A provision in a state constitution that municipal corporations
may establish and operate public utility plants, and that persons
and corporations may establish and operate works for supplying
public service upon such conditions and under such regulations as
the municipality may prescribe is a step towards municipal control
or ownership, and is not a grant to others of a right to occupy
streets without the consent of the municipality; nor does it limit
the municipality to regulations under its police power. The
conditions are of general import, and so
held as to the
provision in Article XI, § 19, of the constitution of California as
amended October 11, 1911.
There is no sufficient reason why this Court should not follow
the highest court of California in construing "telegraph"
corporations as used in § 536 of the Civil Code of that state as
not including " telephone " corporations.
Page 224 U. S. 331
Where a statute is amended so as to bring a certain class
thereunder, the amendment to take effect at subsequent date, before
which date another act is passed relating to the same subject with
a general repealing act enumerating exceptions, the amended statute
is repealed, subject only to the exceptions before any rights
accrue under the amendment.
In the absence of any apparent policy inducing it, it will be
assumed that an exception to the repealing clause of an act to
regulate franchises of "lines doing an interstate business" was
made unwillingly and because the legislature assumed it was bound
to exempt such lines from regulations.
In this case,
held that, under the statutes of
California, a telephone corporation operating interstate and local
lines in Pomona, a city of the fifth class, obtained rights to
maintain its main line in the streets, but not its local posts and
wires except subject to regulations of the city.
172 F. 829 reversed.
The facts, which involve the validity and constitutionality of
certain provisions of the constitution and statutes of California
in regard to the use of streets by telephone companies, are stated
in the opinion.
Page 224 U. S. 342
MR. JUSTICE HOLMES delivered the opinion of the Court.
This is a bill brought by the appellee, a California
corporation, to restrain the City of Pomona from removing the
appellee's poles and wires from the streets of the city, and from
preventing the appellee's placing further poles and wires in the
streets. The circuit court dismissed the bill, 164 F. 561, but the
decree was reversed and an injunction granted by the circuit court
of appeals. 172 F. 829. Two of the grounds originally relied upon
were that the appellee, being a telegraph as well as a telephone
company, had rights under the Act of Congress of July 24, 1866, c.
230, 14 Stat. 221 (Rev.Stat. §§ 5263
et seq.), that were
infringed, and that the conduct of the city had given rise to a
contract. These are no longer pressed, but they warranted taking
the case to the circuit court of appeals.
Spreckels Sugar
Refining Co. v. McClain, 192 U. S. 397,
192 U. S. 407.
The remaining ground is that the Constitution of California, as
amended in 1911, or the statutes of the state, contained a grant
with which the Constitution of the United States does not permit
the city to interfere. This is the only argument pressed here.
Unless the appellee got a grant from one of these two sources, it
has no right to occupy the streets.
The claim based upon the amendment to Article XI, § 19, of the
Constitution of the state, October 10, 1911, does not impress us.
Before that date, the article provided that in cities having no
public works for artificial light, etc. individuals or corporations
of the state, duly authorized, should have the privilege of using
the streets, etc., for the purpose, upon the condition that
Page 224 U. S. 343
the municipal government should have the right to regulate the
charges. By the amendment, "any municipal corporation may establish
and operate public works for . . . telephone service," either by
construction or by purchase. It then goes on:
"Persons or corporations may establish and operate works for
supplying the inhabitants with such service upon such conditions
and under such regulations as the municipality may prescribe under
its organic law, on condition that the municipal government shall
have the right to regulate the charges therefore."
We agree with the appellants that the amendment seems intended
as a step in the direction of municipal ownership or control. The
words, "upon such conditions," etc., are not to be confined to
police powers, which are conferred by § 11 of the same article, but
are of general import. If the municipal corporation does not see
fit to establish the public works itself, it may let others do it,
but its power to impose conditions excludes the notion that the
Constitution alone is a grant to others of a right to occupy the
streets without its consent.
The claim founded upon the statutes seems to us stronger. By §
536 of the Civil Code,
"Telegraph . . . corporations may construct lines of telegraph .
. . along and upon any public road or highway . . . and may erect
poles . . . in such manner and at such points as not to incommode
the public use of the road."
This is treated by the Supreme Court of California as a grant
when acted upon.
