Opinion of the Justices To the House of Representatives

293 Mass. 589
Massachusetts Supreme Judicial Court·Decided December 31, 1935·Published·Cited by 12 cases

Opinion

[594] To The Honorable the House of Representatives of the Commonwealth of Massachusetts:

The Justices of the Supreme Judicial Court respectfully submit these answers to questions contained in the order adopted on June 28, 1935, copy whereof is hereto annexed. The questions relate to a pending bill entitled “An Act providing for the Acquisition by the Boston Metropolitan District of the Entire Assets, Property and Franchises of the Boston Elevated Railway Company.” That title is fairly descriptive of the scope of the bill. The Boston Elevated Railway Company was incorporated by St. 1894, c. 548. Large powers were conferred upon it: by § 4, it was authorized to mortgage or pledge its franchise and property as security for its bonds, and by § 16, it was empowered to establish a fare not in excess of five cents for a single ride, which sum could not be reduced by the Legislature during a period of twenty years. See also St. 1897, c. 500, §§ 10, 17, 19, 21. It was granted by subsequent legislation exclusive leases for terms of years of subways and tunnels. By Spec. St. 1918, c. 159, its management and operation were taken over by the Commonwealth as [595] a public enterprise and exercised through a board of trustees appointed by the Governor with the advice and consent of the council. That statute constituted in substance a lease of the properties of the railway company to the Commonwealth. The income derived from that operation has not been sufficient to meet required expenses at least for a part of the time, and taxes have been levied to make up the deficiency. Boston v. Treasurer & Receiver General, 237 Mass. 403, 415, 420-421. The Boston Metropolitan District was created by St. 1929, c. 383 (see St. 1931, c. 333; St. 1932, c. 147), as a political subdivision of the Commonwealth and constituted “a district or incorporated municipality, and . . . made a body politic and corporate . . .” Its affairs are managed by a board of five trustees (hereafter called trustees), four being appointed by the Governor and one by the mayor of Boston. That district comprises Boston and certain neighboring cities and towns dependent in greater or less degree for local transportation facilities upon the system of the Boston Elevated Railway Company. According to the recitals in the order, (1) the pending bill relates to the policy to be pursued by the Commonwealth with reference to the public ownership of the Boston Elevated Railway Company by the Boston Metropolitan District and the management and operation thereof under public ownership; (2) the whole plan and purpose of the pending bill depend upon the successful sale of bonds of the district to the amount of many millions of dollars in order to obtain funds for the acquisition of the property of the Boston Elevated Railway Company; and (3) the marketability, prices, and interest rates for such bonds depend upon the rights given to their holders and particularly the extent to which the provisions of the bill, if enacted into law, could be varied by subsequent legislation and upon the certainty whether there would be available to such holders any effective remedy to prevent violation of the rights given them by the terms of the bonds and of the act.

The pending bill consists' of two parts. In the several sections of Part I, provisions are made for the sale of the [596] property of the railway company to the district, the conditions and means by which such sale shall be accomplished and the property transferred, and the sale by the trustees of bonds issued by the district in order to procure funds to make the payments required for such purchase. The latest maturity of such bonds by § 2 of the pending bill shall be thirty-one years from the date of issue. The issue of bonds of the district to provide funds to pay bonds and other obligations and liabilities of the railway company to be assumed by the district as a part of the sale is authorized by § 5 of the pending bill for terms not exceeding sixty years. St. 1929, c. 383, § 10. The issue of bonds to purchase certain other bonds of the railway company is authorized by § 6 of the pending bill for terms not exceeding fifty years. The precise dates of the ultimate maturities of these several issues of bonds under said §§ 5 and 6 are not clear from the bill, because of the power of refunding again and again and other provisions. They may be many years hence. .

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Opinion of the Justices To the House of Representatives, 293 Mass. 589 (Mass. 1935).

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