293 Mass. 589 | Mass. | 1935
The Justices of the Supreme Judicial Court respectfully submit these answers to questions contained in the order adopted on June 28, 1935, copy whereof is hereto annexed. The questions relate to a pending bill entitled “An Act providing for the Acquisition by the Boston Metropolitan District of the Entire Assets, Property and Franchises of the Boston Elevated Railway Company.” That title is fairly descriptive of the scope of the bill. The Boston Elevated Railway Company was incorporated by St. 1894, c. 548. Large powers were conferred upon it: by § 4, it was authorized to mortgage or pledge its franchise and property as security for its bonds, and by § 16, it was empowered to establish a fare not in excess of five cents for a single ride, which sum could not be reduced by the Legislature during a period of twenty years. See also St. 1897, c. 500, §§ 10, 17, 19, 21. It was granted by subsequent legislation exclusive leases for terms of years of subways and tunnels. By Spec. St. 1918, c. 159, its management and operation were taken over by the Commonwealth as
The pending bill consists' of two parts. In the several sections of Part I, provisions are made for the sale of the
The pending bill by Part II regulates the operation of the railway system under the ownership of the district. Succinctly stated, its provisions are these: By § 1, those who have been trustees of the railway company under public management are created officers of the district under the title Metropolitan Transportation Board (hereafter called the board) with the same tenure and method of appointment and removal and compensation as theretofore existing with respect to the trustees of the railway company under. Spec. St. 1918, c. 159. All officers and employees of the railway company with certain exceptions become officers and employees of the district subject to control and removal by the board. By § 2, the board has possession on behalf of the district of all properties acquired under the act with exclusive authority to sell any part not necessary for the operation of the transportation system, and to make leases and contracts respecting such properties in order to obtain additional income without impairing the transportation service; it has complete management and control of the cash, mortgages, other securities and current assets
The point fundamental in the consideration of the first five questions in the order is whether the General Court can authorize the district to make a binding contract with the holders of its bonds, with remote ultimate maturities already described, to the effect that the bill, if enacted into law, shall not be changed by future legislation with respect to the management or operation of the railway system or increasing the capital debt of the district without the concurrence of the trustees of the district and the department of public utilities. The department of public utilities is under the supervision and control of a commission of five members appointed by the - Governor with the advice and consent of the council. G. L. (Ter. Ed.) c. 25, § 2. The aim of the pending bill is to enable the district as a political subdivision of the Commonwealth to acquire title to the railway system, to issue bonds to pay for it, and to operate it as a self-supporting public enterprise subject to certain powers vested in the metropolitan transit council by St. 1931, c. 333, § 3. If the bill is enacted, a political sub
The power of the General Court to authorize the making of contracts by public agencies for the public welfare is undoubted. In holding valid the grant of an exclusive right to operate a railroad between designated termini for a period of thirty years, it was said that, “in addition to the lawmaking power, the legislature is the representative of the whole people, with authority to control and regulate public property and public rights, to grant lands and franchises, to stipulate for, purchase and obtain all such property, privileges, easements and improvements, as may be necessary or useful to the public, to bind the community by their contracts therefor, and generally to regulate all public.rights and interests.” Boston & Lowell Railroad v. Salem & Lowell Railroad, 2 Gray, 1, 32. Boston v. Treasurer & Receiver General, 237 Mass. 403, 416. It was said in Murray v. Charleston, 96 U. S. 432, 445: “The truth is, States and cities, when they borrow money and contract to repay it with interest, are not acting as sovereignties. They come down to the level of ordinary individuals. Their contracts have the same meaning as that of similar contracts between private persons.” This principle finds support in Perry v. United States, 294 U. S. 330, 352-353, where occurs the statement that “‘Punctilious fulfillment of contractual obligations is essential to the maintenance of the credit of public as well as private debtors.’ . . . the right to make binding obligations is a competence attaching to sovereignty.” The right to exact fares of a specified amount for a term of years not grossly unreasonable in length, established by contract with a public service corporation pursuant to legislative authority, cannot thereafter be varied by statute without violating § 10 of art. 1 of the Constitution of the United States, although power to fix just compensation for service furnished by public utilities in general is vested in
