City of Kenosha v. Kenosha Home Telephone Co.
135 N.W. 848
Wis.
1912
Check Treatment
ViNje, T.

The first question presented by the appeal is, Was the ordinance of March, 1903, purporting to grant to the Citizens Telephone & Telegraph Company the right to operate a general telephone system in the city of Kenosha, valid as a franchise ? This court has repeatedly answered the question in the negative. The only franchise needed by a telephone company to enable it to conduct its business anywhere within the state is the franchise conferred upon it by virtue of sec. 1118, Stats., when it is incorporated pursuant thereto. Wis. T. Co. v. Oshkosh, 62 Wis. 32, 21 N. W. 828; Marshfield v. Wis. T. Co. 102 Wis. 604, 78 N. W. 735; State ex rel. Wis. T. Co. v. Sheboygan, 111 Wis. 23, 86 N. W. 657; State ex rel. Wis. T. Co. v. Sheboygan, 114 Wis. 505, 90 N. W. 441; Wis. T. Co. v. Milwaukee, 126 Wis. 1, 104 N. W. 1009; State ex rel. Smythe v. Milwaukee Ind. T. Co. 133 Wis. 588, 114 N. W. 108, 315. Such franchise confers upon the incorporated telephone company full and adequate authority to construct its lines upon the public highways of the state and the streets of municipalities, subject only to reasonable regulations under the police power. Wis. T. Co. v. Milwaukee, supra; State ex rel. Smythe v. Milwaukee Ind. T. Co., supra. The attempted exercise, therefore, by the city of the legislative function of granting a franchise was ineffectual and void. Marshfield v. Wis. T. Co., supra; State ex rel. Wis. T. Co. v. Sheboygan, supra; State ex rel. Vilter Mfg. Co. v. M., B. & L. C. R. Co. 116 Wis. 142, 92 N. W. 546; State ex rel. Smythe v. Milwaukee Ind. T. Co., supra.

*341But it would, avail tbe city nothing if tbe franchise was valid at its inception, for tbe provision contained in see. 8 thereof for free telephones was repealed by tbe enactment of cb. 499, Laws of 1907, known as tbe public utility law. Sec. 1797m — 89 thereof provides:

“If any public utility or any agent or officer thereof, or any officer of any municipality constituting a public utility as defined in this act shall, directly or indirectly, by any device whatsoever or otherwise, charge, demand, collect or receive from any person, firm or corporation a greater or less compensation for any service rendered or to be rendered by it in or affecting or relating to the production, transmission, delivery or furnishing of heat, light, water or power or the conveyance of telephone messages or for any service in connection therewith than that prescribed in the published schedules or tariffs then in force or established as provided herein, or than it charges, demands, collects or receives from any other person, firm or corporation for a like and contemporaneous service, such public utility shall be guilty of unjust discrimination which is hereby prohibited and declared to be unlawful, and upon conviction thereof shall forfeit and pay into the state treasury not less than one hundred dollars nor more than one thousand dollars for each offense; and such agent or officer so offending shall be deemed guilty of a misdemeanor and upon conviction thereof shall be'punished by a fine of not less than fifty dollars nor more than one hundred dollars for each offense.”

The effect of this law was to amend the franchises of all existing public utilities operating within the state so as to conform to its provisions. Manitowoc v. Manitowoc & N. T. Co. 145 Wis. 13, 129 N. W. 925; La Crosse v. La Crosse G. & E. Co. 145 Wis. 408, 130 N. W. 530; Calumet S. Co. v. Chilton, 148 Wis. 334, 135 N. W. 131; Kilbourn City v. Southern Wis. P. Co., ante, p. 168, 135 N. W. 499. Hence, were the ordinance in question valid, sec. 8 thereof would be repealed.

It is clear the ordinance in question purports to grant a franchise and cannot be construed to be a contract between the *342telephone company and the city. In its proprietary right the city had no consideration to give for such a contract, should it be deemed to be* one, for it could not barter the exercise of its police power for free telephones. State ex rel. Wis. T. Co. v. Sheboygan, 111 Wis. 23, 86 N. W. 657; Wis. T. Co. v. Milwaukee, 126 Wis. 1, 104 N. W. 1009; State ex rel. Smythe v. Milwaukee Ind. T. Co. 133 Wis. 588, 114 N. W. 108, 315; La Crosse v. La Crosse G. & E. Co. 145 Wis. 408, 130 N. W. 530. As a state agency it had no power to enter into a contract not subject to amendment by the public utility law. Manitowoc v. Manitowoc & N. T. Co. 145 Wis. 13, 129 N. W. 925; La Crosse v. La Crosse G. & E. Co., supra.

Much reliance is placed by the plaintiff upon the case of Superior v. Douglas Co. T. Co. 141 Wis. 363, 122 N. W. 1023. That was a case where the city of Superior in its proprietary character entered into a contract for free telephones with an existing telephone company operating under a charter from the state. No attempt was made by the city to confer any franchise, or right to operate any telephone system, upon the telephone company. The city and the telephone company, prior to the passage of ch. 499, Laws of 1907, entered into a contract — not a part of any franchise granted or attempted to be granted — whereby the telephone company, for a valuable consideration, agreed to maintain a certain number of free telephones in the city of Superior. The city had paid the consideration by permitting alterations to be made in its city hall and buildings as requested by the telephone company, and it was held the passage of the public utility law did not affect the contract, since sec. 1797m — 91 thereof expressly provided that “the furnishing by any public utility, of any product or service at the rates and upon the terms and conditions provided for in any existing contract executed prior to April 1, 1907, shall not constitute a discrimination within the meaning specified.” It is obvious the case at bar does not come *343witbiu tbe principle applied or tbe section referred to in tbe Superior Case.

Tbe trial court beld that tbe defendant was not tbe successor of tbe Citizens Telephone & Telegraph Company, and therefore was not bound by tbe terms of tbe franchise even if they were valid. We express no opinion on this branch of tbe case.

By the Gowrt. — Judgment affirmed.