Warren Manufacturing Co. v. Mayor of Baltimore

Thomas, J., delivered the opinion of the Court. In 1908 the Legislature passed an Act “to empower the Mayor and City Council of Baltimore to establish and maintain a reservoir or lake in the valley of the Gunpowder River, in Baltimore County, for the purposes of augmenting and improving the municipal water supply of Baltimore City,” etc. The first section of this Act (Ch. 214 of Acts of 1908, page 649) authorizes the Mayor and City Council of Baltimore “to convert the entire valley or basin of the Gunpowder river, in Baltimore county, and its dependencies, or so much thereof as may be necessary for the purposes of this Act, from the present dam, at the lower end of Loch Raven, in said county, to. the upper end of the village of Phoenix, in said county, or to such point above said village, as may be necessary or proper for the purposes of this Act, into a reservoir or basin for augmenting and improving the municipal water supply of the City of Baltimore ; to create, establish and maintain said reservoir or lake and its appurtenances; — to create, establish, set apart and maintain, regulate and protect, afforest or otherwise improve water sheds and reservations along, and, to such full extent of adjacency as may be necessary for the purposes of this Act, adjacent to the waters of said reservoir, or lake, for securing a pure, copious and constant flow of water into said reservoir or lake; to create, establish and maintain, construct, erect, lay out and employ all such dams, — instrumentalities or means, as may be necessary or proper, for the ¹⁹² purposes of this Act, including all instrumentalities or means for diverting, deflecting, disposing of, controlling, collecting, confining, impounding, storing, protecting, clarifying, purifying, transmitting or distributing or otherwise handling, water that may be necessary or proper for the purposes of promoting or securing the full working efficiency and utility of said reservoir, — to make and enter into any and all contracts, agreements or stipulations germane to the scope of its power under this Act, — to acquire by gift, purchase, arbitration, exchange, lease, whatever the duration of the lease, or other like methods of acquisition, or by condemnation, any land or property public, quasi public or private, situated wholly or partly ih Baltimore county or in Baltimore City, or situated wholly or partly in Anne Arundel county or in any other county of this State, or any interest, franchise, easement, right or privilege therein, which may be required for any of the purposes of this Act, including springs, brooks, creeks, rivulets, rivers or other water courses, mills, factories and industrial plants of every description, and their appurtenances, workshops, stores, farm buildings, structures and erections, churches, grave yards, school houses, or, other school property, dwelling houses, out-houses, bridges, streets, alleys, roads and ways, and all other buildings, structures, erections or improvements of every description, on, over or under, land, or other property, or any interest, franchise, easement, right or privilege therein, — and generally to do and perform all and every such .acts or things which, by anything short of a palpably forced construction, could be held to be auxiliary or conductive to the proper exercise of any, or all, of the powers of this Act conferred upon the Mayor and City Council of Baltimore, or to the effective accomplishment of the leading purposes of this Act. The title acquired by condemnation, or otherwise, by the Mayor and City Council of Baltimore, under this Act, for the purposes