The broad power of the General Court to represent the Commonwealth with respect to matters necessary or useful to the public, and to make or to authorize the making of binding contracts therefor,. is subject to essential limitations inherent in our government. The underlying and comprehensive principle is that no contract can be made or authorized by the General Court which in effect is á surrender or renunciation of the sovereign powers of the Commonwealth. The right to exercise the police power cannot be relinquished even by explicit stipulation. Commonwealth v. Boston & Northern Street Railway, 212 Mass. 82, 85. Opinion of the Justices, 261 Mass. 523, 553. The doctrine that a contract specially authorized by the legislative department of government is protected by the Constitution of the United States “against impairment by
The provisions of the present bill exceed the bounds of those hitherto considered in Opinions of the Justices, 261 Mass. 523, and 261 Mass. 556, in respect to limitations upon legislative power touching the relations of the Commonwealth and the Boston Elevated Railway Company.
The dominant purpose of the pending bill is to enable the district to acquire title to the railway system with the privileges and franchises of the railway company, to provide for its operation through public officers, and to sell bonds to raise the necessary funds. In order to make those bonds more salable, limitations are imposed upon the exercise of legislative powers in respect to the management and operation of the railway system and its extensions as prescribed in the bill and in respect to increases in the capital debt of the district. Those limitations prevent for the future, except as provided in §§ 3 and 15 of Part II, modification, change or alteration by the General Court in the appointment and tenure of the members of the board, in the exclusive power of the board to sell property devoted to railway uses and to make contracts concerning the same, in the complete control by the board over cash, mortgages, notes, securities and other current assets acquired from the railway company and over the investment, reinvestment and sale of the same
These restrictions and limitations are not absolute. Legislative change in these particulars, however, is in effect prohibited except upon the petition of the trustees of the district and a certificate of the department of public utilities that in its opinion such change is in the public interest. Thus the concurrent approval of two official bodies is a condition precedent to such change. These" boards are established by statute. Such boards commonly are subject to legislative reorganization and change. The members of each of these boards are appointed for considerable terms. Their duties require the members to be familiar with the transportation facilities and needs of the district. Those restrictions and limitations are substantial; they might preclude
Some limitations and restrictions of this nature might be permissible as a part of the contract embodied in bonds to be issued by the district, and be secure against future legislative alteration. For example, the substantial continuance of the board of management as to tenure and appointment, Adams v. Plunkett, 274 Mass. 453, 462-463; Detroit v. Detroit Citizens’ Street Railway, 184 U. S. 368, 382; Perry v. United States, 294 U. S. 330, 352; regulation of fares and charges for services, Railroad Commission of California v. Los Angeles Railway, 280 U. S. 145,151-152; and rules touching methods of financing the district as to determination, certification and payment of deficiencies in the cost of service and assessment and collection thereof, Seibert v. Lewis, 122 U. S. 284. The pending bill goes further.
The maintenance and operation through the medium of public officers of a very large and vital street railway system to be bought, paid for and owned by a political subdivision of the Commonwealth are of high concern to the general welfare. They require at the outset the exercise of sovereign powers. They may present from time to time during the life of the bonds authorized under the pending bill imperative problems calling upon the General Court to exercise its judgment to determine whether and how it will put forth its inalienable powers. The Constitution by c. 1, § 1, art. 4, confers full power and authority upon the “general court, from time to time, to make, ordain, and establish, all manner of wholesome and reasonable orders, laws, statutes, and ordinances ... as they shall judge to be for the good and welfare of this commonwealth.” In our opinion it is not consonant with this broad grant to narrow its sweep as provided in the pending bill by requiring for a period of time reaching indefinitely into the future the assent of two public boards created by statute before the General Court can consider favorably the enactment of amendments of general public importance to the pending
The questions must be answered subject to the principles already stated.
