An ordinance of the borough of New Hope, Pennsylvania, imposing
an annual license fee of one dollar per pole and two dollars and a
half per mile of wire on the telegraph, telephone and electric
light poles within the limits of the borough, is not a tax on the
property of the telegraph company owning the poles and wires, or on
its transmission of messages, or on its receipts for such
transmission, but is a charge in the enforcement of local
governmental supervision, and as such is not, in itself, obnoxious
to the commerce clause of the federal Constitution.
As the elements entering into such a charge are various, and as
in this case the courts of Pennsylvania have decided that the
charge imposed by the ordinance is reasonable in the circumstances
and the ordinance valid, this Court does not feel justified in
holding that conclusion to be so manifestly erroneous as to require
revision.
By an ordinance passed in 1894, the Borough of New Hope,
Pennsylvania, imposed an annual license fee of one dollar per pole
and two dollars and a half per mile of wire on the telegraph,
telephone, and electric light poles and wires within its limits.
The Western Union Telegraph Company had constructed prior thereto,
and had since maintained and operated, a line of telegraph poles
and wires through the borough, and this was an action brought in
the Court of Common Pleas of Bucks
Page 187 U. S. 420
County, in that state, against the company to recover license
fees for the four years commencing with 1895. The case came on for
trial before the court and a jury, and plaintiff put in evidence
the ordinance in question, and it was agreed
"between the parties that, for the year beginning October 1,
1895, there were seventy-five poles and twenty miles of wire, and
for the three succeeding years, beginning October 1, 1896, there
were thirty-six poles and twelve miles of wire maintained by the
defendant in said borough."
Plaintiff then rested, and defendant offered evidence tending to
show that the wires were used as through wires for the transmission
of messages between the different states and the United States and
foreign countries; that the company had no office at New Hope which
it operated itself, but that the Philadelphia & Reading
Railroad Company handled the business there, and transferred it to
the Western Union at Philadelphia; that no part of the business
that went to or from New Hope went over these lines of wires and
poles, and that the local business handed to the Western Union at
Philadelphia amounted to from about seven to seven and one-half
dollars per month. The evidence further tended to show that the
cost value of its lines through New Hope was about $372, and that
the cost of inspection, repairs, and maintenance of the plant of
the company had averaged for thirteen years one dollar and
forty-nine and one half cents per wire per annum; that, since
October, 1894, the borough had not expended any money on account of
the poles and wires of the company; that its expenditures were for
repairing streets, street lamps, moderate sums in payment of
official services, etc., and that, when on holidays the burgess saw
fit to appoint a policeman, he often called on the constable, who
was generally paid $2.50 per day. A lineman testified that, during
those years, the borough never did anything, to his knowledge, "in
the way of inspecting or repairing or removing or anything else in
connection with the poles and wires of those telegraph companies."
Defendant contended that the requirement of payment of the license
fee in question amounted to a regulation of commerce, and that the
ordinance was therefore void.
The court left it to the jury to find whether the license
fee
Page 187 U. S. 421
exceeded what was reasonable under the circumstances. The jury
returned a verdict in favor of the plaintiff, and judgment was
rendered thereon, which on error to the superior court was
affirmed. 16 Pa.Super.Ct. 306. The Supreme Court of Pennsylvania
refused to allow an appeal to that court.
Page 187 U. S. 424
MR. CHIEF JUSTICE FULLER delivered the opinion of the Court.
