Home Owners' Loan Corp. of Washington, D.C. v. Mayor and City Council of Baltimore

• Decision Date: 11 January 1939
• Docket Number: 86.
• Citation: 3 A.2d 747,175 Md. 676
• Parties: HOME OWNERS' LOAN CORPORATION OF WASHINGTON, D. C., v. MAYOR AND CITY COUNCIL OF BALTIMORE et al.
• Court: Maryland Court of Appeals

3 A.2d 747

175 Md. 676

HOME OWNERS' LOAN CORPORATION OF WASHINGTON, D. C., v. MAYOR AND CITY COUNCIL OF BALTIMORE et al.

No. 86.

Court of Appeals of Maryland

January 11, 1939

Appeal from Baltimore City Court; Edwin T. Dickerson, Judge.

Mandamus proceeding by the Home Owners' Loan Corporation of Washington, D. C., a corporate instrumentality of the United States of America, against the Mayor and City Council of Baltimore and others, to compel the defendants to restore water service to petitioner's property. From an order dismissing the petition, the petitioner appeals.

Order reversed and case remanded for further proceedings.

Thomas E. Barrett, Jr., and Franklin P. Gould, both of Baltimore (John I. Rowe and Risque W. Plummer, both of Baltimore, on the brief), for appellant.

Charles R. Posey, Jr., Asst. City Sol., of Baltimore (Charles C. G Evans, City Sol., of Baltimore, on the brief), for appellees.

Argued before BOND, C.J., and OFFUTT, PARKE, SLOAN SHEHAN, and JOHNSON, JJ.

OFFUTT Judge.

This appeal is from an order of the Baltimore City Court dismissing the petition of the Home Owners' Loan Corporation for a writ of mandamus directing the defendants, the Mayor and City Council of Baltimore and Leon Small, Water Engineer of Baltimore, to restore the water service to the petitioner's property located near Catonsville in Baltimore County.

It is alleged in the petition that the Home Owners' Loan Corporation is a corporate instrumentality of the Federal government, organized, existing and operating under a Federal Act approved June 13th, 1933, 12 U.S.C.A. §§ 1461 to 1463a, inclusive; that in the exercise of its lawful powers it acquired by deed from Augustus A. Piper, Assignee, on July 29th, 1926, title to a tract of land containing about 22.34 acres on the Frederick Road and Devere Lane in the First Election District of Baltimore County; that the defendants are under a duty, upon application, to supply that property with water, but that they on February 16th, 1936, discontinued water service to the property; that after petitioner took title to the property, defendants submitted to it a claim for water service charges of $139.12 covering charges for water supplied to the property during a period beginning November 2nd, 1934, and ending March 31st, 1938; that petitioner denied its liability for charges accuring prior to the date on which it acquired title to the property, but tendered itself ready and willing to pay all charges accruing since that date and demanded that defendants restore water service to the property, but that defendants refused to restore said service unless appellant paid all arrearages including those which had accrued before it took title to the property and that such refusal will result in great and irreparable damage to the petitioner.

Defendants after denying all issuable allegations of fact, alleged that the service was discontinued on April 12th, 1937, and asserted its right to refuse water service to the property until all arrearages for water service thereto are paid.

The case was tried on those pleadings and at the conclusion of the trial the petition was dismissed. The question submitted by the appeal is not novel. It is whether a public utility corporation under a duty to supply without discrimination, its service to all persons applying therefor, may rightfully refuse to serve a person who acquired title to property from an owner served by the utility, unless and until the transferee pays all charges and arrearages due by the former owner to the corporation for service rendered before the transfer.

It is axiomatic that a public service corporation, private or municipal, is under a duty to furnish to all persons applying therefor the service which it offers without discrimination and at reasonable rates, where the service requested is within the reasonable range of its plant, equipment, lines or mains. Dillon on Mun. Corp., 5th Ed., sec. 1317; McQuillen on Mun.Corp. sec. 1946 n. secs. 1821, 1829; 51 C.J.7; Merryman v. Baltimore, 153 Md. 419, 427, 138 A. 324. Where the service or utility is supplied by a municipality, it has been said that while the purpose must be public and the utility must be impressed with a public interest, nevertheless the municipality acts in its business or proprietary rather than its governmental character, McQuillen on Mun.Corp. sec. 1946; 43 C.J. 420; Wagner v. Rock Island, 146 Ill. 139, 34 N.E. 545, 21 L.R.A. 519, and that is especially true where the service is supplied beyond the territorial limits of the municipality, Dillon on Mun.Corp. sec. 1299, 1300.

