Mayor of Baltimore v. Baltimore Gas & Electric Co.

Brune, C. J., delivered the opinion of the Court. The City of Baltimore (the City) appeals from a final order, a declaratory and monetary judgment, in favor of Baltimore Gas & Electric Company (the Company) entered by one of the law courts of Baltimore in a proceeding instituted by the Company. The ultimate question is whether or not the City is obligated to pay compensation to the Company for the Company’s costs of removal, relocation, reconstruction or abandonment (as the case may be) of its public utility facilities located in public streets or highways comprised within a redevelopment area, which were incurred by reason of the City’s redevelopment of the area and the consequent closing of some of the streets and alleys therein. (There is no question as to the amount payable, if the City is liable at all.) The area is the same area which was involved in Herzinger v. Baltimore, 203 Md. 49 , 96 A. 2d 3 , 98 A. 2d 87 .

The question now presented is similar to that involved in Baltimore Gas & Electric Co. v. State Roads Commission (referred to below as the Harbor Tunnel case), 214 Md. 266 , 134 A. 2d 312 , which the trial court held to be controlling in the instant case. In the Harbor Tunnel case this Court stated at the outset ( 214 Md. at 270 ) that “[ujnless 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 Company contends that, under the constitutional and legislative provisions here involved, there are directions that its removal and like costs shall be paid. It also contends that the rule is applicable only in cases involving what it calls “public projects for normal highway uses (e.g., sewer pipes, ⁹⁷ storm drains, etc.) or improvements (e.gstreet widening, regrading, etc.)” and does not apply where the City is engaged in a proprietary function, as the Company asserts that it is in the instant case. The trial court sustained the Company’s first contention and found it unnecessary to pass on the second.

Section 1 of Article XI-B of the State Constitution provides as follows: “The General Assembly of Maryland, by public local law, may authorize and empower the Mayor and City Council of Baltimore: “(a) To acquire, within the boundary lines of Baltimore City, land and property of every kind, and any right, interest, franchise, easement or privilege therein, by purchase, lease, gift, condemnation or any other legal means, for development or redevelopment, including, but not limited to, the comprehensive renovation or rehabilitation thereof; and “(b) To sell, lease, convey, transfer or otherwise dispose of any of said land or property, regardless of whether or not it has been developed, redeveloped, altered or improved and * * * [however] acquired, to any private, public or quasi public corporation, * * * person or other legal entity.” 1 Section 2 of Article XI-B provides in part as follows: ⁹⁸ “The General Assembly of Maryland may grant to the Mayor and City Council of Baltimore any and all additional power and authority necessary or proper to carry into full force and effect any and all of the specific powers which the General Assembly is authorized to grant to the Mayor and City Council of Baltimore pursuant to this Article and to fully accomplish any and all of the purposes and objects contemplated by the provisions of this Article, provided such additional power or authority is not inconsistent with the terms and provisions of this Article or with any other provision or provisions of the Constitution of Maryland.” This Section also authorizes the General Assembly to impose limitations or restrictions upon the exercise of any powers granted under Article XI-B. In accordance with Article XI-B in its present form, 2 the General Assembly, by Chapter 217 of the Acts of 1949, granted redevelopment powers to the City by adding Paragraph 14A to the enumerated powers of the City stated in Section 6 of its Charter. The first sub-paragraph, (a), of Par. 14A granted to the City power “To acquire, within the boundary lines of Baltimore City, land and property of every kind, and any right, interest, franchise, easement or privilege therein, including land or property and any right or interest therein already devoted to public use, by purchase, lease, gift, condemnation or any other legal means, for development or redevelopment, including but not limited to, the comprehensive renovation or rehabilitation thereof;” subject to a proviso not here material. (Italics supplied.) The language quoted is identical with that of Sec. 1 (a) of Article XI-B, supra, except for the addition of the italicized clause. The second sub-paragraph, (b), of Par. 14A of the City Charter affirmatively and expressly granted power to the ⁹⁹ City “[t]o develop or redevelop, including but not limited to, the comprehensive renovation or rehabilitation of, any and all land or property acquired by any of the methods herein-before mentioned”.

