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carrying into effect the known pow- railroad company, was beyond the ers of the government. Wain- power of the Director General, and wright v. Pennsylvania R. Co. (D.

was void. C.) 253 Fed. 459; Legal Tender Order reversed. Cases, 12 Wall. 457, 539, 20 L. ed. 287, 308. We do not question the power of Congress to enact the laws

NOTE. above recited, nor the power of the President, directly or through the General Order No. 50 promulgated Director General, to issue the orders by the Director General of Railroads, he has issued, if not inhibited by which the court, in the reported case congressional legislation.

(LAVALLE v. NORTHERN P. R. Co. ante, It seems clear, however, that if 1659), holds invalid in so far as it purthe act of Congress and an order of

ports to prohibit the maintenance the Director General are in conflict, against the railway companies of acthe act of Congress must prevail. A majority of the court are of the of the possession, control, or opera

tions for death or injury growing out opinion that $ 10 of the Act of

, ,

tion of the roads by the Director GenMarch 21, 1918, gives to one having

à cause of action eral, is the subject of subdivision II. Railroad

arising out of the d, 3, of the annotation beginning at Director General operation of a rail

page 1680, on the general subject of -validity.

road while under Federal control of public utilities. Federal control, the right to sue the An examination of that subdivision railroad company thereon, and that discloses a diversity of opinion among Order No. 50, in so far as it denied the courts as to the validity and effect to a plaintiff the right to pursue the of that order.

action against

PUBLIC SERVICE COMMISSION

V.
NEW ENGLAND TELEPHONE & TELEGRAPH COMPANY.

Massachusetts Supreme Judicial Court - March 22, 1919.

(232 Mass. 465, P.U.R.1919D, 49, 122 N. E. 567.)

Parties consent to be sued.

1. Consent by the Federal government to be made a party to a proceeding to regulate rates of a telephone company which has been taken over by it under authority of Congress is not conferred by a proviso in the resolution authorizing the taking, to the effect that nothing in the act shall be construed to impair the lawful police regulations of the state.

[See note on this question beginning on page 1680.] Pleading equity cause allegation Telephone - assumption of authority taken as true.

by President effect. 2. Upon reservation of an equity

3. The proclamation of the Presicause for consideration of the full

dent, and bulletin issued by the Postcourt upon bill and answer, the cause

master General under authority conmust be considered upon the footing that the averments of the answer are

ferred by Congress, by which the true where in conflict with those of the

President assumes control of the tele. bill, and that those of the bill are true

phone and telegraph lines, was a cononly so far as admitted or not at vari- plete possession and control, to the ance with facts well pleaded in the plete posssession and control, to the answer.

exclusion of every private interest.

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(232 Mass. 465, P.U.R.1919D, 49, 122 N. B. 567.) Parties United States.

Public Service Commission regula4. The United States cannot be made

tion of rates of company in posses

sion of government. a party without its consent, to a pro- 5. Rates cannot be regulated by a ceeding to regulate the rates of a state Commission for a telephone comtelephone company which has been pany in possession of the Federal gov

ernment if the government cannot be taken over by it.

made a party to the proceedings be[See 15 R. C. L. 1029.]

cause it has not consented to be sued.

RESERVATION by the Supreme Judicial Court for Suffolk County for the determination by the full court of a bill in equity to enforce by injunction an order of the Public Service Commission relative to toll telephone rates. Petition dismissed.

The facts are stated in the opinion of the court.

Messrs. Henry C. Attwill, Attorney 194 U. S. 601, 48 L. ed. 1134, 24 Sup. General, and William Harold Hitch- Ct. Rep. 820; Wells v. Roper, 246 U. S. cock, Assistant Attorney General, for 335, 62 L. ed. 755, 38 Sup. Ct. Rep. 317; plaintiff.

