Court Opinion

ID: 6972452
Source: CourtListenerOpinion
Date Created: 2022-07-24 02:05:00.403897+00
Date Added: 2024-06-11T16:08:51.031695
License: Public Domain

Mr. Chief Justice Cartwright delivered the opinion of the court: By leave of the circuit court of Cook county an information in the nature of a quo warranto was filed in this case in the name of the People of the State of Illinois, upon the relation of the city of Chicago, against the Chicago Telephone Company, with the double object of declaring a forfeiture of the franchise of said company and also a forfeiture of the right to exercise said franchise in the public streets of the city of Chicago under an ordinance of said city passed January 4, 1889. The information charged the defendant with having misused and abused its franchise by demanding and receiving unlawful rates for telephone service and otherwise, and with having unlawfully executed and misused the license and privilege of maintaining and operating telephone lines in the streets of said city and exercising its rights therein. The defendant filed a special plea setting up the facts from which it claimed the right to continue in the exercise of said franchise, license and privilege, and to that plea a general demurrer was filed. The demurrer being overruled, the People elected to stand by it, and the information was dismissed and judgment was rendered against the relator for costs. The case is brought to this court by appeal. Counsel for appellee open their argument by insisting that quo warranto is not a proper remedy for the alleged wrongs complained of in the information, and that we must affirm the judgment on that ground. That question was not raised in the circuit court by motion to set aside the leave granted for filing the information, or in any other manner. On the contrary, the abstract of the record shows that the rule upon the defendant to plead to the information was based on an agreement of its counsel, and in pursuance of that rule a plea to the merits was filed. The only errors are assigned by appellant, but as the question may arise in the future progress of the cause, we will say that the remedy invoked is the proper one. One of the objects of the proceeding is to forfeit the franchise of the corporation, and it seems that no one should deny the propriety of the proceeding for that purpose. So far as the information questions the right of the defendant to continue in the occupation and use of the streets held by the city of Chicago in trust for the general public, and to exercise its franchise therein, the proceeding involves a matter of public right, as to which the people have no other legal remedy. The license or privilege to occupy the streets is not a franchise, but it can only be granted in pursuance of legislative authority, and the right to hold or exercise the license or privilege may be questioned by an information in the nature of a quo warranto on the ground that it has been granted improperly or without warrant of law, or that it is so held or exercised. Swarth v. People, 109 Ill. 621; Martens v. People, 186 id. 314. The information and plea cover one hundred and fifty-nine printed pages of abstract, and it is impracticable to state their contents in detail. A brief statement of the leading facts as alleged in the information and admitted or not denied by the plea, and as set up in the plea, will afford an understanding of the questions involved and make our views clear on the question whether the demurrer was properly sustained. The defendant is a corporation formed to do a general telephone, telegraph and district telegraph business. The capital stock, which was originally $500,000, has been increased to $20,000,000. An ordinance of the city of Chicago was passed on January 4, 1889, and accepted by the defendant on January 10, 1889, which granted permission to the defendant to construct, maintain, repair and operate in the public streets, alleys and public ways of the city of Chicago, for the period of twenty years, its lines of wires by means of underground conduits in part of the city and by means of poles and wires in the streets and alleys and over public grounds in the other portions of the city. The grant was upon certain conditions, among which were the following: The defendant was required to file with the comptroller of the city, on the first days of January and July of each year, a sworn statement of its gross receipts from the telephone business done by it within the city of Chicago for the six months next preceding and to pay into the city treasury three per cent on such gross receipts. It was also required to file with its acceptance of the ordinance a schedule “showing the rates charged by said company for telephone service at the date of the passage of this ordinance within the limits of the city of Chicago,” and was prohibited from increasing to its present or future subscribers the rates for telephone service then established. The defendant accepted the ordinance with its terms and conditions and filed with its acceptance a schedule of the rates then charged for telephone service within the limits of said city. After-, ward other territory was annexed to and brought within the limits of the city of Chicago which had previously been within the limits and under the jurisdiction of other minor municipalities organized as towns or villages, which, upon such annexation, ceased to exist. Those towns or villages had previously granted to the defendant the right to occupy and use the streets therein for its telephone business upon certain conditions contained in the ordinances granting such privileges, but without any limit of time or condition as to rates. As to those streets and grants the defendant claimed that it had acquired vested contract rights which were not and could not be affected by ordinances of the city of Chicago, and that as to the territory so annexed the limitation of the ordinance as to rates did not apply. One of the principal matters in controversy therefore is whether the defendant had a right to continue to charge such rates as it saw fit in such portions of the city as were not within the city limits when the ordinance was passed. Another question arises out of the improvements in telephone service and the equipment and appliances therefor that have been effected since the ordinance was passed. Since January 4, 1889, when the privilege of using the streets for telephone business was granted, great improvements have been made in the means and appliances for conducting the business, one of the most important of which is the substitution of a metallic circuit for the grounded circuit which was in use at that time. The grounded circuit, and the outfit or appliances connected with it, were not satisfactory and successful, particularly in the operation of long distance telephones, and a method was devised for furnishing a combined local and long distance telephone service with a single set of instruments, and this was an improved service both for local and long distance business. The defendant presented to its patrons within the city of Chicago propositions to enter into what they called “special service contracts,” by which patrons were to have the improved service at higher rates than were charged when the ordinance was passed. This scheme of presenting to the patrons an option to retain the antiquated service at the ordinance rate or to have a better and more satisfactory service at a higher rate has resulted in the substitution of the better service as to a very large majority of all the patrons of the defendant in the