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amendment was to limit an existing right or privilege; and, while I personally think that the law ought to be at least as stringent as is contended by the objecting creditors, it appears to me too plain for fur~ ther argument that Congress did not make the law in that shape.
The exception to the objection is sustained.
Cus'roms DUTIES—OLASSIFICATION—JAPANNED SKINS—UPPER LEATHER. Japanned skins used for uppers are within the provision in paragraph 456, Tariff Act October 1, 1890, c. 1244, § 1, Schedule N, 26 Stat. 601, for “dressed upper leather, including * * * japanned leather,” rather than under the provision in the same paragraph for “japanned calfskins,” the latter provision being limited to japauned skins which are not upper leather.
On Application for Review of a Decision of the Board of United States General Appraisers. Affirmed, 4 C. C. A. 680.
The decision of the Board of General Appraisers reversed the assessment of duty by the collector of customs at the port of New York on merchandise classified as “japanned calfskins,” under paragraph 456, Tarifl Act October 1, 1890, c. 1244, § 1, Schedule N, 26 Stat. 601, and claimed by the importers to be dutiable under the provision in the same paragraph for “dressed upper leather, including * * * japanned leather.” This contention was sustained by the Board on the authority of a former decision. G. A. 272 (T. D. 10,719).
Thomas Greenwood, Asst. U. S. Atty. Curie, Smith & Mackie (W. Wlickham Smith, of counsel), for importers.
LACOMBE, Circuit Judge. I am inclined to the opinion that the words “japanned calfskins” in the section must be construed as mean— ing only such as are not upper leather, dressed or undressed. It appears from the finding of the Board that the article is commercially known as “patent leather,” and is, in fact, an upper leather.
The decision of the Board of General Appraisers is affirmed.
HOME TELEPHONE & TELEGRAPH CO. v. CITY OF LOS ANGELES et a1.
1. TELEPHoNEs—RATEs—REGULATION—STATE POWER. A state has power to regulate charges for telephone service and to delegate such power to municipalities. 2. SAME—CITY CHARTER—CONSTRUCTION—AUTHORITY or CITY. Const. art. 4, § 33, provides that the Legislature shall pass laws for the regulation of charges for services performed and accommodations
furnished by telegraph companies. Los Angeles City Charter, art. 3, § 12, provides that all legislative power of the city is vested in the council, subject to the mayor’s veto power, and section 31 declares that the council shall have power by ordinance to regulate telephone service, the use of telephones within the city, and to fix and determine the charges for telephones and telephone service and connections, etc. Held, that the city council’s power to fix telephone rates was not limited to a determination of the charges to be made by a telephone company permanently by contract so as to preclude the council from subsequently passing another ordinance changing the rates.
3. SAME—TELEPHONE RATEs-MUNIOIPAL AFFAIR—DISCRIMINATION.
The regulation and fixing of charges to be made by telephone companies doing business within a city is none the less a “municipal affair” within the jurisdiction of a city, because rates so fixed would not be uniform throughout the state; the reasonableness of the charge depending on the value of the plant, cost of maintenance and operation, etc., which varies in different localities.
4. SAME—REGULATION 0F CHARGES—MODE.
Const. art. 4, '§ 33, provides that the Legislature shall pass laws for the regulation and limitation of the charges for services performed and accommodations furnished by telegraph companies; and, where laws shall provide for the selection of any person or oflicer to regulate or lower such rates, no such person 0r oflicer shall be selected by any corporation or individual interested in the business to be regulated and no person shall be selected who is an officer or stockholder of any such corporation. Held, that such provision does not contemplate the accomplishment of its purposes by general state law, or through commissions, but by a suitable delegation of power to municipalities.
Under Los Angeles City Charter, art. 3, 5 31, authorizing thecity council to fix and determine the charges to be made for telephone services, the city had power to pass an ordinance requiring telephone companies to report to the city council the value of their plant, receipts, and expenditures in order to enable the city to prescribe reasonable rates.
6. SAME—TELEPHONE RATEs—POWER To FIX—POLICE POWER—SURRENDER. Control of telephone rates by a municipality is an exercise of police power of the state; and, while this right may be surrendered or suspended by contract, such suspension will not be presumed.
7. SAME—REGULATION or RATES—RIGHTS or MUNICIPALITIES—SUSPENSION.
A city being authorized to fix and regulate telephone rates granted a franchise under Cal. St. 1901, p. 267, c. 103, providing for the sale of franchises under which complainant’s assignor and his assigns were given the right for a period of 50 years to construct, maintain, and operate a telephone line. The ordinance fixed the charges not to exceed $60 per annum for business telephones and $30 per annum for private telephones until the exchange comprised more than 10,000 telephones, after which the rates should not be increased by more than a sum equal to $6 per annum for each 1,000 phones connected in excess of the 10,000. In consideration for this franchise, the telephone company furnished 30 tele~ phones to the city gratis and also provided 150 pairs of wires in its conduits and the upper arms of its poles for the use of the city’s police and fire alarm telegraph system and agreed to pay a 2 per cent. gross earnings tax. Held, that the city by such ordinance did not surrender its right to regulate rates for the 50-year term of the franchise, but that the city was entitled to reduce the rates below the maximum charge so fixed during such term.
