In re Opinion of the Justices

• Citation: 261 Mass. 556,159 N.E. 70
• Parties: In re OPINION OF THE JUSTICES.
• Decision Date: 22 November 1927
• Court: United States State Supreme Judicial Court of Massachusetts

261 Mass. 556

159 N.E. 70

In re OPINION OF THE JUSTICES.

Supreme Judicial Court of Massachusetts.

Nov. 22, 1927.

Opinion of the Justices of the Supreme Judicial Court relative to the constitutionality of certain pending legislation affecting the Boston Elevated Railway Company and the future of passenger transportation in Metropolitan Boston, in answer to questions propounded by order of the House of Representatives.

See, also, 159 N. E. 55.

The Commonwealth of Massachusetts.

House of Representatives, April 25, 1927.

Whereas, there is pending before the General Court a bill entitled ‘An act to incorporate the Metropolitan Transit System and to authorize such corporation to acquire the properties and franchises of the Boston Elevated Railway Company,’ printed as House No. 522 copy of which is hereto annexed, which said bill has been used as a basis for a bill now pending before the General Court entitled ‘An act extending the term of the lease to the commonwealth of the properties of the Boston Elevated Railway Company and continuing public management and operation thereof,’ printed as Senate No. 276, as amended, copy of which is hereto annexed, which said bills relate to the policy to be pursued by the commonwealth in regard to the continuance of the public operation and management of the Boston Elevated Railway Company or of a corporation authorized to acquire the properties and franchises thereof; and

Whereas, there is also pending before the General Court a bill entitled ‘An act providing for the extension and improvement of rapid transit facilities in the city of Boston,’ printed as Senate No. 285, copy of which is hereto annexed, which said bill relates to the construction and improvement of certain rapid transit routes and the leasing of the same to the Boston Elevated Railway Company; and

Whereas, the House of Representatives is of the opinion that the General Court ought not to proceed further in its consideration of the issues involved in these bills until certain grave constitutional questions involved therein are disposed of; therefore be it.

Ordered, that the opinions of the honorable the Justices of the Supreme Judicial Court be required on the following important questions of law:--

1. Is it constitutionally competent for the General Court, as proposed in said bill, House No. 522, to authorize the Boston Elevated Railway Company to sell its property, privileges and franchises to a corporation chartered by the General Court for the purpose of acquiring the same upon terms and conditions set forth by the General Court, if such sale is authorized by the holders of not less than a majority in amount of the capital stock of the Boston Elevated Railway Company, including both the preferred stock of all classes and the common stock, voting thereon at a meeting called for the purpose?

2. Is it constitutionally competent for the General Court to authorize the Boston Elevated Railway Company to dissolve and liquidate its affairs substantially as set forth in the provisions of said bill, House No. 522:

(a) by other than a unanimous vote of all its stock of all classes;

(b) by a vote of the majority of all its stock of all classes voting equally, regardless as to whether a majority vote is obtained of each or any one of the three classes of preferred stock now outstanding;

(c) by a vote of a majority of all the stock of all classes present and voting equally, if a quorum is present;

(d) if the provisions of section 6 and other sections of said bill, House No. 522, giving to nonassenting stockholders the right to have their stock valued, were eliminated?

2A. Upon such liquidation, if constitutional, may the General Court provide that holders of preferred stock issued under and in accordance with section 2 of chapter 740 of the Acts of 1911 and section 5 of chapter 159 of the Special Acts of 1918 shall receive such payment in cash as is provided in the event of liquidation in said statutes and the terms of issue of such preferred stock, or exprcise such rights of conversion into common stock as they have, without appeal to any judicial tribunal for a valuation of their shares?

3. Is it constitutionally competent for the General Court to authorize or require retirement by the Boston Elevated Railway Company of any class or classes of the company's stock by the exercise of the power of eminent domain, or otherwise?

4. Is it constitutionally competent for the General Court to provide for the acceptance of said bill, Senate No. 276, as amended, by the Boston Elevated Railway Company by:

(a) other than a unanimous vote of all stock of all classes;

(b) a vote of a majority of all its stock of all classes voting equally, regardless as to whether a majority vote is obtained of each or any one of the three classes of preferred stock now outstanding;

(c) by a vote of a majority of all the stock of all classes present and voting equally, if a quorum is present?

