ment, are hereby transferred to the custody and control of said board of commissioners," meaning the board of fire and police commissioners of the city. It is seen that by the act of 1879 "the entire control" of the streets was granted by the Legislature to the city of Memphis. And we think that for reasons hereafter noted this grant of power included the power to demand and receive compensation for facilities afforded for a use and occupation not enjoyed by the general public. But it is claimed by the defendant that this grant of authority was superseded and rendered null so far as telegraph and telephone companies are concerned by the act of 1885, p. 120, c. 66, the first section of which provides that any such company "may construct, operate and maintain such telegraph, telephone or other lines necessary for the speedy transmission of intelligence along and over the public highways and streets of the cities and towns of this state, or across and under the waters and over any lands or public works belonging to this state." Our attention is called to the fact that in the prior statute (Milliken & V. Code, § 1535), relating to the same subject, such companies were granted this privilege "free of charge" as expressed therein, while in the act of 1885 these words were omitted. It is contended by the city that the Legislature by the act of 1885, which is a general statute, did not intend to resume the power of control of its streets which it had given to the city of Memphis by the act of 1869-70, and that the general law operates only as a permission, to exercise in the streets of Memphis the franchises granted to telegraph companies subject to the control which it had already granted to the city. We think that this contention should be sustained, first, upon the ground of the familiar rule of construction that a statute general in its terms will not repeal by implication a particular statute relating to some particular matter or locality unless the intention of the Legislature to repeal the special act shall plainly appear. We had occasion to consider this subject with special attention in Guthrie v. Sparks, 131 Fed. 443, 65 C. C. A. 427, where we said: "The general rule is that an act which relates to a particular subject is not repealed by a later one which is general in its terms, but would include the particular case if that were not already provided for. The exception to this rule is that, if it plainly appears that the later general statute was intended to cover the particular case, and hold sway in place of the former act. the latter must be regarded as repealed by implication. But as repeals by implication are not favored the intent to repeal must plainly appear." And we referred to several cases in the Supreme Court in support of this statement. In Sutherland on Statutory Construction (2d Ed.) $275, it is said that: "Unless there is a plain indication of an intent that the general Act shall re peal the other, it will continue to have effect, and the general words with which it conflicts will be restrained and modified accordingly." This statement has a peculiar adaptation to the case before us. Again, there are certain special reasons for thinking that the Legislature could not have intended to displace the "entire control" of the streets which it had committed to the city. No one doubts, we sup pose, that the power to charge a telegraph company with a proportion of the cost of making and keeping in repair and policing a street of the city was lodged somewhere. And if so, no place was so appropriate for lodging it as in the city itself. It alone was obliged to bear the whole cost of maintenance. The share of the cost of maintenance for public use belonged to the city. The share due from the telegraph company for its special use was also due to the city, for the latter was carrying it, and its treasury should be reimbursed. It was a local matter and could be most conveniently attended to by the officials of the municipality who would be best informed of the circumstances and by all analogies the proper persons to assess and collect the charge. It would belong to no other public fund. It was therefore perfectly reasonable that the city should possess the authority to make and collect such a charge, and rather unreasonable that it should be committed to any other depositary of governmental authority. And there is no machinery provided by statute for the levy and collection of such charges by the state, and there was none when the Legislature passed the act of 1885. These seem to us strong reasons for believing that the Legislature had no intention of reserving to the state the power to charge the telegraph company for its proportion of the cost of maintaining the streets of the city of Memphis, but rather that it intended to leave that matter with the authority to which it had granted the power of control possessed by the state. The grant of "entire control" seems even a more absolute delegation of power than the power "to regulate." which was held in St. Louis v. Western Union Tel. Co., 148 U. S. 92, 13 Sup. Ct. 485, 37 L. Ed. 380, and 149 U. S. 465, 13 Sup. Ct. 990, 37 L. Ed. 810, to authorize the city of St. Louis to assess and collect a like charge for the use of the streets for the maintenance of the structures of a telegraph company. Indeed that case, if we are right in thinking that the Tennessee Act of 1885 did not deprive the city of the control of its streets in this regard, is ample authority for holding that it had power to levy and collect the charges in question, the