thereof, shall, as to land, or other property, or things required for said main reservoir or lake, or for subsidiary reservoirs, lakes, ponds or basins, or for said water ¹⁹³ sheds or reservoirs, or for surface buildings, erections, structures, works or thing’s of a permanent character, involving the idea of exclusive use .and occupation by the Mayor and City Council of Baltimore, be in fee simple, but may, as to land, or other property, or things, required for other purposes under this Act, be in fee simple, or limited to some lesser quantum of interest, in point of estate, or duration, accordingly as the Mayor and City Council of Baltimore may determine.” Section 15 declares: “That all the powers, including powers of condemnation, and duties heretofore conferred and imposed, and all the discretion hereinbefore lodged by this Act upon and in the Mayor and City Council of Baltimore, other than the power of passing ordinances hereinbefore expressly conferred upon it, shall in the name and on behalf of -the Mayor and City Council of Baltimore without the necessity of any further legislative action by the Mayor and City Council of Baltimore be exercisable and exercised as one continuous, unbroken delegation of authority by the municipal officials or official who may for the time being have charge of the general municipal water supply of Baltimore City,” except that in the event that the charge of said water supply shall at any time be confided to one municipal official, there shall be associated with him until said main reservoir or lake, etc., shall have been completed, two capable and upright citizens of the City of Baltimore to be appointed by the Mayor, etc. Section 16 authorizes the Mayor and City Council of Baltimore to issue the stock of said corporation for a sum not exceeding $5,000,000.00 to cover the cost of the improvements authorized by the Act, and provides that the money derived from the sale of said stock, not including any premiums, shall be deposited with the City Register, and be placed to the credit of a fund to be known as the “Gunpowder Reservoir Fund,” which shall be exclusively applicable to the cost of carrying the purposes and provisions of this Act into execution, and shall be chargeable with no other items of cost or expense whatsoever, and appropriation to ¹⁹⁴ defray said cost, based upon the estimate of the person charged with the duty of doing the wort contemplated by this Act shall be annually included by the Board of Estimates in the usual way in the ordinance of estimates.” Section 17 provides “That in the event of said loan of $5,000,000.00 being approved by the legal voters of Baltimore Oity as hereinbefore mentioned, but not otherwise, all contracts or agreements, which may have been entered into prior to the passage of this Act, by the Water Board of Baltimore City, in and name and on behalf of the Mayor and City Council of Baltimore with any person or persons, corporation or corporations, for the acquisition for the purposes of this Act, of any land, property or thing shall by virtue of this Act, stand ratified and confirmed as fully in all respects as if the same had been so entered into after the passage of this Act, and the popular approval of said loan.” Prior to the passage of this Act the Water Board of Baltimore City entered into an alleged contract with the Warren Manufacturing Company of Baltimore County for the purchase of the mill and other property of said company situated in the valley of the Gunpowder river. The contract is contained in the correspondence between the Water Board and the Warren Company, beginning with the following letter: February 17, 1908.