Flagg v. Bradford, 181 Mass. 315, 63 Messrs. Powers & Hall and James N. N. E. 898. Clark, for defendant:

Since the bill in effect seeks to conThe New England Telephone & Tele- trol action taken by the President of graph Company has been improperly the United States, and by the Postselected and named as the party re- master General of the United States, spondent.

in their official capacities as representRailroad Comrs. v. Burleson, P.U.R. atives of the government of the Unit1919E, 465, 255 Fed. 604.

ed States, involving on their part the The United States, the President of exercise of judgment and discretion the United States, and the Postmaster in the performance of their official General of the United States are, or duties, this court can have no jurisdic. some one of them is, necessary parties, tion of the bill. or party, respondent, and therefore Louisiana v. McAdoo, 234 U. S. 627, have, or has, been improperly omitted 633, 634, 58 L. ed. 1506, 1509, 1510, 34 as parties, or party, respondent.

Sup. Ct. Rep. 938; Wells v. Roper, 246 William J. McCarthy Co. v. Rendle, U. S. 335, 338, 62 L. ed. 755, 760, 38 222 Mass. 405, 111 N. E. 39; Shields Sup. Ct. Rep. 317; Decatur v. Pauldv. Barrow, 17 How. 130, 15 L. ed. 158. ing, 14 Pet. 497, 515, 10 L. ed. 559, 568;

The real, even though not the nomi- Mississippi v. Johnson, 4 Wall. 475, nal, respondent, is the United States, 18 L. ed. 437; Cunningham v. Macon and therefore this court has no juris- & B. R. Co. 109 U. S. 446, 27 L. ed. 992, diction in the absence of consent, 3 Sup. Ct. Rep. 292, 609; United States which has not been given.

ex rel. Dunlap v. Black, 128 U. S. 40, 32 Belknap v. Schild, 161 U. S. 10, 16, L. ed. 354, 9 Sup. Ct. Rep. 12; United 40 L. ed. 599, 601, 16 Sup. Ct. Rep. States ex rel. International Contract443; Troy & G. R. Co. v. Com. 127 ing Co. v. Lamont, 155 U. S. 303, 39 L. Mass. 43; William J. McCarthy Co. v. ed. 160, 15 Sup. Ct. Rep. 97; Roberts Rendle, 222 Mass. 405, 111 N. E. 39; v. United States, 176 U. S. 221, 44 Burroughs v. Com. 224 Mass. 28, 112 L. ed. 443, 20 Sup. Ct, Rep. 376; UnitN. E. 491, Ann. Cas. 1917A, 38; Louis- ed States ex rel. Riverside Oil Co. v. iana v. McAdoo, 234 U. S. 627, 629, 58 Hitchcock, 190 U. S. 316, 47 L. ed. L. ed. 1506, 1507, 34 Sup. Ct. Rep. 938; 1074, 23 Sup. Ct. Rep. 698; United United States ex rel. Goldberg v. Dan- States ex rel. Ness v. Fisher, 223 U. iels, 231 U. S. 218, 58 L. ed. 191, 34 S. 683, 56 L. ed. 610, 32 Sup. Ct. Rep. Sup. Ct. Rep. 84; Oregon v. Hitchcock, 356. 202 U. S. 60, 68, 69, 50 L. ed. 935, 938, The Federal government had power, 26 Sup. Ct. Rep. 568; Naganab v. in view of the existing war, to take Hitchcock, 202 U. S. 473, 475, 476, 50 possession and control and to conL, ed. 1113, 1114, 26 Sup. Ct. Rep. 667; duct the operation of the respondLouisiana v. Garfield, 211 U. S. 70, 53 ent's telephone system, and through L. ed. 92, 29 Sup. Ct. Rep. 31; Inter- the President, acting by and through national Postal Supply Co. v. Bruce, the Postmaster General, to establish

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rates for telephone service free from 247 U. S. 105, 114, 62 L. ed. 1006, 1016, interference by the commonwealth of 1 A.L.R. 1278, P.U.R.1918D, 865, 38 Massachusetts.

