Mayor of Baltimore v. Chesapeake Marine Railway Co.

Hammond, J., delivered the opinion of the Court. The Mayor and City Council of Baltimore in 1957 filed an action on the case against the Chesapeake Marine Railway Company (which before trial in 1963 had been dissolved and had its assets distributed to its four owners who were substituted as defendants) for the obstruction of a way in Baltimore and for an injunction against the maintenance of a fence across the entrance of the way and the use thereof for private purposes on the claim that it owned an easement in the way for the public benefit and, therefore, the way was a public street. The case was tried, after removal, in the Circuit Court for Baltimore County on the issues of whether there had been an effective dedication and, if so, whether the City was estopped to claim present ownership of an easement in the street. In 1782 various owners of land in the area abutting on and adjacent to what is now Key Highway, running along the south inner habor basin of Baltimore, petitioned the Maryland Legislature to annex their holdings to the town of Baltimore.

The Legislature responded by passing Ch. VIII of the Laws of 1782 (session beginning November 4, 1782, and ending January 15, 1783). The act set forth the names of the petitioners, and of their holdings, including Christopher Hughes (who was the owner of a tract called “Gist’s Inspection” contiguous to Baltimore-town), and said that the various tracts were “well calculated for the purposes of commerce and navigation” and that it would be for the benefit and advantage of the town and its trade “in case the said tracts * * * were laid out into convenient streets, lanes and alleys” and authorized the commissioners of the town to cause the tracts by September the first next to be surveyed and laid out “into lots, streets, lanes and alleys” at the owners’ cost. Section III of the act directed the ⁵⁶⁴ commissioners then to cause a “plot” of the lots, streets, lanes and alleys to be prepared and said that “said plot shall be recorded amongst the records of said town, as soon as conveniently may be thereafter.” It then provided that said streets, lanes and alleys so laid out and plotted “shall be highways, and be so deemed and taken to all intents and purposes whatsoever” as part of Baltimore-town.

Section IV of the act directed the commissioners to “cause their proceedings to be recorded amongst the records of said town, there to remain as evidence of the boundaries, situation and location of said lots, and of the streets, lanes and alleys aforesaid.” 1 The commissioners of Baltimore-town followed the directions of the Act of 1782 and, after a survey, a plat was prepared which showed a number of streets, including Leonard Street (which thereafter became Covington Street) which ran north across what was then Hughes Street (later and now Key Highway) to the edge of the water of the harbor. The plat contained this legend over the hands and seals of a majority of the commissioners of Baltimore-town. “The platt hereto annexed examined approved and passed by us the subscribers Commissioners of Baltimore Town pursuant to the Act of Assembly in that case provided [the Act of 1782].” The plat so signed and sealed was recorded among the records of Baltimore-town and long has reposed in the Bureau of Archives in the City Hall in Baltimore, to be found in Atlas 1 as Plat 11. We think it clear that the Legislature’s directions as to how Baltimore was to accept the offers of dedication of the individual owners transmitted by the Act of 1782 were complied with and that the offer was accepted and Leonard Street (hereafter to be called Covington Street) became a public street. In Cushwa v. Williamsport, 117 Md. 306, 315 , the Court said: ⁵⁶⁵ “It would seem that when the legislature had previously authorized a plat to be made for a town, and with that plat on record had incorporated the town, there would be still stronger ground for such contention [an acceptance of an offer of dedication], and in the absence of some positive act on the part of the municipality declining to accept the streets, alleys and public square laid out on the plat and dedicated to the public (if indeed it could do so without the consent of the legislature), it might well be presumed that it had accepted them, without any further facts being shown.” Here the express acceptance by the town in the manner directed by the Legislature is a matter of record and makes solid the presumption referred to in Cushwa .

There is nothing to indicate any declination by the City of the streets shown on the plat. We turn to consideration of the matter of estoppel. The record offers no direct showing of what occurred on and in relation to Covington Street from 1783 when it became a public street until about 1900. The title records reveal that in 1825, following the death in 1824 of Christopher Hughes, who had continued to own the bed of Covington Street, subject to the easement for public use as a street, and the land on both sides of the street, there was a partition proceedings in the High Court of Chancery by which Hughes’ real property was divided among his children.

