147 Mo. App. 216 | Mo. Ct. App. | 1910
Lead Opinion
This is a suit in equity. Plaintiff seeks to enjoin further breaches of a contract between it and the defendant. Upon a hearing, the court dismissed the bill and plaintiff prosecutes the appeal. There is no question presented as to the form of the remedy pursued and that matter will remain unnoticed. Both plaintiff and defendant are telephone companies incorporated and existing under the laws of this State. The plaintiff, Home Telephone Company, maintains offices and telephone exchanges at Joplin, Carthage, Car-terville and other points in southwest Missouri and southeast Kansas. The defendant, Granby & Nleosho
“Second: Each party hereto grants a license to the other party to connect with the telephone exchange or system of the other party, through its switchboard at Carthage and Joplin and Granby, so that an interchange of business may at all times be carried on between said parties. Said connections to be made as. soon as the lines are completed, it being understood and agreed that the line of both parties hereto shall be so operated that service may be given from all lines owned, controlled or connected with the line or lines of either of the parties hereto over the lines of the other and its connections. And each party hereto agrees not to enter into any contract with any other person, firm or corporation whereby any of the rights, privileges or advantages herein acquired by either party may be impaired.
“Fourth: Each party agrees to transmit all messages destined to points on the lines of the other party hereto not reached by its own system of wires, to and over the lines owned and controlled by the other party. In consideration of the benefits to be derived by each of the parties hereto from the toll service herein provided to be furnished by each, each party agrees to transmit all business to points reached by its own line or lines, and those to be constructed or acquired over the lines of the parties hereto.”
It appears the plaintiff constructed the telephone line from Carthage to Granby, as required, and that the two systems were connected thereby. A physical connection of the lines was established under the contract by means of a switchboard in the defendant’s exchange at Granby with the new line constructed thereto from Carthage by the plaintiff. For a considerable period the parties operated under this contract without any disagreement whatever, and it appears that at all times plaintiff faithfully transmitted all messages received
Plaintiff prosecutes an appeal from that judgment and argues that the contract is a valid • arrangement between the parties for the reason that it amounts to no more than an arrangement between connecting carriers whereby each selects the agency to forward initial business originating on its lines and thus enlarges the scope of a beneficial use. And it is said, as each telephone company enjoys the right which inheres in the ownership of property to control its own instrumen-talities, no right of a physical connection with the exchange of either obtains in favor of any other person or company against the consent of the owner. The argument is that as the Missouri & Kansas Telephone Company could not enforce a physical connection with the exchanges of either the plaintiff or defendant contrary to the consent of the owner, then the stipulation in the contract affording an exclusive privilege to such physical connection as between plaintiff and defendant violates no rights of a third party. It is argued, too, that neither of the contracting telephone companies is under any obligation whatever with respect to the transmission of telephone messages after such messages leave their own lines. In other words, it is insisted that the. obligation of the carrier goes only to the extent of carrying the message over its OAvn lines and to deliver to the connecting carrier with reasonable promptness, and that, in view of this, each initial carrier may, in the absence of directions to the contrary, select the particular agency to be employed as a connecting carrier for
Even though telephone companies are not common carriers in the sense essential to render them amenable under the obligations of an insurer (27 Am. and Eng. Ency. Law [2 Ed.], 1021; Jones on Telephones, sec. 243; State ex rel. v. St. Louis, 145 Mo. 551, 46 S. W. 981), there nevertheless arises from the voluntary undertaking to serve the public in their chosen capacity at least one obligation incident to the relation of a common carrier. This obligation the common law annexes to the use of their instrumentalities, which operates to affix the duty upon such companies of furnishing impartial services to any one offering to comply with their reasonable requirements, not only in respect to their public station system but also as to the private use of instruments installed in offices, residences and places of business. The obligation