Public Service Commission v. Maryland Bay Co.

Parke, J., delivered the opinion of the Court. The Maryland Bay Company, a body corporate of the State of Maryland, is the plaintiff, and the Public Service Commission of Maryland is the defendant, in a bill of complaint filed on June 2nd, 1938, on the equity side of the Circuit Court for Anne Arundel County. The defendant demurred to the bill of complaint and answered at the same time, and after hearing, the chancellor overruled the demurrer, and set the cause down for hearing on bill and answer, pursuant to the provisions of section 405 of article 23 of the Code. From this order the pending appeal was taken.

The institution of this suit in a court of equity was for the purpose of securing a review and reversal of an order of the Public Service Commission of Maryland which rejected the application of the plaintiff for permission to operate a public ferry for hire between certain points on the opposite shores of the Chesapeake Bay. The Commission’s refusal was based upon the conclusion that it was prohibited by law from permitting the operation of a ferry within the area desired by the applicant. The soundness of this conclusion is the principal question. The bill of complaint avers the plaintiff’s corporate existence and its powers, which embrace the transporta ⁶² tion of passengers and freight upon Chesapeake Bay and adjacent waters; the ownership, lease and control of ferries and other vessels and their operation; the construction, acquisition and operation of docks, piers, channels and appurtenant facilities; the ownership, purchase, sale and lease of lands and their improvements, and, generally, to do the things and to acquire the accessories and equipment for its corporate purposes.

It sets out that the defendant has the jurisdiction and power, pursuant to section 379 of article 23 of Code Pub. Gen. Laws (Supp. 1935), to grant the permission and approval for a public utility to exercise any franchise or right under any provision of law, which has not been theretofore exercised, whenever it shall, after due hearing, determine that such exercise is necessary or convenient for the public service. The plaintiff desired to obtain the authorization specified for the exercise of its corporate powers and filed with the defendant on March 24th, 1938, an application for an order to permit, authorize and empower the plaintiff to operate, across the Chesapeake Bay, a ferry service between Sandy Point, in Anne Arundel County, to a point near Stevensville, on Kent Island, in Queen Anne’s County, for the transportation of passengers and freight in intra-state commerce; and the plaintiff prayed that it be afforded a hearing on the matter, and be given such further relief and authority as might be necessary to accomplish the object sought.

The bill of complaint further alleges that the application is new and original, and a copy of this application is filed as part of the bill. The application was dismissed on May 11th, 1938, without its being set down for a hearing on the merits, on the ground that the defendant was without jurisdiction to authorize the establishment of a ferry across the Chesapeake Bay from Sandy Point to Kent Island, or in the immediate vicinity of these places, so long ás an Act of the General Assembly of Maryland, passed at its January Session of 1935, and known as the Bay Bridge Act, remains in effect, or the restriction upon the establishment of a ferry or bridge within twenty miles of the ⁶³ site of a certain proposed Chesapeake Bay Bridge continues. A copy of this order of the defendant is filed and incorporated in the bill by reference. The bill of complaint recites that the plaintiff had, on October 28th, 1936, filed with the defendant an application for a permit to exercise its franchise, and that this application was dismissed on January 27th, 1937.

On March 26th, 1937, the plaintiff made application for a re-consideration of this action, and this request was denied on April 28th, 1937; and, again, on May 25th, 1937, an application for a re-consideration was made and, likewise, denied. The complainant shows that the refusal in every instance was based on the same ground, that the defendant was without jurisdiction. The plaintiff next filed in the Superior Court of Baltimore City, on August 7th, 1937, a petition for a writ of mandamus to command the defendant to grant a public hearing on its application for a certificate of public convenience and necessity for the operation of a ferry service between the points named. A demurrer to this petition was sustained, on the theory that the remedy of the plaintiff had been a statutory appeal from the action of the defendant.

