
    Farmer et al. v. The Columbiana County Telephone Company.
    
      Telephone companies obtain power — To construct lines, etc., from sections 8454-8471-8, Revised Statutes — Powers of municipal authorities in reference to telephone companies, defined — 1 Question of free service for city or citizens — City ordinance to receive free compensation not effective, when.
    
    Telephone companies organized in this state obtain power to construct their lines along the streets and public ways of municipal corporations from the state by virtue of sections of the Revised Statutes, 3454 to 3471-8, inclusive, and not from the municipal authorities. The latter have the power, under section 3461, to agree with such'companies as to the mode of use, and upon compensation for such use, but not beyond what may be necessary to restore the streets to former state of usefulness. They have not power to exact or receive compensation by way of free telephone service for themselves or for citizens, or to fix rates for telephone charges. Where such power to so obtain free service and fix rates is attempted to be exercised by the passage of an ordinance incorporating such provisions, the company will not be required to adhere to them by a court of equity by mandatory injunction, even though it be shown that the rates agreed upon and incorporated in the ordinance were so fixed at the solicitation of the company and that the company thereby obtained a benefit which it would not have otherwise obtained in a mode of use of the streets more beneficial to it and more inconvenient to the public.
    (No. 9004
    Decided June 27, 1905.)
    Error to the Circuit Court of Columbiana county.
    The action below, brought by the plaintiffs in error, Farmer & Getz, in the court of common pleas of Columbiana, was to obtain a mandatory injunction requiring The Columbiana County Telephone Company to place a telephone instrument in their place of business in accordance with the terms specified and at the rates fixed by an ordinance of the city of Salem, by which the Company was accorded its right to erect its poles, wires, et cetera, in the streets of the city. Among other provisions of the ordinance were the following:
    
