Opposition Brief — County of Los Angeles v. Southern California Telephone Co.

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Office - Supreme Court, U,

rine

JAN 17 1949

CHARLES ELMGné

SUPREME COURT OF THE UNI

OCTOBER TERM, 1948

No. 514

COUNTY OF LOS ANGELES, a Bony Pourric anp Cor-

PORATE

Appellant,

vs.

SOUTHERN CALIFORNIA TELEPHONE COMPANY.

APPEAL FROM THE SUPREME COURT OF THE STATE OF CALIFORNIA

STATEMENT OPPOSING JURISDICTION AND

MOTION TO DISMISS OR AFFIRM

VY Oscar LawLer,

Joun W. Hotes,

Jj Francis N. Manrsnaz,

Counsel for Appellee.

Law.er, Feux & Haut,

Puissury, Mapison & Sutro,

Of Counsel.

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INDEX

Sussect Inpex

Statement opposing jurisdiction and motion to dis-

miss or affirm _. 1

Appendix “‘A””—Interlocutory opinion of Trial

ON Te tO ee er ae ee 11

Appendix “B”—Final opinion of Trial Court 22

Appendix ‘‘C’’—Findings of fact and conclu-

sions of S's Fens Hous das ae ads dicks hao vy o's os 33

EE eth nO aL Mewes Sas 7 81

Tasie or Cases Citep

Aluminum Co. v. Ramsey, 222 U. 8. 251

Assaria State Bank v. Dolley, 219 U. 8. 121. .

Bell Telephone Co. v. Van Dyke, 296 U. 8S. 533

Borden’s Co. v. Baldwin, 293 U. 8. 194. __.

Central Pac. Ry. Co. v. Costa, 84 Cal. App. 577

Chicago, R. 1. & Pac. Ry. v. Perry, 259 U. 8. 548

City and asnited of Denver v. vn 307 U.S.

615

City of Salinas v. Pac. Tel. & Tel. Co., 72 Cal. App.

(2d) 494

County of Inyo v. Hess, 53 Call. App. 415

County of Los Angeles v. Southern California Tele-

phone Co., 74 Cal. App. 97, 168 Pac. (2d) 207

County of Los Angeles v. Graves, 210 Cal. 21

County of Los Angeles v. Riley, 6 Cal. (2d) 625

County of Tulare v. City of Dinuba, 205 Cal. 111

Crescent Oil Co. v. Mississippi, 257 U. 8. 129

Detroit Bridge Co. v. Tax Board, 287 U. 8. 295

Dillingham v. McLaughlin, 264 U. 8. 370

Engel v. O’Malley, 219 U. 8. 128.

Enterprise Irrig. Dist. vy. Canal Co., 243 U. S. 157

First Nat. Bank v. Taz Comm., 289 U.S. 60.

cw uo Na qn an

~»

—

Nonnananqa

—987

li “INDEX

Frost v. Corporation Commission, 278 U.8.515..___.

German Alliance Ins. Co. v. Kansas, 233 U.S. 389. _..

pe eS Se 8 ee

Hammond Packing Co. v. Arkansas, 212 U.S. 322

Hampton v. St. L., lron Mt. d 8. Ry., 227 U.S. 456

Hatch v. Reardon, 204 U.S. 152..

Heald v. District of Columbia, 259 U.S. 114

Henneford v. Silas Mason Co., 300 U. 8.577...

Lawrence v. State Tax Comm., 286 U.S. 276..

Los Angeles v. Los Angeles County Flood Control

District, 305 U. 8. 564...........

Madden v. Kentucky, 309 U.S. 83... .

Mallinckrodt Works v. St. Louis, 238 U.S. 41... .

Metropolitan Co. v. Brownell, 294 U. 8. 580

— etc., R.R. Co. v. Mississippi, 210 U. 8.

187 .

Monaghan Vv. Armatage, 323 U. s. 681

Morf v. Bingaman, 298 U. 8. 407... ..

Noble State Bank v. Haskell, 219 U. S. 104

O’Gorman € Young v. Hartf’d Ins. Co., 282 U. 8.

251

Pacific States Co. v. White, 296 U.S. 176

Pawhuska v. Pawhuska Oil Co., 250 U. 8. 394

Phillips Petroleum Co. v. Jenkins, 297 U. S. 629

Postal Tel. Cable Co. v. Los Angeles, 160 Cal. 129

Postal Telegraph-Cable Co. v. Los Angeles, 164 Cal.

SP Geen dies be iat Se beledh-vawe es

Postal Tel.-Cable Co. v. Railroad Com., 200 Cal. 463

Prudential Ins. Co. v. Cheek, 259 U. 8. 530

Reclamation District v. Superior Court, 171 Cal.

672 .

Risty v. Chicago, R. 1. & Pac. Ry. Co., 270 U. S.

aK: dew ute dee kOe cid oan

Shallenberger v. First State Bank, 219 U. 8. 114

Texas v. City of Houston, 322 U. 8. 711

Trenton v. New Jersey, 262 U. 8. 182

Tyler v. United States, 281 U.S. 497

Twin Falls County v. Henderson, 305 U.S. 568

United States v. Title Ins. Co., 265 U. 8. 472

Utley v. St. Petersburg, 292 U. 8. 106

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sit

Io on on

owcwoua- ca uo

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INDEX

Warburton v. White, 176 U.S.484..... ss.

Weaver v. Palmer Bros. Co., 270 U. 8S. 402...

Weed v. Bergh, 141 Wis. 569

Western Union Tel. Co. v. Los Angeles, 160 Cal. 124

Western Union Tel. Co. v. Visalia, 149 Cal. 744

Williams v. Mayor, 289 U. 8. 36.

Winnebago, The, 205 U.S. 354

Statutes Crrep

California Civil Code, Section 536

California Constitution:

Article IV:

Section 22 .

Eg vcon es adh atten ces

Article XI:

Secs. 1, 3 and 7}

bo b>

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SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1948

No. 514

COUNTY OF LOS ANGELES, a Bopy Pouitic anp Cor-

PORATE

Appellant,

vs.

SOUTHERN CALIFORNIA TELEPHONE COMPANY,

A CorporaTIoN,

Appellee.

STATEMENT OPPOSING JURISDICTION AND

MOTION TO DISMISS OR AFFIRM

Appellant county brought this suit to enjoin appellee

telephone company for maintaining its lines in the public

streets and highways of the county unless and until appellee

should have procured a county franchise, and for an ac-

counting and money judgment. In answer, appellee as-

serted as defenses that its franchise from the state under

section 536 of the California Civil Code’ is a vested right

' “Telegraph or telephone corporations may construct lines of telegraph,

or telephone lines along and upon any publie road or highway, along or

across any of the waters or lands within this state, and may erect poles,

posts, piers, or abutments for supporting the insulators, wires, and other

necessary fixtures of their lines, in such manner and at such points as not

to incommode the publie use of the road or highway or interrupt the navi-

gation of the waters.”

and contract secure against impairment, that the decisions

of the Supreme Court of the State of California confirm.

ing over many years appellee’s right to a franchise under

that section constitute a rule of property, and that the

county is barred by estoppel and laches. At the trial appel-

lant’s sole contention was that section 536 violated the

California constitutional provisions forbidding appropria-

tions and grants, without consideration, of the state’s funds

or property for specified private purposes.? The superior

court rendered interlocutory and final opinions overruling

appellant’s contentions, found the statute valid and appel-

lee possessed of a state franchise under it, found that ap.

pellant was estopped to assert the contrary, concluded

inter alia that the state court decisions constituted a rule

of property in appellee’s favor, and gave judgment for

appellee.* No question under the equal protection clause

2 Art. IV, see. 22:

“No money shall be drawn from the treasury but in consequence of ap-

propriation made by law, and upon warrants duly drawn thereon by the

Controller; and no money shall ever be appropriated or drawn from the

State treasury for the purpose or benefit of any corporation, association,

asylum, hospital, or any other institution not under the exclusive manage-

ment and control of the State as a State institution, nor shall any grant

or donation of property ever be made thereto by the State; * * *°.”

Art. IV, see. 31:

“The Legislature shall have no power to give or to lend, or to authorize

the giving or lending, of the credit of the State, or of any county, city

and county, city, township or other political corporation or subdivision

of the State now existing, or that may be hereafter established, in aid

of or to any person, association, or corporation, whether municipal or

otherwise, or to pledge the credit thereof, in any manner whatever, for

the payment of the liabilities of any individual, association, municipal or

other corporation whatever; nor shall it have power to make any gift or

authorize the making of any gift, of any public money or thing of value

to any individual, municipal or other corporation whatever; * * °.”

3 Copies of these opinions and of the court’s findings and conclusions

of law are appended to this statement. See particularly Findings XX-

XXIII, XXIV-6, XXVa, and Conclusions of Law I-V, VII, VIII, X.

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of the Federal Constitution was raised or decided, or even

intimated.

Appellant appealed to the Supreme Court of the State

of California, which transferred the case to the district

court of appeal for hearing and decision. That court

affirmed the judgment; its opinion is unofficially reported

at 74 Advance California Appellate Reports 97, 168 Pacific

Reporter, Second Series 207, and a copy thereof is ap-

pended to this statement. No question under the equal

protection clause was raised or decided.

On June 18, 1946, the Supreme Court of the State of

California granted a hearing of the case. After argument

(during which no question under the equal protection

clause was raised) and submission for decision, the Su-

preme Court on February 11, 1947, set aside the submission

and invited briefs and argument on two questions of state

law, namely, whether section 536 had been impliedly re-

pealed by another California statute passed at the same

session of the legislature, or whether the other statute

so qualified section 536 as to require franchise payments

to the county.* Following resubmission, the court on De-

cember 2, 1947, again set aside the submission and requested

briefs and argument on a new set of questions, inviting

consideration of the equal protection clause and of the

standing of either party to raise the constitutional question

of discrimination.’ This was the first time any question

*“1. Was section 536 of the Civil Code repealed by the Broughton Act?

In this connection, the court desires to give further consideration to the

holding in County of Inyo v. Hess, 53 Cal. App. 415.

“2. Can effect be given to both section 536 of the Civil Code and the

Broughton Act by construing section 536 as an offer by the State of rights

which a county may not deny, but for which a county may make a charge

as provided in the Broughton Act?”

°“1. If, in order to reconcile Civil Code See. 536 and the Broughton

Act, See. 536 is construed to apply only to telegraph and telephone cor-

porations and not to individuals (see County of Inyo v. Hess, 53 C.A. 415,

423), would there be an unconstitutional discrimination and denial of

under the equal protection clause had been raised or

suggested in the case.

After argument on these questions, the Supreme Court on

August 13, 1948, affirmed the judgment of the superior

court, with one of the seven judges dissenting. The court

considered and rejected the suggestion that Section 536

of the California Civil Code violated the equal protection

clause, holding that there was ample justification for the

legislative classification of corporations, recognizing that

the statute had been accepted as valid for many years and

that vast sums had been invested in reliance on the rights

granted thereby, and finding no such compelling and cogent

reasons as would warrant the disturbance of its own many

prior decisions upholding the constitutionality of the stat-

ute, which had become ‘‘something akin to a rule of prop-

erty.”’ On September 8, 1948, the court modified its opinion

in a respect not material here. Appellant appeals, assign-

ing error only in the holding that Section 536 does not vio-

late the equal protection clause.

equal protection of the laws, on the ground that only an individual and

not a corporation would have to pay a franchise fee to use the highways,

or that, regardless of payment of fees, the privilege to use the highways

is granted only to corporations and not to individuals?) See Frost ».

Corporation Com., 278 U. S. 515.) Is there any basis for a holding that

there was a reasonable classification or that it was justifiable under police

power?

“2. Have either of the parties to this action the proper standing to

raise the constitutional question of diserimination, or can this question

be raised only by an individual who has been harmed?

“3. Assuming that there would be unconstitutional discrimination under

the above construction of the statutes, would Sec. 536 alone be unconstitu-

tional or would both See. 536 and the Broughton Act, insofar as it applies

to telephone lines, be unconstitutional? (Compare Speegle v. Board of

Fire Underwriters, 29 Cal. (2d) 34, 47-48, and cases there cited.)

“4. If both See. 536 and the Broughton Act are unconstitutional, inso-

far as telephone franchises are concerned, is there any other statutory

authority which would permit the county to impose the franchise fees

involved here ?”

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Appellee states the following matters and grounds mak-

ing against the jurisdiction of this Court:

1, Appellant is a political subdivision of the State of

California * and as such has no standing to challenge the

validity under the Federal Constitution of the state statute

here involved or the legislative classification which the state

has made therein.

Pawhuska v. Pawhuska Oil Co. (1919), 250 U. S. 394;

Trenton v. New Jersey (1923), 262 U. S. 182, 188;

Risty v. Chicago, R. 1. & Pac. Ry. Co. (1926), 270 U. S.

378, 390;

Williams v. Mayor (1933), 289 U. S. 36, 40;

Los Angeles v. Los Angeles County Flood Control Dis-

trict (1938), 305 U. S. 564;

Twin Falls County v. Henderson (1938), 305 U. S. 568;

City and County of Denver v. Colorado (1939), 307

U.S. 615;

Texas v. City of Houston (1944), 322 U. 8. 711;

Monaghan v. Armatage (1945), 323 U. S. 681.

2, Appellant’s sole attack upon the constitutionality of

Section 536 is that the statutory grant of a franchise tendered

by that statute is limited to telephone and telegraph cor-

porations and does not include individuals or partnerships.

Appellant is not a member of the class asserted to be thus

discriminated against. No one can assail the validity of a

statute on the ground that it impairs the constitutional

rights of others.

Hatch v. Reardon (1907), 204 U. S. 152, 160-161;

The Winnebago (1907), 205 U. S. 354, 360;

6 California Constitution, Art. XI, sees. 1, 3, and 742;

County of Los Angeles v. Riley (1936), 6 Cal. 2d 625, 627-628;

County of Los Angeles v. Graves (1930), 210 Cal. 21, 25;

County of Tulare v. City of Dinuba (1928), 205 Cal. 111, 117;

Reclamation District v. Superior Court (1916), 171 Cal. 672, 679-680,

Central Pac. Ry. Co. v. Costa (1927), 84 Cal. App. 577, 586-588.

Hampton v. St. L., Iron Mt. & 8. Ry. (1913), 227 U. §,

456, 468-469 ;

Mallinckrodt Works v. St. Louis (1915), 238 U.S. 41, 54;

Heald v. District of Columbia (1922), 259 U. 8, 114,

123;

First Nat. Bank v. Taz Comm'n (1933), 289 U. S. 60, 65:

Henneford v. Silas Mason Co. (1937), 300 U. S. 577, 583,

3. A party asserting unconstitutional discrimination

has the burden of proving actual and injurious, not hypo-

thetical, discrimination, and of negativing every conceiy.

able basis which might support the legislative classification,

The presumption of constitutionality can be overcome only

by factual demonstration that the classification oppressively

discriminates against particular persons and classes.

Weaver v. Palmer Bros. Co. (1926), 270 U. 8. 402, 410;

O’Gorman € Young v Hartf’d Ins. Co. (1931), 282 U.§,

251, 257-258;

Detroit Brigde Co. v. Tax Board (1932), 287 U. 8. 295,

297-298 ;

Borden’s Co. v. Baldwin (1934), 293 U. S. 194, 209;

Metropolitan Co. v. Brownell (1935), 294 U. S. 580, 584;

Pacific States Co. v. White (1935), 296 U. S. 176, 185;

Madden v. Kentucky (1940), 309 U. 8. 83, 88.

There is no evidence or other showing of discrimination

in the case at bar. The record contains no hint that any

individual or partnership has attempted or proposed the

construction of a statewide telephone system like that

operated by appellee, or has ever sought or been denied a

franchise therefor on equal terms with appellee or on any

terms. In the absence of such factual showing, this Court

has nothing before it upon which to base a judgment of

unconstitutional discrimination.

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The inequality necessary to justify setting the statute

aside for unconstitutional discrimination must be actual,

not conjectural, hypothetical or sporadic.

Hatch v. Reardon (1907), 204 U. 8. 152, 160;

Williams v. Mayor (1933), 289 U. 8. 36, 42-43;

First Nat. Bank v. Tax Comm’n (1933), 289 U. S. 60,

64-65 ;

Morf v. Bingaman (1936), 298 U. S. 407, 412-413.