6. CONSTITUTIONAL LAW—IMPAIRMENT or CONTRACT. Where a city by granting a telephone franchise had not surrendered its charter right to fix telephone rates, the subsequent passage of an ordinance establishing lower rates than the maximum rates fixed by the franchise ordinance was not an impairment of the telephone company’s-contract franchise rights.
9. SAME—EQUAL PROTECTION OF LAws.
Where a city was authorized by its charter to regulate telephones and to fix and establish rates, an ordinance fixing lower rates for one company than those another company was permitted to charge within the same-city was not invalid as denying the first company the equal protection of~ the laws.
10. SAME—UNLAWFUL DISCRIMINATION. The mere fact that different rates were prescribed by ordinance for two companies operating telephone lines within a city did not of itself establish unlawful discrimination against either.
11. INJUNOTION—ORDINANOEs—RIGHT To ENJOIN ENFORCEMENT.
Where a city having the charter right to regulate telephones and fix rates passed an ordinance requiring telephone companies to submit a. statement of the value of their plants with their receipts and disbursements in order that the city might establish reasonable rates, complainant telephone company, while refusing to comply with su_ch ordinance, couldnot seek to enjoin the enforcement of rates established by the city council, in the absence of such information, on the ground that the ordinanceswere void.
12. CONSTITUTIONAL LAW—DUE PROCESS OF LAW—NOTICE. Where a city had charter power to regulate telephones and fix rates,. a telephone company had no right to notice of the passage of an ordinance fixing the rates it was authorized to charge, so that such ordinance passed without notice was not unconstitutional as depriving the telephone company of its property without due process of law.
In Equity. Demurrer to the bill.
This suit was brought to restrain the enforcement of two ordinances attached to the bill, respectively, as Exhibits C and D, and hereinafter more fully set forth.
The allegations of the bill are substantially as follows:
The city of Los Angeles exists, and since 1888 has existed, under a freeholders’ charter.
That by section 2 of said charter said city is vested with power to provide and maintain a proper and efficient fire department, and make and adopt such rules and regulations for the preservation of property endangered by fire as may by it be deemed expedient, and to make and enforce within its limits local police, sanitary, and other regulations deemed by it expedient to maintain the public peace and protect property, and to exercise all municipal powers necessary to the complete and efficient management and control of municipal property and for the efiicient management of the municipal government, whether such powers be expressly enumerated in such charter or not,. except such powers as are forbidden or are controlled by general laws.
That all legislative power of said city is vested in the city council, subject to the power of veto and approval by the mayor.
That under section 31 of said charter said council has power by ordinanceto regulate telephone service and the use of telephones Within the city and to fix and determine the charges for telephone and telephone service and connections. and to prohibit or regulate the erection of poles for telephones, telegraph or electric wires in the public grounds, streets, or alleys Of said city, and the placing of wires thereon, and to require the removal from the public grounds, streets, or alleys of any or all such poles and the removal and placing under ground of any or all telegraph, telephone, or electric wires.
That by section 33 of said charter the council is required by ordinance to provide for maintaining a fire alarm and police telegraph system.
That “it is further provided in and by said charter that said council shall also have full power to pass ordinances making contracts and upon any other subject of municipal control or to carry into effect any other powers of the municipality.”
That prior to December 9, 1901, an application was filed with the governing or legislative body of defendant by M. A. King for a franchise to construct, maintain, and operate a telephone system, and that, on the 6th day of February, 1902, an ordinance, attached to the bill as Exhibit B, was passed granting said franchise, and that all the steps and proceedings required by law and the provisions of said charter for the advertisement and sale of said franchise and the approval thereof, and all other matters connected therewith, were duly had and taken.
That, by regular assignments from M. A. King and others, plaintiff became and now is the owner of said franchise and telephone system.
That immediately upon the taking effect of said ordinance as aforesaid the assignors of this plaintiff, pursuant to the terms thereof, commenced the work of constructing and laying down the conduit required by said ordinance in the district therein described, and continuously prosecuted said work in good faith and completed the same in full compliance with the conditions of said ordinance relating thereto, and within the period therein prescribed, so that within said period a complete conduit system was established of sufficient capacity and extent to accommodate at least 10,000 subscribers and to provide a general telephone service in all parts of said telephone conduit district, and that likewise the said assignors of this plaintiff did, pursuant to the terms and conditions of said ordinance and in good faith, expend for material and labor used and performed in the construction and installation in connection therewith of wires, switchboards, and telephonic apparatus and appliances, and within the time specified in said ordinance, sums greatly in excess of the sums therein specified to be so expended, and did so expend more than the sum of $200,000 within 36 months after the grant of said franchise.
That the assignors of plaintiff did also, within the periods of said ordinance provided, after the grant of said franchise, file a statement, verified as therein provided, showing in detail the sums expended as required by and in compliance therewith, and did also cause to be erected and maintained poles of a size and character satisfactory to the street superintendent of said city of Los Angeles, and that the assignors of said plaintiff and this plaintiff have executed and .complied with and observed, and that the said defendant the city of Los Angeles has never at any time claimed or pretended that plaintifi’s assignors and this plaintiff had not executed, complied with, and observed the terms, covenants, and provisions of said ordinance as aforesaid.
