West v. Williams

• Decision Date: 14 June 1934
• Docket Number: 63,64.
• Parties: WEST ET AL. v. WILLIAMS. RED STAR LINES, INC., v. WILLIAMS.
• Court: Maryland Court of Appeals

173 A. 259

167 Md. 316

WEST ET AL. v. WILLIAMS.

RED STAR LINES, INC., v. WILLIAMS.

Nos. 63, 64.

Court of Appeals of Maryland

June 14, 1934

Appeals from Circuit Court of Baltimore City; Eugene O'Dunne Judge.

Bill by George Weems Williams, receiver of the Washington, Baltimore & Annapolis Electric Railroad Company, against Harold E. West and others, constituting the Public Service Commission of Maryland, wherein the Red Star Lines, Inc., intervened. From decrees for plaintiff, defendants and intervener appeal.

Reversed and remanded.

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

Herman M. Moser, of Baltimore, for appellants West and others.

Clarence W. Miles and Seymour O'Brien, both of Baltimore, for appellant Red Star Lines, Inc.

William L. Rawls and George Weems Williams, both of Baltimore (Marbury, Gosnell & Williams, of Baltimore, on the brief) for appellee.

PARKE Judge.

George Weems Williams, as the receiver of the Washington, Baltimore & Annapolis Electric Railroad Company, a corporation organized under the laws of the state of Maryland, under appointment by the District Court of the United States for the District of Maryland, brought suit in the circuit court of Baltimore city on May 17, 1933, against Harold E. West, J. Frank Harper, and Steuart Purcell, commissioners of the Public Service Commission of Maryland, to obtain a preliminary injunction pending the proceedings, and finally a permanent injunction against the said defendants as such commissioners, their agents, servants and employees, that would enjoin and restrain them from permitting or approving the operation of the Red Star Lines, Inc., of busses between Baltimore and Annapolis as allowed by the order of the commission passed on April 28, 1933; and, further, to obtain a decree adjudging such order to be contrary to law and void, and vacating and setting aside the order, and granting to the plaintiff any other and further relief as his case might require. The allegations of the bill of complaint are that the corporation of which the plaintiff is receiver, and its predecessor, the Washington, Baltimore & Annapolis Electric Railway Company, have for the past twenty-five years been carrying on the business of a common carrier of passengers and freight between the cities of Baltimore and Washington, and the city of Annapolis and intermediate points, and that, for some years before the receivership and since, two single track lines of railroad, connecting the city of Annapolis with the cities of Washington and Baltimore, and intermediate points, and with other points inside and outside of the state of Maryland, have been operated as common carriers of freight and passengers.

A number of years ago a ferry was established between the city of Annapolis and a point known as Claiborne in Talbot county, Md., for the carriage of passengers, automobiles, and freight, and, since the establishment of the ferry service, the railroad company and its receiver have operated cars and trains which meet the ferries on arrival at the wharf of the ferry company at the foot of King George street, in the city of Annapolis, and there receive and transfer passengers, who desire to be transported between Annapolis, Washington, Baltimore, and other points, whereby a substantial traffic has been created, and the arrangement has been of great convenience to the traveling public desiring transportation between points on the eastern shore of Maryland and elsewhere in the state of Maryland, District of Columbia, and other states.