Warren Manufacturing Company, Baltimore, Maryland. GmTLEMEKT: As to the proposition to acquire the property of the Warren Manufacturing Company, at or near Warren, Md., the Water Board will agree to purchase the same for $725,000.00, subject to the ratification of a loan of $5,000,000, an enabling Act for which is about to be introduced in the General Assembly of the State. The said sum to be paid when available from said loan, with the understanding that the said Water Board will rent said property back to the said Warren Manufacturing ¹⁹⁵ Company for a period of two years from the date of said payment for the rental of $50,000 a year; said sum to be deducted from the payment of $725,000, to be paid as aforesaid. Yery truly, (Signed) Alfred M. Quick, The Water Board of Baltimore City.

This offer was finally accepted by the Warren Company on March 3rd, 1908, with the modification that the “purchase price,” $725,000.00, was to be paid “out of the proceeds of the first sale of bonds under the enabling Act mentioned,” and that “the rent for said property” was to be paid “quarterly in advance”. The issue of the City stock to the amount of $5,000,000 for the purposes specified in Act, was by an ordinance of the Mayor and City Council of Baltimore submitted to the legal voters of Baltimore City, and was approved by a majority of the votes cast at the election held November 3, 1908. In pursuance of the authority contained in the Act the Water Board of Baltimore City on the 31st day of July, 1911, passed the following resolution: “Resolved, That the Water Department of Baltimore City proceed forthwith to construct a dam of such material as may hereafter be approved by the Water Board, to such a height that it will in no manner impair the property, property lights or water power of the Warren Manufacturing Company, such dam to be located 2,100 feet above the present dam at Loch Raven on the Gunpowder River, measured on axis of stream, said new dam to be so constructed that it can subsequently be raised, if occasion requires, to any elevation deemed reasonably necessary for impounding the available water of said river.” On the 27th of September, 1911, the Warren Manufacturing Company of Baltimore County, the appellant, filed its ¹⁹⁶ Bill of Complaint in this case against the Mayor and City Council of Baltimore and the members of the Water Board of Baltimore City, alleging the existence of said contract and the failure of the City to accept the property of the plaintiff'in accordance with its terms; that the defendants had finally determined to exercise the authority vested in them by the Act of 1908, and had declared their purpose to construct in the valley of the Gunpowder river, above the present dam at the lower end of Loch Raven, “an impound ing dam to an elevation of 192 feet or thereabouts above mean tide, and thereby to convert a large part of the valley of the Gunpowder river into a reservoir or basin for augmenting the municipal water supply of the City of Baltimore— that if the proposed impounding dam is erected to the height of 192 feet or thereabouts above mean tide;, and put in use, the fall from the lower boundary” of the plaintiff’s property “to the still waters of said dam and down through said still waters for a distance of several miles, will be only about 1.80 feet, a fall totally insufficient for the free and accustomed flow’ of the water away from” plaintiff’s property “and from the power plant of its aforesaid factory, and a fall totally insufficient for the continuance and maintenance of the power in and at said factory;— that the building and use of the aforesaid dam by the defendant will irreparably damage” plaintiff’s property. “by casting deposits of sand, silt and other things upon the banks and in the bed of said river along and through the property of the plaintiff,” and will thereby obstruct and fill up the bed of said river through said property; that it will at all times during the ordinary flow of the Gunpowder river greatly impair the water power now and for more than forty years past used by” the plaintiff in operating its said mill, “and that it will be destructive of the said wrater power for about six months of each year, and that it will, during each year, at the time of high water in said river, inundate and flood” plaintiff’s property ; that if the defendants are permitted to construct said dam, as aforesaid, “the menace which will exist at all times, of dam ¹⁹⁷ age and injury from floods and back water of tbe Gunpowder river, will greatly impair and destroy, not only tbe value of” plaintiff’s property, “but the established trade of its aforesaid factory, and render it impossible”- for tbe plaintiff “to retain or secure sufficient number of employees for tbe operation of said factory.” Tbe last paragraph of tbe bill alleges “that within tbe last few days- tbe defendants, tbe Mayor and City Council of Baltimore, and tbe present Water Board of said City, have advertised for bids for tbe work of building tbe dam mentioned in these proceedings, and have issued certain plans and specifications for tbe doing of said work — that said plans and specifications show that tbe aforesaid' dam is to be built at a lower elevation than 192 feet above mean low tide;” that tbe plaintiff “is credibly informed and believes and upon information and belief charges, that tbe building ot the aforesaid dam to tbe elevation set forth in tbe aforesaid pians and specifications will cause tbe same general character of damage and injury to and interference with” tbe property of tbe plaintiff, “and with tbe operation of its aforesaid factory, as is set forth in tbe bill of complaint, less only in degree, frequency and extent.” Tbe prayer of the bill is for an injunction enjoining tbe erection of a dam according to said plans and specifications, etc., and for specific performance of said contract. On tbe 11th of October, 1911, tbe present members of the Water Board of Baltimore City were made defendants, and on tbe 3rd day of January, 1912, on tbe petition of the plaintiff, tbe Court below granted an injunction enjoining the defendants, etc., from doing any work in tbe construction of tbe dam mentioned until tire final determination of the case.