reasonableness of them not being now disputed; and the case of Postal Telegraph Co. v. Baltimore, 79 Md. 502, 29 Atl. 819, 24 L. R. A. 161, affirmed by the Supreme Court of the United States in 156 U. S. 210, 15 Sup. Ct. 356, 39 L. Ed. 399, is directly in point. See also further discussion of the subject in Western Union Tel. Co. v. Borough of New Hope, 187 U. S. 419, 23 Sup. Ct. 204, 47 L. Ed. 240, and Atlantic & Pacific Tel. Co. v. Philadelphia, 190 U. S. 160, 23 Sup. Ct. 817, 47 L. Ed. 995, and in Western Union Tel. Co. v. Pennsylvania R. R. Co., 195 U S. 566, 25 Sup. Ct. 133, 49 L. Ed. 312. It is argued that this charge is a tax, and that the city of Memphis is not empowered to levy a tax not specified in its charter. But although such charges as these are sometimes called "taxes," they are not such as are generally meant in constitutions and statutes by that term. But by whatever name called, the power to impose them was given to the city by the grant of "entire control" over its streets. If there is a burden imposed upon abutting owners by the structures of the telegraph company, that is a matter between those parties, and is irrelevant to the subject of the present controversy. The fourth ground assigned for demurrer was this: "The said defendant further demurs to so much of said bill as seeks to recover for the period between December 20, 1894, and January 4, 1896, for that period of said demand is barred by the statute of limitations." The Tennessee statute of limitations bars the recovery for such a demand after six years, and the yearly rental falling due December 20, 1895, would be affected by this limitation. The general rule is that in actions at law, the defendant must raise the defense by plea, and that it cannot be presented by a demurrer, for the reason that the plaintiff would then be cut off from his right to reply and prove matter in avoidance. Allen v. Word, 6 Humph. (Tenn.) 284. But the rule is different in equity, where the pleadings end in the formal replication, which denies the matters or the sufficiency of the matters set up in the answer; and the defense may be made by demurrer. Wyatt v. Luton, 10 Heisk. (Tenn.) 458; Dunlap v. Gibbs, 4 Yerg. (Tenn.) 94. The fifth ground of demurrer is that the charge sought to be collected is "in violation of the Constitution of Tennessee and of the United States." But what provision of either of those instruments this charge infringed is not pointed out, and we are unable to apprehend what it may be, unless it is that a supposed contract was created between the state and the telegraph company by the act of 1885 and the action of the telegraph company thereunder, which is impaired by the city of Memphis in imposing this charge. But for the reasons stated we think that upon the proper construction of the act of 1885 the state did not propose to contract for an immunity to the telegraph company for charges of this character. As this appeal brings here only the questions raised by the demurrer we deal with nothing else. The decree of the court below is reversed, with costs, except as to that part of the bill which seeks to recover the annual rental charge falling due December 20, 1895, as to which it is affirmed. MAYOR, ETC., OF CITY OF NASHVILLE, TENN., v. CUMBERLAND TELEPHONE & TELEGRAPH CO. (Circuit Court of Appeals, Sixth Circuit. June 5, 1906.) No. 1,507. MUNICIPAL CORPORATIONS-TAXATION-TELEPHONE COMPANY-CONTRACT WITH CITY CONSTRUED. An ordinance granting a franchise to a telephone company to construct and operate its plant and the right to maintain its poles and wires in the streets contained a provision that the company should pay to the city annually a stated sum for each box in use by it, "in lieu of all other taxes except water tax." Under the Constitution and statutes of the state, the city had no power to exempt property from ad valorem taxation, but was expressly prohibited from doing so. Held that, in view of such limitation and of the rule that, where a statute or an ordinance is capable of two constructions, one of which would make it valid and the other void, the former is to be adopted, such provision must be construed as providing the box tax as the measure of the municipal taxes or charges which might be imposed by the city on account of the use and occupation of its streets and public places; that, as so construed, it was valid, and the payment of the tax therein provided for did not affect the right and duty of the city to tax the property of the company as assessed by the state for general purposes. Appeal from the Circuit Court of the United States for the Middle District of Tennessee. Hill McAlister and Edward J. Smith, for appellant. Before LURTON, SEVERENS, and RICHARDS, Circuit Judges. SEVERENS, Circuit Judge. For some time prior to October 16, 1888, the Cumberland Telephone & Telegraph Company had maintained and operated in the city of Nashville a telephone exchange under a revocable license. On that day the mayor and city council of the city passed an ordinance granting to the company the right to erect and maintain in the city a telephone plant. The ordinance was accepted by the company October 25, 1888. The first and sixth sections of the ordinance are the sections most involved in the present controversy. They are as follows: "Section 1. That the Cumberland Telephone & Telegraph Company be and is hereby granted the right to erect and maintain in operation telegraph poles. cables, and wires over the various streets, alleys, and squares of the city, and cables and wires over the Cumberland