Case Name: City of Jamestown, Respondent, v. Home Telephone Company, Appellant
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1908-03-04
Citations: 125 A.D. 1
Docket Number: 
Parties: City of Jamestown, Respondent, v. Home Telephone Company, Appellant.
Judges: 
Reporter: Appellate Division Reports
Volume: 125
Pages: 1–6

Head Matter:
City of Jamestown, Respondent, v. Home Telephone Company, Appellant.
Fourth Department,
March 4, 1908.
Municipal corporations — statutory construction — repeal of special act — Transportation Corporations Law — local power to regulate telephone company — demurrer. -
Special and local laws are not deemed repealed by general legislation! unless the intent to do so is clear. Ordinarily an express repeal hy some intelligible reference to the special act is necessary.
The Transportation Corporations Law does not either expressly or by implication repeal the provision in the charter of the city of Jamestown (Laws of 1886, chap. 84, tit. 8, § 9, subd. 46) by which the common council is empowered “to prevent ” the setting out or stringing of telephone poles and wires.
Although a municipal corporation which possesses only power to “ regulate” the erection of telephone poles and wires cannot exact compensation as a consideration for a franchise, yet a corporation empowered to “prevent” the erection or operation of such system has authority to hind such company to pay a percentage of its gross earnings to the city asa condition to the granting of a franchise, and such condition, having been accepted, is binding upon the company.
Hence, the complaint in an action hy the city of Jamestown to recover percentages so agreed to he paid cannot he said to fail to state a cause of action upon the theory that the city had no right to make the contract.
Appeal by the defendant, the Home Telephone Company, from an interlocutory judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Chautauqua on the 6th day of April, 1907, upon the decision of the court, rendered after a trial at the Chautauqua Special Term, overruling the defendant’s demurrer to the complaint, interposed on the ground that the complaint fails to state facts sufficient to constitute a cause of action.
The action was commenced on the 12th day of October, 1906, to recover certain percentages of the gross earnings of the defendant, which has installed and is engaged in operating a telephone system or plant in the plaintiff city, the plaintiff alleging that such percentages are due and owing to it from the defendant under and hy virtue of an agreement or condition contained in the franchise granted to the defendant and which was duly accepted by it, and which agreement or condition it expressly agreed to keep and perform.
The demurrer interposed raises the issue that the agreement or condition contained in the franchise was imposed by the plaintiff without authority of law; that there was no consideration for the same and, therefore, that it was void. The defendant insists that it is entitled to exercise all the rights and privileges granted or conferred by such franchise, but as matter of law it is absolved from all' obligation to keep and perform the agreement made by it to pay to the plaintiff any percentage of its gross earnings.
Arthur C. Wade, for the appellant.
Eleazer Green, for the respondent.

Opinion:
McLennan, P. J.:
The plaintiff is a municipal corporation, created by chapter 84 of the Laws of 1886.
Subdivision 46 of section 9 of title 3 of said act, which constitutes the plaintiff's charter, provides that the common council of the plaintiff shall have power " To prevent or regulate the setting and stringing of telegraph and telephone-poles and wires in said city."
The defendant is a domestic corporation, organized and existing under and by virtue of chapter 566 of the Laws of 1890, known as the " Transportation Corporations'Law."
On the 17th day of June, 1901, the plaintiff, by resolution of its •common council, granted a franchise to the defendant which authorized it to install, construct, maintain and operate a telephone system and plant in said city upon certain conditions and subject to certain restrictions and regulations therein specified.
The 17th clause of such grant or franchise, and which is the sole subject of this controversy, is as follows: " It is also made a condition for the granting of this franchise, and the company by its •acceptance hereby agrees to pay to the City of Jamestown one per centum per annum of its gross earnings at and after the time that the said company shall have in operation one thousand (1,000) revenue earning telephones; and whenever said company shall have two thousand (2,000) revenue earning telephones in actual operation, it shall pay to the Oity of Jamestown two per centum per annum of its gross receipts, and said'company waives the right to have said percentages deducted from any taxes, according to the provisions of the Tax Law, and agrees to pay such percentages in addition to all taxes."
Said defendant company, by its president and secretary, so authorized by vote of its directors, accepted said franchise. The franchise so accepted contained the provision : " Whereas, the terms, regulations and conditions contained in said ordinance or franchise ar'é in the form requested by said company (the defendant) and approved by said city, now, therefore,
" In consideration thereof and of other good and valuable considerations passing to said company, including One Bollar (§1.00) paid to said company by said city, the receipt whereof is hereby acknowledged, the said 'The Home Telephone Company of Jamestown, M. Y.,' party of the first part hereto, accepts said franchise and the privileges thereby granted, and said company hereby covenants on its part to fully perform all the conditions of said franchise and to conform to all its regulations and limitations, and not to ask, charge or collect more than the rates therein mentioned."
Thereafter, as appears by the allegations of the complaint (all of which must be assumed to be true), under the ordinance and franchise thus granted to it, the defendant installed and constructed a telephone system or plant in the city of Jamestown, and has ever since maintained and operated the same.
