Kelly v. Consolidated Gas, Elec. Light & Power Co.

• Decision Date: 23 July 1927
• Docket Number: 53.
• Citation: 138 A. 487,153 Md. 523
• Parties: KELLY ET AL. v. CONSOLIDATED GAS, ELECTRIC LIGHT & POWER CO.
• Court: Maryland Court of Appeals

138 A. 487

153 Md. 523

KELLY ET AL. v. CONSOLIDATED GAS, ELECTRIC LIGHT & POWER CO.

No. 53.

Court of Appeals of Maryland

July 23, 1927

Dissenting Opinion August 8, 1927.

Appeal from Circuit Court No. 2 of Baltimore City; Robert F Stanton, Judge.

Suit by Edgar C. Kelly and others against the Consolidated Gas Electric Light & Power Company. From a decree dismissing the bill, complainants appeal. Reversed and remanded, for the passage of a decree to conform with opinion.

Offutt J., dissenting.

Argued before BOND, C.J., and PATTISON, URNER, ADKINS, OFFUTT, DIGGES, PARKE, and SLOAN, JJ.

Francis J. Carey and Charles Mc H. Howard, both of Baltimore (Piper, Carey & Hall, of Baltimore, and Alexander Armstrong, of Hagerstown, on the brief), for appellants.

E. M. Sturtevant and Charles Markell, both of Baltimore, for appellee.

SLOAN J.

On April 13, 1927, the Northern Maryland Power Company, a Maryland corporation, and 21 residents of the city of Havre de Grace, Md., purchasers and consumers of electricity in that city, filed their bill of complaint in circuit court No. 2 of Baltimore city against the Consolidated Gas, Electric Light & Power Company of Maryland, also a Maryland corporation, praying the court to restrain and enjoin the defendant, now the appellee in the appeal before us, from constructing its electric lines along and upon the streets of Havre de Grace without first having obtained an order of the Public Service Commission of Maryland permitting and approving such construction; and to restrain and enjoin the appellee from exercising any right or privilege under the franchise granted to it on March 7, 1927, by the mayor and city council of Havre de Grace, authorizing it to use the streets of Havre de Grace for the purpose of erecting thereon and therein its electric lines without first having obtained an order by the Public Service Commission of Maryland permitting and approving the exercise of such right or privilege; and to restrain and enjoin the construction and extension of its electric lines from Short Lane in the second election district of Harford county to or in the direction of the city of Havre de Grace without first having obtained an order from the Public Service Commission of Maryland permitting and approving such construction. The court below dismissed the bill of complaint, and from this order the appeal is taken.

On the 4th day of April, 1899, the mayor and city council of Havre de Grace passed an ordinance entitled "An ordinance granting to John H. Reckord, his successors, and assigns the exclusive right to erect and maintain poles and wires upon the streets, lanes, and alleys of the city of Havre de Grace for the purpose of furnishing electric current for light, heat, and power, etc., for public and private use and for the regulations governing the same," the first paragraph of the ordinance concluding, "And the privilege hereby granted is granted exclusively for a period of 25 years, unless terminated as hereinafter provided" (the only conditions as to termination being that the plant should be installed ready to supply electric light on or before May 1, 1900, or a failure to operate for a continuous period of 6 months or more). Ever since the installation of his plant, Reckord and his assigns have operated in Havre de Grace. It appears from the testimony that in the summer of 1900 Reckord's electric light plant and system in Havre de Grace was transferred to the Havre de Grace Electric Company. The only record evidence of this transfer is a deed from John H. Reckord and wife to the Havre de Grace Electric Company made and executed July 13, 1900, conveying the parcel of land upon which the plant was located. Ordinance No. 171 of the town of Havre de Grace, approved March 2, 1903, provided for the execution of a contract between the mayor and city council of Havre de Grace and the Havre de Grace Electric Company of Harford county for lighting the streets, lanes, and alleys of Havre de Grace by electricity, and also re-enacted and confirmed Ordinance No. 147 of the mayor and city council of Havre de Grace, approved April 4, 1899; the ordinance reciting in its preamble that by an amendment to the charter of Havre de Grace contained in section 152 of chapter 127 of the Acts of Assembly of 1902, express power and authority were given the mayor and city council to contract for the lighting of the city by electricity. The proposed agreement was incorporated in the Ordinance No. 171. By this agreement the Havre de Grace Electric Company agreed "to furnish for the term of 20 years, beginning on the 1st day of December, 1899, and ending on the 30th day of November in the year 1919, electric current for the purpose of lighting the streets, lanes, and alleys of the city of Havre de Grace with electric lights. The contract also provided that:

"After the expiration of the term of this contract the party of the second part shall have a right to renew this contract for an additional period not exceeding 20 years, at the prices and upon the terms and conditions herein set forth."