The plaintiff next here states that Order No. 33„058 of the Commission, which, as heretofore stated, was passed on May 11th, 1938, is final; and that the bill of complaint now under consideration is the only remedy at law or in equity which is available to it, and is an appeal from the order dismissing the plaintiff’s application which was filed with the defendant on March 24th, 1938; and which embraces facts that were not available at the several times of the prior applications. These alleged changes and different circumstances are said to be: (1) The abandonment of the Chesapeake Bay Bridge project contemplated in the Chesapeake Bay Authority Act (Acts of 1935, ch. 330, p. 743) ; article 89B, sections 85 to 104, inclusive, of Public General Laws (Supp. 1935) ; and (2) The passage of chapter 356 of the Acts of 1937, and the assumption of jurisdiction and duties by the Board created by this Act; and ⁶⁴ (3) The requirements of residents and merchants of the State which render necessary an adequate ferry service in the vicinity of the route proposed. The plaintiff avers that the defendant’s Order No. 33058 is unlawful and unreasonable and null and void; and is in violation of the Constitution of Maryland; and that chapter 356 of the Acts of 1937 materially modified, amended and superséded the Chesapeake Bay Authority Act (Acts of 1935, ch. 330) with respect to the construction and operation of ferries. Furthermore, it is declared that under the provisions of sections 404, 405, and 407 of the Public Service Commission Law of Maryland (Code, art. 23), the Circuit Court for Anne Arundel County has jurisdiction to set aside, vacate and amend Order No. 33058 of the defendant.

The plaintiff alleges that it has established its right to a certificate or finding of public necessity and convenience as required by article 23, section 379, of the Public Service Commission Law; and that it will show that it has a well conceived plan to afford service over the proposed route, which is the shortest on Chesapeake Bay, without interference with small boat traffic; that it is financially able to conduct the enterprise; that it controls practicable and adequate terminals at Stevensville and Sandy Point; and that it is prepared to proceed promptly with' the construction necessary to establish service, which is now inadequate; and, further, that the plaintiff has expended large sums of money and incurred large obligations in connection with the proposed ferry service; and that the refusal of the defendant denies to the plaintiff the right to exercise its franchise and deprives it of its property without due process of law. On allegations thus stated in summary, the relief prayed, in addition to that of general relief, is: (1) That said Order No. 33,058 of May 11th, 1938, be declared null and void. (2) That the Bay Bridge Authority Act (Acts of 1935, ch. 330) be declared null and void in so far as it is a bar to the action of the defendant in approving or denying on its merits the application of the plaintiff. ⁶⁵ (3) That the application of the petitioner for a certificate of convenience and necessity be approved; and that the Order No. 33,058 be so amended. The proposed ferry service is admittedly within the distance of twenty miles from the site of the bridge contemplated by the Acts of 1935, ch. 330.

The demurrer and answer filed by the defendant raises, first, the sufficiency of the averments to justify equitable relief; and, secondly, issues of fact on all the material allegations upon which the relief sought is founded. Since the demurrer was heard and over-ruled, and the appeal comes from that decision, the facts alleged must be taken to be true for the purposes of a review of the action of the chancellor on the demurrer. The problem presented by the demurrer will depend for its solution on the meaning of the statutes which relate to the construction of bridges and the operation of ferries for the use of the public in traversing the Chesapeake Bay. Under the provisions of chapter 330 of the Acts of 1935, nineteen new sections are added to article 89B of the Code of Public General Laws of Maryland, title “State Roads,” as enacted by chapter 539 of the Acts of 1931, and its amendments.

These new sections followed section 74 of the article and were numbered 75 to 93, inclusive, and are now codified in the 1935 Supplement of the Code (Flack), in article 89B, as sections 85 to 103, inclusive. Section 2 of the Act of 1935 (now section 104 of article 89B of Code) declared that, in so far as the provisions of these sections are inconsistent with the provisions of any other act, general, special or local, the provisions of chapter 330 are controlling. By these sections a new official body, to be known as the Chesapeake Bay Authority, was created, and its duties and powers defined. It was declared to be a body corporate and politic of three members, whose terms of office of the original members should be respectively two, four and six years, and as these terms expired the terms of members who should succeed in the office would be of six years.

The corporate existence of this body is limited ⁶⁶ to ten years, and thereafter until all liabilities and obligations have been met and paid or otherwise discharged. On its final extinction, all its rights and properties shall pass to the State of Maryland. The numerous provisions, conditions and limitations of the enactment will not be here set forth, except as may be pertinent to the present questions. The fundamental objects of the legislation are to furnish the agency power and funds (1) to construct a toll bridge, with its approaches, across the Chesapeake Bay, from a point in Baltimore County,^ over Hart Island and Miller’s Island to a point near Tolchester, Kent County; and (2) to acquire, maintain and operate for hire the ferry line then in private ownership, use and management from Annapolis to both Matapeake and Claiborne or to either of these points.