Sup. Ct. Rep. 438, reversing 224 Mass. Pensacola Teleg. Co. v. Western U. 365, P.U.R.1916F, 176, 113 N. E. 192; Teleg. Co. 96 U. S. 1, 24 L. ed. 708; Manigault v. Springs, 199 U. S. 473 Selective Draft Law Cases (Arver v. 481, 50 L. ed. 274, 279, 26 Sup. Ct. Rep. United States) 245 U. S. 366, 62 L. ed. 127; New Orleans Gaslight Co. v. 352, L.R.A.1918C, 361, 38 Sup. Ct. Rep. Louisiana Light & H. P. & Mfg. Co. 159, Ann. Cas. 1918B, 856; Hoffman v. 115 U. S. 650, 666, 29 L. ed. 516, 522, Charlestown Five Cents Sav. Bank, 231 6 Sup. Ct. Rep. 252; Salem v. Eastern Mass. 324, 121 N. E. 15; Marbury v. R. Co. 98 Mass. 431, 96 Am. Dec. 650; Madison, 1 Cranch, 137, 2 L. ed. 60; Sawyer V. Davis, 136 Mass. 239, 49 M'Culloch v. Maryland, 4 Wheat. 316, Am. Rep. 27; State ex rel. Wisconsin 4 L. ed. 579; Legal Tender Cases, 12 Teleph. Co. v. Sheboygan, 111 Wis. 23, Wall. 457, 20 L. ed. 287; Marshall 86 N. W. 657; St. Louis v. Bell Teleph. Field & Co. v. Clark, 143 U. S. 649, 36 Co. 96 Mo. 623, 2 L.R.A. 278, 9 Am. L. ed. 294, 12 Sup. Ct. Rep. 495; Min- St. Rep. 370, 10 S. W. 197; Munn y. nesota Rate Cases (Simpson v. Shep- Illinois, 94 U. S. 113, 24 L. ed. 77; ard) 230 U. S. 352, 57 L. ed. 1511, 48 Budd v. New York, 143 U. S. 517, 534, L.R.A.(N.S.) 1151, 33 Sup. Ct. Rep. 537, 36 L. ed. 247, 252, 253, 4 Inters. 729, Ann. Cas. 1916A, 18; Houston, E. Com. Rep. 45, 12 Sup. Ct. Rep. 468. & W. T. R. Co. v. United States, 234 U. Under what is known as the welfare S. 342, 58 L. ed. 1341, 34 Sup. Ct. Rep. clause in municipal charters, giving 833; United States v. Pierce, 245 Fed. to municipalities broad powers of po878; United States v. Casey, 247 Fed. lice, it is uniformly held that the mu362; Moore & Tierney v. Roxford Knit- nicipalities do not receive power to ting Co. 250 Fed. 278; Pappens v. Unit- control rates of public utilities. ed States, C. C. A. —, 252 Fed. 55; State ex rel. Wisconsin Teleph. Co. United States v. Nagler, 252 Fed. 217; v. Sheboygan, 111 Wis. 23, 86 N. W. Wainwright v. Pennsylvania R. Co. 657; St. Louis v. Bell Teleph. Co. 96 253 Fed. 459; Rhodes v. Tatum, Mo. 623, 2 L.R.A. 278, 9 Am. St. Rep. Tex. Civ. App. —, 206 S. W. 114; State 370, 10 S. W. 197; Bluefield Waterex rel. Tod v. Fairfield Common Pleas works & Improv. Co. v. Bluefield, 69 Ct. 15 Ohio St. 377.

W. Va. 1, 33 L.R.A.(N.S.) 759, 70 S. The joint resolution of July 16, 1918, E. 772; Mills v. Chicago, 127 Fed. 731; conferred upon the President, acting Jacksonville v. Southern Bell Teleph. by and through the Postmaster Gen- & Teleg. Co. 57 Fla. 374, 49 So. 509. eral, power to fix rates for telephone The authority of the President, actservice during the period of Federal ing by and through the Postmaster operation.

General, to fix telephone rates, was Selective Draft Law Cases (Arver in full effect when the telephone toll v. United States) 245 U. S. 366, 377, rates involved in this case were es62 L. ed. 352, 353, L.R.A.1918C, 361, tablished, and said authority is still 38 Sup. Ct. Rep. 159, Ann. Cas. 1918B, in full effect. 856, 32 Harvard L. Rev. 299, 300.

Salamandra Ins. Co. v. New York L. The phrase "police regulations," Ins. & T. Co. 254 Fed. 852; Commercial used in the joint resolution, is con- Cable Co. v. Burleson, 255 Fed. 99; fined to regulations which have to do Barber v. Burleson (1919; U. S. Dist. with public health, safety, and morals, Ct. N. J.); State of Mississippi v. and therefore by necessary implication Burleson (1919; 1st Jud. Dist. Miss.); excludes rate fixing.

