Public Service Commission v. Philadelphia, Baltimore & Washington Railroad

Oeeutt, J\, delivered tbe opinion of tbe Court. This appeal grows out of an irreconcilable conflict between tbe views of tbe respective parties as to tbe powers, functions and duties of tbe Public Service Commission of Maryland, in tbe exercise of tbe control and supervision conferred upon it by tbe Legislature over tbe operation and management of public service corporations. Tbe precise question which it presents is whether tbe commission has tbe power to annex, as a condition precedent to its permission to a railroad company engaged in interstate commerce to relocate its tracks, a requirement that tbe tracks, as relocated, shall be at a grade which in the judgment of tbe railroad company will be inconsistent with tbe efficient and economical operation of tbe railroad, when such a condition is not required by any consideration for tbe convenience or welfare of tbe general public, but is solely in tbe interest of persons whose property would be affected by tbe relocation. It involves a consideration of whether tbe “public,” in whose interest tbe commission was created, means tbe whole public, or only that part of tbe public whose property rights are directly or consequentially affected by tbe construction, operation, or maintenance of some public utility under its control and supervision.

To understand tbe scope and significance of tbe inquiry it will be necessary to examine briefly tbe background of ¹⁰⁷ the conflicting theories, and the circumstances under which the question arises in this case. The Philadelphia, Baltimore and "Washington Railroad Company, herein called the Railroad Company, is the successor of the Columbia & Port Deposit Railroad Company, which was incorporated by chapter 103 of the Acts of 1858 of the General Assembly of Maryland, amended by chapter 31 of the Acts of 1868, and which was later merged by a consolidation with the Columbia & Port Deposit Railroad Company of Pennsylvania. Later still its lines were leased to the Pennsylvania Railroad Company, and are used as a part of its system. Acting under the powers conferred by its charters, the Columbia & Port Deposit Railroad Company constructed, and appellee for many years operated, a railroad along the east bank of the Susquehanna River, between Perryville in Maryland to a point in Pennsylvania, passing in its course through the town of Port Deposit.

Some time prior to 1906 interested persons conceived the idea of utilizing the water power of the Susquehanna River by the construction of dams and the establishment of power plants at McCall’s Perry in Pennsylvania and at Conowingo in Maryland, and in furtherance of that plan the McCall’s Ferry Power Company was incorporated, and it constructed a dam and power plant at McCall’s Ferry, and apparently contemplated the construction of another dam at Conowingo, for, in 1906, it entered into an agreement with the railroad company as to the relocation of that part of its roadbed which would be affected by the construction of both dams. But in 1908 the Susquehanna Power Company, herein called the Power Company, acquired the rights and property of the McCall’s Ferry Company along the Susquehanna River below Cully’s Falls, and assumed all its obligations in respect to the relocation of the tracks of the Philadelphia, Baltimore and Washington Railroad Company, made necessary by the erection of a dam at Conowingo, to which substitution that company assented, and, on March 21th, 1908, it executed with the power com ¹⁰⁸ pany a supplemental agreement assenting to the substitution. In the agreement of 1906 the McCall’s Perry Power Company agreed, in case it undertook to build the Conowingo dam— “to acquire, as hereinafter provided, the right of way and construct such relocated railbed, track and appurtenances between a point about 850 feet south of Pishing Creek Station, Lancaster County, Pennsylvania, and Rock Run Station, Cecil County, Maryland, the said relocated road bed, track and appurtenances to be constructed upon such alignment and with such grades and in accordance with such plans and specifications as the railway companies may prescribe, and subject to the approval of their chief engineer, or his representative, it being hereby understood and agreed that the alignment shall not be less favorable, nor shall it be required to be more favorable, than that of the present roadbed and track of the said railway between the said points, but that there shall be no grades opposed to the eastbound traffic and that the grades opposed to the westbound traffic shall not be more than 0.3 per cent, equated for curvature, excepting that until the work of constructing the Conowingo dam is undertaken the grade against the westbound traffic may be 0.5 per cent, between a point 850 feet south of Pishing Creek Station and a point 500 feet south of Benton Station.” The charter of the Susquehanna Power Company was amended by chapter 268 of the Acts of 1908 of the General Assembly of Maryland, which authorized it to “locate and build in, along or across the said river, and the bed and shores thereof, and the canals, railroads, ferries and highways thereon, therealong or leading thereto, any dam or dams, the crest or crests of which shall not exceed an elevation of 110 feet above mean low tide at Havre de Grace, said dam or dams to be located at any points between Tidewater and Mason and Dixon’s line.” ¹⁰⁹ Acting under its charter powers, the Susquehanna Power Company made arrangements and formulated plans for the erection of a dam across the Susquehanna Eiver at a point some distance helow Conowingo, and applied to the Public Service Commission of Maryland for its approval of its plans for financing the project. The commission approved the plans and the Power Company proceeded with the work of erecting a dam, which would raise the waters of the Susquehanna Eiver to a point 108.5 feet above mean low tide at Havre de Grace, or 60. 9 feet above the old level of the river.