By Ordinance No. 277, approved February 10, 1920, another agreement was entered into between the Havre de Grace Electric Company and the city of Havre de Grace for the furnishing of street lights for the period of 3 years, beginning the 1st day of December, 1919, with the right to an additional period of 2 years from and after the 1st day of December, 1922. On August 16, 1926, by Ordinance No. 234 the Mayor and city council of Havre de Grace entered into a contract with the Northern Maryland Power Company, the appellant, for the installation on Union avenue and Commerce street of a post type or "white way" system of lighting, to continue for a period of 10 years, with the provision for a refund of $850 per year for the unexpired portion of said 10-year period in case the city should decide to discontinue the use of said system.

By Ordinance No. 310, passed by the mayor and city council of Havre de Grace on April 21, 1927, Ordinances Nos. 147, 171, and 277 were repealed. By resolution of the mayor and city council of Havre de Grace, passed at a meeting held on January 3, 1927, the city clerk of Havre de Grace was instructed to notify the Northern Maryland Power Company that from and after the 30th day of June, 1927, its services to the city would be discontinued for all purposes, and "that the mayor and city council of Havre de Grace negotiate with the Baltimore Gas and Electric Company (meaning the appellee) to furnish electric current to the city of Havre de Grace and its citizens for such purposes as may be desired, subject to the approval of the Public Service Commission of Maryland as to service and rates."

The Havre de Grace Electric Company of Harford county was incorporated under the general laws of the state of Maryland on June 19, 1900, the object and purposes for which incorporation was sought, among other things, being "for the transaction of any business in which electricity, over or through wires, may be applied to any useful purposes; the articles, conditions, and provisions under which this corporation is formed are those applicable to corporations formed under the general corporation laws of the state of Maryland," and "the operations of said corporation are to be carried on in and beyond the state of Maryland, and its principal office is to be located at Havre de Grace, in Harford county, in said state." The time of the existence of said corporation was fixed in its charter at 40 years, which has since been made perpetual by the general laws of this state. By agreement of consolidation made on April 20, 1927, the Havre de Grace Electric Company of Harford county and three other electric light and power companies were consolidated under the general laws of the state under the name of the Northern Maryland Power Company, and the latter succeeded to all the rights, powers, and franchises of the constituent corporations.

It is contended by the appellee that the Northern Maryland Power Company has no standing in this court because, so far as the city of Havre de Grace is concerned, it has no existence, that its franchises there have expired, and that it is in effect a trespasser. The Northern Maryland Power Company contends that it had through the franchise granted to Reckord on April 4, 1899, an exclusive franchise for the period of 25 years (if the city of Havre de Grace had the authority to grant an exclusive franchise) and, thereafter, a perpetual franchise, without any other conditions than those recited in Ordinance No. 147, and they cite as authority for this contention Des Moines City Ry. Co. v. Des Moines (C. C.) 151 F. 854. The Des Moines case was appealed to the Supreme Court and reversed on jurisdictional grounds, the Supreme Court suggesting that the right of the city of Des Moines to oust the railway was the proper subject of a direct proceeding by the city to determine the question. 214 U.S. 179, 29 S.Ct. 553, 53 L.Ed. 958.

The appellee is not in a position to dispute, under its own claim of a state-wide franchise, the right of the appellant, the Northern Company, to exercise the charter rights of the Havre de Grace Electric Company in Havre de Grace as conferred by section 337 of article 23 of the Code of 1924, this provision having been in effect when the Havre de Grace Electric Company was chartered in June, 1900, nearly 2 years before the charter of the city of Havre de Grace was amended by Acts 1902, c. 127. Reckord had his plant in operation December 1, 1899, sold it to the Havre de Grace Company in July, 1900, and it has ever since been operated by it and its assigns. In N. Y., N.H. & H. R. Co. v. Deister, 253 Mass. 178, 148 N.E. 590, the court said:

"The plaintiff may maintain its

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