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the testator as derived from the will, but also the policy of the law. The court interpreted the clause in the will directing that in case of the death of both granddaughters the share which they would have received should be divided among the lawful issue of the children per stirpes, as an intention to adopt the per stirpes rule as to the whole will.

Under a devise of the residue of the property to the daughters of the testator and the survivor of them for life, and, upon the death of the longest liver, to such children and issue of the daughters as may then be living, to be divided equally between them, share and share alike, and to their respective heirs forever, on the death of the life tenants the children of the deceased grandchildren are entitled to share by representation, but, aside from this, the distribution among the grandchildren is to be per capita. Joyce's Estate (1922) 273 Pa. 404, 117 Atl. 90.

-under a bequest to the "families" of several individuals.

(Supplementing annotation in 16 A.L.R. 78.)

The rule that if a gift be to A and B and their children, or to a class and their children, every individual coming within the terms of the description, both children and parents, will take an equal distribution of the fund, was held applicable to a devise bequeathing all the real and personal property to the testator's brothers and their families, in Williamson v. Williamson (1922) 45 S. D. 180, 186 N. W. 827. The court stated that from the use of the words "and their families" it was manifest that the testator intended that each member of his brothers' families should take a share of the estate as a direct gift from him, rather than by right of succession from his brothers at their death.

It was said, however, that nothing in the opinion was to be taken as indicating any view as to what share each individual would have taken, provided that one of the children of the decedent's brothers had died prior to the death of the decedent, and left surviving children.

-under a bequest to persons named and children of others. (Supplementing annotation in 16 A.L.R. 83.)

In McKay v. Zilar (1923) 73 Colo. 529, 216 Pac. 534, under a will which provided that in the event of the death of the testator's son without heirs, the property should go, share and share alike, to two named children of one daughter and the children in esse of another daughter, who were all of the grandchildren, it was held that the grandchildren of the testator took per capita, in the absence of anything indicating a greater affection for the children of one daughter than for those of another. This mode of distribution was construed as carrying out the testator's intention, the court stating: "The language of the will seems to convey this meaning when it is said that the property 'shall go to and become the property, share and share alike, of Ester McKay and Jefferson McKay, children of my beloved daughter Mary Allen Brewer McKay, and the children then in esse of my beloved daughter Lue Adah Brewer Zilar.' This was the interpretation put upon the will by the trial court. The interpretation for which plaintiffs in error contend would make this phrase 'share and share alike' apply to the two McKay children as individuals and to the Zilar children as a class. All the devisees belong to one class, to wit, grandchildren of the testator. That two of them are named specifically, while the others are designated as children of the daughter, is not indicative of an intent to discriminate between the two families.”

Nor does the mere fact that at the time the will was executed the mother of some of the children was living require a per stirpes distribution, for the reason that it created an uncertainty as to the number of beneficiaries and consequently as to the shares each would receive, since the natural intent of a testator in making provision for his grandchildren would be to provide for those living at the time of his death; technical rules worked out from the old cases invoked to sustain the con

tention that the distribution should be per stirpes must yield to the general rule that it is the duty of the court to ascertain the intent of the testator, and to interpret the will accordingly. McKay v. Zilar (Colo.) supra.

Under a devise to an individual named, or to several individuals named, and to the children of another, share and share alike, the children are to be considered as a class, and take under the will equally with the individuals named, per stirpes and not per capita. Palmer v. Jones (1921) 299 III. 263, 132 N. E. 567, holding that under a devise to "my brother Elisha surviving children and my sister Eliza Gates" one half of the property vested in Eliza Gates upon the death of the testatrix, and the other half in the children of the brother.

And in Beal v. Higgins (1922) 303 Ill. 370, 135 N. E. 759, it was stated that under a devise to a named individual, or to several named individuals, and to the children of another, the children are to be considered as a class and take equally with the individuals named, per stirpes and not per capita. -under a bequest to persons standing in unequal degrees of relationship. (Supplementing annotation in 16 A.L.R 96.)

In Untereiner's Succession (1922) 151 La. 804, 92 So. 343, testatrix devised the residue of her estate to "all of my children and the children of my deceased son in equal portions," and, there being five children and two grandchildren, it was held that each child and grandchild should receive one seventh of the residue of the estate, the court stating that the language used was not susceptible of any other interpretation, for a bequest to several persons in equal portions could only mean that they are to receive share and share alike. -under a bequest to the "relatives," "heirs," or "next of kin" of the testator and of the testator's wife or husband.

