Case Name: Merchants Police and Dist. Telegraph Co. v. Citizens Telephone Co.
Court: Kentucky Court of Appeals
Jurisdiction: Kentucky
Decision Date: 1906-05-24
Citations: 123 Ky. 90
Docket Number: 
Parties: Merchants Police and Dist. Telegraph Co. v. Citizens Telephone Co.
Judges: 
Reporter: Kentucky Reports
Volume: 123
Pages: 90–95

Head Matter:
Case 11. — ACTION BY THE CITIZENS TELEPHONE CO. AGAINST THE MERCHANTS POLICE AND DISTRICT TELEGRAPH CO. TO ENJOIN THE LATTER FROM OPERATING. —
May 24.
Merchants Police and Dist. Telegraph Co. v. Citizens Telephone Co.
Appeal from Kenton Circuit Court.
W. McD. Shaw, Circuit Judge.
Judgment for plaintiff. Defendant appeals.
Af-' firmed.
1. Municipal Corporations — Grant of Franchise — Validity—Where a franchise was granted to a telegraph company without limit as to term, for the purpose of avoiding Const. Sec. 164, requiring municipalities before granting a franchise for a term of years to first advertise for public bids, such franchise was void.
2. Same — Injunction—Right to Sue — Where plaintiff, a telephone company, having a legally granted franchise to cpsrate in a city, was a taxpayer, it was entitled to sue to restrain another company, operating without a valid franchise, from continuing to do business, though plaintiff’s franchise was not exclusive.
3. Constitutional Law — Self-Executing Provisions — Franchises— Const., See. 164, declaring that, before granting a franchise to use the streets of a city “for a term of years,” the municipality shall first, after due advertisement, receive bids therefor publicly, etc., was self-executing, and did not require an ordinance of the general council of the city to make the same obligatory.
W. A. BYRNE and R. G. WILLIAMS for appellant:
POINTS AND AUTHORITIES.
1. Appellee did not state a cause of action, and demurrer should have been sustained to the petition.
2. Appellant’s right to the use of the streets of the city, is a right not for a term of years, but determinable at the pleasure of the power granting it, the General Council of the city of Covington, therefore not in conflict with the Constitution or charter of the city.
3. Appellee has no right to injunction under the law or the testimony, for two reasons: First, because its right is not exclusive; second, because it neither alleges nor proves special injury.
AUTHORITIES CITED.
Civil Code, Sec. 119; Constitution, Sec. 164; Sec. 3068, Charter of Second Class Cities; High on Injunctions, Vol. 1 (2 Ed.), See. 902-3-5; Am. & Eng. Ency. of Law, 1 Ed., Vol. 17, page 518; Paducah Lumber Co. v. Paducah Supply Co., 12 S. W., 554; Dillon on Mun. Corp., 3 Ed., Vol. 2, Sec. 921.
MYERS & HOWARD, Attys. for appellee.
1. Appellants alleged franchise or permissive right to construct a telephone plant in Covington is void.
2. Appellee has the right to protect its franchise by injunction. (Monarch v. Ownesboro City R. R. Co., 27 Ky. L. R., 33°; Keith v. Johnson, 109 Ky., 426; Nieholasville Water Co. v. City of Nieholasville, 18 Ky. L. R., 592; Maraman v. Ohio Valley Telephone Co., 25 Ky. L. R., 784, 2 Moraruetz Private Corp. Sec.’621, 718; High on Injunctions, Vol. 2, See. 1547, 1553, 1556.)

Opinion:
Opinion by
Judge Nunn.
Affirming.
Appellee is the owner of a franchise to operate a telephone plant in the city of Covington. It is admitted to be a legal one, obtained in the way directed by section 164 of the Constitution. The record shows that the appellant has no right whatever to construct or operate a telephone plant in the streets of the city of Covington, except that it claims a permissive right granted by the city council for an indefinite length of time. It does not claim its right to operate a telephone in that city by reason of the purchase of a franchise, as provided by the section of the Constitution referred to.
