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stock of the Interstate Company and a major- , approximately 85 per cent. of the bonds, ity of the bonds and equipment trust notes 86 per cent. of the shares of stock, and 98 of that company. The Interstate Company per cent. of the equipment trust notes of the is engaged in the business of operating tele Interstate Company not already held by or phone lines and exchanges in many cities in the interest of the American Company, and towns in the northern half of Illinois and 93 per cent. of the bonds of the Northin competition with the Bell system. For western Company, were deposited with the a number of years it has been operating at Northern Trust Company for delivery by the a loss, and has been unable to meet its obli- committee to the Atlantic & Pacific Company gations as they have matured, or to furnish upon the terms stated in the offer made by adequate service to the public. A bill hav- that company. Edwm Romberg, the owner ing been filed in one of the United States dis- of 14 bonds of the Interstate Company and trict courts on behalf of the holders of equip- the holder in trust of two other bonds of that ment trust notes issued by the Interstate company, each bond being of the par value of Company, charging that the Interstate Com- $1,000, refused to accept the offer for the purpany was insolvent and praying for the ap- chase of the bonds owned and controlled by pointment of a receiver, certain of the stock him. The Atlantic & Pacific Company thereholders of the Interstate Company organiz- after waived the requirement that at least ed themselves into a committee and opened 90 per cent. of each class of securities must negotiations with the American Company be tendered, and offered to accept such with a view to ascertaining whether the shares of stock and securities as were on deAmerican Company would purchase for it. posit with the Northern Trust Company on self, or on behalf of some of its subsidiary May 27, 1915. companies, the shares of stock and the bonds Various telephone companies filed interand equipment trust notes not then held by vening petitions, setting up contracts for or for it. After several months of negotia- telephone connections with the Interstate tions the Atlantic & Pacific Company, a sub-Company and praying that their rights under sidiary of the American Company, submitted such contracts be protected by the Commisa written offer to said committee for the con- sion in case the prayer of the petition should sideration of the holders of the stock and be granted. Romberg filed objections to the securities of the Interstate Company, pro- petition, based upon the ground that the ultiposing to purchase: (1) All or not less than mate object of the proposed purchase is the 90 per cent. of the outstanding bonds of the creation and perpetuation of a monopoly in Interstate Company not owned by the Ameri- the telephone business in the territory in can Company or its subsidiary companies at which the Interstate Company and the Bell 46 per cent. of their par value; (2) all or not system are now both operating. less than 90 per cent. of the outstanding cap The respective parties offered evidence beital stock of the Interstate Company not own- fore the Commission, after considering which ed by the American Company or its subsid- the Commission entered an order, finding the iary companies at 4 per cent of the par facts as above set forth, and that it is to the value thereof; (3) all or not less than 90 per best interests of the Interstate Company, cent. of the outstanding equipment notes is- and the telephone-using public and of the sued by the Interstate Company not owned people of the state of Illinois that the prayby the American Company or its subsidiary er of the original and supplemental petitions companies at 70 per cent. of the par value; be granted on the terms and conditions and (4) all or not less than 90 per cent. of specified in the order. The order granted the outstanding bonds of the Northwestern leave to the Atlantic & Pacific Company to Telephone Company not owned by the Ameri- purchase the outstanding stock, bonds, and can Company or its subsidiary companies at equipment trust notes of the Interstate Com46 per cent. of the par value; provided, how- pany and the bonds of the Northwestern ever, that the proposed purchase should re- Telephone Company at the price stated in ceive the approval of all federal, state, and the offer made by it, and authorized the Atmunicipal authorities whose consent to the lantic & Pacific Company to sell and transtransaction should, in the opinion of the pur- fer the same to the American Company, and chaser, be desirable; and provided, further, authorized the latter company to hold, own, that said securities, upon delivery to the pur- and control such bonds, stock, and notes; chaser, should be accompanied by resigna- provided, however, that until the further ortions of the directors and other officers of the der of the Commission the Interstate ComInterstate Company, to take effect upon their pany shall continue as a separte corporate acceptance.
