Home Owners' Loan Corp. v. Mayor of Baltimore

Offutt, J., delivered the opinion of the Court. 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. Code, Ann. secs. 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 accruing 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 ⁶⁸⁰ 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, Mun. Corp. (5th Ed.) sec. 1317; McQuillen, 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, Mun.

Corp. sec. 1946; 43 C. J. 420; Wagner v. Rock Island, 146 Ill. 139 , 34 N. E. 545 ), and that is especially true where the service is supplied beyond the territorial limits of the municipality. Dillon, Mun. Corp. secs. 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 char ⁶⁸¹ ter, or by the constitution of the state in which it is located.

Dillon, Mun. Corp. sec. 1299; McQuillen, 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, (1938) sec. 6, subsecs. 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, Acts 1918, ch. 82, sec. 17; Acts 1908, ch. 214, sec. 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 Acts 1937, ch. 186, Acts 1924, ch. 539.

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, Public Utilities, secs. 222, 224; Dillon, Mun. Corp. sec. 1323; McQuillen, 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, Mun. Corp. sec. 1949; Dillon, 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, Mun. Corp. sec. 1822-1825; Title Guarantee & Trust Co. v. 457 Schenectady Avenue, 260 N. Y. 119 , 183 N. E. 198 ; 28 A. L. R. 486; Etheredge v. Norfolk, 148 Va. 795 ; 139 S. E. 508 ; 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 ⁶⁸² 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,” tljat 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 ; Parlett v. Dugan, 85 Md. 407, 409 , 37 A. 36 ; Dillon, 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 (Suppl. 1935) art. 81, sec. 69; Code, art. 81, sec. 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 ⁶⁸³ 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. 817 , 217 N. W. 94 ; 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 state. The courts of the City of Baltimore would obviously have no jurisdiction in such an action brought against a person residing in the state but beyond the city limits. Nor would the machinery provided for the enforcement of the payment of state and city taxes be applicable, whether the expression used be intended to apply to the collection of taxes in the city, or in one of the counties, or in the particular county in which the property served is located, since tne city officials charged with the collection of taxes would have no official authority beyond rue territorial limits of the city, and the county officials would be under no duty to act.

Certainly there is no intention implicit in that statute that rent for water service to property lying in Baltimore County