Chesapeake & Potomac Telephone Co. v. Baltimore & Ohio Telegraph Co.

Alvey, C. J., delivered the opinion of the Court. This was an application by the appellee, a telegraph company, to the Court below for a mandamus, which was accordingly ordered, against the appellant, another telegraph company, but doing a general telephone business. Both the appellant and appellee are corporations formed under the general incorporation law of this State, (Act 1868, ch. 471,) and-both were organized “for constructing, owning, leasing and operating telegraph lines within this State, or from or to any point or points within this State, or upon the boundaries thereof.” The appellee was incorporated on the 7th day of January, 1882, by the name of the Baltimore and Ohio Telegraph Company of Baltimore City, and the appellant was incorporated on the 10th day of March, 1834, by the name of the Chesapeake and Potomac Telephone Company of Baltimore City. The principal offices of both companies are in Baltimore City; the appellee doing a large and extensive general telegraph business, and the appellant doing a general telephone business.

Section 138 of the General Incorporation Law declares that “ Any person, association or corporation, owning any telegraph line doing business within the State, shall receive despatches from and for other telegraph lines, associations and companies, and from and for any individual, and shall transmit such despatches in the manner established by the rules and regulations of such telegraph lines, and in the order in which they are received, with impar ⁴¹⁰ tiality and good faith, under the penalty of one hundred dollars for every neglect or refusal so to do, to be recovered, with costs of suit, in the name and for the benefit of the person or persons sending or desiring to send such despatch; provided, however, that arrangements may be made with the proprietors or publishers of newspapers for transmission of intelligence of general and public interest, for the purpose of publication out of its order.” And by the amendatory Act of 1884, ch. 360, the general incorporation law is made in terms to confer authority to form corporations to construct, own or operate telephone as well as telegraph lines ; and by the sam,e amendatory Act, it is provided that the several sections of the general incorporation law relating to telegraph companies, “shall likewise apply to and have full force and effect in respect to telephone companies created under the provisions of this Act.” This latter Act is supposed to have been passed in order to remove all possible doubt as to the authority, under the general incorporation law, for incorporating telephone companies. But it is clear, if we take the term “ telegraph ” to mean and include any apparatus or adjustment of instruments for transmitting messages or other communications by means of electric currents, and signals, that term is comprehensive enough to embrace the telephone. And that the telephone is so embraced within the definition of the telegraph has been expressly decided in England, after the most careful analysis and comparison of the different instrumentalities, and the manner of using thepi, in the two systems. Att’y-Gen. vs. Edison Telph.

Co., 6 Q. B. Div., 244. Therefore, notwithstanding the appellant was organized as a telegraph company, under the general incorporation law before the passage of the Act of 1884, ch. 360, it was, and still is, fully authorized to do a general telephone business; and, in doing such business, it is subject to the provisions of the general incorporation law that apply to telegraph companies. ⁴¹¹ The appellant appears to he an auxiliary company, operating the telephone Exchange under the patents known as the Bell patents. Those patents, formerly held by the Rational Bell Telephone Company, are now held by the American Bell Telephone Company, a corporation created under the law of the State of Massachusetts. The patents, with the contracts relating thereto, were assigned by the former to the latter company, prior to the 23rd of May, 1882; and it is under a contract, of the date just mentioned, that the appellant acquired a right to use the patented devices in the operation of its system of telephonic exchanges.

