City of Richmond v. Chesapeake & Potomac Telephone Co.

105 S.E. 127, 127 Va. 612, 1920 Va. LEXIS 74
CourtSupreme Court of Virginia
DecidedSeptember 16, 1920
StatusPublished
Cited by19 cases

This text of 105 S.E. 127 (City of Richmond v. Chesapeake & Potomac Telephone Co.) is published on Counsel Stack Legal Research, covering Supreme Court of Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
City of Richmond v. Chesapeake & Potomac Telephone Co., 105 S.E. 127, 127 Va. 612, 1920 Va. LEXIS 74 (Va. 1920).

Opinion

Prentis, J.,

delivered the opinion of the court.

While the arguments of counsel in this case are thorough and complete, most of the questions so ably discussed are well settled, and the crucial questions involved lie within narrow limits. Without- neglecting the consideration of every authority cited and every fair argument based thereon, we shall omit reference to many of them in our effort to escape a criticism similar to that made by one of the counsel, to the effect that the briefs in this case are overloaded by the industry displayed and the voluminous citations, as well as confused by irrelevant argument and the discussion of uncontested points. The issue to be determined is whether or not the State Corporation Commission (hereafter called the commission) erred in taking jurisdiction of the rates of the appellee company for services performed within the city of Richmond, which the city claims have been prescribed by a contract which is [616]*616protected by the proviso in section 156-b of the Virginia Constitution.

The city having the right under its charter and by the general law (Code 1887, sec. 1287) to prohibit any telephone company from occupying the streets of the city with its lines without the consent of the council, by ordinance of October 15, 1901, granted a franchise to the Southern Bell Telephone and Telegraph Company, its successors and assigns, giving it the right to occupy the streets of the city with its works for the period of thirty years; and by section eleven of this ordinance the company contracted not to charge for telephone service rates in excess of those set forth in a schedule marked “Schedule of Rates of the Southern Bell Telephone and Telegraph Company,” to be filed with the clerk of the city council. The original company and its successor, the appellee, observed the rates thereby prescribed until the Postmaster-General, under the act of Congress (U. S. Comp. St. 1918, U. S. Comp. St. Ann. Supp. 1919, § 3115%x), passed pursuant to the war power of the Federal government, took over and. operated the property, and increased these rates. Then, before the government released the property and returned it to its owner the company filed before the commission its petition, asking for still further increases in the rates.

Pending the consideration of this petition, the city denied the authority of the commission over the rates, a,nd as it was evident that the property would be returned to the company November 30, 1919, before there could be any proper investigation of the. questions involved, upon the application' of the company the commission entered an order authorizing it to continue to charge the rates which had been fixed by the Postmaster-General until the commission could itself make the necessary inquiries and prescribe reasonable rates.

[617]*617The city insisted that the commission was without jurisdiction to increase the rates fixed by the ordinance of 1901, and that they constitute the legal and only rates which the company has the right to charge in the city of Richmond.

The recital of a few general principles which may be regarded as settled, and which are conceded, may be helpful. . [1-3] A State can authorize one of its municipal corporations to establish by an inviolable contract the rates to be charged by a telephone company, or other public service corporation, for a definite term, not unreasonable in point of time, and the effect of. such a contract is to suspend’during the term of the contract the governmental power of regulating the rates. For the very reason, however, that such a contract has the effect of extinguishing for the time being an undoubted power of government, the contract and the authority to make it must clearly and unmistakably appear. All doubts must be resolved in favor of the continuance of the power of the State. It may be stated, as a general rule, that a,n ambiguous or doubtful contract between a telephone company and a municipal corporation as to the rights of the public, will be construed in favor of the public rights. Where express power to fix telephone rates is not given a municipality, it is subject to the general law passed pursuant to the Constitution, and a constitutionally created commission may be authorized by statute to revise rates established by a municipal franchise conferred on a telephone company. The State may direct the company to raise its rates above those fixed bv the franchise, if it is necessary to secure effective service, and so far as the city is concerned there is no constitutional objection on the ground of impairment of a contract obligation. Home Telephone, etc., Co. v. Los Angeles, 211 U. S. 265, 29 S. Ct. 50, 53 L. Ed. 176; Colorado Telephone Co. v. Fields, 15 N. M. 431, 110 Pac. 571, 30 L. R. A. (N. S.) 1088; Woodburn v. Public Service Commission, 82 Ore. 114, [618]*618161 Pac. 391, Ann. Cas. 1917E, 996, note, L. R. A.. 1917C, 98, note; State v. Superior Court, 67 Wash. 37, 120 Pac. 861, Ann. Cas. 1913D, 78, note; L. R. A. 1915C, 287, note; Benwood v. Public Service Commission, 75 W. Va. 127, 83 S. E. 295, L. R. A. 1915C, 261, note; Manitowoc v. Manitowoc, etc., Co., 145 Wis. 13, 129 N. W. 925, 140 Am. St. Rep. 1056, 26 R. C. L. 540.

As pointed out in Virginia Western Power Co. v. Commonwealth, 125 Va. 469, 99 S. E. 723, it is essential that the authority to make such an irrevocable contract, superior to the police power of the State, be expressly conferred, or, as stated in Borne Telephone, etc., Co. v. Los Angeles, supra, “for the very reason that such contract has the effect of extinguishing pro tanto an undoubted power of government, both its existence and the authority to make it must clearly and unmistakably appear, and all doubts must be resolved in favor of the continuance of the power.” Numerous other cases can be cited to sustain this proposition.

[4, 5] One question then is whether or not the city of Richmond has ever been vested with express power to prescribe telephone rates; and we look in vain in the statutes under which this franchise was granted, prior to the Constitution of 1902, for such a power. The charter provision relied on is negative, that “no company shall occupy with ' its works the streets of the city without the consent of the council,” while the statute is affirmative, that every telephone company “may construct, maintain and operate its line * * * along or over the streets of any city or town, with the consent of the council thereof,” and these statutes are the sole source of the city’s , power, and mark its limit. It is claimed- that even though there may not be express words giving such a power, it nevertheless exists if “clearly and by express intendment, though not by express words,” the State abandons to municipalities the control of rates [619]*619for local service, and that both the courts and the legislature itself are bound by such clear intendment. No just criticism of this suggestion can be made, but the difference, if any, between “power expressly conferred” and “power conferred clearly and by express intendment” is so shadowy as to be indistinguishable.

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Cite This Page — Counsel Stack

Bluebook (online)
105 S.E. 127, 127 Va. 612, 1920 Va. LEXIS 74, Counsel Stack Legal Research, https://law.counselstack.com/opinion/city-of-richmond-v-chesapeake-potomac-telephone-co-va-1920.