Campbellsville Tel. Co. v. Lebanon, L. & L. Telephone Co.

80 S.W. 1114, 118 Ky. 277, 26 Ky. L. Rptr. 127, 1904 Ky. LEXIS 41

• Court: Court of Appeals of Kentucky
• Decided: May 18, 1904
• Status: Published

Opinion

Opinion op the court by

JUDGE O’REAR

Reversing.

This is an appeal from a judgment dismissing plaintiff’s petition, which, after being amended, was still held' to state mo cause of action. From the statements of the petition it .appears that appellant, the Campbellsville Telephone Company, built an exchange at Campbellsville; that appellee, the Lebanon, Louisville & Lexington Telephone Company, built an exchange at Lebanon. These two companies agreed, to unite their lines at Phillipsburg, which was a point about midway between Campbellsville and Lebanon; the Campbellsville Company building the line from Campbellsville to Phillipsburg, and the Lebanon Company, by which name we will designate appellee, from Lebanon to Phillipsburg. This diagram fairly presents the geographical situation:

The agreement under which this .connection was made and was to be operated was written, and is as follows: “It is hereby mutually agreed by and between the Lebanon, Louisville & Lexington Telephone Company (incorporated) of Lebanon, Kentucky, and the Campbellsville Telephone Company (incorporated) of Campbellsville, Kentucky as follows: The Lebanon, Louisville & Lexington Telephone Company to build, equip and maintain a first-class telephone line from Lebanon, Kentucky, to Phillipsburg, Kentucky, to meet and attach to the line of the Campbellsville Telephone Company at said place; and the Campbellsville Telephone Company to build, equip and maintain a first-class telephone line from: Campbellsville, Kentucky, via Spurlington to Phillipsburg, Kentucky, to meet and attach to the said line of the Lebanon, Louisville & Lexington Telephone Company at that place, each company to keep its part of said line in good repair at its own expense. Each company to have all the receipts for business which goes over only that part of the line belonging to it; and the receipts for all business which goes over all or any part of the line belonging to both companies shall be equally divided between them. Rates of toll to and from all points on these lines to be fixed by mutual agreement between the companies. Accounts between the companies to be settled monthly. Signed in duplicate this April 26th, 1896.”

There aré two points in the foregoing contract that have given rise to this controversy: (1) It' failed to state for what length of time the connection and the agreement were to continue. Appellant contends that it was to endure at least during the corporate lives of the two companies. Appellee contends that it was determinable at the will of either of the parties. (2) Did the contract include messages originating elsewhere than at Lebanon or Campbellsville, or on the line between those points? Appellant affirms that it did. Appellee insists that it did not.

The trouble between the litigants came up in this way: They were each “independent” companies; that is, not using the Bell patents. Subsequently a licensee- of the Bell patents, the Cumberland' Telephone & Telegraph Company, acquired a controlling interest in the stock of the Lebanon Company, and built a line from Louisville to Lebanon, there connecting with the Lebanon Exchange. Later an independent line was built from, Louisville to- Campbellsville by the Independent Long Distance Telephone & Telegraph Company. Until then the customers of the Campbellsville Exchange used the line in connection with the Cumberland Company’s line to talk to Louisville, and customers of the Cumberland Company used the same lines in talking to persons at Campbellsville and contiguous connected points through the Campbellsville exchange. This was all done under the contract quoted. But when the independent line was built to Campbellsville from Louisville, and the Campbellsville Company effected arrangements with it for transmitting messages to and from Louisville, and when it was attempted to use the joint line of these litigants via Phillipsburg to transmit messages from Louisville to Lebanon by way of the Independent and the Campbellsville Companies, appellee refused to make the connection at the Lebanon exchange and excluded the messages. This suit was for a mandamus to compel the Lebanon Company to receive the messages over its wires, and to make the necessary connection therefor. The specific execution of the contract was thus sought by appellant.

If the contract and all rights under it are determinable at the will of either party, appellee argues that will end this suit, for, it is claimed, a court will not direct the specific execution of a contract that either party has the right to terminate the next moment. However, if the parties have not terminated the contract, as they have not in this instance, but are continuing it, and' if one of them withholds a part to which the other is entitled, we perceive no good reason for refusing to compel him to bring up his end of the agreement, so long as it lasts. While the case might be rested here, we are not content to do so, but will decide the larger question, which is also presented, and which has been ably argued and fully considered; that is, whether the contract is one determinable at the will of either of the parties.

