#### Citizens Telephone Company of Eau Claire, Respondent, vs. Railroad Commission of Wisconsin, Appellant.

*March 21*—

June *17, 1914.*

*Public utilities: Railroad commission: Orders, when set aside: Evidence: Telephone companies: When engaged in furnishing local service.*

1. An order of tlie railroad commission should not he set aside in an action brought under sec. 1797 — 16, Stats. 1913, unless it is-shown by clear and satisfactory evidence to be unlawful or unreasonable.

2. A finding by the railroad commission to the effect that the local service rendered by a certain telephone company in the city of Eau Claire was incidental to its rural and toll-line service and did not constitute it a public utility engaged in furnishing local telephone service to subscribers in that city, within the meaning of sec. 1797m — 74, Stats., is *held*to be supported by the evidence.

Appeal from a judgment of the circuit court for Dane county: E. Ray Stevens, Circuit Judge.

*Reversed.*

The plaintiff is an existing corporation organized under the laws of this state for the purpose of conducting a telephone business and particularly to acquire from the Chippewa County Telephone Oompany, Limited (hereafter called the Chippewa Company), certain properties and privileges to enable it to conduct a local telephone exchange in the city of Eau Claire. The capital stock of the company is fixed in its articles of organization at $60,000', consisting of 400 shares of common stock of $100 each share, and 2,000 shares of preferred stock of $10 each share. The defendant is the duly constituted *Railroad Commission*of the state of Wisconsin.

On May 21, 1913, the plaintiff by petition made application to the defendant for leave to issue and sell 300 shares of its common stock and 2,000 shares of its preferred stock, and stated to the *Railroad Commission*the purpose for which and *499the terms upon wbicb the stocks were proposed to be issued, and alleged other material necessary matters in conformity to the provisions of secs. 1751 — 1 to 1753 — 22, Stats. 1913. The plaintiff complied with the direction of *the Railroad Commission*requiring it to file with the *Commission*a schedule of the physical properties of the Chippewa Company located in Eau Claire which the plaintiff proposed to purchase with proceeds from sales of its stock if authorized to issue and sell the same. The plaintiff’s petition also alleges that the Chippewa Company, under its corporate powers and authority, was then engaged in and for many years prior thereto had been engaged in conducting a local telephone exchange in the city of Eau Claire in connection with its rural and long-distance telephone business in Chippewa and Eau Claire counties and other parts of the state. Hearing on the petition was had before the *State Railroad Commission*in the' month of June, 1913. On July 30, 1913, the *Railroad Commission*made and caused to be served on the plaintiff an order whereby the *Commission*denied the prayer of the plaintiff’s petition for leave to issue and sell its stock as therein demanded for the purpose of engaging in a local telephone business in the city of Eau Claire, upon the ground that the Chippewa Company at the time the petition was presented to and filed with the *Railroad Commission*or at any time prior thereto was not engaged in furnishing local telephone service in the city of Eau Claire. The plaintiff, being dissatisfied with the decision of the *Railroad Commission,*instituted this action in the Dane county circuit court praying that the *Railroad Commission's*order of July 30, 1913, be vacated and that the prayer of its petition be granted. The *Railroad Commission*answered in the action, admitting plaintiff’s incorporation, that proceedings were had before it as heretofore stated, and that it rendered its decision in the proceedings as declared in the order of July 30, 1913, upon the ground that on the date of the publication of eh. 546, *500Laws of 1911, to wit, July 6, 1911,. and from and after tbe passage, and publication of cb. 590, Laws of 1911, to wit, July .8, 1,911, and continually thereafter, the Wisconsin Telephone .Company was and is. operating a local 'telephone exchange in the city of Eau Claire undér an indeterminate permit pursuant to secs. 1797ro — 1 to 1197m — 105, and also upon the ground that neither the pláintiff nor the Chippewa Company was on July 6 or on July '8, 1911, or any time theretofore, furnishing local telephone service in the city of Eau Claire within the meaning of .sec.. 1797m — 74. The; defendant has issued no declaration to=the effect that public necessity and convenience require another local telephone utility in the city of Eau Claire. After trial of the action, in circuit court the court vacated the order of the *Commission*dated July 30, 1913, which denied authority to issue-the stock as the plaintiff petitioned the *Railroad Commission.*■