entity, and shall be operated as such and The committee submitted the proposal to shall keep up its equipment so as to provide the holders of the bonds, stocks, and equip- adequate service; and provided, further, that ment trust notes, and advised the acceptance all existing contracts between the Interstate of the offer and the deposit of the shares of Company and other companies shall be fully stock and securities with the Northern Trust kept and performed, together with the diviCompany for delivery by the committee to sion of business, rates, tolls, and charges the Atlantic & Pacific Company. Thereafter and the routing of messages as provided in
such contracts or by existing methods of state depends upon whether the public policy handling business, all of which shall con- upon the particular subject has been estab tinue as they now exist; provided, however, lished by statute, or is a part of the comthat if any portion of the lines or plant of mon law, or has been declared by some pro said Interstate Company (toll lines exclud- vision of the state Constitution. If it exists ed) shall become so impaired that adequate merely by virtue of some statute or the comservice thereover shall be impossible, the mon law, it may be changed by the LegislaAtlantic & Pacific Company may provide sub-ture at will. If the Constitution has declar. stitutes therefor, similar in quality and ed the public policy of the state with referquantity, which will permit such service to ence to the particular subject the Legislature be furnished the same as it would be fur- is powerless to change it. The fact that the nished under existing contracts or methods common law or some former statute prohibitof doing business if the lines of the Inter- ed one public utility from obtaining control state Company were used. The order stat- over another competing public utility through ed that it was entered upon the further con- the purchase of its stocks, bonds, and other dition that the money expended by the At- evidences of indebtedness is therefore not a lantic & Pacific Company and the American sufficient ground for holding that the proviCompany in purchasing the stocks and se sion of said section 27 above quoted is void curities above described should not be con- because it contravenes the public policy of sidered as an expenditure of capital funds, the state. and that neither of said companies, its suc  Appellant contends, however, that seccessors, lessees, or assigns, shall at any time tion 22, art. 4, of the state Constitution, issue stocks, bonds, or other evidences of which provides that the General Assembly indebtedness for the purpose of reimbursing shall not pass local or special laws "grantits treasury for the money expended in the ing to any corporation, association or indipurchase of said stocks and securities. It vidual any special or exclusive privilege, imwas further provided that the order should munity or franchise whatever,” constitutes a not become effective unless the Atlantic & clear declaration that the public policy of Pacific Company and the American Com- the state is opposed to monopolies, and that pany should, within ten days, notify the an act of the Legislature, attempting to auCommission, in writing, of their acceptance thorize and legalize the elimination of comof all the terms and conditions of the or- petition, is therefore unconstitutional and der. The Commission retained jurisdiction void. In support of this contention the apof the subject matter and of the parties to pellant relies upon certain language used in enter hereafter such order with reference to People v. Chicago Gas Trust Co., 130 Ill. 268, the control or disposition of the Interstate 22 N. E. 798, 8 L. R. A. 497, 17 Am. St. Rep. Company as may be within the jurisdiction 319, and Dunbar v. American Telephone & of the Commission and as circumstances Telegraph Co., 238 Ill. 456, 87 N. E. 521. In may require. Romberg alone prosecuted an the first of these cases it appeared that the appeal to the circuit court of Sangamon Chicago Gas Trust Company had been orcounty, where the order of the Commission ganized under the General Incorporation Act was affirmed, and he has prosecuted a fur- of this state for the express purpose, among ther appeal to this court.
others, as stated in its articles of association, Section 27 of the State Public Utilities Act of purchasing and holding the capital stock provides in part:
of any gas or electric company or companies With the consent and approval of the Com- in the city of Chicago or elsewhere in the mission, a public utility may purchase, acquire, state of Illinois, and that after its organizatake, or hold stock, stock certificates, bonds, notes or other evidences of indebtedness of tion it proceeded to acquire the shares of another public utility." Hurd's Stat. 1916, stock of each of the gas companies then fur
nishing gas to the city of Chicago and its inIt is by virtue of this provision of the stat- habitants. We held that this action on the utes that the Atlantic & Pacific Company or part of the Chicago Gas Trust Company was the American Company has acquired the illegal on two grounds: First, because the right, with the consent and approval of the Legislature had not conferred upon corporaState Public Utilities Commission, to pur- tions organized under the General Incorporachase the stock, bonds, or other evidences of tion Act for some purpose specified in that indebtedness of a competing public utility, if act the power to purchase and hold shares of such right exists.
