Potomac Electric Power Co. v. Birkett

Hammond, J., delivered the opinion of the Court. The Potomac Electric Power Company (Pepeo) appealed in one record from final judgments and orders of the Circuit Court for Montgomery County in two cases dismissing its petitions to condemn land, for the construction of an electric transmission line to serve the Washington Metropolitan area, on a holding that Pepeo had no right of eminent domain in Maryland. Having reached a conclusion to the contrary, we reversed the judgments and orders appealed from by per curiam order. We now state our reasons for so doing.

Pepeo is a domestic corporation of the District of Columbia and of Virginia that furnishes electricity to Washington and the heavily populated suburban areas of nearby Virginia and Maryland counties. Since 1909 it has been qualified to do ⁴⁷⁹ business in Maryland and has supplied electricity to residents through its lines located on public roads. By consolidation, merger or purchase, Pepeo has succeeded over the years to the assets, property, rights and franchises of various light and power companies. One of these was Great Falls Power Company (Great Falls), a corporation chartered in 1894 by the Virginia Legislature for the purposes of generating electricity at Great Falls in the Potomac River and transmitting and selling electric power.

By amending Chapter 540 of the Acts of 1894 by Chapter 245 of the Acts of 1900, the General Assembly of Maryland conferred upon Great Falls a state-wide franchise to construct electric transmission and distribution lines along public roads, and also conferred upon it power to acquire by condemnation land necessary for its corporate uses and purposes, saying that it “* * * shall have the same full, ample and like powers for acquiring by agreement, purchase, gift or condemnation property for its uses and purposes as a railroad company would have under the provisions of the aforegoing Article 23 of the Code of Public General Laws of Maryland, and any amendments thereto * * Chapter 245 of the Acts of 1900, added two further provisions. One authorized Great Falls to erect dams anywhere in the Potomac River necessary to accomplish its purposes and objects and for that purpose to have the same powers of condemnation as had railroad corporations. The other authorized the company to consolidate or merge with, or sell its assets to, any corporation with purposes not inconsistent with those of Great Falls and provided that upon the merger, consolidation or sale being accomplished, * * all of the assets, rights, franchises and properties of every kind and description whatsoever shall be and become the assets, rights, franchises and properties of the company so resulting from said consolidation, lease, merger or otherwise, as fully and to all intents and purposes as if the powers herein conferred had been expressly granted to such consolidated or merged company * * The act further bestowed upon any appropriate domestic or foreign corporation the power to act with Great Falls to accomplish the processes and results authorized. ⁴⁸⁰ Great Falls accepted the grant of rights given it by the Maryland Legislature and acquired a tract of land in the State near the Great Falls of the Potomac. It employed engineers to make studies looking to the construction of a power dam and the generation of electricity by water power, and had a survey and plan of its proposed dam approved by the Maryland Board of Public Works.

Thereafter in 1902, two-thirds of the capital stock of Great Falls was acquired by Washington Railway & Electric Company (Washington Railway), a holding company which owned Pepeo and utilized, it to take title to and operate electric properties acquired by it. After Great Falls was bought by Washington Railway, its activities came to a virtual standstill, because it was contemplated that its assets, properties, rights and franchises would be utilized by Pepeo. Nevertheless, Great Falls maintained its corporate existence. It held regular meetings of stockholders and directors and regularly paid its Virginia and Maryland franchise and property taxes and Federal and State income taxes.

In 1947, Washington Railway, which by then owned all of the stock of Great Falls, and Great Falls both were liquidated under the Public Utility Holding Company Act of 1935, pursuant to an opinion and order of the Securities and Exchange Commission. The mechanics were that Great Falls transferred all of its assets to Washington Railway, and Washington Railway immediately transferred them to Pepeo. The real estate was transferred by deeds and all other assets of every kind, nature and description were conveyed by assignments. As consideration for the deeds and assignments Pepeo assumed all obligations of Washington Railway, which just before had assumed all obligations of Great Falls.

In 1955 Pepeo found itself in need of greatly increased generating capacity to meet the foreseeable demands of its system and proposed to build an additional generating plant. The original site chosen was in Virginia just above the Great Falls of the Potomac River. The United States Army Engineers and the Department of Defense required Pepeo to move the site upstream because of plans for a water supply reservoir immediately above Great Falls and because it was de ⁴⁸¹ sired to have the station further from Washington and less vulnerable to a bombing attack in case of war. The best available location under the conditions laid down by the Army Engineers and the Department of Defense was found to be Dickerson, Maryland, about twenty miles from Great Falls and several miles from the Potomac River near the mouth of the Monocacy River.

A dam was to be built because millions of gallons of water a day from the Potomac River will be used for the new plant in the condensation of steam and for other purposes. In order to conduct electricity from the Dickerson generating plant to where it could be used in the system, Pepeo planned to construct a transmission line across Montgomery County. Finding itself unable to agree on a purchase price with various landowners, it instituted a number of condemnation suits, two of which are those before us. The proceedings in these two cases were instituted in February of 1957.