Tbe Mayor and City Council of Baltimore and tbe present members of tbe Water Board of Baltimore City answered tbe bill of complaint, and filed a motion for a dissolution of tbe injunction. Tbe case was set down for a bearing on tbe motion to dissolve tbe preliminary injunction, but by agreement of counsel tbe whole controversy was ¹⁹⁸ considered and disposed of by the Court below, and this appeal is from a final decree dissolving the injunction-and dismissing the bill, as against the Mayor and City Council of Baltimore and the present Water Board of Baltimore City, “without prejudice to any new application for an injunction that the plaintiff may think itself entitled to make at any time hereafter, when it shall think that danger of damage to its property more clearly appears.” • One of the defences relied on by the defendants is that section 11 of the Act of 1908 only ratifies such, contracts, made prior to the passage of that Act, as the Water Board is authorized to make under the provisions'of the Act, and that - the Act does not authorize the purchase of movable machinery in a mill. If this contention of the defendants was- sound, it would be' á complete answer to the claim of the plaintiff for specific performance of the alleged contract, for it is conceded that prior to the Act of 1908 the Water Board had no povimr to make such a contract, and unless it can be fairly included within'the terms of section 17 'of that Act it is a mere nullity. The terms of section 17 are general and do not refer to any particular contract.

It declares that contracts made b'y the Water Board prior to the passage of the Act, “for the acquisition for the purposes of this Act of any land, property or thing shall, by virtue of this Act, stand ratified and confirmed as fully in all inspects as if the same had been made after the passage of this Act.” The words'“for the purposes of this Act,” and the words “in all respects as if the same had been so entered into after the passage of this Act,” clearly indicate that the Legislature only intended to ratify prior contracts of the Water Board for the acquisition of such “land, property or thing” as the City is authorized to acquire under the provisions of the Act. But the more important inquiry in this connection is, does the Act authorize the acquisition of property of- the kind mentioned in the contract in question? ¹⁹⁹ The property is described in the correspondence referred to as “all the real estate and interest of every kind in real estate, all the buildings and improvements, of every character, all machines and machinery and all. water rights and privileges, all unencumbered, which the Warren Manufacturing Company owns in or near the village of Warren, in Baltimore County.” This property consists of several mills buildings, equipped with machinery employed in manufacturing cotton duck and .operated by water and steam power, about 2M acres of land, a number of dwelling houses, used and occupied by the officers and employees of the company, farm buildings, and a number of other buildings used in connection with the mill. It appears from the testimony of Mr. Whitman, who made out a list and an estimate of the value of the machinery in and connected with the mill, that the water power machinery and steam engine and boiler were annexed to the land, or built in or annexed to the buildings, and that the water power machinery is connected with the- mill by two large shafts, which are supported by and secured to “masonry pier foundations that are probably seven or eight feet above the floor level and about ten feet in one direction by ten or twelve feet in the other,” and which were built for that purpose, and that the power is conveyed from these shafts by belts to the line shafts of the mill, which are bolted to the floor, and to the machinery. The heavier looms in’the mill are supported by and secured to masonry foundations which were built for that purpose.

By section 15 all the powers conferred by the Act, other than the power to pass ordinances, are to be exercised by the municipal officials who have charge of the municipal water supply of Baltimore City, and these officials constitute the Water Board of Baltimore City. They are authorized to convert the entire valley or basin of the Gunpowder River, or so much thereof as may be necessary, into a reservoir or basin for the purpose of augmenting and improving the water ²⁰⁰ supply of the city, aud to that end they are empowered “to acquire by gift, purchase, arbitration, exchange, lease, whatever the duration of the lease, or other like methods of acquisition, or by condemnation, any land or property * * * which may be required for any of the purposes of this Act, including springs, brooks, creeks, rivulets, rivers or other water courses,' mills, factories and industrial plants of every description, and their appurtenances,” etc. The Water Board is, therefore, expressly authorized to acquire by condemnation or otherwise “mills, factories and industrial plant of every description, and their appurtenances,” and the appellant has cited many cases holding that the words mills, factories, etc., include all of the machinery annexed to the mill and used therein. Patterson v. Delaware Co., 70 Pa. St. 331; Schott v. Harvey, 105 Pa.