As has been stated, the tracks of the railroad were located along the northeast bank of the river, and upon the completion of the dam would necessarily be submerged by the waters impounded by it, and if the railroad was to continue it was necessary to relocate its tracks on some lino where its operation would not be affected by the new water level of the pool. The relocation was of course required by the necessities of the Power Company, and since the Eailroad Company was satisfied with the then existing location of its tracks, the Power Company assumed the burden of paying all expenses incident to the relocation, which was to be constructed, however, under the direction and supervision of the Eailroad Company. The Columbia & Port Deposit Eailroad Company was, as has been stated, consolidated with the Philadelphia, Baltimore & Washington Eailroad Company, and the linos of that company are leased to the Pennsylvania Eailroad Company, and are operated as a part of its system. Eor some years past the policy of the latter company has been to establish its railroads as low grade lines, and from time to time it has expended “vast sums” of money in changing, projecting, and building its lines in furtherance of that policy, which has also been adopted by other railroad systems throughout the country, and which is responsible for the present rate structure in the United States and without which that structure could not be maintained.

One of the low grade lines operated by the Pennsylvania Eailroad Company as part of its system, is the Columbia & Port Deposit line, the max ¹¹⁰ imum grade of which, before the relocation of the tracks was, except for a relatively short section at Fishing Creek, approximately 3 per cent. The railroad company in accordance with its policy undertook to see that the grade of the line as relocated should be no heavier than that, and, accordingly, its first agreement with the McCall’s Ferry Power Company, provided for a 3 per cent, grade, except that a 5 per cent, grade was allowed on a short section at Fishing Creek in Pennsylvania. That agreement was based, however, upon the hypothesis that the dam would be erected at Conowingo, but when application was made to the Federal Power Commission for authority to proceed with the power project, that commission, to better utilize the power of the river, ordered the dam to be located at a point east of Conowingo. That change materially altered the conditions which would have resulted from the establishment of a roadbed on a 3 per cent, grade, as originally contemplated, and would not only have made the construction very expensive, but would have had a ruinous effect upon the town of Port Deposit, since it would have required an embankment through the town which would have been twenty feet high at Port Deposit Station, and, since the location of the dam could not be changed without the approval of the Federal Power Commission, the railroad company and the power company agreed that the relocation should be at a grade of 0.35 per cent, instead of 3 per cent., as originally provided.

Thereafter the railroad company applied to the Public Service Commission of Maryland for its approval of a relocation of its tracks to be located and graded in accordance with the following description: “The proposed new line, as shown in solid red, is the location selected as best fitting- the contour of the ground for the ascending grade of 0.35 per cent, northbound, properly equated for curvature. It is proposed to secure a right of way 60 feet in width at grade, except within the lines of Port Deposit, where the width of right of way shall be 36 feet at grade, with such additional land as may be required for slopes, cuts, fills and for drainage purposes, and in ¹¹¹ addition such land for station lots, signal towers, water facilities and all other appurtenances as will equal in area the land now held and owned by the railroad for such facilities. * * * The elevation of the top of rail of the relocated rail was fixed at the Conowingo Dam by the elevation of the water in the new pool, viz., plus 108.5 U. S. Government and P. R. R. datum. The elevation of the new top of rail 100 feet west of the base line of the dam will likewise he plus 108.5. The equated grade oí 0.35 per cent., therefore, hy starting at the elevation of the water in the dam, will reach the grade of the present tracks at Tome Institute Station, the distance from the base line of the dam to the foot of the grade at Tome Institute being 5% miles. * * * In order that the top of rail of the relocated line shall he safely above all flood waters, the grade of 0.35 per cent, equated is to he carried northward beyond the dyke a distance of about 3800 feet from the breast of the dam to reach an elevation of plus 102, U. S. Government and P. R. R. datum, which will place the top of rail lD/a feet above the pool level of the dam.

The total length of the 0.35 per cent, equated grade from the summit 3,800 feet north of the breast of the dam to Tome Institute Station will be about 6j/2 miles.” A protest against that application was filed by a committee representing the citizens of the town of Port Deposit, who, after referring to the history, improvements, and advantages of the town, alleged that: “The relocation of the railroad as projected, elevating these tracks to tho height proposed between the river and the street, will have the effect of placing the street in the bottom of a trench and will shut off the view and cut off the breeze and air from the residences as well as the street, and render the town undesirable as a place of residence. “In times when the river is in flood, the proposed embankment between the street and the river will render the street a perfect sluiceway. The water pour ¹¹² ing through the necessary opening at the north end of the town will become a perfect torrent, flowing down the street destroying property the entire length of the embankment. “If this plan of relocation of the railroad as projected by the Pennsylvania Railroad is carried out, the result will be the absolute destruction of the adjacent property and will materially depreciate all property values through the town. “We have been assured by competent engineers, that the raising of this embankment is absolutely unnecessary, as the railroad, by increasing their grade no more than one-half inch in each 100 feet, would avoid the destruction of our town.” To understand that protest a brief description of the town is necessary. It is situated in the gorge of the Susquehanna, and is located on a narrow strip of comparatively level land which lies between a series of high bluffs on the east and the river on the west.- A state road connecting the state highway at Perryville and the Conowingo road runs through it from northwest to southeast. Between that road and the river are the tracks of the Railroad Company, on which there are two stations, one, the Tome station, at the southern end of the town, and another, the Port Deposit station, a short distance north of that.