This, is an appeal from the judgment of the circuit court vacating the order of the *Railroad Commission.*

Eor the appellant there was a brief by the *Attorney General*and *Walter Drew,*deputy attorney general, and oral argument by *Mr. Drew.*

For the respondent there was a brief by *Sturdevant &*Farr, and oral argument by *L.' M. Sturdevant.*

A brief was also filed, by Miller, *Mach &*Fairchild, attorneys for the Wisconsin Teléphone Company, as *amici curiae,*and the cause was argued orally by *E. S. Mach.*

The following opinion was filed April 9, 1914:

SusbboKER, J.

The *State Railroad Commission*found as a fact that the plaintiff, as conceded, had never engaged in furnishing local , telephone service in the city of Eau Claire. It also found that the plaintiff proposed to acquire the privileges and physical properties of. the Chippevfa Company in the city of Eau Claire and succeed to its rights and privileges to conduct a telephone business, in, that city, and that. *501tbe Chippewa Company has at no time conducted, a .public, utility in the city of Eau Claire, constituting a telephone exchange for furnishing local telephone .service to .the people of' the city within the meaning of the statutes enacted in 1911 and 1913 which govern and control.the rights of the parties on the question presented in this litigation. The circuit court after trial of. the -issues .found as fact .“'that the Chippewa Company has: maintained a. telephone exchange which furnished service-to subscribers in the city of Eau Claire ever since theinonth of December, 1910,” and as a matter of law held that the order of July 30, 1913, of the defendant *Commission*is unlawful, and entered judgment vacating and setting it aside.

As urged by counsel for the respondent, there are but two questions presented on this record for determination: Eirst. Does the evidence show that prior to July 6, 1911, when ch. 546, Laws of 1911, took effect, the Chippewa Company was conducting a local telephone exchange for furnishing local telephone service to the: people of-the city óf'Eau. Claire ? Second. If such- a local telephone ' exchange was being operated, is the plaintiff entitled to succeed to the rights, privileges, and the property of the. Chippewa Company in that city? In determining the correctness of the trial court’s finding of fact upon the evidence adduced, the-nature of the proceeding and statutes governing it must be considered. In an action to set aside the order of the *Railroad Commission*“the burden of proof shall be upon the plaintiff to show by clear and satisfactory evidence that the-order of the *Commission*complained of is unlawful or unreasonable.-. ...” Sec. 1797 — 16, Stats. 1913. An examination and study of the evidence in the case convinces us that the circuit court erred in holding that the plaintiff has shown “by clear and satisfactory evidence that the order of the-*Commission : :*is unlawful.” • The inquiry before the circuit court and -the principles that must guide it in a review *502of an order made by tbe *Commission*were declared in the ease of *Minneapolis, St. P. & S. S. M. R. Co. v. Railroad*Commission, 136 Wis. 146, 165, 116 N. W. 905, and is applicable here. It is there said: “In reviewing the order of the *Railroad Commission*the inquiry is not whether the rate, regulation, or service fixed by the *Commission*is just .and reasonable, but whether the *order*of the *Commission*is unreasonable or unlawful.” Does the record show by clear .and satisfactory evidence that the order of the *Commission*is unlawful, as held by the circuit court? The determination of the *Commission*upon the evidence before it is that •the service furnished by the Chippewa Company in Eau Claire did not constitute it a public utility engaged in furnishing local telephone service to the people of the city of Eau Claire within the meaning of sec. 1797m — 74 as it stood in 1911 (amended by ch. 610, Laws of 1913). The law of 1911 provided, “no telephone exchange for furnishing local service to subscribers within any village or city shall be installed in such village or city by any public utility other than those already furnishing such telephone service therein.” The amendment of 1913 states the exception in these words: “except that any public utility already engaged in furnishing local service to subscribers within any city or village may extend its exchange within such city or village without the-authority of the *Commission*

