Public Service Commission v. Maryland Gas Transmission Corp.

³⁰⁰ Digges, J., delivered the opinion of the Court. On July 8th, 1931, the appellants, the Public Service Commission of Maryland, passed the following order: “Ordered: (1) That Maryland Gas Transmission Corporation be and it hereby is directed and required forthwith to obtain proper franchises to lay, maintain and operate its pipes under the public roads crossed by the line of the said Maryland Gas Transmission Corporation, and to present the said franchises to the Commission for its permission and approval, as by law required. (2) That a copy of this order be forthwith served upon the said Maryland Gas Transmission Corporation, and that the said corporation within ten (10) days of the date of the service of such copy shall notify the Commission in writing whether or not it will accept and abide by the same.” In response to said order the appellee, on July 15th, 1931, notified the commission in writing that it would not accept and abide by the order, but proposed within the time limited by statute to bring a proceeding to vacate and set aside said order. Thereafter, on September 5th, 1931, the appellee filed its bill of complaint in the Circuit Court ETo. 2 of Baltimore City, praying that the said order of the commission be vacated and set aside.

On September 11th the commission demurred on the ground that the complainant had not stated such a case as entitled it to any relief in equity. On December 3rd, 1931, the chancellor passed an order overruling the appellants’ demurrer to the bill of complaint, with leave to answer. The appellants declined to answer, and the appeal in this case is from the order overruling the demurrer. Eor the purposes of the demurrei’ we must accept the allegations of fact contained in the bill of complaint as true, the substance of which may be stated as follows: “That the plaintiff is a corporation duly organized and existing under the laws of the State of Delaware; that it caused to be constructed during the months of September, October, ETovember, and December, 1930, and January, 1931, a gas transmission line from a point on the boundary between the states. ³⁰¹ of Maryland and Pennsylvania, two miles east of the Susquehanna River in Cecil County, Md., for a distance of approximately seventy-four miles in a fairly straight direction, to a point about two miles northwest of Rockville, Montgomery County, Md.; that this line has been maintained and operated by the plaintiff at all times since January 30th, 1931; that subsequently it caused to be constructed an extension of said pipe line to a point on the boundary between the states of Maryland and Virginia, about live miles southwest of Rockville, which line has been maintained and operated by the plaintiff at all times since May 30th, 1931; that the total length of said pipe line, including extension, is approximately seventy-nine miles; that said pipe line passes through a small portion of Cecil County and across the counties of Harford, Baltimore, Howard, and Montgomery, in the State of Maryland; that the pipe line was constructed for the plaintiff by the Columbia Gas Construction Company, a Maryland corporation; that the plaintiff is a public utility corporation engaged in the business of transmitting gas at high pressure, into, through, and from the State of Maryland and of selling gas so transmitted by it to other corporations, public or private, or persons, firms, associations, or other organizations which are now or may hereafter be engaged in the business of selling gas to the public in the State of Maryland, the District of Columbia, or elsewhere; that the plaintiff has not transmitted or sold, and does not, intend to transmit or sell, any gas in Maryland, except gas purchased by it at high pressure at the Maryland-Pennsylvania state line or at .the Maryland-Virginia state line; that the plaintiff has not sold, and does not intend to sell, any gas except at high pressure and except to corporations, public or private, or persons, firms, associations, or other organizations not affiliated with the plaintiff, which are or may hereafter be engaged in the business of supplying gas to the public in Maryland, the District of Columbia, or elsewhere, and to affiliated corporations at the Maryland-Pennsylvania state line and at the Maryland-Virginia state line; that the plaintiff has not been engaged, is not engaged, and does not intend ³⁰² to engage in any business in Maryland except tbe business aforesaid; that the gas so transmitted by the plaintiff is natural gas and will be transmitted at a maximum pressure of 450 pounds per square inch; that said pipe line passes through no incorporated towns or villages, but solely through strictly country properties, 247 in number, and upon rights of way acquired by purchase from the various landowners by the plaintiff and conveyed to it by deeds properly executed, acknowledged, and recorded; that said pipe line is, however, at several points where it crosses under public roads, within a mile or two from several small towns or villages, one of