The decided weight of authority supports the proposition that a municipality engaged in a public utility business may not supply the utility beyond its territorial limits unless thereto authorized by a statute, by its charter or by the constitution of the state in which it is located. Dillon, Mun. Corp. sec. 1299; McQuillen on Mun.Corp. secs. 1944, 1945.

In this case the power of the City of Baltimore to furnish water to the inhabitants of Baltimore County may be found in its charter, Charter and Pub.Loc.Laws, of Baltimore City, sec. 6, subsections 30(b) 30(G), (E); Baltimore City v. Day, 89 Md. 551, 555, 43 A. 798; Merryman v. Baltimore, 153 Md. 419, 138 A. 324, and in certain statutes, Ch. 82, Acts 1918, § 17; Acts 1908, Ch. 214, § 1 (p. 649), sec. 17. Collateral to, but considered in connection with these statutes are certain ordinances of the City of Baltimore. Baltimore City Code, Art. 48, secs. 14, 27, 35, and Ch. 186, Acts 1937; Ch. 539, Acts 1924.

The rates for the service sometimes referred to as taxes are literally service charges. They are not taxes, in the ordinary sense of that word, Pond on Public Utilities, secs. 222, 224; Dillon on Mun.Corp. sec. 1323; McQuillen on Mun.Corp. sec. 1948, but are commonly referred to as rates or rents, although the charge is for a commodity actually consumed, but as the term 'service charge' is not infrequently applied to the installation of equipment, the term 'rent' conveniently and sufficiently identifies and distinguishes the charge for supplying the water. The general rule is, that unless made so by statute water rents are not a lien on the property served, McQuillen on Mun.Corp. sec. 1949, Dillon on Mun.Corp. sec. 1323, nor, in the absence of statutory or contractual authority may the corporation discontinue its service to property to coerce the owner thereof into paying charges incurred by a former owner for service rendered before the present owner acquired title thereto, 27 R.C.L. 1455; McQuillen on Mun.Corp. sec. 1822-1825; Title Guarantee & Trust Co. v. 457 Schenectady Avenue, 260 N.Y. 119, 183 N.E. 198, 86 A.L.R. 347; 28 A.L.R. 486; Etheredge v. Norfolk, 148 Va. 795, 139 S.E. 508, 55 A.L.R. 781; 13 A.L.R. 349, unless the charges constitute a lien on the land, Ibid.

In this case no provision can be found in any statute affecting the rights of the parties which expressly makes water rents a lien on the property served or authorizes the corporation to discontinue its service to property unless the owner thereof pays the debt incurred by a former owner for service to him.

It is suggested that since Charter and Pub.Loc.Laws of Baltimore City, sec. 6, subsec. E, provides that payment of water service charges may be enforced 'by the same process that city or state taxes are collected, or that may be collected by process before a Justice of the Peace, or in any of the Courts of the City of Baltimore having jurisdiction in such cases,' that such charges are by the force of that statute a lien on the property served. The only authority cited in support of that proposition is a decision in one of the law courts of Baltimore City, 3 Baltimore City Reports 152, without attempting to review that case, which is not in point here, it may be said that while logic and certain analogies lend some support to the conclusion of the court in that case, the general trend of case law appears to be the other way. Taxes are not a lien on property unless expressly made so by statute, 61 C.J. 912, 920; Thompson v Henderson, 155 Md. 665, 666, 142 A. 525, 58 A.L.R. 1213; Parlett v. Dugan, 85 Md. 407, 409, 37 A. 36; Dillon on Mun.Corp. sec. 1421, for as stated in Cooley on Taxation, sec. 1230; 'The general rule is that taxes are not a lien unless expressly made so by statute or ordinance; and a statute to create a tax lien must expressly provide for the lien, or the implication must be so plain as to be equivalent to positive language.' In this state legislative recognition of that principle may be inferred from the fact that the legislature has in express terms made all 'State, county and city taxes' a lien on real estate in 'respect of which they are levied', Code 1935, Suppl. Art. 81, § 69; Code, Art. 81, § 56. If that is true of taxes a fortiori it must be true of such a charge as a water rent. The statute does it is true authorize the enforcement of the payment of such charges by the 'same process that City or State taxes are collected, or they may be collected by process before a Justice of the Peace, or in any of the Courts of the City of Baltimore having jurisdiction of such cases', but that very language indicates in the clearest way that it was not intended to apply to the collection of charges for delivering water to property beyond the territorial limits of Baltimore. The suggestion that the situs of the debt is at the creditor's domicile is hardly in point. Salyers Auto Co. v. DeVore, 116 Neb. 317, 217 N.W. 94, 56 A.L.R. 594; 2 R.C.L. 806, cited in support of the suggestion deal only with jurisdiction of courts over the res in attachment proceedings, they have no connection with the venue in ordinary actions of assumpsit between residents of the same...