Rae v. Selectmen of Town of Concord

• Decision Date: 26 January 1937
• Citation: 6 N.E.2d 366,296 Mass. 394
• Parties: MAC RAE et al. v. SELECTMEN OF TOWN OF CONCORD.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

296 Mass. 394

6 N.E.2d 366

MAC RAE et al.

v.SELECTMEN OF TOWN OF CONCORD.

Supreme Judicial Court of Massachusetts, Middlesex.

Jan. 26, 1937.

Petition by Austin D. MacRae and others against the Selectmen of the Town of Concord and others. From a decree dismissing the petition, the petitioners appeal.

Decree reversed and decree entered for petitioners.Appeal from Superior Court, Middlesex County; Morton, Judge.

R. E. Goodwin and F. B. Wallis and R. M. Nichols, all of Boston, for petitioners.

H. R. Bygrave, of Boston, for respondents.

RUGG, Chief Justice.

This is a petition by citizens of Concord under G.L.(Ter.Ed.) c. 40, § 53, against the selectmen, the members of the municipal light board, the treasurer, and the manager of the municipal light plant, to enjoin them, as officers of the town of Concord, from conducting the business of selling at retail various kinds of household electrical appliances and from doing free installation and repair work for consumers using power and light supplied by the municipal light plant.

The case was referred to a master, whose report has been confirmed. By that report these facts are disclosed. The municipal light plant of Concord is operated under the authority of G.L.(Ter.Ed.) c. 164. It generates no power but buys all its electrical energy of the Edison Electric Company of Boston at a rate so computed that the larger the amount of energy used the smaller the cost per unit, and the more constant the demand the smaller the cost per unit. In 1931, the municipal light board, finding that the municipal light plant had experienced a reduction in consumption of its product through replacement of electric ranges by gas stoves, due to competition of the Boston Consolidated Gas Company in Concord, undertook a ‘load building program’ through the sale of appliances.A store was established, where a retail business in the sale of electrical appliances was conducted. This business consisted in buying outright for cash from manufacturers and others and reselling to the public. This store was the regular place for the transaction of all business of the municipal light department. There was carried an inventory of large appliances comprising refrigerators, ranges and water heaters, and also a supply of smaller appliances such as percolators, flatirons, toasters, cruling irons, plugs, switches, cord connections, bulbs and the like. A salesman was employed, who also had other duties in connection with keeping accounts. The larger appliances were sold on liberal terms and the municipal light plant did the installation work free of charge. Directions were given that no sales of any appliances be made except to residents of Concord. This order has not been closely observed where a customer pays cash, but in general has been well observed as to the larger appliances, although there have been some infractions. The result of the merchandising and jobbing operations for the years 1931 to 1934 was a substantial loss in each year, although for the first five months of 1935 a small profit was shown. The municipal light plant as a whole has made a profit in each of the last five years. During the last three years the average monthly consumption per customer has increased due to the use of appliances in homes.

A preliminary question is raised as to the standing of the petitioners. They were sixteen in number. All were taxable inhabitants of Concord. Although many of them apparently were unfamiliar with the exact nature of this proceeding, we are of opinion that at least ten of them acted in good faith as petitioners. They have not been guilty of laches. There is no lack of sufficient parties as petitioners. The case at bar is distinguishable from Conners v. Lowell, 246 Mass. 279, 140 N.E. 742.

Cities and towns in this Commonwealth differ in their nature from trading, manufacturing or public service corporations, and even from municipal corporations outside of New England. ‘They are created primarily for political purposes and the convenient administration of government. They possess few of the characteristics which distinguish the ordinary corporation. Bloomfield v. Charter Oak Bank, 121 U.S. 121, 129, 7 S.Ct. 865, 30 L.Ed. 923.’ Donohue v. Newburyport, 211 Mass. 561, 566, 98 N.E. 1081, 1082, Ann.Cas.1913B, 742. They ‘can exercise those powers and perform those duties, only, which are expressly conferred by statute or necessarily implied from those expressly conferred or from undoubted municipal rights or privileges.’ White v. Treasurer of Wayland, 273 Mass. 468, 470, 173 N.E. 701, 702. The right to erect, maintain and operate electric plants is not one of the general powers conferred by implication of law upon municipalities in this Commonwealth. Opinion of the Justices, 150 Mass. 592, 24 N.E. 1084,8 L.R.A. 487;Spaulding v. Peabody, 153 Mass. 129, 26 N.E. 421,10 L.R.A. 397;Whiting v. Mayor of Holyoke, 272 Mass. 116, 118, 119, 172 N.E 338. The development of electricity by a municipality for light, heat and power for general use is a function which under the Constitution can be conferred by an appropriate statute. It is a public use. Barnes v. Peck, 283 Mass. 618, 629, 187 N.E. 176;Citizens' Gas Light Co. v. Wakefield, 161 Mass. 432, 439, 37 N.E. 444,31 L.R.A. 457. In this Commonwealth statutes as to powers conferred upon cities and towns have always been given a strict construction. Spaulding v. Peabody, 153 Mass. 129, 135, 26 N.E. 421,10 L.R.A. 397;Attorney General v. Lowell, 246 Mass. 312, 320, 141 N.E. 45. See Opinion of the Justices, 155 Mass. 598, 30 N.E. 1142,15 L.R.A. 809;Id., 182 Mass. 605, 66 N.E. 25,60 L.R.A. 592. This principle applies with special force to statutes enabling municipalities to enter into commercial activity. It was said in Donohue v. Newburyport, 211 Mass, 561, 567, 98 N.E. 1081, 1083, Ann.Cas.1913B, 742: ‘Where cities and towns are authorized to enter the field of business enterprises, like the manufacture of gas and electricity, they do it not under the laws relating to private corporations * * * but under’ special statutory provisions.

The municipal light plant of Concord is established and operated under G.L. (Ter.Ed.) c. 164, §§ 34 to 69, inclusive. These sections confer in terms no power to engage in the retail sale and...