arising from the use is to furnish each and all equal facilities for communication without unjust discrimination, unless the privilege is sought for an illegal or immoral purpose. Authorities affirming the doctrine are numerous. [State ex rel. v. Kinloch Telephone Co., 93 Mo. App. 349, 67 S. W. 684; State ex rel. v. Cadwallader (Ind. Sup.) 87 N. E. 644; State ex rel. Webster v. Nebraska Telephone Company, 17 Neb. 126; State ex rel. Gwynn v. Citizens’ Telephone Co., 61 s. c. 83; State ex rel. B. & O. Telegraph Co. v. Bell Telephone Co., 23 Fed. 539; s. c., 8 Am. & Eng. Corporation Cases, 7; State ex rel. Postal Telegraph Company v. Delaware & A. Telegraph & Telephone Co., 47 Fed. 633; Delaware & A. Telegraph & Telephone Co. v. State ex rel. Postal Telegraph Co., 50 Fed. 677; State ex rel. American Union Telegraph Co., etc. v. Bell Tele
In keeping with this doctrine the courts .have, under varying circumstances, denied the right of telephone companies to withhold from one person the privilege accorded to another and forced such companies to install telephones for the use of a proposed private patron upon his paying the price and complying with the reasonable rules of the company, to the end that no discrimination may be allowed. Such were the cases of State ex rel. v. Kinloch Telephone Co., 93 Mo. App. 349, 67 S. W. 684; State ex rel. v. Nebraska Telephone Co., 17 Neb. 126; State ex rel. Gwynn v. Citizens’ Telephone Co., 61 s. c. 83 and several other among those above cited. The principle has been applied and enforced, too, with respect to the rights of other telephone and telegraph companies, notwithstanding the fact that such companies were competitors or rivals in the same business. The doctrine of those cases is to the effect that even though a rival telegraph or telephone company might not in the first instance have the right to compel the use. of another company’s appliances and service, such right accrues upon the one company according the
“I agree that if this telephonic system had refused a telephonic connection with any telegraph company, that the Baltimore & Ohio Telegraph Company could not insist upon such connection, but when it has established telephonic connection with one telegraph company, I think every other telegraph company has equal right; on the same principle that if it established a telephonic connection with one lawyer, it could not refuse telephonic connection with another lawyer.”
The same situation was presented in State ex rel. Postal Telegraph Co. v. Delaware & A. Telephone Co., 47 Fed. 633. In that case the telephone company had established business relations with the Western Union Telegraph Company and afforded it facilities for telephonic communication by installing a telephone in the Western Union office. The telephone company denied the same right to the Postal Telegraph Company. The Circuit Court of the United States enforced the right of the Postal Telegraph Company by mandamus and said that as the telephone company had selected the telegraph as one of the classes it was willing to serve, all of
The judgment given in each of the cases above referred to proceeds in affirmance of the obligation enjoined by the principles of the common law. Other courts have ruled to the same effect by commingling the common law principles with'statutory obligations imposed. It is said that both under the common law and the statu
Aside from the common law obligation above referred to, our statutes impose the obligation on telephone companies operating in this State to act impartially and in good faith with respect to others. The statute is as follows:
“It shall be the duty of every telegraph or telephone company, incorporated or unincorporated, operating any telephone or telegraph line in this State, to provide sufficient facilities at all its offices for the dispatch of the business of the public, to receive dispatches from and for other telephone or telegraph lines, and from or for any individual, and on payment or tender of their usual charges for transmitting dispatches, as established by the rules and regulations of such telephone or telegraph line, to transmit the same promptly and with impartiality and good faith, under a penalty of two hundred dollars for every neglect or refusal so to do, to be recovered, with costs of suit, by civil action, by the person or persons or company sending or desiring to send such dispatch, one-half of the amount recovered to be retained by the plaintiff, and one-half to be paid into the county public school fund of the county in which the suit was instituted; and the burden of proof shall be upon the company to show that the wire was engaged as the reason for the delay in transmitting such dispatch.” [Sec. 1255, R. S. 1899, sec. 1255, Ann. St.] The courts have held generally that statutes such as ours above quoted are merely declaratory of the common law obligations. See Davis v. Western Union Telegraph*232 Co., 1 Cinc. Super. Ct. Reporter 100; s. c., Allen’s Tel. Cas. 363; De Rutte v. N. Y. Alb. & Buff. Tel. Co., 1 Daly (N. Y.) 547; Western Union Tel. Co. v. Reynolds, 77 Va. 173; Western U. Tel. Co. v. Graham, 1 Colo. 230; Tyler v. Union Tel. Co., 60 Ill. 421; s. c. (on App.), 74 Ill. 168; G. C. & S. F. R. R. v. Levy, 59 Tex. 542; Telegraph Co. v. Griswold, 37 Ohio 301; Western Union Tel. Co. v. Neill, 57 Tex. 283; Wolf v. Western Union Tel. Co., 62 Pa. St. 83; Passmore v. Western Union Tel. Co., 78 Pa. St. 238; N. Y. & Wash. Pr. Tel. Co. v. Dryburg, 35 Pa. St. 298; Dorgan v. Telegraph Co. (C. C. S. D. Ala. 1874), 1 Am. L. T. Rep. (N. S.) 406; Turnpike Co. v. News Co., 43 N. J. Law, 381.