It is conceded that the borough had the right, in the
exercise
Page 187 U. S. 425
of its police power, to impose a reasonable license fee upon
telegraph poles and wires within its limits, and that an ordinance
imposing such fee is to be taken as
prima facie
reasonable. But it is insisted that, on the evidence in this case,
the presumption of reasonableness is rebutted, and that the
ordinance as administered is void because a regulation of
interstate commerce. While in the exercise of its control over its
streets, it is admitted that the borough may supervise the location
of the poles erected to sustain the wires of the plaintiff in
error, may require them to be marked, may make such inspection of
them as may be necessary to protect the public welfare, and may
impose a reasonable license fee for the cost of such regulation and
supervision, and of the issuing of such permits as may be required
for the enforcement thereof, yet it is contended that, if the
license fee turned out to be in excess of the amount necessary to
reimburse the municipality, the ordinance became unreasonable and
invalid. The superior court, in its opinion, referred to many
decisions of the Supreme Court of Pennsylvania as definitely
establishing, among other propositions,
"that, in an action to recover the license fee for a particular
year, the same being payable at the beginning of the year, the fact
that the borough or city did not expend money for inspection,
supervision, or police surveillance of the poles and wires in that
year is not a defense,"
and
"that the courts will not declare such ordinance void because of
the alleged unreasonableness of the fee charged unless the
unreasonableness be so clearly apparent as to demonstrate an abuse
of discretion on the part of the municipal authorities."
And it was said that, in many of the cases cited, the license
fee was the same as that imposed by this ordinance. 16 Superior
Ct.Rep. 309. The supreme court affirmed the judgment in a similar
case on the opinion given below in this. 202 Pa. 532.
In
Chester City v. Telegraph Company, 154 Pa. 464, in
which it was averred in the affidavit of defense that the rates
charged were at least five times the amount of the expense involved
in the supervision exercised by the municipality, the supreme court
said:
"For the purposes of this case, we must treat this averment as
true as far as it goes. The difficulty is it does not go far
enough. It refers only to the usual, ordinary,
Page 187 U. S. 426
or necessary expense of municipal officers of issuing licenses
and other expenses thereby imposed upon the municipality. It makes
no reference to the liability imposed upon the city by the erection
of telegraph poles. It is the duty of the city to see that the
poles are safe and properly maintained, and should a citizen be
injured in person or property by reason of a neglect of such duty,
an action might lie against the city for the consequences of such
neglect. It is a mistake, therefore, to measure the reasonableness
of the charge by the amount actually expended by the city for a
particular year, to the particular purposes specified in the
affidavit."
In
Taylor v. Telegraph Company, 202 Pa. 583, the
supreme court said:
"Clearly the reasonableness of the fee is not to be measured by
the value of the poles and wires or of the land occupied, nor by
the profits of the business. The elements which enter into the
charge are the necessary or probable expense incident to the
issuing of the license and the probable expense of such inspection,
regulation, and police surveillance as municipal authorities may
lawfully give to the erection and maintenance of the poles and
wires. . . . Whether or not the fee is so obviously excessive as to
lead irresistibly to the conclusion that it is exacted as a return
for the use of the streets, or is imposed for revenue purposes, is
a question for the courts, and is to be determined upon a view of
the facts, not upon evidence consisting of the opinions of
witnesses as to the proper supervision that the municipal
authorities might properly exercise and the expense of the
same."
And see Philadelphia v. Western Union Telegraph
Company, 89 F. 454.
Concurring in these views in general, we think it would be going
much too far for us to decide that the test set up by the plaintiff
in error must be necessarily applied, and the ordinance held void
because of failure to meet it. As the supreme court pointed out,
the elements entering into the charge are various, and the court of
common pleas, the superior court, and the Supreme Court of
Pennsylvania have held it to be reasonable, and we cannot say that
their conclusion is so manifestly wrong as to justify our
interposition.
Page 187 U. S. 427
This license fee was not a tax on the property of the company,
or on its transmission of messages, or on its receipts from such
transmission, or an its occupation or business, but was a charge in
the enforcement of local governmental supervision, and, as such,
not in itself obnoxious to the clause of the Constitution relied
on.
St. Louis v. Telegraph Company, 148 U. S.
92;
149 U. S. 149 U.S.
465.
Judgment affirmed.
MR. JUSTICE WHITE, MR. JUSTICE PECKHAM, and MR. JUSTICE McKENNA
dissented.