It is alleged that on and after a certain day the defendant had installed, was operating and was receiving revenues from 1,000 telephones; that on and after a certain other day it had installed, was operating and was receiving revenues from 2,000 telephones; that after a certain other day it had installed, was operating and was receiving revenues from a much larger number of telephones, the number of which was unknown to the plaintiff, and the action was brought to recover the percentages provided for in the 11th clause of the franchise upon the gross earnings concededly received and to compel an accounting by the defendant disclosing the revenues received by it from telephones in excess of the 2,000 mentioned in the franchise.
The learned trial judge in the interlocutory judgment directed judgment in favor of the plaintiff for the amount alleged to be due, and directed that the defendant should account for the percentages on its gross earnings upon telephones installed and operated by it in excess of the 2,000 mentioned in the franchise. There is and there can be no denial by demurrer of these facts alleged in the complaint.
So that we come to the proposition, can the defendant repudiate the agreement solemnly made by it, in substance, that it would pay to the city of Jamestown a certain percentage of its gross earnings in consideration of the rights given to it under the franchise which it sought and obtained from such city ? °
For the purposes of this appeal we may assume, without deciding, that an agreement so made is Void and without consideration, however formally expressed, if the municipality had no right under the law to exact such conditions. But, as we have seen, the city of Jamestown was by its charter given the light to prevent any telephone or telegraph company from setting its poles or stringing its wires in said city. Hot only was it given authority to prevent, but it was given the power to prevent or regulate. Under plaintiff's charter, it was competent for it to prevent any corporation from setting poles or stringing wires upon its streets. Such were the express words of the charter. By the franchise in question it gave to the defendant such right upon certain conditions, which were accepted by the defendant, but which are now sought to be repudiated.
The only question presented by this appeal is, was.the power given by its charter to the city of Jamestown to prevents telephone company from doing business within its jurisdiction repealed by the Transportation Corporations Law; and, really, the question presented is, did the Legislature intend by the passage of such Transportation Corporations Law to repeal the power conferred in the premises upon the city of Jamestown by the charter granted to it? Under such charter it is set forth in express language that the municipality may prevent the erection of telephone poles, or the stringing of its wires. Is there anything in the Transportation Corporations Law which by implication or otherwise can nullify such right or authority conferred by special statute upon the city of Jamestown ? It seems to us that it is axiomatic that such special statute must be repealed, if at all, by express enactment of the Legislature; that it cannot he accomplished by implication. There is nothing in the act authorizing the incorporation of the defendant, which, as it seems to me, by any implication can abrogate the right of the plaintiff to prevent the installation by the defendant of a plant or system which shall obstruct the streets of said city. If this proposition is correct the plaintiff had the right to reject the defendant's application for a franchise to do business in its city, and if so, it would seem axiomatic that such city had the right to impose such conditions as were reasonable and in the interests of its inhabitants. We think there is no implication of repeal of the Jamestown charter in the Transportation Corporations Law. (Parker v. Elmira, Cortland & Northern R. R. Co., 165 N. Y. 274.) The authorities relied upon by the appellant (Wright v. Gien Telephone Co., 112 App. Div. 745 ; Village of Carthage v. Central N. Y. Tel. Co., 185 N. Y. 448, and other similar cases) are cases in which the municipality was given only the power to regulate and in which it was held that under such provision such municipality could not exact that compensation should be paid to it as a consideration for a franchise.
In the case at bar, as we have seen, the plaintiff had the power to prevent the defendant from installing, maintaining or operating a plant or telephone system within the city and this authority to prevent, as it seems to me, is absolutely fatal to defendant's contention, unless such right to prevent was taken from such city by the Transportation Corporations Law.
It seems to be well settled that special and local laws are not deemed repealed by general legislation unless the intent to do so is clear. " ' Ordinarily an express repeal by some intelligible reference to the special act is necessary to accomplish that end.' " (Aldinger v. Pugh, 57 Hun, 181; Buffalo Cemetery Assn. v. City of Buffalo, 118 N. Y. 61; Stack v. City of Brooldyn, 150 id. 335 ; Parker v. Elmira, Cortland & Northern R. R. Co., 165 id. 274.)
In the case at bar there certainly is no language in the Transportation Corporations Law which can be deemed to repeal the provision of the plaintiff's charter to which attention has been called, and we think there should be no undue effort to accomplish or bring about such result by implication. The defendant entered into the agreement in question, accepted the franchise and the conditions thereby imposed, none of which was against good morals or in any manner in conflict with public policy. It received and accepted the benefits thus conferred upon it and certainly there is no reason in equity why it should not keep and perform the duties and obligations imposed upon it by the franchise which it accepted, and under which it installed and is maintaining and operating its plant in the plaintiff city. As we have said, it seems to us that under its charter the plaintiff had full power and authority to prevent the defendant from doing business in said city, but after negotiating and considering all the conditions the plaintiff consented that the defendant should install, maintain and operate a telephone system and plant in such city upon the condition, among others, that it should pay to the municipality certain percentages of its gross earnings. The defendant accepted such franchise, agreed to keep and perform the obligation thereby imposed, and we see no reason for holding that such obligation was not in all respects binding upon the defendant.
We conclude that the interlocutory judgment appealed from should be affirmed, with costs.
All concurred.
Interlocutory judgment affirmed, with costs, with leave to the defendant to plead over upon payment of the costs of the demurrer and of this appeal.