The fact that no time is fixed in the contract for which it shall endure is seized upon as affixing it to that class of contracts that run at the mutual will of the parties, and that may therefore be terminated when either of them elects to do so. The intention of the parties at the time of the making of the contract, to be gathered from its terms, and the surrounding circumstances, is the thing to be! sought fori and enforced, if enforceable. That certain agreements are to continue only so long as the parties to them mutually will, is necessarily true. Such agreements may be lawful, and when so, and found to exist, are to be construed and enforced according to their true intent. But whether such was or was not the intention of the parties ought not to be settled alone by the presence or absence of a definitely stated term. If the intention be manifest otherwise, it is as controlling. In Smith v. Theobald, 86 Ky., 141, 9 R., 449, 5 S. W., 394, a contract for personal services of one as a hotel clerk, nothing being said in the writing as to the time it was to run, was construed not to be terminable at the will of the landlord. The court declared that the question of duration, intended by the parties was one to be determined from the circumstances of each case. And this must be so. Otherwise the intention of the parties would be ignored, and there would be substituted instead an arbitrary rule of construction frequently defeating the intention and doing great injustice. This contract evinces a purpose to make a telephone connection between two towns in which respectively the parties owned and operated telephone exchanges. To build the connecting line as contracted necessarily required the outlay of a considerable sum, at least as proportioned to the income from it for a year or less. To say that the parties mutually intended that either of them might quit the arrangement the next day after the line was built, thereby practically destroying the value of the connecting line, would be preposterous. The contract provides for monthly settlements, which of itself indicates a protracted duration. The nature of the business was such that the more extended the service afforded its patrons, the more desirable it became to them, and the more profitable, therefore, to the owners of the lines. They must have had in mind the continuance of those conditions which they were to bring about by this extraordinary outlay of expense, instead of abandoning them. In addition, all telephone companies operating exchanges in different towns or cities in this State are required by the Constitution of this Commonwealth to receive and transmit messages between their users. What is meant by the phrase “shall receive and transmit each other’s messages” is the controlling feature of the sentence. For appellee it is contended that the requirement is satisfied by one company’s receiving the message as taken down and transcribed by an operator of the other company, and by forwarding or repeating it over the line as received to the person addressed. Such is the manner, doubtless, of forwarding telegraphic dispatches which pass over two or more lines. The telephone is a comparatively modem invention. Yet its utility is so universally recognized and employed as to be almost an indispensable factor among this business worldsi agencies, not to mention its very general employment for social purposes. It has largely superseded the telegraph, as. it is a distinct improvement in many features over that means of communication. It is of scarcely less importance to business.men than the post. Its practical utility, indeed its distinguishing, ¡valuable features over the telegraph, is the means it affords not merely for instantaneously transmitting a message, but for a conversation face to face, as it weju, between persons remotely situated. To hear the voice of the speaker, to give the counterpart of the conversation, and at once, impress its use with a value entirely different from that of the telegraph. In a sense it takes the place of the telegraph and the post. So that “sending a telephone message” means usually that the persons in communication be afforded the means of talking to each other. The nature and commercial use of this great ■modern invention have made it a quasi public agency. To call a thing >a common carrier can not make it so. It is the nature of the business in which it is engaged that determines its character. It would not be an inapt description to say of telephone companies that they are common carriers of messages, as truly as telegraph companies are. Being in the service of the public, their control, to a reasonable and necessary extent, by the State government within whose jurisdiction they ply their business, is a proper and legitimate governmental affair. All corporations so engaged, and created in this State since 1856, take their charters subject to amendment or repeal by operation of general laws with which they may be incompatible. This provision of the Constitution (section 199) is as if written into the charter of the two companies. The section reads: “Any association or corporation, or" the lessees or managers thereof, organized for the purpose, br any individual, shall have the right to construct andl maintain lines of telegraph within this State, and .to connect the same with other lines, and said companies shall receive and transmit each ■other’s messages without unreasonable delay or discrimination, and all such companies are hereby declared to be common carriers and subject to legislative control. Telephone companies operating exchanges in different towns or cities, or other 'public stations, shall receive and transmit each other’s messages without unreasonable delay or discrimination. The General Assembly shall, by general laws of uniform operation, provide reasonable: regulations to give full effect to this section. Nothin herein shall be construed to interfere with the rights of cities or towns to arrange and control their streets and alleys, or to designate the places at which, and the manner in which, the wires of such companies shall be erected or laid within the limits or such city or town.” When these two telephone companies did make such connection, they complied with a duty imposed by the laws of their existence. The section of the Constitution implies that such connections shall not only be made, and the service allowed, but that they shall be maintained and continued.

Appellee’s argument at this point is that section 199 is not self-executing; that, until the Legislature has provided a way of compelling its execution, it is nugatory, so far as enforceable rights growing out of it are concerned. It is true that the Legislature has not provided a method for compelling the physical connection required by the Constitution, and has not prescribed the terms upon which one corporation may coerce the use of another’s property. It is even insisted ■that such arrangement is so impracticable as to be impossible. The fact that these parties have made an arrangement which is not unreasonable on its face, and, so far as has been pointed out to us; is not. unreasonable in its application, would seem to answer the argument, of impracticability. But however that may be, these parties have done voluntarily all that was required of them by the Constitution — have made the necessary connection, and have entered into an arrangement by which each is to use, and is to pay for using the other’s property. We are asked — for such is the reach of the argument — to suffer one of them to annul this arrangement, although in doing so it violates the Constitution of the State, to the direct injury of the other party to the contract. The Constitution is as binding as a law upon all citizens of the State, and all persons doing business within the State, as a statute could be. The absence of a penalty for its unobservance can take nothing from the duty of such persons to observe the law. This connection,' positively enjoined by the Constitution, haying been established, must be continued. Not even the consent of both parties could legally sever it. The public are concerned in it, as much as the maintenance of a railroad depot where one has been kept for a certain number of years, or the maintenance of a turnpike-railroad crossing, _ although the railroad company and the turnpike company might agree to abandon the crossing.

