DocketNumber: Docket No. 165
Citation Numbers: 190 Mich. 337
Judges: Bird, Brooke, Kuhn, Moore, Ostrander, Person, Steere, Stone
Filed Date: 3/30/1916
Status: Precedential
Modified Date: 9/8/2022
Complainant filed its bill in the circuit court of Kent county, to obtain an injunction restraining further action and a decree vacating an order of the Michigan Railroad Commission, which approved and permitted the consummation of a tentative contract, entered into between the Michigan State Telephone Company and the Southern Michigan Telephone Company for an exchange and sale to each other of certain telephone property and a division of territory between them within certain portions of the counties of Branch and St. Joseph. Each of said contracting companies owns and operates a telephone system, and is duly incorporated for that purpose under Act No. 129, Pub. Acts 1883, entitled “An act for the organization of telephone and messenger service companies,” and acts amendatory or supplemental thereof. Complainant is incorporated under the same act, but does not appear to itself own or operate any telephone line, its corporate activities, s'o far as disclosed, being confined to transmission of toll or long-distance messages, and the conduct of a so-called “interchanged business” carried on under leases, or contracts, with telephone companies or persons owning and operating telephone lines. Some time previous to the hearing before the
In the subject-matter, course pursued, proceedings had, and questions raised, this case is, in many- respects, analogous to the case entitled Home Telephone Co. v. Railroad Commission, reported in 174 Mich. 219 (140 N. W. 496). In that case certain telephone companies which had agreed upon a contract eleminating competition and in effect providing for a merger by purchase and sale of properties between them, petitioned the railroad commission for approval of their contract. The complainant there claimed to have rights which would be adversely affected by an order of the commission permitting such contract of merger,
The first question which naturally presents itself in the order of investigation is whether, and in what way, complainant’s rights under its contract with the Southern Michigan Company (Exhibit E) are legally affected or violated by the order of the railroad commission. If its rights under this contract still exist as before, it is not a legally interested party, nor entitled to file this bill under the statute relied on, and the various other questions raised and argued at length
“That this lease is not intended to affect any business whatsoever originating upon or terminating upon the lines of the lessor, such business being known as ‘local business.’ ”
The instrument is a somewhat lengthy and detailed document, with numerous descriptions, provisions, and conditions as to the rights and duties of the contracting parties between themselves, over the construction of which various questions are raised. The question involved here does not call for a determination of the rights of the contracting parties between themselves, or a construction of their contract beyond a consideration of whether defendant’s rights under it are invaded by the order of the commission. Amongst other provisions of this contract we find the following, not elsewhere qualified so far as we are able to discover:
“Seventeenth. That all the rights and duties specified in this lease as vesting in either party hereto, or being required from either party to the other, shall be held to apply to the successors and assigns of each, and that no sale or transfer of the property of either party of its title or ownership shall operate as a consideration for the cancellation or annulment of this agreement except as specifically assented to in writing by the lessee, and the right to claim specific performance of this contract regardless of any change in the ownership or the control of the lessor, or any changes which may be effected in the title of its property.”
The right of one incorporated telephone company to
“It is understood by the contracting parties hereto that nothing in this agreement is to abrogate or interfere with the arrangements now existing between the Southern Company and the Michigan Independent Telephone & Traffic Association and the transfer to the Michigan Company of lines in any way affected by such agreement with said Traffic Association is accepted with full knowledge of its provisions.”
By this it is made plain that the Michigan State Telephone Company agreed to take over the property of the Southern Michigan Telephone Company, for which it contracted with full knowledge- of and subject to complainant’s agreement, or lease.