Under the statute of Ohio, in all respects material here identical with our own, the Supreme Court of that state declared that, independent of the common law, the statute quoted, imposed the obligation upon a telephone company affording a business connection to one telegraph company to grant the same with impartiality to all others. In that case, the telephone company, as in many others above referred to, was the licensee of the American Bell Telephone Company which owned the telephone patent and was operating its telephone line under a contract with the owner of the patent to the effect that it should afford the Western Union Tel. Co. an exclusive right to transmit messages over its lines. This contract, in this respect, is similar to the one in judgment now before us. The Supreme Court declared the contract void as violative of the statute above referred to in that it purported to authorize the giving of one telegraph company an exclusive right to employ the telephone; that in so doing, it operated an unjust discrimination against other telegraph companies employed in. the same service. The court said the telephone company “cannot be permitted to operate a line or system of telephones, in this State, and in the face of the statute, either directly or through the agency of licensees without impartiality, or in other words, with dis
But it is argued first that the law does not impose the obligation even upon a common carrier, such as railroads, to transport beyond the limits of their own lines, and, second, that such institutions as railroads, which are universally declared to be common carriers for all, may refuse ¿o accord a rival the physical use of its in-strumentalities. We believe it is true as a general proposition that in the absence of contract or statute to that effect, a common carrier may not be compelled to do more than receive and transport or transmit to the end of its own line and deliver to the connecting carrier with reasonable promptness, and this much and no more has been enforced as the entire obligation of telegraph
However, this doctrine touching the right of common carriers to an exclusive control of their instrumen-talities, notwithstanding the public interest, arises largely from consideration of public policy influenced to a more or less extensive degree by the very necessities of the calling.
It is sufficient to suggest that no one can foresee or foretell the possibilities for interminable confusion, and extraordinary dangers which would attend the promiscuous use of the tracks, terminals and instrumen-talities of one railroad by another without consent.
It is said that the identical doctrine obtains with respect to the right of one telephone company to enforce the physical use of the exchange of another to the end of connecting with its lines. This may be true but it is certain that although the obligations of the railroad
In this State a railroad company granted to a connecting hack line an exclusive privilege of receiving and discharging passengers at a particular portion of its depot platform. At the suit of a rival hack line, the court declared the exclusive contract void for the reason it operated an unjust discrimination in facilities in favor of one common carrier against another. It may be, and no doubt is, true that neither of the hack lines involved in that case could enforce the right of a physical use of any particular part of the depot platform of the railroad company, but it appearing that the privilege had been granted to one to use a certain portion thereof, the court declared another could use the same portion, as an obligation existed in favor of all to the end that there should be no unjust discrimination.. [Cravens v. Rodgers, 101 Mo. 247, 14 S. W. 106. See, also, McConnell v. Pedigo, 5 Am. & R. R. Corp. 711 Rep. and cases in note.]. These cases deal with the question of discrimination by one common carrier against another as to equal facilities for connecting business and that is this case, precisely, for the question relates not to an interchange of business. As to the reception and transmission of the business from other companies, the statute, supra, sec. 1255, pointedly lays this obligation on every company falling within its provisions.