Western Union Telegraph Co. v. Hopkins,
160 Cal. 106. But, as the words "telegraph corporations" have been
construed not to include telephone corporations,
Sunset
Telephone & Telegraph Co. v. Pasadena, 118 P. 796,
construction that we know no sufficient reason for not following,
Yazoo & Mississippi Valley R. Co. v. Adams,
181 U. S. 580;
Richmond v. Southern Bell
Telephone & Telegraph Co.,
Page 224 U. S. 344
174 U. S. 761, the
section, until amended, did the appellee no good. On March 20,
1905, however, the section was amended so as to include telephone
corporations, so that, if that were all, the case of the appellee
would be clear, the City of Pomona not having been organized under
provisions of the constitution that withdrew certain cities from
the operation of general laws.
See Ex Parte Helm, 143 Cal.
553;
Sunset Telephone & Telegraph Co. v. Pasadena, 118
P. 796, 803.
But the amendment did not go into effect for sixty days, and two
days later, on March 22, a franchise act was passed, to take effect
immediately, providing that
"every franchise or privilege to erect or lay telegraph or
telephone wires, to construct or operate street or interurban
railroads, . . . or to exercise any other privilege whatever
hereafter proposed to be granted"
by the legislative body of any country, city and county, city or
town, except telegraph or telephone lines doing an interstate
business, should be granted upon the conditions specified in the
act, and not otherwise. "Any applicant for any franchise or
privilege above mentioned" was required to file an application,
there was to be an advertisement for bids, etc., with other
particulars that need not be specified, as the appellee does not
claim under this statute. It contends that this act establishes
conditions only for counties, cities, and towns, and does not
qualify the grant from the state in the amended § 536. The
appellant, on the other hand, argues that the franchise act
repealed § 536 so far as it affects this case except as to
telephones doing an interstate business. In view of the frame of
the act as a whole, of a general repealing clause at the end,
naming certain exceptions of which § 536 is not one, and of the
fact that the grant of such franchises seems generally to have been
left to the local subdivisions concerned (
Sunset Telephone
& Telegraph Co. v. Pasadena, supra), we construe the words
quoted as
Page 224 U. S. 345
of general application, and are of opinion that they cannot be
supposed to have had the narrow operation that would be left to
them if there were in force a grant from the state of almost
universal scope. Until the state court shall decide otherwise, we
must take § 536 to have been repealed, subject to the exception
contained in the later act, before any grant or right under it had
accrued to the appellee.
We come, then, to consider the extent of the exception. This is
not a question whether all telephones having the usual connections
might not be instruments of commerce among the states; it is not a
question whether the state could interfere with the local business
of lines engaged in such commerce. It is a question of how far the
offer of a grant that had not yet taken effect should be understood
to have been left on foot by the repealing act -- a question as to
the meaning of words. In construing them, it may be assumed that
the exception was made unwillingly. No policy can be discovered
that would be likely to induce the making of it, and it is most
easily explained by the uncertainty then prevailing as to the power
of the state over telegraphs, etc., running into other states in
view of the commerce clause of the Constitution and the Act of July
24, 1866, an uncertainty then lately and since largely dispelled.
Western Union Telegraph Co. v. Pennsylvania Railroad Co.,
195 U. S. 540;
Western Union Telegraph Co. v. Richmond, April 1, 1912.
The words to be interpreted are "except telegraph or telephone
lines doing an interstate business." The qualification "doing an
interstate business" shows that not all telephones were expected to
benefit by the grant in § 536, and the limitation is presumably
substantial. The legislature probably supposed by mistake that it
was bound to grant a right to direct through lines, but evidently
meant to grant no more than it must. It was understood so by the
city. The order and threat of the city were confined to poles and
wires
Page 224 U. S. 346
doing a state and local business. This appears by the bill and
the finding of the circuit court, not disturbed above, as to what
actually was done. We are of opinion that the city's interpretation
was correct.
The result is that the appellee must be taken to have a grant of
the right to keep its main through lines in the streets of Pomona,
but not to maintain the posts and wires by which it connects with
subscribers. So far as appears, the city attacks only the latter,
and therefore no present ground is shown for the bill. But ,as the
line of distinction may be delicate and questions may arise, the
bill will be dismissed without prejudice.
Decree reversed.
Bill to be dismissed without prejudice.