5. Would the provisions of Senate No. 276, as amended, if further amended by the substitution therefor of said House No. 522, be constitutional in every particular, if enacted into law?

6. If said bill, House No. 522, were enacted into law, could the General Court thereafter, by virtue of the fifty-ninth article of the Amendments of the Constitution of the commonwealth, constitutionally amend, alter or repeal such provisions of said bill as are declared thereby to constitute a contract binding upon the commonwealth, or any of them?

7. Would the provisions of Senate No. 276, as amended, providing for the acceptance of the terms of said bill by the Boston Elevated Railway Company by affirmative vote of a majority of each class of stock thereof given at a meeting called for the purpose, be constitutional in every particular, if enacted into law?

8. Under an extension of the present system of public operation and management of said company under said Senate No. 276, as amended, or under public operation and management under said House No. 522, would the provisions of section 1 of the sixty-third article of the Amendments to the Constitution of the commonwealth apply to the receipts from operation during the period of such operation and management?

9. Would the enactment by the General Court of a law extending public management of the Boston Elevated Railway Company, a private corporation, or creating a new contract of public management of said company, and providing in certain events for the lending of the credit of the commonwealth under such extension or contract, as proposed in said Senate No. 276, or in said House No. 522, be repugnant to section 1 of article LXII of the Amendments to the Constitution of the commonwealth on the ground that said amendment only permits the lending of credit to a private corporation which at the time of the adoption of said amendment was publicly managed, or on any other ground?

10. Do the provisions of article LXII of the Amendments to the Constitution apply to section 15 of Senate No. 276, requiring the treasurer and receiver general to sign and guarantee the bonds and other evidences of indebtedness of the Boston Elevated Railway Company?

11. Is the joint control for operating and maintaining the Boston Elevated Railway Company, as set forth in said bill, Senate No. 276, repugnant to article LXII of the Amendments to the Constitution of the commonwealth?

12. Would it be a violation of the Constitution of Massachusetts, and particularly of article LXII of the amendments thereof, for the Legislature to enact the bill printed as Senate No. 276, by the terms of which bill a constitutional officer of the executive branch of the state government, namely, the treasurer and receiver general is required upon request of the trustees mentioned in said bill, which trustees are specifically exempted from the provisions of section 40 of chapter 271 of the General Laws and other provisions of law, to pledge the credit of the commonwealth and guarantee by indorsing the bonds, notes and other evidences of indebtedness of the Boston Elevated Railway Company, the money secured thereby to be used in the operation and management of said railway company organized as a corporation with a board of directors elected by its stockholders and given power under the provisions of said bill, Senate No. 276, to govern, veto and nullify the acts of the so-called public trustees, thereby keeping within the control of the corporation, through its stockholders and directors, the operation and management of said railway company as a private corporation specifically prohibited from receiving in any manner the aid or loan of the credit of the commonwealth by the terms of said article LXII of the Amendments to the Constitution of Massachusetts?

13. Are the provisions of section 3 of said Senate No. 276, as amended, whereby the board of directors of the Boston Elevated Railway Company, a private corporation, would retain in certain cases control over the making of contracts for operation or lease of subways, elevated or surface lines or extensions thereof and over the construction or purchase of surface lines, in conjunction with section eleven of chapter one hundred and fifty-nine of the Special Acts of nineteen hundred and eighteen or any provision of said Senate No. 276, as amended, providing for the loan of the credit of the commonwealth, repugnant to section 1 of article LXII of the Amendments to the Constitution of the commonwealth as a retention in part of private management and a failure to provide for complete and exclusive public management, or for any other reason?

14. Has the General Court power under the Constitution to authorize the assessment of all or a specified part of the cost of a public improvement or of the extention thereof, consisting of additional facilities for rapid transit of passengers, which is to be built by a board of public officers and owned by the commonwealth or by a municipal corporation, but leased to and...