Havre De Grace Water Co. v. Mayor of Havre De Grace

Adkins, J., delivered the opinion of the Court. This is a suit for the specific performance of an alleged contract of sale and purchase, under section 14 of Ordinance Ko. 172 of the City of Havre de Grace, and chapter 176 of the Acts of 1922, between the Mayor and City Council of Havre de Grace and the Havre de Grace Water Company of Harford County, of the said company’s plant. Said section is as follows: “Sec. 14. The Mayor and City Council of Havre de Grace shall have the right at the expiration of the period of twenty years from the date of the passage of this ordinance, and at the expiration of any one of the successive periods of twenty years thereafter, to purchase from said water company its entire water works, plant, including real estate, wells, water rights, buildings, reservoirs, pipes, machinery, fixtures, as the same may then exist, for an amount of cash equal to its then actual value. “For the purpose of ascertaining and fixing said value, the following proceedings shall be had. “If the Mayor and City Council of Havre de Grace desire to exercise the option hereby given, it shall give written notice to said Water Company not more than one year, nor less than six months, prior to the expiration of any one of said periods of its intention so to do.

The city shall thereupon within twenty days from the service of said notice, appoint an appraiser and notify the water company of said appointment. In case the said Mayor and City Council shall fail to .■appoint said appraiser within said twenty days, the water company may in writing demand his appointment; and if the said appointment is not made within ten days after such written demand, such failure ²⁴⁴ shall he deemed a recall and cancellation of the notice of the exercise of said option, hut shall not affect the right to purchase' at the expiration of any of the succeeding periods of twenty years as herein provided for. The water company shall within twenty days after the receipt of said notice, appoint an appraiser and notify the Mayor and City Council of such appointment. The two appraisers shall within twenty days from the time of the appointment of the last appraiser appointed by or on behalf of said parties choose a third appraiser.

In ease the water company shall fail to appoint an appraiser within the time above limited, or in case the two appraisers shall fail to appoint the third within said time, then any person who may at that time be a judge of the Circuit Court for Harford County, or of the court that may have succeeded to its jurisdiction, shall appoint the appraiser on behalf of said water company, or appoint the third appraiser as may be required under the terms hereof. In case any appraiser so appointed shall die, resign or refuse to act, the party by whom he may have been appointed shall within twenty days after written demand by the other appoint his successor; if the appraiser so dying, resigning or refusing to act shall be the third appraiser appointed by said judge, or if the-party so entitled to make said appointment shall fail to make the same within the time herein limited therefor, the appointment shall be made by the judge aforesaid. The above provisions shall apply as to any person who may at any time succeed to the position of appraiser hereunder. “The three appraisers shall provide for their own procedure and shall fix and determine the said actual cash value based upon the earning capacity of the-property so to be sold; they shall make their award or decision in writing wdthin sixty days of the time of their appointment, and the award or decision of a majority of said appraisers upon the question of said value or upon any other question they are authorized to decide, shall be conclusive and binding on the said. ²⁴⁵ water company and the said Mayor and City Council of Havre de Grace. “The award of said appraisers or the valuation of said property so made by them shall be payable within sixty days after written notice to the said Mayor and City Council of such award or decision. And upon payment of said award the said Havre de Grace Water Company of Harford County shall by good and sufficient deed or other instrument transfer, assign and convey all of its said property so valued to the said Mayor and City Council of Havre de Grace, and upon snch payment or tender, the rights, privileges and franchises hereby granted shall cease and determine. “If any act required by this section to he done by either said city or said water company shall be enjoined by legal process, then the time for doing snch act or thing shall extend for a period after the dissolution of such injunction or removal of such prohibition equal to the time either party may have been deprived of by said injunction or prohibition.

In case the said Mayor and City Council shall fail to exercise said option at any one of said periods above mention jd for the purchase of said plant and property, ihen (he rights, privileges and franchises hereby granted to the said Water Company shall continue until the expiration of the succeeding period, and the arrival of the next succeeding time for the purchase of said property herein provided for until said option is actually exercised and said property purchased.” The relevant provisions of the charter, in force when this ordinance was passed, on June 16th, 1903, are contained in chapter 127 of the Acts of 1902, as follows: “152. The Mayor and City Council shall have power to pass all such ordinances directly or impliedly authorized by this sub-title, and not contrary to tbo Constitution and laws of this State as they may deem necessary for the good government of the city; * * * to protect and preserve the health of the citizens and the property, rights and privileges of the city; * * * for the preservation of peace and good order, secur ²⁴⁶ ing persons and property from violence, danger or destruction; * * * for the levy and collection of a tax thereon (all kinds of property) for the general purpose of the corporation, not exceeding in any one year eighty-five cents to every one hundred dollars of assessable property; * * * to purchase fire engines, establish, construct and maintain waterworks, or whatever appliances may be deemed best for extinguishing fires and protecting the property of the inhabitants from injury by fire, and to furnish and supply all pure water for the use of the inhabitants under such rules and regulations as they may by ordinance prescribe; * * * they shall have power to contract with individuals, companies or corporations for the introduction of gas, water or electricity into said city, and for the lighting of the streets and alleys thereof; they may erect or purchase any plant for the supplying of gas, water or electricity to the city and its inhabitants for public or private uses, and may operate the same. They shall have the power to construct or maintain or contract for the construction of sewers, or a general system of sewers for the city; provided, however, that before the said Mayor and City Council shall proceed to erect or purchase any plant for the supplying of gas, water or electricity to the city or its inhabitants and before authorizing the construction of any general system or systems of sewers they shall first submit .such proposition or propositions to the legally qualified voters of said city at a general or special election to be held after at least twenty days’ previous notice thereof. And if at said election a majority of said voters shall approve any such proposition or propositions, the said Mayor and City Council shall thereupon proceed to carry same into effect.

