193 Mich. 515 | Mich. | 1916
On the 11th day of June, 1914, the Michigan railroad commission made an order:
“That the Michigan State Telephone Company and the Citizens’ Telephone Company, two Michigan corporations, make such a physical connection or connections between their toll lines or systems, in the city of' Traverse City as is required for the furnishing of toll line service to the subscribers of each company at the stations installed in their residences and places of business over the toll lines of the other company.”
The order was granted upon the petition of certain residents of Traverse City, who are said to represent in their application a large number of their fellow townsmen. Complainant, as one of the companies affected by the order, brings this suit, under the provisions of the statute, asking that it be vacated and set aside.
In the first of these groups, comprising more than half of the places considered, the Michigan Company operates the only exchange now in existence. Formerly there were two exchanges in each of these towns, the one owned and operated by the Michigan Company, and the other by what was known as thev Swaverly Company. At that time the Citizens’ Company in Traverse City and other so-called independent companies in other places were connected with the exchanges of the Swaverly Company so that the subscribers of the one could talk with the subscribers of the other. About March, 1912, the Michigan Company purchased from the Swaverly Company all of its property and business and united the exchanges of the latter company with its-own. But as a condition of the merger it was required by the railroad commission that the Citizens’ Company should be allowed to continue the same connection with the exchanges thus consolidated that had before existed with the Swaverly
In the second of the groups into which we have divided the towns around Traverse City, full competition still exists between the two telephone companies. There are in this group about nine cities and villages, and between these towns and Traverse City the Michigan Company and the Citizens’ Company has each its own toll line, and in them each maintains its own exchange. As between Traverse City and these towns the subscribers of one company cannot talk from their own telephones with the subscribers of the other, and will not be able to do so unless the physical connection is made between the lines of the two companies as required by the order of the railroad commission.
The third group is also composed of some nine or ten towns, and includes places of considerable import^ anee. In these towns the Michigan Company has the only exchanges and its toll lines are the only ones connecting them with Traverse City. With the residents of these towns the subscribers of the Citizens’ Company in Traverse City have no telephonic communica
Traverse City, according to the census of 1910, has a population of more than 12,000. It has wholesale and jobbing concerns patronized by merchants of surrounding communities. And it is the site of the Traverse City State Hospital for the Insane, which receives patients from the thirty-seven counties of the northern portion of the lower peninsula. The business men of the city must necessarily have telephonic communication, not only with residents of the city, who mostly use the Citizens’ telephone, but also with towns of the third group, which can be reached only over the lines of the Michigan Company. This forces a duplication of instruments, and there are 188 subscribers in the city who feel obliged to, and do, keep both telephones. And in asking for the order in question it was the object of petitioners to obviate the expense of two telephones, where one could be made to answer the purpose of both, and to bring about the same facilities of communication among telephone subscribers in the city, and between them and the towns of the second and third group, that they now have with the numerous towns of the first, or Swaverly, group, and with the towns and cities in the southeastern part of the State.
Upon the hearing of the case in the circuit court the order of the commission was upheld and a decree entered dismissing complainant’s bill. From this decree complainant, the Michigan State Telephone Company, appeals to this court.
The power of the railroad commission to regulate the business of telephone companies is to be found in Act No. 206 of the Public Acts of 1913 (2 Comp. Laws 1915, §§ 6689-6714), and authority to require the physical connection of telephone lines is contained in section 6 of the act, which reads as follows:
*521 “Whenever the commission, after a hearing had on its own motion or upon complaint of any party in interest, shall find that a physical connection can reasonably be made between the lines of two or more persons, copartnerships or corporations operating telephone lines, whose lines by such connection can be made to form a continuous line of communication, and that public convenience and necessity will be subserved thereby, or shall upon like motion or complaint find that two or more persons, copartnerships or corporations so operating telephone lines have failed to establish joint rates, tolls or charges for service by or over their said lines, the commission may by its order require that such physical connection be made, and may prescribe through lines and joint rates, tolls and charges to be made and to be used and observed in the future. If such persons, copartnerships or corporations so operating telephone lines and telephone facilities do not agree upon the division between them of the cost of installing of such physical connection or connections, or the division of any joint rate, tolls or charges established by the commission over such through line, the commission shall have authority after hearing to establish such division.”