4, The Federal question asserted by appellant is unsub-

stantial. The reasonableness of separate classification of

corporations for the conduct of particular functions and

businesses, and particularly those tinged with importance

to the public, is so well settled as no longer to be an open

question.

Noble State Bank v. Haskell (1911), 219 U. S. 104;

Shallenberger v. First State Bank (1911), 219 U.S. 114;

Assaria State Bank v. Dolley (1911), 219 U. S. 121;

Engel v. O’Malley (1911), 219 U. S. 128;

Crescent Oil Co. v. Mississippi (1921), 257 U. S. 129,

137;

Prudential Ins, Co. v. Cheek (1922), 259 U. S. 530, 546;

Chicago, R. 1. d Pac. Ry. v. Perry (1922), 259 U. S. 548,

556 ;

Dillingham v. McLaughlin (1924), 264 U. S. 370;

Lawrence v. State Tax Comm. (1932), 286 U. S. 276,

283-284 ;

Phillips Petroleum Co. v. Jenkins (1936), 297 U. S. 629;

Hammond Packing Co. v. Arkansas (1909), 212 U. S.

322, 349;

Aluminum Co, v. Ramsey (1911), 222 U. S. 251, 255-256 ;

German Alliance Ins. Co. v. Kansas (1914), 233 U. S.

389 ;

Mallinckrodt Works v. St. Lowis (1915), 238 U. S. 41,

55-56.

The majority holding in Frost v. Corporation Commis.

sion (1929), 278 U. S. 515, the only case cited in Opposition,

was correctly distinguished by the Supreme Court of the

State of California in the case at bar. The dissenting

opinion of Justice Brandeis in that case, concurred in by

Justices Holmes and Stone, is undoubtedly, as the cases

above cited show, the established rule of this Court.

The California legislature was entitled to consider (and

in the absence of any factual showing in the record to the

contrary must be presumed to have considered) facts which

sustain the classification embodied in the statute. The

many facts justifying such classification are familiar and

well recognized ; as the California Supreme Court said in the

ease at bar (Appendix to typewritten Statement as to

_ Jurisdiction, pp. 24-25):

‘*There is ample justification for treating corpora-

tions differently from individuals in granting franchises

for the operation of telephone and telegraph systems,

and there is a reasonable basis for the classification of

corporations as the sole recipients of the grant offered

in section 536. Corporations are in a better position

than individuals to finance and carry on statewide

projects of this nature, they are more easily regulated

and supervised, and they have much greater perma-

nency of existence and can give better assurance of

uninterrupted service. It may be that one of the pur-

poses of section 536 was to promote the establishment

of statewide communication systems, and the use of

corporate ownership and management may have been

considered the best method of achieving that purpose.”

Though statutes similar to Section 536 and applying to

telephones and telegraphs, or to railroads, have existed for

many years in most of the states of the Union, no case has

been found in which such a statute was held unconstitutional

on the ground of improper discrimination ; on the contrary,

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where the objection has been raised, the power to limit the

granting of franchises has been upheld (Appendix to type-

written Statement as to Jurisdiction, p. 25).

Asa practical matter, individuals are not discriminatorily

burdened by Section 536 of the California Civil Code. Any-

one can obtain all the benefits of that section through the

simple expedient of incorporating as a telephone or tele-

graph corporation.

Weed v. Bergh (1910), 141 Wis. 569.

5. The decision below rests upon adequate non-federal

grounds. The superior court found that appellee has spent

vast sums in reliance upon many judicial decisions * uphold-

ing the validity of Section 536 of the California Civil Code

and upon the rights granted thereby.* Both the superior

court and the supreme court of California have declared °

that appellee has the protection of these decisions as a rule

of property, a state ground of decision binding upon this

Court.

Tyler v. United States (1930), 281 U.S. 497, 501 ;

United States v. Title Ins. Co. (1924), 265 U. S. 472, 486;

Warburton v. White (1900), 176 U. S. 484, 496.

The superior court also found that by a long course of

conduct in many aspects, appellant is estopped to assert

that appellee has not a valid franchise under Section 536 of

1 Western Union Tel. Co. v. Visalia (1906), 149 Cal. 744, 747;

Western Union Tel. Co. v. Los Angeles (1911), 160 Cal. 124, 126;

Postal Tel. Cable Co. v. Los Angeles (1911), 160 Cal. 129, 130;

Postal Telegraph-Cable Co. v. Los Angeles (1912), 164 Cal. 156, 160;

County of Inyo v. Hess (1921), 53 Cal. App. 415, 422, 425;

Postal Tel.-Cable Co. v. Railroad Com. (1927), 200 Cal. 463,

472-474;

City of Salinas v. Pacific Tel. & Tel. Co. (1946), 72 Cal. App. 2d

494, 497.

8 Finding XXIII, Appendix to this Statement, p. 66.

* Conelusion of Law VII; Appendix to this Statement, p. 78; Appendix

to Statement as to Jurisdiction, p. 27.

the California Civil Code." The Supreme Court of Cajj.

fornia affirmed the judgment of the trial court withoy

qualification and in its opinion recited the facts found and

relied upon by that court as establishing this defense"

Estoppel to challenge the constitutionality of a statute ig an

adequate nonfederal ground to sustain the judgment,

Enterprise Irrig. Dist. v. Canal Co. (1917), 243 U. 8.

157, 162-165;

Utley v. St. Petersburg (1934), 292 U. S. 106, 111, 112;

Hale vy. Lewis (1901), 181 U. 8S. 473, 479;

Mobile, Jackson, etc., R. R. Co. v. Mississippi (1908),

210 U. S. 187, 204;

Bell Telephone Co. v. Van Dyke (1935), 296 U. 8. 533.

On the foregoing matters and grounds making against

the jurisdiction of this Court, appellee moves the court to

dismiss with costs the appeal taken herein.

And appellee moves this Court in the alternative to

affirm the judgment from which the appeal is taken on the

grounds that if this Court should determine that it has

jurisdiction in the premises, nevertheless the federal ques-

tion raised by appellant is not substantial and there are ade-

quate nonfederal grounds to sustain the judgment appealed

from.

Dated, San Francisco, California, December 13, 1948.

Respectfully submitted,

Oscar Law Ler,

Joun W. Hotmes,

Francis N. Marsa,

Counsel for Appellee.

Law er, Fevix & Hat,

Prtissury, Mapison & Sutro,

Of Counsel.

10 Findings XX-XXIII; conclusion of Law VIII; Appendix to this

Statement, pp. 49-66; 79.

11 Appendix to Statement as to Jurisdiction, p. 30.

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APPENDIX “A”

(Title of Court and Cause)

No. 410067

Decision oN Question Wuetuer orn Nor C. C. 536 Is

CoNnsTITUTIONAL

It is hardly necessary for me to say that I have profound

respect for the ability of both counsel who have argued

the question whether or not section 536 of the Civil Code

is constitutional. Were the three of us, all from a disinter-

ested point of view, to deal with a problem requiring much

thought, and were my own conclusion to differ from that of

either of counsel, I would suspect the correctness of my own

analysis and deductions, and would re-examine with much

care the mental processes by which I had come to that con-

clusion.

In respect to the question now before me I have one advan-

tage over counsel, and I am inclined to believe that it com-

pensates for such advantages as they may have over me.

I am on the side lines, in the neutral section, with the per-

spective that comes from disinterestedness. They are advo-

cates, each exceedingly loyal to his client as he ought to be.

At the outset I would express agreement with Mr. Prich-

ard in this, that if section 536 of the Civil Code is unconsti-

tutional, or if this court believes it to be unconstitutional,

it is the duty of this court to so declare, regardless of ex-

press or implied contrary holdings of higher courts, unless

the ultimate futility of such a ruling by the trial court might

be so evident as to show that its only effect would be the

prolonging of litigation.

Every judge of this state has taken his oath to support

the constitutions, federal and state, and even the usually

beneficial and necessary principle of stare decisis must yield

to that oath.

But I do not agree with Mr. Prichard in his observation

that the higher courts of this state never have passed on the

question of constitutionality of that section. Because of

the oath I have mentioned, and because of the principle of

constitutional government under which our courts exist,

even were no formal oath taken by the judges, whenever

court enforces an act of the legislature or gives a

under such an act, it thereby rules that the act is constity.

tional. This ruling is as effective as if expressly stated, If

made without the point having been raised in argument, it

may be in error, or, whether right or wrong, it may be dif.

ferent from the ruling that would have been made had there

been argument, but it is no less a decision on a question

that always is at issue whenever any litigant claims a

or remedy under a statute. A court cannot excuse itself

for enforcing an unconstitutional act of the legislature

saying that counsel in the case did not raise the question of

constitutionality. It is the sworn duty of the court, itself,

to be vigilant in guarding the Constitution, and it must be

presumed that that duty has been fulfilled according to the

light and ability of the judges.

In each of the ten cases cited by plaintiff’s counsel on

page 2 of the trial memorandum, the higher court, being the

Supreme Court of this state in nine of such cases, held that

section 536 of the Civil Code is constitutional. None of the

cases cited by plaintiff’s counsel on page 5 of the trial memo.

randum involved a question of constitutionality of a statnte.

Although, as I have said before, the oath of this judge to

uphold the Constitution is paramount to the principle of

stare decisis, still the prestige of a long succession of deci-

sions by the highest court of the state, uniformly holding an

act to be constitutional, ought to command respect and ought

not to be ignored except under the most earnest and most

carefully reached conviction that the high court has erred

and that a resulting injustice needs correction. It may be

that section 536 is so free from suspicious characteristics

that it has not suggested a question of constitutionality

to even one of the learned justices in even one of the many

cases involving its application. Or it may be that the ques.

tion has been raised in the mind of the court and has been

discussed and thoroughly considered, although not com-

mented on in any opinion because not argued. Regardless

of which possibility may be the fact, the fact is significant.

For some years after the adoption of the Federal Con-

stitution a question heatedly argued was whether Congress

or the Supreme Court had the ultimate authority to decide

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whether or not an act of Congress was constitutional. There

was a good deal of logical force in the contention that so

important an authority ought to abide with Congress, rather

than with a few justices, and that Congress ought to be not

only primarily but ultimately responsible for upholding and

obeying the Constitution.

Although the question finally was decided by the Supreme

Court in favor of the Supreme Court, nevertheless the view

that the legislative body maintains over a long period of time

as to the constitutionality of a particular act is a fact of sig-

nificance. For sixty-five years since the Constitution of 1879

was adopted, section 536 of the Civil Code has been recog-

nized by the California legislature as a valid constitutional

enactment. This recognition was emphasized when by the

Statutes of 1905, the act was repealed to be re-enacted so

as to include telephone as well as telegraph corporations and

to bear a new title.

When to the foregoing facts we add the fact that in other

jurisdictions statutes similar to Civil Code 536 have been

held to be constitutional against constitutional provisions

similar to ours, it will be evident that the plaintiff in this

case is petitioning this court to take a boldly original step.

Although the position in which such a plea places the judge

of this department is neither a novel nor fearful one for him

to be in, all the precedent and prestige standing against the

plaintiff do advise the court to insist that the burden of

persuasion be clearly fulfilled by the plaintiff.

It seems trite to say that the Constitution may not vio-

late itself. When different provisions appear to be contra-

dictory, some reconciliation must be found, for we have no

authority to allow either of such provisions to fall. The

constitution must be consistent within itself.

The Constitution of 1879 contained a section, section 19

of Article XI, which did for privately owned water and gas

companies what C. C. 536 does for telegraph and telephone

companies. The language was not exactly the same, but no

substantial difference in purpose or effect existed. The

original section 19, Article XI, provided in part as follows:

‘In any city where there are no public works owned

and controlled by the municipality, for supplying the

same with water or artificial light, any individual or

any company duly incorporated for such purpose under

and by authority of the laws of this state, shall, under

the direction of the superintendent of streets, or other

officer in control thereof, and under such general regy.

lations, as the municipality may prescribe for damages

and indemnity for damages, have the privilege of using

the public streets and thoroughfares thereof, and laying

down pipes and conduits therein, and connections there.

with, so far as may be necessary for introducing into

and supplying such city and its inhabitants either with

gaslight or other illuminating light, or with fresh water

for domestic and all other purposes, upon condition that

the municipal government shall have the right to regu-

late the charges thereof.’’

The language of the foregoing provision seems so clear

as to require no construction and no search for implied or

double meanings. But the provision is in direct conflict

with those parts of Sections 22 and 31 of Article IV, on

which plaintiff now relies, if Sections 22 and 31 of Article

IV mean what plaintiff now claims they mean. If those

sections are violated by Civil Code 536, they are violated

at least in principle by Section 19, Article XI, of the Con-

stitution itself. If sections 22 and 31 of Article IV mean

what plaintiff now claims they mean, then the framers and

adopters of the constitution did with the left hand what they

wrote with the right hand might not be done. But such a sit-

uation may not be. While lawmakers and judges may be

inconsistent and self-contradictory, the framers of a consti-

tution may not be, for the constitution is the word of the

ultimate and sovereign power.

Thus the court is compelled to question the soundness of

plaintiff’s present interpretation of Sections 22 and 31

of Article IV as applied to Civil Code 536. In the necessity

of reconciling section 19 of Article XI with sections 22 and

31 of Article IV, we are confronted by three words demand-

ing consideration. One is the word ‘‘gift;’’ one, the word

‘*donation ;’’ one the word ‘‘grant.’’

Section 31, Article IV, denies the legislature ‘‘power

to make any gift or authorize the making of any gift of any

publie money or thing of value.

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Section 22, Article IV denies the state the power to make

any ‘grant or donation of property. . . .”’

It might be argued that there is no conflict in denying to

the legislature a power like that exercised directly by the

people through the Constitution, but that argument would

not apply to Section 22 which denies authority to the state

as such, not merely to the legislature. Furthermore, as

counsel for plaintiff aptly has argued, section 31, Article IV,

doubtless was written for the purpose of enunciating and

writing into the basic charter a certain sound principle of

government, and it is not likely that the framers of the

constitution themselves would violate a principle of gov-

ernment that they desired to write into the foundational

document for others to respect.

It is possible, as one of counsel suggested, when consid-

ering a problem such as the one now before us, to become

overly concerned with definitions rather than with facts.

Yet, because we are dealing with words which, theoretically

at least, denote facts, we are compelled to deal with both

meanings and facts. In both law and lay usage, a gift is

something voluntarily bestowed without return or compen-

sation, or, as we say in the law, without consideration. For

our purposes it probably is better to think with the word

‘“eonsideration,’’ because by the legal meaning of that term,

it may consist of either a benefit that moves to the promisor

or a burden that is undertaken by the promisee. It seems

too clear to require argument that Civil Code 536 does not

give away something of value without exacting a return.

Indeed the section operates strictly on a pay-as-you-enter

basis. In this respect the language is not nearly so liberal

as was that of the original section 19 of Article XI of the

Constitution. That section made an outright investment

of ‘‘the privilege of using the public streets’’ in individuals

and companies that complied with a few requirements as to

incorporation and purpose of business. Civil Code 536

merely says that certain companies ‘‘may erect poles, posts,

piers,’’ ete., the terminology setting nothing apart and re-

serving nothing, until the pole, the post, or the pier is con-

structed in place. Section 536 delivers nothing until the

consideration is delivered to the community, and the privi-

lege it conveys ceases to exist the minute the recipient ceases

to perform the public service, in return for which the priyi-

lege is created.

Although as previously indica.ed, it is not my intention

to be concerned over purely academic niceties of definition,

I am inclined to value a discriminating comment made ip

James C. Fernald’s work on ‘‘ English Synonyms, Antonyms

and Prepositions.’’ The work is rather old, but not nearly

so old as the constitutional provisions with which we are

dealing. Treating the word ‘‘gift’’ and its several

synonyms, the famous lexicographer said: ‘‘A gift is in the

popular, and also in the legal sense that which is voluntarily

bestowed without expectation of return or compensation,”

This distinction penetrates to the core of the matter and

causes us to realize that motive is an essential factor in the

transaction. What may appear to be a gift on its face may

in reality be payment intended for profit. What may in’

truth be a gift may, under the law of harvest, bring a re.

turn. It is evident that in enacting section 536 of the Civil

Code, the legislature expected a return to the people of the

state. It is equally evident that compensating good to the

people of the state was the motive for the enactment. Here

was no conveyance to any named corporation. Here was no

preference to any named company. The invitation went

forth to all comers, without any discrimination. The legis-

lature said ‘‘we want our people to have the advantages of

telegraph service ;’’ and later, ‘‘we want our people to have

the advantages of telephone service.’’ This implied declara-

tion was the basic premise of section 536. Continuing,

the legislature said: ‘‘that we may have these modern con-

veniences, at the most economical rates, we make the use of

our public streets and highways available to those who will

provide the necessary private capital to supply the desired

service.’’