In the agreed statement of facts, it is admitted that all the telephones used by the Chesapeake and Potomac Telephone Company, (a company to which the appellant is an auxiliary organization,) and also all the telephones used by the appellant in its Exchange in the City of Baltimore, and elsewhere in the State, are the property of the American Bell Telephone Company. It is alleged by the appellee and admitted by the appellant, that the offices of the Western Union Telegraph Company of Baltimore City are connected with the Telephone Exchange of the appellant, and that when a subscriber to the Telephone Exchange wishes to send a message by way of the lines of the Western Union Telegraph Company, the subscriber calls up the Telephone Exchange, and the agent there connects him with the office of the Western Union Telegraph Company, and the subscriber thereupon telephones his message over the lines of the appellant, to the Western Union Telegraph office; and a like process is repeated when a message is received by the Western Union Telegraph Company for a subscriber to the Telephone Exchange of the appellant. The appellee is a competing company, in the general telegraph business, with the Western Union Telegraph Company. And being such, it made application to the appellant to have a telephone in ⁴¹² strument placed in its receiving room in Baltimore, and that the same might he connected with the Central Exchange of the appellant in that city ; so that the appellee might he placed upon the same and equal footing with the Western Union Telegraph Company, in conducting its business.

This request was refused, unless the connection be accepted under certain conditions and restrictions, to be specially embodied in a contract between the two companies, and which conditions and restrictions do not apply in the case of the Western Union Telegraph Company. It appears that there were conflicting claims existing as to priority of invention, and alleged infringement of patent rights, which were involved in a controversy between the Western Union Telegraph Company and others, and the National Bell Telephone Company, to whose rights the American Bell Telephone Company succeeded; and in order to adjust those conflicting pretensions, the contract of the 10th of Nov., 1879, was entered into by the several parties concerned. The contract is very elaborate, and contains a great variety of provisions. By this agreement, with certain exceptions, the National Bell Telephone Company was to acquire and become owner of all the patents relating to telephones, or patents for the transmission of articulate speech by means of electricity.

But while it was expressly stipulated, (Art. 13, cl. 1,) that the right, to connect district or exchange systems, and the right to use telephones on all lines, should remain exclusively with the National Bell Telephone Company, (subsequently the American Bell Telephone Company,) and those licensed by it for the purpose, it rvas in terms provided, that “such connecting and other lines are not to be used for the transmission of general business messages, market quotations, or news, for sale or publication, in competition with the business of the Western Union Telegraph Company, or with that of the Gold and Stock Telegraph Company. And the party of the second part, [National Bell Teleph. ⁴¹³ Co.] so far as it lawfully and properly can prevent it, will not permit the transmission of such general business messages, market quotations, or news, for sale or publication, over lines owned by it, or by corporations in which it owns a controlling interest, nor license the use of its telephones, or patents, for the transmission of such general business messages, market quotations, or news, for sale or publica-. tion, in competition with such telegraph biisiness of the Western Union Telegraph Company, or that of the Gold and Stock Telegraph Company.” The contract of the 23rd of May, 1882, under which the appellant derives its right to the use of the patented instruments, was made in subordination to the prior contract of the 10th of Rov., 18T9, and contains a provision to conform' to the restrictions and conditions just quoted. In that subordinate contract, it is provided, that “no telegraph company, unless specially permitted by the licensor, can be a subscriber, or use the system to collect and deliver messages from and to its customers,” &c. These contracts are pleaded and relied on by the appellant as affording a full justification, for exacting from the-appellee a condition in the contract of subscription to the Exchange, that the latter should observe the restrictions in favor of the Western Union Telegraph Company.

The appellant contends that these restrictive conditions in the contracts recited are binding upon it, and that it is not at liberty to furnish to the appellant, being a telegraph company, the instruments applied for and place them in connection with the Exchange, unless it be subject- to the restrictive conditions prescribed. And if this be so, the Court below was in error in ordering the mandamus to is-sure. But is the contention of the appellant well founded, in view of the .nature of the service that it has undertaken to perform? The appellant is in the exercise of a public employment, and has assumed the duty of serving the public while in ⁴¹⁴ that employment.

In this case, the appellant is an incorporated body, but it makes no difference whether the party owning and operating a telegraph line or a telephone exchange be a corporation or an individual, the duty imposed, in respect to the public, is the same. It is the nature of the service undertaken to be performed that creates the duty to the public, and in which the public have an interest, and not simply the body that may be invested with power. The telegraph and telephone are important instruments of commerce, and their service as such has