      1 ‘ Section 3. Be it further ordained, that the said S. C. Thayer, his associates, successors or assigns, be and they are hereby limited in the price to be charged for exchange service within the corporate limits of said city of Salem, under the powers herein granted, as follows, to-wit: The charge for residence service shall not exceed eighteen dollars [$18.00] per annum, payable quarterly in advance; and the charge for business service shall not exceed twenty-four dollars [$24.00] per annum, payable quarterly in advance.
    “Section 4. Be it further ordained, that the said. S. C. Thayer, his associates, successors or assigns, under the powers granted herein, shall erect a line and furnish telephone service to any person residing within the corporate limits of said city, who shall desire to become a subscriber thereto and at the price hereinbefore mentioned; and said subscriber shall be entitled to free telephone service over the lines of the said S. C. Thayer, his associates, successors or assigns, with all their exchanges and subscribers, when connected, within the county of Columbiana, state of Ohio, but shall not be entitled to the use of said lines for such purpose for more than five minutes at any one time; and that the said S. C. Thayer, his associates, successors or assigns, shall permit the police and fire alarm wires and boxes of said city to be placed upon their poles within the corporate limits of said city, without charge therefor, if the city so elects.”
    The ordinance purported to give the grant to one S. C. Thayer, his associates, successors or assigns and the present Company acquired its rights by assignment from Thayer. It appears by the petition that the above sections of the ordinance were presented to the council by Thayer voluntarily, and were not required as a condition precedent to the passage of the ordinance, the said Thayer stating that the rates asked were ample for the service to be given, and he confidently expected that they might be reduced. The ordinance being accepted by Thayer a bond was duly given by him to well and truly comply with its provisions. The present Company built and operated the system of lines and a telephone exchange upon the terms provided, especially as to the price tó be charged subscribers, and said subscribers have received free telephone service over the lines of the defendant within the county of Columbiana, until the first of July, 1903, when plaintiffs applied for an instrument in their business place in Salem, tendering the proper amount as provided in the ordinance, which the Company refused, demanding a hig’her amount. The Company has also refused to continue service to any of its subscribers at the ordinance rate and will remove its instruments unless restrained by injunction. The Company is estopped to deny the terms of the ordinance, which remains in full force, constituting a binding* obligation upon the Company, and the plaintiff is entitled to all the rights, benefits and privileges granted by the ordinance.
    The city of Salem, by cross-petition, adopting the allegations of the petition, further alleged that if it had not been for the proposition made by Thayer to furnish service at the rates fixed by the ordinance, and the grant of the privilege to the city of county service without extra charge, the council would not have agreed on a mode of use or construction of the system and exchange as favorable to Thayer, or his assigns, as that fixed by the ordinance; that at the time of the grant of the ordinance an application had been made by another company, and a franchise ordinance was subsequently granted to it by which it was required to remove its poles from the streets and place its wires under ground, being a more expensive mode than that granted to Thayer; that many of the property owners of the city, relying on the terms of the ordinance granted Thayer and now enjoyed by the defendant Company, permitted defendant to erect poles and to string wires thereon over and across their premises, thus invading’ their rights in the streets and alleys, as abutting property owners, and permitted the defendant Company to cut and destroy portions of their buildings, to their great and irreparable injury; that at the time said franchise was granted to Thayer, another company was operating a system of telephone lines and exchange in the city and throughout Columbiana county, and furnishing county service to its city subscribers at a rate lower than the rate proposed to be charged by the defendant Company under which it now proposes to operate in disregard of the rights of its subscribers as fixed by the ordinance; that almost all of said subscribers who were then in the enjoyment of the privileges aforesaid, relying on the rates proposed by defendant Company and fixed by the ordinance, and on the contracts made by defendant Company with them at the ordinance rates, and on the representations of the officers and agents of defendant Company that it would continue during the term of the ordinance to furnish telephone service at the rates provided in the ordinance; that the county service would be without extra charge as provided by the ordinance, all of which was at a lower rate than that then being paid by said subscribers to the other company,for like service, said subscribers, almost without exception, can-celled their contracts with the other company, and they cannot now renew said contracts for local service, and county service, without extra charge at any rate; that had they not relied on said representations and cancelled the said contracts they would still be entitled to receive the same service and at the same price they were receiving at the time the franchise ordinance was granted to Thayer, as all subscribers at that time were given the option of continuing their original contracts; that by reason of the foregoing facts many of the then subscribers of the other company have suffered great loss, and will, unless the defendant Company be restrained as prayed, be required to pay the rates now demanded by the said Company, and in addition thereto, extra for county service. Then follows a prayer that defendant be enjoined from raising its rates and from refusing the benefit of free county service.
    Demurrers to these pleadings severally were sustained and judgment dismissing the petition and cross-petition entered. This being affirmed by the circuit court, the plaintiff below and the city bring error.
    
      Mr. Lewis P. Metzger, for plaintiffs in error.
    
      Messrs. Carey & Mullins, for defendant in error, submitted no brief.
   Spear, J.

One principal question, and another in the alternative, are presented. Was the contract as to rates within the power of the council to make, and; if not, is the defendant Company estopped now to set up as a defense that want of power? ;

The first question is answered by the statute itself. Sections 3461 and 3471, Revised Statutes, provide: :

Section 3461. “When any lands authorized to be appropriated to the use of a company are subject to the easement of a street, alley, public way or other public use, within the limits of any city or village, the. mode of use shall be such as shall be agreed upon between the municipal authorities of the city or village and the company; and if they cannot agree, or the municipal authorities unreasonably delay to enter into any agreement, the probate court of the county, in a proceeding instituted for the purpose, shall direct in what mode such telegraph line shall be constructed along such street, alley or public way, so as not to incommode the public in the use of the same; but nothing in this section shall be so construed as to authorize any municipal corporation to demand or receive any compensation for the use of a street, alley or public way, beyond what may be necessary. to restore the pavement to its former state of usefulness.”

