City of Superior v. Douglas County Telephone Co.

The following opinion was filed October 5, 1909: MARSHALL, J. The arguments of counsel cover a very wide range as to whether the transactions detailed in the statement show that a contract was made between appellant and respondent telephone company. On that branch, waiving the matter of public policy, such purely elementary principles are involved that it is not thought best to follow the intricacies of the arguments with which the court has been favored. What constitutes a contract, in the general sense, is too familiar to require discussion. If there was an offer on one side to render a service to the other within the competency of that other to receive for the use of its officers in the conduct of the public business or the convenience of the public, in exchange for a privilege of value within the competency of such other to grant and which was granted in such exchange, subject to legitimate conditions which were accepted, there is hardly room for argumeut but that a valid contract was made. — 367 — No pecuniary liability on the part of the city was contemplated in the transaction. Therefore, it is useless to consider appellant’s charter provisions respecting the maimer of making contracts in that field. It is obvious that it was important for the telephone company to be able to afford its general customers facilities for ■communicating by telephone with the public offices. That ■opportunity could not operate otherwise than to render the service it offered in general more valuable than it would otherwise be and so attract customers and greatly extend its sphere •of operations. - That which it sought to obtain was then a legitimate basis for a contract. It is just as obvious1 that the ¡service which it offered in return for the privilege sought could not he otherwise than valuable to appellant as a means of expediting the public business. Such privilege may well have been considered so specially valuable to the company as to he •a fair equivalent for the free service, so called, that is free as regards appellant rendering any direct pecuniary consideration therefor. ' No question is raised, or could well he, hut that it was ■competent for appellant to contract for telephone service. So there is no question of competency in general to be considered. It is argued that no contract was made because the offer of the •company was only conditionally accepted by appellant. That, ■of course, does not cut any figure, since the modified acceptance was submitted to by the company by installing the telephones. As in the case of any municipal privilege granted, no written acceptance was necessary. The actual enjoyment of the privilege granted was as effective to close the contract as a formal written acceptance, in the absence of any written ■law requiring a different acceptance. Even in case of a legislative franchise granted upon specified conditions but without providing any manner of acceptance, use of the franchise constitutes an acceptance and creates .contractual obligations. Heath v. Silverthorn L. M. & S. Co. — 368 — 39 Wis. 146; Madison, W. & M. P. Co. v. Reynolds, 3 Wis. 287. In a case of this sort parties are competent to contract the-same as private persons. An offer on one side may be accepted by unqualified performance on tbe other, as well as in any other way, in case tbe offer does not otherwise require. This is so in harmony with the most familiar of elementary principles that nothing further need be said in respect to the matter. The facts show unmistakably that a binding contract was made as appellant claims, unless it is void upon grounds hereafter discussed. It is suggested that the transaction contemplated treating-appellant as a favored customer, contrary to public policy. It is conceded that there was no written law at the time the contract was made prohibiting the company from granting appellant a different rate for service than general customers, but it is insisted the circumstances fall within the common-law rule that a quasi-public corporation should afford the service it offers, to every person upon the same basis that 'it does to any one under the same or similar circumstances; that any substantial departure therefrom is an unjust discrimination and contrary to sound public policy, rendering any contract for such discriminatory service unenforceable by judicial-remedies. The contract in this case having been made before the legislation occurred prohibiting discriminatory rates, such legislation does not cut any figure in the case. If the contract were-valid when made it is within the constitutional protection precluding the legislature from impairing the obligations of contracts. Moreover, it is by no means certain but that the special circumstances in this case would, in any event, take the same out of tbe common-law rule mentioned. We need not go further on this branch of the case than to suggest that it is not every discrimination in the treatment by public-service corporations of their customers which is condemned by the369 common law. Only unjust discriminations axe so condemned. For special reasons, in the absence of any written law on the subject, such a corporation may make a different rate to one person than to another, or accept pay from one upon a money rate and from another in service of a legitimate character or some other reasonable equivalent, so long as the compensation demanded is within reason under the circumstances. This subject covers a broad field. - We leave it without stating much more than the rule in general, nothing further being at all necessary to the case in hand.. It should be noted that the legislature in enacting the law of 1907 (Laws of 1907, ch. 499), appreciating there might be contr acts existing between public-service corporations and customers», valid in the absence of prohibition by written law, and that it was not within its competency to nullify or impair them, expressly provided at sec. 1797m — 91, that: “The furnishing by any public utility, of any product or service at the rates and upon the terms and conditions provided for in any existing contract executed prior to April 1st, 1907, shall not constitute a discrimination within the meaning specified. ...” Sufficient has been said to indicate that the question of whether the contract in question is unenforceable on ’grounds of public policy must be solved with reference to» the condition of things at the time it was made. If public policy sanctioned it then, a change thereof by act of the legislature or otherwise does not affect its validity. Greenhood, Pub. Pol. 5. Public policy as bearing