Celina & Mercer County Telephone Co. v. Union-Center Mutual Telephone Ass'n

102 Ohio St. (N.S.) 487
CourtOhio Supreme Court
DecidedJune 14, 1921
DocketNo. 16139
StatusPublished

This text of 102 Ohio St. (N.S.) 487 (Celina & Mercer County Telephone Co. v. Union-Center Mutual Telephone Ass'n) is published on Counsel Stack Legal Research, covering Ohio Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Celina & Mercer County Telephone Co. v. Union-Center Mutual Telephone Ass'n, 102 Ohio St. (N.S.) 487 (Ohio 1921).

Opinions

Hough, J.

It is urged in the amended petition, and admitted in the answer, that the defendant is a partnership association. A partnership association is a creature of statute, being provided for under Part Second, Title VII, Division I, Chapter 1, General Code, and the purpose for which it may be formed, as provided in Section 8059, General Code, is for “conducting any lawful business or occupation within the United States.”

And Section 8070, General Code, provides that “The association from time to time may divide profits.”

The whole tenor of the act seems to provide for the organization and conduct of business for profit. We very much doubt, whatever may be its legal aspect, that the defendant is a partnership association.

■ Defendant says (record, page 24) that it has accepted the ordinance, which in Section 1 gave permission to use the streets, alleys and public ways, to supply the citizens and the public with telephone communication, for the purpose of erecting a mutual telephone plant, and operating it.

. Section 614-2, General Code, which is a part of the public utilities act, provides in part as follows:

“Any person or persons, firm or firms, co-partnership or voluntary association, joint stock association, company or corporation, wherever organized or incorporated: * * * When engaged in the business of transmitting to, from, through, or in [492]*492this state, telephonic messages, is a telephone company and as such is declared to be a common carrier.”

Whatever genus of association or sort of grouping of interest this defendant may be, in whatever legal entity it may be classed, the above recitation is broad enough to include it, and when it is concerned in the erection and operation of a telephone plant "it seems clear beyond peradventure that it expects to engage in the business of transmitting to, from, through, or in this state, however extended, or however limited, telephonic messages.

Then this concern, whatever may be its species, is a telephone company, and, being a telephone company, it is also a common carrier, so declared to be by the legislature.

What is a common carrier ? “A common carrier is one that undertakes for hire or reward to carry, or cause to be carried, goods for all persons indifferently who may choose to employ him, from one place to another.” United States Express Co. v. Backman, 28 Ohio St., 144.

The term “common carrier,” applied to telephone companies, would then be defined to be one who undertakes, for hire or reward, to carry, or furnish the medium for carrying, messages, news, or information, for all persons indifferently, who may choose to employ it, or use such medium, from one place to another.

The telephone company then must serve, without discrimination, all who desire to be served and who conform to the reasonable rules of the company.

[493]*493Section 614-2a provides that "The term ‘public utility’ as used in this act, shall mean and include every corporation, company, co-partnership, person or association, their lessees, trustees or receivers, defined in the next preceding section, except such public utilities as operate their utilities not for profit, and except such public utilities as are, or may hereafter be owned or operated by any municipality, and except such utilities as are defined as ‘railroads’ in sections 501 and 502 of the General Code * * *

It is apparent that the defendant is a public utility, a servant of the public, and being a public utility, it must necessarily hold itself out to serve impartially the citizens generally of the territory occupied by it. It is this very public obligation that permits it to be the recipient of a grant or franchise from the village, and would permit it to receive the same character of grant in the public highways; but counsel for the defendant say that it might exercise that right without a franchise, under Sections 9170 and 9180, General Code, which are made applicable to telephone companies by Section 9191, General Code.

It is true that this power came from the state, but with the passage of Section 9182, General Code (62 O. L., 72, and 77 O. L., 264), which refers to the same subject-matter as do Sections 9170 and 9180, supra, and is a part of the same act, the first mentioned sections apply only to public utilities. In State, ex rel. Am. Union Telegraph Co., v. Bell Telephone Co., 36 Ohio St., 296, it is held as follows: ‘‘By the provisions of chapter 4, title 2, of the revised statutes, each company operating a line or system of telephones in this state is required to re[494]*494ceive despatches from and for telegraph and other companies without discrimination.”

Then by analogy when Section 9191, General Code, was passed, making the act of which Sections 9170, 9180 and 9182 are a part, applicable to telephone companies as well as telegraph companies, the reference is manifestly limited to those telephone companies which are public utilities.

Section 614-2a, General Code, provides:

“The term ‘public utility’ as used in this act, shall mean and include every corporation, company, co-partnership, person or association, their lessees, trustees or receivers, defined in the next preceding section, except such public utilities as operate their utilities not for profit, and except such public utilities as are, or may hereafter be owned or operated by any municipality, and except such utilities as are defined as ‘railroads’ in sections 501 and 502 of the General Code * * * .”

As a public utility the defendant comes under the jurisdiction of the public utilities act, unless it is taken out under one of the three exceptions mentioned in Section 614-2a. Two of these exceptions have no application whatever to the defendant and may be discarded, as it is not a railroad or a municipally owned or operated utility. The next question, then, is whether or not it is a public utility operated “not for profit.” How may it be determined whether a corporation or association is one for profit or not for profit ? Does the filing of articles of incorporation, in which the declaration is made that it is not for profit, and on which the charter is issued, govern or determine this question? Is the issuance or non-[495]*495issuance of capital stock controlling, or is it whether a business is to be engaged in, and operated with consideration of the character of that business and the method of conducting it, that is the true test ?

We think the latter. Section 8667, General Code, provides:

“If a corporation be organized for profit, it must have a capital stock.”

It is held in Snyder v. Chamber of Commerce, 53 Ohio St., 1, that the declaration in the articles of incorporation, that it is formed not for profit, is not inconsistent with a provision for capital stock. In other words, it is the character of the business and the method of conducting that business that controls.

A corporation then, organized for profit, providing no capital stock whatsoever, under certain circumstances, may be in fact conducting a business for profit. A partnership association for the same reason, although having no capital stock, when engaging in a business, may and usually is engaging in that business for profit.

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Cite This Page — Counsel Stack

Bluebook (online)
102 Ohio St. (N.S.) 487, Counsel Stack Legal Research, https://law.counselstack.com/opinion/celina-mercer-county-telephone-co-v-union-center-mutual-telephone-assn-ohio-1921.