New England Tel. & Tel. Co. v. City of Brockton

• Decision Date: 08 June 1955
• Parties: NEW ENGLAND TELEPHONE & TELEGRAPH CO. v. CITY OF BROCKTON.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 301

127 N.E.2d 301

332 Mass. 662

NEW ENGLAND TELEPHONE & TELEGRAPH CO. v. CITY OF BROCKTON.

Supreme Judicial Court of Massachusetts, Plymouth.

Argued Feb. 8, 1955.

Decided June 8, 1955.

Charles C. Cabot, Boston (Charles Ryan, Boston, with him), for plaintiff.

Ovide V. Fortier, Brockton (Hugh F. Blunt and Samuel Smolensky, City Solicitor, Brockton, with him), for defendant.

Before QUA, C. J., and RONAN, WILKINS and COUNIHAN, JJ.

RONAN, Justice.

This is an appeal from a final decree entered in a proceeding for a declaratory decree under G.L. (Ter.Ed.) c. 231A, inserted by St.1945, c. 582, § 1, adjudging that the telephone company is obligated to continue to furnish telephone service to the city at a discount of seventy-five per cent from its regular rates, and that the city, having paid at the reduced rates, did not owe the company the difference between the regular rates and the discount rates since April 1, 1949, notwithstanding a notice seasonably given by the company that it would charge it at the regular rates since the last-mentioned date.

The company has formally waived any claim for the difference between the regular rates and the reduced rates which had accrued when the bill was filed, and so there is left open for our consideration the single issue whether the company is entitled to charge the city the regular rates. The suit was heard upon a statement of agreed facts.

The plaintiff has succeeded to the franchises, privileges, rights, and obligations of the Southern Massachusetts Telephone Company. The petition of the latter company to place underground conduits in certain streets in the defendant city was granted October 21, 1895, by an order approved by the mayor and aldermen. Among the provisions of the grant were the following: 'Said Company shall furnish to said city all such telephones as it shall require, at a discount of seventy-five percent from its regular rates * * *. Said company shall not increase its charges for telephone rentals within the city above the existing rates, viz.: six dollars per month for 'long distance' and five dollars per month for 'Blake transmitter.' Said company shall file with the City Clerk a written acceptance of the provisions of this Order within thirty days of the date of the adoption hereof, otherwise this Order shall be null and void.'

At the time of the passage of this order St.1880, c. 83 (see now G.L. (Ter.Ed.) c. 166, § 25, as revised by St.1951, c. 476, § 2), was in effect and it authorized the city council of a city to establish by ordinance reasonable regulations for the erection and maintenance of all telegraph and telephone lines and to cause the removal of lines constructed or maintained in violation of such regulations. Pursuant to this statute the city had adopted ordinances (see now cc. 21, 29, in the 1899 revised ordinances), requiring the filing of plans showing the location of poles and underground conduits and regulating the construction and maintenance of underground conduits, cables, and wires. One of these ordinances, c. 29, § 1, provided that the board of mayor and aldermen may grant authority to construct underground conduits, cables, and wires 'under such conditions, restrictions and limitations as the said board may impose to be expressed in the license or permit.' The company accepted the locations, installed the underground conduits included in the grant, and filed a written agreement as required by an ordinance regulating the laying and maintenance of underground cables, wires, and manholes, and the erection and maintenance of poles. Subsequent applications for an extension of the underground system were filed by the company and granted by the mayor and aldermen of the city, and similar agreements were filed by the company. None of these written agreements provided for telephone service at discount rates. An indemnity bond to secure the city against claims for damage arising out of the work done under the grants was first filed by the company on September 22, 1899, and thereafter several bonds were filed evidently in compliance with the ordinance. Without further discussion it is enough to say that the mayor and aldermen in granting locations, were acting as public officers under a delegation of power from the Legislature and not as agents of the city. Springfield v. Springfield Street Railway Co., 182 Mass. 41, 64 N.E. 577; City of Worcester v. Worcester Consolidated Street Railway Co., 182 Mass. 49, 64 N.E. 581, affirmed 196 U.S. 539, 25 S.Ct. 327, 49 L.Ed. 591; Flood v. Leahy, 183 Mass. 232, 66 N.E. 787; Lynch v. Lowell Electric Light Corp., 263 Mass. 81, 160 N.E. 413; Carroll v. Cambridge Electric Light Co., 312 Mass. 89, 43 N.E.2d 340. The ordinances cannot go beyond the scope of the enabling statute. There was nothing in St.1880, c. 83, giving the municipal board any rate-making power. Commonwealth v. Hayden, 211 Mass. 296, 97 N.E. 783; Kilgour v. Gratto, 224 Mass. 78, 112 N.E. 489; Borggaard v. Department of Public Works, 298 Mass. 417, 10 N.E.2d 724; Commonwealth v. Rivkin, 329 Mass. 586, 109 N.E.2d 838.