The first question is answered in the negative. The three points specified in that question stretch beyond the contract powers of the General Court and reach into the domain of powers which are inalienable as applied to the subject of the proposed bill.
The second question is answered in the affirmative.
The several subdivisions of the third question involve further factors. The rates of fare and amounts of charges for services rendered by the railway system afford some security for the payment of the bonds. That is a subject about which binding contracts for a fixed time not grossly unreasonable in length might be made under legislative
The character and extent of the services and facilities to be provided by such a railway system for a period of time indefinite in length, we think, are matters so vitally concerning the welfare of the inhabitants of the district and of the general public that their regulation as provided in the pending bill cannot be surrendered by the General Court. The pending bill in this aspect is so indeterminate as to time that it is not within the scope of what was said in Opinions of the Justices, 261 Mass. 523, 553, and 261 Mass. 556, at page 602.
The provisions of the bill relative to the determination, certification and payment of deficiencies or deficits in the cost of service, and to the assessment and collection thereof, furnish some security for the payment of the bonds. Provisions touching that subject, within reasonable limitations, might become a part of the obligation of bonds, secure against legislative impairment. Those provisions in the pending bill cannot, we think, be pronounced in excess of legislative competency.
Efficient and experienced management of the railway system is highly desirable. Public ownership commonly entails the result that the continuance of any board of management would be under legislative control. Nevertheless, there are strong analogies between the principles governing a contract made as to the board of management of a publicly owned charity, which cannot be impaired by subsequent legislation (Cary Library v. Bliss, 151 Mass. 364, Adams v. Plunkett, 274 Mass. 453), and the principles governing a similar contract made with those who furnish the money to enable an incorporated municipality to buy a privately owned railway system.
The vice of the pending bill consists mainly in the indeterminate but certainly prolonged period of time during which legislative regulation concerning important features
It is doubtful whether a solemn occasion is presented by questions four and five so as to warrant answers under c. 3, art. 2, of the Constitution. In general, it may be said that whatever rights, contractual in nature, are possessed by holders of bonds, may at their suit be enforced in the courts. It is not now perceived that cities and towns have such rights under the pending bill as would enable them to maintain litigation in the courts. They have no private rights in the subject. Whatever proprietary municipal rights, if any, would be created by the pending bill, if enacted into law, appear to be vested in the Boston Metropolitan District as a political subdivision of the Commonwealth and not in the several cities and towns composing that district. See Mount Hope Cemetery v. Boston, 158 Mass. 509; Bolster v. Lawrence, 225 Mass. 387, 390; Boston v. Treasurer & Receiver General, 237 Mass. 403, 418. The rights of the public have not in this respect been lodged in these cities and towns. See Arlington Board of Survey v. Bay State Street Railway, 224 Mass. 463, and cases there reviewed; Donham v. Public Service Commissioners, 232 Mass. 309, 328.
The sixth question is answered in the affirmative. The reasons are stated at length in Opinion of the Justices, 261 Mass. 556, 594, 595, 602.
The seventh question is answered in the affirmative. The controlling reasons have been elaborated on previous occasions and need not be repeated. Opinion of the Justices, 261 Mass. 556, 596-600. Stone v. Framingham, 109 Mass. 303, 305.
The eighth question is answered in the affirmative. There is no doubt of the power of the General Court to
The ninth question is answered in the negative. The grounds for that view are set forth in Opinion of the Justices, 261 Mass. 523, 553-554. See also Christian v. Secretary of the Commonwealth, 283 Mass. 98, 105.
Arthur P. Pugg.
John C. Crosby.
Edward P. Pierce.
Fred T. Field.
Charles H. Donahue.
Henry T. Lummus.
Stanley E. Qua.