United States Telephone Co. v. Middlepoint Home Telephone Co.

22 Ohio C.C. Dec. 18
CourtOhio Circuit Courts
DecidedJuly 1, 1910
StatusPublished

This text of 22 Ohio C.C. Dec. 18 (United States Telephone Co. v. Middlepoint Home Telephone Co.) is published on Counsel Stack Legal Research, covering Ohio Circuit Courts primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States Telephone Co. v. Middlepoint Home Telephone Co., 22 Ohio C.C. Dec. 18 (Ohio Super. Ct. 1910).

Opinion

ALLREAD, J.

This action began in the court of common pleas.* It is founded upon a contract for an exclusive interchange of telephone business between the plaintiff and the defendant companies. The relief sought is an injunction against the defendant company from a violation.of the contract by connecting its exchange with, and routing business over, the lines of the Central Union Telephone Company.

A temporary injunction was allowed in that court as prayed for and made permanent upon final hearing.

[20]*20An appeal has been taken and the cause submitted here upon the pleadings and evidence, and upon elaborate and able argument of the respective counsel.

As a preliminary to a discussion of the legal principles involved it may be recited that The Middiepoint Home Telephone Company, an incorporation of Ohio, is a characteristic local telephone company with'village and rural lines, a central exchange in the'village of Middiepoint, Yan Wert county, and toll service connection with the county seat exchange at Yan Wert.

The Central Union Telephone Company is incorporated under the laws of the state of Illinois, and engaged in the operation of both local and long distance service in the various cities, towns and villages throughout th,e states of Ohio, Indiana and Illinois, has a pay station and at least two local telephones in the village of Middiepoint and operates in connection with and through the American Telegraph and Telephone Company, a long distance company incorporated under the laws of New York, and extending throughout the United States and into portions of Canada.

The Central Union and the American Companies for the purposes of this case, and as applied to the general territory in-volved, comprises the “Bell System.” This system first occupied the telephone field both local and long distance.' Opposition companies appeared competing at first through local exchanges for local service, to which was added in due time toll service to nearby exchanges.

' The opposition companies were usually denominated “Independents,” although there was usually no connection except as they were in general opposition to the Bell System.

In the year 1898 the United States Telephone Company was incorporated under the laws of Ohio as a long distance company, and intended by its promoters to meet the needs and demands of the various so-called “independent” local companies. It obtained various similar ninety-nine year contracts from local telephone companies, upon the faith of which capital was invested in the construction of metallic circuits and [21]*21other improved equipment and the extension of long distance; service. The zone of influence of the United States companies comprises chiefly the state of Ohio, portions of Indiana, Michigan, Illinois, with limited service to points beyond. The service of the United States company is distributed to the public through local exchanges and pay station booths. The alliance of the United States and the various local companies; through the operating contracts was, within the zone of its influence, in a general sense a rival and competitor of the Bell system.

The Middlepoint Home Telephone Company succeeded to. the properties and rights of the Middlepoint Telephone Company and the Middlepoint Southern Telephone Company. Each, of the former companies were in the independent system and under ninety-nine year contracts with the United States Company. Upon succeeding to the rights and properties of its; predecessor companies the prior contracts were abandoned or. superseded by the contract of September 2, 1904, entered into by the defendant company.

The main provisions of the existing contract are as follows :

Par. 4. “The second party (The Middlepoint Company) * * * agrees to transmit all business to points not now-reached by it or its own line or lines of the first party (except in Van Wert.county).”
Par. —. “The first party (The United States Company)agrees to transmit all messages destined to points on the lines; of the second party, not reached by its own system of wires, to> and over the lines owned or controlled by said second party-lying within Van Wert county, Ohio.”
Par. 2. “Said parties agree not to enter into any contract with any other person, firm, or corporation whereby any of the rights, privileges, or advantages herein acquired by either party may be impaired.”
Par. 5. ‘ ‘ Each party hereto agrees to receive from the other all messages destined to points within its charter or connecting lines which may be delivered to it by the other party hereto.'’"’
[22]*22Par. 6. “As to all messages received by the Middlepoint company and transmitted over the lines of the United States company the Middlepoint company shall receive twenty-five per cent of the toll charges, and the United States company the balance, provided the Middlepoint company shall in no case receive more than twelve and one-half cents for any message.”
Par. 14. “This contract shall be in force for a period of ninety-nine years from the date hereof.” '

Pursuant to this and the preceding contracts the United States company constructed and has maintained long distance connections with the defendant’s exchange and has furnished long distance service with interchange of business.

The Middlepoint company, in order to secure service to points and exchanges not reached by the United States company and better long distance service to points within the territory of the United States company, contracted on November 29, 1907, with the Central Union company for a connection •of the wires of the Central Union company with the exchange .and subscribers of the Middlepoint company and a designation of the former company as toll agent of the latter at a specific per centum compensation. The stipulated connections were made December 23, 1907; and maintained for long distance service and the routing of business until February 23, 1908, when terminated by the restraining order of the common pleas court.

There is considerable testimony as to imperfect and inferior service at different points over the lines of the United States company and its connections. But we think that the nature of this service is not of such a character as to differ materially from that contemplated by the contract with the United States company, nor has the proper foundation-been laid for a termination of the contract upon that ground. The case rests upon the validity of the ninety-nine year contract. Independent of the obligations of the contract there is no doubt of the right of the Middlepoint company to maintain connections with and obtain the advantages of both companies. The Middlepoint company, [23]*23therefore, is only restrained,, if at all, by virtue of the obligations of its contract.

The Middlepoint company contends that the dual connections and long distance service afforded thereby greatly extends and improves the service to its patrons and facilitates thereby the public necessity represented by its charter and the duties it has assumed. It therefore justifiés its violation of the exclusive and nonimpairment covenants of its contract with the United States company upon the ground that such stipulations are ultra vires and opposed to public policy.

Gen. Code 9171 (R. S.

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Bluebook (online)
22 Ohio C.C. Dec. 18, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-telephone-co-v-middlepoint-home-telephone-co-ohiocirct-1910.