on the validity, or in other words the judicial enforceability, of contracts, is that principle which maintains that a person cannot rightfully do or bind himself to do that which is inimical to the public good. So where a contractual situation is not found to be clearly within the principle condemning it, it cannot properly be said to be illegitimate merely because there is discrimination. Discriminatory contracts between public utility corporations and their — 370 — patrons wbicb are beld to be void as inimical to tbe public good are so beld because unreasonable advantage is thereby given to one customer or a class over others, whereas all have a moral and legal right to equality of treatment. In case of the contract being between a private corporation and the state or other public corporation, whatever advantage the particular customer has over general customers, obviously, inures to the benefit of the latter in the aggregate. In other words, in the ultimate there is no discrimination which is inimical to the public good, and hence no violation of public policy. Such is the situation here. If we concede that the appellant under the contract was a favored customer, in that if the same advantages had been granted by contract to a private corporation the agreement would have been unenforceable, still in the circumstances here the contract is enforceable because the advantage is to the public instead of to any particular member thereof. But it is argued that, conceding there is a contract as claimed by appellant, valid as regards any written or unwritten law, it is unenforceable, so far as executory, because no time is specified, with reasonable definiteness for its duration. We assume that point is made relying on the familiar principle governing such cases as Irish v. Dean, 39 Wis. 562, and Coffin v. Landis, 46 Pa. St. 426, 430. The rule on the subject was stated in Robson v. Mississippi River L. Co. 43 Fed. 364, thus: “When a contract is silent as to the matter oí its duration, then it is ordinarily terminable at the pleasure of either party, reasonable notice being given to the other party. When there is nothing in a contract, when applied to its subject matter, which either directly or in fair implication can be considered to fix a limit to its duration, the law infers that the parties intended that such contract' is terminable at the option of either party, reasonable notice of the exercise of such option being required, when such notice is needed for the protection of the other party to the contract.” 43 Fed. 368. — 371 — Tbafc doos not mean that a contract for continuous service is fatally indefinite so as to’ be subject to the option mentioned merely because it does not specify a time, presently definite, for its termination.. As said in the case quoted from: “The duration of a contract may be made dependent upon the expiration of a period of time, or upon the completion of a given undertaking, or the happening of some event, all of which in turn may be certain or.uncertain as to 'the date when the undertaking may be completed, or the event may happen. This uncertainty, however, does not render the-contract terminable at will.” 43 Fed. 370. It is conceded' that the contract in question, in its letter, fixes a time for its termination, to wit, when the telephone company ceases to “maintain and operate a telephone exchange in said city.” But it is argued that the language is ambiguous, because it would be so unreasonable for a telephone company to agree for such a mere privilege as that granted to give service through twelve telephones during the entire period of its existence as an operating company in the grantee city, that it cannot be there was any such mutual intention in this case. For my own part, the proposition thus presented is one of serious difficulty. However, it is the opinion of the court that it may well be the telephone company, under the circumstances,-supposed the contract, taking it at its letter, provided for a fair exchange of equivalents. At any rate, in the opinion of the court, there is nothing in the situation presented to indicate that the agreement, taken literally, is so unreasonable as regards its continuance, as to warrant treating the language of the parties in that regard as ambiguous. Therefore, in the opinion of the court, the contract is binding according to its terms. No question is raised as to whether, in any event, this case, from the showing made in the complaint, falls within some recognized head of equity jurisprudence. Therefore, we take it that the parties considerately waived that question. Hence — 372 — this court will not consider it. It follows that the ground upon which the general demurrer to the complaint was susr tained and the temporary injunction denied is untenable, and that others, if any there be, are deemed waived. It is the opinion of the court that the order sustaining the demurrer as regards the improper joinder of actions should be affirmed; that the statutory action created to enable a party aggrieved by an order of the Railroad Commission, by action against such Commission to challenge the validity of such order, is not joinable with another action of primary import against some other party, to prevent the latter from complying with such order; that the statute does not contemplate affording opportunity to compel the Railroad Commission to appear in court as a party defendant and vindicate the validity of its action upon such validity being challenged at the suit of another against a third person, and that to permit such to be done would unduly prejudice administration of the law by such Commission. Sec. 2647, Stats. (1898), on the subject of joinder of actions, it is thought, does not permit the special statutory action against the Commission to be joined with any other. The point is made that the complaint is. demurrable because it is aimed at an order of October 14, 1908, which is based on one of June 12, 1908, in favor of which the limitation of time to question the validity under sec. 1797m — 65, expired before the action was commenced. It is a sufficient answer thereto that the complaint is silent about any order of June 12, 1908. So far as the pleading shows, the order of October 14, 1908, is wholly an original matter. From the foregoing it follows that the order appealed from, as regards the temporary injunction and the general demurrer, is reversed, and that as regards improper joinder of causes of action, it is affirmed. By the Court. — So ordered, with costs in favor of appellant against the telephone company and costs in favor of the Railroad Commission against appellant.