The bill of complaint further alleges that a corporation called the Red Star Lines, Inc., has for some years past been operating busses on the public highways for the transportation of passengers to and from various points on the eastern shore of Maryland and Claiborne, at which point passengers would be either delivered at the dock of the ferry or there received from the ferries that operated between Claiborne and Annapolis, and at Annapolis passengers would be received or delivered by the ferries from or to the cars of the Washington, Baltimore & Annapolis Electric Railroad Company; and that through tickets were sold by the three public carriers, the railroad company, the ferry company, and the Red Star Lines, Inc., to the great advantage of the traveling public. The Red Star Lines, Inc., however, desired to obtain a franchise to operate busses between the cities of Annapolis and Baltimore, which, the bill of complaint avers, would be in direct competition with the railroad company, but the bus company had been unable to obtain this franchise, and so, in the early part of 1933, renewed its application to the Public Service Commission of Maryland for a franchise or permit to operate certain passenger busses over the Claiborne-Annapolis Ferry and between Annapolis and Baltimore for the purpose of furnishing continuous and through service between Baltimore and points on the lines of the Red Star Lines, Inc., on the eastern shore of Maryland, but not of including transportation of local passengers between Baltimore and Annapolis or intermediate points. A hearing was had on this application, and the plaintiff and its receiver were there represented, and, after testimony and argument, the Public Service Commission passed on the 28th of April, 1933, its order directing that the permit applied for be issued, "provided that the service shall be rendered in all respects as described at the hearing herein and that this order and the permits issued thereunder shall be effective only so long as the busses are transported over the ferry as proposed, and no change of vehicle is made at Annapolis, and provided further, that the said Red Star Lines, Inc., shall not, under the said permits, transport passengers locally in either direction between Baltimore and intermediate points."

The further allegation is made that the exercise of the privilege granted by the order is not necessary or convenient for the public service, and that it is not required by or consistent with the public interests, for the reason that the service now being furnished to the public by the railroad company, the ferry company, and the bus company is adequate and reasonably satisfactory to the traveling public and the people of the state of Maryland, and that, if it is deficient, either in the rates charged, frequency of service, or time required for this service, the Public Service Commission has full power and authority to make the service satisfactory, reasonable, and convenient in every respect, and that the plaintiff, at the hearing before the commission, offered on behalf of the railroad company that it would conform to any order the commission might pass which would improve the service, and would be willing to reduce rates, adjust schedules, and in every way co-operate with the commission and other carriers in the improvement of the service.

The bill of complaint then alleged that the maintenance and operation of the lines of railroad owned by the railroad company as a transportation system is of vital interest not only to the many communities served, but to the public at large, both in and out of the state of Maryland, and that therefore the granting of any franchise or permission to any other carrier to operate other forms of transportation in competition with the railroad company which would reduce the revenues of the railroad company, and thereby have the effect of causing the suspension of the operation of the lines of the railroad company is inconsistent with the public interest, unnecessary, not convenient for the public service and unlawful, and, in support of these averments, the bill of complaint sets up these alleged facts:

(a) The precarious financial condition of the railroad company, with its revenues declining to an extent that it was barely making operating charges, if proper depreciation on its rolling equipment were disregarded, and giving effect to the act of 1931 passed by the General Assembly of Maryland, exempting the railroad property of the company from taxation for 1931 and 1932. Acts 1931, c. 497.

(b) The railroad company carried in the year 1932 approximately 2,500,000 passengers.

(c) Since the hearing before the commission, the General Assembly of Maryland passed an act which provided that no taxes should be assessed or levied against the railroad company for the years 1933 and 1934 or such part of said years as the railroad should be operated, except out of net income arrived at after allowing for proper depreciation on the rolling equipment and interest on its car trust equipments.

(d) Since the appointment of the receiver, no interest payments, except on car trust equipment, and no dividends of any kind have been paid to the bondholders or stockholders of the company.

(e) The franchise granted by the municipality of Annapolis that enabled the railroad company and its receiver to maintain and operate certain tracks in specified streets of the municipality expired on or about July 1, 1932. Without the use of the tracks leading from the West Street Station of the railroad company in Annapolis to the ferry wharf, railroad service in connection with the ferry would have been inconvenient to the public; and, being unable to obtain a renewal or extension of the franchise, the receiver instituted condemnation proceedings to obtain, and did thereby obtain, the right to maintain said tracks in the city of Annapolis and to operate cars thereon for the period of two years from July 1, 1932, for the purpose of connecting as theretofore with the ferry service.

(f) In the year 1932 the total railway operating revenues were $1,018,661.56 as against $1,261,650.13 for the period from January 27, 1931, to ...