Tri-State Tel. & Tel. Co. v. Intercounty Tel. Co.

• Decision Date: 02 January 1942
• Docket Number: No. 33038.,33038.
• Citation: 211 Minn. 496,1 N.W.2d 853
• Parties: TRI-STATE TELEPHONE & TELEGRAPH CO. v. INTERCOUNTY TELEPHONE CO.
• Court: Minnesota Supreme Court

1 N.W.2d 853

211 Minn. 496

TRI-STATE TELEPHONE & TELEGRAPH CO. v. INTERCOUNTY TELEPHONE CO.

No. 33038.

Supreme Court of Minnesota.

January 2, 1942.

Appeal from District Court, Steele County; Fred W. Senn, Judge.

Proceeding by the Tri-State Telephone & Telegraph Company against the Intercounty Telephone Company to compel, on ground of public convenience, the continuance of the physical connection of the lines of the companies maintained under contract. The Railroad and Warehouse Commission made a decision that public convenience required the continuance of the physical connections of the lines of the companies, and the Intercounty Telephone Company appealed. From a judgment of the district court setting aside and vacating the order of the Railroad and Warehouse Commission, the Tri-State Telephone & Telegraph Company appeals.

Judgment modified and, as modified, affirmed.

C. B. Randall, of St. Paul, and Noel C. Fleming, of Minneapolis (Tracy J. Peycke, of Omaha, Neb., of counsel), for appellant.

Sawyer & Sawyer, of Winona, for respondent.

PETERSON, Justice.

This proceeding was instituted before the railroad and warehouse commission under Mason St.1927, § 5295, by the Tri-State Telephone and Telegraph Company (herein referred to as Tri-State) against the Intercounty Telephone Company (herein referred to as Intercounty) to compel, upon the ground of public convenience, the continuance of the physical connection of the lines of the companies maintained under contract, notice of termination of which pursuant to its terms had been given by Intercounty.

The statute provides for compulsory physical connection of telephone lines and for the continuance of such connection where public convenience so requires. The first paragraph provides in part: "Whenever public convenience requires the same, every telephone company shall, for a reasonable compensation, permit a physical connection or connections to be made, and telephone service to be furnished between any telephone exchange system operated by it, and the telephone toll line or lines operated by another company, or between its telephone toll line or lines and the telephone exchange system of another telephone company, or between its toll line and the toll line of another company, whenever such physical connection or connections are practicable and will not result in irreparable injury to the telephone system so compelled to be connected." It also provides that where, after investigation and hearing, the commission shall find that "physical connections will not result in irreparable injury to such telephone properties, it shall by order direct that such connections be made, and prescribe reasonable conditions and compensation therefor and for the joint use thereof."

The second paragraph provides: "Wherever a physical connection or connections exist between any telephone exchange system operated by a telephone company and the toll line or lines operated by another telephone company or between its toll line or lines and the telephone exchange system of another telephone company, or between its toll line and the toll line of another telephone company, neither of said companies shall cause such connection to be severed or the service between said companies to be discontinued without first obtaining an order from the commission upon an application for permission to discontinue such physical connection. Upon the filing of an application for discontinuance of such a connection, the commission shall investigate and ascertain whether public convenience requires the continuance of such physical connection, and if the commission so finds, shall fix the compensation, terms and conditions of the continuance of said physical connection and service between said telephone companies."

Tri-State owns and operates telephone exchanges at St. Paul, Owatonna, Austin, Albert Lea, and many intermediate points, with toll lines connecting its several exchanges. It has a line extending from Owatonna through Blooming Prairie to Hayfield.

Intercounty has exchanges at Ellendale, Blooming Prairie, and Hayfield. It has toll lines which connect these exchanges and which extend from Ellendale to Owatonna, Ellendale to New Richland, Ellendale to Hollandale, Blooming Prairie to Hollandale, Hayfield to Dodge Center, and Hayfield to Brownsdale.

Both companies acquired their properties, in the area where Intercounty operates, from corporate predecessors to whose rights and franchises they have succeeded. Intercounty's lines were built about 1901. It acquired them in the manner stated in 1926. Tri-State acquired its properties in the same manner in 1918.

