Western Union Tel. Co. v. New Hope - 187 U.S. 419 (1903)
U.S. Supreme Court
Western Union Tel. Co. v. New Hope, 187 U.S. 419 (1903)
Western Union Telegraph Company v. City of New Hope
Argued December 2-3, 1902
Decided January 4, 1903
187 U.S. 419
ERROR TO THE SUPERIOR COURT
OF THE STATE OF PENNSYLVANIA
An ordinance of the borough of New Hope, Pennsylvania, imposing an annual license fee of one dollar per pole and two dollars and a half per mile of wire on the telegraph, telephone and electric light poles within the limits of the borough, is not a tax on the property of the telegraph company owning the poles and wires, or on its transmission of messages, or on its receipts for such transmission, but is a charge in the enforcement of local governmental supervision, and as such is not, in itself, obnoxious to the commerce clause of the federal Constitution.
As the elements entering into such a charge are various, and as in this case the courts of Pennsylvania have decided that the charge imposed by the ordinance is reasonable in the circumstances and the ordinance valid, this Court does not feel justified in holding that conclusion to be so manifestly erroneous as to require revision.
By an ordinance passed in 1894, the Borough of New Hope, Pennsylvania, imposed an annual license fee of one dollar per pole and two dollars and a half per mile of wire on the telegraph, telephone, and electric light poles and wires within its limits. The Western Union Telegraph Company had constructed prior thereto, and had since maintained and operated, a line of telegraph poles and wires through the borough, and this was an action brought in the Court of Common Pleas of Bucks
County, in that state, against the company to recover license fees for the four years commencing with 1895. The case came on for trial before the court and a jury, and plaintiff put in evidence the ordinance in question, and it was agreed
"between the parties that, for the year beginning October 1, 1895, there were seventy-five poles and twenty miles of wire, and for the three succeeding years, beginning October 1, 1896, there were thirty-six poles and twelve miles of wire maintained by the defendant in said borough."
Plaintiff then rested, and defendant offered evidence tending to show that the wires were used as through wires for the transmission of messages between the different states and the United States and foreign countries; that the company had no office at New Hope which it operated itself, but that the Philadelphia & Reading Railroad Company handled the business there, and transferred it to the Western Union at Philadelphia; that no part of the business that went to or from New Hope went over these lines of wires and poles, and that the local business handed to the Western Union at Philadelphia amounted to from about seven to seven and one-half dollars per month. The evidence further tended to show that the cost value of its lines through New Hope was about $372, and that the cost of inspection, repairs, and maintenance of the plant of the company had averaged for thirteen years one dollar and forty-nine and one half cents per wire per annum; that, since October, 1894, the borough had not expended any money on account of the poles and wires of the company; that its expenditures were for repairing streets, street lamps, moderate sums in payment of official services, etc., and that, when on holidays the burgess saw fit to appoint a policeman, he often called on the constable, who was generally paid $2.50 per day. A lineman testified that, during those years, the borough never did anything, to his knowledge, "in the way of inspecting or repairing or removing or anything else in connection with the poles and wires of those telegraph companies." Defendant contended that the requirement of payment of the license fee in question amounted to a regulation of commerce, and that the ordinance was therefore void.
The court left it to the jury to find whether the license fee
exceeded what was reasonable under the circumstances. The jury returned a verdict in favor of the plaintiff, and judgment was rendered thereon, which on error to the superior court was affirmed. 16 Pa.Super.Ct. 306. The Supreme Court of Pennsylvania refused to allow an appeal to that court.
MR. CHIEF JUSTICE FULLER delivered the opinion of the Court.
It is conceded that the borough had the right, in the exercise
of its police power, to impose a reasonable license fee upon telegraph poles and wires within its limits, and that an ordinance imposing such fee is to be taken as prima facie reasonable. But it is insisted that, on the evidence in this case, the presumption of reasonableness is rebutted, and that the ordinance as administered is void because a regulation of interstate commerce. While in the exercise of its control over its streets, it is admitted that the borough may supervise the location of the poles erected to sustain the wires of the plaintiff in error, may require them to be marked, may make such inspection of them as may be necessary to protect the public welfare, and may impose a reasonable license fee for the cost of such regulation and supervision, and of the issuing of such permits as may be required for the enforcement thereof, yet it is contended that, if the license fee turned out to be in excess of the amount necessary to reimburse the municipality, the ordinance became unreasonable and invalid. The superior court, in its opinion, referred to many decisions of the Supreme Court of Pennsylvania as definitely establishing, among other propositions,
"that, in an action to recover the license fee for a particular year, the same being payable at the beginning of the year, the fact that the borough or city did not expend money for inspection, supervision, or police surveillance of the poles and wires in that year is not a defense,"
"that the courts will not declare such ordinance void because of the alleged unreasonableness of the fee charged unless the unreasonableness be so clearly apparent as to demonstrate an abuse of discretion on the part of the municipal authorities."
And it was said that, in many of the cases cited, the license fee was the same as that imposed by this ordinance. 16 Superior Ct.Rep. 309. The supreme court affirmed the judgment in a similar case on the opinion given below in this. 202 Pa. 532.
In Chester City v. Telegraph Company, 154 Pa. 464, in which it was averred in the affidavit of defense that the rates charged were at least five times the amount of the expense involved in the supervision exercised by the municipality, the supreme court said:
"For the purposes of this case, we must treat this averment as true as far as it goes. The difficulty is it does not go far enough. It refers only to the usual, ordinary,
or necessary expense of municipal officers of issuing licenses and other expenses thereby imposed upon the municipality. It makes no reference to the liability imposed upon the city by the erection of telegraph poles. It is the duty of the city to see that the poles are safe and properly maintained, and should a citizen be injured in person or property by reason of a neglect of such duty, an action might lie against the city for the consequences of such neglect. It is a mistake, therefore, to measure the reasonableness of the charge by the amount actually expended by the city for a particular year, to the particular purposes specified in the affidavit."
In Taylor v. Telegraph Company, 202 Pa. 583, the supreme court said:
"Clearly the reasonableness of the fee is not to be measured by the value of the poles and wires or of the land occupied, nor by the profits of the business. The elements which enter into the charge are the necessary or probable expense incident to the issuing of the license and the probable expense of such inspection, regulation, and police surveillance as municipal authorities may lawfully give to the erection and maintenance of the poles and wires. . . . Whether or not the fee is so obviously excessive as to lead irresistibly to the conclusion that it is exacted as a return for the use of the streets, or is imposed for revenue purposes, is a question for the courts, and is to be determined upon a view of the facts, not upon evidence consisting of the opinions of witnesses as to the proper supervision that the municipal authorities might properly exercise and the expense of the same."
And see Philadelphia v. Western Union Telegraph Company, 89 F. 454.
Concurring in these views in general, we think it would be going much too far for us to decide that the test set up by the plaintiff in error must be necessarily applied, and the ordinance held void because of failure to meet it. As the supreme court pointed out, the elements entering into the charge are various, and the court of common pleas, the superior court, and the Supreme Court of Pennsylvania have held it to be reasonable, and we cannot say that their conclusion is so manifestly wrong as to justify our interposition.
This license fee was not a tax on the property of the company, or on its transmission of messages, or on its receipts from such transmission, or an its occupation or business, but was a charge in the enforcement of local governmental supervision, and, as such, not in itself obnoxious to the clause of the Constitution relied on. St. Louis v. Telegraph Company, 148 U. S. 92; 149 U. S. 149 U.S. 465.
MR. JUSTICE WHITE, MR. JUSTICE PECKHAM, and MR. JUSTICE McKENNA dissented.