(Supplementing annotation in 16 A.L.R. 145.)

And in Griffitt v. Wetzel (1915) 17 Ohio N. P. N. S. 49, it was held that a devise of the proceeds of a fund to the

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(Supplementing annotation in 16 A.L.R. 148.)

In Eaton's Estate (1922) 49 N. B. 193, the testator devised his property in trust directing the income to be paid to his named daughters in equal shares during their lives, providing that upon the death of any daughter without issue her interest should go to the survivor or survivors of them, and that, "should any one of my daughters die, leaving issue, I bequeath to her heirs all of the one-fifth share of all my real and personal estate as they arrive at the age of twenty-one years.

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. Should any one or all of my daughters die leaving issue, I bequeath all my real and personal estates at the death of their mothers as they may become of age, . . . I give my executors full power to set off and divide all my estate amongst the heirs of my daughters after their death, or her death should any one of my daughters die and leave no issue, all of my real and personal estate is to be divided between the heirs of those that leave issue according to their respective families." In directing distribution of the corpus of the trust fund among the grandchildren after the death of all the children, it having been agreed among the heirs that there should be no distribution until such time, the court, adopting the rule that where a testamentary gift is modified by a subsequent clause of a will, or is in conflict therewith, the latter clause controls, directed that it should be divided among the grandchildren per capita. The court said: "The prin

ciples to be followed in construing a will are fairly clear. The duty of a court is, if possible, to arrive at and give effect to the intention of the testator, and in doing so to give effect to every word of the will, providing an effect can be given to every word not inconsistent with the general intent of the whole, taken together, and to give to each word employed, if it can with propriety bear it, the literal ordinary meaning which it has in the vocabulary of ordinary life. See Cliff v. Cliff (1920) 47 N. B. p. 302. In this case, however, the clauses of the will are so contradictory and inconsistent one with the other that I feel it is not possible to give effect to every word of the will, and it certainly seems to me that the intention of the testator, judged by the language of the whole will, appears to have varied in the last part of the will from the intention which was expressed in an earlier portion. .

The meaning of this

would seem to be that the issue of any of the daughters would divide between them the property which their mothers took under the will.

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The expression 'according to their respective families' is a peculiar one, and it is difficult to say what it means, but I am disposed to think that it should read as if it stated 'according to the numbers of their respective families.'"

A fund given to trustees to pay the income to certain beneficiaries, which upon the death of the beneficiaries was to be disposed of among the testator's children and grandchildren in accordance with the directions in the residuary clause regarding the residue of the estate, requiring a division thereof "into as many parts as there shall be children of mine surviving, or deceased having issue then surviving," is to be treated as vesting at the death of the testator, in the absence of anything in the will to show a contrary intention, and to be divided into as many parts as there were children surviving at death of testator and children then deceased leaving issue, and the issue of deceased children are to take per stirpes. Warren v. Morris (1924) Mass. 143 N. E. 271. G. S. G.

STATE OF MISSOURI EX REL. SOUTHWESTERN BELL TELEPHONE COMPANY, Plff. in Err.,

V.

PUBLIC SERVICE COMMISSION OF MISSOURI et al.

United States Supreme Court — May 21, 1923.

(262 U. S. 276, 67 L. ed. 981, 43 Sup. Ct. Rep. 544.)

Telephones what is adequate rate for service.

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1. A return of 5 per cent upon the minimum value of property of a public telephone corporation is wholly inadequate, at a time when prevailing investment and interest rates are much higher than that. [See note on this question beginning on page 825.]

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ERROR to the Supreme Court of the State of Missouri to review a judg

ment affirming a judgment of the Circuit Court for Cole County which sustained an order of the Public Service Commission fixing rates for telephone service. Reversed.

The facts are stated in the opinion of the court.
Messrs. Frederick W. Lehmann, J.
W. Gleed, Thomas O. Stokes, Claude
Nowlin, and E. W. Clausen, for plain-
tiff in error:

The value of the property found by the commission was not its present value, but was its actual cost, or its value in 1913, plus net additions since, its present value being ignored, the value found being far below the present value of the property, with the result that the rates prescribed were confiscatory in their effect and operation.