Appellant's contention is predicated upon the assumption that, even admitting it has no right in the public streets of Covington, appellee cannot enjoin it from operating a telephone in that city, because ap pellee's right to the use of the streets of Covington is' not exclusive. Appellee's contention is that, while, its franchise is not exclusive in terms, it is exclusive so far as appellant, or any other mere trespasser, is concerned, and is exclusive in fact until the city legally grants another franchise to be operated in competition with it. The appellant also claims that its right to the use of the streets of the city as granted by the council is not for a term of years, but determinable at the pleasure of the general council. Therefore its grant is not in conflict with the Constitution; second, that appellee has no right to maintain this action, because its right is not exclusive, and does not show any special injury to it by the acts of appellant. As stated, it is conceded that the appellee did, aud the appellant did not, obtain a franchise to operate a telephone plant in Covington in accordance with the provisions of section 164 of the Constitution; that is, the one did, and the other did not, purchase the franchise as provided by that section.
The only questions, therefore, to be determined are: First. Did the appellant ebtain a legal franchise to operate a telephone line in the city by the ordinance making an indefinite grant to it for that purpose? Second. If not, has the appellee the right to maintain this action to prevent it from exercising this illegal right?
Section 164 of the Constitution says: "Before granting such franchise or privilege for a term of years, such municipality shall first, after due advertisement, receive bids therefor publicly," etc. This section became operative upon the adoption of the Constitution. It did not require an ordinance of the general council to make it binding and obligatory. See case of Nicholasville Water Co. v. Board of Councilman, 36 S. W. 549, 38 S. W. 430, 18 Ky. Law Rep. 592. Therefore any effort or act of the council in granting a franchise or privilege, contrary to this section of the Constitution, is absolutely void, and confers no right whatever upon the party securing the. grant. One of the objects in adopting this provision was to prevent the citizens of towns and cities from being deprived of valuable rights by the acts of councils in giving-away to persons and corporations franchises and privileges worth in many cases thousands of dollars. The framers of the Constitution realized that cases might arise where persons dr corporations might want a privilege or franchise for a short time; i. e., for temporary purposes, and which would result to the mutual benefit of all concerned, and it was the purpose to relieve the parties in such cases from the time, trouble, and expense which would be necessarily lost and incurred in making a sale of the franchise or privilege as provided by that section; hence the insertion in the section of the words "for a term of years. ' ' In the event the council of a city or town should grant a privilege or franchise for such temporary purpose, the limit of time should be expressed in the ordinance granting it.
We will now consider the grant under which apellant is operating or attempting to operate. It is conceded that the ordinance making the grant was enacted in 1895, more than 10 years since. Its right to operate under the franchise or privilege was without limit, except as the city council might see proper to revoke it. This is a clear attempt to avoid the provisions of the Constitution. The appellant has already operated under this privilege or franchise for half the time for which it could have purchased the right, and without buying and paying for it. In our opinion appellant is operating its telephone without authority of law, and the attempted grant to it by the council was void and conferred no right whatever upon it.
The second question is more difficult. The appellant concedes, however, that if appellee owns or had purchased the exclusive right to operate a telephone in the city,and its (appellant's) grant is void,then appellee could maintain this action to prevent its interference with appellee's exclusive right; but, as appellee does not own the exclusive privilege, it has no right to prosecute this action. There are no decisions of this court directly in point. The nearest are Rough River T. Co. v. Cumberland T. & T. Co., 119 Ky. 470; 84 S. W. 517, 27 Ky. Law Rep. 33; East Tennessee T. Co. v. Anderson Co. Telephone Co., 57 S. W. 457, 22 Ky. Law Rep. 418; Id. 115 Ky. 488; 74 S. W. 218, 24 Ky. Law Rep. 2358, and Maraman v. Ohio Valley Telephone Co., 76 S. W. 398, 25 Ky. Law Rep. 784. In all these cases, the parties plaintiff instituted the action to prevent the defendants (rival telephone companies) from erecting poles and operating telephones, to their injury and damage and without right. The cases were decided against the plaintiffs, upon the sole ground that they did not show the legal right in themselves to operate telephones in their respective cities; that they had not complied with the law in obtaining their franchises, and consequently had no right to maintain the action.
But the question before us was not decided, and we are of the opinion that it is not necessary to decide the matter in this case, as we have arrived at the conclusion that appellee can maintain this action upon another ground. It is conceded that appellee is a citizen and taxpayer of that city, and in our opinion, as such, it should have the right by action to prevent the further continuance of the wrong perpetrated by the council of that city, in granting illegally the franchise to appellant, by stopping it from the further exercise of its pretended rights thereunder. The appellee is interested with all citizens in saving the city from loss of its revenues by the illegal gift of a valuable franchise, which, if sold legally, would increase the revenues, and thereby lessen the taxes of appellee and all persons in the city.
For these reasons the judgment is affirmed.