Pub. Serv. Comm'n v. New England Tel. & Tel. Co.

• Decision Date: 22 March 1919
• Citation: 122 N.E. 567,232 Mass. 465
• Parties: PUBLIC SERVICE COMMISSION v. NEW ENGLAND TELEPHONE & TELEGRAPH CO.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

232 Mass. 465

122 N.E. 567

PUBLIC SERVICE COMMISSION

v.NEW ENGLAND TELEPHONE & TELEGRAPH CO.

Supreme Judicial Court of Massachusetts, Suffolk.

March 22, 1919.

Case Reserved from Supreme Judicial Court, Suffolk County.

Petition in equity by the Public Service Commission against the New England Telephone & Telegraph Company. On reservation by a single justice of the Supreme Judicial Court for the determination of the full court. Petition dismissed.

Henry C. Attwill, Atty. Gen., and Wm. Harold Hitchcock, Asst. Atty. Gen., for complainant.

Powers & Hall and James N. Clark, both of Boston, for respondent.

RUGG, C. J.

This is a petition in equity brought under St. 1913, c. 784, § 28, to enforce by injunction an order of the Public Service Commission dated January 20, 1919, relative to toll telephone rates within the commonwealth. The case comes before us by reservation for determination upon the bill and answer. The case must be considered upon the footing that the averments of the answer are true where in conflict with those of the bill and that the allegations of the bill are true only so far as admitted or not at variance with facts well pleaded in the answer. Perkins v. Nichols, 11 Allen, 542;American Carpet Lining Co. v. Chipman, 146 Mass. 385, 16 N. E. 1. The pertinent facts thus ascertained are that prior to July 3, 1918, the defendant was a corporation operating within the commonwealth an extensive system for the transmission of intelligence by telephone. On July 16, 1918, during the continuance of the great war the Congress of the United States in the exercise of its war powers passed a resolution empowering the President during the war ‘to supervise or to take possession and assume control of any telegraph, telephone, marine cable or radio system or systems, or any part thereof, and to operate the same in such manner as may be needful or desirable for the duration of the war.’ The President exercised the power thus conferred by his proclamation of July 22, 1918. Its relevant provisions were that--

‘I * * * do hereby take possession and assume control and supervision of each and every telegraph and telephone system, and every part thereof, within the jurisdiction of the United States, including all equipment thereof and appurtenances thereto whatsoever and all materials and supplies. It is hereby directed that the supervision, possession, control, and operation of such telegraph and telephone systems hereby by me undertaken shall be exercised by and through the Postmaster General, Albert S. Burleson. Said Postmaster General may perform the duties hereby and hereunder imposed upon him, so long and to such extent and in such manner as he shall determine, through the owners, managers, boards of directors, receivers, officers, and employés of said telegraph and telephone systems. Until and except so far as said Postmaster General shall from time to time by general or special orders otherwise provide, the owners, managers, boards of directors, receivers, officers and employés of the various telegraph and telephone systems shall continue the operation thereof in the usual and ordinary course of the business of said systems, in the names of their respective companies, associations, organizations, owners, or managers, as the case may be. * * * From and after 12 o'clock midnight on the 31st day of July, 1918, all telegraph and telephone systems included in this order and proclamation shall conclusively be deemed within the possession and control and under the supervision of said Postmaster General without further act or notice.’

On August 1, 1918, the Postmaster General issued a bulletin wherein he declared:

‘Pursuant to the proclamation of the President of the United States, I have assumed possession, control and supervision of the telegraph and telephone systems of the United States. * * * Until further notice the telegraph and telephone companies shall continue operation in the ordinary course of business through regular channels. Regular dividends heretofore declared and maturing interest on bonds, debentures and other obligations may be paid in due course, and the companies may renew or extend their maturing obligations unless otherwise ordered by the Postmaster General. All officers, operators and employés of the telegraph and telephone companies will continue in the performance of their present duties, reporting to the same officers as heretofore and on the same terms of employment.’

The proclamation of the President and the bulletin of the Postmaster General have been put into effect and operation according to their terms and are still in force unrevoked and unmodified. The answer avers further that pursuant to this proclamation and bulletin the entire telephone system of the defendant, including all its equipment, appurtenances, material, supplies and property of every description, has been taken possession of by the government of the United States and is vested in the President and is controlled and operated exclusively by him, and that in consequence thereof the defendant has been divested of all its telephonesystem and all its property of every kind thereto appertaining and of all power, management and control over the same and retains only the legal title thereto. Just compensation for the supervision, possession, control and operation by the government of the United States of the defendant's telephone system in an amount satisfactory to it has been determined upon and awarded to and accepted by it, and an agreement has been entered into whereby the entire compensation to be received by it from July 31, 1918, to the end of the period of governmental control has been fixed and the amount of such compensation is not in any respect dependant upon the financial result of the operation of its system by the United States government and the defendant has no pecuniary interest in the profits or losses resulting from such operation. The resolution of Congress of July 16, 1918, conferred ample power upon the President to determine the amount of just compensation to be paid to the owner for such possession, supervision, control and operation.

The defendant has pleaded that the United States, the President, the Postmaster General or some one or more of them, are necessary parties to this proceeding, and further that the proceeding is in substance against the United States and that the relief prayed for, which relates exclusively to toll rates for intrastate telephone service, will in effect restrain the United States in its control, possession and operation of the telephone system belonging to the defendant and formerly operated by it, and that it has not been since July 31, 1918, a common carrier or otherwise furnishing as a corporation any service for public use so as to be subject to the jurisdiction of the Public Service Commission under St. 1913, c. 784.

It is conceded by both parties hereto that the resolution of Congress of July 16, 1918, was a constitutional exercise of the war powers of...