The statute, St.1880, c. 83, is unlike Pub.Sts. c. 113, codifying the previous statutes, to wit, St.1871, c. 381, and St.1874, c. 29, regulating the grants of location to street railways, for c. 113 contained one section that such grants may be made 'under such restrictions as they deem the interests of the public may require', § 7, and another section provided that the rate-making power given to the directors of a street railway company subject to regulations by the board of railroad commissioners shall not be construed 'to authorize a company or said board to raise the rate of fare or the price of tickets above the rate or price established for a locality by agreement made as a condition of location'. § 45. ¹ We are of opinion that c. 113 is much broader than St.1880, c. 83, and that the former confers the right to fix fares while the latter is confined to establishing the location of equipment. Furthermore, St.1880, c. 83, § 3, indicates that 'its provisions were intended to attach by way of amendment to the general law touching telegraph companies, then found in Gen.Sts.1860, c. 64', Metropolitan Home Telephone Co. v. Emerson, 202 Mass. 402, 407, 88 N.E. 670, 675, and there is nothing contained in said c. 64 authorizing a municipal board to prescribe rates. The subsequent legislative history and decisions withdrawing from local officers the power to establish fares and other conditions in granting locations to street railway companies need not be detailed. ² We are of opinion that the mayor and aldermen had no authority to fix the telephone rates in granting the first and subsequent locations to the company.

The city acting in a proprietary capacity could purchase such telephone services as were reasonably necessary for the proper conduct of its municipal affairs, and the company could deal with the city, as it obviously did for more than a half century, presumably under the belief that it was under an obligation to furnish telephone service at the reduced rates or, as the company concedes, it may have been wrong in extending to the city the discount since the passage of St.1913, c. 784. Both parties were acting in good faith. It can hardly be said that both parties did not recognize the existence of an arrangement of some sort between themselves, however the arrangement may be termed, until the company notified the city that commencing April 1 1949, it would charge regular rates. In a different situation, it was said in Selectmen of Clinton v. Worcester Consolidated Street Railway Co., 199 Mass. 279, 286, 85 N.E. 507, with reference to the validity of conditions attached to the granting of a street railway location, that 'the terms of the locations when accepted by the company impose, as we have already seen, a liability which becomes by virtue of such acceptance something like a contractual liability; and the Legislature has often spoken of such terms, conditions and restrictions in the grant of locations as contracts, agreements, or stipulations.' The city in respect to the permanency of the rates, even if it had a contract, would not stand any better than any other customer of the company. 'One whose rights, such as they are, are subject to state restriction, cannot remove them from the power of the state by making a contract about them. The contract will carry with it the infirmity of the subject-matter.' Hudson County Water Co. v. McCarter, 209 U.S. 349, 357, 28 S.Ct. 529, 531, 52 L.Ed. 828; Hamer v. Nashawena Mills, Inc., 315 Mass. 160, 166, 52 N.E.2d 22.

The city, however, does not now contend that the order granting the location in 1895 constituted a contract between it and the company, but maintains that the restriction fixing the rates to be charged to it is valid. We have already pointed out that such restriction was void. Grants of locations were valid and the rate restriction imposed after St.1898, c. 578, § 13, withdrawing from local boards the right to fix fares as a condition to the granting of a location, was of no force and effect. Keefe v. Lexington & Boston Street Railway Co., 185 Mass. 183, 185, 70 N.E. 37. It was said in ...