But if a majority of said voters shall disapprove of any such said proposition or propositions, then the said Mayor and City Council shall abandon the same. And no such proposition shall again be submitted to the public vote until at least six months have elapsed from the date of the election at which said proposition was dis ²⁴⁷ approved. Ho use shall be made of the streets of said city by any individuals or corporation for the purpose * * * of gas or water conduits or pipe lines without the consent of the Mayor and City Council, and subject to such franchise tax and regulations as they may by ordinance prescribe.” Prior to the passage of said ordinance, the company since1 the year 1883, had been supplying water to the city under Ordinance Ho. 41, which was repealed and re-enacted by Ordinance 172, the latter ordinance, however, providing that it was not passed “to repeal Ordinance Ho. 41 except for the purpose of amending and adding to the same and is not intended to impair the obligations of any of the subsisting contracts of the said Havre de Grace Water Company, with its creditors.” The new ordinance granted to the water company for a period of twenty years and “for the periods for which it may be renewed or1 continued in accordance with the terms hereof,” the franchise to reconstruct, maintain and operate, within the City of Havre de Grace, water works to supply the city and its inhabitants with water for public and private use; provided for the annual levy of a tax of five cents on each one hundred dollars of taxable property within the-city limits for the use of the company, the amount to be paid the company annually by the city not to be less than six hundred and fifty dollars; also provided for the enlargement of the company’s reservoir, the duplication of its pumping apparatus, boilers and connections, and the extension of its. mains, and many other details as h> the character of the plant and the service to be rendered. The terms of the ordinance were promptly accepted in writing by the company, -and, according to the agreed statement of facts, have been duly complied with.

In April, 1922, chapter 176 of the Acts of 1922 was. passed, to become effective June 1st, 1922, which added a new section to article 13, Code Public Local Laws, Harford County, as follows: ²⁴⁸ “Act of Geneeai Assembly, 1922, ch. 176, page 405. “Approved April 13, 1922. “In effect June 1, 1922. “Section 1. Hew section added to article 13, Code Public Local Laws, Harford County, Havre de Grace, to be section 340A, to. follow section 340. “Section 340A. The Mayor and City Council of Havre de Grace are hereby authorized and empowered to issue bonds on the credit of said city for the purchase of the plant, pipes, reservoir and other property of the Havre de Grace Water Company, provided that the provisions of Ordinance Ho. 172, approved June 16, 1903, as to' notice, appraisal, etc., be complied with. “Provided, that the notice to purchase shall be given to the said Havre de Grace Water Company on or before December 1st, 1922, and that the appraisal of the plant and property of said company be approved by the Mayor and City Council. “Provided, further, however, that before said bonds shall be issued and the plant and property of said company actually purchased, the question shall be submitted to the legal and qualified voters of said city at the regular city election in May, 1923. If a majority of the votes cast on said question be in favor of issuing said bonds, then the bonds shall be issued in the manner and under the terms and conditions as to form, maturity,. redemption, sinking funds, interest and other particulars as provided in section 309 of this article for the issue of bonds for the liquidation of the floating indebtedness of said city.” Within less than a year and more than six months prior to the expiration of the period of twenty years following the date of said ordinance, the city, by a resolution duly passed, having determined to exercise said option of purchase, caused the following letter to be written to the company: ²⁴⁹ “Havre de Grace, Md., Dee. 7, 1922. “Mr. George W. Albaugh, Treasurer, “Havre de Grace Water Company, ‘Westminster, Maryland. “Dear Mr. Albaugh: “At its regular meeting on the 4th inst., the Council, in regular session, requested that I notify you regarding the expiration of your franchise and agreement with the city in June next, stating that it is the desire of the Mayor and City Council that an appraisal as outlined in the agreement, be made, prior to that time, with a view of municipal purchase thereof. “Very truly yours, “Guo.

H. Ooboukn', Clerk.” Pursuant to which the respective parties named