Mayor of Baltimore v. United Railways & Electric Co.

Boyd, C. J., delivered the opinion of the Court. This is an action to recover from the appellee what is known as the “Park Tax” on receipts derived from its passenger business on portions of its railway, within the Annex of Baltimore City. As shown by three prayers offered by the appellant, it contends: ist. That it is entitled to recover an amount equal to a tax of nine per cent upon the gross receipts of the defendant, derived from passenger traffic upon all its lines within the present city limits: 2nd.

That it is at least entitled to recover that amount of the gross receipts so derived from all of the lines of the defendant, operated upon public streets, within the present city limits; and, 3rd. That if the other contentions be not sustained, it is entitled to that portion of the gross receipts, so derived from all the lines of the defendant, formerly owned by and forming ²⁵² part the Baltimore City Passenger Railway Company, within the present city limits. The case was tried before the Court, upon an agreed statement of facts, which admitted that for the quarter involved in the suit — April 1st, to June 30th, 1906 — the company paid a park tax amounting to $104,447.01 — being nine per cent of the total receipts from city tracks, and from those in the Annex not claimed to be exempt, which amounted to $1,160,522.42. The total passenger receipts for the quarter, from lines other than those in the county, were $1,383,228.07 — those from the Annex on which exemption is .claimed being $222,705.65.

Omitting fractions, there are twenty-two miles of double track in the Annex, which are claimed to be exempt from the park tax, because fourteen of them are upon private rights of ways, two were constructed under private grants upon what subsequently became public streets of Baltimore County, and about six miles were constructed under grants from the Legislature and the County Commissioners of Baltimore County, before annexation. The appellee does not deny its liability for this tax on the receipts derived from tracks authorized by grants from the city, since the annexation (in 1888), but it is stated in its brief that on such the tax has been regularly paid. The Court below rejected the three prayers offered by the city, and granted one offered by the defendant; “That the plaintiff has offered no evidence legally sufficient under the pleadings in this case to show that the right to construct and operate over the tracks, in respect of which the plaintiff claims park tax, was derived from the plaintiff; and the verdict should be for the defendant.” A verdict was accordingly rendered for the defendant, and from the judgment entered thereon this appeal was taken. 1. The history of this tax is interesting, and although it has for the most part heretofore been given by us in other cases, some of it must again be referred to, in order that we may keep before us the ordinances of the city and statutes applicable to the questions involved.

The figures stated above, showing the receipts for one quarter, suggest the importance ²⁵³ of the case to the respective parties, and will justify a reference to anything that may throw light on the question, although there be some repetition of facts, which may be found in previous decisions. In 1859 certain individuals applied for the privilege of constructing a horse railway in Baltimore City, and an ordinance was passed providing for a four-cent fare. Mayor Swann vetoed the ordinance and suggested that the fare be raised to five cents, and that the additional cent be used for the establishment and improvement of the city boundary avenue and for a park or parks. An ordinance was then passed requiring the company, as it was called, to pay quarterly “one-fifth of the gross receipts accruing from the passenger travel upon said roads located within the city limits under this ordinance, or any extension of said limits which may be determined upon hereafter,” &c.

In 1862 the General Assembly, at the instance of those individuals, incorporated the Baltimore City Passenger Railway Company making it subject to the terms of the ordinance. In 1881 an ordinance granting the Central Railway Company the right to construct, operate and maintain its railway contained a provision requiring the payment, for the use of the park fund, of “twelve per centum of the gross receipts accruing from the passenger travel-upon said railway within the city limits.” The agreed statement says that: “The provision of the ordinance of the Central Railway Company given above, is typical of the provisions of the ordinances by which rights were granted in the old city limits to the various companies on whose tracks in the Annex, park tax was not paid by the defendant. ” Then by the Act of 1882, ch. 229, it was provided that in lieu of the twelve per cent tax: “the said several passenger horse railway companies shall pay to the Mayor and City Council of Baltimore a tax upon their gross receipts of nine per cent, to be paid at the same time and in the same manner as the tax of twelve per cent is now paid by said companies. ” The Act of 1888, ch. 98 (Annexation Act), provided that all streets, avenues or alleys in the Annex, which shall have been legally condemned as streets under the provi ²⁵⁴ sions of statutes relating to streets in Baltimore County, “shall be held to be validly constituted streets of Baltimore City in all respects as if the same had been legally condemned as such by the Mayor and City Council of Baltimore.” In ch. 628 of the Acts of 1890, there was a similar provision, in reference to streets, etc., in Baltimore County, acquired by deed or dedication, but that seems to have been omitted from the charter, which only applied to such streets, etc., as had been legally condemned by Baltimore County. Then the Act of 1894, ch. 550, was passed which provided for an inspection of the books of the railway companies by the Park Commission, or its agents, and that “On default of any of the street railway companies operating street railway lines within the present city limits, in the payment of the park tax of nine per centmn of the gross receipts for all street railway lines within the present city limits,” for the time therein named a penalty of thirty per cent should be imposed. The Acts of 1882 and 1894 were embodied in the City Charter of 1898, being sections 797 to 800 inclusive, and do not .materially change the language of those statutes.