The tendency to monopoly in this type of business is not

the result of section 536, and is not promoted in the slightest

degree by that section, but is inherent in the character of the

business, a fact recognized and provided for by the state’s

regulation and by its control over rates.

Plaintiff’s scholarly counsel has argued that the propo-

sition as just stated by me is exactly the kind of propo-

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sition governing bodies had made to railroads and perhaps

to other public utilities before the Constitution of 1879 was

adopted and that it is the kind of transaction the framers of

the Constitution intended to abate. Counsel’s statement of

facts may be right, although there is a vast difference

between the creation of a privilege generally for a class,

making no discriminations, as is done by section 536, on the

one hand, and the making of a specific conveyance or grant

to a specific named person, corporate or natural, on the

other hand. That difference ought to be borne in mind as

one reads the cases. In any event, regardless of the precise

accuracy or inaccuracy of the statement as an historical

reference, it is an argument inappropriate to the point

instantly under consideration.

In the simple statement of Section 31, Article IV, of the

Constitution that the legislature shall not ‘‘have power

tomake any gift or authorize the making of any gift’’ of any

“thing of value,’’ we have a clear statement, expressing an

idea as clearly as can be done by the language, entirely free

of ambiguity, a statement that is reasonable, that means

the same whether considered by itself or in its context, a

statement that is consistent with the context and that, unless

given an artificial or strained meaning, is not in conflict

with other parts of the Constitution or with principles

enunciated or approved by the Constitution. In these cir-

cumstances, there is no occasion to look to extraneous facts

to learn the meaning of the words used, and under a familiar

rule of construction we are not permitted to do so. If the

framers of the Constitution intended to say one thing but

in fact said another, doing so with perfect clarity and con-

sistency of expression, it is not for the courts to redraft

the law thus stated.

This brings me to another significant fact. Section 536

of the Civil Code was the law of the state before the Con-

stitution of 1879 was adopted. It must be presumed that

the designers of the Constitution were familiar with the sec-

tion. It would have been a simple matter for the writers of

the Constitution to say that no franchise to use the public

streets or highways shall be granted to any telegraph com-

pany except upon payment of a substantial consideration

in money to the incorporated city or to the county wherein

the use is to be made. Or it might have been said that no

telegraph company shall use the public streets or hi

for the placing of poles, posts, piers, etc., until it first shal]

have obtained from the incorporated city or from the

wherein the use is sought a franchise granting such use,

for which franchise it shall pay a substantial consideration

in money. The facts that a possible objective was so

and clearly of attainment, that the subject matter was in the

mind of the draftsmen, and that the clear and effective lan.

guage required by the objective was not used, support a

strong inference that the possible objective was not the

intended one.

The second word for our consideration i« the word ‘‘dona.

tion’’ as used in Section 22 of Article LV of the constitution

The skillful workman with words ae would diserimi-

nate between the word ‘‘gift’’ and th rd‘ donation.”

The latter word often is used when the thine wiven is to be

consumed through use within the near future Also, more

often than not, I think, the word i« used in respect to a gift

of money. There is another shade of meaning pointed out

by Mr. Fernald in his work previously mentioned. He said:

‘*A4 donation is something . . . given usually on some

public ground, as to a cause or to a person representing a

cause, but not necessarily of value beyond the immediate

present.”’

As a donation is a gift and as any special shade of mean-

ing the word ‘‘donation’’ may have lends nothing to plain-

tiff’s cause, my discussion of the word ‘‘gift’’ and its

use in the constitutional provision in question applies also

to the word ‘‘donation.”’

I come now to the word ‘‘grant’’ as used in Section 22 of

Article TV. A grant may or may not be a gift. One of

its meanings is synonymous with the word gift. We have

then at first appearance a question: Was the word ‘‘grant”

intended to be synonymous with the word ‘‘gift’’, and was it

used to supplement the word ‘‘donation’’ by indicating

something of more permanent character than the word

donation,’’ or was the word ‘‘grant’’ used in its broad

meaning to denote any transfer or conveyance of a thing

of value, whether as a gift or for consideration?

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If it was used in that latter sense, the plaintiff has stated

no cause of action except only for an outright injunction,

because the complaint is founded on an alleged right claimed

by plaintiff to grant to the defendant a franchise, or an ease-

ment, or a privilege by any other name, in the public streets

and highways of the county, whereby the defendant might

slace and maintain poles, posts, piers, etc., in such streets

and highways. If such a grant is forbidden by the Con-

stitution, plaintiff is not exempt from that basic law and

may not grant a franchise and may not collect any com-

pensation for a franchise. In such a circumstance, it might

be possible for plaintiff to have a cause of action for dam-

ages, but no such cause is pleaded.

As the able counsel for defendant has pointed out, if the

word ‘‘grant’’ was used in the broad sense of denoting every

transfer or conveyance of a thing of value, then neither the

state nor any city or county thereof since the adoption of the

Constitution of 1879 has had authority to grant any fran-

chise. But the point may be carried to an even more absurd

conclusion. If every kind of transfer and conveyance of

property by the state was forbidden by the use of the word

“grant’’ in Section 22 of Article IV, then every deed issued

by the state conveying property purchased on sale for

delinquent taxes is invalid as a transaction enjoined by the

Constitution.

The foregoing considerations and also the context in

which the word ‘‘grant’’ appears compel me to the con-

clusion that the word was used as a synonym of the word

“vift,’’ denoting the same kind of a transaction as the word

“gift’’, and contrasting with, and supplementing, the word

‘‘donation’’ only in the sense that whereas the word ‘‘dona-

tion’’ was used in its ordinary sense of indicating something

of temporary use, something to be consumed in the using,

the word ‘‘grant’’ was used to denote things of lasting or

permanent use and value.

Thus as to all three of the words in question, ‘‘gift,’’

‘“donation,’’ and ‘‘grant,’’ we are dealing with the one

idea denoted by the word ‘‘gift,’’ which embraces the other

two terms; and my discussion of the use of that word ap-

plies also to the use of the word ‘‘grant’’ as it is employed

in the constitutional provision under consideration.

As there has been a good deal of comment on the ‘‘ incaley.

lable”’ value of the right created by section 536 of the Civil

Code, on the millions of dollars that a company would have

to pay for equivalent easements over private lands, it seems

that although irrelevant to the question at hand, I should

conclude with some discussion of the social and economic

policy involved. Manifestly, in one form or another, the

public must pay for its telephone service. This would be

true if the business were owned by one giant capitalist, the

state, rather than by many private citizens, all of whom are

part of the public. If the telephone company were required

to pay the ‘‘incaleulable’’ sums for the privilege of placing

its poles and wires in public streets or over private prop-

erty, the sums so paid would have to be accounted for in

the rates charged the public. Because of the peculiar nature

of the telephone business, being a business wherein the unit

costs, instead of being decreased by enlargement of the

business, are increased, and because of the additional finane.

ing that the payment for franchise privileges would require,

it is quite possible that the plan advocated by the plaintiff,

resting on its contention that Section 536 of the Civil Code

is unconstitutional, would cost the public more than the plan

originated by the legislature and maintained by it for many

decades.

When we undertake to appraise the value of using the

public streets and highways, we ought not to overlook the

value of such use to all persons, other than the telephone

company. What is the value of that use, for instance, toa

great furniture store, whose trucks must have such means

for delivery of goods? What is the value of that use toa

great oil company, which must deliver its products to the

service station near your home and to the hundreds of other

service stations near the homes of millions of other citizens?

It is not necessary to go on indefinitely, giving illustrations,

as one might.

Who, in the use of public streets, incommodes the public

so little as does a telephone company by placing and main-

taining its poles and wires? And what use of the public

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orrcnrn LID ow iseis

streets costs the public so little? Indeed, the question

might fittingly be asked, does that use cost the public any

substantial sum? True, telephone poles have been known to

bring to an abrupt end the wild ride of a drunken driver.

But no one not drunk would blame the telephone pole for

that interference. And poles and wires may be unsightly,

but so may be billboards and buildings, and so certainly are

many trucks and trailers and the loads they carry. If one

will drive from Bakersfield to Los Angeles at a late hour

of the night, he will be impressed by the extent to which he

can be incommoded, “isecommoded and placed in peril by the

numerous trucks on the highway, and he will be inclined to

a comparatively friendly feeling for telephone and tele-

graph poles.

The legislature has made many rules for the use of the

highways, and subject to those rules, they are open to the

public generally. The use made under section 536 of the

Civil Code is different from that made under other acts only

in the physical nature of the implementation, but so far as

concerns the burden on the public, the difference definitely

is in favor of the use made under section 536; and so far

as concerns the principle involved, there is no difference.

It is a grave mistake in thinking to set the stockholders of

a telephone company apart and then to draw a line between

them and the public. They are as much a part of the public

as any of us. That they have been able to save some money

and have invested it in an enterprise that performs a serv-

ice indispensable to a modern community does not isolate

them from the public nor place them in a position where their

interests are adverse to those of the public. Nor do these

facts mean that if such persons are able to make a fair

profit on their investment they are enemies or oppressors of

the public.

In establishing the legislative policy in question the fore-

going considerations doubtless were in mind, and even if this

court disagreed with such observations, the language used

by the legislature in voicing its policy, and by the Constitu-

tion in the provisions in question, would not justify, in my

opinion, voiding the act of the legislature. Hence it is my

conclusion that section 536 of the Civil Code is a constitu-

tional enactment, entitled as such to the respect of, and to

enforcement by, this court. ;

Dated May 2nd, 1944.

Wu. J. Pater,

Judge.

(Endorsed:) No. 410067. Decision on Question Whether

or Not C. C. 536 Is Constitutional. Filed May 2

1944. J. F. Moroney, County Clerk, by W. L. Goff, Deputy.

APPENDIX “B”

No. 410067

(Title of Court and Cause)

Notice or Decision

In view of the extensive research and briefing done by

counsel in this case, it would be an act of supererogation for

this judge to attempt an additional assembly of precedents

for their enlightenment. This notice is dictated for only one

purpose, and that purpose is not to make a contribution to

the body of the law, but rather only to inform counsel of

the court’s decision in this case, and, as briefly as possible,

of the court’s reasons for the decision.

In the final brief of counsel for plaintiff we have, I think,

a correct statement of the nature and basis of plaintiff's

alleged cause of action, a much clearer statement than can

be gathered from the complaint itself. The cause of action,

if it be such, stated as simply as possible, is this: The de-

fendant is a trespasser upon the public highways of the

county and it is such because section 536 of the Civil Code,

under which defendant claims, is unconstitutional. Plaintiff

concedes again that defendant maintains no nuisance except

only as the bare fact of being a trespasser constitutes a

nuisance. Hence, we need not discuss the subject of

nuisances.

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nh ot ak al = Bie a Ole ee eee

Plaintiff seeks two remedies. It asks for two per cent of

defendant’s gross profits from a time two years next imme-

diately preceding the commencement of the action, and for

what plaintiff’s counsel now terms a conditional injunction.

The former of the two prayers suggests a novel remedy.

I know of no law, theory or principle of law that would

justify it and counsel has cited none. It is plain that the

r had in mind the ‘‘ Broughton Act’’, Act 2720, Deer-

ing’s General Laws, titled the ‘‘Franchise Sales Law.’’

But that act does not even purport to change the law gov-

erning damages for trespass, section 3333 of the Civil Code.

Plaintiff has alleged no damage and has proved none.

Indeed plaintiff concedes a benefit to the county, calling it

an “‘indirect’’ benefit, and the evidenee amply supports

that concession, whether the benefit be called direct or in-

direct.

At an early stage of the proceedings, I informed counsel

of my opinion that if Civil Code section 536 is constitutional,

the complaint states no cause of action. I would reassert

that opinion in the light of plaintiff's latest definition of the

nature of its action.

The ‘conditional injunction’’ proposal sifts down to this:

Having taken jurisdiction of the cause, a court of equity

ought to make complete disposition of it, whether the ap-

propriate relief appears to be the remedy prayed for or

some other type of relief. To grant an injunction or a

“eonditional injunction’’ which might become an injunction,

the effect of which would be to stop telephone service in

Los Angeles County, is, of course, incomprehensible. The

city police departments, fire departments, and the sheriff’s

office, to say nothing of all the other agencies of government

or of the needs of the sick or of private citizens generally,

would lose much of their effectiveness in the effort to pro-

tect the county against crime; and from the military au-

thorities of the United States probably would come a

declaration of martial law made necessary by the need for

keeping the telephone service alive. If plaintiff is entitled

to any relief, the remedy would be an order of this court

directing the defendant to purchase a franchise from the

County of Los Angeles and providing for the appointment

of a commissioner or other agent of the court to execute

such a contract in behalf of the defendant in the event jt

should refuse to do so. An action for the franchise pay-

ments would follow if they were not paid.

In an opinion delivered at plaintiff’s request in the course

of the trial, I held that section 536 is a constitutional, valid

enactment. To repeat the statements then made ig not

necessary, although I might suggest a thoughtful reading

of the informal memorandum, not that counsel would gain

enlightenment from it, but only that it might be fairly

understood and represented. Counsel for plaintiff have

been given a genuine opportunity to prove the fallacy of

that opinion, and I am sure that as they see the matter,

have succeeded. I do not, however, seem to place the same

value as they do on their arguments, and some brief com.

ment on them might not be out of place.

Counsel disagree with me as to the significance of section

19, Article XI of the Constitution, whereby private water

companies were given the privilege of using the public

streets. They argue that this is a point in their favor,

showing that the framers of the Constitution intended that

the people, through the Constitution, and not the legislature,

be the only power from whom such a dedication might come.

But the people are the state, and counsel overlook the fact

that part of section 22, Article IV, on which they rely, does

not refer to the legislature but denies to the state the very

power which, if counsel’s arguments are sound, was exer-

cised by the state in section 19, Article XI. The conclusion

necessarily follows that the writers of the Constitution, in

using the word ‘‘grant’’ in section 22, Article IV, could

not have intended the establishment of a right like that

announced in section 19, Article XI, which is exactly the

same kind of a right in the public streets as that decreed

by the legislature in section 536, Civil Code. Except only

for the incidental differences in the two kinds of uses, the

rights are identical in their nature.

Counsel have argued at considerable length to restrict

the effect of the cases cited by themselves on page three of

their trial memorandum, and to which reference was made

by the court . To discuss those cases in detail would be of

no importance when the one outstanding fact to which this

court attached importance is not only conceded by plaintiff's

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counsel but has been emphasized with much force and under-

scoring. That fact is that the Supreme Court of California,

consistently whenever opportunity has presented itself, has

dealt with section 536 of the Civil Code as a valid, constitu-

tional enactment.

Plaintiff’s counsel have argued correctly that questions

of social and economic policy are not before this court and

are not in any degree determinative of the legal question

submitted. This court stated the same thing in its opinion

during trial and made quite clear the fact that the court

commented on such points only because counsel for plaintiff

previously had given them a good deal of attention.

We have further insistence that section 536, Civil Code,

makes a gift of public property to telephone companies.

This insistence proceeds from the contention that the right

which goes to telephone companies from the state under the

section is totally bare of consideration. At this point I

feel that I fail in some way to comprehend counsel’s rea-

soning, for they admit that the state has received and con-

tinues to receive a benefit from the installations and service

of the defendant and its predecessors, flowing from their

investment and efforts in reliance on section 536 and their

adaptation to public use of the rights created by the section.

Perhaps counsel attach importance not readily apparent

to the designation of this benefit as an ‘‘indirect’’ benefit.

Iam not certain of understanding counsel’s meaning in

their use of the term ‘‘indirect’’ in this connection, but I see

no need to discuss the question whether the admitted and

significant benefit should be regarded as direct or indirect,

because the law of consideration does not require that the

benefit conferred be a direct as distinguished from an in-

direct one. Indeed, no benefit need be conferred on one

party if the other assumes a burden in return for what he

receives.

