Auditor of Commonwealth v. Trustees of Boston Elevated Ry. Co.

• Decision Date: 21 July 1942
• Citation: 43 N.E.2d 124,312 Mass. 74
• Parties: AUDITOR OF THE COMMONWEALTH v. TRUSTEES OF BOSTON ELEVATED RAILWAY COMPANY.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

312 Mass. 74

43 N.E.2d 124

AUDITOR OF THE COMMONWEALTH v. TRUSTEES OF BOSTON ELEVATED RAILWAY COMPANY.

Supreme Judicial Court of Massachusetts, Suffolk.

July 21, 1942

March 2, 1942.

Present: FIELD, C.

J., DONAHUE, DOLAN & RONAN, JJ.

Boston Elevated Railway Company. Auditor of the Commonwealth. The books and accounts kept by the trustees of the Boston Elevated Railway

Company constituted by Spec. St. 1918, c. 159, as amended and extended by St. 1931, c. 333, are not "accounts" of "departments, offices, commissions, institutions and activities of the commonwealth" within the meaning of G L. (Ter. Ed.) c. 11, Section 12, and the Auditor of the

Commonwealth cannot require their production for his examination.

PETITION for a writ of mandamus, filed in the Supreme Judicial Court for the county of Suffolk on April 30, 1941.

The case was heard by Qua, J. W. S. McCallum, by permission of the Attorney General, for the petitioner.

W. B. Downey, (C.

A. McCarron with him,) for the respondents.

FIELD, C.J. This is a petition for a writ of mandamus brought in the Supreme Judicial Court. G. L. (Ter. Ed.) c. 249, Section 5, as amended by St. 1938, c. 202. The petitioner is the Auditor of the Commonwealth. Arts. 17 and 64 of the Amendments to the Constitution. G. L. (Ter. Ed.) c. 11; c. 54, Section 62, as amended by St. 1935, c. 257, Section 5. The respondents are the persons constituting the board of trustees of the Boston Elevated Railway Company, created by Spec. St. 1918, c. 159 Section 1, appointed by the Governor with the advice and consent of the Council, as thereby authorized, herein referred to as the Public Trustees. The powers and duties of such trustees are prescribed by said Spec. St. 1918, c. 159, as amended and extended by St. 1931, c. 333, herein referred to as the Public Control Act.

The petitioner has made demand upon the respondents "to be allowed to examine and audit the books and records of account of the said . . . [respondents] in connection with their public operation and management of the said Boston Elevated Railway Company," and the respondents have declined to comply with the petitioner's demand. The petitioner prays for a writ of mandamus commanding the respondents "to produce for examination, and to permit . . . [him] and his assistants to examine all books and records aforesaid, and commanding said . . . [respondents] to afford such reasonable facilities and assistance for such examination as the Court may deem proper."

The respondents filed an answer in which they admitted some of the allegations of the petition and denied others, and made certain affirmative allegations. The petitioner traversed none of the allegations of the answer. G. L. (Ter. Ed.) c. 249, Section 5, as amended. Lowry v. Commissioner of Agriculture, 302 Mass. 111 , 112. The case was heard by a single justice of this court on the petition and answer and an agreement by the parties that "the Trustees have continued in effect the system of books kept by the railway before the Trustees took control, and that the Trustees have supervision, control, dominion and possession of the books." No evidence was introduced.

The single justice made rulings, including a ruling "that the books and accounts to which this petition relates are not `accounts' of `departments, offices, commissions, institutions and activities of the commonwealth' within the meaning of G. L. (Ter. Ed.) c. 11, Section 12, which it is the duty of the Auditor of the Commonwealth to audit," and ordered the petition dismissed. The petitioner excepted.

If the ruling of the single justice above recited was right, the petitioner is not entitled to relief in this proceeding, and no other question need be considered. This ruling was right.

General Laws (Ter. Ed.) c. 11, Section 1, provides: "There shall be a department to be known as the department of the state auditor under his supervision and control, organized as provided in this chapter." Section 12 provides, in part, as follows: "The department of the state auditor shall annually make a careful audit of the accounts of all departments, offices, commissions, institutions and activities of the commonwealth . . . and for said purpose the authorized officers and employees of said department of the state auditor shall have access to such accounts at reasonable times and said department may require the production of books, documents and vouchers," with certain express inclusions and exceptions not here material.