The actual interchange of business between railroads and the transportation thereof by each connecting road for the other is a question which leads quite beyond the matter of equal facilities and essentially involves the right of contract between the parties as to the terms
“A railroad company is prohibited, both by the common law and by the Constitution of Colorado, from discriminating unreasonably in favor of or against another company seeking to do business on its road. ... The bill does not seek to reduce the local rates, but only to get this company put into the same position as the Denver & Rio Grande on a division of through rates. This cannot be done until it is shown that the relative situations of the two companies %oith the Atchison, Topeka & Santa Fe, "both as to the kind of services and as to the conditions under which it is to be performed, are substantially the same, so that what is reasonable for one must necessarily be reasonable for the other.
That case clearly implies that the right of equal privileges .as to interchanging business existed and would have been enforced had the complainant been circumstanced the same and sought an interchange of business at the union station such as was being afforded to
As to the proposition that an enforcement of a physical connection of other telephone lines with the exchanges involved here is violative of the rights of property which inhere in the companies owning such exchanges, it is to be said that by entering into the avocation of furnishing the public with telephone service, the use operates to invest the public with an interest to which the private property rights referred to are
“Where private property is, by the consent of the owner invested with a public interest or privilege for the benefit of the public, the owner can no longer deal with it as his private property only, but must hold it subject to the rights of the public, in the exercise of that public interest or privilege conferred for their benefit.” Allnutt v. Inglis, 12 East. 527.
In Munn v. Ill., 94 U. S. 113 (2d 1. Ed. 77), private parties owned certain warehouses or elevators used in receiving, storing, assorting and reloading grain' for transportation. The Legislature levied a tax on like property as though it concerned the public interest because of the use. In giving judgment on the validity of the tax, the Supreme Court of the United States said:
“Property does become clothed with a public interest when used in a manner to make it of public consequence and affect the community at large. When, therefore, one devotes his property to a use in which the public has an interest, he, in effect, grants to the public an interest in that use, and must submit to be controlled by the public for the common good, to the extent of the interest he has thus created. He. may withdraw his grant by discontinuing the use, but so long as he maintains the use, he must submit to the control.”
Aside from the question as to these companies enjoying their franchises as corporations granted by the state in which, of course, the public has an interest, it is clear from the authorities quoted that even if the two parties to this suit were private individuals, conducting a general telephone business, as they are, such use to which they have seen fit to devote their private property would impress the same with a public interest
In keeping with this doctrine, the Supreme Court of Kentucky declared that where two telephone companies had entered into a contract for a physical connection by means of a switch in their exchanges and no time was limited when such contract should expire, the right to maintain such physical connection continued as long as either continued to exercise its franchise as a telephone company. The reasoning of the court on that question recognized the primary right of the contracting companies in the first instance to control their instrumentalities and said that it was a proper matter of contract primarily, but as they had contracted with reference to the same without limitation as to time when the right of connection should expire, the matter was, because of the use, one of public concern and therefore the relation thus established could not be severed by the withdrawal of one company so long as it remained in the telephone business. [Campbellsville Co. v. Lebanon Co., 118 Ky. 277, 80 S. W. 1114, 84 S. W. 518.]