In Balto. Union Pass. Ry. Co. v. Balto., 71 Md. 405 , the appellant had three railway lines, two of which were wholly within the city limits, but a half mile of the third extended into the county.

The main question involved in that case was what proportion of the gross receipts of that company should be deducted before imposing the park tax, on account of the half mile of track. In passing on the question, this Court said; “Inasmuch as one of these lines extends beyond the city and into Baltimore County, the gross receipts from or on account of that portion of the track which is without the city limits ought not to pay any part of the nine per centum tax which has been imposed for the privilege accorded by the city to the appellant of using its streets for railway purposes.” In what is known as The Park Tax case, 84 Md. 1 , the city undertook to collect this tax from the company, on the part of its railway 'which ran for about two miles through the territory which had been annexed to the city. It had pur ²⁵⁵ chased a right of way for its tracks from the Baltimore and Frederick Turnpike road, upon whose roadbed its tracks were laid, and no franchise or concession had been granted it by the city. This Court, through Chief Judge McSherry, said that since the decision in 71 Md. there could be no question that the tax thus imposed “was laid and collected in consideration of the privilege or franchise granted by the city to the several street railway companies to lay their tracks and to run their cars upon the public thoroughfares of the city,” and quoted from the prior case what we have italicized above.

Again he said, “The history of the legislation relating to this subject would, apart altogether from the explicit language used in 71 Md., supra, be sufficient to demonstrate, we think, that the tax was a franchise tax exacted in exchange for the privilege accorded these several companies to lay their rails and run their cars upon city streets — streets subject to the control of the Mayor and City Council of Baltimore and subject to no other dominion whatever. This is emphasized by the ordinance which reduced the rate of the tax to twelve per cent, for it provided that the several railway companies named in it (and the appellee is not included) should be required to pay the City Register twelve per cent of their gross receipts ‘in lieu of the one-fifth as now required under their respective grants.’ Clearly this language indicates, if it does not ■expressly declare, that the tax was the equivalent for the grant; and consequently if there were no grant there was to be and in reality was, no tax.” The various ordinances and statutes applicable to this tax, including the Acts of 1882 and 1894, were relied on, and were ■urged upon the Court with great force and ability by the counsel who then represented the city, but it declined to adopt the position they contended for. It was said, “It would do violence to the words employed in the Act of 1894, ch. 550, relating to this subject, and would ignore the distinctive char•acter of the tax itself, if the term street railway were stretched ■so far from its natural and primary meaning as to force it to Include railways, that though operated like street railways, ²⁵⁶ are in fact not built upon and do not occupy streets at all.” In answer to the claim of the city, that as the Annexation Act had brought part of the tracks of the company within the new limits, therefore it became liable to pay the tax, it was said, “But the obvious answer, it seems to us, is that appellee’s road was not constructed upon a street of the city; is not now located on such a street; but was built upon and still occupies its own purchased right of way over which the city has not now and never has had control; and as to the occupancy of which the city could not confer and never undertook to confer on the appellee any right or privilege whatever.” We have thus quoted at length from that case, because in our opinion it is just as applicable to the fourteen miles of tracks constructed upon the rights of way of the appellee, as it was to the facts then before the Court. There can be no real distinction between the two cases, in so far as those fourteen miles are concerned.

Both were in the annex, the tracks of both were on their respective rights of way, and the ordinances and statutes relied on by the city now were relied on by it then. The first prayer of the plaintiff was therefore properly rejected, as it asked the Court to rule that it was entitled to recover the tax derived from passenger traffic upon all the lines of the defendant, within the present city limits, which including the fourteen miles constructed on the defendant’s private rights of way. 2. This brings us to the consideration of the appellant’s second prayer, which involves the lines of the defendant operated upon public streets, within the present city limits — including, as