Relocating the railroad at a grade of .35 per cent, would require a fill or embankment beginning at zero at the Tome station and rising to 6.7 feet at Port Deposit station, and to 15.11 feet at Rock Run near the northern limit of the town. As the grade of the relocated railroad is increased, the height of that embankment or fill will be decreased, which will appear if the roadbed is regarded as a straight line, one end of which is fixed at a point 3800 feet north of the dam, at an elevation of 108.5 above mean low tide at Havre de Grace, and the other end is at the elevation of the original roadbed at Tome station six and one-half miles away, which we will call zero. In such a case, as the zero end of the line is lowered, the grade is increased and the embankment or fill decreased, but ¹¹³ as it is raised the grade is lowered and the height of the embankment increased. The buildings and improvements in the town are for the most part located along the state highway, and the effect of the embankment required to maintain a grade of .35 per cent, would be, the protestants claimed, to obstruct their view of the river, to lessen the light and air which they now receive, and to convert the main street of the town into a sluiceway, through which the waters of the river will pour in time of flood.

The commission, after considering the application and the protests, and hearing evidence offered in connection with them, refused it as made, but authorized and permitted the Eailroad Company “to change the location of a portion of its line of railroad extending from a point near Port Deposit Station, Maryland, to the Maryland-Pennsylvania state line, as in the petition herein set forth, provided that that portion of the said line of railroad, between a point about 200 feet south of Port Deposit station and a point where it will run out south of the Octarora Bridge, when so relocated, shall be built to a 0.38 per eont. grade instead of to a 0.35 per cent, grade as proposed by the said company, and provided further that the said Philadelphia, Baltimore and Washington Eailroad Company shall provide access to the Susquehanna river by suitable means at points where public crossings now exist.” From that order the Eailroad Company appealed to the Circuit Court No. 2 of Baltimore City, and on December 24th, 1927, that court decreed: “That the proviso attached by the Public Service Commission to its approval of the application of The Philadelphia, Baltimore & Washington Eailroad Company for the relocation of its lines between a point 2000 feet South of Port Deposit, Cecil County, Maryland, to- a point beyond the Maryland-Pennsylvania state line, is null and void,” and remanded the case to the Public Service Commission directing it to approve the relocation at a grade of .35 per cent. Prom that decree this appeal was taken. ¹¹⁴ The evidence offered before the commission, while divergent, was for the most part not conflicting. The witnesses for the railroad company testified that the change of .03 per cent, in the grade ordered by the commission would diminish the tonnage which an engine of given power could draw over the road, would seriously impair its value as a low grade line, would interfere with the established policy of the entire system of which that section was a part, of maintaining low grade lines, and such interference, if generally permitted, would have an effect on the rate structure now prevailing to the detriment of the general.public; that the efficiency of a low grade system is to some extent measured by the grade of any section of the road over which its cars are generally routed, because the capacity of the whole line is measured by the heaviest grade on it where it is long enough to overcome the momentum of the train, rather than by its average grade, and that the original grade of the road was 3 per cent. While there was some disposition to question these conclusions, the testimony offered for that purpose was not sufficient to affect their value, and they must be taken as established.

The evidence offered by the protestants was sufficient to show that the proposed relocation on a grade of .35 per cent, will seriously affect property values in at least a part of the town of Port Deposit, and will seriously interfere with the convenience of at least some of its inhabitants, but whether it will have the extreme effects prophesied by some of the witnesses was not so- clearly shown. The Public Service Commission of Maryland was created by chapter 180 of the Acts of 1910. It exercises a naked statutory authority, and has no powers save such as were expressly granted to it by the Legislature, and such implied powers as are necessary to enable it to exert its express powers. North.

Cent. Rwy. Co. v. Pub. Serv.

Commn., 124 Md. 152 ; 22 R. C. L. 783; R. R. Commn. v. Oregon R. Co., 17 Or. 65 ; 2 L. R. A. 195. Its creation was dictated by ia governmental policy of delegating to certain boards, com ¹¹⁵ missions, and other similar agencies, administrative powers and functions in respect to the supervision and control of corporations employed in a public service, which found expression in such laws as the Interstate Commerce Commission Act, of Eebruary 4th, 1887, and in many statutes of a similar nature, that state legislatures have passed since that time. That policy was the outgrowth of neceessity, and the paramount law of self-preservation. The welfare, safety, and convenience of the public depended so closely upon the fair and efficient administration of corporations engaged in furnishing transportation, light, power, water, sewage, and other sanitary facilities to the public, that it became necessary to devise some agency by which they could be supervised and controlled in the exercise of their corporate functions and in the use of the privileges granted to them by the State, so as to insure the highest quality of service commensurate with the compensation charged, and to secure a relation between service and rates fair alike to the corporation and the public.

Texas & P. R. R. Co. v. Interstate Commerce