One child was given a lot on the east side of Covington Street — one hundred feet on Hughes Street with a depth northerly binding on Covington Street of two hundred twenty-eight feet — and another child received a lot on the west side of Covington Street — with sixty-four feet frontage on Hughes Street and a depth of two hundred sixty-five feet binding on Covington Street. Title to the bed of the street remained in the six children of Christopher Hughes as tenants in common and the street thus was recognized as a street in the judicial proceedings. 2 Thereafter all conveyances of the lots ⁵⁶⁶ on the east and west sides of Covington Street followed the partition proceeding description and called for them to bind on Covington Street until 1955, when the appellees caused to be prepared a self-serving straw deed which claimed title to the bed of the street. During the nineteenth century various plats and maps showed Covington Street as extending north to the water’s edge. These included the Warner and Hanna Map of 1801, the Samuel Green Survey of 1807, and Sanhorn’s Atlas of 1887 (this also showed a pipe under the street).

McCreary’s Street Index, described as an authoritative index covering the opening, closing, widening and naming of streets from 1732 to 1900 and which was used by the Bureau of Surveys in renaming streets in 1927, showed Covington Street as continuing north to the water and gave as one of its authorities a reference to Atlas 1, Plat 11, where the 1783 Plat was recorded in the Bureau of Archives of Baltimore. City Directories, up to 1900, described Covington Street as going to the water’s edge. Newspapers referred to the shipyard at the foot of Covington Street. In 1911 the ordinance (No. 682) for the condemnation of a right of way for Key Highway recognized the part of Covington Street in dispute.

In 1914 when one of the Reeders sold the property on the east side of the part of Covington Street now in dispute, the grantor and her attorney wanted to incorporate a statement or agreement that Covington Street was a private street and was not intended to be dedicated by the deed, and the City would not agree or accept a deed so stating. When the City leased a pier adjoining Covington Street to ⁵⁶⁷ a man in the junk business named Jording (by lease which ran from 1920 to 1934), the calls recognized Covington Street as a public highway. The street was recognized as such in 1938 by a tax assessment plat of the City and in 1941 by a storm drain plat. The property disposition records of the Commission on Efficiency and Economy from 1927 to 1955 showed Covington Street as extending to the harbor.

The testimony of C. Howard Reeder was that property on both sides of Covington Street had been owned by his grandfather and his father since the early nineteenth century. The street was never paved or curbed (although when Key Highway was built turn-in curbs at its intersection with Covington Street were installed). Mr. Reeder’s personal knowledge of the street began in 1903. It was used by his family’s marine railway business (which later became the Chesapeake Marine Railway Company) for the storage of lumber and the construction of barges and one tugboat.

Mr. Reeder said that it was his understanding that the City had never accepted the offer of dedication of the street by Christopher Hughes but that his family had never claimed legal title to the street until 1955. A Mr. Ruber, who worked for the marine railway company from 1909 to 1926, testified that six or seven barges had been built in the part of the street near the water in that period. Mr. Reeder’s father raised a bulkhead at the water line two feet and filled in land to that extent. The evidence of use of Covington Street in the twentieth century by others than the Reeders was that schooners from Maine unloaded ice there, which was transported over the street to the ice company to which it was consigned (The Main Rake Ice Company, later the Knickerbocker Ice Company, the address of which in the City Directories of the period was Hughes & Covington Streets), and children visited the waterfront, using the street, as did adult spectators who would walk down the street to view the harbor.

Jording caused heavy junk to be hauled over the street to his yard. A small ferry, which took passengers to the other side of the harbor, operated from a nearby dock and substantial numbers of passengers regularly walked down the street to get to the ferry. ⁵⁶⁸ City records, made in the ordinary course of business, show that for some thirty years prior to 1952 (beginning in 1921) Chesapeake had paid the City a monthly rental of $25.00 for, according to the notation on the City record card, “rental of City Property” (which was described on the card as the bulkhead at the foot of Covington Street). The appellees claim that the rent was for use of the pier which the City had leased to Jording in 1920 (the year before the rental began) for fourteen years, and the trial court so found. The pier was destroyed by a storm in 1933.

It is difficult to accept the finding below with its necessary implication that the City leased to Chesapeake and it accepted a pier already leased to another, and that Chesapeake was so inadvertent, as it claims, as to have continued to pay $25.00 a month from 1933 tO' 1952 for a nonexistent pier. Further doubt is cast on the appellees’ claim that the monthly rental was for the neighboring pier by testimony that in 1941, about the time of that year when the City had determined, according to its records, that it was necessary that a storm drain “be rebuilt in Key Highway and Covington Street,” Mr. Harry Gilbert, a well known real estate owner, dealer and appraiser and a lawyer, had approached the City on behalf of Chesapeake in an effort to have Covington Street closed and transferred to Chesapeake. The appellees claim that Mr. Gilbert’s agency was not established because Mr. Craig, a substituted defendant below and an appellee here, who was an officer of Chesapeake, said that he thought Gilbert had never represented Chesapeake because his father, who was then its president, would have told him if he had. He said also, however, that his father and Gilbert were intimate friends who regularly attended the same small church and saw each other frequently.

