Mayor of Hagerstown v. Littleton

⁵⁹² Briscoe, J., delivered the opinion of the Court. The questions arising on this appeal are presented by a demurrer tot a bill in equity for an injunction, to restrain the appellants from building an electric light plant, under chapter 40 of the Acts of 1920, and from issuing or disposing of any bonds, upon the credit of the City of Hagerstown, to pay for any such plant, without having first obtained a permit or certificate of authority from the Public S'ervice Commission of Maryland to construct the plant. The plaintiffs are residents of Hagerstown, Washington County, and payers of taxes levied by the Mayor and City Council of Hagerstown on real and personal property, situate in that city and owned by them. The bill charges that the Mayor and City Council of Hagerstown is a municipal corporation created and existing under the laws of the State of Maryland, and that the Board of Street Commissioners of Hagerstown, now composed of W. L. Middlekauf, M. Finley Seibert and Charles A. Ritchey, is a branch of the government of Hagerstown and, under chapter 58 of the Acts of the General Assembly of Maryland of 1884, as amended by the various acts of the General Assembly subsequent thereto, has charge and control of the lighting of the streets of Hagerstown and of the operation of the plant owned by the city, used for the purpose of manufacturing electric current, and for the commercial sale of the current to residents and citizens of Hagerstown.

First, that the city under the management and control of the Board of Street Commissioners, is now and has been for 'a number of years last passed, manufacturing electric current in the plant for lighting of the streets and avenues of the city, and for the commercial purpose of selling the current to the residents and citizens thereof for lighting and power purposes. Second, that under and by virtue of an alleged authority conferred upon it by chapter 40 of the Acts of the General Assembly of Maryland of 1920, the Mayor and Council of ⁵⁹³ Hagerstown lias directed and authorized the Board of Street Commissioners to erect a new electric light plant in Hagerstown, designed and planned and intended for the' manufacture of electricity for other than municipal purposes — to wit: for sale to tire residents and citizens of Hagerstown, for lighting and power purposes, without having first obtained from the Public Service Commission of Maryland a certificate of authority 'therefor, and is about to issue and offer for sale bonds upon the credit of the City of Hagerstown, to the amount of $300,000 for the purpose, of erecting the plant without having first obtained a certificate of authority therefor from the Public Service Commission of Maryland. Third, that under the direction and authorization of the Mayor and Council, the Board of Street Commissioners is about to enter into various contracts for the erection of new electric light plant for the purpose of manufacturing' electric current, not only for municipal purposes, hut also for the commercial purposes of selling such current to the residents and citizens of Hagerstown for lighting and power purposes. Fourth, that neither the Mayor and Obuncil of Hagerstown, nor the Board of Street Commissioners was given or granted the power or authority to build, maintain or operate the new electric light plant, for manufacturing electric current for lighting other than for municipal purposes, without first having obtained a certificate of authority from the Public Service Commission of Maryland, by chapter 40 of the Acts of 1920, nor by other acts of the General Assembly, but under chapter 180 of the Acts of the General Assembly of 1910 and amendments subsequent ther*eto, they are required to obtain such a certificate of authority in order to build, maintain or operate an electric light, plant for supplying light for other than municipal purposes.

Fifth, that neither the Mayor and Council of Hagerstown, nor the Board of Street Commissioners has applied for or intends to apply for such certificate of authority, and without such certificate of authority neither the Mayor and Council of Hagerstown, nor the Board of Street Commissioners, nor ⁵⁹⁴ have they jointly, any power or authority to huild, maintain or operate such an electric light plant, as they intend and are about to huild, that is, an electric light plant for the purpose of selling, current to the residents and citizens of Hagerstown, for light and power purposes. Sixth, that the building of such an electric light plant, or the entering! into any contract or contracts therefor, or the issuing of any bonds to pay therefor, without a certificate or authority being first had and obtained from the said Public Service Commission of Maryland, by the said Mayor and Council of Hagerstown, and the said Board of Street Commissioners, or by either of them, will increase the burdens of your orators and all other taxpayers of Hagerstown, and will he an illegal and unwarranted exercise of power on the part of the Mayor and Council of Hagerstown, and on the part of the Board of Street Commissioners. The prayer of the bill, in addition to the prayer for general relief, is that “the defendants, the Mayor and Council of Hagerstown, and the Board of Street Commissioners of Hagerstown, W. L. Middlekauff, M. Finley Seibert and Charles A. Ritchey, all and each of them, may he restrained by the injunction of this honorable court from building an electric light plant for any hut municipal purposes, from contracting in the name of the Mayor and Council of Hagerstown or the Board of Street Commissioners of Hagerstown, with any person, persons or corporation for the construction-of the whole or of any part of an electric light plant for the purpose of manufacturing electricity or electric current to be used for any but municipal purposes, or to- he sold to citizens or residents of Hagerstown for lighting purposes, and from issuing, selling or1 disposing of any bonds, upon the credit of the City of Hagerstown to pay for, in whole or in part, any such plant, without having first obtained a certificate of authority from the Public'Service Commission of Maryland, to huild such an electric light plant.” The defendants appeared to the hill on the 13th day of January, 1923, and demurred to the hill, upon the ground ⁵⁹⁵ that the plaintiffs have not stated in their hill such a ease as entitles them to any relief in equity against the defendants-, and as-lc that the hill may he dismissed with costs. The ease was heard upon hill and demurrer, and from a decree of court, dated the 7th day of February, 1923, overruling the demurrer, and directing an injunction to issue, this appeal has been taken.

The order of court, directing the writ of injunction to issue, decreed that the defendants and each of them he and they are hereby restrained aud enjoined from building or contracting in the name of the. Mayor and Council of Hagerstown, or in the name of the Board of Street Commissioners of Hagerstown, for the construction of the whole or any part of an electric light- plant for the purpose of manufacturing electricity or electric current to be sold to citizens or1 residents of Hagerstown for power purposes, and from issuing, selling or disposing of any bonds, upon the credit of the City of Hagerstown, to pay for, in whole or in part, the construction •of any such plant, to he used for the purpose; hut liberty is hereby reserved to the defendants, and to each of them, to move for the rescinding of this order, and for a dissolution of the injunction to he1 issued as aforesaid, at any time after filing their answer to the hill, on giving the: plaintiffs or their attorney of record, five days’ previous notice of such motion. We have no difficulty in reaching the conclusion, under the facts alleged in the hill and admitted by the: demurrer1 in this case, that the appellants should be required to obtain a permit ■or certificate of authority from the Public Service-Commission of Maryland, before constructing and operating the electric light plant, mentioned in the hill, and before issuing the municipal bonds provided by chapter 40 of the Acts of 1920. By section 413A, article 23, vol. 3 of the Code, it is provided that every municipal corporation of this State engaged in the. business of manufacturing aud supplying or of supplying gas or electricity for other than municipal purposes ■shall be included within the terms “gas corporation” and ⁵⁹⁶ “electrical corporation” as defined in the next- preceding section of this sub-title, and shall be subject as other gas and electrical corporations are to the provisions of this subtitle.

And by section 447 of article 23 of the Code, vol. 1, it is provided that no gas corporation or electrical corporation incorporated under the laws of this or any other state shall begin construction or exercise any right or privilege under any franchise hereafter granted or under any franchise heretofore granted but not heretofore actually exercised, without first having obtained -the permission and approval of the commission. And. it is further provided in the same section that “no municipality, except- the Mayor and City Council of Baltimore, shall build, maintain and operate for other than municipal purposes any works or systems for1 the manufacture and supplying of gas or electricity