St. 227; Teaff v. Hewitt, 1 Ohio St. 511 ; Gibson v. Hammersmith Ry. Co., 32 L. J. Ch. (N. S.) 337; Delaware L. & W. R. R. Co. v. Oxford Iron Co., 36 N. J. Eq. 452; William Firth Co. v. S. Carolina Loan and Trust Co., 122 Fed. R. 569; Dudley v. Hurst, 67 Md. 44 . In the case of Dudley v. Hurst, supra, the mortgagor owned a farm upon which he had established a canning factory for the purpose of canning fruit, vegetables and corn.

The mortgage conveyed the farm, “together with all the buildings and improvements thereon, and the rights, roads, ways, waters, privileges, appurtenances and advantages thereto be’-nging, or in any wise appertaining.” The farm was sold under the mortgage, and the purchasers took possession of the roperty. After the sale the mortgagor executed a chattel mortgage of the machinery in the canning factory, and the mortgagees in the chattel mortgage were about to sell the machinery under the power of sale contained therein when the purchasers of the real estate at the mortgage sale obtained a preliminary injunction against such sale, upon the ground that the machinery in the canning factory were fixtures, and jjassed to them under the mortgage sale. In that case the ²⁰¹ Court, after stating that the main part of the machinery consisted of a boiler which was placed upon a brick foundation in a boiler house built for that purpose, and connected by pipes with a steam pump and with the kettles and scalder, etc., in the canning house proper, and that in order to mov; the boiler, pump and process kettles it would be necessary to tear down the boiler house and to tear up the floor of the process room, said: “That the machinery above described, and which constituted the motive power of the factory, is a fixture, and as between mortgagor and mortgagee passed to the latter, we think, well settled. CirAsrcEmon.

Joi-iixsoit, who seems to have favored the relaxation of the ancient rule, as fax' as practicable,, in McKim v. Mason, 3 Md. Ch. 186 , decided that the motive power of a cotton mill, coxxsisting of boiler, engine, etc., passed to the mortgagee, even when they ■were placed upon the land after the mortgage was executed.” “Many other cases might be cited from other states showixxg that machinery located as that we have described, passes to the mortgagee, but it is hardly necessary to cite thexn.” “But it seems to be intimated in Kerwan v. Latour ( 1 H. & J. 289 ), above cited, that, although what was actually fastened to the soil passed by the deed, sxxch parts of the distillexy as were not so fixed did not so pass. This case was decided in 1802. But since the decision of that case the doctrine of constmctive annexation has been much discussed. From the general current of decisions, the following pxfinciple seems clearly dedxxcible: “Whex’e in the case of machinery the principal pant becomes a fixture by actxxal annexation to the soil, sxxch paxd of it as may be not so physically anxxexed, bxxt which if rc-xxioved would leave the principal thing unfit for use, and would not of itself and standing alone-be well adapted for general use elsewhere, is considered constructively annexed.” “Thus the key of a lock, the sail of a wind mill, the leather belting of a saw mill, although actually severed from the principal thing and stored elsewhere, passed by constructive ²⁰² annexation.

They must be such as to go to complete the machinery, which is affixed to the land, and which, if removed, would leave the principal thing incomplete and unfit for use. Beardsley v. Bank, 31 Barber, 619; Burnside v. Twichell, 43 N. H. 390. “In this case there are some articles not actually annexed to the soil, such as crates, cripping machines and work tables, hut are essentially necessary to the-working of -the principal machinery, • and passed by constructive annexation. The main machinery would not be in working condition without them, and they are not adapted for general purposes.” Mr. Lewis, in his work on Eminent Domain, says: “Fixtures upon the property taken must be valued and paid for as part of the real-estate, and any depreciation in the value of fixtures upon the part not taken is to be taken into consideration, the same as damage to the soil itself.” 2 Lewis on Eminent Domain (3rd Ed.), sec. 728. See also Edmands v. Boston, 108 Mass. 535 ; Allen v. Boston, 137 Mass. 319; White v. Cincinnati R. & M. R. R., 34 Ind.