We will conclude that this contract was not determinable at the will of either of the parties to it, but that it must continue during the corporate existence of the two companies.

Appellee’s next position is that the contract limited the parties to it to the exchange of such messages as emanated at either Lebanon or Campbellsville. There is nothing in the language of the contract to exclude from its operation messages originating elsewhere, and being transmitted via the Campbellsville and Lebanon lines. The nature of the business in which the contracting parties were engaged wasi to handle telephone messages to and from their patrons. Of course, connecting and independent lines would have to have their part of the tolls. But that was not against the desirability of using them in connection with the local lines where tariff rates could be agreed upon. That such is the fact is not left to even reasonable conjecture, but it is admitted, as the record now stands, that for nearly eight years the parties to the contract have so interpreted its meaning, and applied it practically to their operations under it. Messages originating elsewhere were received and passed over the joint line, and through the other exchange, exactly as if they had originated in Campbellsville or Lebanon. 'Such contemporaneous practical construction by the parties to an agreement is always accorded great weight by the courts in determining' a dispute between those parties as to what the contract means. Bookkeeping and accounting under this contract had evidently come to- be either so burdensome, or the experience of former years had demonstrated that the tolls each way were so nearly the same, that the parties amended their original contract by «another, covering the matter of accountings between them. The contract provides as follows: “By mutual agreement of both parties, the contract heretofore made between the Lebanon, Louisville & Lexington Telephone Company (incorporated) of Lebanon, Kentucky, and the Campbellsvilie Telephone Company (incorporated) of Campbellsvilie, Kentucky, on the 28th of April, 1896, is hereby changed in the following particulars, to wit: The Lebanon, Louisville & Lexington Telephone Company is to keep and retain as its own all the receipts that it collects, at its offices at Lebanon and Calvary for all messages that go over all or any part of said line from Lebanon to Camphellsville, and the Campbellsvilie Telephone Company is to keep and retain as its own all the receipts that it collects at its offices in Campbellsvilie and' Spurlington for all messages that go over all or any part of said line from Campbellsville to Lebanon; and the division of profits between said companies are to be made in this way in lieu of monthly settlements and- divisions of receipts as set out in the original contract; thus dispensing with bookkeeping and monthly settlements. But each company is to account for and pay to the other company all moneys that it may pay out for-the other company. This March 5th, 1897.” These two contracts were construed by the parties, in their practical application, to mean that if a message originated in Louisville Vol. 118 — 19 and sent via Lebanon, destined for Campbellsville, and transmitted through the Lebanon exchange and over the joint wire and through the Campbellsville exchange, the tolls were altogether the Lebanon company’s and the company’s who had transmitted it from Louisville to Lebanon. But if a message originated at Campbellsville, or other point coming ■through the Campbellsville exchange, destined for Louisville, ■via the Lebanon exchange and its connecting Louisville company, then the Lebanon company got none of its tolls; but, to the extent the Lebanon company was. compelled to pay the Louisville line toll upon the message, Campbellsville reimbursed Lebanon for it. And so on. The converse of the proposition must be equally true. The terms of these contracts are matters subject to change by mutual agreement of the parties. But until changed they are enforceable.

We therefore conclude that when a message originating in Louisville, or on the line of the Independent Long Distance Telephone & Telegraph Company, destined for Lebanon or vicinity, connected with the Lebanon exchange, and to pass •via the Campbellsville exchange, it was the right of appellant to have the message passed over the joint wires of the two contracting companies, and through the Lebanon exchange, under the terms of the contracts. The mandatory injunction prayed for should have been granted.

Judgment reversed and remanded for proceedings consistent herewith.

Chief Justice Burnam and Judges Settle and Paynter dissent.

Extension of opinion by Judge O’Rear, January 18, 1905:

Lest the expression in the original opinion that the duration of the contract between appellant and appellee “must continue during the corporate existence of the two companies,” should be misleading, we extend the opinion so as to; express- more clearly what was meant. The contract ¡should. endure so long as the parties to it and their successors continue to maintain an exchange or public station at the cities of Lebanon and Campbellsvilla, or at-the intermediate point of Phillrpstourg. Should either of the parties elect to withdraw from the city of Lebanon or Gampbellsville and quit doing telephone business or operating a public station or exchange at either of those points, then the contract would be terminable by that fact, although the company so withdrawing might continue its corporate existence and do a telephone business elsewhere. But so long as it exercises its franchise in maintaining an exchange or public station as a telephone corporation in the cities or at the station now served in that community, they must observe the constitutional requirement and maintain the connection and transmit messages between their respective lines,