stock of other corporations; and, second, be  Appellant contends that said section 27, cause, by the common law, contracts having in so far as it purports to confer upon one a tendency to create monopolies were void, public utility the right to obtain control of and the General Incorporation Act, which another competing public utility through the provides that corporations may be formed in purchase of its stock, bonds, and other evi- the manner provided by the act for any law. dence of indebtedness, contravenes the pub- ful purpose, except certain specified purposes, lic policy of this state, and is therefore void. did not authorize the organization of a corpo Whether an act of the Legislature is void be- ration for the purpose of purchasing and holdcause it contravenes the public policy of the ing the capital stock of all other corporations
engaged in the same kind of business in the Afterwards, in 1897, the Legislature passed city of Chicago or elsewhere in the state of an act authorizing the consolidation and Illinois, as that was not a lawful purpose. merger into one corporation of all gas comThat part of the opinion upon which appel- panies organized in this state doing business lant relies is as follows:
in the same city, town or village. Hurd's “We have been referred to more than 50 spe
Stat. 1915-16, p. 687. A merger, under the cial charters granted by the Legislature of this provisions of this act, of the gas companies do state, in the years 1853, 1854, 1855, 1857, 1859, ing business in Chicago was attacked, but 1861, 1865, 1867, and 1869, to gas companies in various cities and towns' in the state, each was held valid in People v. People's Gasone of which confers the exclusive privilege of light Co., 205 Ill. 482, 68 N. E. 950, 98 Am. laying gas pipes in the streets for a number of St. Rep. 244, it being there held that the act years. But when the Constitution of 1870 was of 1897 under which the gas companies were adopted,
it provided, in section 22, art. 4, that merged into one corporation is not in violathe General Assembly should pass no local or special law for ‘granting to any corporation, as- tion of section 22, art. 4, of the Constitution, sociation or individual any special or exclu- and that as section 11 of the act (Hurd's Rev. sive privilege, immunity or franchise whatever,' St. 1915–16, c. 32, § 167) provides that the and, in section 1, art. 11, that 'no corporation shall be created by special laws,
but corporation into which any companies are the General Assembly shall provide, by general merged shall not increase the price charged laws, for the organization of all corporations for gas of the quality furnished to consumers hereafter to be created.' Manifestly the Con during any part of the year immediately prestitution of 1870 reversed the old policy of granting exclusive privileges to gas companies. ceding such consolidation and merger, and After 1870 the public policy of the state was shall furnish gas to consumers as good in against the granting of exclusive privileges to quality as that furnished previous to the concorporations of any kind. The General In- solidation and merger, and as section 12 procorporation Act of 1872 was passed in pursuance of section 1, art. 11. The prohibition of vides for the infliction of penalties for the special charter granting exclusive privileges, violation of the provisions of section 11 and and the authorization of incorporations under the recovery of damages by any person ina general law, followed by the passage of such jured thereby, the act neither promotes nor a law, put the people of this state on record as being opposed to the creation of monopolies of creates a monopoly. all kinds. But of what avail is it that any The Dunbar Case, supra, presented the number of gas companies may be formed under question whether one corporation organized the general incorporation law if a giant trust for a lawful purpose could legally purchase company can be clothed with the power of buy. ing up and holding the stock and property of a majority of the shares of stock of a comsuch companies, and, through the control there- peting company, and in holding that it could by attained, can direct all their operations and not, the rules of law applied in People v. weld them into one huge combination ? several privileges or franchises intended to be Chicago Gas Trust Co., supra, were followed. exercised by a number of companies are thus That part of the opinion upon which appelvested exclusively in a single corporation. To lant relies is as follows: create one corporation for the express purpose "The public policy of the state on any ques. of enabling it to control all the corporations tion is to be sought for in the Constitution and engaged in a certain kind of business, and legislation as interpreted and expounded by the particularly a business of a public character, courts. Section 22, art. 4, of the Constitution is not only opposed to the public policy of the of 1870 provides that the General Assembly state, but is in contravention of the spirit, if shall pass no local or special law for 'granting not the letter of the Constitution. That the to any corporation, association or individual exercise of the power attempted to be conferred any special or exclusive privilege, immunity or upon the appellee company must result in the franchise whatever.' This is a clear declara. creation of a monopoly results from the very tion that the public policy of this state is opnature of the power itself.
