Evening star. [volume] (Washington, D.C.) 1854-1972, 1900-02-05
Justice Barnard Passes Upon Oontro-
versy Over Telephone Rates.
FIXING OF RATES UNCONSTITUTIONAL
Courts Review of the Act of June
30, 1898.
EFFECT OF THE DECISION

today delivered his opinion in the proceed
ings instituted by James F. Manning and
others against the Chesapeake and Poto-
mac Telephone Company-the telephone
injunction cases. Justice Barnard, on the
whole case, decides that the injunction PEN
dente lite should be dissolved and the bill
of complaint dismissed. The matter is one
OF general interest, many prominent bust
ness men and firms and leading citizens be-
ing numbered among the compliments in
the several cases.
1t will be recalled that in June, 1885, Con-
gress passed bill fixing the rate for tee
phone service in the District at figure
not to exceed $50 year. Many subscribers
refused to pay more than that amount and
the Chesapeake aad Potomac Telephone
Company gave notice that it would remove
the telephone instruments and appliances
from the establishments of such subscrib-
ers The latter thereupon took steps to
prevent such removal by Injunction pro-
ceedings. The constitutionality of the act
of Congress was attacked by the telephone
company, 1t maintaining that the effect of
the enactment was to require the furnish
ing OF service without just compensation
there1or. A mass of testimony was taken
In various parts of the United States and
canada. The case was argued recently
before Justice Barnard, the hearing occupy
ing more than two weeks.
Grounds for Diminishing Bill.
The reading of he opinion consumed an
hour Want of jurisdiction and absence of
equities. so Justice Barnard holds. are
grounds for refusing the injunction and dis
missing the bill
But, as the case is a novel one, and
raises important constitutional questions"
says the court, some inquiries as to these
should be made before disposing of the
case
Justice Barnard further holds that latter
dsallowing all expenses in the past ex-
perience about which there is any room for
fair difference of opinion. the defendant
cannot continue to render the same efficient
service to subscribers located throughout
this District that it has heretofore without
mourning greater expense per subscriber
than the maximum rates fixed by this act"
As to the fixing of rate of rental for
telephone service by Congress, Justice Barn.
ard holds: without stating further rea-
sons or making deductions from the vo-
luminous testimony on other points, 1 am
clearly of the opinion that this provision of
the act is unconstitutional, by reason of the
fact that the rates fixed thereby are
reasonably low for the service and supplies
to which it must be considered they refer"
Justice Barnard, in his opinion, recites the
provisions of the act of June 30, 1898, relat-
ing to telephone service, and calls atten-
ton to the fact that the Chesapeake and
Potomac Telephone Company was the only
telephone company doing business in this
act. The compliments had a contract with
the defendant at the time by which it
agreed that the defendant should furnish
them with a telephone for which the sum
of S14o per year was to be paid. Two days
after the passage of the act the complain
ants notified the defendant that they de-
sill ed to terminate their contract. The de-
PENDANT acknowledged receiving the notice,
and in reply stated that it would remove
the telephone. The conplainants again
wrote the defendant stating that they
would retain the telephone at the rate
fixed by the act This tender being de-
clined, the compliments filed their bill to
enjoin the defendant from removing the
telephone.
Questions Involved.
Some of the questions suggested to the
court were: What are the equities, If any,
as established in the case, which warrant
the court in granting an injunction as
prayed, under the general principles and
equity jurisprudence? Is the act unconsti-
tutional by reason of its provisions being
repugnant to those sections which provide
that no person shall be deprived of life,
liberty or property without due process of
law and private property shall not be taken
for public use without just compensation
and state shall pass a law impairing
the obligation of contracts?
Justice Barnard discusses the foregoing
questions at some length. and then says:
1.-The court is asked to make In effect a
decree TO operate as a contract Dlndlng on
the defendant perpetually, but with no OBJ
legation on the part of the complainants to
continue for any definite length of time or
do any other thing except to pay $50 year.
To do this would require the court to con-
strue this law if it granted a perpetual
monopoly to the defendant and Affirmative
ly and expressly required it to do all the
telephone business in this District at the
rates stated, and furnish the best grade of
service and equipment then being furnished
by the defendant and to continue to furnish
the same indefinitely, so long as parties are
willing to pay therefor at said rates.
Grant that Congress had the power to
pass this law. and that the defendant is a
public service corporation and a common
carrier of telephone messages and bound
to furnish the high-grade service and
equipment as claimed, is it the province Of
court Of equity to compel 1t to continue
to do business with or without a profit
against its will? If it should refuse to per-
form duty for the public or for a citizen
which it was required under its charter or
from the nature of it's business to perform,
would not the proper remedy by man
damus?'
The court intimates that an action for
damages would be a complete and adequate
remedy on behalf of a paSty who might be
wrongfully refused the use of telephone.
Constitutional Questions.
Taking up the constitutional questions the
court says that while Congress is given
power ito exercise exclusive legislation in
all cases whatsoever over this District,
that should not be understood TO mean that
1t can exercise powers which are prohib-
tied to the states in respect to personal
rights guaranteed by the Constitution
Under the courts construction of the act
fixing the rate for telephone service the
law would not prima facie be repugnant to
the provisions Of the Constitution which
prohibit the impairment of contracts The
compliments must have understood the
statutes as SO construed, so it is set forth
In the opinion, for the reason that they
terminated their contracts then in force be-
fore asking for the benefits Of the lower
rates named therein and before filing their
bill for injunction.
Justice Barnard next took I'D the point
to which most Of the proof and argument
had been directed, namely, the claim of the
unconstitutionality of the act on the ground
that the rates fixed are too low to allow
any returns or reward to the defendant for
the moneys invested in the business and
necessary to be used to supply the service.
In this connection Justice Barnard recalls
that the first effort to establish a telephone
exchange in this city was made in 1873
when George c. Maynard began by running
a line from the Capitol to his office, and
from his office to the Office of The Evening
Star Newspaper Company.