Ribas y Hijo v. United States, 194 U. Com. v. Libbey, 216 Mass. 356, 49 S. 315, 323, 48 L. ed. 994, 996, 24 L.R.A. (N.S.) 879, 103 N. E. 923, Ann. Sup. Ct. Rep. 727. Cas. 1915B, 659; Bogni v. Perotti, 224 Whatever may be the power of this Mass. 152, L.R.A.1916F, 831, 112 N. commonwealth to regulate telephone E. 853; Freund, Pol. Power, 1904, $ rates during Federal operation, the 10; Hockett v. State, 105 Ind. 250, 55 Public Service Commission possesses Am. Rep. 201, 5 N. E. 178; Sligh v. no jurisdiction in the premises. Kirkwood, 237 U. S. 52, 59, 59 L. ed. United States v. Hill, 248 U. S. 420, 835, 837, 35 Sup. Ct. Rep. 501; West- 63 L. ed. 337, 39 Sup. Ct. Rep. 143; ern U. Teleg. Co. v. Pendleton, 122 U. Erie R. Co. v. New York, 233 U. S. 671, S. 347, 359, 30 L. ed. 1187, 1189, 1 681, 58 L. ed. 1149, 1153, 52 L.R.A. Inters. Com. Rep. 306, 7 Sup. Ct. Rep. (N.S.) 266, 34 Şup. Ct. Rep. 756, Ann. 1126; Western U. Teleg. Co. v. Foster, Cas. 1915D, 138; Re Debs, 158 U. S.

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(232 Mass. 465, P.U.R.1919D, 19, 122 N. E. 567.) 564, 39 L. ed. 1092, 15 Sup. Ct. Rep. needful or desirable for the duration 900; Ex parte Siebold, 100 U. S. 371, of the war." [40 Stat. at L. 904, 25 L. ed. 717; People v. Hudson River chap. 154, Comp. Stat. § 31154x.] Connecting R. Corp. 104 Misc. 19, 171

The President exercised the power N. Y. Supp. 971; Atchison, T. & S. F. R.

thus conferred by his proclamation Co. v. United States, 225 U. S. 640, 649, 56 L. ed. 1236, 1239, 32 Sup. Ct. Rep.

of July 22, 1918. Its relevant pro702; Missouri Pub. Utilities Co. v.

visions were that “I

do Poplar Bluff (Mo.) P.U.R.1915D, 974; hereby take possession and assume White Oak Light, Heat & P. Co. v. control and supervision of each and Benson (Pa.) P.U.R.1916A, 811; Re every telegraph and telephone sysSouth Side Gas & E. Co. (Ariz.) P.U.R. tem, and every part thereof, within 1918A, 493; Re Southern California

the jurisdiction of the United States, Mountain Water Co. 11 A, T. & T. Co.

including all equipment thereof and Com. L. 83.

appurtenances thereto whatsoever Messrs. C. M. Bracelin for the Post

and all materials and supplies. It master General, and T. J. Boynton, United States District Attorney, amici

is hereby directed that the supercuriæ.

vision, possession, control, and operRugg, Ch. J., delivered the opinion phone systems hereby by me under,

ation of such telegraph and teleof the court:

taken shall be exercised by and This is a bill in equity brought through the Postmaster General, under Stat. 1913, chap. 784, § 28, to

Albert S. Burleson. Said Postenforce by injunction an order of

master General may perform the the Public Service Commission dat

duties hereby and hereunder imed January 20, 1919, relative to toll posed upon him, so long and to such telephone rates within the common- extent and in such manner as he wealth. The case comes before us

shall determine, through the ownby reservation for determination

ers, managers, boards of directors, upon the bill and Pleading

receivers, officers, and employees of eqnity cause

answer.
The case

said telegraph and telephone sysallegation must be considered

tems. Until and except so far as upon the footing said Postmaster General shall from that the averments of the answer

time to time by general or special are true where in conflict with those

orders otherwise provide, the ownof the bill and that the allegations

ers, managers, boards of directors, of the bill are true only so far as

receivers, officers, and employees of admitted or not at variance with

the various telegraph and telephone facts well pleaded in the answer. systems shall continue the operation Perkins v. Nichols, 11 Allen, 542; thereof in the usual and ordinary American Carpet Lining Co. v.

course of the business of said sysChipman, 146 Mass. 385, 16 N. E. 1.

tems, in the names of their respecThe pertinent facts thus ascertained are that before July 31, 1918, the izations, owners, or managers, as

tive companies, associations, organdefendant was a corporation operat

the case may be.