Suppose posed to all exclusive and monopolistic fran. that after appellee had purchased and become chises and powers, of whatsoever kind or charthe holder of the majority of shares of stock | acter." of the four companies in Chicago, another cor
That it was not the intention of this court poration had been organized with the same ob ject in view; that is to say, for the purpose of in either of the cases relied upon by appellant purchasing and holding a majority of the shares to announce the doctrine that section 22, of stock of the gas companies in Chicago. art. 4, of the Constitution had declared as There being only four of such companies, what would there be for the corporation last formed the public policy of the state that no law to do? It could not carry out the object of should be passed by the Legislature or conits creation, because the stock it was formed tract made between individuals the effect of to buy was already owned by an existing corpo- which would be to suppress or eliminate comration. Hence to grant to the appeilee the privilege of purchasing and holding the capital petition is evident from the decision rendered stock of any gas company in Chicago is to in People v. People's Gaslight Co., supra, grant to it a privilege which is exclusive in its and other cases in which the question was character. It is making use of the general in directly involved and expressly decided. In corporation law to secure a special privilege, Venner v. Chicago City Railway Co., 258 Ill. immunity or franchise.' It is obtaining a special charter, under the cover and through 523, 101 N. E. 949, we upheld an agreement the machinery of that law, for a purpose forbid- made under and by virtue of an ordinance of den by the Constitution. To create one corpo- the city of Chicago, the effect of which was ration that it may destroy the energies of all to place the joint operation of all the sur. other corporations of a given kind and suck their life blood out of them is not a 'lawful face lines of street railway in the city of purpose.'"
Chicago under a single management, notwith.
standing the fact that one of the results of The interests of the public are best served inified operation would be to eliminate com- by competition in the telephone business, but petition. We there held that the city coun- by the consolidation and merger of competing cil has the right to declare whether the opera- lines and regulation as to rates and service tion of street railways in the streets of a by the state or some agency thereof. city shall be competitive or monopolistic, In our opinion one of the purposes of the and this holding was approved and followed provision of section 27 of the State Public in People v. City of Chicago, 270 Ill. 188, 110 Utilities Act above quoted was to afford reN. E. 366. Again, in Union Trust & Savings lief to the public where such a state of facts Bank v. Telephone Co., 258 Ill. 202, 101 N. E. exists as was disclosed to the Commission 535, 45 L. R. A. (N. S.) 465, Ann. Cas. 1914B, in this case; that the provision applies to 258, we said:
competing as well as noncompeting public "The courts have declared the public policy utilities, and that in so far as it purports to of the state, in accordance with the common confer upon one public utility the right to law, to be opposed to such contracts which tend to put the power to render public service obtain control of another competing public in the hands of one corporation and to take it utility through the purchase of stock, bonds, away from all others. The Legislature has the and other evidences of indebtedness, it is not power to change this policy. It is a legislain violation of the public policy of this state tive question whether the public interest will be promoted by monopolistic rather than com
as declared by section 22, art. 4, of the state petitive service."
