Videon Corp. v. Burton, 23778

• Decision Date: 03 June 1963
• Docket Number: No. 23778,23778
• Citation: 369 S.W.2d 264
• Parties: VIDEON CORPORATION, a Missouri Corporation, Appellant, v. Tyre W. BURTON, E. L. McClintock, William Barton, Frank J. Iuen, and Frank W. May, Commissioners, Public Service Commission, State of Missouri, Jefferson City, Missouri, and Southwestern Bell Telephone Company, Respondents.
• Court: Missouri Court of Appeals

Page 264

369 S.W.2d 264

50 P.U.R.3d 309

VIDEON CORPORATION, a Missouri Corporation, Appellant, v. Tyre W. BURTON, E. L. McClintock, William Barton, Frank J.

Iuen, and Frank W. May, Commissioners, Public Service

Commission, State of Missouri, Jefferson City, Missouri, and

Southwestern Bell Telephone Company, Respondents.

No. 23778.

Kansas City Court of Appeals, Missouri.

June 3, 1963.

Friedman, Lawson & Burns, Clayton, Ryan & Maitland, Kansas City, Edward J. Lawson, Clayton, John P. Ryan, Kansas City, for appellant.

Glenn D. Evans, Gen. Counsel, and Thomas J. Downey, Asst. Counsel, Jefferson City, for Public Service Commission.

John Mohler and Wm. C. Sullivan, St. Louis, for Southwestern Bell Telephone Co., respondents.

MAUGHMER, Commissioner.

Appellant, Videon Corporation, has been since July 12, 1959, engaged in the business of television service. Respondent Southwestern Bell Telephone Company is a public utility corporation furnishing telephone service in the Midwest, including the City of St. Louis. Each year Bell, in connection with the publication of its regular telephone directory in which all subscribers are listed alphabetically, publishes the Greater St. Louis Classified Telephone Directory, or the St. Louis Yellow Pages. In this Classified or Yellow Page directory commercial telephone customers are classified as to their types of business or professions and listed in alphabetical order thereunder. They may also, for an additional monetary consideration, place an advertisement in the Yellow Pages describing their particular type of merchandising or service offered, providing the contents thereof has the approval of the publisher. Southwestern Bell refused to accept or include, in its 1961 addition of the St. Louis Yellow Pages, Videon's proffered advertisement. Videon thereupon filed a complaint with the Missouri Public Service Commission, alleging that Bell's refusal was unreasonable, discriminatory and unlawful. It asked that the Commission order and direct acceptance and publication of the tendered advertising. After an exhaustive hearing the Commission denied and dismissed the complaint, holding, in effect, that the refusal was not unreasonable or unlawful. The circuit court on review affirmed, and Videon has appealed to this court.

Videon had requested approval for the of the phrase 'Videon checks tubes in the home free', in the 1960 Yellow Pages. Bell refused, but a compromise was reached and in lieu thereof these phrases were accepted and used in advertising which appeared in the 1960 addition. 'Pay only for tubes necessary to fix your set', and 'If tubes won't fix your set, you pay nothing'. The Telephone Company was unwilling to renew the advertising with this particular wording for the 1961 issue. No further compromise was effectuated--hence this litigation.

Many witnesses testified before the Commission. Numerous exhibits were received in evidence. It is Videon's position that the chief basis of their particular appeal for business lies in the fact that they check tubes in the home free. Mr. Beatty, president, and Mr. Boos, salesmanager, said the whole purpose of their advertising is to create an image in the minds of the public for 'free tube checking in the home'. It was the testimony of these company officers that although the company advertises in other media, their calls for service must almost all come by telephone, that while owners of television sets may see Videon's advertising on television or hear it on radio, they will not write down the name, the address or telephone number of the company unless and until their sets become inoperative and they need the service, at which time they will look in the Yellow Pages and if appellant is not there advertised it will lose business. President Beatty of Videon estimated that there had been a fifty percent decline in the number of their customer telephone calls since publication of the 1961 directory.

Videon's business classification, as to which there is no dispute, is under 'Television service'. Three hundred sixty-five television service groups in the St. Louis area were listed in the 1961 Directory but only 133 of these advertised in the Yellow Pages and these conformed to Bell's requirements.