The third sub-paragraph, (c), restates and amplifies the provisions of paragraph (b) of Sec. 1 of Article XI-B, supra, and adds a clause that any leases entered into shall be deemed to be exclusively for business or commercial purposes, and that unless otherwise specifically agreed, no lessee or tenant shall have the right to redeem the rent reserved. None of the other sub-paragraphs of Section 14A seem material to the present controversy, except (g), which authorized the City to create a suitable board, commission, department, bureau or other agency and to vest in it jurisdiction and authority to exercise powers granted under Par. 14A. By Ordinance No. 718, approved June 2, 1949, such powers were vested in the Baltimore Redevelopment Commission. In 1956 its powers and duties were transferred by ordinance to the Baltimore Urban Renewal and Housing Agency.

Ordinance No. 718, above referred to, provided that the Baltimore Redevelopment Commission should “exercise on behalf of the Mayor and City Council the powers contained in Paragraph 14A, Section 6 of the Baltimore City Charter (1946 Edition), as added by Chapter 217 [of the Acts of 1949] * * *, together with such other powers and duties as may be legally delegated to it by the Mayor and City Council subject, however, to the limitations contained herein.” It further provided, in part, that, subject to the approval of the Board of Estimates, the Commission might expend funds available to it for “the acquisition, by purchase, lease, gift, condemnation, or any other legal means, of land or property and any right, interest, franchise, easement or privilege therein, including land or property and any right or interest therein already devoted to public use, in the City of Baltimore, for development or redevelopment, including, but not limited to, the comprehensive renovation or rehabilitation thereof and for the payment of any and all costs and expenses incurred in connection with, or incidental to, the acquisition of said land or property, and for the demolition, removal, relocation, ¹⁰⁰ renovation or alteration of land, buildings, streets, highways, alleys, utilities or services, and other structures or improvements, and for the construction, reconstruction, installation, relocation or repair of streets, highways, alleys, utilities or' services, in connection with the development or redevelopment of land or property, including the comprehensive renovation or rehabilitation thereof, as aforesaid; * * (Italics supplied). This portion of Ordinance No. 718, prior to the italics, is taken almost verbatim from Paragraph 14A (a) of Sec. 6 of the Baltimore City Charter, supra. The italicized portion originated in the Ordinance. We have no doubt that the italicized language in the section just quoted is broad enough to warrant the payments which the Company seeks by way of reimbursement for the ■cost of removing, relocating or reconstructing some of its utility facilities as a result of the closing of some streets and alleys in the redevelopment area or for the depreciated value ■of some utility facilities abandoned for the same reason.

The City contends that the word “utilities” does not refer to the physical properties or facilities of a utility company used for the purpose of furnishing gas or electric services to customers. We are quite unable to accept this argument. The word ■“utilities” obviously could not refer to the corporate entities which furnish utility services; it is not their removal, relocation or reconstruction which the Ordinance contemplates as a part of a redevelopment project. The term is used in its popular significance of utility facilities—a meaning which is made all the clearer by its being coupled with the word “services”.

We come then to the heart of the case—do the controlling constitutional and statutory provisions permit the City to enact an Ordinance providing for the payment of the costs of removal, relocation, and the like, of utility facilities as part of a redevelopment project? The validity of these provisions ■of the Ordinance must, of course, rest upon their being within the powers granted to the City, since municipal corporations have only the powers conferred upon them by the Constitution or by the Legislature. City of Baltimore v. Canton ¹⁰¹ Co., 186 Md. 618, 631 , 47 A. 2d 775 ; Mayor and Council of Mt. Airy v. Sappington, 195 Md. 259, 263 , 73 A. 2d 449 .

Much of the argument in this case has been directed to whether or not the language of Article XI-B, Sec. 1 (a) of the Constitution and of Paragraph 14A (a) of Sec. 6 of the City Charter, enacted by Ch. 217 of the Acts of 1949, relating to the acquisition of land and property, or franchises, easements, or other interests therein, is broad enough to authorize the provisions of the Ordinance which empower the Commission (subject to the approval of the Board of Estimates) to make payment of the costs of demolition, removal, relocation or reconstruction of streets, highways, alleys, utilities or services in connection with the redevelopment of land. Article