Constitution. The public policy of the state, as declared  It is also urged that the purchase by section 22, art. 4, of the Constitution, is of the stocks, bonds, and securities of not opposed to the elimination of competi- the Interstate Company by a competing tion in all cases, but only applies where a company violates the federal anti-trust “monopoly," in the sense in which that word law. Appellant is in no position to inwas used in the common law, would be there- voke the federal Anti-Trust Act in this by created, viz. where competition is eliminat- case. The enforcement of the provisions of ed by conferring upon a specified person or that act is, by the terms of the act itself, comcorporation the right to exclude all others mitted to the Attorney General of the United from engaging in the same business, in the States, except in cases where an individual same field of operation, or by upholding the can show some special damage resulting validity of contracts and agreements which to him from a violation of the provisions of place it within the power of certain individu- the act. Minnesota V. Northern Securities als or corporations to control production and Co., 194 U. S. 48, 24 Sup. Ct. 598, 48 L. Ed. fix prices, thereby resulting in injury to the 870; Wilder Manf. Co. v. Corn Products Co., public. No such consequences can follow the 236 U. S. 165, 35 Sup. Ct. 398, 59 L. Ed. 520, purchase by the American Company of a Ann. Cas. 1916A, 118. Appellant has shown controlling interest in the Interstate Com- no special damage resulting to him from the pany under the authority conferred upon it purchase by the American Company of stock by the State Public Utilities Act. The Ameri- and bonds of the Interstate Company from can Company will not, by this purchase, ac- persons other than appellant, and the quesquire the right to exclude any other person tion whether the transaction violates the fedor corporation from engaging in the tele- eral Anti-Trust Act cannot be determined phone business in the same field of operation, in this suit. nor will it be within its power to arbitrarily  It is finally contended that section 28 limit the service to be furnished to the pub- of the state Public Utilities Act prohibits the lic, or fix the rates to be charged for the Atlantic & Pacific Company and the Ameriservice rendered. The state possesses the can Company, both of which are foreign corright to exercise supervision over public porations, from purchasing a majority of the utilities with reference to such matters, and stock and securities of the Interstate Comhas made provision for the exercise of such pany and thereby obtaining control of that right through the State Public Utitities Com-company.
That section is as follows: mission. Instead of resulting in injury to the "No franchise, license, permit or right to own, public, the tendency of the elimination of the operate, manage or control any public utility, Interstate Company as a competitor of the commerce, shall be hereafter granted or trans
except common carriers engaged in interstate Bell system would be to benefit the public. ferred to any grantee or transferee other than As we said in Union Trust & Savings Bank a corporation duly incorporated under the laws v. Telephone Co., supra:
of this state.
“No public utility shall be in any manner "It is the possibility of connection with a exempt from the provisions of this act because large number of instruments that gives useful or by virtue of the fact that it may be or may ness to the system. The use of the telephone have been incorporated or organized under the has come to be quite generally regarded, not laws of another state, or of the United States, as a luxury or convenience, but a necessity, or of a foreign country.” and it is essential to the greatest public convenience that all users of telephones should be
Notwithstanding the fact that by section able to secure, as nearly as possible, direct con- 10 of the act the term “public utility," when nection with all other users.