From and ing within the commonwealth an ex

after 12 o'clock midnight on the tensive system for the transmission of intelligence by telephone. On

31st day of July, 1918, all telegraph

and telephone systems included in July 16, 1918, during the continuance of the great war, the Congress

this order and proclamation shall of the United States in the exercise

conclusively be deemed within the of its war powers passed a resolu- possession and control and under the tion empowering the President dur- supervision of said Postmaster Gening the war "to supervise or to take

eral without further act or notice.” possession and assume control of [40 Stat. at L. 163]. any telegraph, telephone, marine On August 1, 1918, the Postcable, or radio system or systems, or

master General issued a bulletin any part thereof, and to operate the wherein he declared: "Pursuant to same in such manner as may be the proclamation of the President of

4 A.L.R.-105.

taken as true.

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the United States, I have assumed the amount of such compensation is possession, control, and supervision not in any respect dependent upon of the telegraph and telephone sys

the financial result of the operation tems of the United States.

of its system by the United States Until further notice the telegraph government, and the defendant has and telephone companies shall con- no pecuniary interest in the profits tinue operation in the ordinary or losses resulting from such operacourse of business through regular tion. The resolution of Congress of channels. Regular dividends here- July 16, 1918, conferred ample tofore declared and maturing inter- power upon the President to deterest on bonds, debentures, and other

mine the amount of just compensaobligations may be paid in due tion to be paid to the owner for such course, and the companies may re- possession, supervision, control, and new or extend their maturing obli- operation. gations unless otherwise ordered by The defendant has pleaded that the Postmaster General. All officers, the United States, the President, the operators, and employees of the tele- Postmaster General, or some one or graph and telephone companies will more of them, are necessary parties continue in the performance of their to this proceeding, and further that present duties, reporting to the the proceeding is in substance same officers as heretofore and on · against the United States, and that the same terms of employment. the relief prayed for, which relates

The proclamation of the Presi- exclusively to toll rates for intradent and the bulletin of the Post- state telephone service, will in efmaster General have been put into fect restrain the United States in effect and operation according to its control, possession, and operatheir terms, and are still in force tion of the telephone system belongunrevoked and unmodified. The an- ing to the defendant and formerly swer avers further that, pursuant to operated by it, and that it has not this proclamation and bulletin, the been since July 31, 1918, a common entire telephone system of the de- carrier or otherwise furnishing as a fendant, including all its equip- corporation any service for public ment, appurtenances, material, sup- use so as to be subject to the jurisplies, and property of every descrip- diction of the Public Service Com tion, has been taken possession of mission under Stat. 1913, chap. 784. by the government of the United It is conceded by both parties States and is vested in the President hereto that the resolution of Conand is controlled and operated ex- gress of July 16, 1918, was a conclusively by him, and that in conse- stitutional exercise of the war powquence thereof the defendant has ers of the Federal government, and been devested of all its telephone that the proclamation of the Presisystem and all its property of every dent and the bulletin of the Postkind thereto appertaining and of all master General have been pursuant power, management, and control thereto and are operative according over the same, and retains only the to their terms. legal title thereto. Just compensa- The order of the Public Service tion for the supervision, possession, Commission here sought to be encontrol, and operation by the gov- forced purported to suspend the takernment of the United States of the ing effect of substantial increases in defendant's telephone system in an the rates of toll charges to users of amount satisfactory to it has been the telephone between places within determined upon and awarded to the commonwealth, in accordance and accepted by it, and an agree- with a "basic toll-rate schedule" is. ment has been entered into whereby sued by an order of the Postmaster the entire compensation to be re- General of the United States. ceived by it from July 31, 1918, to It seems manifest from this narthe end of the period of govern- ration of facts and recital of official mental control has been fixed, and documents that the United States is

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