which, namely Rockville, is incorporated, but all said roads at said crossings are strictly country roads; that said pipe line has been laid and is now being maintained and operated by the plaintiff across and under a number of public roads, both improved and unimproved, in the said counties; that said public roads have been acquired by the public authorities, but for road purposes only, by condemnation, grant, or prescription; that, in cases where proceedings or grants have not been found relating to such roads, they have in every instance been utilized and are now utilized by the public as public roads, have been and- are controlled and maintained by the respective county commissioners or other public authorities, and are in fact public roads; that the plaintiff has taken from every owner of land abutting on each of said public roads, where the pipe line of the plaintiff crosses under the same, a deed granting to it a right of way thereunder; that the fee of each of said roads where the pipe line of the plaintiff crosses under the same was, on the respective dates -of said deeds, owned by the respective abutting owners from whom the plaintiff obtained said deeds, subject, however, to the public easement therein of passage and its incidents; that said pipe line across and under said roads is in all cases laid within the rights of way granted by said deeds and in accordance with the terms thereof; that in no case does said pipe line run along any such road, nor is it the intention of the plaintiff to supply any gas in any such road to others or to construct any lateral or branch line along any such road; ³⁰³ that- the only relation of such roads, or any of them, to said pipe line, is that of obstacles which have to be crossed, and said pipe line is placed thereunder solely for the purpose of crossing the same; that in some cases the pipe line is as near to the surface of the road as twenty inches, but does not interfere in any way with the use of any of said roads at existing or presently proposed grades by the public for passage, or with the fitting’ or maintaining of any of such roads at existing or presently proposed grades for passage by the public; that the plaintiff obtained from the county commissioners of each of the five counties, in which its said pipe line is laid, permits to construct said pipe line across and under the public county roads in the respective counties, and also obtained from the State Roads Commission permits to construct its said pipe line across and under the public roads known as state roads; that the pipe line was physically constructed in strict compliance with the rules and regulations governing such physical construction of the State Roads Commission and of the county commissioners of the five counties through which its line passes, including the requirements set forth in the several permits, and in strict compliance with the directions of the engineers supervising the work on behalf of the public authorities by which such permits were issued; that said line is of the best and most modern construction and of indefinite life and utility, and will in all probability be utilized continuously by the plaintiff, or its successors or assigns, in its present location for the next hundred years or more, subject to changes required by relocation of roads and changes of grades of roads; that, promptly upon the organization of the plaintiff, it presented to the defendant a copy of its certificate of incorporation, together with all information with respect to its plans which the plaintiff believed to be material, and all additional information with respect thereto which it was requested to give; that subsequently the defendant submitted said certificate of incorporation and said information, or such part thereof as it deemed to be relevant, to its general counsel with the request that he advise the commission whether or not it should re ³⁰⁴ quire the plaintiff to apply to it for its permission and approval under section 390 of article 23 of the Code (1929 Supplement); that in an opinion rendered to the defendant under date of August 23rd, 1930, the general counsel to the defendant ruled that, under the decisions of the Supreme Court, the plaintiff was under no obligation to apply to the • defendant for its permission and approval before beginning construction, and in said opinion the general counsel reserved the question as to how far the permission and approval of the defendant would be necessary were the plaintiff to undertake local business; that in conformity with said opinion the plaintiff did not apply to the defendant for its permission and approval before beginning construction; that the construction was begun on or about September 25th, 1930, and was proceeded with in all respects in conformity with the plans of which it informed the defendant; that on December 10th, 1930, a complaint was filed with the defendant by a citizen in Baltimore County, following the filing of which the commission by its order instituted a complaint against the plaintiff, reciting, among other things, that complaint had been