used in the act, is declared to mean “every corTo the same effect is State Public Utilities poration, company, association, Joint-stock Commission v. Noble (No. 10511) 113 N. E. 910. I company or association, firm, partnership or
individual" engaged in certain lines of busi- | master for further hearing were addressed to the ness, it is evident that the term as used in discretion of the court, and their denial manifestthe first paragraph of said section 28 can-ly was not an abuse of discretion, no question
of law was presented for review. not be given such meaning. If the term as
[Ed. Note.-For other cases, see Appeal and there used be given the meaning declared by Error, Cent. Dig. 88 3825, 3826; Dec. Dig. Ons section 10, the section would, in effect, pro- 959(1).] vide that no franchise, license, permit, or Appeal from Superior Court, Suffolk right to own, operate, manage, or control any County. corporation, etc., or individual engaged in
Action by Alice V. Hannaberry and others the lines of business specified, should be against George W. Green. Decree for de granted or transferred to any other than a fendant, and plaintiffs appeal. Affirmed. corporation organized under the laws of this state. The term “public utility,” as used in
A. D. Radley, of Boston, for appellants. the first paragraph of section 28, evidently
Chas. Toye, of Boston, for appellee. means the plant operated by a public utility,
RUGG, C. J. (1) This is a suit in equity and the section requires that the franchise alleging in substance that the female plainto own, operate, manage, or control the plant tiff, hereafter referred to as the plaintiff, shall be vested in a corporation organized wa's an heir at law and a distributee of the under the laws of this state. The purchase estates of her deceased father and mother, by the American Company of a majority of and as such entitled to an interest in real the shares of stock and securities of the In- estate and personal property; that the de terstate Company has not divested, and can- fendant conspired with two other persons to not divest, the Interstate Company of its procure fraudulently the conveyance to him franchise to own, operate, manage, or control of her interest in this real estate and the its plant. The order of the Commission es. assignment of her share as distributee in the pressly preserves the integrity of the Inter personal property, which together were of state Company and its franchise rights. the value of $2,500, for the grossly inade There is therefore nothing in this transaction quate consideration of $500 in cash and a which violates the provisions of section 28 time note for $300. The case was referred of the state Public Utilities Act.
to a master, who found that the plaintiff was The judgment of the circuit court is af- owner of the interest in the estates of firmed.
her father and mother of the value alleged, Judgment affirmed.
and that she made conveyance and transfer
to the defendant for the price averred. He (225 Mass. 201)
further found that the defendant did not HANNABERRY et al. v. GREEN.
conspire with the persons alleged to procure (Supreme Judicial Court of Massachusetts.
the deed and assignment from the plaintiff,
but that both were executed for a valuable Suffolk. Nov. 28, 1916.)
consideration and were obtained by the de1. FRAUD 30_MISCONDUCT OF ATTORNEY—fendant without fraud or conspiracy. This LIABILITY OF THIRD PERSON. If plaintiff's counsel betrayed her interests
finding rendered immaterial all the other in advising her to convey to defendant her in allegations of the plaintiff's bill. If those terests in the estate of her father and mother, acting as counsel for the plaintiff were faithdefendant, who was not a participant in any less or betrayed her interests, she cannot fraud or conspiracy and was innocent of any hold the defendant responsible therefor, who wrong to plaintiff, is not responsible therefor.
[Ed. Note.- For other cases, see Fraud, Cent. was not a participant in any fraud or conDig. g 35; Dec. Dig. Om 30.)
spiracy and was innocent of any wrong to 2. APPEAL AND ERROR @ 907(2) — REVIEW
the plaintiff. FINDINGS OF FACT.
 The whole issue presented by the recWhere there is no report of the evidence, ord was one of fact. The master found the findings of fact by a master must be accepted as essential facts in favor of the defendant. final.
[Ed. Note.--For other cases, see Appeal and That finding must be accepted as final, beError, Cent. Dig. $8 2911, 2916; Dec. Dig. en cause there is no report of the evidence. 907(2).)
 The plaintiff presented eleven “requests 3. APPEAL AND ERBOR 842(10)_REVIEW– for rulings.” These are all requests for findINSTRUCTIONŞ.
ings of fact. No one of them relates to a The refusal by a master of requests for find- principle of law. The master's refusals to ings of fact, being only another way of saying find in accordance with these requests was that the evidence did not convince him that they were in accordance with the facts, presents no only another way of saying that the evidence question of law for review.
did not convince him that they were in ac(Ed. Note.-For other cases, see Appeal and cordance with the facts. No question of Error, Cent. Dig. § 332942 ; Dec. Dig. En law thereby is involved. 842(10).)
 The plaintiff filed a motion to be al4. APPEAL AND ERROR 959(1) - REVIEW
lowed to amend her bill and to recommit the DISCRETION OF COURT,
Where the denial of motions of plaintiff to case to the master for further hearing. Both amend her bill and to recommit the case to the these motions were addressed under the cir
For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexen