Baltimore Gas & Electric Co. v. State Roads Commission

Hammond, J., delivered the opinion, of. the Court. Unless the Legislature directs to the contrary, the rule is that a public utility must, at its own expense, remove and relocate its service facilities in, on or under a public road or other land owned by the State if this is made necessary by improvement or extension of the road system. The question before us is whether the Legislature, in authorizing the State Roads Commission to build toll bridges, tunnels and motorways. by the enactment of Chap. 561 of the Acts of 1947 (now found in Code, 1951, as Art. 89B, Secs. 106-126, both inclusive, hereinafter sometimes referred to as “the statute”) changed this common law rule as to relocations required by the construction of revenue projects. The State Roads Commission is constructing a tunnel under the Patapsco River in Baltimore Harbor, with approaches on both sides, as a revenue bond project known as the Harbor Crossing.

The construction of the tunnel required the removal of four armored submarine cables of the Baltimore Gas and Electric Company from one part to another of the bed of the Patapsco River, which, it is agreed, is owned by the State. The construction of the approaches to the tunnel necessitated the removal and relocation of various utility service facilities of the Company, both electric and gas, that it had put “in, on, over and under certain public highways, streets, alleys and places”, under various of its franchises. It was agreed (a) that the Company would remove the old cables and install new cables at a place in the bed of the Patapsco River outside the working area, approved by its engineers and the consulting engineers for the Harbor Crossing; (b) that the Commission would advance the cost of the work, including the cost of acquiring new rights of way on private property where necessary, on vouchers audited and approved by the consulting engineers; (c) that the legal question of the ultimate liability for the costs would be submitted to appropriate courts. The Commission promised that ²⁷¹ even if the Company were held to be liable, it would pay “for the cost of acquiring new .rights of way over, under or through private property” made necessary by the new location of the cables.

If the Commission had to pay the cost of the new cables, the Company agreed to refund the difference between the depreciated value of the old cables and the value of the new. Similar arrangements were entered into as to utility service facilities that had to be changed or rebuilt because of the construction of the roads approaching the tunnel. The Company agreed to do the necessary work according to plans approved by the consulting engineers. The Commission agreed to advance the costs from time to time as the work progressed, on vouchers audited and approved by the consulting engineers, and the ultimate liability for payment was to be decided, as in the case of the cable expenses, by the courts.

If the Company were found responsible, it was to repay the Commission. If the decision made the Commission liable, the Company would retain the advances and, in addition, be paid what it had expended to acquire “private rights of way or other real property” to take the place of the publicly owned property it had been forced to vacate. The building of the Harbor Crossing affected utility facilities, other than the submarine cables, in various ways. There is no dispute as to those that had to be moved from private property of customers or of the Company, for the Commission has conceded it must pay for these.

It is the ones located in, on or under public highways that are before us. Some of these had to> be moved to newly acquired private property. Some had to be reconstructed at the same location or at another location on the public highway. Others had to be disconnected and temporary facilities built, to be used until the project had been completed, when the original facilities could be reconnected.

Another category consisted of electric cables located in municipally owned ducts or conduits which had to be moved to other similar conduits. Gas mains under the roads had to be raised or lowered. Some tangible personal property was physically damaged or destroyed but its value was a very small part of the total expense of the ²⁷² Company. Some tangible personal property was abandoned, but the Company makes no claim “for the cost or the value of the facilities disconnected or abandoned” and asks to be reimbursed “only for the labor and material cost and expenses incurred * * * in disconnecting and capping service facilities at such point of disconnection.” To carry to court the question of who must pay, the parties chose as a vehicle a petition for a declaratory judgment by the Commission, with numerous exhibits, and an answer by the Company, with many more exhibits.

In these pleadings and exhibits were set forth the matters, facts and circumstances that have been recited and the respective claims of the parties. The Commission moved for summary judgment on the ground that the petition and answer, and the exhibits, showed “no genuine issue as to any material fact”, and the parties agreed that the court could enter a summary judgment for the Commission or for the Company. The trial court decided that the Company must pay, finding that the Legislature had not intended to change, and had not changed, the common law rule, on the strength of cases such as Transit Commission v. Long Island R. Co. (N. Y.), 171 N. E. 565 ; New York Tunnel Authority v. Consolidated Edison Co. (N. Y.), 68 N. E. 2d 445 ; and New Jersey Bell Telephone Co. v. Delaware River Joint Commission (N. J.), 15 A. 2d 221 , which had held that statutory authorization to buy or condemn did not make either mandatory or require the payment of compensation for property damaged but not taken. Seemingly alarmed at Judge Byrnes’ reliance, in deciding against it, on the emphasized premise that the only issue was liability for the agreed cost of the removal, relocation and reconstruction of the gas and electric utility facilities, the Company has argued in this Court that the gas mains and the electric pipes, poles, wires, underground and submarine cables and appurtenant service facilities were literally physically damaged and destroyed and that it is entitled to its compensation for such physical damage and destruction.

The Commission contends that the point does not arise on the pleadings and exhibits and was not attempted to be raised below, and the Company counters both claims. It is clear to us that ²⁷³ the Commission is right and that the case was submitted and argued below on the agreed premise on which Judge Byrnes based his decision, and that the question of literal physical damage to, or destruction of, tangible personal property entered the case for the first time on appeal. We have considered and decided the matter on the basis on which it was considered and decided below. The Commission and the Company agree that the controlling part of the statute is the paragraph of Sec. 120 reading: “All private property damaged or destroyed in carrying out the powers granted by this sub-title shall be restored or repaired and placed in its original condition as nearly as practicable or adequate compensation made therefor * * *.” Its meaning and the general legislative purpose and pattern come clear on a reading of the statute from start to end.

The cost of a bridge, motorway or tunnel is to be paid for in full out of proceeds of sale of the revenue bonds, not the obligations of the State, sold to finance it. (“Cost” includes not only direct costs but also expenses “necessary or incident to the construction”.) No individual, corporation or political subdivision or agency is to be put to expense by the building of a project, either individually or as a taxpayer — rather, the users of the project are to pay all costs by their tolls. All real and personal property and interests therein, public or private, used in a project are to be acquired in the name of the State, either by purchase or by condemnation. All public property “damaged” in the doing of the work is to be restored or repaired to its original condition, and all private property “damaged or destroyed” is either to be restored to its original condition, as nearly as may be, or the owner paid “adequate compensation”.

The only individual or entity, public or private, not to be paid for the contribution of property to the project is the State of Maryland, which expressly is to receive no compensation for any of its “public lands, playgrounds, parks, parkways or reservations”. The Commission is given the power to construct grade separations at road intersections and to change the location of public highways but it is told specifically that if it does either, it must pay both the cost and any damages incurred “as part of the cost of such project.” ²⁷⁴ If the Commission damages private property in the course of arranging grade separations or relocating roads, it must, under Sec. 120, restore it or pay compensation, as a part of the cost of the particular work and, in turn, of the cost of the project. It is clear that Sec. 120 puts an obligation on the Commission, as an agency to whom the State has delegated the police power necessary for the doing of the work authorized, that it would not bear otherwise. Assuming for the purpose of discussion that Sec. 120 does not embrace or extend to the service facilities of utilities on State-owned land, that obligation is to make whole the owners of all other private property injured in the construction of a project, even though the injury, at common law, would be damnum absque injuria because it did not amount to a taking (as, for example, in Baltimore v. Himmelfarb, 172 Md. 628 ).

If the words in Sec. 120, read in context, do not mean this much, the Legislature must be credited, as it is not to be, with having passed a meaningless provision. Decisions elsewhere support this conclusion. In Ewalt v. Pennsylvania Turnpike Commission (Pa.), 115 A. 2d 729 , Ewalt owned a lake well stocked with fish and other aquatic life. As a result of erosion caused by the construction of the Philadelphia extension of the Pennsylvania Turnpike, large quantities of dirt were carried into the lake.

The Supreme Court of Pennsylvania, noting that the damages were consequential and not direct, and as such non-compensable in the absence of a statute to the contrary, held that the identical Pennsylvania counterpart of Sec. 120 was such a statute and required the commission to compensate Ewalt. In United States Gypsum Co. v. Mystic River Bridge Authority (Mass.), 106 N. E. 2d 677 , the provision of the Act creating the toll authorities that matched Sec. 120, read: “Any person damaged in his property by the exercise of any of the powers granted by this act may recover his damages from the authority * * In constructing a toll bridge, the authority erected a pier on the navigable part of the Mystic River, the bed of which was owned by the Commonwealth. The pier blocked access by water to the wharf of the Gypsum Co. It was con ²⁷⁵ ceded that neither the Constitution of the United States, that of Massachusetts, nor the common law required the payment of compensation for the damage done, since there was no taking of the wharf property and the loss of use to the property owner was damnum absque injuria. The Supreme Judicial Court of Massachusetts upheld the award of the jury, saying: “The damages caused by the erection of the pier come within the description in the act of the damages for which compensation is to be made.” The same conclusion was reached in City of Philadelphia v. Commonwealth (Pa.), 130 A. 491 , as to the damage to riparian rights that were revocable at will, caused by the construction of a bridge.

The Commission concedes that if private property, other than that of a utility, located in, on or under State-owned land, is damaged but not taken in the course of the building of a bridge, motorway or tunnel, Sec. 120 requires the payment of compensation for the damages that otherwise would be incidental or consequential and, so, damnum absque injuria. Its earnest argument is that there is a fundamental difference between statutes, on the one hand, that merely extend to owners of property damaged consequentially, and not directly, the right to compensation enjoyed by owners of property taken, and statutes, on the other “which deny to the State the police power with respect to public utility facilities located on the public domain * * Section 120, the Commission claims, has nothing whatever to do with “a denial of the police power”. It agrees with the Company that there is no case squarely holding that a legislature, in passing a provision like Sec. 120, either meant to, or did not mean to, abrogate the common law rule that a utility company must pay the expense of relocating its facilities in the streets when the public interest requires it. The Commission finds the decision of the New York Court of Appeals in New York Tunnel Authority v. Consolidated Edison Co., 68 N. E. 2d 445 , supra, the most analogous authority favorable to it, because the question as to who should pay was directly at issue, the costs of the project were paid from the sales price of revenue bonds and the statutory provisions ²⁷⁶ are said to be specific and compelling in protecting property-rights.

The law under which the authority was proceeding said it should acquire by purchase or condemnation property necessary or convenient for its purposes, including real property of public utility corporations. The term “real property” was defined as including “* * * easements * * * uses * * * licenses * * * and also claims for damage to real estate.” The Court noted that if the common law rule that public utility corporations are bound to relocate their facilities whenever public interest requires, is not to apply, “* * * the distinction must lie in the nature of the project, the character of the authority, or the intent of the Legislature as shown by the enabling statute.” The New York rule is that if the project is proprietary and not governmental the utility must be compensated for its cost of removal. 1 The Appellate Division had held that the Tunnel Authority was acting in a proprietary capacity but the Court of Appeals disagreed and, it would seem, decided the case largely on this point. To the contention that the legislative intent was otherwise, the Court gave the short answer that the contention had no merit, citing, as did the trial court in the case at bar, New Jersey Bell Telephone Co. v. Delaware River Joint Commission (N. J.), 15 A. 2d 221 , supra, and similar cases in which it had been held that the authorization to purchase or condemn property did not require its purchase or the payment of compensation for consequential damages. We do not find the case persuasive, and even in New [York its force may have been greatly weakened by In re Gillen Place, Borough of Brooklyn, City of New York (N. Y.), 106 N. E. 2d 897 , in which Judge Fuld, who wrote the opinion in the Tunnel case, dissented vigorously.

In arguing that no legislative intent to change the common law rule as to public utilities can be found in Sec. 120, the Commission relies strongly on Chap. 437 of the Acts of 1955, providing for the construction of the Northeastern Expressway as a revenue project, now found in Code, 1956 Supp., ²⁷⁷ Art. 89B, Secs. 126A to 126V. Sec. 126-0 contains a paragraph identical to the critical one in Sec. 120. Sec. 126E says, inter alia, that whenever the Commission requires the facilities of a public utility to be relocated or