The appellees themselves adduced testimony from one Simmons (who was in 1941 and at the time of the trial on the staff of the Director of Public Works of Baltimore assigned to the handling of special legal and engineering problems in order to make recommendations to the director) that he was a member of the Bar, that he knew Gilbert to be a member of the Bar, and that Gilbert came to talk to him about Covington Street in 1941 and said he was representing the Chesapeake Marine Railway Com ⁵⁶⁹ pany in his capacity as attorney and his client wished to have Covington Street closed and transferred to it. Thereafter, Mr. Gilbert wrote a letter on April 4, 1941, on his stationery as attorney at law to the City Engineer, saying that Chesapeake “would like to purchase the bed of Covington Street which lies between the Key Highway and the water of the Patapsco River.” The letter continued that Chesapeake owned the adjoining property to the west “and for a number of years past has been renting from the City the bed of this street which has never been either graded or paved.” Mr. Simmons testified that upon receipt of Gilbert’s letter his department, as was the custom, checked to see if there were any utilities in the bed of the street and then, as the municipal law directs, submitted the proposal to the Commission on City Plan for approval or disapproval. The Commission wrote the Chief Engineer that the proposal for closing Covington Street had been considered at a regular meeting of the Commission and that “the Commission on City Plan disapproves the proposal to close this portion of Covington Street, or any part thereof, from the north building line of Key Highway to the pierhead line of the Harbor, because it is the opinion of the Commission that this street bed is essential to the City for municipal purposes.” The Chief Engineer forwarded a copy of this letter to Mr. Gilbert with the statement that nothing further could be done to accomplish Gilbert’s desires in the matter. Several months later the City began to install a 24-inch concrete drain pipe in the bed of Covington Street to the water’s edge, digging a deep trench in the process.

The project took eight months to complete. Chesapeake made no protest whatsoever and no claim that the City did not have full right to install the drain. Quiet prevailed thereafter for some ten years. Then Chesapeake’s counsel, Mr. Walter Mylander, who represents the appellees on this appeal, advised it to discontinue the $25.00 a month rental and it did so.

Mr. Mylander conferred with Mr. Eloyd McAllister, a most competent, experienced and reputable lawyer who was the Assistant City Solicitor in charge of real estate matters in the City Solicitor’s office. Mr. McAllister sent ⁵⁷⁰ one of his eight assistants to investigate the matter and, on the basis of what he later termed a “skimpy” and “not extensive” investigation, concluded, in effect, in a letter to the Deputy Comptroller dated December 2, 1952 (with a copy to Mr. My-lander), that there had been an offer of dedication to public use but that “the physical use of the land within the street is in direct conflict of any intention to dedicate” and the street was private property. This conclusion, according to the letter, was largely the result of the investigator’s interview with Mr. C. Howard Reeder. In 1955 Mr. Mylander pressed the City for abatement of the monthly rental of $25.00, solicited the placing of the street on the tax rolls and the payment of three years back taxes (taxes were assessed for 1956 on the strength of the asserted record claim of title), put on record a straw deed which incorporated the letter of Mr. McAllister and enlarged the description of appellees’ property to include Covington Street, and Chesapeake built a fence across the entrance to the street and built a wooden pier to replace its dilapidated, inadequate and dangerous floating dock at a cost of $12,000.

Two-thirds of the width of the pier was opposite the foot of Covington Street and one-third opposite the foot of appellees’ property on the west of Covington Street. Bethlehem Steel Company had purchased the land east of Covington Street from the City by a deed of September 8, 1954, in which the City reserved all title to the bed of Covington Street. When Chesapeake put up the fence, Bethlehem protested to the City and demanded that Chesapeake be required to remove the fence and its material and equipment from the street and that the City take all necessary steps to establish the area as a public street. After a thorough investigation and mature consideration, Mr. McAllister became convinced that his conclusion of 1952 that Covington Street was private property had been erroneous.