It appears under the evidence in the case that the Chippewa Company is conducting a telephone business in Chippewa, Rusk, and Eau Claire counties, and extended its lines from Chippewa to Eau Claire in 1904 and commenced to ■do business in Eau Claire in the spring of 1905. It started with fifteen subscribers in the city, which increased in the course of time to twenty-eight. There were also several pay stations maintained in the city. The common council of Eau Claire, upon petition, authorized the Chippewa Company to do business in the city by resolution to the effect that *503tbe company “be permitted to erect poles and wires for use-as a part of its system in and upon tbe following streets and alleys in tbe city of Ean Claire and not otherwise” (describing roads, streets, and alleys). It also ..provided that if the company at any time assigned or sold its interests to tbe Wisconsin Telephone Company or Combined with it, “then tbe rights granted” were to “become null and void.” Tbe Chippewa Company was engaged in Turnishing rural service. It appears that prior to 1910, if any-subscriber in Eau Claire desired a connection with another in tbe city, be would call central at Chippewa and ask foneommunication through the-Chippewa central. This method continued to the time when, in 1910, a new cable was put up) and. a common battery switchboard was installed and an operator employed to attend to the business throughout all hours of the day. Connections were made with the telephones of the subscribers at Eau Claire, the trunk lines from - Chippewa Ealls, and two-circuits of the Tri-State Telephone' Company doing business in parts of Wisconsin, Minnesota; and the Dakotas. The connection at this station connected toll with toll lines, toll with local lines, and the local with local lines in Eau Claire. The subscribers of the Chippewa Company paid uniform monthly rental for services over the entire system. The Eau Claire subscribers were business houses. It appears from the testimony that these connections were made to obtain communication with the rural subscribers for business purposes, and that communication with each other in Eau Claire was only occasional and when their local connection of the-local ’ exchange of the Wisconsin Telephone Company, of which they were patrons, was engaged. The Wisconsin Telephone Company has a local exchange in the city with approximately 2,000 subscribers. It also appears that the switchboard of the Chippewa Company installed in Eau Claire in 1910 had facilities for connecting the local subscribers in Eau Claire by means of two cords which provided *504for two local communications at tbe same time. Tbe Chippewa Company, it appears, solicited subscribers in Eau Claire for out-of-town business, and- tbe ’ subscribers testify tbey made their subscription upon this -understanding. Tbe Chippewa Company’s reports and rate schedules filed with tbe *Railroad Commission*did not list Eau C'laire as an exchange until 1912. It is evident that tbe local service actually rendered at Eau Claire was in tbe nature of an occasional accommodation to tbe subscribers in tbe city and was incidental to the rural and tol-l-line service of tbe company. Tbe evidence given by subscribers tends strongly to support this conclusion. We are persuaded by tbe evidence in tbe record that tbe Chippewa Company at no time operated a local telephone exchange in the city of Eau Claire for furnishing local telephone service to subscribers in tbe city within tbe meaning of tbe provisions of sec. 1797m — 74, and that tbe finding of tbe *Railroad Commission*to this effect is amply sustained by tbe evidence. Tbe plaintiff failed to show “by clear and satisfactory evidence that tbe order of tbe *Commission*is unlawful,” and tbe circuit court erred in awarding judgment vacating tbe order. This result renders discussion of other questions unnecessary.

*By the Court.*— Tbe judgment appealed from is reversed, and the cause remanded to tbe circuit court with directions to enter judgment affirming tbe *Commission’s*order.

A motion for a rehearing was denied, with $25 costs, on June 17, 1914.