Sometime prior to 1915, the then owners and operators of the lines in question by contract arranged for physical connections of the Intercounty and Tri-State lines at Owatonna, Blooming Prairie and Hayfield. Apparently the contract has been renewed or extended from time to time. In 1938 the parties entered into the contract here involved.

Under the contractual arrangement, all Intercounty messages destined for Owatonna and points beyond coming into its exchanges at Hayfield and Blooming Prairie were transferred at those points to Tri-State for transmission. Messages from Owatonna and beyond destined for Intercounty's subscribers at Blooming Prairie and Hayfield were carried over Tri-State's lines to those points, where they were transferred to Intercounty. In short, Tri-State had the entire long-distance "haul" between Hayfield-Blooming Prairie and Owatonna. Messages between Ellendale and points tributary thereto destined to Owatonna and beyond were transmitted over Intercounty's lines. At Owatonna outgoing messages were transferred from Intercounty's lines to Tri-State's, and incoming messages were transferred from Tri-State's to Intercounty's lines. Toll messages originating at Hayfield and Blooming Prairie destined for Owatonna and beyond were never carried by Intercounty over its own lines via Ellendale. All its other toll messages were carried over its own lines.

Becoming dissatisfied with the contractual arrangement, Intercounty decided to terminate it and gave notice of such intention. Thereupon Tri-State instituted the present proceeding. It claims that public convenience requires continuance of the physical connections and that as a matter of law it is entitled to carry toll messages as it did under the contract, subject only to a determination of its compensation by the commission.

Intercounty admits that public convenience requires the continuance of the physical connections. It claims that it is entitled to carry to Owatonna over its own lines all messages destined for Owatonna and beyond received by it at any exchange, including those at Blooming Prairie and Hayfield, and to transfer the same to Tri-State at Owatonna by means of the connection there existing, and it prayed for an appropriate order in the premises.

The effect of granting Intercounty's counter petition would be to permit Tri-State to have the haul from Owatonna to Blooming Prairie at Hayfield and to permit Intercounty to have such haul over its own lines from Hayfield and Blooming Prairie via Ellendale to Owatonna. In other words, Intercounty wants to carry its messages as far as its lines permit instead of transferring them to Tri-State at the first junction point, just as it is willing to accord to Tri-State a similar haul of its messages from Owatonna to Blooming Prairie and Hayfield.^*

The proceeding, instituted as one to compel continuance of the physical connections between the companies, finally involved only the routing of messages. Tri-State characterizes all business between Hayfield, Blooming Prairie and Owatonna as its — "our" — business, whether it originates on Intercounty's lines or not. It contends that it is entitled to have the routing of messages continued as before as a matter of legal right upon the ground that it has lines and equipment for handling such business and has on file with the commission a tariff of its charges; and that Intercounty is not entitled to its proposed routing for the reasons that, since Tri-State has such lines and equipment, it will constitute a duplication of telephone lines and equipment in violation of Mason St.1927, § 5299, to permit Intercounty to route its messages as proposed; that Intercounty's proposed routing via Ellendale of messages destined for Owatonna will involve an extension of its lines for which a certificate of public convenience will be required under § 5300, which Intercounty admittedly does not have, and that Intercounty has failed to secure the commission's approval of its tariff of toll charges for the proposed routing which it has filed pursuant to § 5290.

In opposition, Intercounty showed that neither it nor its predecessors had ever filed or been required to file any tariffs until about four or five months prior to the hearing before the commission, when at the suggestion of the commission it then filed its tariffs, and that some time thereafter a representative of the commission had conferences with the representatives of Intercounty and other companies operating in the same general part of the state concerning the adjustment and equalization of rates. Apparently the commission had not approved Intercounty's tariffs.

Intercounty contended that, since it did not propose to install any new lines or equipment, but intended to use those which it already had and had been using for many years, there was no duplication of telephone lines and equipment and hence no need for a certificate of public convenience under § 5299; that it proposed only to reroute a part of its business and not to extend its lines; that the approval of its tariffs by the commission is not required by the statute; but, if it were, such approval is not a condition precedent to granting its petition and can and should be given when and if it is determined that messages are to be routed as it has petitioned, and that...