Mayor of Baltimore v. United Railways & Electric Co.

Boyd, O. J., delivered the opinion of the. Court. This is an appeal from four orders- of the Baltmore City Court setting aside assessments on certain easements of the appellee on streets in the Annex to Baltimore City—being ⁴⁵ for the years 1911 and 1912 on York road and Thirty-first street; for the year 1913 on York road, Thirty-first and Seventh streets, and for the year 1914 on York road, Thirty-first street, Seventh street and Harford road. Appeals were taken by the company to the Baltimore City Court from assessments made by the Appeal Tax Court of Baltimore City in the four cases, which were by agreement consolidated.

At the hearing the railway company presented sixty and the City forty-three prayers, applying to the several assessments. The Court granted the company’s tenth prayer applying to the assessment for the year 1911, its tenth to the assessment for 1912, its' fourteenth to that of the year 1913 and its eighteenth to that of the year 1914, and rejected all of the others. The appellant (the City) states in its brief that there are three questions which are brought before this Court: (1) The constitutionality of Chapter 566 of the Acts of 1906; (2) Whether an assessment for purposes of taxation .can under existing laws, be apportioned during the term of the fiscal year; (3) The proper construction of Chapter 566 of the Act of 1906, if a valid exercise of legislative power. The company contended that, by virtue of the Act of 1906 and the decision of this Court in United Railways and Electric Co. v. Mayor and City Council of Baltimore, 111 Md. 264 , as soon as the Park Tax attaches there can be no1 tax on the easement.

We will first consider the question of the constitutionality of the Act of 1906. The grounds relied on by the City are: (a) Because it is a special law in favor of the United Railways and Electric Company, in reference to a subject for which provision has been made by the existing general la.w. (b) Because it violates Article 15 of the Declaration of Rights, in that it exempts the company from contributing its “proportion of public taxes,” according to its “actual worth in real and personal property.” As the Act of 1906 is quite long, we will not quote it in full in this opinion, but will request the reporter to publish it in his report of the case. In considering the constitution ⁴⁶ ality of that Act it is proper that we keep in mind the conditions existing at the time of its passage.

It had been decided in 1896 in the Park Tax Case, 84 Md. 1 , that the “gross receipt or park tax” could not be imposed on a suburban railway upon a turnpike road within the limits of the City, as extended under the Act of 1888, Chapter 98—being what is commonly spoken of as the Annex—so long’ as the company owned that road and it was not a public street. In Baltimore City v. United Rys. Co., 107 Md. 250 , decided in 1908, we held that the Railway Company was liable for the park tax upon its gross receipts from all its lines operated on public streets within the present City limits, including the roads that were formerly county roads, but was not liable to the tax upon its receipts from lines constructed on turnpikes and other rights of way acquired by private grant, which had not been made public streets. We pointed out that in the Park Tax Case in 84 Md., in exonerating the railway in that case, the decision was based on the fact that it was not using any street of the City.

So at least since 1896, when the case in 84 Md. was decided, a railway company was known not to be liable for the park tax upon its receipts from lines on turnpikes and other private rights of way, which had not become public streets. Then in United Rys. Co. v. Baltimore City, 111 Md. 264 , we held that no other tax upon the assessments or* franchises of the railway companies, or their right to occupy the streets in Baltimore City, could be assessed against them without express legislative authority, but that when a street railway company in said City is located in part on turnpike roads and private rights of way, upon the receipts from which such tax is not paid, the easements therein are liable to taxation. It was shown in the evidence in this record “that on January 1, 1906, there was not, and has never been since, any electric street railway company operating or owning tracks in the Annex of Baltimore City on any private rights of way or turnpikes other than the United Railways and Electric Company of Baltimore City.” ⁴⁷ Section 796 of Article 4 of Code of Public Local Laws (Charter 123 of 1898) provided that, “Each of the several passenger street -railway companies in the City of Baltimore shall charge five cents, and no more, for the conveyance of each passenger over twelve years of age, and three cents, and no more, for each child between the ages of four and twelve years, from any point on any line of its railway to any other point on such line within the City of Baltimore, with a charge of three cents, and no more, for transfers;” and Section 797 is, “The said several passenger street railway companies shall pay to the Mayor and City Council of Baltimore a tax upon their gross receipts of nine per cent., in quarterly instalments, on the first day of January, April, July and October, in each year.” Those sections are the same as those of the Act of 1882, Chapter 229, which became sections 768 and 769 of Article 4 of Code of 1888, except that in the latter the word “horse” was used instead of “street”-—reading “several passenger horse railway companies.” There is no significance in the change made by the new charter, as the latter was simply adapted to the new conditions, when horse railways were but little, if any, used, and adopted a term which covered all kinds of passenger street railway companies.

The Act of 1900, Chapter 313, however, is significant. ’ That Act in terms repealed and re-enacted section 796 of Article 4 and read as follows: “796. The United Railways and Electric Company of Baltimore, its successors and assigns, shall charg'e five cents-, and no more, as a fare for the conveyance of each passenger over twelve years of age, and three cents, and no more, for each child between the ages of four and twelve years, from any point on any of its lines to any other point on such lines within the City of Baltimore,” and then, after providing for free transfers, added, “provided, that nothing in this Act shall be construed to affect any of the interests of the Mayor and City Council of Baltimore in the said United Railways and Electric Company of Baltimore, or any of the railways consolidated under the corporate name.” ⁴⁸ One contention of the City, in reference to the Act of 1906, is that it is -unconstitutional because it limits the privileges, rights, etc., to the United Railways Company instead of making it applicable to all railway companies, and yet we have above a statute which undertook to repeal and re-enact the provisions of the City Charter in reference to the rates to be charged, which on its face only applied to that company and to its constituent companies, and that too was the Act which required free transfers, instead of- charging three cents as theretofore. It did not purport to be an amendment to the charter of the railway company, but to the City Charter, and after the amendment of section 796, section 797, imposing the Park Tax, referred to the United Railways Company “or any of the railways consolidated under the corporate name,” when it provided that, “The said several passenger street railway companies,” etc., as there were then no other passenger street railway companies mentioned in that connection. That was the provision in the Charter when the Act of 1906 was passed, and apparently the appellee was regarded by the Legislature, and presumably by the City, as at that time including all of the passenger railway companies then operating in the City.