Evidently counsel find significance in the fact stressed

by them that the defendant yet owns every telephene pole,

every foot of wire, every installation made by it in the public

highways; but what does that fact have to do with the

question of consideration? The passing of title is not a

requisite of consideration; the value of property is depend-

ent on its use and its adaptability for use; and one may

COPY BOUND CLOSE IN CENTER

enjoy that value and be benefitted by such use al

not the owner of title. We are reminded also that ey

telephone user pays for the service he receives; but this

does not change the fact that the private capital of other

persons was invested and risked to buy the equipment and

to employ the technical knowledge, the efficiency, and judg.

ment, required to provide the service at the rates estab.

lished.

I am tempted to remind counsel of a story. The newly.

weds, who had used a very long list for their wedding in.

vitations, with a resulting stock of silverware, china,

glassware, linens, et cetera, and the usual duplications, were

putting their home in order when a letter came, written on

quality stationery and in a good hand. The letter went

like this:

‘‘Dear Friends: After strenuous days establishing a

home and attending to the many little duties involved

in placing one’s house in order, I know that you will

enjoy an evening at the theater. Enclosed are two

tickets to the Biltmore for Friday evening of this

week. I'll let you guess who is sending them.?ftt”

An appropriate and timely gift, the newlyweds thought,

and they commenced guessing. Returning from the theater

they were still guessing until, arriving home, they dis.

covered the effects of a perfect burglary, with much of the

silverware missing. On the dining table was a brief note

saying, ‘‘Now you know who.’’

Yes, the theater tickets were a ‘‘gift’’ but I am sure

that the California legislature did not intend that kind

of a ‘‘gift’’, when they enacted section 536 of the Civil Code.

Would it not prove to be a similar sort of gift if now,

after the invitation of section 536 has been accepted and

acted upon, after the people have received the consideration,

after the telephone and telegraph systems have been es-

tablished by private capital, and not by taxpayers’ money

or government bonds, after the people (the state) have

accepted all the intended benefits, the state were to say:

‘*Sorry, but permitting you to use the public streets was

a gift, totally devoic of consideration and hence invalid,

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~aes Er — ., Se eee ee 2 eee eo

so move along to private property or commence paying

for the gift.’’?

The plain fact is that when the legislature enacted

section 536 it did so for only one purpose and that purpose

was to encourage the use of private capital, private busi-

ness judgment, and technical skill, and to invite the use

of the public highways, in the establishment of a system

of modern and needed communication for the benefit of

the people of the state. That purpose does not comport

with the conception denoted by the word ‘‘gift’’.

Counsel have induced me to purchase ‘‘Webster’s Dic-

tionary of Synonyms’’, published in 1942 to find out what

the framers of the Constitution meant in 1879 when they

ysed the word ‘‘grant’’ in Section 22, Article IV, whereby

they denied to the state the authority to make any grant of

perty. This excellent work points out (p.66) that the

word ‘‘grant’’ has general uses which are to be distin-

guished from the special use sometimes designated by the

term ‘‘grant-in-aid’’. It defines this special term as quoted

by plaintiff’s counsel in their opening brief (pp. 14, 15),

and illustrates the use of the term, as not quoted, in the

following language :

“thus grants of land (land grants) from the federal

government were made to various railroads building

new lines and to various colleges and universities

providing agricultural and industrial courses in the

mid-nineteenth century; the Rockefeller Foundation

makes grants chiefly to institutions engaged in health

and medical research.’’

Counsel for plaintiff seem to contend that the framers

of our Constitution, when using the word ‘‘grant’’ in re-

stricting the power of the state, used it in that special

sense sometimes denoted by the term ‘‘grant-in-aid’’, as

that term is defined and its use illustrated in Webster's

Dictionary of Synonyms. This definition and these illustra-

tions may, indeed, be helpful. One of the essentials appears

to be a specific, named grantee. We can eliminate certain

possibilities. For reasons pointed out in my opinion de-

livered in course of trial, we must conclude that the Consti-

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tution does not forbid grants for compensation, although

the language specifies no such exception. For reasons algo

pointed out in that opinion, the reasonable deduction is

that the makers of the Constitution did not intend to for.

bid designations of use of publie highways in the installa.

tion and maintenance of certain necessary public utilities

for the public benefit, as was done by the Constitution

itself in respect to private water companies. It seems

quite probable, therefore, that what the framers of the

Constitution intended to forbid was the giving away of

public lands and moneys to specific, named private cor.

porations, associations and other institutions, in the manner

illustrated in the cited work on synonyms.

If we shall be realistic, we shall note a decided and im.

portant distinction between the outright grant of a traet

of land or the donation of a sum of money or the grant of

a monopolistic franchise to a specific, named private cor.

poration or association, for its exclusive use, on the one

hand, and, on the other hand, the provisions of section

536, Civil Code, whereby it is directed that among the

many uses to which public highways may be put shall be

the use by telephone and telegraph companies, not any one

such company, but all such companies then in existence

or thereafter to be formed, so long as other users of the

highways are not incommoded.

The use of the word ‘‘exclusive’’ in connection with the

right conferred by section 536 has been greatly over-em-

phasized. Such ‘‘exclusive’’ right as this section confers

comes only from the law of physics, that two bodies may not

occupy the same space at the same time, and not from any

other necessary implication in the code section. In pro-

viding that the telegraph and telephone installations must

not incommode the public use of the highway, the law

places the telegraph and telephone companies, as to such

installations, at the bottom of the list among highway users,

and that position is a far ery from exclusiveness. No com-

pany is given an exclusive right over any other company in

this restricted use of the highways. All must be accommo-

dated, and the road commissioner or other authority in

charge may order a pole moved whenever in his discretion

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such moving is required by the public convenience. Be-

cause of the law of physics the parked automobile has the

same ‘‘exclusive’’ use of a bit of the highway, while it is

parked, as the telephone company has of a tinier bit of

ground, off the traveled portion of the highway, while the

pole remains in place. Indeed the ‘‘exclusive’’ privilege of

the parked car, except in a restricted parking area, rests

on a more secure basis than does that of the telephone

pole, although in most instances the function of the parked

car is purely private and often to serve a pleasure-bent

owner.

The guarded and restricted privilege of the teiephone

company is such a different status from the ownership of

fee title to a section of land and from the ownership of a

monopolistic franchise and from the ownership of a sum

of money that one must totally ignore facts to insist that

because all are property rights no distinction may be made

between them.

The familiar principle, often announced, and stated

again recently in Hill v. Fowble, 65 A.C.A. 45 (3), is that

the practical construction given a contract by the parties

in their conduct and actions while executing the agreement

is strong evidence of what was intended. This principle

applies with extraordinary force and appropriateness to sec-

tion 536, Civil Code, in respect to which, since the adoption

of the Constitution, and until the preliminaries of filing of

the instant suit, the practical construction adopted by the

state in all departments called upon to construe the section

and its relationship to the Constitution has been uniform,

and consistent with the validity of the section.

This observation brings me to the question of estoppel.

Counsel for plaintiff have foreclosed the defense of estoppel

with such absoluteness and finality, shutting their case off

from it with such iron-clad, water-proof, fire-proof, and

bullet-proof encasement as to invite some suspicion of the

merit of the argument, because we like to think of the

doctrine of equitable estoppel as a principle having a

degree of flexibility, capable of being molded into the

factual form of a given case when justice cannot be done

without it, and hence a principle, the application of which

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nearly always is debatable, and which presents some appeal

to the conscience and discretion of the chancellor.

California no doubt would recognize the principle of

equitable estoppel if there were no statutes on the subject,

However, we do have legislative enactments to which we

may look to learn the nature and scope of the principle,

They are section 1962, par. 3, Code of Civil Procedure, and

sections 3512, 3515, 3516, 3517, 3519, 3521 and 3528 of the

Civil Code.

The method of counsel for plaintiff in disposing of the

defense of estoppel in this case is as simple as it is precise

and efficient. The steps are as follows: (1) Section 536 is

unconstitutional. (2) Hence, every act by an official of the

state which has rested upon, assumed or recognized the act

as a valid enactment, has been ultra vires. (3) The state

may not be bound by the ultra vires acts of its official agents,

(4) Therefore, no estoppel can rise against the state from

those acts.

In support of step (2) counsel cite a number of cases on

page 36 of their opening brief. These cases announce the

familiar rule that acts of public officials ‘‘in excess’’ of the

power conferred upon them are ultra vires and not binding

on the state, county or city involved.

There appears to be a weakness in the argument that

comes from ignoring the fact that all the official conduet

upon which defendant relies in the defense of estoppel was

conduct within the scope of the authority vested in the re-

spective officials, and the further fact that defendant re-

lies not only on acts but on omissions to act. The legis-

lature has authority to legislate and to be the first to de-

termine the constitutionality of a proposed enactment.

It has power to err in deciding that question, but there is

a rebuttable presumption that its decision is correct and

that the statutes it creates are constitutional. Executive

and administrative officers of the state have the right, if

not a duty, to rely on that presumption until it is overcome.

The Supreme Court has authority to question the validity of

a statute, to decide whether or not it is constitutional,

to announce its decision, and to err in its judgment. The

county assessor and the county tax collector have full

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authority to do everything they did which is included in

the recitation of facts upon which defendant relies. They,

too, have authority to err in the judgment they are required

by law to exercise. The same rule applies to the road

commissioner and to the board of supervisors and to the

district attorney and to the county counsel. A significant

feature of the defense of estoppel in this case is that no

act or proceeding included in the long series of official

conduct upon which defendant has relied was an act or

proceeding done or conducted in excess of the authority

vested in the respective officials.

Counsel for plaintiff cite the four requisites of estoppel,

as summed up and stated on page 627 of 10 California

Jurisprudence. As stated in that work, the four listed con-

ditions generally are required, but the pages that follow to

page 645 must be read, if one does not read all the cases

cited to learn that those four requisites are not nearly

so rigid as they appear in the summary and that in practi-

cal application the doctrine is as flexible as I suggested at

the outset of this discussion.

Much importance appears to be attached to the fact

that defendant and its predecessors, having able counsel to

advise them, always have been in equal position with the

plaintiff to know the law. We may conclude, of course, as

counsel for plaintiff urge, that defendant and its prede-

cessors have relied on the advice of their own counsel.

But these facts and deductions do not seem to me to be a

complete answer. As former Chief Justice Hughes once

wrote, the law is what the Supreme Court says it is, and if a

lawyer may not rely on what the Supreme Court of his

state has done, and if he may not rely on what the legisla-

ture has done, with the later sanction of the Supreme

Court, and if he may not rely on what many other capable

officials of the state have done, they in turn relying on the

legislature and the Supreme Court, then it may not be

said that he has had a fair opportunity to know the truth

and a fair basis upon which to advise his client. If all

the officials of the state with whose conduct he must be

concerned combine to deceive him, certainly the fact that

he is a lawyer, with his own right to have thoughts as to

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what the law is or should be, does not deprive him of the

right or rid him of the necessity of advising his client jp

accord with the practical interpretation placed on the law

by the officials of the state.

If counsel for plaintiff now are right, then every tax

that has been collected from the defendant and its prede-

cessors levied against the ‘‘franchise’’ held under section

536, has been wrongfully collected because if defendant

has been only a trespasser, it has had no franchise to be

assessed or taxed, and this is the kind of irreconcilable

reversal of position, I think, with which the law is con.

cerned in connection with the doctrine of estoppel. The

county, through the many years, has assessed and collected

taxes from the defendant and its predecessors claiming that

they have held a valid, valuable and taxable property

right under section 536. The county has used that money

and makes no offer to restore; indeed, does not even

come before the court and admit having collected the

money wrongfully or even offer to credit the wrongfully

collected sums against the franchise payments it seeks,

Yet by this action it would make a complete reversal of

its position and would declare the defendant to be only

a trespasser. This, I think, is rather typical of the kind

of situation for which the doctrine of estoppel was con-

ceived to implement the purpose of the court to do justice

and to prevent injustice.

It is the decision of the court that the plaintiff is not

entitled to take anything by this action. Counsel for de-

fendant will prepare findings, conclusions and judgment.

This case is now on the court’s calendar for Monday,

August 21, 1944, having been placed there pending the

filing of briefs and the consideration thereof and decision

by the courts. As there is no occasion for its being on the

calendar in the light of this decision, it is ordered off

calendar.

Dated: August 18, 1944.

WuuuM J. Patmer,

Judge of the Superior Court.

(Endorsed) : No. 410067. Notice of Decision, Filed Aug.

18, 1944. J. F. Moroney, County Clerk, by W. L. Goff,

Deputy.

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Ix rae Superior Court or THE State or CaLiroRNiA IN AND

ror THE County or Los ANGELES

No. 410067

County or Los Anogzes, Plaintiff,

Sovrnern Catirors1a TELEPHONE Company, a corporation,

Defendant.

Findings of Fact and Conclusions of Law

This cause came on regularly for trial on the 26th day

of April, 1944, before the court sitting without a jury in

Department 12 thereof, the plaintiff being represented by

J.H. O'Connor, Esq., County Counsel of the County of Los

Angeles, by S. V. O. Prichard, Esq., Assistant County Coun-

sel, and Gerald G. Kelly, Esq., and A. Curtis Smita, Esq.,

Deputies County Counsel, and the defendant being repre-

sented by Messrs. Pillsbury, Madison & Sutro and Messrs.

Lawler, Felix & Hall, by Oscar Lawler, Esq., John W.

Holmes, Esq., and Thomas H. Hearn, Esq., its attorneys,

and oral testimony and documentary evidence having been

offered by the parties respectively and received by the

court, and the parties, through their respective counsel,

having made and entered into certain stipulations and ad-

missions, both oral and in writing, and counsel for the

respective parties having submitted oral arguments and

written briefs, and the court, having heard and considered

all of the testimony and evidence so offered and received,

and having heard, read and considered all of the said stipu-

lations and admissions of counsel and having considered

said arguments and briefs and being fully advised in the

premises, now makes its findings of fact and conclusions

of law herein as follows:

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Findings of Fact

Plaintiff is now and during all the times herein stated

has been a body politic and corporate, a county of the State

of California.

Ever since the 19th day of April, 1916, defendant has

been and is now a corporation, organized and existing

under the laws of the State of California for the purpose,

among other purposes, of engaging in the telephone and

telegraph business. Ever since its incorporation defendant

has been and is now a wholly owned subsidiary of the

Pacific Telephone and Telegraph Company, which now owns

and at all times since the incorporation of defendant hag

owned all issued and outstanding capital stock of defendant.

Ill

At all times between and including the 27th day of April,

1889, and the 30th day of April, 1937, Sunset Telephone and

Telegraph Company (hereinafter called ‘‘Sunset’’) was a

corporation organized and existing under the laws of the

State of California for the purpose, among other purposes,

of engaging in the telephone and telegraph business, and

at all times during the period commencing on or about the

27th day of April, 1889, and until on or about the 2nd day

of January, 1907, said Sunset engaged in and carried on,

in the State of California and in other states of the United

States, an exchange and interexchange, intrastate and inter-

state telephone, and an intrastate and interstate telegraph

business, and for such business maintained and operated,

in the State of California and in said other states of the

United States, an exchange and interexchange, intrastate

aud interstate telephone and intrastate and interstate tele-

graph system. At all times during said period, Sunset, for

the purposes and as a part of its said business and system,

constructed, maintained and operated, and held itself out to

the publie as constructing, maintaining and operating, tele-

phone lines and lines of telegraph along and upon the public

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roads and highways and along and across the lands and

waters of the State of California and of the incorporated

and unincorporated areas of the plaintiff County, and con-

structed, erected, maintained and operated along and upon

said roads and highways and along and across said lands

and waters, poles, posts, piers and abutments for support-

ing the insulators, wires and other necessary fixtures of

said lines in such manner and at such points as not to incom-

mode the publie use of any such road or highway or to

interfere with the navigation of any such waters, and by

means thereof rendered telephone and telegraph service

to the public.