Willcox v. Consolidated Gas Co. 212 U. S. 19, 53 L. ed. 382, 48 L.R.A. (N.S.) 1134, 29 Sup. Ct. Rep. 192, 15 Ann. Cas. 1034; Minnesota Rate Cases (Simpson v. Shepard) 230 U. S. 352, 57 L. ed. 1511, 48 L.R.A. (N.S.) 1151, 33 Sup. Ct. Rep. 729, Ann. Cas. 1916A, 18; Lincoln Gas & E. L. Co. v. Lincoln, 250 U. S. 256, 63 L. ed. 968, 39 Sup. Ct. Rep. 454; Elizabethtown Gaslight Co. v. Public Utility Comrs. 93 N. J. L. 18, 111 Atl. 729; City Light & Traction Co. v. Sedalia, 8 Mo. P. S. C. 204; Hurst v. Chicago, B. & Q. R. Co. 280 Mo. 566, 10 A.L.R. 174, 219 S. W. 566.

Valuation, though described as tentative, must be as of the date of determination, and rates prescribed, though designated as temporary, must be just and reasonable.

State ex rel. Columbia Teleph. Co. v. Atkinson, 271 Mo. 28, P.U.R.1917F, 27, 195 S. W. 741; Galveston Electric Co. v. Galveston, 258 U. S. 388, 66 L. ed. 678, 42 Sup. Ct. Rep. 351; New York Teleph. Co. v. Prendergast (U. S. D. C. New York, decided May 26, 1922); Potomac Electric Power Co. v. Public Electric Utilities Commission, 51 App. D. C. 77, 276 Fed. 327.

The findings of the commission as to the value of the property were made under a mistake of law, are entirely without support in the evidence, and are against the evidence of indisputable character in the case. The rates prescribed by the commission are, therefore, without legal effect and void.

State Public Utilities Commission ex rel. Chicago Bd. of Trade v. Toledo, St. L. & W. R. Co. 286 Ill. 582, P.U.R. 1919C, 620, 122 N. E. 158; State Fub. Utilities Commission ex rel. Springfield v. Springfield Gas & E. Co. 291 Ill.

209, P.U.R.1920C, 640, 125 N. E. 891; State v. Great Northern R. Co. 135 Minn. 19, P.U.R.1917B, 413, 159 N. W. 1089; Interstate Commerce Commission v. Union P. R. Co. 222 U. Ş. 541, 56 L. ed. 308, 32 Sup. Ct. Rep. 108; Interstate Commerce Commission v. Louisville & N. R. Co. 227 U. S. 88, 57 L. ed. 431, 33 Sup. Ct. Rep. 185.

The commission's calculation of expenses was far below what was actually and necessarily incurred in the operation of the property, and resulted in a showing of net earnings far beyond what was realized, and, the reduced rates being predicated on such showing, there was a taking and appropriation of the company's property without due process of law and a denial of the equal protection of the law.

Houston V. Southwestern Bell Teleph. Co. 259 U. S. 318, 66 L. ed. 961, 42 Sup. Ct. Rep. 486; Chesapeake & P. Teleph. Co. v. Manning, 186 U. S. 239, 46 L. ed. 1144, 22 Sup. Ct. Rep. 881; Interstate Commerce Commission v. Chicago G. W. R. Co. 209 U. S. 108, 52 L. ed. 705, 28 Sup. Ct. Rep. 493; Chicago, M. & St. P. R. Co. v. Wisconsin, 238 U. S. 491, 59 L. ed. 1423, L.R.A.1916A, 1133, P.U.R.1915D, 706, 35 Sup. Ct. Rep. 869; People ex rel. Delaware & H. Co. v. Stevens, 197 N. Y. 1, 90 N. E. 60; Bacon v. Boston & M. R. Co. 83 Vt. 421, 76 Atl. 128; Atlantic Coast Line R. Co. v. North Carolina Corp. Commission, 206 U. S. 1, 51 L. ed. 933, 27 Sup. Ct. Rep. 585, 11 Ann. Cas. 398; State Pub. Utilities Commission ex rel. Springfield v. Springfield Gas & E. Co. 291 Ill. 209, P.U.R.1920C, 640, 125 N. E. 891.

Messrs. L. H. Breuer and James D. Lindsay, for defendants in error:

The supreme court of Missouri found, upon a review of the evidence, that the rates established by the commission were not confiscatory, or unreasonable, and were calculated upon the basis of the fair value of the property of the Telephone Company, being used and useful in the service of the public. These findings of fact are supported by substantial evidence, are not arbitrary or capricious, and will not be set aside by this court upon writ of error.

