City of Tulsa v. Southwestern Bell Telephone Co.

75 F.2d 343, 1935 U.S. App. LEXIS 2928
CourtCourt of Appeals for the Tenth Circuit
DecidedJanuary 26, 1935
Docket1113, 1114
StatusPublished
Cited by33 cases

This text of 75 F.2d 343 (City of Tulsa v. Southwestern Bell Telephone Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Tenth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
City of Tulsa v. Southwestern Bell Telephone Co., 75 F.2d 343, 1935 U.S. App. LEXIS 2928 (10th Cir. 1935).

Opinion

PHILLIPS, Circuit Judge.

The. City‘brought this action against the Southwestern Company. The amended petition set up three alleged causes of action:

In its first cause of action the City alleged that on January 5, 1903, the incorporated town of Tulsa granted a franchise to *345 the Indian Territory Telephone Company for a term of 20 years; that the Southwestern Company succeeded to the rights of the Territory Company under such franchise; that the franchise expired January 5, 1923; that in 1908 the City, under authority of section 3 (a) of article 18) Oklahoma Constitution, adopted a charter which provided that no streets, alleys, or public highways in the City should ever be used by any person, firm, or corporation for the construction or operation of a telephone system without first obtaining authority therefor under a franchise granted by the Board of Commissioners of the City, with the approval of a majority of the qualified electors of the City; that any person to whom such a franchise should be granted, should pay as compensation for the right or privilege enjoyed, 4% of the gross receipts of the business carried on under such franchise; that on April 12, 1928, the charter was amended so as to provide that such compensation should not be less than 1% nor more than 4% of such gross receipts;

And that after the expiration of the 1903 franchise the Southwestern Company, without having secured an extension thereof or the grant of a new franchise, continued to occupy the streets and alleys of the City; that since January 5, 1923, it has enjoyed the privileges and benefits it would have enjoyed had it obtained an extension of such franchise or the grant of a new one, and the City has suffered the same detriment it would have suffered had such franchise been extended or a new one granted; that during such time the Southwestern Company has received in gross receipts $12,934,442.62 from its local exchange service, and $10,-054,851.08 from its long distance service; that 4% of such gross receipts, or $919,571.-74, is fair and reasonable compensation for the use of the City’s streets and alleys by the Southwestern Company, and that having received the benefit of the use of such streets and alleys and having deprived the City of the compensation it would have received had such franchise been extended or a new one granted, the Southwestern Company is liable to the City for 4% of such gross receipts. The City sought recovery thereof.

In its third cause of action the City set out substantially the same facts, and alleged it had been damaged by the unlawful use of its streets and alleys by the Southwestern Company from January 5, 1923, to June 1, 1932, in the sum of $919,571.74, and sought recovery thereof.

In its second cause of action the City alleged the same principal facts as in the first, and sought a judgment of ouster.

As construed by the City, the first cause of-action is for the reasonable value of the use of the streets, whether the occupancy by the Southwestern Company was lawful or unlawful, and the third cause of action is for damages for the alleged wrongful occupancy of the streets by the Southwestern Company.

In its amended answer the Southwestern Company admitted the City is a municipal corporation originally organized under the laws of the Indian Territory, and the adoption and approval of the City’s charter.

It denied the validity of the franchise, and denied it or its predecessors had accepted same or done business thereunder.

It alleged it had the right to occupy the streets and alleys by virtue of the approval by the Secretary of Interior of an application for a telephone right of way in Tulsa filed by its predecessor, Pioneer Telephone & Telegraph Company, pursuant to the Act of March 3, 1901 (31 Stat. 1083, § 3, 25 US CA § 319), and by virtue of the provisions of article 9, § 2, Oklahoma Constitution, and section 11976, O. S. 1931, originally enacted in 1890 by Oklahoma Territory and carried into the statute law of Oklahoma by section 2 of the Schedule to the Oklahoma Constitution, and by virtue of easements granted to it by adjoining owners.

It also pleaded estoppel, limitation of action, and a judgment in favor of its predecessor, the Pioneer Company, in an ouster proceeding brought against the latter company on September 14, 1908.

On June 5, 1899, the Town of Tulsa undertook to grant to R. H. Hall a franchise to construct a local telephone exchange and system in Tulsa. On October 10, 1899, the Acting Commissioner of Indian Affairs undertook to give to Hall a permit to establish and operate such exchange and system. Hall constructed and commenced the operation of a local telephone system in Tulsa in 1899.

The Territory Company completed a toll line into Tulsa late in 1902 or early in 1903. It desired to purchase Hall’s telephone system, but he declined to sell. The Town of Tulsa wanted the Territory Company to acquire Hall’s system in order to afford long *346 distancie communication to the citizens of Tulsa. To induce Hall to sell, the town on January 5, 1903, enacted Ordinance 36, purporting to grant to the Territory Company the right to construct and operate a telephone system in Tulsa. The Territory Company did not construct a telephone system under that ordinance, but on January 16, 1903, purchased the existing system from Hall.

On November 15, 1907, the Territory Company transferred its telephone system in Tulsa to the Pioneer Company. On July 7, 1917, the name of the Pioneer Company was changed to Southwestern Bell Telephone Company, an Oklahoma corporation. On April 16,. 1920, the latter company transferred its property to the Southwestern Company, a Missouri corporation, and the defendant here.

Oklahoma' was admitted to statehood on November 16, 1907. Tulsa became a city of the first class under the laws of Oklahoma on December 30, 1907.

On July' 3, 1908, Tulsa adopted a special charter. It was approved by the governor on January 5, 1909. Such charter undertook to provide that no person, firm, or corporation should use the streets and alleys of the City for the construction or operation of a street railway, telegraph line, telephone system,, or other business of a public or quasi public nature without first obtaining authority therefor under a franchise granted by the City. Paragraph 1, § 1, art. 7, Charter, City of Tulsa. Paragraph 5, § 7, art. 2 of the charter, provided that such a person, firm, Or corporation should pay as compensation for the use of the streets and alleys not less than 4% of the gross receipts of the business conducted under such a franchise. As amended April 12, 1928, it provided that such compensation should be not less than 1% nor more than 4% of the gross receipts.

The trial court held that section 7, art. 2, of the charter of the City of Tulsa undertakes to impose a burden on interstate commerce and -is void, and that the Southwestern Company and its predecessors had acquired the right to occupy the streets of Tulsa under the Act of March 3, 1901, and section 11976, O. S. 1931.

It rejected proffered proof in support of the pleas of limitation and estoppel, and directed a verdict for the Southwestern Company. Judgment, was entered accordingly and both parties have appealed.

Franchise Granted by the Town of Tulsa.

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Bluebook (online)
75 F.2d 343, 1935 U.S. App. LEXIS 2928, Counsel Stack Legal Research, https://law.counselstack.com/opinion/city-of-tulsa-v-southwestern-bell-telephone-co-ca10-1935.