city. Although the improved service is in quite general use, and from the averments of the plea is evidently the form of service furnished by telephone companies keeping up with the improvements in that business, it is still called by the defendant a special service furnished under a special service contract. The claim of the defendant as to these improvements in the service is, that the proper construction of the ordinance only requires it to furnish the same style of service and equipment that was furnished when the ordinance was passed at the rate then fixed, and that it can charge a higher and different rate for better telephone service if the patrons agree to the special service contract. The limitation that the defendant should not increase to its present or future subscribers within the city of Chicago the rates for telephone service then established had no provision restricting it to the existing limits of the city. The words of the ordinance are clear and not ambiguous, and apply to all the territory within the city of Chicago during the period of the grant. The ordinance having been accepted by the defendant became a contract by which both parties were bound, and the territory which has since been annexed to the city is within the city of Chicago. If there had been an intention to restrict the limitations to the existing city limits, such an intention would naturally have been expressed in the ordinance or the acceptance. Where the words are not doubtful, the courts have no right to annex terms or conditions not agreed to by the parties. The ground of defendant’s claim that the ordinance does not limit its charges in the annexed territory is, that before the annexation the minor municipalities had granted to it the right to occupy the streets therein for its business without any limit as to time. If the grants had been for terms of years under legislative authority authorizing them, and the terms had extended beyond the existence of the corporations granting the privileges, there might be ground for saying that the grants were binding upon the city because they had become binding contracts under which the defendant had vested contract rights for such terms. But they were not for definite periods, and the grants were in consideration of furnishing something to the town or village, such as telephone service to the town or village hall or the village authorities free or for some reduced rate. Such grants cannot be construed to be perpetual and at most cannot extend beyond the lives of the corporations granting them. Upon annexation there ceased to be any town or village authorities entitled to the benefits of the contract or authorized to demand or receive them, and it could not have been understood that the grant should continue discharged of the obligation annexed to it. But if it were otherwise, and the defendant has the right to maintain its wires and occupy the streets where the towns and villages formerly existed, we do not see how it can be said that it has a right to occupy the streets of the city as they existed when the ordinance was passed, in violation of the conditions of that ordinance. We do not think the defendant can be heard .to say it will retain streets which it concedes it has no right to occupy except under the ordinance, and will not comply with the conditions of the ordinance. If the rates for telephone service are increased within the city it is a violation of the contract; and it seems to be no answer to a charge of such violation for the defendant to say that it has a right, derived from the towns and villages, to violate the agreement. The ordinances of the city extended over the annexed territory immediately upon annexation, (Illinois Central Railroad Co. v. City of Chicago, 176 U. S. 646,) and the limitations of the ordinance applied to the annexed territory. The question in this case is the same as the one involved in the case of Indiana Railway Co. v. Hoffman, 160 Ind. 601, (69 N. E. Rep. 399,) where it was held that a provision for transfers applied to the territory annexed to the city after the contract was made, and on an interurban line on which the defendant had been entitled to charge an additional fare before the annexation of the territory. The next question is whether the telephone service named in the ordinance means the general telephone service furnished by the defendant during the period of the grant, or only the kind of service with the kind of appliances and equipment which was furnished at the time the ordinance was passed. The words are general and on their face include every kind of telephone service, and we see no warrant for saying that they do not include any improved service adopted by the defendant. The improved transmitters, receivers, switch-boards and metallic circuits are the means and appliances for telephone service, and nothing else. It is true that a corporation may make a special contract with an individual, upon any terms agreeable to both parties, for services which it is not bound to furnish at all. But that is not the question here. If it be conceded that the defendant is not bound to furnish the improved service to its patrons and may furnish such service under its special contract, the individual who has entered into the contract may be bound by it. But that question is of no importance in determining whether the defendant shall be bound by its contract not to increase its rates for telephone service during the period for which it has a right to occupy the public streets. We do not see how it can be said that the city of Chicago by its ordinance gave to the defendant rights which were not restrained by the limitations of the ordinance, and if the defendant is using the streets of the city of Chicago for "a kind of telephone service which is not within the limitations of the ordinance it certainly is not within the grant. To construe the ordinance otherwise would be to say that whenever any improvement is made in the service the defendant may rid itself of all its obligations with respect to rates and still enjoy the granty—may retain the benefits and escape the burdens of the contract. The information charges in a number of counts that the defendant is exercising powers not conferred by law, and if the streets are being used for a new and unauthorized service that fact would sustain the charge. Under the ordinance the defendant cannot be required to adopt improvements in the service or equipment or to keep up with the general progress in the business, but if it sees fit to adopt improvements and furnish a better grade of telephone service, it can only have the benefit of the ordinance granting it the right to use the public streets by complying with the terms of the ordinance and not increasing the rates. The facts alleged in the plea, taken in connection with the charges of the information admitted or not denied, wouldi not, in our opinion, warrant the court in declaring a forfeiture of the franchises of the corporation, but so far as the information charges the defendant with a misuse and abuse of the license and privilege granted by the ordinance and seeks to oust the defendant from the enjoyment of such license and privilege the plea is not a good defense and the court erred in overruling the demurrer. The views we have expressed will be sufficient for a settlement of all the questions involved in the controversy, for the reason that the same principles and rules apply to all of them. The judgment of the circuit court is reversed and the cause is remanded to that court with directions to sustain the demurrer. Reversed and remanded.