The railroad commission, with these contracts before it, in approving the contract between the two operating companies, took cognizance of and sought to protect intact, not only complainant’s contract but all other outstanding contracts which either of the contracting petitioners had made, by comprehensive provisions in its order of approval, which are- in part as follows:'
“It is further ordered that all telephone companies iwithin the State of Michigan, the interveners in this ¡proceeding and all their associated companies and their*343 successors, and the successors, lessees and assigns of any telephone company within the State of Michigan, jointly, severally, and in any combination, shall hereafter have, possess, and enjoy for their subscribers and patrons all of the facilities both as to quantity and efficiency necessary for connection and transmission of messages to and from all of the subscribers that are now or may hereafter be connected with the toll lines of exchanges of the said Southern Michigan Telephone Company, the Three Rivers Telephone Company, the properties conveyed by the said Charles K. Esler, and with any extension or additional lines that may be hereafter connected with said facilities by said Southern Michigan Telephone Company, its successors, lessees, and assigns, and likewise with the lines, exchanges, and facilities conveyed by said Southern Michigan Telephone Company to the Michigan State Telephone Company, and with any exchanges and lines of said Michigan State Telephone Company at points where property is now conveyed by the Southern Michigan Telephone Company to the Michigan State Telephone Company, and any extension or additional lines that may be hereafter connected with said facilities by said Michigan State Telephone Company, its successors, lessees, and assigns, within the territory of the property transferred, it being the intent ánd purpose of this order to give access to all persons, associations, and companies rendering telephone service within the State of Michigan and to their respective successors, lessees, and assigns, jointly, severally, and in any combination, to all of the facilities within said territory, both as to quantity and efficiency necessary for the transmission of telephonic messages between the patrons of such persons, associations, or companies affording telephone service and the patrons which are now or may hereafter be added to the lines and facilities of the Southern Michigan Telephone Company through the purchase of the various properties herein mentioned, or through the extension and addition of lines and other telephonic facilities, with a like access to the facility for communication with patrons upon the lines and exchanges conveyed by said Southern Michigan Telephone Company to the Michigan State Telephone Company, and with any additional subscrib*344 ers and patrons that may be added thereto through the extension, enlargement, and combining of such facilities. * * *
“It is further ordered that it is not the intent of this order to change, modify, qualify, direct, or pass upon any question of rates or charges for telephone service for transmission of telephonic messages, either for local or long-distance service, or for toll service of any kind, nor to affect, qualify, disturb, or pass upon the question of validity of any contracts which may exist between any of the petitioners, or either of them, with any other telephone company,” etc.
' Complainant cannot enlarge its fights as fixed by its contract (Exhibit E) by the allegations in its bill. This lease contract recognizes the right to sell or assign and contemplates that there may occur a “sale or transfer of the property of either party of its title or ownership” and provides that in any such event the rights and duties vesting in the party who sells or transfers its property shall be held to apply to its successors and assigns, and the agreement be enforced as to property to which it relates. In this case the contract, not separately assigned as a distinct thing, followed and passed with the property's an incident of its transfer.
We are unable to recognize'the force of complainant’s contention that the contract was not assignable because personal. Not only does the contract itself contemplate that the property to which it relates may change hands, and the contract necessarily go with it as an incident of transfer, but the contracting parties were public utility corporations, having but an artificial entity, destitute of any natural personality, the persons composing their officers and members subject to change without affecting their corporate existence or the powers conferred by the statute under which they were organized. There is nothing of a personal nature in a public service corporatión which can be recognized as applying to or restricting its powers to alienate or contract. If such were the law, authority of the rail
Counsel for complainant, having contended and argued at length in their original brief that Exhibit E was “designed and intended to be executed by th'e cooperation of companies in sympathy with each other and with like co-operation of companies having similar leasehold contracts,” that this personal character was “understood between the parties when it was entered into by them,” and that “leases and other contracts which involve a personal liability, and a relation of personal confidence, or call for the skill or experience of one of the parties, are nonassignabíe,” citing numerous authorities, subsequently state in their supplemental brief that it is not denied “but what the properties could be sold subject to the lease,” and insist that their position has been misunderstood or avoided by opposing counsel in claiming complainant did not. have possession and control of the properties under the leasehold agreement, while complainant’s position is:
“That the effect of the proceedings before the commission is not to sell the toll line circuits subject to the lease, but that the proceedings complained of operate upon and take the possession and control of the properties from complainant and place them in the Michigan State Telephone Company.”
We can discover no foundation for this contention unless it is based upon the correctness of complainant’s proposition, as urged in the original brief, that its
In this case the order made by the commission dis-affirms in distinct terms any attempt or intent to affect, qualify, disturb, or pass upon Exhibit E, and the contract it approves recognizes the same as in force, unabrogated and unaffected by the proposed transfer. If complainant was in actual or constructive possession of the, transferred property before the contract was entered into between the two companies and approved by the commission, or had a right to be, under Exhibit E, its legal position and rights remained unaffected in that particular.
We find no reason for disturbing the decree of the lower court sustaining the demurrer and dismissing complainant’s bill because its legal rights under the contract upon which it plants its claim (Exhibit E) remain to it as before, undetermined and unaffected by the order complained of, and, not having shown by its bill that it has been injured in that particular, it is not, under the statute relied upon, entitled, as a “party in interest,” to maintain this suit against the railroad commission to vacate its order.
The decree is affirmed.