At all times since the 31st day of December, 1906, szid

The Pacific Telephone and Telegraph Company (hereinafter

ealled ‘‘ Pacifie’’) has been and now is a corporation organ-

ized and existing under the laws of the State of California

for the purpose, among other purposes, of engaging in and

carrying on, and it has engaged in and carried on and is

now engaging in and carrying on in the State of Califoria

and in other states of the United States, an exchange and

interexchange, intrastate ad interstate telephone and intra-

state and interstate telegraph business, and for such busi-

ness manitained and operated, in the State of California

and in said other states of the United States, an exchange

and interexchange, intrastate and interstate telephone and

intrastate and interstate telegraph system. At all times

since the 2nd day of January, 1907, said Pacific, for the

purposes of its said business, and as a part of said system,

has constructed, maintained and operated, and has held

itself out to the public as constructing, maintaining and

operating, telephone lines and lines of telegraph along and

upon the publie roads and highways and along and across

the lands and waters of the State of California, and has

constructed, erected, maintained and operated along and

upon said roads and highways and along and across said

lands and waters, poles, posts, piers and abutments for

supporting the insulators, wires and other necessary fix-

tures of said lines in such manner and at such points as

not to incommode the public use of any of said roads or

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highways or to interfere with the navigation of said

and by means thereof rendered telephone and tel

service to the public. Continuously during the period from

on or about the 2nd day of January, 1907, to the 31st

of May, 1930, said Pacific, as a part of its said system and

business, constructed, erected, maintained and operated its

said lines and its said poles, posts, piers and abu

for supporting said lines along and upon the public roads

and highways and along and across the lands and waters

in and throughout the incorporated and unincorporated

areas of the plaintiff county, and by means thereof rendered

and continued to render telephone and telegraph service

to the public.

1. On the 2nd day of January, 1907, and the 17th day of

October, 1907, said Sunset leased to said Pacific for a

period of thirty (30) years all of said Sunset’s said system

and all property, real and personal, owned and used by it

in and in connection with its said telephone and telegraph

system in the States of California, Washington and Ore.

gon, including all of said Sunset’s rights, privileges, fran-

chises and property, except its corporate franchise, in and

throughout the said states. Said leasing was accomplished

by two indentures in writing, copy of each of which has

been received in evidence herein, marked respectively ‘De.

fendant’s Exhibit 19°’ and ‘‘Defendant’s Exhibit 20.”

2. Continuously from and after January 2, 1907, said

Pacifie maintained, operated, carried on and added to and

extended the said telephone and telegraph business, system

and property so leased to it by said Sunset, and by means

thereof rendered telephone and telegraph service to the

publie.

3. On the 8th day of January, 1917, pursuant to and upon

the authority of orders and decisions Nos. 3845 and 3959

of the Railroad Commission of the State of California,

duly given and made respectively on November 4, 1916 (re-

ported in Vol. 11 CRC at page 806), and December 29,

1916 (reported in Vol. 12 CRC at page 115), said Sunset

sold, granted, conveyed, assigned and transferred to said

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Pacific all of said Sunset’s property of every kind and

nature whatsoever and wheresoever situated, including

franchises, but excluding its corporate franchise, and in-

cluding in particular said Sunset’s said telephone and tele-

graph property and system. A copy of said conveyance has

been received in evidence herein, marked ‘‘Defendant’s

Exhibit 22’’.

4, Except as hereinafter set forth, said Pacific, ever since

the 8th day of January, 1917, has continued to and now

does own the telephone and telegraph property, rights and

franchises so acquired by it from said Sunset, and continues

to and does now operate, maintain and extend the same.

1. On the 30th day of April, 1917, pursuant to said order

and decision No. 3845 of the Railroad Commission of the

State of California (11 CRC 806), said Pacifie sold, granted,

assigned, transferred and conveyed to the defendant the

Los Angeles and Eagle Rock Telephone exchanges of said

Pacific, including all properties, both real and personal,

and all rights and franchises, owned by said Pacific in the

cities of Los Angeles, Watts, Vernon, Eagle Rock and Hunt-

ington Park in the County of Los Angeles, and in portions

of the unincorporated areas of said county, within said

exchanges, contiguous and adjacent to said cities, but ex-

cluding said Pacifie’s toll lines and the rights and fran-

chises therefor in said exchanges. The boundaries of said

Los Angeles and Eagle Rock telephone exchanges were,

prior to and on said 30th day of April, 1917, established

by the said Railroad Commission and are shown by red

lines on a map received in evidence herein and marked

“Defendant’s Exhibit 27’’. A copy of said conveyance has

been received in evidence herein marked ‘‘ Defendant’s Ex-

hibit 24.’’

2. Continuously since the 30th day of April, 1917, the

defendant has continued to, and still and now does, own,

maintain, operate and extend the telephone and telegraph

properties and system so acquired by defendant from said

Pacific, in conjunction with and as a part of the general

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exchange and interexchange, intrastate and interstate tele.

phone and intrastate and interstate telegraph system owned

and operated by defendant.

VII

1. At all times between the 22nd day of September, 1902,

and the 30th day of April, 1917, Home Telephone and Tele.

graph Company (hereinafter called ‘‘Home of Los Ap.

geles’’) was a corporation organized and existing under

the laws of the State of California for the purpose of

engaging in the telephone and telegraph businesses, and

for the purposes of said business constructed, operated and

maintained a telephone system, and as a part of said sys-

tem constructed, maintained and operated and held itself

out to the public as constructing, maintaining and operating

telephone lines along and upon the public roads and high-

ways, and along and across the lands and waters in the

plaintiff county, and erected poles, posts, piers and abut.

ments for supporting the insulators, wires and other neces.

sary fixtures of said lines in such manner and at such points

in the said public roads, highways, lands and waters as

not to incommode the public use of any of said roads or

highways or to interfere with the navigation of any of said

waters and by means of said system rendered telephone

service to the public. Said telephone system of said Home

of Los Angeles was maintained and operated in competition

with said telephone and telegraph system owned, main-

tained and operated successively by said Sunset and said

Pacific, in the area fixed, established and designated by the

Railroad Commission of the State of California, as the

Los Angeles Exchange of said Home of Los Angeles, and

shown by yellow lines on the map received in evidence and

marked ‘‘Defendant’s Exhibit 27’’ herein.

2. Pursuant to said order and decision No. 3845 of the

Railroad Commission of the State of California (11 CRC

806) and on the 30th day of April, 1917, said Home of Los

Angeles sold, granted, assigned, transferred and conveyed

to the defendant all of the real and personal property, in-

cluding franchises, of Home of Los Angeles (except the

corporate franchise, corporate records, cash, bills receiv-

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able and securities on hand), and particularly including the

said telephone and telegraph properties and system then

and theretofore owned, maintained and operated by said

Home of Los Angeles. A copy of said conveyance has

heen received in evidence in this cause, marked ‘‘Defend-

ant’s Exhibit 23.”’

3. The aforesaid telephone and telegraph properties of

said Pacific and of said Home of Los Angeles so conveyed

to defendant as hereinbefore set forth were consolidated

into and maintained and everated as a single unified tele-

phone and telegraph system, and by means thereof defend-

ant rendered and continues to render telephone and tele-

graph service to the public.

Vill

1, At all times between and including the 2nd day of June,

1904, and the ist day of October, 1918, San Fernando Val-

ley Home Teiephone Company (hereinafter called ‘‘San

Fernando Home’’) was a corporation organized and exist-

ing under the laws of the State of California for the purpose

of engaging in the telephone and telegraph business, and

for the purposes of said business owned, operated and

maintained a telephone system in competition with the busi-

ness and system of said Pacific in portions of the incorpo-

rated and unincorporated areas within the plaintiff county,

particularly in the cities of Glendale and Burbank and

unincorporated areas contiguous and adjacent to said cities,

and for the purposes of its said business and as a part of

said system constructed, maintained and operated, and held

itself out to the public as constructing, maintaining and

operating, telephone lines along and upon the public roads

and highways within said county, and poles, posts, piers

and abutments for supporting the insulators, wires and

other necessary fixtures of said lines in said roads and

highways in such manner and at such points as not to in-

commode the public use of any of said roads or highways,

and by means thereof rendered telephone service to the

public.

2. On or about the Ist day of October, 1918, pursuant

to and upon the authority of decision No. 5316 of the Rail-

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road Commission of the State of California, made April 16,

1918 (reported in Vol. 15 CRC, at page 572), said San

Fernando Home sold, granted, conveyed, assigned and trans.

ferred to said Pacific all of the telephone plant and system

of said San Fernando Home and all properties owned

it and used in connection therewith, including franchises,

except its corporate franchise.

3. Pacifie incorporated the telephone property, rights

and franchises so acquired by it from said San Fernando

Home into and consolidated the same with the telephone

and telegraph system and property of said Pacific, and con.

tinued by means thereof to render telephone and telegraph

service to the public.

1. At all times between and including the 29th day of

April, 1903, and the 18th day of October, 1907, Compton

Home Telephone and Telegraph Company (hereinafter

called ‘‘Compton Home’’) was a corporation organized

and existing under the laws of the State of California

for the purpose of engaging in the telephone and telegraph

business, and for the purposes of said business owned, oper-

ated and maintained a telephone system in competition

with the said telephone and telegraph business and system

successively operated, as hereinbefore mentioned, by said

Sunset and said Pacific in the incorporated and unineorpo-

rated areas within the plaintiff county, particularly in the

city of Compton and in the unincorporated areas contiguous

and adjacent to said city, and for the purposes of its said

business and as a part of its said system, constructed, main-

tained and operated, and held itself out to the public as

constructing, maintaining and operating telephone lines

along and upon the public roads and highways within said

county, and constructed, erected, maintained and operated

along and upon said roads and highways poles, posts, piers

and abutments for supporting the insulators, wires and

other necessary fixtures of said lines in such manner and

at such points as not to incommode the public use of any

of such roads or highways, and by means thereof rendered

and continued to render telephone service to the public.

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9, On or about the 18th day of October, 1907, said Comp-

ton Home, for a valuable consideration, transferred and

conveyed to Consolidated Utilities Company all of its assets

ond property of every kind and nature, including its said

telephone system.

3. At all times between on or about the 6th day of Octo-

ber, 1907, and on or about the 31st day of May, 1930, said

Consolidated Utilities Company (hereinafter called ‘‘Con-

solidated’’) was a corporation organized and existing under

the laws of the State of California for the purpose of en-

gaging in the telephone and telegraph business.

4, Continuously from the 18th day of October, 1907, until

the 3lst day of May, 1930, said Consolidated continued to

own, maintain, operate and extend the telephone system

and properties so acquired by it from said Compton Home,

and by means thereof to render telephone service to the

public.

At all times during the period commencing on or about

the 28th day of June, 1903, and ending on or about the

31st day of May, 1930, Home Telephone & Telegraph Com-

pany of Pasadena (hereinafter called ‘‘ Pasadena Home’’)

was a corporation organized and existing under the laws

of the State of California for the purpose of engaging in

the telephone and telegraph business, and for the purposes

of said business owned, operated and maintained a tele-

phone system in the City of Pasadena and in unincorporated

areas contiguous thereto, and for the purposes of its said

business and as a part of its said system constructed, main-

tained and operated, and held itself out to the public as con-

structing, maintaining and operating, telephone lines along

and upon the public roads and highways of the incorporated

and unincorporated areas of said county, and erected, main-

tained and operated along and upon said roads and high-

ways poles, posts, piers and abutments for supporting the

insulators, wires and other necessary fixtures of said lines

in such manner and at such points as not to incommode the

public use of any of such roads or highways, and by means

thereof rendered and continued to render telephone service

to the public.

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Continuously between on or about the 3rd day of

tember, 1902, and on or about the 31st day of May, 1

United States Long Distance Telephone & Telegraph Com.

pany (hereinafter called “USLD’’) was a telephone and

telegraph corporation organized and existing under the laws

of the State of California, engaged in and carrying

in competition with the business and system of said Pacific

in the counties of Los Angeles, Orange, Riverside, San

Diego, San Bernardino, Santa Barbara and Ventura, an

interexchange intrastate and interstate toll and long dis-

tance telephone business and for such business maintained

and operated, in and throughout said counties, an inter.

exchange intrastate and interstate toll and long distance

telephone system. At all times during said period USLD,

for the purposes of its said business and as a part of its said

system, constructed, maintained and operated, and held it.

self out to the public as constructing, maintaining and

operating, telephone lines along and upon the public roads

and highways and along and across the lands and waters

of the State of California and of the incorporated and

unincorporated areas of the plaintiff county, and con-

structed, erected, mainiained and operated, along and upon

said roads and highways and along and across said lands

and waters, poles, posts, piers and abutments for support-

ing the insulators, wires and other necessary fixtures of

said lines, in such manner and at such points as not to in-

commode the public use of any of said roads or highways or

to interfere with the navigation of any such waters, and by

means thereof rendered and continued to render telephone

service to the public.

1, On the 31st day of May, 1930, under and pursuant to

the authority of decision No. 22333 of the Railroad Com:

mission of the State of California, made April 14, 1930 (re-

ported in Vol. 34 CRC at page 584), said Pacific sold,

granted, conveyed, assigned and transferred to the defend-

ant all of the telephone and telegraph property, assets and

business of said Pacific in the counties of Santa Barbara,

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Ventura, San Bernardino, Los Angeles, Orange, Riverside,

San Diego and Imperial, including real and personal prop-

erty of all kinds and including all franchises (except its

corporate franchise) owned by said Pacific in said counties.

A copy of said conveyance has been received in evidence

herein, marked ‘‘Plaintiff’s Exhibit I.’’

2, Under and pursuant to the authority of said decision

No. 22333 of the Railroad Commission of the State of Cali-

fornia (34 CRC 584), said Pasadena Home, on the 31st

day of May, 1930, sold, granted, conveyed, assigned and

transferred to the defendant all of the property, assets and

business of said Pasadena Home, including all of its real

and personal property of every kind and including all its

franchises (except its corporate franchise). A copy of said

conveyance has been received in evidence in this cause,

marked ‘‘Defendant’s Exhibit 16.’’ Upon making said

conveyance and continuously thereafter said Pasadena

Home retired from the telephone business.

3. Under and pursuant to the authority of said decision

No. 22333 of the Railroad Commission of the State of

California (34 CRC 584) said Consolidated, on the 31st

day of May, 1930, sold, granted, conveyed, assigned and

transferred to the defendant all of the property, assets and

business of Consolidated, including all of its real and

personal property of every kind and including all its fran-

chises (except its corporate franchise). A copy of said

conveyance has been received in evidence in this cause,

marked ‘‘Defendant’s Exhibit 17.’’ Upon making said

conveyance and continuously thereafter said Consolidated

retired from the telephone business.

4. Under and pursuant to the authority of said decision

No. 22333 of the Railroad Commission of the State of

California (34 CRC 584), said USLD on the 31st day of

May, 1930, sold, granted, conveyed, assigned and trans-

ferred to defendant all of the property, assets and business

of said USLD, including all of its real and personal prop-

erty of every kind and including all of its franchises (except

its corporate franchise). A copy of said conveyance has

been received in evidence in this cause, marked ‘‘ Defend-

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ant’s Exhibit 28.”” Upon making said conveyance and con.

tinuously thereafter said USLD retired from the telephone

business.

5. Said Sunset, Pacific, Home of Los Angeles, Pasadena

Home, Compton Home, Consolidated, San Fernando Home

and USLD are hereinafter sometimes referred to Collec.

tively as the defendant's cerporate predecessors in interest.

XIII

Defendant consolidated said properties so conveyed to it

by said Pacific, Pasadena Home, Consolidated and USLD

with the said telephone and telegraph system then and

theretofore owned, maintained and operated by defendant,

as hereinbefore found, and continued to maintain and

operate the same in conjunction with and as a part of de.

fendant’s said telephone and telegraph system and by

means thereof has rendered and still continues to render

telephone and telegraph service to the public.

XIV

1. The telephone and telegraph system so owned, main.

tained and operated by defendant as aforesaid has at all

times been and now is a single and unified system, and has

been and still is constructed, maintained and operated by

the defendant as such. Said system has been throughout

said time and is now being added to and extended by the de.

fendant to meet the needs and demands of public telephone

and telegraph service. By means of said system the defend-

ant now engages in and carries on, and throughout all of

said time has engaged in and carried on, a public exchange

and interexchange intrastate and interstate telephone and

intrastate and interstate telegraph system and business.

Said system extends, and throughout all of said time has

extended, throughout portions of the incorporated and

unincorporated areas of this state and of the plaintiff

county and, ever since the 31st day of May, 1930, has

extended and now extends throughout the incorporated

and unincorporated areas of the counties of Santa

Barbara, Ventura, Los Angeles, Orange, Riverside, San

Bernardino, San Diego and Imperial.