In June of that year Pepeo filed in each case an application for a decision on questions of law before further proceedings, pursuant to Maryland Rule 502, requesting the court to determine that it had the legal right to acquire by condemnation the land necessary for its transmission line. The cases were consolidated for the purposes of this preliminary determination and in September, after a hearing, the Circuit Court found for Pepeo. On rehearing, the court reversed itself and entered the final judgments and orders appealed from, adjudging that Pepeo had failed to establish that it had the power of eminent domain in Maryland and dismissing the petitions in the two cases, without leave to amend. Pepeo contends that it acquired the power of eminent domain in Maryland that the legislature gave Great Falls and the successors of Great Falls.

The landowners counter that the court could not make a preliminary determination of the right to condemn because Code, 1957, Art. 33A, Sec. 9, requires that issues of law relative to that right, as well as questions of fact, are to be determined at the trial after the jury has viewed the property. Appellees argue from this premise that the final judgments and orders appealed from were cor ⁴⁸² rect, apart from the merits, in that Pepco’s testimony as to its right to condemn was erroneously taken in clear violation of the statute and must be treated as if it were not in the case. On the merits the landowners argue (a) that condemnation of their property, located many miles from Great Falls, for a transmission line unconnected with the generation of electricity by water power at Great Falls, is outside the scope of the power of condemnation conferred on Great Falls; (b) that the consent of the State of Maryland was given only to a consolidation, merger or sale of assets by Great Falls, but not to a transfer of the power of condemnation; (c) that Great Falls did not even purport to transfer to Pepeo whatever rights of condemnation it possessed or, indeed, any rights or franchises, except those exercisable “at or near the Great Falls”; (d) that the franchise and condemnation powers of Great Falls had expired before the 1947 conveyances because they had never been used; and finally, (e) that the power of Great Falls to acquire land by condemnation or by other means was limited by the Maryland Legislature to two thousand acres, and since Pepeo holds more than two thousand acres of land in Maryland, it has no power to acquire more. We think it plain that the question of the right to condemn properly was determined by the court as a preliminary matter.

This question, of course, was one for the court to decide. Lustine v. State Roads Commission, 217 Md. 274 , just decided. Code, 1957, Art. 33A, Sec. 4 gives the court in condemnation cases the same power to permit amendments to petitions, answers and other proceedings “as in other actions at law” and provides further that “all demurrers, motions and other proceedings therein, except as otherwise herein provided, shall be disposed of in accordance with the rules and practice in said court now governing in the trial of other civil cases at law.” We held in Herzinger v. City of Baltimore, 203 Md. 49, that because of the conformity provisions of Sec. 4 of Art. 33A, the rule of court abolishing bills of exception took precedence over another section of Art. 33A providing for bills of exception. Maryland Rule 502 provides that at any stage of the case the court may, for convenience, have raised for decision, in any expedient way, ⁴⁸³ including the production of evidence, any question of law.

If this is done such further proceedings as may be rendered unnecessary by the decision of such question shall upon the decision be stayed, and the decision reached is reviewable on appeal after final judgment. We find the rule to be applicable to proceedings under Art. 33A. The landowners argue that the limitation in Sec. 4, that the proceedings shall be in accordance with those governing other civil cases at law “except as otherwise herein provided”, requires that issues of law as well as fact be decided under Sec. 9 of Art. 33A only after the jury has viewed the premises. We think that the issues of law to be so decided in Sec. 9 are only those which have not previously been determined.

At a time when the provisions now codified as sections 4 and 9 of Art. 33A were in effect, the Court held in Davis v. Board of Education, 166 Md. 118 , that there was no right of appeal from a preliminary determination that a petitioner had a right to condemn because that was not a final judgment, but accepted as a matter of course the fact that the question had been decided in advance of the trial by decision on a demurrer to a plea in bar. See also Herzinger v. City of Baltimore, supra, where determinations as to the right to condemn were made before the trial by rulings on a demurrer and on exceptions to particulars and to interrogatories and the procedure was at least implicitly approved by this Court. The first three contentions of the landowners may be answered together. If Pepeo succeeded to the franchises and all of the rights of Great Falls, as we think it did, as a transferee company “incorporated for purposes not inconsistent with the objects of the Great Falls Power Company”, it acquired the right of eminent domain throughout Maryland.

The fact that Pepeo, in the exercise of powers not derived from Great Falls, is to generate electricity at a site some twenty miles from that originally contemplated would not make condemnations for the transmission of that electricity, under the authority derived from Great Falls, outside the scope of the power granted that company by the Maryland Legislature. Pepeo could exercise, in combination, rights and powers it owned independently of Great Falls and those it acquired from that company. It did not lose existing ⁴⁸⁴ powers or rights by acquiring others as a transferee or successor corporation. State, Use of Dodson v. Baltimore & Lehigh R. R. Co., 77 Md. 489, 491-492.

In any event, the generating site and the line of transmission are not too far or too different from those