made to the defendant that the plaintiff had laid and was engaged in laying its pipe line in a permanent way under the public roads of the counties through which the said pipe line passed without obtaining from the county commissioners of said counties proper franchises therefor, and in particular, as regards Baltimore County, with•out complying with section 611 of Offutt’s Code of Public Local Laws of Baltimore County and without obtaining permission and approval of the defendant before exercising :such franchises; that on December 15th, 1930, the plaintiff :filed its answer to the complaint of the defendant, and on January 5th, 1931,-the defendant held a hearing upon its complaint; that in compliance with the request of the defendant for an opinion in relation to the three legal questions developed by the testimony at the hearing aforesaid, the general counsel to the defendant, under date of January 28th, 1931, rendered an opinion to the defendant, holding: (1) that the natural gas to be transmitted by the plaintiff in ³⁰⁵ Maryland would be an interstate commodity; (2) that, as^suming the testimony taken at said bearing to be true, the legal effect thereof was to negative any intent on the part of the plaintiff to engage in local business; and (3) that the plaintiff had no right to lay its pipe line across any public highway in Baltimore County without first complying with the provisions of section 611 el seq. of the Revised Code of Public Local Laws of Baltimore County, which section declares that no franchise or right in relation to any highway, avenue, street, lane, or alley, either on, above, or below the surface of the same, shall be granted by the County Commissioners of Baltimore County until the provisions of that section relating to advertisement of the application for such franchise or right, compensation therefor, etc., shall be gratified; that said opinion does not touch upon the question of whether or not the plaintiff requires franchises to maintain its pipe line across and under public roads in any other county; that under date of July 8th, 1931, the defendant, by its order Ro. 17,413, in case E’o. 3175, after reciting that it wras the opinion and finding of the defendant that the plaintiff had “failed to obtain from the boards of county commissioners of the several counties traversed by the pipe line of said corporation franchises authorizing it to lay, maintain and operate its pipes under the public roads crossed by the line of the said Maryland Gas Transmission Corporation and to present the said franchises to the commission for its permission and approval, as by law required,” directed and required the plaintiff “forthwith to obtain proper franchises to lay, maintain and operate its pipes under the public roads crossed by the line of the said Maryland Gas Transmission Corporation, and to present the said franchises to the commission for its. permission and approval, as by law required”; that said order of July 8th, 1931, does not state what laws in the opinion of the defendant require the plaintiff to obtain from the boards of county commissioners of the several counties franchises to lay, maintain, and operate its pipe line under the public roads therein; that the order of the commission of December 11th, 1930, and the opinion ³⁰⁶ of its general counsel of January 28th, 1931, refer as to Baltimore County to section 611 et seq. of the Code of Public Local Laws of Baltimore County, and there exists in Montgomery County a similar statute, codified as sections 772 to 775, inclusive, of the Code of Public Local Laws of Montgomery County; the plaintiff, however, has been unable to find any franchise law in Cecil, Harford, or Howard counties; that no claim has been made by the State Roads Commission or by the county commissioners of any of said five counties, or by the counsel of any of them, that the plaintiff requires a, franchise to construct, maintain, or operate its pipe line across and under any of such public roads; that the question of whether or not it was necessary for the plaintiff to obtain a franchise to1 entitle it to construct, maintain, and operate the pipe line across and under the public county roads of Baltimore County was, however, orally raised by the author of the complaint filed with the defendant under date of December 10th, 1930, and the County Commissioners of Baltimore County thereupon obtained an opinion of their counsel thereon; that said opinion advised said county commissioners that they were acting wholly within their rights and legally in granting a permit to the plaintiff without requiring the plaintiff to apply for and obtain a franchise; that with this single exception, and with the exception of the commission and its counsel, no one in any of said five counties or elsewhere has claimed that the plaintiff requires any such franchise; that plaintiff is dissatisfied with the order of the commission passed on July 8th, 1931, and brings this suit to vacate and set aside said order on the ground that said order is unlawful, first, because the defendant is without jurisdiction to direct