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9, In connection with and as a part of said system, the

defendant has throughout all of said time owned, con-

structed, maintained and operated, and held itself out to

the public as owning, constructing, maintaining and operat-

ing, and now owns, maintains and operates, lines of tele-

graph and telephone lines consisting of conduits with wires

therein and poles and wires attached thereto, and of posts,

piers, abutments and other necessary fixtures and appur-

tenances of said lines in, over and along substantially all of

the streets, alleys and publie highways and along and across

the waters and lands throughout the incorporated and unin-

corporated areas of the County of Los Angeles and, ever

since the 31st day of May, 1930, also along and upon sub-

stantially all of the st@fets, alleys and public highways and

along and across the waters and lands throughout the in-

corporated and unincorporated areas of the counties of

Santa Barbara, Ventura, Orange, Riverside, San Bernar-

dino, San Diego and Imperial. Through the instrumen-

tality of said exchange and interexchange and intrastate

and interstate telephone and intrastate and interstate tele-

graph system and said conduits, poles, wires and other

fixtures and appurtenances employed in conjunction there-

with, defendant has been throughout all of said time, and

now is, rendering throughout the incorporated and unin-

corporated areas aforesaid, to the public, exchange and

interexchange, intrastate and interstate telephone, and

intrastate and interstate telegraph services.

3. At all of said times said system, so owned, maintained

and operated by the defendant, has included numerous

telephone and telegraph instruments and stations; said

system, at the time of the commencement of this action, and

now, includes more than nine hundred thousand telephone

stations, each of which has been and is an integral part of

said system, and is and has been used and in use for public

telephone and telegraph communication and service by

connection with many hundreds of thousands of telephone

stations in the states of California, Oregon, Washington,

Idaho and Nevada, and with many millions of telephone

stations throughout the United States and in foreign

countries.

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4. The defendant’s said system is, and at all of said times

has been, so operated and maintained that, as a part of

defendant’s public telephone service, each such telephone

station therein could be and can be connected and conver.

sation had by means thereof, and of said telephone and tele.

graph lines, with each and every other of said telephone

stations in said states of California, Oregon, Washin

Idaho and Nevada, and with each of said many millions of

telephone stations throughout the United States and in

foreign countries.

5. During all of said times all of the defendant’s said

telephone lines and lines of telegraph, and its said con-

duits, poles, wires, posts, piers, abutments, fixtures and

appurtenances, which have been or now are in, along or

upon the public roads, highways, streets, alleys, lands and

waters in this state, have been and now are constructed,

erected and maintained in such manner and at such points

as not to incommode the public use of any of such roads,

highways, streets or alleys or to interrupt the navigation

of any of such waters.

1. On or about the 3rd day of February, 1903, the Board

of Supervisors of plaintiff county adopted an ordinance

designated as Ordinance No. 67 (N. S.) of said county,

granting to one Arthur Wright and his assigns the right and

privilege for the period of forty (40) years from and after

the 2nd day of March, 1903, to construct, erect, maintain

and operate telephone lines and lines of telegraph under,

upon, over and along the streets, alleys and public highways

of the plaintiff county, then or thereafter established. Copy

of said ordinance has been received in evidence in this

cause, marked ‘‘ Plaintiff’s Exhibit J.’’

2. Thereafter, and on or about the 3rd day of February,

1903, said Arthur Wright assigned, transferred and con-

veyed all of his rights under said Ordinance No. 67 (N. 8.)

to one F. F. Graves.

3. On or about April 18, 1904, said F. F. Graves assigned,

transferred and conveyed all of his rights under said Ordi-

nance No. 67 (N. 8S.) to said USLD.

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XVI

1. On or about the 7th day of April, 1903, the Board of

Supervisors of plaintiff county adopted an ordinance,

designated as Ordinance No. 70 (N. S.) of said county,

granting to one Arthur Wright and his assigns the right

for the period of fifty (50) years from and after the Ist

day of May, 1903, to construct, erect, maintain and operate

telephone lines and lines of telegraph under, upon, over and

along the streets, alleys and public highways then or there-

after established within the area known as Cahuenga Valley

Road District, in and of the plaintiff county. Copy of said

ordinance has been received in evidence in this cause,

marked ‘‘ Plaintiff’s Exhibit B.’’ There have been received

in evidence in this cause, marked respectively ‘‘Plaintiff’s

Exhibit C’’ and ‘‘Plaintiff’s Exhibit D,’’ a legal deserip-

tion and a map of said Cahuenga Valley Road District.

2. On or about the 7th day of May, 1903, said Arthur

Wright assigned, transferred and conveyed all of his rights

under said Ordinance No. 70 (N. 8S.) to one F. F. Graves.

3. On or about May 24, 1904, said F. F. Graves assigned,

transferred and conveyed all of his rights under said

Ordinance No. 70 (N. 8S.) to said Home of Los Angeles.

XVII

On or about the 29th day of June, 1903, the Board of

Supervisors of plaintiff county adopted an ordinance,

designated as Ordinance No. 77 (N. 8.) of said county,

granting to said Compton Home and its assigns the right

for the period of thirty (30) years from and after the 21st

day of July, 1903, to construct and operate telephone lines

and lines of telegraph over and along the public streets,

alleys and public highways of the plaintiff county within

the voting precincts of Compton, Downey, Clearwater, Gar-

dena, Wiseburn and Redondo Beach City. Copy of said

ordinance has been received in evidence in this cause,

marked ‘‘Plaintiff’s Exhibit H.’’

XVIII

1. On or about the 31st day of May, 1904, the Board of

Supervisors of the plaintiff county adopted an ordinance

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designated as Ordinance No. 108 (N. 8.) of said county, .

granting to one Arthur Wright and his assigns the right for

the period of thirty (30) years from and after the 21st day

of June, 1904, to construct, maintain and operate telephone

lines and lines of telegraph under, upon, over and al

the streets, alleys and public highways of the plainti

county, then or thereafter established, within the San

Fernando, Los Angeles, Canada and Crescenta Road Dis.

tricts as the same were then established. Copy of said

ordinance has been received in evidence in this cause,

marked ‘‘Plaintiff’s Exhibit G."’ The boundaries of the

area covered by said Ordinance No. 108 (N. 8.) appear upon

a transparency received in evidence herein and marked

‘*Plaintiff’s Exhibit M,’’ for use as an overlay to the map

received in evidence herein and marked ‘‘Plaintiff’s Ex.

hibit A.’’

2. Thereafter, and on or about the 1st day of October,

1904, said Arthur Wright assigned, transferred and con-

veyed all of his rights under said Ordinance No. 108 (N. 8.)

to San Fernando Home.

3. Thereafter, and on or about October Ist, 1918, by order

and authority of said Railroad Commission, San Fernando

Home transferred and conveyed all of its rights under

said Ordinance 108 N. S. to said Pacific.

XIX

1. On or about the 17th day of October, 1905, the Board

of Supervisors of the plaintiff county adopted an ordinance,

designated as Ordinance No, 129 (N. S.) in and of said

county, granting to said Home of Los Angeles and its as-

signs the right and privilege for the period of thirty (30)

years from and after the 1st day of November, 1905, to con-

struct, maintain and operate a telephone and telegraph sys-

tem under, upon and over the public streets, lanes, high-

ways and places in that part of the plaintiff county lying

outside of and immediately adjacent to the city of Los An-

geles and within a radius of eight miles from the inter-

section of Ninth and Main Streets in said City. A copy

of said ordinance has been received in evidence in this

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eause, marked ‘‘Plaintiff’s Exhibit F.’"’ There has been

received in evidence in this cause, marked ‘‘Plaintiff’s

Exhibit E,’’ a map of the respective areas covered by said

Ordinances No. 70 (N.S.) and 129 (N.S).

9, Said Home of Los Angeles, on April 30, 1917, pursu-

ant to the order and authority of said Railroad Commission,

transferred and conveyed all of its rights under said ordi-

nance to defendant.

Each said corporate predecessor in interest of the de-

fendant, and the defendant, respectively at all times held

itself out as constructing, maintaining and operating, and

each did construct, maintain and operate telephone lines

and/or lines of telegraph along and upon the public roads

and highways and along and across the lands and waters

of this state and of the incorporated and unincorporated

areas of the plaintiff county, and as erecting poles, posts,

piers and abutments for supporting the insulators, wires

and other necessary fixtures of said lines, in such manner

and at such points as not to incommode the public use of

said roads or highways or interfere with the navigation of

such waters, pursuant to and in reliance upon the offer

and tender of the right, privilege and franchise so to do by

Section 536 of the Civil Code of the State of California;

and each said corporate predecessor in interest of the de-

fendant, and defendant, at all times openly and notoriously

constructed its said lines and erected said poles, posts,

piers and abutments for supporting said insulators, wires

and other necessary fixtures of said lines, and claimed said

right, privilege, authority and franchise so to do under and

pursuant to said Section 536 of said Civil Code; that all

of the facts stated in this paragraph were at all times well

known to said plaintiff county and to its duly constituted

officers.

XXI

Each said corporate predecessor in interest of the de-

fendant, and defendant, at great cost and expense, respec-

tively and successively enlarged, extended and improved its

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telephone and/or telegraph system to meet and supply the

constantly increasing need and demand for telephone and

telegraph service by the public, and respectively and sue.

cessively constructed telephone lines and/or lines of tele.

graph along and upon the public roads and highways and

along and across the lands and waters of the unincorporated

area of said county, and erected poles, posts, piers and abut.

ments for supporting the insulators, wires and other neces.

sary fixtures of said lines, in such manner and at such points

as not to incommode the public use of said roads or high.

ways or to interfere with the navigation of such waters,

and said construction and erection by each said corporate

predecessor in interest of the defendant, and by the de.

fendant, were made openly and notoriously and under and

pursuant to the claim of right that under said Section 536

of said Civil Code of California each respectively and sue.

cessively had the right, privilege, authority and franchise

to construct telephone lines and/or lines of telegraph along

and upon the public roads and highways and along and

across the lands and waters of this state and of the incorpo-

rated and unincorporated areas of the plaintiff county in

such manner and at such points as not to incommode the

public us¢ of said roads or highways or to interfere with

the navigation of such waters. At all of said times the plain-

tiff county well knew of said claim of right by each said

corporate predecessor in interest of the deferidant, and by

the defendant, and in all respects acquiesced therein, and

recognized, acknowledged, conceded and agreed that each

said corporate predecessor in interest of the defendant,

and the defendant, respectively and successively had the

said right, privilege, authority and franchise so respectively

and successively claimed by it, and the plaintiff county did

not in any wise interfere with, object to or (except as here-

inafter found) question the exercise of said right, privilege,

authority and franchise by either of said corporate prede-

cessors in interest of the defendant, or by the defendant,

respectively and successively, but on the contrary the plain-

tiff county, by its acquiescence aforesaid, induced each

said corporate predecessor in interest of the defendant,

and the defendant, to believe that the plaintiff county recog-

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nized, acknowledged, conceded and agreed that each said

corporate predecessor in interest of the defendant, and the

defendant, respectively and successively, had said right,

privilege, authority and franchise as aforesaid. All of said

telephone lines and lines of telegraph so constructed, and

all of said poles, posts, piers and abutments for support-

ing the insulators, wires and other necessary fixtures of

said lines so erected by said corporate predecessors in in-

terest of the defendant, and by the defendant, as hereinbe-

fore found, were constructed and erected by them respec-

tively in the belief, induced as aforesaid, that the plaintiff

county recognized, acknowledged, conceded and agreed that

said corporate predecessors in interest of the defendant,

and the defendant, respectively and successively had said

right, privilege, authority and franchise so respectively and

successively claimed by each of them. The plaintiff county

acquiesced, recognized, acknowledged, conceded and agreed

as aforesaid with the intention that such acquiescence,

recognition, acknowledgment, concession and agreement

would be acted upon by said corporate predecessors in

interest of the defendant, and by the defendant, respectively

and successively, in so constructing said telephone lines

and lines of telegraph, and in so erecting said poles, posts,

piers and abutments; and said corporate predecessors in

interest of the defendant, and the defendant, in constructing

said telephone lines and lines of telegraph, and in erecting

said poles, posts, piers and abutments, respectively and

successively relied upon said acquiescence by the plaintiff

county and its said recognition, acknowledgment, conces-

sion and agreement that said corporate predecessors in

interest of the defendant, and the defendant, respectively

and successively had said right, privilege, authority and

franchise so claimed by them.

XXII

1. Between on or about the 20th day of January, 1913,

and on or about the 12th day of May, 1914, the Board of

Supervisors of the plaintiff county considered the question

whether the defendant’s said corporate predecessor in in-

terest, The Pacific Telephone and Telegraph Company, and

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other telephone and/or telegraph corporations respectively,

had a franchise to use and occupy the public roads and high.

ways of the unincorporated areas of the plaintiff county

for their telephone lines or lines of telegraph, and the

further question whether the defendant’s said predecessor

and such other corporations could be required by the plain.

tiff county to obtain from said county a franchise so to do,

The fact that said Board of Supervisors had said questions

under consideration came to the attention of the defendant's

said predecessor on or about the 22nd day of January, 1913,

During the time when said Board of Supervisors had said

questions under consideration, as aforesaid, the plaintiff

county refused to grant to the defendant’s said predeces-

sor, or to other such corporations, permits to make excaya.

tions in the public roads and highways of said county for the

purpose of erecting their poles, posts, piers and abutments

for supporting the insulators, wires and other necessa

fixtures of their lines. On or about the 12th day of May,

1914, the said Board of Supervisors, duly assembled in

meeting and acting upon the opinion and advice of the

county Counsel of said county, concluded, decided and

agreed that said Pacific and all other telephone and/or

telegraph corporations which accepted and availed them-

selves of the right, privilege and franchise offered and

tendered by Section 536 of the Civil Code of the State of

California by constructing their telephone lines and/or lines

of telegraph in such roads and highways, and rendered to

the public telephone and/or telegraph service by means

thereof, thereby become the owner of the franchise from

the State of California, to so use and occupy and continue

to use and oceupy such roads and highways, and could not

be required to obtain franchises from the said county so

to do, but could only be required to obtain permits from

said county to make excavations in the public roads and

highways for the purpose of constructing thereon telephone

lines and lines of telegraph and poles, posts, piers and

abutments for supporting the insulators, wires and other

fixtures of said lines along and upon said public roads and

highways, pursuant to applications duly made for such

permits pursuant to the ordinances of said county in these

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findings hereafter referred to. Thereupon, said county

resumed the granting, and ever since said 12th day of May,

1914, has continued to grant, to the defendant’s said pred-

ecessors in interest, and ever since the 30th day of April,

1917, has granted and continued to grant to defendant, per-

mits to make such excavations for said purposes in such

roads and highways in said county pursuant to applications

therefor and without obtaining, from said county, any fran-

chise so to use and occupy the said roads and highways for

telephone lines and lines of telegraph.

9, On or about the 10th day of September, 1935, the

County Auditor of the plaintiff county, by letter addressed

to the Board of Supervisors of said county, advised said

Board that he had notified the defendant that said Ordi-

nance No. 129 (N.S.) of said county would expire on the

3ist day of October, 1935, and suggesting that the defend-

ant file application for a renewal of the franchise granted

by said ordinance at an early date, and further advising

that the defendant had acknowledged receipt of such noti-

fication and had stated that it had the matter under con-

sideration. In and by said letter the said County Auditor

suggested to said Board of Supervisors that it refer said

matter to the County Counsel with instructions that he

proceed against the defendant on November 1, 1935, in the

event the defendant failed to make application for a re-

newal of said franchise. On or about September 16, 1935,

said Board of Supervisors, duly assembled in meeting,

ordered that the matter mentioned in said letter from said

County Auditor be referred to the County Counsel with

instructions to proceed against the defendant on November

1, 1935, in the event that the defendant failed to make

application for a renewal of said franchise. On or about

October 18, 1935, the defendant, by a letter to said County

Auditor, advised him that the defendant would not apply

for a renewal of said franchise, for the reason that it had

been advised by its attorneys that it was fully invested

with a franchise to maintain and operate its telephone lines

and lines of telegraph along the public roads and highways

and along and across the lands and waters in said county

without such renewal.

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On or about the 29th day of October, 1935, the Coun

Counsel of the said county advised said Board of Super.

visors, in substance and effect, that the defendant wag

possessed of a franchise under Section 536 of the Civil Code

of California to construct its telephone lines and lines of

telegraph along and upon the public roads and highways

of the plaintiff county and could not be required to obtain

a franchise from said county so to do. (Copy of the letters

hereinbefore mentioned in this paragraph have been re.

ceived in evidence herein as parts of defendant’s Exhibit

52.)