Section 3471. “The provisions of this chapter shall apply also to any company organized to construct any line or lines of telephone; and every such company shall have the same power and be subject to the same restrictions, as are herein prescribed for magnetic telegraph companies.” • . ,

It is further answered by the case of Macklin v. Home Telephone Company, reported by the circuit court in 24 O. C. C., 446, and affirmed in this court as City of Findlay v. same Company, 70 Ohio St., 507. A telephone company gets its right to go upon the streets, with its poles, wires, etc., from the state (sections 3454 to 3471-8 inclusive), and the power of the municipal authorities in the premises is to agree upon, not the right to use, hut the mode of use, and if no agreement as to mode shall be made within a reasonable time, the company may apply to the probate court, which court shall direct in what mode the line shall be constructed so as not to incommode the public in the use of the streets, etc. In other words, municipal authorities may do what the probate court may do when a proper ease is presented, and no other or different thing. One is a substitute in all respects for the other. Beyond this, the municipality is not permitted to demand or receive any compensation beyond what may be necessary to restore the streets to their former state of usefulness. In short, the right of the public to the free use of the streets, alleys, etc., is to be maintained and the general duty of the municipal authorities to keep the streets, etc., ■open, in repair and free from nuisance is to be performed. It follows that the council had no power to make an effective arrangement as to rates, and that the principal question will have to be determined against'the plaintiffs in error.

A majority of the court is of the opinion that the alternative question should, also, be determined against the plaintiffs in error. It follows from what has preceded that the municipality possessed nothing in the way of a valuable right to bestow upon the Company.' Hence the promises of the Company to do what it was not, and could not by the city be required to do, was a naked promise, without consideration. It therefore fails as a contract, and it is difficult to see how Farmer & Getz could take advantage of a nude pact to raise an estoppel, a pact to ■which they were in no wise parties, or privies in the eye of the law, and against a party with whom they had no contract or other legal relátions whatever themselves. It seems reasonably clear that the petition of plaintiffs below did not state a cause of action.

Is the City’s cross-petition in error in any better situation as matter of law? It is stated that but for the proposition as to rates incorporated in the ordinance, the city would not have conferred the mode of use which it did, but would have demanded and required a mode of use less beneficial to the applicant ; that he was saved delay and the necessity of going to the probate court; that it not only conferred upon h,im a more beneficial mode of using the streets than it otherwise would, or could have been compelled to under the statute, but a mode more inconvenient to the public, so that the City parted with something and the applicant received something in the way of benefit. But this view antagonizes the proposition already determined that the City had nothing in the way of rights or special benefits to give away, or barter away. Its plain and only duty was to insist upon and secure a mode of use entirely consistent with the full beneficial use by the public at large of the streets and alleys of the municipality. It had no authority to consent to an arrangement more inconvenient to the public in order to get gain to itself or to anybody else. It had no right, upon any consideration whatever, to incommode the public in the use of the streets. Any attempt to obtain advantage to itself, by free service or otherwise, or to such portion of the public as might want to avail itself of the telephone service, was manifestly against the letter as well as the spirit of the statute, and cannot in law, or in equity, constitute a predicate for an estoppel. It asks to stand upon its own illegal contract, and asks a court of equity to compel the other party to stand upon and perform it. In other words, the City asks a court of equity to decree specific performance, by mandatory injunction, of a contract which, admittedly, it had no power to make, and which the statute forbids. As it seems to a majority of the court, the proposition cannot be maintained upon any established rule known to courts of equity.

This is the court’s view of the cold law of the case. But before leaving the subject we feel impelled to express strong condemnation of the lamentable want of fair dealing shown on the part of [he defendant Company in its transactions with the municipal authorities. Of course, Thayer was a mere vehicle; the Company was and remains the power behind. If the pleadings truly state the situation the Company’s action was in a high degree reprehensible. Were there any ground which this court could regard as substantial for such action the court would take pleasure in .granting the relief asked and thus administer a deserved rebuke; but there seems none. Possibly a recognition of this phase of the case on the part of the learned and honorable counsel of record for the defendant Company may account for the absence of a brief from them in this court.

: The conclusion is that the cross-petition does not state a cause of action and that the demurrer to it was properly sustained.

Judgment affirmed.

Davis, C. J., Shauck and Summers, JJ., concur. - • ■ Price, J., dissents. ' ....  