In view of the doctrine hereinbefore adverted to, the Supreme Court of Indiana very recently in State ex rel. Goodwine v. Cadwallader, 87 N. E. 644, declared that although telephone companies might refuse in the first instance to accord a physical connection with other lines through their exchanges that if they saw fit to grant the right to one company, the public interest required the same privilege should be accorded to others. It is said that as the company saw fit to waive its primary right with respect to the absolute control of its own property and grant a physical connection to another telephone line such voluntary act raised an obligation to grant an equal privilege without discrimination- to
We therefore conclude that as by the contract involved here the defendant granted the right of a physical connection with its exchange to the plaintiff this raised an obligation on the part of defendant to grant the same right to other telephone companies as well and that the provisions in the contract to the effect that like advantages and privileges should be granted to no other person or corporation are void and of no effect. The contract being void, of course, it may not be enforced in this proceeding.
Another feature of the case arises under the provisions of onr statutes, section 1256, which is as follows:
“Where the person sending the dispatch desires to have it forwarded over the lines of other telephone or telegraph companies, whose termini are respectively within the limits of the usual delivery of such companies, to the place of final destination, and shall tender to the first company the amount of the usual charges for the dispatch to the place of final delivery, it shall be the duty of the company to receive the same, and, without delaying the dispatch, to pay to the succeeding line the necessary charges for the remaining distance; and it shall be the duty of the succeeding line or lines to accept the same, and forward the dispatch in the same manner as if thé person sending the same had applied to the agent or operator of such line or lines in person, and paid to him the usual charges; and for omitting so to do the company or companies owning or operating such line or lines shall severally be liable to the penalty prescribed in section 1255.”
This section clearly recognizes the right of a person sending a telephone message over the lines, of one company to direct by what connecting line it shall be
“Any company incorporated as herein provided may contract, own, use and maintain any line or lines of telephone or magnetic telegraph, whether wholly within or wholly or partly beyond the limits of this State, and shall have power to lease or attach to the line or lines of such company other telephone or telegraph lines, by lease or purchase, and may join with any other corporation or association in constructing, leasing, owning, using or maintaining their line or lines, upon such terms as may be agreed upon between the directors or managers of the respective corporations, and may own and hold any interest in such line or lines, or become lessees thereof, on such terms as the respective corporations may agree.”
It is argued by the plaintiff that as this section authorizes telephone companies to join in using their lines, the contract before us is thus expressly authorized by the statute. We are not so persuaded. The several statutes quoted are in pari materia and must be read and interpreted together. There are many plans by which telephone companies may join in using their respective lines without affording to either an exclusive privilege or operating a discrimination against those rightfully entitled to the same privileges. The statute quoted obviously contemplates that such companies may join in using their lines or system in a manner not violative of the other statutes referred to. Section 1255 declares the common law obligation of telephone companies to deal impartially and with good faith towards all other telephone companies in the matter of the reception and transmission of messages. This means, as' said by the Supreme Court of Ohio, in State v. Bell Telephone Co., 36 O. 296, that they shall accord equal privileges to all of the same class and that there shall be no unjust discrimination. When section 1254, above
We believe, too, the exclusive privilege accorded in and now sought to be enforced under the contract is violative of the public policy of the State as declared in section 8978, Revised Statutes 1899, section 8978, Ann. St. 1906, and therefore void. The contract stipulates that each of the two companies shall have the exclusive right to transmit over its lines all messages coming from the lines of the other which are destined to points on lines of the connecting company and not reached by the lines of the initial carrier. When this provision is analyzed, it is observed that it requires each of the parties to transmit all messages either passing over its lines, or originating with it and destined to points on the lines of the other not reached by its own lines, over the lines of the other party, to the exclusion of all others.
Each company may discharge its full duty to the public by carrying the message of its patron to the end of its own line and delivering the same with reasonable promptness and due care to the connecting carrier. In performing this duty in respect to a message not routed by the sender by delivering to and forwarding a message over a connecting line, the initial carrier assumes the attitude of a purchaser of the convenience or commodity of telephone service from the connecting carrier to transmit the message to destination. And identically as the initial carrier of the message becomes a purchaser of the service of the connecting company to complete the transmission, so the connecting company becomes the seller of its service to the end of transmitting the message over its own lines.
