its approval and under its direction, at a cost to the appellant of more than $6,716.48; (3) the extension of the appellant's telephone system by the alleged permission of the city, under a resolution thereof of date October 23, 1903, at a cost of about $1,500; and (4) the assessment and taxation by the city to the appellant of a franchise for several years preceding the commencement of this suit, including the years 1904-05 and 1905-06, and the acceptance and use by the city of two free telephones from the appellant for more than three years prior to and after the commencement of the suit.

The appellant was incorporated in April, 1889, for the purpose of doing a general telephone and telegraph business in the states of California, Oregon, and Nevada, and the then territories of Washington, Utah, and Arizona, and elsewhere. Prior to its incorporation, to wit, on the 8th day of August, 1888, the city of Pomona passed an ordinance, numbered 30, granting to another and distinct corporation, called the Sunset Telephone-Telegraph Company, a franchise to erect telephone poles and wires along the public streets of the city for a period of 10 years, and in the month of May of the following year that company transferred to the appellant all of its property, including whatever rights it acquired under that ordinance. Since the month of May, 1889, the appellant has carried on a general telephone business throughout the state of California, including the city of Pomona, and in many parts of Oregon, Washington, and Nevada; its lines of poles and wires in Pomona being an integral part of its system, and its subscribers and all other persons using its system in any place in the states or territories mentioned, holding conversations from time to time by telephone with other subscribers and persons in other cities and places reached by the said system. On the 8th day of August, 1898, the term of the franchise granted by the aforesaid ordinance numbered 30 to the appellant's aforesaid assignor expired by limitation, notwithstanding which the appellant, according to the record, continued to construct, maintain, and operate its telephone system in Pomona without question on the part of the city as to its right to use the public streets and highways therein for its poles and wires, until February 2, 1899, when the board of trustees of the city for the first time notified the appellant that it had 'no franchise, privilege, or other legal right in the city.'

The record shows subsequent extensions and changes of the appellant's poles and wires in the city, made with the consent, and in some instances at the suggestion, of the city; but the contentions of the respective parties were such, from and after February 2, 1899, that no consent on the part of the city to the permanent maintenance of the appellant's poles and wires in the streets of the city without the procurement of a franchise from it can be properly affirmed of the matters occurring subsequent to that date. At no time, so far as the record shows, has the appellant disputed the exercise by the city of its police power in the matter of designating and indicating the places where, in the streets and highways of the city, appellant's poles should be set and its wires strung, and until some time in the year 1903 the city had always, through its proper officers, made such designation. In the latter year, upon the making of applications by the appellant for permission to set new poles and to make extensions so as to accommodate its new subscribers, the city refused to grant such applications, upon the ground that the appellant should secure a franchise from it.

In effect, the court below treated the appellant's telephone system as if it constituted two separate and distinct systems-- one interstate and the other intrastate. In our opinion there is no valid ground for such a view. The appellant's poles and wires were erected under and by virtue of a charter which empowered it to transact an interstate telephone business. That such companies, like telegraph companies, are important agencies in the transaction of interstate commerce, is well settled. Muskogee Nat. Tel. Co. v. Hall, 118 F. 382, 55 C.C.A. 208; Southern Bell Telephone & Telegraph Co. v. Richmond (C.C.) 78 F. 858, and cases there cited. Each pole and wire erected formed an integral part of that system, just as each rail and tie of an interstate railroad constitutes an integral part of its system; and if there be any statute conferring upon the appellant as an interstate telephone company the right to construct and maintain its poles and wires in the streets of the city of Pomona (subject, of course, to the proper exercise of the police power of the city), we do not understand that any of them can be legally cut down or destroyed by municipal authority. The main question in the case, therefore, is, we think, whether there was any statutory authority for the erection and maintenance in the streets of Pomona of the appellant's poles and wires. As has already been said, the right of the city to impose a charge upon the company for the use of such portions of the city as it actually uses is not here involved.

Municipalities are the creatures of state Legislatures, and are, of course, subject to state legislation. By its Constitution of 1879 California undertook, in respect to certain privileges in the streets of the cities and towns of the state, to control even the power of the Legislature of the state, and by section 19 of article 11 of that instrument made a direct grant to the persons therein designated of the right to lay pipes in the streets of any city or town within the state, for the purpose of supplying such cities and towns and their inhabitants with water and light, such work to be done under the direction of the superintendent of streets, and under such general regulations as the municipality should prescribe for 'damages and indemnity for damages,' and with the right on the part of the municipality to regulate the charges therefor. See People v. Stephens, 62 Cal. 209. In the subsequent case of In re Johnston, 137 Cal. 115, 120, 69 P. 973, the Supreme Court of California said:

'When the sovereign authority of the state, either in its Constitution or through its Legislature, has created a right and expressed and defined the conditions under which it may be enjoyed, it is not within the province of a municipality, where such right is sought to be exercised or enjoyed, to impose additional burdens or terms as a condition to its exercise. The Constitution does not authorize the municipality to require a permit as a condition upon which the pipes may be laid in its streets, and its claim of a right to require a permit includes the right to refuse one, and the right to annex one condition to the exercise of the privilege implies the right to annex others, which may at least impair, if not in fact amount to a denial of, its exercise. The provision that the work is to be done under the direction of the superintendent of streets gives all the protection for the use of the streets that could be obtained under a permit; and, under the provision authorizing the municipality to prescribe regulations for damages and indemnity for damages, the city will be fully protected against any

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