river bridge, for the purpose of transmitting messages by telephone." "Sec. 6. That said Telephone & Telegraph Company shall pay directly to the city comptroller each year, in lieu of all other taxes except water tax, one dollar on each and every box actually in use, said tax to be paid quarterly." By another section the city was given the right to string the wires for the maintenance of the city's fire alarm system on the poles of the company. Since that time the company has paid the one dollar per box tax or charge, as stipulated in the sixth section, and also the general taxes assessed upon its real estate and office furniture in the city. For the years 1897, 1898, 1899, and 1900, the state board of assessors, in pursuance of a general law of the state, assessed the distributable property, the poles, wires, and accessories, according to its value, and certified its assessment to the tax assessor for the city of Nashville for the levy and collection of taxes for the purposes of the city. These taxes amount in the aggregate to the sum of $4,970.78, together with interest and penalties prescribed by law. The company has declined to pay these taxes or any part of them. The city brought this suit in the state chancery court to enforce the payment thereof, and the company, being a Kentucky corporation, removed the cause into the Circuit Court of the United States, where, the pleadings being reformed, it filed an answer denying its liability to pay the taxes sued for, and also filed a crosspetition, praying that it be allowed to set-off the sums which it had paid as one dollar per box charges specified in the sixth section of the ordinance above mentioned. The court below held and adjudged that the company was liable to pay the ad valorem taxes sued for, but that it was entitled to recover the sums paid on account of the one dollar per box charge, and to set the same off against the ad valorem taxes sued for by the city. The amount of the set-off somewhat exceeded the amount due the city, but, the defendant having waived a judgment for the ex cess, the suit of the city was dismissed. The costs were divided equally between the parties. The city appeals from the allowance of the setoff. The company does not appeal. No question is raised as to the regularity of the proceedings for the assessment of the ad valorem taxes or the liability of the company to pay them, if the city is not precluded from claiming them by its stipulation to accept the one dollar per box tax in lieu of all other taxes except water taxes. The contention of the company is that the city stipulated to waive all other taxes than the one dollar per box tax and water taxes, and that it is estopped from claiming to recover this ad valorem tax; or, that if it is not so estopped, the stipulation of the company to pay the one dollar per box tax is void, and that it is entitled to recover what it has paid upon the understanding that that was to be in lieu of all other taxes except water taxes, about which no controversy has arisen. The contention of the city is that, upon the proper construction of the sixth section of the ordinance, it cannot be held to have intended, or the company be supposed to have expected, that it was thereby obtaining immunity from general taxation, but only such as the city itself had rightful authority to impose. We think, for reasons presently to be stated, that the position of the city should be sustained. 1. The city had no power to grant immunity from general taxes levied and collected by the direct authority of the state. The Constitution of the state (section 28, art. 2) requires that "All property, real, personal, or mixed, shall be taxed.' And section 20 of the charter of the city provides that "no municipality controlled by this act shall exempt any property from taxation not exempt from state taxation." The purpose is that there shall be equality in the burden of taxation of all property in the state and this applies to municipalities as well as to the state. Counsel for the company frankly says in his brief: "The telephone company also concedes that the city has no right, by contract or otherwise, to exempt property from ad valorem taxes." But he contends that under its agreement the city cannot do both; that is, collect the one dollar per box tax and the ad valorem tax also. The city was bound to regard the limitations upon its power imposed by its charter. and the company was bound to know the charter limitation of the city, for it was public law, and that the city had not the power to grant an immunity from ad valorem taxes imposed under the general law of the state. In the face of this presumed knowledge of the parties, what did they mean by the provision that the company should pay one dollar per box annually, and that this should be in lieu of all other taxes except water taxes? To construe this language as importing an agreement that the city would violate an express provision of its charter is altogether unreasonable, and cannot be admitted. To construe the language as intending to include those taxes or charges which the parties had power to contract about, and not those things which were wholly beyond their control, is not only a reasonable, but we think a natural, construction of their language. Among the "taxes" which they had in mind were "water taxes," and these were ejusdem generis with those from which they were excepted. 2. There were various local "taxes" or charges to which the company was at the instance of the city liable to be subjected. Such as, for in 145 F.-39 |