Among the many powers specifically granted were those to acquire the bridge franchises of the Chesapeake Bay Bridge Company and the assets and franchises of the Claiborne-Annapolis Ferry Company, as these private corporations enjoyed franchises which, unless acquired, were in conflict with the proposed public works and enterprises. The statute contained the limitation that, if no contract should be made by the Chesapeake Bay Authority for the construction of the contemplated bridge within the period of two years from the passage of the Act, “all of the rights,, powers, duties and obligations of the Board with respect to the acquisition, maintenance and operation of the Ferry, and the payment of the debt service requirements of any bonds issued for the purchase of the Ferry shall be taken over, transferred to, and shall thereafter be exercised and performed by the State Roads Commission of Maryland to the same extent as if the State Roads Commission had been named in this Act [sub-title] instead of said Board. And in such event, it shall be the duty of said Board to transfer to the State Roads Commission all of the assets of the Ferry, and acquired with the Ferry Property, and all books, records, documents in any manner relating to the Ferry, its acquisition and operation.” Section 76 (sec. 86). ⁶⁷ The effect of a failure by the Authority to enter into a contract for the construction of the bridge, on the site designated, for a period of two years from the passage of the Act, is not to deprive the Authority of its powers with reference to the bridge; but only to deprive it of its rights, powers, functions and obligations so far as the specified ferry is concerned, and to transfer and impose its delegated corporate powers and functions with regard to the ferry project upon the State Roads Commission of Maryland, which, in this contingency, has imposed upon it all the powers, duties, rights and functions with respect only to the particular ferry service, as though the State Roads Commission had been originally named in the Act in the place and stead of the Chesapeake Bay Authority. Thus, during its corporate life, there is no limitation of time imposed by the statute within which the Chesapeake Bay Authority would, because of delay, forfeit its corporate powers with respect to the particular bridge authorized by the Act.

The incorporation of the mentioned condition of time with respect to one undertaking and not to the other may be ascribed to the circumstance that the ferry service was in actual operation by a public service corporation, but the public bridgeway was not in being but in contemplation. The first existed, but the second had to be created. The distinction is observed in section 77 (87), and in its sub-section (h) the power is granted “To acquire the bridge franchises of The Chesapeake Bay Bridge Company, and subject to the rights of The Chesapeake Bay Bridge Company under its existing franchises, but without any limitations as to the time of commencement and completion, to construct” the particular bridge authorized. The rights, functions and franchises of the Authority are created by chapter 330 of the Acts of 1935.

The Authority’s exemption from any of the limitations, restrictions, conditions, taxes or other requirements imposed by sections 44 to 55 of article 89B, sub-title “Chesapeake Bay Bridge” (Chesapeake Bay Bridge Company), are declared by section 89 (99), sub-sec. C, of chapter 330, and are wholly independent of the provisions of ⁶⁸ chapter 109 of the Acts of 1935. The last named statute is an amendment of chapter 539 of the Acts of 1931, and had reference to the tax exemption and the duration of the franchise of a particular corporation, the Chesapeake Bay Bridge Company. It is, therefore, clear that-it is a misconception of the language of chapter 330 of the Acts of 1935, to argue that all power of the Chesapeake Bay Authority to construct the proposed bridge ceased when the contract for its construction was not made within two years after the passage of this Act.

The plaintiff in this cause contends that a contrary view is supported by the opinion in Wyatt v State Roads Commission, 175 Md. 258 , 1 A.2nd 619. The court there had primarily under consideration the constitutionality of chapter 356 of the Acts of 1937. After a full discussion of the problem and the statement of the reasons upon which chapter 356 was held free of objections on constitutional grounds, the subordinate question, of conflict between the provisions of chapter 330 of the Acts of 1935 and of chapter 356 of the Acts of 1937, was briefly treated, and the conclusion concisely stated that, should there be any inconsistency, the conflict would be resolved in favor of the later Act. At the head of the single paragraph in which this entire matter is discussed, a brief preliminary summary is given of some of the terms of chapter 330.

In the course of this synopsis, which was in nowise designed to be a definitive construction of