UNITED STATES v. AMERICAN BELL TELEPHONE co. 39
contracts. The right reserved to take possession and carry on the
business of telephony in Ohio, on the contingency of the local corpo-
rations’ failure to observe and perform the terms and stipulations of
the license contracts, certainly does not constitute a present carrying
on of business by theiAmerican Bell Telephone Company, such as
would bring it within the provisions even of the Ohio statutes.
When the Bell Company exercises its reserved rights and powers
‘ under the contracts, and takes possession of the telephones, lines,
etc., in Ohio, and operates the same. through agents or officers of its
own, it _may then with some propriety be said to carry on its business
in the state, so as to be amenable to suit here under the Ohio statute
relating to suits against foreign corporations, but not before. The
only thing presenting the appearance of an agency relation between
the American Bell Telephone Company and the local or license cor-
porations is found in that provision of the "private-line" contracts
which requiresthe rents and royalties of telephones used on such
private lines to be reserved to the licenser. But, when this pro-
vision is considered in connection with other stipulations of the con-
tract, it will be found that these rents and royalties are transferred
and assigned, even before created, to the licensee corporations, which
have the right to collect and appropriate them to their own use so
long as the contracts are complied with on their part; The provision
was onlyintended to guard against the contingency of default by the
licensee corporations, and to protect the American Bell Telephone
Company against loss and embarrassment in the enforcement of its
rights, upon the failure of the local companies to perform and observe
the terms of the contracts. With the delivery of the telephone in-
struments at Boston tothe licensee corporation it became entitled,
by the terms of the contract, to all the rents and royalties that might
arise from private-line customers, and acquired the right to collect
the same asits own, for a year in advance, and to continue to do so,
from year to year, while the contracts were in force, with no liability
to account therefor to the American Bell Telephone Company. The
local corporations purchased these rents and royalties as a part of
the rights they acquired under their license contracts. They alone
had the right to collect them, and apply them to their own use, so
V long as they observed andperformed the stipulations of the contracts.
The local or licensee corporations, in fact, alone make such collections
· of the private-linecustomers. The American Bell Telephone Com-
pany has never had the right to collect, and has, in fact, never col-
lected, any of said rents and royalties. ·
‘ The contract provides that said second party, (the licensee corpora-
tions,) "so long as it makes, or causes to be made, the payments herein
stipulated, and keeps all the terms thereof, may collect the rentals
and royalties from the customers thereunder for a period in advance,
not exceeding one year. Upon any default on its part which shall
continue for more than 30 days after written notice thereof, the