He wrote the Deputy Comptroller on July 27, 1956, in reference to his former letter of December 2, 1952, saying in part: “The examination made by this office at that time on the status of the street was not very extensive, and ⁵⁷¹ recently a more thorough investigation has been made in respect to the street status. Based upon this, it is now my opinion that the street is a public highway under the jurisdiction of the City of Baltimore. Furthermore, the City has a utility in the bed of the street which was installed by it several years ago within the 20-year limitation. There are other factors which have been discovered that will, in my judgment, firmly establish the fact that the street is public. “I might add that the City is now in the course of preparing the necessary Court papers to have the Court confirm the City’s position in respect to the status of the street.” In response to a question from the Bench as to what facts were before him in 1956 that were not in 1952, Mr. McAllister said that he had not had a complete record to consider in 1952 and then did not know of the Act of 1782, the Map (the plat) made by the commissioners under the authority of the Act of 1782, the details of the Hughes partition in 1825, and the fact of the installation of the storm drains.

Suit was filed by the City ten months after the second Mc-Allister letter and came to trial six years later. Mr. McAllister said the delay was solely due to the frequent changes in personnel in the City Solicitor’s office which resulted in only the most pressing and the “squeaking wheels” litigation being disposed of first. In their brief and in oral argument counsel for the appellees agreed with counsel for the City that an essential basis of an estoppel against the City was a finding of an actual and notorious abandonment of the street which had continued for at least the period of statutory prescription. The appellees argued that there was evidence of such abandonment and the City contended the evidence was clearly to the contrary.

At the re-argument of the case the appellees urged that without regard to abandonment estoppel against the City could and should be predicated on the 1952 letter of Mr. McAllister, followed by the building of the fence and of the pier, each having been built after a permit therefor had been issued by the City. ⁵⁷² We think that the law that governs the case is that which both sides originally conceived to be the law. It is firmly established that land held by a municipality in its governmental capacity (as opposed to a proprietary or business capacity) and therefore held in trust for the public cannot be disposed of without special statutory authority and may not be acquired privately by adverse possession, which does not run against the sovereign. Messersmith v. Riverdale, 223 Md. 323, 327-328 ; Montgomery Co. v. Met. District, 202 Md. 293, 303 ; Town Commissioners of Centreville v. Queen Anne’s County, 199 Md. 652, 656 .

In exceptional cases, where the Court found that right and justice demanded it, there has been recognition in Maryland that private ownership has been acquired of property held by a municipality in a governmental capacity (and so in trust for the public) where there has been actual and notorious abandonment of the property by the municipality for at least as long as the legal period of prescription which has induced action by the person claiming ownership, the results of which it would be unjust and inequitable to disturb. In Baldwin v. Trimble, 85 Md. 396 , the Court found that the owner in fee of the bed of part of Lanvale Street in Baltimore, subject to an easement of public use and travel owned by the City of Baltimore, had acquired the street free of the easement and had a merchantable title thereto. Lanvale Street had never been accepted and the Court found in fact that any claim to it had been abandoned by the City. For twenty-five years it had actually been largely closed physically by buildings constructed across it for almost all of its length and the small remaining part had been rendered impassable by the dumping of sand and earth thereon by the owers of the fee.

The Court held that in Maryland encroachment on a highway is a public nuisance “which can never grow by prescription into a private right” and then adopted the views of Judge Dillon set forth in 2 Dillon, Mun. Corp. (2nd Ed.), Sec. 433, that in cases of “actual and notorious abandonment of the highway by the public” justice may require that an equitable estoppel ought to be asserted against the public in favor of individuals. The Court further said (p. 403): ⁵⁷³ “In that event, such cases [of abandonment], as observed by Judge Dillon, ‘will form a law unto themselves,’ and will ‘not fall within the legal operation of limitation enactments. * * * ‘There is no danger,’ he continues, ‘in recognizing the principle of an estoppel in pais as applicable to such cases, as this leaves the Court to decide the question, not by the mere lapse of time, but by all the circumstances of the case, to hold the public estopped or not, as right and justice may require.’ ” The Court concluded that the owner of the fee, subject to the easement, had a full and merchantable title because the easement had been obviously and notoriously abandoned and the street had been physically closed with the acquiescence of the City for so long a time that innocent parties had been led to assume it was no longer a highway and had made permanent improvements on it. The theory of law advocated by Judge Dillon and adopted by the Court in the Baldwin case has been severely criticized and many courts have refused to follow it. 11 McQuillin, Mun.

Corp., Sec. 30.181, says: “In many jurisdictions, including some of those where the rule prevails that title to streets cannot be acquired by third persons by adverse possession, such rule is largely nullified by holding that the doctrine of equitable estoppel may preclude the right of a municipality to remove an obstruction or assert title to the street. This rule of equitable estoppel is the well-settled law in Iowa, and is recognized and applied in many other jurisdictions. The rule is