Upon considering this section of the act, it will be observed in the first place, that the railroad commission is given no authority by the statute to require a physical connection between the lines of two or more persons, copartnerships, or corporations operating telephone lines, unless the lines, by such connection, “can be made to form a continuous line of communication.” Complainant insists that this means a “continuous line of communication” between places not already connected by any telephone line, and that it does not apply to such a situation as that at Traverse City, which is now connected with practically all other places by the lines of the Michigan Company. If the lines of the Michigan Company, counsel say, in illustrating their position,- ran only from Charlevoix to Traverse City, and the lines of the Citizens’ Company ran only from Traverse City to Cadillac, then the lines might be re
Complainant also claims that an enforced physical connection between its lines and those of the Citizens’ Company would not be an exercise of the right of regulation, but would amount to such a taking of its property as could be justified only under the power of eminent domain and upon the payment of compensation. As the basis of this contention, it is argued that the Citizens’ Company would be given the use and control of complainant’s lines every time one of its subscribers talked over them by means of the connection. In support of this position our attention is directed to Pacific
In one sense there may be, and often is, a taking of property through the legitimate exercise of the power of regulation, and as necessarily incident thereto. In such case the company whose business is subjected to the regulation is not deprived of the title to or possession of its property, but it may be required to ■forego profits which it might otherwise receive; to apply its property, within the dedicated use, to some purpose contrary to its wishes; to expend its money as it would not otherwise expend it; to perform service it would not perform except for the regulation; and to submit to losses which it would prefer to avoid. In Wisconsin, etc., R. Co. v. Jacobson, 179 U. S. 287 (21 Sup. Ct. 115), the railroad company was required to expend its money for a railroad connection, and to submit to certain losses in revenue. In Chicago, etc., R. Co. v. Iowa, 233 U. S. 334 (34 Sup. Ct. 592), the company was required to accept and transport loaded cars received from other railroads, although it was willing and desired to use its own cars for the purpose. In Mayor, etc., of Worcester v. Railroad Co., 109 Mass. 103, the company was subjected to heavy expenses in establishing a union depot. And see Oregon R. R. & N. Co. v. Fairchild, 224 U. S. 510 (32 Sup. Ct. 535); Pittsburg, etc., R. Co. v. Railroad Commission, 171 Ind. 189 (86 N. E. 328); Grand Trunk R. Co. v. Railroad Commission, 231 U. S. 457 (34 Sup. Ct. 152), and many other cases. These relate mainly, if not wholly, to the connection of railroad tracks, but the principles announced are applicable to the control of any public utility by the State.
Inasmuch as the regulation of public utilities by the State is thus, and necessarily, an interference to some extent with private property, it can' be justified only by the demands of public convenience and necessity;
The commission has found that the physical connection of telephone lines as directed by the order in question is a public convenience and necessity, and we think it had sufficient grounds for that conclusion. The telephone has become a vital element in the business and social life of the people, and enters so largely into the conduct of all of their affairs that the elimination of unnecessary expense and the saving of time in its use have become matters of importance. Men can no longer afford to loiter around public pay stations for the purpose of ■ sending or receiving messages, and the duplication of instruments in the house and office has grown into a waste of large proportions. These evils come largely from the existence of competing companies in the same community, and so far as reasonable regulation can improve the situation such regulation is assuredly required by public convenience and necessity. Communities should not be held up until one or the other of adverse companies; has been eliminated through the long battle of competition, if the delay can be justly and lawfully avoided. This was evidently the view of the legislature when telephone companies were brought under the control of the railroad commission, and that body was given the powers of regulation conferred by the statute referred to. It is suggested, however, by counsel for complainant, that the evils mentioned as furnishing grounds for regulation in the interest of the public are evils common to all competition between telephone companies, and could not have been within the. contemplation of the legislature when it required in each case, before action by the commission, a special
“If there was a strong or urgent need of the connection here sought, then there was a necessity for it.” Wisconsin Telephone Co. v. Railroad Commission, supra.
And there was evidence justifying the commission in finding the existence of such need.
That a physical connection may be required, in many instances at least, between the lines of competing companies without injury to either, is clearly shown by the record in this case. The toll lines of the Citizens’ Company and those of the Michigan Company both run into the same exchanges in the 30 cities and villages of the Swaverly territory, as well as into the
The objection complainant does raise as to the reasonableness of the order in question relates entirely to its effect upon its local exchange in Traverse City. That exchange, it says, will be destroyed if the order goes into effect. It bases this conclusion upon the fact that the business houses of the city find it necessary, without the connection, to use its telephone in communicating with the towns in the third group, as we have classified them, to which complainant has the only toll line. These telephones will be no longer required, it says, if, by means of the connection, these towns can be reached from the telephones of the Citizens’ Company. And it further claims that with the removal of its telephones in the city the value of its toll service with the Swaverly towns must be much impaired.
Undoubtedly complainant might suffer some loss if these results should in fact follow the enforcement of the order; yet just what the loss might amount to we are unable to determine with any accuracy from the record. But we do not think that complainant has shown with sufficient certainty that the apprehended results would in fact follow the enforcement of the order. And it is insisted by the railroad commission that they would not. The commission has full power under the statute to prescribe the joint rates, tolls,
Will the adjustment of the rates, tolls, and charges, when properly made, remove the danger of destruction of its local exchange which complainant fears? The whole thing, both as to the danger of loss and as to the remedial provisions intended by the commission, is somewhat a matter of speculation. It is for complainant to show affirmatively that the physical connection ordered by the commission will inflict upon it
“In all actions under this section the burden of proof shall be upon the complainant to show by clear and satisfactory evidence that the order of the commission complained of is unlawful or unreasonable, as the case may be.”
What rates would be required to prevent the surrender of complainant’s telephones by such residents and business houses of the city as now employ them is not shown by the record. Nor is it shown that an adjustment of rates, tolls, and charges by the commission under its powers as we have construed them could not be so made as to obviate the injurious results which complainant apprehends from an enforcement of the order. And from the very nature of the order it is within the power of the commission to rescind it if it is found to operate unduly to complainant’s injury.
For these reasons, the decree appealed from will be affirmed, with costs to the defendant.