or require it to obtain franchises to lay, maintain, or operate its pipe line across and under public roads as aforesaid, second, because the enforcement of the order complained of would deprive the plaintiff of property without due process of law, in contravention of the Fourteenth Amendment of the Constitution of the United States, third, because it would disseize the the plaintiff of its freehold, liberties, and privileges, or de ³⁰⁷ prive it of its property, in contravention of article 23 of the Declaration of Rights of Maryland, fourth, because its enforcement would burden interstate commerce, in contravention of clause 3 of section 8 of article 1 of the Constitution of the United States, fifth, because neither of the said Public Local Laws of Baltimore County or Montgomery County, nor any other law, purports to require it to obtain a franchise thereunder to entitle it to lay, maintain, or operate its pipe line across and under any of said public roads, and further, that, if any such law were construed to require the plaintiff to obtain a franchise thereunder to entitle it to lay, maintain, or operate its said pipe line across and under any of said public roads, the said law would to that extent be in violation of clause 3, section 8, article 1, and of the Fourteenth Amendment, of the Constitution of the United States, and article 23 of the Declaration of Rights of Maryland, sixth, because the defendant is without jurisdiction to direct or require it to present any franchises for its said pipe line, if acquired, to the -defendant for its permission and approval, and, seventh, because, if the Public Service Commission Law of Maryland were construed to require the plaintiff to present any such franchise to the defendant for its permission and approval, such would be to that extent unconstitutional and void, in that it would burden interstate commerce in contravention of clause 3, section 8, article 1 of the Constitution of the United States.

The appellants make four main contentions: (1) That the commission had ample statutory power to pass the order requiring franchises to be obtained and submitted to it for its approval, provided the appellee was required by law to obtain such franchises. (2) That the fact that the appellee is a foreign corporation does not relieve it, before invading the public easement and its incidents, from the necessity of satisfying the requirements relating to the obtaining of franchises which are imposed on domestic corporations engaged in similar business. (3) That the fact that the- appellee claims to be engaged in interstate commerce does not relieve it, before invading the public easement and its incidents, from the ³⁰⁸ necessity of satisfying the reasonable- requirements relating to tbe obtaining of franchises which are imposed by the state on corporations engaged in intrastate business. (4) That the fact that the highways crossed are rural county highways, the fee simple title to which, subject to the public easement and its incidents, is in the abutting owners, while it requires the appellee to obtain permission from the abutting owners, dctes not relieve it from the duty of obtaining franchises or rights from the county commissioners also.

In the view which we entertain in respect to- the case made by the record, it is unnecessary for us to discuss or determine the questions raised by the appellants’ contentions, except the fourth contention as above recited. It is at once apparent that the validity of the order of the commission passed on July 8th, 1931, must be dependent upon whether or nojt there is some law which requires the- appellee to obtain a franchise from the proper authorities of the counties through which the pipe line passes, in order that it might legally place the said pipe line under the bed of the public roads located in the respective counties, for the sole purpo'se- of crossing the road. Or, stating the proposition in another way, unless there is some general or local law requiring the obtention of a franchise from the county authorities befóte the obstacle presented by a public road to the laying of the plaintiff’s pipe- line can be overcome, the Public Service Commission could have no authority to pass the order herein attacked. It requires no argument or citation of authority to support the proposition that, if this pipe line, although passing through a portion of the State of Maryland, did not cross any public road, it would not be- subject to the- jurisdiction of the Public Service Commission of this state.

The validity or legality of the order passed by the commission, therefore, must depend upon the commission’s jurisdiction and power to compel the plaintiff in this case- to obtain such franchise or franchises as are required by the general or local laws of this state. It follows that the primary and all-important inquiry is whether there is any general or local law which requires the plaintiff, under the facts set out in the bill of complaint, ³⁰⁹ to obtain a franchise to cross a public road in the manner and at the points alleged. These allegations are that,