Upon receiving the said letter of October 29, 1935, from

the County Counsel, the said Board of Supervisors, duly

assembled in meeting, on or about November 12, 1935,

ordered that the same be placed on file. The fact that said

letters were written by the said County Auditor and the

said County Counsel to the said 3oard of Supervisors, and

the said actions taken by the said Board with reference

thereto, came to the attention and knowledge of the defend.

ant at or about the times when said letters were written

and said actions taken respectively. On or about the 9th

day of December, 1935, the said County Counsel advised

said Board of Supervisors by letter, among other things,

as follows:

‘*Although the courts of this state have consistently

recognized the statutory franchise of telephone and

telegraph companies and have held that no franchise

from a county is required, we think that for the pro.

tection of the interests of the taxpayers and in the

effort to preserve this source of revenue if possible,

an action would be justified. It is possible that we may

be able to persuade our courts to reverse their decisions

and adopt a different view of the law than they have

maintained in the past, and as the privilege enjoyed

by the telephone companies of operating in this county

is a valuable one, some revenue should be forthcoming

to the taxpayers therefrom if not barred by our Con-

stitution and laws.

‘*I am informed that there is at least one area in

this county in which no franchise tax has ever been

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paid. May I suggest that this office be authorized to

bring an action for accounting as to such area, and in

conjunction therewith to bring either an action in quo

warranto or for injunction—whichever may be the

most efficacious remedy—to test the general power of

the telephone companies to operate without a franchise

from the county.”’

Upon receiving said last mentioned letter, and on or about

December 9, 1935, said Board of Supervisors, duly as-

sembled in meeting, authorized said County Counsel to

bring an action for accounting as to area in the county in

which no franchise had ever been paid, and in conjunction

therewith to bring either an action in quo warranto or

for injunction, to test the general power of telephone com-

panies to operate without franchise from the county.

(Copies of the said letter of the County Counsel, of De-

cember 9, 1935, and minutes of the Board of Supervisors at

its meeting of December 9, 1935, taking the action afore-

said, have been received in evidence herein as parts of plain-

tiff’s Exhibit R.) Neither the fact that said County Coun-

sel had written said letter of December 9, 1935, nor the

said action of the Board of Supervisors with reference

thereto, ever came to the notice, knowledge or attention of

the defendant until the trial of this cause.

3. At various times between said 19th day of May, 1905,

and the date of the commencement of this action, the Board

of Supervisors of plaintiff county passed and adopted suc-

cessive ordinances regulating the making of excavations

and fills and the doing of other work in the public highways

of said county. Said successive ordinances included the

following designated ordinances, to wit:

(a) Ordinance No, 133 (N.S.), entitled ‘‘An Ordi-

nance regulating the making of excavations and fills

and the doing of other work in public highways of the

County of Los Angeles.’’ Said ordinance was passed

and adopted January 9, 1906, took effect on February

1, 1906, and continued in effect until June 1, 1909. A

copy of said ordinance No. 133 (N.S.) has been re-

ceived in evidence herein, marked ‘‘Defendant’s Ex-

hibit 1,”’

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(b) Ordinance No. 205 (N.S.), entitled “An Ordi-

nance regulating the making of excavations, and

and the doing of other work in public highways of the

County of Los Angeles.’’ Said ordinance was passed

and adopted May 10, 1909, took effect on June 1, 1999

and continued in effect until June 15, 1911. A copy of

said ordinance No. 205 (N.S.) has been received jy

evidence herein, marked ‘‘Defendant’s Exhibit 2.”

(ec) Ordinance No. 213 (N.S.), entitled “An Opdi.

nance to amend Ordinance No. 205, new series, entitled

‘An Ordinance regulating the making of excavations

and fills and the doing of other work in public high-

ways of the County of Los Angeles,’ adopted May 10th,

1909.’ Said Ordinanwe No. 213 (N.S.) was passed and

adopted June 28, 1909, and took effect on July 15,

1909. A copy of said ordinance No. 213 (N.S.) hag

been received in evidence herein, marked ‘‘ Defendant's

Exhibit 3.’’

(d) Ordinance No. 266 (N.S.), entitled ‘An Ordi-

nance regulating the use of highways, traffic over the

same, the making of excavations and fills and the doing

of other public work thereon.’’ Said ordinance was

passed and adopted May 29, 1911, and took effect on

June 15,1911. A copy of said ordinance No. 266 (N.S.)

has been received in evidence herein, marked ‘Defend.

ant’s Exhibit 4.’’

(e) Ordinance No. 372 (N.S.), entitled ‘‘An Ordi-

nance prescribing the regulations under which permits

shall be issued for the making of excavations and fills,

and the performance of other work on public roads and

highways within the County of Los Angeles.’’ Said

ordinance was passed and adopted September 29, 1914,

and took effect on October 28, 1914. A copy of said

ordinance No. 372 (N.S.) has been received in evidence

herein, marked ‘‘ Defendant’s Exhibit 5.’’

(f) Ordinance No. 675 (N.S.), entitled ‘‘An Ordi-

nance prescribing the regulations under which permits

shall be issued for the making of excavations and fills,

and the performance of other werk on public roads and

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highways within the County of Los Angeles.’’ Said

ordinance was passed and adopted May 25, 1921, took

effect on June 26, 1921, and ever since has been and

now is in effect. A copy of said ordinance No. 675

(N.S.) has been received in evidence herein, marked

‘‘Defendant’s Exhibit 6.’’

In substance, the provisions of each of said ordinances,

material to this action, were as follows: Each of said ordi-

nances prohibited the making of excavations and fills in

public highways, or the traveled portion thereof, of said

county, Without first obtaining a permit therefor, as in said

respective ordinance provided, from the Board of Super-

visors or official of said county as specified in each respec-

tive ordinance ; and each of said respective ordinances pre-

scribed the manner of obtaining such permit, to wit, the

filing with said Board of Supervisors, or with the other

oficial of said county designated in said respective ordi-

nance, of a written application describing specifically the

location, nature and extent of the proposed work and the

purposes thereof ; and each of said ordinances, except said

Ordinance No. 133 (N.S.), further provided that said appli-

eation should show the nature of the right of the applicant

to do such work, or to the use and occupancy, for the pur-

pose mentioned in the application, of the highway wherein

the excavation was proposed to be made, and that if it

appeared that the applicant was lawfully entitled under

any franchise to do such proposed work at the place and in

the manner proposed, such board or official mentioned in

each respective ordinance should grant a written permit

to the applicant for the proposed work or such part thereof

as it or he might find the applicant entitled to do.

On many hundreds of occasions during the period of time

between said 19th day of May, 1905, and the date of the

commencement of this action, the said several corporate

predecessors in interest of the defendant, and the defendant,

respectively and successively, made applications, pursuant

to said respective ordinances hereinabove described, to

the board or official specified in each such respective

ordinance for permits to excavate in said public roads and

highways for the purpose of erecting poles, posts, piers

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and abutments for supporting the insulators, wires and

other necessary fixtures of their respective telephone lines

and/or lines of telegraph. Said applications were made

on printed forms prescribed and furnished by the plaintiff

county, and in making said applications the said corpora

predecessors in interest of the defendant, and the defen

respectively and successively specified in the space pro-

vided in said forms for the specification of the applicant's

right to occupy the highway for the purpose stated, said

Section 536 of the Civil Code of the State of California;

and each of said several applications was approved and

permit granted pursuant thereto by the plaintiff county,

and thereupon the plaintiff county issued and delivered to

the respective corporation having made said application

(being one of the said corporate predecessors in interest of

the defendant, or the defendant, as the case might be)

a permit in writing, duly executed by the official of the

plaintiff county authorized to execute the same, by the

terms of which the applicant was by the plaintiff county

granted permission to make the excavation for which such

permit was applied for, for the purpose of erecting such

poles, posts, piers or abutments for supporting the insula.

tors, wires and other necessary fixtures of said lines, with

full knowledge on the part of the plaintiff county that the

applicant (being one of the respective corporate predeces.

sors in interest of the defendant, or the defendant, as the

case might be) intended to erect said poles, posts, piers

or abutments for supporting the insulators, wires and

other necessary fixtures of its said lines, under and pur.

suant to its claim of right, privilege, authority and fran.

chise under said Section 536 of said Civil Code, as afore.

said, and at no time did the plaintiff county refuse to grant

any such permit upon the ground that the said corporate

predecessors in interest of the defendant, or any of them,

or the defendant, had no right, privilege, authority or

franchise to construct, maintain and operate telephone lines

and/or lines of telegraph or to erect poles, posts, piers or

abutments for supporting the insulators, wires and other

necessary fixtures of their said lines along or upon such

roads or highways.

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In reliance upon said permits, said respective corporate

predecessors in interest of the defendant, and the defend-

ant, respectively and successively, laid out large sums of

money in constructing, maintaining and operating tele-

phone lines and/or lines of telegraph and in erecting poles,

posts, piers and abutments for supporting the insulators,

wires and other necessary fixtures of their said telephone

lines and/or lines of telegraph along and upon the public

roads and highways in said county, and neither of the said

corporate predecessors in interest of the defendant, nor

the defendant, would have so laid out said large or any

sums or sum of money unless they had respectively received

said permits. Between and including the 18th day of July,

1910, and the 4th day of December, 1914, the plaintiff

county, acting by and through its duly authorized officers

and agents, issued and granted to said Pacific and to said

Pasadena Home, each of which was and is a corporate

predecessor in interest of the defendant, at least 173 such

permits, pursuant to applications therefor duly made by

said corporations respectively, as hereinbefore found. Be-

tween an unascertained date in the year 1914 and on or

about the 2nd day of June, 1930, the plaintiff county, acting

by and through its duly authorized officers and agents,

issued to said The Pacific Telephone and Telegraph Com-

pany approximately 3458 such permits, in addition to those

mentioned in the last preceding sentence hereof, pursuant

to applications therefor duly made by said last mentioned

corporation, as hereinbefore found. Between on or about

the 30th day of April, 1917, and on or about the 10th day

of July, 1941, the plaintiff county, acting by and through

its duly authorized officers and agents, issued to the defend-

ant approximately 7141 such permits, each pursuant to an

application therefor duly made by the defendant, as herein-

before found. Between said last mentioned date and the

time of the trial of this cause the plaintiff county has con-

tinued to, and still and now does, regularly and in the due

course of the administration of its affairs, issue such

permits to the defendant pursuant to such applications

therefor, duly made by the defendant, as hereinbefore

found.

COPY BOUND CLOSE IN CENTER

4. On twenty-seven (27) separate occasions between and

including the 23rd day of February, 1915, and the 25th day

of May, 1937, said plaintiff county requested said Pag;

one of the corporate predecessors in interest of the defend.

ant, and the defendant, respectively and successively, in

connection with and because of street and highway improve.

ment work undertaken by the plaintiff county, to relocate

parts of their said respective telephone lines and lines of

telegraph and some of their said poles, posts, Piers, and

abutments for supporting the insulators, wires, and other

necessary fixtures of their said lines, which said Pacific

and the defendant had respectively and successively con.

structed and erected along and upon the public roads and

highways of the unincorporated area of the plaintiff county,

and said Pacific and the defendant respectively and succes.

sively complied with said requests; and said requests were

made by said county and complied with by said Pacific and

by the defendant, as herein found, with full knowledge on

the part of said county that said Pacific and the defendant

respectively and successively claimed the right, privilege,

authority, and franchise, under said Section 536 of the Civil

Code of the State of California, to construct, maintain and

operate their said respective telephone lines and lines of

telegraph along and upon the public roads and highways of

said state and of the unincorporated area of said county,

and to erect their said respective poles, posts, piers and

abutments for supporting the insulators, wires, and other

necessary fixtures of their said lines, in such manner and

at such points as not to incommode the public use of said

roads er highways.

In most instances when such relocations were so required

by the plaintiff county, said Pacific and the defendant

respectively and successively made the same in the public

roads and highways of said county under and pursuant to

excavation permits issued by said county, in the form and of

the character of the permits hereinbefore described; and

each of said permits was issued following and pursuant to

an application in writing made by said Pacifie or by the

defendant, as the case might be, specifying, in the space

provided in said application for specification of the right

of the applicant to occupy the highway for the purpose

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shown in-the application, said Section 536 of the Civil Code

of the State of California, as hereinabove found. In all

other such instances the said county knowingly required

and permitted said Pacific and the defendant, respectively

and successively, to make such required relocations in the

public roads and highways of said county without the

formality of any such written permit and without the

necessity on the part of either of said corporations of mak-

ing any written application for any such permit.

5. Upon completion by the defendant, or by either of its

said corporate predecessors in interest, as the case might

be, of the work of locating or relocating any of its poles,

posts, piers, abutments or other equipment or accessories

for supporting the insulators, wires and other necessary

fixtures of its lines of telegraph and/or telephone, pursuant

to the said permits issued by the plaintiff county, as found

in this paragraph XXII of these findings, the said com-

pleted work was inspected in each instance by a duly au-

thorized officer or agent of the plaintiff county who re-

ported his findings with regard thereto to the Road Depart-

ment of said county. In no such case was it found or

reported by such inspecting officer or agent of the plaintiff

county that the place or manner of such installation or

relocation was such as to incommode, obstruct or interfere

with the public use of the road or highway in which the

same was made. In each such case where the work au-

thorized by any such permit involved breaking of the

pavement or other surfacing of the traveled portion of any

public road or highway by the defendant or either of its

said corporate predecessors in interest, such work was

inspected by an employee of said Road Department during

its progress. In each such case of installation or relocation

by the defendant or either of its said corporate predecessors

in interest requiring restoration of such pavement or sur-

facing, such restoration was undertaken and completed by

said Road Department. All costs and expenses of each

such installation or relocation were borne and paid directly

by the permittee in each such case, and all costs to the

plaintiff county for such inspections and restorations of

pavement or surfacing of roads and highways by said

COPY BOUND CLOSE IN CENTER

county or any of its officers or agents were reimbursed and

paid to said county by the permittee in each such case,

6. On numerous occasions since on or about said 19th

day of May, 1905, the plaintiff county successively requested

said respective corporate predecessors in interest of the

Cefendant, and the defendant, and still and now continues

to request the defendant, to furnish to the said county

telephone and telegraph service from and to various points

ia and outside of the unincorporated areas of said county

by means of portions of the said telephone and telegraph

system of said corporate predecessors in interest of the

defendant, and of the defendant, situate in said unincor.

porated area of said county. The said corporate prede.

cessors in interest of the defendant, and the defendant, in

compliance with said requests, respectively and successively

furnished, and defendant continues to furnish to said county

telephone and telegraph service from and to various points

in and outside of the unincorporated area of said county

by means of said telephone and telegraph system of said

corporate predecessors in interest of the defendant, and of

the defendant, including the portions of said system situate

in said anincorporated area of said county, and for that

purpose said predecessors in interest of defendant from

time to time constructed and maintained, defendant still

and now constructs and maintains telephone lines and lines

of telegraph along and upon the public roads and highways

of said unincorporated area of said county, and poles, posts,

piers and abutments for supporting the insulators, wires,

and other necessary fixtures of their said lines, in such

manner and at such points as not to incommode the public

use of said roads or highways, and said predecessors in

interest of defendant at all times have made available,

respectively and successively, and defendant now makes

available to said county telephone and telegraph service

from and to all points in and outside of said unincorporated

area of said county where the said corporate predecessors

in interest of the defendant, and the defendant, respectively

had or the defendant now has such telephone and telegraph

service available, by means of said portions of said tele-

phone and telegraph system of said corporate predecessors

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in interest of the defendant, and of the defendant. The

plaintiff county made and continues to make said requests

with full knowledge that in order to comply therewith it

was and would be necessary for said corporate predeces-

sors in interest of the defendant, and the defendant, respec-

tively, to furnish and make available the service so re-

quested over and by means of said telephone lines and

lines of telegraph situate along the public roads and high-

ways and along and across the lands and waters in said

unincorporated area of said county, and for that purpose

to construct, maintain and operate the necessary telephone

lines and lines of telegraph along and upon said public

roads and highways and along and across said lands and

waters in said unincorporated areas of said county, and

to erect along and upon said roads and highways and along

and across said lands and waters the necessary poles, posts,

piers, and abutments for supporting the insulators, wires,

and other necessary fixtures of their said lines. Such tele-

phone and telegraph service was and continues to be re-

quested by and was and continues to be furnished and made

available to said county, and to be paid for by said county

at the regular rates prescribed for such service by said

Railroad Commission with full knowledge on the part of

said county that each said corporate predecessor in interest

of defendant, and defendant, respectively and successively

claimed, and that the defendant continues to claim the right,

privilege, authority and franchise under and pursuant to

said Section 536 of the Civil Code of said state, to construct,

maintain and operate its telephone lines and lines of tele-

graph along and upon the public roads and highways and

along and across the lands and waters of this state and of

the unincorporated area of said county, and to erect poles,

posts, piers and abutments for supporting the insulators,

wires, and other necessary fixtures of said lines, in such

manner and at such points as not to incommode the public

use of said roads or highways or to interfere with the

navigation of such waters. All of the said telephone and

telegraph service so rendered and furnished to the plaintiff

county by the defendant and its said corporate predeces-

sors in interest has been and is now used by the plaintiff

COPY BOUND CLOSE IN CENTER

county in and about the handling, carrying on, facilitation

and expedition of its public business, affairs and functj

including particularly the public business, affairs and fune-

tions of its sheriff and other peace officers.

