Case Name: The Ashley Tri-County Mutual Telephone Co. v. The New Ashley Telephone Co.; The Farmers Mutual Telephone Co. v. The Morrow County Telephone Co.
Court: Supreme Court of Ohio
Jurisdiction: Ohio
Decision Date: 1915-07-02
Citations: 92 Ohio St. 336
Docket Number: Nos. 14652 and 14766
Parties: The Ashley Tri-County Mutual Telephone Co. v. The New Ashley Telephone Co. The Farmers Mutual Telephone Co. v. The Morrow County Telephone Co.
Judges: Nichols, C. J., Johnson, Newman and Matthias, JJ., concur.
Reporter: Ohio State Reports, New Service
Volume: 92
Pages: 336–344

Head Matter:
The Ashley Tri-County Mutual Telephone Co. v. The New Ashley Telephone Co. The Farmers Mutual Telephone Co. v. The Morrow County Telephone Co.
Public utilities — Certificate of necessity required — Section 614-52, General Code, applies — To competing telephone companies— Organised not for profit — Mutual companies.
Section 614-52, General Code, applies to the telephone companies defined in previous sections of the code, whether such companies are organized for profit or not, where the entrance of the second company substantially affects the public convenience. In such case a certificate must be secured to the effect that the exercise of the right or franchise is proper and necessary for the public convenience.
(Nos. 14652 and 14766
Decided July 2, 1915.)
Error to the Court of Appeals of Delaware county.
Error to the Court' of Appeals of Morrow county.
The defendant in error, The New Ashley Telephone Company, was a corporation with a plant installed in the village of Ashley, Delaware county, Ohio, furnishing telephonic service under a franchise granted by the village council, and owning the equipments and lines established in that village.
The plaintiff in error, The Ashley Tri-County Mutual Telephone Company, was also á corporation, incorporated not for profit, and engaged in like telephonic business, though mutual in character. Having obtained a franchise authorizing its installation and operation in the village, it was about to install its plant in competition with that of the defendant in error. The plan adopted by the mutual company was to furnish telephonic service to those stockholders who wished to become members and who purchased their own ’phones and used them for communication among themselves. No long-distance communication or service was contemplated, nor were tolls or rentals to be collected as such. While the erection and maintenance of the plant by the mutual company were contemplated, the record does not clearly disclose how the funds were to become available for such construction and maintenance, It is admitted that a certificate of public necessity has not been secured from the public service commission of Ohio to the effect that the franchise to be exercised was proper or necessary for the public convenience. These facts appear affirmatively, either as admitted by the answer or by answers to interrogatories attached thereto.
The action originated in the court of common pleas, where an injunction was sought restraining the mutual company from the construction and operation of its plant in the village of Ashley. The case was submitted on the pleadings and a permanent injunction was ordered. The court of appeals of Delaware county affirmed that judgment, and the mutual company now prosecutes error to this court.
The salient and controlling facts in the Morrow county case are similar to those in the Delaware county case. In the former, the established com pany was much larger than the Delaware company and it had installed and in use in Morrow county 2,348 telephones and 451 miles of pole lines, 570 of these telephones being connected with the Cardington exchange in said county. This company had made application to the Cardington council for a franchise for its poles, lines and plant in that vil-' lage. A restraining order having been granted in the trial court, the' mutual company applied to the court of appeals of Morrow county, where the case was heard upon the pleadings and evidence, and' the appellate court stated separately its conclusions of fact and law and enjoined the mutual company from constructing and operating its lines in Morrow county. Error is likewise prosecuted to this court from that judgment.
Messrs. Marriott, Freshwater & Wickham, for plaintiff in error, The Ashley Tri-County Mutual Telephone Co.
Messrs. Overturf, Hough & Jones, for defendant in error, The New Ashley Telephone Co.
Mr. B. A. Myers; Mr. O. J. Myers and Mr. J. D. Johnson, representing The Celina & Mercer County Telephone Co., for defendant In error.
Messrs. Badger & Ulrey; Messrs. Harlan & Wood and Mr. O. W. Kennedy, for plaintiff in error, The Farmers Mutual Telephone Co.