The words "the accounts of all departments, offices, commissions, institutions and activities of the commonwealth" used in this statute are comprehensive terms. But the meaning of these words in particular instances cannot be determined solely by dictionary definitions. In the striking language of Mr. Justice Holmes in Towne v. Eisner, 245 U.S. 418, 425, a "word is not a crystal, transparent and unchanged, it is the skin of a living thought and may vary greatly in color and content according to the circumstances and the time in which it is used." There are numerous illustrations of this principle in our own decisions. See, for example, Commissioner of Corporations & Taxation v. Filoon, 310 Mass. 374 , 382. Whether the statutory phrase in question includes the Public Trustees must be determined in the light of their nature and functions and their relation to the Boston Elevated Railway Company (herein referred to as the company) and of relevant statutes.

The nature and functions of these trustees and their relation to the company were considered recently in Boston Elevated Railway v. Commonwealth, 310 Mass. 528 , 574-580, citing previous cases and opinions. The company is a private corporation organized for profit to carry out a public purpose, the transportation of passengers for hire as a common carrier. Notwithstanding the Public Control Act the "company retains its corporate existence" and "continues to be the owner of the properties or rights therein" constituting the railway system. Page 579. And the company continues to derive profits from its railway system by reason of the provision in the Public Control Act for dividends to its stockholders, which, though fixed in amount, are in effect guaranteed by the Commonwealth by the provision of the statute that if the "income of the company is insufficient to meet the cost of the service" including the payment of these dividends -- and the reserve fund provided by the statute is insufficient for the purpose -- the deficiency shall be paid "to the company" by the Commonwealth out of money raised by taxation. Spec. St. 1918, c. 159 (see St. 1931, c. 333, Section 2), Sections 6, 8, 9, 11 (as amended by St. 1935, c. 99, Section 1), 13, 14. Opinion of the Justices, 309 Mass. 609 . Boston Elevated Railway v. Commonwealth, 310 Mass. 528 , 581. Moreover, under the Public Control Act the company's railway system continues to be used for the public purpose for which it was used before that statute took effect -- the transportation of passengers as a common carrier.

The Public Control Act, as is disclosed by its terms, was enacted for this public purpose, solely for the general welfare and not for private profit. See Boston v. Treasurer & Receiver General, 237 Mass. 403 , 413. But the Public Control Act was not a statute only. By reason of acceptance thereof by the company it was also, in the respects here material, a contract between the Commonwealth and the company. The Legislature did not purport by the statute "to take or to authorize the taking of possession of the properties of the company or the subsequent management and operation thereof by virtue of any sovereign power other than the power to enter into a contract with the company for the carrying out of a public purpose." Boston Elevated Railway v. Commonwealth, 310 Mass. 528 , 577. The contract between the Commonwealth and the company, embodied in the statute, provided that the Commonwealth, acting through the Public Trustees -- who undoubtedly are public officers -- should take such possession of the properties of the company and manage and operate them as therein provided. And the payment of fixed dividends to the stockholders as therein provided -- even though, by reason of insufficiency of the "income of the company" for that purpose, payment is required to be made by the Commonwealth "to the company" out of money raised by taxation -- is in no sense "a gratuity to its stockholders" but is "in the nature of compensation to be made for the use of the property" in carrying out the public purpose of the Public Control Act. Boston v. Treasurer & Receiver General, 237 Mass. 403 , 417. Boston Elevated Railway v. Commonwealth, 310 Mass. 528 , 575-576, 583-584.

The Public Control Act and the contract between the Commonwealth and the company provided for what is described in the Public Control Act as "public management and operation of the railway system" of the company (Spec. St. 1918, c. 159, Sections 1, 12), or more broadly as management and operation or management of the "company." Spec. St. 1918, c 159, Sections 1, 2. St. 1931, c. 333, Section 1. See also Spec. St. 1918, c. 159, Sections 3, 13, 15, 16; St. 1931, c. 333, Sections 3, 17, 19. Boston Elevated Railway v. Commonwealth, 310 Mass. 528 , 575. Specific duties are imposed and specific powers are conferred upon the Public Trustees as such. But no question is here involved as to any difference in the scope of their statutory duties and powers and their contractual duties and powers to deal with the railway system of the company. These duties and powers are described in the Public Control Act in the same terms -- indeed in the same provisions of the statute. Pages 577-578. It is provided that for the purposes of the statute, except as otherwise...