7. For each fiscal year including and between the fiscal

year ending June 30, 1906, and the fiscal year ending June

30, 1935, excepting the fiscal years ending respectively

June 30, 1907, June 30, 1916, June 30, 1919, June 30, 1921,

June 30, 1922, and June 30, 1926, the plaintiff county as.

sessed and levied respectively and successively against said

corporate predecessors in interest of the defendant and

against the defendant, for purposes respectively of Road

Improvement Districts and Flood Control Districts in said

county and for other purposes, taxes upon said franchise

to use the public highways for the telephone lines and lines

of telegraph by defendant and its said respective predeces-

sors in interest; that said taxes were so levied and assessed

with full knowledge that said franchise was the franchise

claimed and held by said corporate predecessors in interest

of the defendant, and by the defendant, respectively and

successively, under and pursuant to said Section 536 of the

Civil Cede of the State of California; that each said cor.

porate predecessor in interest of the defendant, and the

defendant, respectively, paid all of said taxes so levied

against them respectively as aforesaid. In levying and

assessing said taxes, said county intended to tax and did tax

the right, privilege, authority or franchise, under said

Section 536 of said Civil Code, of the said corporate pred-

ecessors in interest of the defendant, and of the defendant,

to construct telephone lines and/or lines of telegraph along

and upon the public roads and highways and along and

across the lands and waters in said county, and to ereet

poles, posts, piers and abutments for supporting the in-

sulators, wires, and other necessary fixtures of their said

lines, in such manner and at such points as not to incommode

the public use of said roads or highways or to interfere with

the navigation of such waters. The plaintiff county has

not at any time returned or repaid, or tendered, offered or

agreed to repay, either to the defendant or to any of its

said corporate predecessors in interest so paying said taxes,

i la'a =_—_—

any portion of the taxes so paid to and collected by the

plaintiff county from the defendant and its said corporate

predecessors in interest respectively.

8. The plaintiff county, by doing and performing the

several acts, matters and things by it done and performed,

as herein found, induced the respective corporate pred-

ecessors in interest of defendant, and defendant, to believe,

and they and each of them were thereby induced by said

acts, matters and things severally and in combination of

any two or more of said acts, matters and things to, and

each of said respective corporate predecessors in inter-

est of defendant and defendant did, believe, that the plain-

tiff county acquiesced, recognized, acknowledged, con-

ceded and agreed that the said corporate predecessors in

interest of defendant, and defendant, respectively and

successively, had the lawful right, privilege and franchise

granted by said state under and pursuant to said Section

536 of said Civil Code to construct telephone lines and/or

lines of telegraph along and upon the public roads and

highways of this state and of the unincorporated areas

of the plaintiff county and along and across the lands and

waters of this state and of said county, and to erect poles,

posts, piers and abutments for supporting the insulators,

wires and other necessary fixtures of said lines, in such

manner and at such points as not to incommode the public

use of said roads or highways or to interrupt the navigation

of said waters. Acting in reliance upon said belief, which

it sincerely entertained in the exercise of its own counsels

and in which belief it was confirmed, supported and en-

couraged by the conduct of plaintiff county as aforesaid,

each said corporate predecessor in interest of defendant,

and defendant, respectively and successively proceeded to

and did at great cost and expense construct its said tele-

phone lines and/or lines of telegraph along and upon the

public roads and highways and along and across the lands

and waters of this state and of the incorporated and unin-

corporated areas of the plaintiff county and proceeded to

and did erect its poles, posts, piers and abutments for sup-

porting the insulators, wires and other necessary fixtures

of said lines in said roads and highways and along and

rmoDoyv pDrvinar 71 occ ta ec Aero

across said lands and waters in such manner and at such

points es not to incommode the public use of said roads or

highways or to interrupt the navigation of said waters,

as hereinafter set forth.

XXIII

1. In their said reliance and belief, sincerely entertained

in the exercise of their own judgment and out of their owp

counsels, and in which belief they were confirmed, supported

and encouraged by the plaintiff county as hereinbefore

found, and pursuant to and in acceptance of the offer of

right, privilege and franchise contained in and made by

Section 536 of the Civil Code of California, each of said

corporate predecessors in interest of the defendant, and the

defendant, respectively and successively, continuously from

and after the times when they respectively commenced to

do business as hereinbefore found, extended its lines of

telegraph and telephone lines and constructed, erected and

from time to time acquired, by means of the outlay and ex.

penditure of large sums of money, poles, conduits, wires and

other parts, equipment and appurtenances of its said

respective telephone and/or telegraph systems along and

upon the public roads and highways and along and across

the lands and waters within the incorporated and unincor.

porated areas of the plaintiff county.

2. Hereinafter in this subparagraph are set forth, as of

and up to the respective dates specified, the number of miles

of poles, conduits and wire so constructed, erected and

acquired by said Pacific and said Home of Pasadena and

by the defendant, respectively, in said unincorporated areas

of the plaintiff county (see Defendant’s Exhibits 54 and

55):

Name of Miles Number Miles of Miles

Date Company of Poles of Poles Conduits of Wire

Dec. 31,1910 Pacific........ 47%) oc... None 6, 225

Dec. 31, 1929 Pacific........ Ge i. *s«eeui 42.32 41,712

Dec. 31, 1925 Home of

Pasadena.... 85.00 ....... 1.6 3,232

Dec. 31, 1929 Home of

P 96.0 caeene 3.6 5,550

Dec. 31,1917 Defendant..... 85.7 ...... 0.4 2,071.9

Dee. 31, 1936 Defendant..... ..... 30 , 954 574.00 316,619.5

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3. Up to and as of the 31st day of December, 1936, the

total investment of the defendant in the operative proper-

ties of its said telephone and telegraph system in this state

was the sum of $171,263,297.10 and its total investment in

le lines, cable, aerial wire and underground conduit was

$73,429,561.05.

(See Defendant’s Exhibit 49.)

4. Up to and as of the 31st day of December, 1936, the

total investment of the defendant in pole lines, wire lines

and underground conduit erected along and upon the public

roads and highways and along and across the lands and

waters in the unincorporated areas of the plaintiff county

was as follows:

Pole lines .... hot pepe $1,453,378.77

Wire lines .__. _... §,499,539.84

Underground conduit . 1,201,701.87

a Ne 48 Fe gc $8,154,620.48

(See Defendant’s Exhibit 50.)

XXIV

1. The defendant has not at any time attempted to pro-

cure from the plaintiff county any franchise authorizing

or permitting the defendant to construct, maintain or op-

erate any telephone line, or any lines of telegraph, or to

erect, construct or install any of the parts, appurtenances or

fixtures of any such line in, upon or along any of the public

roads or highways or along or across any of the waters of

or within plaintiff county.

2. It is untrue that the defendant does not have, or that

it has not had, a franchise covering or granting to it the

right or privilege of constructing or maintaining its said or

any telegraph and/or telephone line or system, or any poles,

conduits, wires or other appurtenances employed in con-

junction therewith, in, under, upon, over or along any

portion of the streets, alleys or public highways of the

plaintiff county.

COPY BOUND CLOSE IN CENTER

3, That at the time of the execution of the instrament

of conveyance referred to in finding VIII, subdivision 2,

and the instrument of conveyance referred to in

XII, subdivision 1, no action had been taken by

or its Board of Supervisors to rescind or set aside or other.

wise modify or nullify Ordinance No. 108 N. 8. or the fran.

chise described in said ordinance or to show or indicate

that plaintiff considered that said ordinance and said fran.

chise were not or that either thereof was not, in force and

effect ; and in so far as shown by the records of said

said ordinance and said franchise were in force and effect

until the end of the period specified therein. That sub.

sequent to the execution of the conveyance referred to in

finding XII, subdivision 1, the defendant never at any time

made any oral or written statement to the plaintiff whe

defendant expressly asserted to the plaintiff that defend.

ant was exercising or was operating under, or because of,

the franchise granted by said Ordinance No. 108 (New

Series).

4. That at the time of the execution of the instrument or

conveyance referred to in finding IX, subdivision 2, and the

instrument of conveyance referred to in finding XII, sub.

division 3, no action had been taken by plaintiff or its

Board of Supervisors to rescind or set aside or otherwise

modify or nullify Ordinance No. 77 N. 8. or the franchise

described in said ordinance or to show or indicate that plain-

tiff considered that said ordinance and said franchise were

not or that either thereof was not, in force and effect; and

in so far as shown by the records of said county said ordi-

nance and said franchise were in force and effect until the

end of the period specified therein. That subsequent to the

conveyance referred to in finding XII, subdivision 3, the

defendant never at any time made any oral or written state-

ment to plaintiff whereby defendant expressly asserted to

the plaintiff that defendant was exercising or was operating

under, or beeause of, the franchise granted by said Or-

dinance No. 77 (New Series.)

5. That at the time of the execution of the conveyance

referred to in finding XII, subdivision 4, no action had been

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YT a kt ae ee a elk ee ee eee

taken by plaintiff or its Board of Supervisors to rescind or

set aside or otherwise modify or nullify Ordinance No, 67

N.S. or the franchise described in said ordinance or to show

or indicate that plaintiff considered that said ordinance

and said franchise were not or that either thereof was not,

in force and effect; and, insofar as shown by the records

of said county said ordinance and said franchise were in

foree and effect until the end of the period specified therein.

That subsequent to the execution of the conveyance referred

to in finding XII, subdivision 4, the defendant never at any

time made any oral or written statement to the plaintiff

whereby said defendant expressly asserted to the plaintiff

that defendant was exercising or was operating under, or

because of, the franchise granted by said Ordinance No. 67

(New Series).

6. At all times since the defendant commenced to do

business within the plaintiff county and elsewhere, as here-

inbefore found and described, it has owned and exercised

the right, privilege, authority and franchise to construct,

maintain and operate telephone lines and lines of telegraph

along and upon the public roads and highways and along

and across the waters and lands within this state, and to

erect poles, posts, piers and abutments for supporting the

insulators, wires and other necessary fixtures of its said

lines, in such manner and at such points as not to incom-

mode the public use of such roads or highways or interrupt

the navigation of such waters, which right, privilege, au-

thority and franchise were during all of said times and now

are granted to and conferred upon it by Section 536 of the

Civil Code of California.

7. It is not true that the defendant has at any time used

or occupied or that it is now using or occupying any of the

streets, alleys or public highways in any unincorporated or

other area of the plaintiff county in dispensing or providing

any type or kind of telephone and/or telegraph service in

any manner whatsoever without any right or euthority so

to do. It is true that the defendant has not at any time

paid to the plaintiff county any toll, rental, consideration

or charge for such right or authority.

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XXV

1. That commencing on or about November 13, 1911, and

annually thereafter until on or about April 30, 1917, the

defendani’s predecessor, Home Telephone and Telegraph

Company, filed with the Board of Supervisors of the plain.

tiff, at the times and in the manner required by the terms of

Ordinance No. 129 (New Series), a statement verified by

the oath of one of its corporate officers, duly authorized

to so act, to the effect that the payment which accompanied

each such statement amounted to two per cent (2%) of the

gross receipts of said company for the period named in

said statement, derived by said company from its opera.

tions in the unincorporated area described in said franchise.

That at or about April 30, 1917, the defendant filed with

the Board of Supervisors of the plaintiff an executed copy

of the instrument to show transfer of said franchise granted

by said Ordinance No. 129 (New Series) from Home Tele.

phone and Telegraph Company to the defendant; that

thereafter annually the defendant filed with the Board of

Supervisors of the plaintiff, at the times and in the manner

required by the terms of said Ordinance No. 129 (New

Series), a statement verified by the oath of one of its cor.

porate officers, duly authorized so to act, to the effect that

the payment which accornanied each such statement

amounted to two per cent (2‘%) of the gross receipts of the

defendant for the period na ied in said statement arising

from defendant’s operations in the unincorporated area

described in said franchise, exclusive of the area within

that covered by Ordinance No. 70 (New Series). That the

statements and payments made by the defendant and its

said predecessor in interest to the plaintiff as aforesaid

were made annually for the period of time covered by said

Ordinance No. 129 (New Series), which continued until

October 31, 1935. That subsequent to October 31, 1935, no

such statement or payment ever has been made by the

defendant to the plaintiff under or by virtue of said Ordi-

nance No. 129 (New Series) or any other ordinance or fran-

chise, or otherwise, excepting only the payment of taxes by

reason of the assessment against the defendant by the

plaintiff on defendant’s rights under Civil Code Section 536,

termed a franchise by plaintiff’s assessor, as herein else-

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where found. That the aggregate of all of the payments

which accompanied the verified statements hereinabove

mentioned, and which amounted to two per cent (2%) of

the gross receipts from the operations hereinabove de-

scribed, was approximately $291,000.00.

2. That in connection with the making and delivery of

said statements and the making of the payments that ac-

companied them, and/or by said statements and said pay-

ments, a0 representation was made by the defendant or the

Home Telephone and Telegraph Company except as here-

inabove in this paragraph recited.

XXVa

That at all times mentioned in these findings, the defend-

ant and its predecessors in interest have had access to the

facts therein recited and to all facts involved in their respec-

tive relations to and transactions with the plaintiff equal

to the access of the plaintiff; and that at all such times the

defendant and its respective predecessors in interest have

been as familiar with the facts involved in their respective

relations to and dealings with the plaintiff as the plaintiff.

That at all times when the defendant and/or its respective

predecessors in interest claimed or asserted rights by virtue

of Section 536 of the Civil Code of California, each of the

corporations when it thus claimed or asserted such rights

sincerely believed in the validity of said Section 536 of the

Civil Code, and sincerely believed that it was entitled to

the rights which it claimed or asserted by virtue of said

section; and in entertaining those beliefs, each of said cor-

porations relied on its own judgment and on its own private

counsels, and relied also on the conduct of the plaintiff as

herein in these findings recited, which conduct confirmed,

supported and encouraged each of said corporations in said

beliefs, and lulled said corporations respectively into a sense

of security and confidence in their reliance on the validity

of said Section 536 of the Civil Code.

XXVb

That no action has ever been taken by plaintiff or its

Board of Supervisors rescinding, setting aside or otherwise

COPY BOUND CLOSE IN CENTER

modifying or nullifying Ordinance No. 70 (New Series)

or the franchise described in said ordinance or to show

or indicate that said ordinance or the franchise granted

said ordinance was not considered by plaintiff to be in foree

and effect; and insofar as shown by the records of saiq

county, said ordinance still is in force and effeet.

XXVI

Defendant intends to continue to use and occupy the

public streets, alleys and highways of and within plaintiff

county and elsewhere in the State of California for its

telephone lines and lines of telegraph and to construet,

erect, operate and maintain therein and thereupon its con.

duits, poles, wires and other appurtenances and fixtures of

its said lines, all in the manner hereinbefore found and des-

cribed, without having or procuring from the plaintiff

county a franchise so to do.

It is not true that the plaintiff county is or has been,

or that any of the inhabitants thereof are or have ever been,

or that any part of the community thereof or of any com-

munity therein is now or has ever been, or that either or

any of said parties are now being or will hereafter be

damaged or injured, or threatened with damages or injury

in any manner or to any extent or degree whatsoever by

such use or occupancy of said streets, alleys and public

This text is long and has been trimmed here. Open the source document for the complete record.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.