San Diego Land & Town Co. v. Jas

(262 U. S. 276, 67 L. ed. 981, 43 Sup. Ct. Rep. 544.)

per, 189 U. S. 439, 47 L. ed. 892, 23 Sup. Ct. Rep. 571; Railroad Commission v. Cumberland Teleph. & Teleg. Co. 212 U. S. 414, 53 L. ed. 577, 29 Sup. Ct. Rep. 357; Portland R. Light & P. Co. v. Railroad Commission, 229 U. S. 397, 57 L. ed. 1248, 33 Sup. Ct. Rep. 820; Darnell v. Edwards, 244 U. S. 564, 61 L. ed. 1317, P.U.R.1917F, 64, 37 Sup. Ct. Rep. 701; New York ex rel. New York & Q. Gas Co. v. McCall, 245 U. S. 345, 62 L. ed. 337, P.U.R. 1918A, 792, 38 Sup. Ct. Rep. 122.

There is no constitutional or inherent right in the utility company, on the one hand, or, in the public, on the other, which imperatively demands that the fair value of property devoted to a public service shall be determined upon estimated cost of reproduction new, either in a time of abnormally high prices, or in a time of abnormally low prices.

Smyth v. Ames, 169 U. S. 466, 42 L. ed. 819, 18 Sup. Ct. Rep. 418; Minnesota Rate Cases (Simpson v. Shepard) 230 U. S. 352, 57 L. ed. 1511, 48 L.R.A. (N.S.) 1151, 33 Sup. Ct. Rep. 729, Ann. Cas. 1916A, 18; Brooklyn Borough Gas Co. v. Public Serv. Commission (N. Y.) P.U.R.1918F, 335.

A net return of 6.81 per cent is not confiscatory or unreasonable-and particularly, under an order tentative and temporary in character and duration.

Willcox v. Consolidated Gas Co. 212 U. S. 19, 53 L. ed. 382, 18 L.R.A. (N.S.) 1134, 29 Sup. Ct. Rep. 192, 15 Ann. Cas. 1034; Denver v. Denver Union Water Co. 246 U. S. 178, 62 L. ed. 649, P.U.R. 1918C, 640, 38 Sup. Ct. Rep. 278; Lincoln Gas & E. L. Co. v. Lincoln, 250 U. S. 256, 63 L. ed. 968, 39 Sup. Ct. Rep. 454.

Mr. Justice McReynolds delivered the opinion of the court:

The supreme court of Missouri (— Mo. —, 233 S. W. 425) affirmed a judgment of the Cole county circuit court, which sustained an order of the Public Service Commission of Missouri, effective December 1, 1919. That order undertook to reduce rates for exchange service and to abolish the installation and moving charges theretofore demanded by plaintiff in error. It is challenged as confiscatory and in conflict with the 14th Amendment.

During the period of Federal con

trol,-August 1, 1918, to August 1, 1919, the Postmaster General advanced the rates for telephone service and prescribed a schedule of charges for installing and moving instruments. The Act of Congress approved July 11, 1919,-41 Stat. at L. 157, chap. 10, Fed. Stat. Anno. Supp. 1919, p. 350,-directed that the lines be returned to their owners at midnight, July 31, 1919, and further:

"That the existing toll and exchange telephone rates as established or approved by the Postmaster General on or prior to June 6, 1919, shall continue in force for a period not to exceed four months after this act takes effect, unless sooner modified or changed by the public authorities-state, municipal, or otherwise-having control or jurisdiction of tolls, charges, and rates or by contract or by voluntary reduction."

August 4, 1919, the commission directed plaintiff in error to show why exchange service rates and charges for installation and moving, as fixed by the Postmaster General, should be continued. After a hearing, it made an elaborate report, and directed that the service rates should be reduced and the charges discontinued.

The company produced voluminous evidence, including its books, to establish the value of its property dedicated to public use. The books showed that the actual cost of "total plant, supplies, equipment, and working capital," amounted to $22,888,943. Its engineers estimated the reproduction cost new as of June 30, 1919, thus,-physical telephone property, $28,454,488; working capital, $1,051,564; establishing business, $5,594,816; total, $35,100,868. They also estimated existing values (after allowing depreciation) upon the same date,-physical telephone property, $24,709,295; working capital, $1,051,564; establishing business, $5,594,816; total, $31,355,675.

The only evidence offered in opposition to values claimed by the

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