Mr. John A. Owen, Directory Sales Supervisor for Southwestern Bell testified that Videon's advertisement was refused because: (1) The rule of Southwestern Bell reading 'The use of the word 'free' is not permitted in any advertisement unless the article or service is actually free or unless the conditions governing the offer are so pronounced and prominent as to preclude possibility of misunderstanding'; (2) Bell was 'going along' with the advertising plan of the Better Business Bureau, under which the word 'free' or words that had the same meaning as 'free' could not be used in 'Television Service' advertising; (3) The actual decision to reject was directed by Mr. Hyatt, his superior officer; (4) Acceptance would have violated an agreement with the television industry in St. Louis.

Neither Mr. Owen nor Mr. Hyatt had personally received complaints as to Videon or its advertising as contained in the 1960 Yellow Pages. However, Mr. John L. O'Brien, President and General Manager of the Better Business Bureau in St. Louis, stated that his office had received such complaints (177 in number) some written and some by telephone. Mr. O'Brien described a meeting of representatives of the television service industry in St. Louis held on March 17, 1960, in the Chase Hotel. Some 300 representatives were in attendance. More than half signed pledge cards approving certain standards of advertising for the industry. We set forth some of these standards:

Item 5. 'Bait advertising and selling practices shall not be used. Bait advertising is an alluring but insincere offer to sell something to the general public. * * * Its primary purpose is to induce customers to respond so that they can be switched to other items'.

Item 6. 'Price advertising. There shall be no quotation of a price or prices for service calls, examination or labor, in any advertisement. * * *'

Item 7. 'Free service. There shall be no wording or device used to give the impression that service will be given without cost * * *'.

Videon employed some 22 servicemen who responded to these customer calls. They were paid $2 per hour by Videon plus 20 percent commission on the sale of tubes and on repair work if the set was brought in for repair. Only about 15 percent of the calls failed to result in either tube sales or repair work. Videon offered and there was received in evidence various advertisements found in the St. Louis Directory in which the word 'free' or words of similar import appeared. We mention two. Arthur Murray Dance Studios. 'Free! Private Lesson and Studio Party', and the Telephone Company itself advertised it would furnish free planning for telephone service in new homes. Telephone directories from other cities (Dallas, Ft. Worth, Wichita and Louisville) were received. These contained television service advertising similar to that proffered by Videon. However, the St. Louis Directory contained no such advertising from any representative of the 'Television Service' industry.

The Commission concluded that while advertisements similar to Videon's appeared in Southwestern Bell Directories in other cities, respondent was making an effort to eliminate such advertising and it could not be done all at once in every city; that appellant was not the victim of unlawful discrimination and denied the complaint.

We are first confronted with respondent Southwestern Bell's challenge to the jurisdiction of the Public Service Commission. Its counsel declared it was willing 'to submit its controversy with Videon to the Commission as an impartial umpire'; otherwise it would have sought a writ of prohibition. Bell prevailed as to the ultimate result before the Commission and filed no motion for rehearing, nor did it appeal. The Commission asserts that because Bell failed to file a motion for rehearing that the protest or challenge as to the Commission's jurisdiction has been waived. It has long been the rule that 'objections to jurisdiction' may not be waived and may be first presented on appeal. In fact the court may and should examine the question, sua sponte. State ex rel. Smithco Transport Co. v. Public Service Commission, Mo.App., 307 S.W.2d 361, 374, and Peerless Fixture Co. v. Keitel et al., 355 Mo. 144, 195 S.W.2d 449, 451. Nevertheless, Bell filed a motion to dismiss for want of jurisdiction and urges that point on appeal. We must determine if the Commission has jurisdiction to regulate advertising in the Telephone Company's classified directory. The Commission expressed the opinion that 'in all matters where a utility company under the jurisdiction of the Commission is charged with performing in a discriminatory manner any service for which it makes a charge, the Commission has jurisdiction to pass upon such question'. Respondent Bell was thereupon ordered to file with the Commission 'a copy of the advertising rules and regulations pertaining to the Yellow Pages of its Missouri Directories'.

The Missouri Public Service Commission has only such powers as are expressly conferred upon it by the Statutes and such as are reasonably incidental thereto. State ex rel. and to use of Kansas City Power & Light Co. v. Buzard, en Banc, 350 Mo. 763, 168 S.W.2d 1044; State ex rel. Harline v. Public Service Commission, Mo.App., 343 S.W.2d 177, 181.

We quote from the applicable Missouri statutes, Section 386.250, V.A.M.S.: 'Jurisdiction of the Commission. (6) To all telephone lines, as above defined * * * so far as said telephone * * * lines are and lie, and so far as said telephone companies * * * conduct and operate such line or lines, * * * within this state'. Section 386.020, V.A.M.S. (18) 'The term 'telephone line,' when used in this chapter, includes conduits, * * *, appliances and all...