Ap. 287 In the case of Matter of the Mayor, 39 N. Y. App, Div. 589, the city contended that although the machinery as it stood upon the land would be a fixture as between vendor and vendee, that rule did not apply in condemnation cases, and that it was the -duty of the owner to remove all machinery that could be removed without its practical destruction. .-In that case the Court said: “There is practically no dispute upon the evidence that, as between vendor and vendee, a very-large portion of this machinery should -have been regarded as a fixture, and, therefore, if the premises had been sold by contract between two individuals the machinery would go with the land. Does this law of fixtures apply to this class of cases?” After stating the rule in regard to fixtures, as between vendor and vendee, the Court says further: “The same rule exists in proceedings to take land under the right of eminent domain, and the commissioners of estimate have no right to restrict the assessment to the simple value of the laud, compelling the owner to retain the fixtures on the ²⁰³ premises, and exempting the city from an obligation to take and pay for them as a part. of the land. (Schuchardt v. Mayor, 53 N. Y. 202, 208 .) . Whatever has been put upon the land by the owner with the intention that it should remain upon the land and was essential to the use which he made of it, is, generally speaking, as between himself and his vendee, a fixture, and goes with the land when he shall sell it.” This case, is cited in Lewis on Eminent Domain, supra, and in a note in 15 Cyc. 759, and was followed in the case of White v. Cincinnati R. & M. R. R., supra, where the appellate.

Court of Indiana held that “in a proceeding to condemn, for a railroad right of wav, land on which there are buildings constituting a manufacturing plant,, the machinery- therein necessary to carry on the business of the plant, regardless of the manner of its attachment to the freehold, should be considered as part of the freehold, in estimating the damages.” In that case the Court said: “The case at bar seems to have been tried upon the theory that a part of this machinery should be considered as part of the land, while- a part of the machinery'might not be so considered. It is clear from the record that the improvement upon the -real estate consists not simply of certain buildings containing various pieces of machinery, but of a paper mill- — a thing complete within itself. Such machinery as is necessary and essential to a paper mill plant would be without value except as a part of a paper mill. Means were provided for. utilizing the water power, buildings erected, and machinery placed in position for the purpose of establishing a paper mill.

It is not questioned that the buildings should be regarded as a part of the land. In such cases there is no more reason for saying that the machinery necessary and essential for the carrying out the purpose of the mill is a mere incident or accessory to the buildings than there is for saying that the buildings are incident or accessories to the machinery. One machine essential in the manufacture of paper might.be so annexed to ²⁰⁴ or constitute such part of a building that it could not be removed, and another machine equally essential might be easily removed, and yet, when the two machines, are separated, each is without value for the uses intended. In such case both of the machines should be considered as attached to the freehold-one by real and the other by constructive annexation.

As the machinery is permanent in its character, and, being essential to the purpose for which the buildings are used, is a fixture, it must be regarded as realty, and goes with the buildings. The land, water power, buildings and machinery constitute a paper mill plant — a unit.” If the machines and machinery in the cotton duck mill of the appellant are tested by the principles announced in Dudley v. Hurst, supra, it would seem clear that, as between a vendor and a vendee of the land and mill, they should be regarded as actually or constructively annexed to the buildings or land, and, therefore, as fixtures, and if, in accordance with the doctrines announced in Lewis on Eminent Domain and the cases last cited, which seem eminently just and fair, we apply that rule to property taken. under condemnation proceedings, it follows that if the City had condemned the land and mill of the appellant it would have been required to take the machinery mentioned in the contract. As the Water Board is authorized by the Act to acquire by corn demnation or otherwise “mills, factories and industrial plants,” which must be construed to include the machinery in and annexed to mills and we do not think that the contract of the appellant and the Water Board is open to the objection that it includes property which the city is not authorized to acquire under the Act. It is urged by the appellees that as nearly all of the items of property mentioned in the Act are species of real property, following the maxim Noscitur a sociis, the words “Mills, factories and industrial plants” should be interpreted to mean real property, not including movable machinery in mills, factories, etc. And this view, they claim, is strengthened by the requirement that the title of the city shall “be' ²⁰⁵ in fee simple.” But if we treat this machinery as fixtures, and, therefore, as a part of the land or real property, we are still within the rule of construction referred to.

