The Mitchell capital. (Mitchell, Dakota [S.D.]) 1879-1918, 1915-05-13

TO pay further amounts and a second
suit was instituted upon which judg-
ment was obtained in the-circuit court
April IA, 1914 for ~$16O3.31.
"A third suit was afterwards in
stituted involving the amount of
$332S.24. The second suit is now up
on appeal by the telephone company
to the supreme court upon technical
grounds. If the city prevails in sus-
tanning these judgments, and there
seems to be no reason why it should
not, the amount received by the city
from the company will be approx
mately S10,156.
Subsequent to the decision of the
supreme court determining the sta
tus of the telephone company under
this franchise, the telephone company
made application to the city council
for permission to construct a new
plant upon increased rates. Negotia-
lions of various kinds passed between
the telephone company and the City
of Mitchell. Or date April IS, 1912
the telephone company submitted in
writing to the city of Mitchell a
proposition upon which it proposed
to install an automatic telephone sys-
TEN under certain conditions and
rates. This matter was discussed by
the city of Mitchell and expressly re-
jected. Thereafter the city of Nit
chell passed an ordinance granting
the telephone company q franchise
upon certain conditions and upon
certain conditions and upon specific
rates for service. The telephone COM
pany refused to accept this franchise.
Before the telephone company in
stalled it's present automatic tele-
phone system, notice was given by
the city that Il franchise would not
be granted under the terms proposed
and hat after the expiration of Or
dinance No. 135 the rights of the tel
ephone company to operate a local
exchange would cease. Notwithstanding
this notice and refusal from time to
time of the city Of Mitchell to agree
to the terms proposed the telephone
company completed a new plant In
stalling it's present automatic system
during the last year of the life of the
Elce Franchise. The contention of
the telephone company that the city
of Mitchell is attempting to conflscate
it's property is without foundation,
for the reason that the supreme court
of South Dakota decided that the Da-
kota Central Telephone Company was
operating it's plant under franchise
which expired May 18th, 1913.
The City's Contentious.
"In this controversy the city OF
Mitchell has relied at all times upon
these principles which have been fix
ed by the constitution of the state
and the decisions of the supreme
court. ~.
81. The telephone company did
not have authority to operate its
plant upon the streets of Mitchell
without the consent of the city.
"2. The city has the authority to
determine in a franchise the terms
it will permit the telephone company
to operate it's plant upon the streets
of Mitchell.
"3. The city of Mitchell has the
authority to determine and fix the
rates which may be charged the cit
izens of Mitchell by the telephone
company as a condition under which
the telephone company may be per-
mitted to use the streets OF Mitchell
for the operation OF its plant.
When it became apparent that an
agreement would not be made be-
tween the City of Mitchell and the
Telephone company relating to a
new plant, and that it would not be
desirable to permit another company
to construct a plant in the city, ana
start a competition between IL Two
organizations, resulting i'll expense
and inconvenience to citizens, the
! CITY decided that it would be wise TO
construct and operate a munlc1pal
nlant. An election was held to au-
thorize the issuing OF $60.o0o, IN
bonds, for the purpose of constructing
a municipal plant. This election re-
shifted in the support of the bonds by
a large majority. The city advertls-
ed for bids for the purchase of-tne
bonds.
City Was EnjOined.
cat the time Of awarding the con-
tract for the bonds a suit against the
city was instituted in the name OF
T. j. spangler enjoining the CITY
from proceeding further in issuing
bonds and the construction OF a NUM-
cinal plant. This action was decided
lin favor Of the city by Judge K. Is.
TRIM of Yankton, and the supreme
court has decided in favor of the city
upon all the points in controversy.
The effect of the decision is hat the
city will have authority to CONSTRUCT
and operate a. municipal plant.
"The CITY of Mitchell has contend
ed that the rates proposed by the tel
ephone company are at least 90 Genus
nar month too high. Ii this contention
Of the city is we'll founded it means
that during the twenty year life OF
the franchise. the reduction Of a pas nno
is Of 1900 phones would be sl44.ooo
hesides interest. Allowing a aso
ahle interest this sum would pay the
entire outstanding Indebtedness o.
the city. So far as can be learned
from the statements of the telephone
company through tbs representatives
the strenuous efforts being MADE Dy
the Company to override the eonsti.
tutional and legal rights of the CITY
is for the reason that new telephone
systems belonging to this company
..,c nore tryhrtp in various parts