Source: https://supreme.justia.com/cases/federal/us/238/482/
Timestamp: 2019-04-23 05:57:59+00:00

Document:
While it is not open in this Court to revise the construction placed on a state statute by the state court, it is open to determine whether the application of the statute as so construed is so arbitrary as to so contravene the fundamental principles of justice as to amount to deprivation of property without due process of law.
The rates of public service corporations, such as telephone companies, are fixed in expectation that they will be paid, and reasonable regulations tending towards prompt payment are necessary as the ability of such corporation to serve the public depends upon the prompt collection of their rates.
regulations requiring payment in advance are not unreasonable, and a telephone company is not subject to penalties for refusing to render service to a subscriber who is delinquent on past rates and refuse to pay in advance in accordance with an established rule uniformly enforced, or because it charges the full price to a subscriber who does not pay in advance, while allowing a stated discount to those who do pay in advance.
To enforce against a telephone company a penalty for refusing to furnish service under such condition amounts to depriving it of its property without due process of law in violation of the Fourteenth Amendment.
The facts, which involve the constitutionality under the Fourteenth Amendment of a statute of Arkansas relating to telephone companies, are stated in the opinion.
"Every telephone company doing business in this state and engaged in a general telephone business shall supply all applicants for telephone connection and facilities without discrimination or partiality; provided, such applicants comply or offer to comply with the reasonable regulations of the company, and no such company shall impose any condition or restriction upon any such applicant that are not imposed impartially upon all persons or companies in like situations; nor shall such company discriminate against any individual or company engaged in lawful business by requiring, as condition for furnishing such facilities, that they shall not be used in the business of the applicant, or otherwise, under penalty of $100 for each day such company continues such discrimination and refuses such facilities after compliance or offer to comply with the reasonable regulations and time to furnish the same has elapsed, to be recovered by the applicant whose application is so neglected or refused. "
For several years, the company had been conducting a general telephone exchange at Little Rock, Arkansas, with over 5,000 patrons, among them being the plaintiff. One of its established regulations was to the effect that it would not furnish telephone service to any patron in arrears for past service, and would not accord to a patron so in arrears the discount usually allowed for paying in advance of a designated time.
and with timely notices theretofore given to the plaintiff, and that the statute, if held to authorize or require the infliction of the designated penalties by reason of what was done in impartially enforcing the regulation, would be purely arbitrary, and would result in depriving the company of its property without due process of law, contrary to the Fourteenth Amendment to the Constitution of the United States.
"Under the law, the defendant should not refuse to serve the plaintiff because she had not paid a debt contracted for services rendered in the past, and if you find that the defendant did refuse to render her services for that reason, your verdict should be for the plaintiff."
"If you find from the evidence that the defendant enforced against plaintiff the same rule or regulation that it enforced against all others in like situation with the plaintiff, your verdict will be for the defendant,"
"A telephone company, being a public servant, cannot refuse to serve any one of the public in that capacity in which it has undertaken to serve the public when such one offers to pay its rates and comply with its reasonable rules and regulations. It cannot refuse to serve him until he pays a debt contracted for services rendered in the past. For the present services, it has a right to demand no more than the rate of charge fixed for such services. It transcended its duty to the public when it demanded more."
Of course, what was then said led to the rulings just stated upon the second trial. In affirming the second judgment, the supreme court adhered to its prior decision, pronounced the regulation unreasonable, and held that its enforcement against the plaintiff was a discrimination against her within the meaning of the statute, and subjected the company to the penalties therein prescribed.
aggregating $6,300. As before indicated, the first question was answered in the negative, and the second in the affirmative.
company's ability properly to serve the public largely depends upon their prompt payment. They usually are only a few dollars per month, and the expense incident to collecting them by legal process would be almost prohibitive. It uniformly is held that a regulation requiring payment in advance or a fair deposit to secure payment it reasonable, and this is recognized in the brief for the plaintiff, where it is said that, to protect themselves against loss, telephone companies "can demand payment in advance." If they may do this, it is difficult to perceive why the more lenient regulation in question was not reasonable.
judicially testing the regulation's reasonableness in advance of acting under it, and, as we have seen, it had the support of repeated adjudications in other jurisdictions. In these circumstances, to inflict upon the company penalties aggregating $6,300 was so plainly arbitrary and oppressive as to be nothing short of a taking of its property without due process of law. Missouri Pacific Ry. v. Tucker, 230 U. S. 340, 230 U. S. 351, and cases cited; Wadley Southern Ry. v. Georgia, 235 U. S. 651, 235 U. S. 661-666; Vaught v. East Tennessee Telephone Co., 123 Tenn. 318, 328.
It follows that the rulings of the trial court, as sustained by the supreme court of the state, tended to deprive the defendant of a right secured and protected by the Fourteenth Amendment.
* See People v. Manhattan Gas Co., 45 Barb. 136; Tacoma Hotel Co. v. Tacoma Light & Water Co., 3 Wash. 316; Wood v. Auburn, 87 Me. 287; Rushville Telephone Co. v. Irvin, 27 Ind.App. 62; Irvin v. Rushville Telephone Co., 161 Ind. 524; Jones v. Nashville, 109 Tenn. 550; Cox v. Cynthiana, 123 Ky. 363; Mansfield v. Humphreys Mfg. Co., 82 Ohio St. 216; Woodley v. Carolina Telephone Co., 163 N.C. 284; Vanderberg v. Kansas City Gas Co., 126 Mo.App. 600, 608; Shiras v. Ewing, 48 Kan. 170; Vaught v. East Tennessee Telephone Co., 123 Tenn. 318.

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