Thus viewed, it is obvious that the two telephone companies are engaged to some extent in buying and
“If any two or more . . . corporations who are engaged in buying or selling any . . . commodity, convenience ... or any article or thing whatsoever, shall enter into any . . . agreement . . . or understanding ... to limit competition in such trade, by refusing to buy from or sell to any other person or corporation any such article or thing aforesaid, for the reason that such other person or corporation is not a member of or party to such . . . combination, confederation, association or understanding ... it shall be in- violation of this article.” [Sec. 8978, R. S. 1899, Ann. St. 1906, sec. 8978. ]
This statute is said by our Supreme Court to be in aid of the common law, therefore not to be strictly construed. [State ex inf. Hadley v. Standard Oil Co., 218 Mo. 1, 116 S. W. 902.]
In this view, it is certainly proper to treat telephone service as a convenience or commodity being bought and sold between those companies. It is very true that under the contract either one of the parties thereto are free to sell their service to whomsoever they will. The right to sell the convenience or commodity of telephone service is not sought to be restrained by the contract. However this may be, it is otherwise as to the right of either company to buy the convenience or commodity of telephone service for the purpose of transmitting messages which originate on or pass from
It is entirely clear that such an arrangement as that portrayed above operates to limit competition in respect to such commodity or convenience as telephone service as is proffered or available for the transmission of messages in the territory occupied by these companies and attempts to confer a complete monopoly on each of the contracting parties with respect thereto.
As the contract assures to each company the exclusive right to transmit all messages, or, in other words, furnish the service for all messages originating
The judgment should be affirmed. It is so ordered.
Dissenting Opinion
DISSENTING OPINION.
I am compelled to dissent from the views expressed and the conclusion arrived at by my brother Nortoni, in his very learned and exhaustive opinion. The contract between the plaintiff and defendant, as I read it, did not in any manner hinder any other company from carrying on and competing for business. Nor did it promote a monopoly. Neither did the contract prohibit other concerns from using the facilities of the Granby & Neosho Company to as full an extent as any other of its customers might use them. It is against such agreements that our statute is aimed. It is for the protection of the public against monopolies and extortion. Beyond doing that they do not attempt to go. It is not within their letter or spirit to require one who has by his means and labor and brain built up a business to let everyone or anyone else into its enjoyment. What he is to do is to so conduct his business that in his dealings with' the public all are treated alike. Fairness and equality to all, favors or special privileges in the conduct of the busi
I do not think any decision of our own appellate courts or of our Supreme Court calls for the interpretation which my learned brother has put on this contract, nor that our statute, properly construed, annuls it. Furthermore, I think a construction of our statute which would compel one company to subject all its facilities to the use of a third party merely because by contract, it had let in another to the enjoyment of them, would violate the constitutional guarantee of protection in the use and enjoyment of one’s own property. Telephone and telegraph companies are common carriers sub modo only. That théy, like railroads, are what are so aptly called public service corporations, is beyond question. But this does not destroy the right of prop-
I think the contract between the plaintiff and the defendant violated no law, common or statutory, and is a valid one. It is limited both as to duration and place of operation. Defendant is a small local- company, a neighborhood line, intended more for neighborhood convenience than profit. It is of a class that deserves promotion. By the contract with plaintiff defendant afforded its patrons access to a territory that without that contract could not have been reached by them. That contract at the time made undoubtedly helped out the small company. If we strike down that contract and allow defendant to avoid it now that it seems profitable to it to do so, the inevitable effect will be to discourage the building and establishing of these small, local companies. As I understand this case, we are far more apt to build up and strengthen a powerful monopoly by striking down this contract than by upholding it. .
If defendant breached it, as alleged, it is liable, as in any other such case, for damages in an action at law; or if, as alleged, an action at law does not afford a
Believing that both the argument advanced and the conclusion reached by the majority are wrong, and without attempting further or fuller elaboration of my reasons for so doing, I am compelled to and do dissent.