As a further defense to the demand for specific performance of the alleged contract, the defendants insist in their answers that ths amount specified therein is greatly in excess of the real value of the propei'ty and that the Water Board was induced to enter into said contract by false representations of material matters made by the appellant or its representatives to the Water Board, or the members thereof, and upon which it relied. An application for specific performance of a contract is addressed to the sound and reasonable discretion of the Court. This discretion is not an arbitrary one, “but a sound judicial discretion, regulated by fixed and established rules.” As said in Gough v. Crane et al., 3 Md. Chancery, 134: “In the exercise-of a sound and judicial discretion, the Court will not be active in specifically enforcing claims, not under the actual circumstances just between the parties,” or as stated in Geiger et al. v. Green, 4 Grill, 472: “A Court of equity must be satisfied that the contract sought to be enforced is fair and just and reasonable and equal in all its parts, and founded on an adequate consideration, before the Court will interpose with this extraordinary assistance.” It is said in O’Brien v. Pentz, 48 Md. 562 : “The interposition of a Court of equity in granting relief by the enforcement of the specific performance of any contract, it is not a matter ex debito justitiae, and to warrant its interference, the terms thereof must be fair, and it must be founded on a valuable consideration,and he made under circumstances commending it hr the favorable apprehension of the Court,” and in Popplein v. Foley, 61 Md. 381 : “AVhile specific execution is a matter not of absolute right in the party, but of sound discretion in the Court, yet if a contract respecting real property is in writing, and is certain, fair in all its parts, for an adeqirate consideration, and capable of being performed, it is as much a matter of course for a ²⁰⁶ Court of equity to- decree specific performance of it, as it is for a Court of law to give damages for a breach of it.” In the light of these rules, let us examine the facts and circumstances connected with the execution of the contract in question, in order to ascertain whether it is entitled to the favorable consideration of a Court of equity A bill to authorize the improvements mentioned in the Act of 1908 was first introduced in the Legislature in 1906. To that bill Baltimore County and the Warren Manfacturing Company secured ceidain amendments which they deemed necessary for the protection of their interests, but which were so objectionable to the City that the bill was abandoned.

In the fall of 1901 the city officials undertook to adjust these differences between the City and Baltimore County and the Warren Manufacturing Company in advance of the meeting of the Legislature of 1908. The negotiations between the City and the Warren Manufacturing Company, which were conducted mainly by Mr. Quick, president of the Water B'oard, on behalf of the Water Board, and by counsel for the Warren Company, resulted in the contract contained in the correspondence referred to. The object of the Warren Company was to accomplish the sale of their entire property, including all machinery in its mill, at what it claimed was a fair valuation, while the moving purpose of the Water Board in these negotiations was to purchase the property at the most reasonable price possible, in order to avoid the risk of condemnation proceedings, and the imposition upon the City of excessive damages through the adoption of a rule of damages that would be especially burdensome. One of the things feared by the Water Board was a valuation by a jury of the appellant’s cotton duck factory as a “going concern” based upon a capitalization of the net profits of its business.

One of the important items of property considered was the machinery in the mill. During these negotiations counsel for the Warren Company wrote Mr. Quick, “Mr. Hooper estimates that $42.00 per spindle is about what it would cost to build ²⁰⁷ and place the machinery of the Warren Mill.” “Mr. Hooper’s estimate of the machinery is, at $42.00 a spindle, nearly $300,000,” and also told Mr. Quick, “That the company earned the previous year net eighty thousand dollars approximately, and for two or