Messrs. Mitchell & Bruce and Mr. J. W. Barry, for defendant in error, The Morrow County Telephone Co.

Opinion:
Jones, J.
In both cases the plaintiffs in the trial courts were telephone companies that had been es tablished and were in operation, one in the village of Ashley, Delaware county, and the other seeking a franchise in the village of Cardington, and intending to operate in the outlying districts of Morrow county. The mutual company endeavored to invade this established territory, for the purpose of furnishing telephonic service, without securing a certificate of public necessity from the public service commission, relying upon the claim that none was required under Section 614-52, General Code, for the reason that the section applies only to such public utilities as operate their utilities for profit.
The chief and determinative question in this case is: Does a telephone company, operating under the mutual membership plan employed by it, under the stated facts, require a certificate of necessity for the public convenience, before it may exercise the right or franchise of owning and operating a plant for the furnishing of telephonic service in a municipality or locality where there is already in operation a telephone company furnishing adequate service ?
For the proper determination of this question it must be conceded that the invading competitive companies were corporations organized as mutual telephone companies not for profit. These latter companies seek to escape the requirement of the code section, supra, by reliance upon other sections of the code, notably Section 614-1 and subsections immediately following. These sections vest in the public service commission jurisdiction and supervisory powers over the public utilities therein defined. By Section 614-2q, General Code, this juris diction was in a general way limited to every utility, corporation, company, etc., except such utilities not operating for profit. They deal with regulation and supervision of public utilities, and do not cover the field of competition which is later specifically applied to telephone companies by Section 614-52, General Code. This section reads as follows:
"No telephone company shall exercise any permit, right, license or franchise that may have been heretofore granted but not actually exercised or that may hereafter be granted to own or operate a plant for the furnishing of any telephone service, thereunder in any municipality or locality, where there is in operation a telephone company furnishing adequate service, unless such telephone company first secures from the commission a certificate after public hearing of all parties interested that the exercising of such license, permit, right or franchise is proper and necessary for the public Convenience."
By other sections of the code (102 O. L., 549) the general assembly sought to regulate and supervise public utilities, using that term generically, and including within the definition of the term "public utilities" those telephone companies operating such utilities for profit. But by Section 614-52, General Code, the legislature specifically treated telephone companies as public utilities requiring special legislation. Telephone companies were thereby taken from the general scheme of public utility regulation and there was added and applied to this particular utility a statutory mandate not applicable to others. Having in view the public convenience primarily, and the adequacy of telephone service secondarily," it protected the public convenience, and, incidentally, the established plant, by a special provision that no telephone company should invade a municipality or locality furnishing adequate service, without a certificate from the commission. And this the statute provides irrespective of whether the company operates for profit or not. The legislature no doubt considered that public policy required special legislation in that particular field when it sought to supervise competition in the interest of public convenience. The language of the section is plain, and we are unable to apply to telephone companies the added words, "operating their utilities for profit." The unequivocal language of the section does not permit the implication claimed for it, and such a construction is forbidden ,by the maxim, expressum facit cessare taciturn. Any tendency to monopoly may easily be curbed by the state, which retains complete control of the situation. Its public service commission has full power to grant or withhold the certificate, as public necessity may require.
In both of the cases stated the mutual companies are of such character and scope as would stamp them, not only as telephone companies, but companies which might affect the public convenience alluded to in the act. Such being the case, the tribunal provided in the first instance for the determination 'of that fact was the public service commission of the state. We do not hold that private telephone lines,, or that even all mutual lines, shall in all cases require the certificate named. Public convenience is the polestar of the act, and an established and adequate service- in a municipality or locality is the chief factor in its determination, and where, as here, these factors may be disturbed by a new and competitive telephone company, substantially affecting established service, it is necessary that a certificate be obtained, to the effect that the right or franchise is necessary for the public convenience, before such second company can exercise its rights and franchises in such occupied locality.
In each case the judgment of the court of appeals is affirmed.
Judgment affirmed.
Nichols, C. J., Johnson, Newman and Matthias, JJ., concur.