Without following that up, we assume that some' provision was made as to the other two companies which the record shows now have some lines in the City, either in their charters or in some other Act or Acts, but however that may be, it cannot consistently be said that the Act of 1906 is invalid because it only names the United Railways Company, but that the Act of 1900, which also only names that company, is valid, especially as the provision for the Park Tax (section 797) is immediately connected with section 796, as shown above, and indeed those two sections were originally passed together in the Act of 1882. But, as we have seen, in point of fact no other railway company did operate or own tracks in the Annex in 1906, or has operated or owned any there since that time, and that is the only portion of the City covered by the Act of 1906. Manifestly the appellee constituted a class of itself, ⁴⁹ and similar conditions did not exist with any other company within thé territory to which this statute was applicable. In addition to that if any new company proposed to come into the Annex such provisions as those included in what aré now sections 273 and 274 of Article 23 of the Code of 1912 1 (sections 255 and 256 of Code of 1904) afforded the City ample protection, and it could have imposed conditions similar to those in the Act of 1906, if necessary or thought to be desirable.

We have then these conditions, which were intended to be covered by this Act. The United Railways Company was in fact the only company which owned or operated tracks in the Annex of Baltimore City on any private rights of way or turnpikes. Some, if not all, of them, had been acquired by its constituent companies, but of course the Act of 1906 applied to all of them.' That company was not in 1906 legally liable to pay any park tax on the roads in question—indeed the Act in terms only applied to roads for which “the said street railway company is not legally liable to the payment of the Park Tax hereinafter mentioned, or in any part or parts of said roads, or any of them.” The City proposed to acquire some parts of those roads in the Annex, and doubtless after it did so the railway company would still want to 'have its tracks on them to accommodate the public—-indeed it might have been assumed that the public would have demanded that the company still have its lines on at least some of those roads. The Act of 1904, Chapter 274, had authorized the City to issue stock (if an ordinance to that end be approved by the voters of the City), for the purpose of providing the cost and expenses of condemning, opening, grading, paving and curbing the streets, etc., in the Annex portion of the City.

It was doubtless the desire, as well as the plain duty, of the authorities to acquire the streets referred to in the Act of 1906 at as low figures as could justly be done. In order to do so some inducement had to be offered. The City had the right, under section 5 of Act of 1904, “to acquire by gift, ⁵⁰ purchase, lease, whatever the duration of the lease, or by other methods of acquisition, or by condemnation, any private property whatsoever, including streets, avenues, lanes and alleys, rights or interests, franchises, privileges, or easements that may be required,” etc. The Act of 1906, expressly referred to the Act of 1904. While if necessary the City could condemn, it could only do so on failure to agree with the owner, and it was of the utmost importance to the City to have special authority to deal with the railway company in a way different from what it could deal under its general charter provisions.

It was an exceptional—call it special if preferred—case that was being provided for. The railway company already had what it wanted in those rights of way in the Annex—it owned them and apparently had franchises or rights in perpetuity in some of them, as the Act indicates. The City could not have taken away the rights of the railway company in the turnpikes, streets or rights of way without paying just compensation for them. By agreement between the City and the railway company an assessment of over $35,000 per mile was imposed on the easements of the company in 1910—there being an assessment of $500,-000 on the fourteen miles of private fights of way, not subject to the Park Tax.

If simple justice was to be done the railway company, the City could not acquire the rights of that company without paying large sums of money for them, if they were to be acquired in the ordinary way, as provided by the Charter. The City wanted to acquire those rights in the road beds “for the sole purpose of securing for the public the unconditional use thereof as public highways,” to use the language of the Act of 1906. If then the City could acquire all it wanted, and thereby also get the right to eventually impose the Park Tax on the gross receipts of the company for such parts of its roads, without paying more than nominal compensation, why should it not be permitted to do so by a special Act? It could not make such an arrangement under the General Laws, as under them it would have been compelled to pay the value of the property and rights taken, ⁵¹ and could not have provided for franchises in perpetuity or have granted them without inviting others to bid for such franchises.

It was not a case of this appellee getting special advantages without paying for them, but it was the City that was profiting by the arrangement. When one of the appellee’s roads would be acquired by the City under the Act the appellee was in no better shape than it was before— indeed it was not in as good a position. Its ownership of the road was gone, it was liable to the control the City had over its public streets, and in three years it commenced to pay the graduated Park Tax, none of which, under existing laws, could it previously have been required to pay. During those three years of exemption from the Park Tax it was liable for taxation on its easements, and it can not be properly said it was exempted from taxation.

It would have been manifestly unfair to require the railway company to turn over all of its rights in a road to the City upon the City simply giving it in return such franchises as it already had-•—in other words, give its property and rights to the City for nothing. If the City had paid the railway company the value of its franchises, rights and property, the interest on a sum which would have been a just compensation might for some years have amounted to more than nine per cent on the gross receipts from such part of the road in the Annex— would likely have been at least more than the difference between the graduated tax and the nine per cent. Certain it is that if there was to be any show of fair dealing, and the City had condemned the franchises and rights in perpetuity owned by the railway company, and could not have given it in