That all of the work done and performed by plaintifi’s assignors and by this plaintiff as aforesaid, and the expenditures made by it for any and all equipment and appliances as aforesaid, were made, done, and performed pursuant to and in reliance upon the terms, covenants, and provisions of said Ordinance No. 6,959 of said city of Los Angeles, and not otherwise, and that the system of plaintiff in said city of Los Angeles is now and at all times has been maintained and operated pursuant to and in reliance upon the terms, conditions, and covenants of said ordinance and not otherwise, and that plaintiff has no rights of property in the said city of Los Angeles except such as were acquired under the said Ordinance No. 6,959.
That pursuant to the powers vested in it by law and the provisions of said charter, and in order to provide for maintaining a fire system and police tele— graph system, the said defendant the city of Los Angeles required in and by section 8 of the said ordinance that this plaintiff should furnish to the said city of Los Angeles, if required by it. free of any charge at all during the life of the said franchise granted by said ordinance, the use of all necessary conductors, not exceeding 150 pairs in said conduit, for the uninterrupted use of a fire system and police system of said city, and for like purpose the free use of the top cross-arm on each of the poles erected or maintained under said franchise during the whole term thereof; that this plaintiff, in constructing and laying said conduits and in constructing and erecting its pole lines and in providing its equipment, made provision for said 150 pairs of lines in said conduits and for the maintenance and operation thereof, and provided that said top cross-arms on each of said poles, and in all respects and at additional cost and expense to it arranged to comply with such provisions of said ordinance, and is now, and at all times has been, able and willing to furnish said conductors, and has as aforesaid reserved the top cross-arm on each of said poles for the use of said city.
That it is also provided in and by section 8 Of said ordinance that there shall be furnished to the said city of Los Angeles, free Of any charge, 30 telephones which shall be connected with the telephone system Of plaintiff, and that this plaintiff did, within the time provided and specified in said franchise, so furnish to the defendant said 30 telephones, and did connect the same with the telephone system Of this plaintiff, all at its own cost and expense, and without charge to the said city of Los Angeles, and that the said city Of Los Angeles is now, and ever since has been, using free Of charge as aforesaid the said 30 telephones.
That section 1 of said ordinance provides: “That said conduit, said poles, and the wires inclosed therein or attached thereto, shall be constructed, erected and installed, and at all times maintained, and said right, privilege and franchise is hereby granted, and shall at all times be exercised and enjoyed, in accordance with and subject to each and every Of the terms of this ordinance and not otherwise.”
That section 9 of said ordinance provides: “That all telephone lines constructed or operated under said franchise shall have complete copper metallic circuits, and that the conduit system constructed and laid down mider said franchise shall be Of such size and capacity as to accommodate wires, cables and conductors, sufficient to provide for ten thousand telephones. That the rent or charge for unlimited, independent, metallic circuit, telephone service, in the system established or maintained under said franchise so long as said system does not connect and exchange with more than 10,000 telephones, shall not exceed $60 per annum for a telephone installed in any business office or premises, or $30 per annum for a telephone installed in a private residence, and that when said system shall comprise more than 10,000 telephones, the annual rental or charge for the telephone service shall not be increased by more than a sum equal to $6.00 per annum for each one thou— sand telephones in said city connected with said telephone system in excess of 10,000.”
That the rate established by said franchise was at said time lower than any which had ever been charged for telephones in said city, and lower than any other company than plaintiff now charges for telephone service in said city, and that there was not at any Of the times herein mentioned any system of telephone lines with complete copper metallic circuits, other than the system of plaintiff.
That at the time of the advertising and sale of said franchise there was in operation in said city of Los Angeles one system of telephonic communication only, and that the corporation owning the same continues to do business in said city.
That at the time said franchise was advertised for sale and sold the city required the use of 150 pairs of lines as provided for in said franchise and the use, of the top cross-arm Of each pole to be erected under said franchise for the fire alarm and police telegraph system Of said city, and said city needed the use of 30 telephones, as provided in said franchise; and all Of said telephones have been used by the said city ever since the construction of said plant of plaintiff, and are now used by the city, and the city is using some Of the lines in the conduit Of plaintiff, and the top cross-arm of some of its poles, and the city has need for the things it is using as aforesaid for public benefit and in the discharge Of its functions.
That by section 10 it is provided that the owner Of said franchise shall in no way enter into any combination at any time. directly or indirectly, with any person or persons, or any corporation, concerning the rate to be charged for telephone or telegraph service.
That the reasonable value to the said city Of Los Angeles of the use Of said 30 telephones provided by said franchise to be furnished free of charge, and the free use Of 150 pairs of lines for the fire system and police telegraph system Of said city, and the free use of the top cross-arm on each Of the poles erected and maintained under said franchise, are and will be during the life of said franchise of the sum of $450,000. That 2 per cent. of the gross annual