Kelly v. Consol. Gas Etc. Power Co. , 153 Md. 523 ( 1927 )

As I read it, the majority opinion in this case rests upon these two propositions: (1) Conceding that the Consolidated Gas Electric Light and Power Company, herein referred to as the power company, had prior to 1902 a state-wide franchise to use the roads, streets, and highways in the State of Maryland for the transmission and sale of electric current, that franchise, so far as Havre de Grace was affected by it, was repealed by chapter 127 of the Acts of 1902, which prohibited such use of the streets of that city without its consent; that therefore, before the power company could go into Havre de Grace, it was obliged to get the consent of the municipality, that its consent amounted to a new franchise, and that the instant it accepted that franchise the power company fell under the operation of section 390, article 23, Bagby's Code, and was obliged to secure the approval of the Public Service Commission before exercising any rights under that new franchise. (2) The state-wide franchise to use the streets, roads, and highways of the state for the transmission and sale of electric current, which the power company enjoyed prior to 1910, while single and complete in form, was nevertheless actually the sum of an indeterminate number of inchoate franchises wholly uncertain in extent, which would fructify and ripen only and when and as they were actually exercised; and that the Public Service Act of 1910, as well as the amendment of 1924, which prohibited the exercise of franchises by companies supplying electric current without the approval of the Public Service Commission, except in cases where the franchise had theretofore been "actually exercised," applied to and limited the rights of the power company everywhere, except in territory in and contiguous to Baltimore City, because that company had not actually exercised its franchise by using the public highways anywhere else for the transmission and sale of electric current.

I do not agree with either of these propositions. If the second is sound, the first is immaterial, because, if it is true, as the court finds, that the power company never had exercised that little piece or part of its franchise, which gave it the right to use the streets and highways in and about Havre de Grace to transmit and market its current, prior to 1910, and if its state-wide franchise was not a single undivided thing, but the aggregate of undetermined units of which Havre de Grace and vicinity was one, then the power company, before it can now use the streets and highways of Havre de Grace and vicinity, must, under section 390 of article 23, Bagby's Code, secure the approval of the Public Service Commission.

But assuming that the proposition is material to the issues raised by the appeal, I do not think it is sound. It turns finally on the meaning to be given the word "franchise." Now in arriving at that meaning, manifestly we are not to be limited by the verbal niceties and refinements of lexicographers, but are to consider what the Legislature meant by the language it used. Legislative acts affect everybody within their reach, and, in construing their language, we ought to be guided rather by the dictates of common sense, common usage, and common experience, than by any rigid, arbitrary, or technical formula whatever. As the opinion states, a franchise is a privilege granted to individuals which does not belong to all the citizens as of common right, which can only be granted by the government. In this case, prior to 1902, the State had granted to the power company through its constituent companies the privilege of using all the roads, highways and streets of the state, except such as were located in the city of Baltimore, for the transmission and sale of electric current, and the power company through some of its constituent companies had accepted the grant by exercising the privilege. Then in 1902 the Legislature qualified that grant as to the City of Havre de Grace by requiring the power company to secure the assent of the municipality before using the streets or highways thereof for the transmission and sale of its current. Assuming that the city of Havre de Grace was at that time fallow territory, I have no doubt that the Legislature had the power to make that qualification, but the question here is not whether it had the power to do that, but whether it exercised it. In other words, when the Legislature in 1902 qualified the original grant by requiring as a condition precedent to its exercise in Havre de Grace the consent of that municipality, did it intend retroactively to convert the actual and complete franchise which the power company then had into an inchoate and incomplete franchise, or did it intend only to give the municipality the right to prevent the exercise of the franchise within its limits and to leave the franchise as to the rest of the state as it was. If it did not intend to affect the general status of the power company's franchise, and I do not think it did, then the company was not affected by chapter 390, article 23, Bagby's Code, because it had actually operated under it prior to 1910. I say that I do not think the Legislature intended by Acts 1902, ch. 127, to modify, qualify, or limit the franchises then enjoyed by the power company further than to prevent it from exercising them in Havre de Grace without municipal consent, and the Legislature, when it passed the Public Service Commission Act, must have thought so, too, when it exempted from its application such corporations as had actually exercised franchises theretofore granted. If it had meant by that language to designate only such corporations as had actually and physically exercised the franchise in a given territory by the construction of generating plants and distributing lines, it would have been wholly unnecessary because, after the corporation had accepted the State's offer and had made substantial capital expenditures, it acquired a vested right to continue to exercise its franchise as far as was reasonably necessary to protect its investment. The proposition that the State could invite the investment of substantial sums in a public utility, and then destroy the value of the investment by revoking the only privileges which made it valuable, is patently unsound, and the Legislature could have had no such case in mind when it referred to the actual exercise of a franchise, because there was no need to state what everybody knew. And if it had intended to repeal the power company's right to extend its service to any new territory without the consent of the commission, it would have said so. It did not say so, and it could not, in chapter 127 of Acts 1902, have said so, because no such purpose is indicated in the title of that act. And I cannot escape the conviction that the company had an entire and complete franchise which it had exercised prior to 1910, and that therefore it was not affected by chapter 180, Acts 1910.

The vital and important matter determined by the opinion, however, involves the second proposition, which is that, notwithstanding the exemption contained in chapter 390, Code P.G.L. of Md., the power company has not now and has not had since 1910 the right to extend its service to any town or "aggregation of people" large enough to indicate a profit from the service without the permission of the Public Service Commission. The reasons advanced in support of these conclusions are that, under chapter 355 of Acts 1922, the steam and street railroad provisions of article 23 of the Code, supra, are applicable to the power company, and that those provisions in effect mean that "no electrical corporation shall begin the construction of an electric light and power plant or system, or any extension thereof without first having obtained the permission and approval of the commission." The difficulty about that equation, however, is that it ignores the proviso exempting from the application of those provisions franchises theretofore lawfully exercised. But that exemption can no more be ignored in the sections of the act relating to railroads than in chapter 390. But to escape the effect of that exemption the opinion adopts this rule: "In the exercise of a state-wide or general electrical charter, each town or aggregation of people in sufficient numbers to induce a corporation to look upon the territory as promising a profit should be regarded as a separate unit and not as a part of the whole state, to be served or not served at the pleasure of the corporation operating under such a charter." That proposition goes too far. No authority is cited to support it, for I do not think the case of New York ElectricLines Co. v. Empire City Subway Co., 239 U.S. 139, bears upon it at all. What that case decides, and all it decides, is that an unused franchise is not "susceptible of practically indefinite retention," but that is not the same thing as holding that a franchise to use the streets, roads, and highways of the entire state may not be a single and an entire thing, but must be the aggregate of an indefinite number of units, each one of which is composed of an "aggregation of people in sufficient numbers to induce a corporation to look upon the territory as promising a profit." As I have said, I do not question the right of the Legislature to revoke or repeal so much of such a franchise as relates to territory in which it has never been actually exercised, and which the corporation possessing it is not obliged to serve, but that is not the question. It is rather whether, until such a franchise is repealed as to such territory, it is to be regarded as single and undivided. In my opinion, until repealed it is single and entire, and therefore any work done under it, or any privilege exercised in pursuance of the powers granted by it, is necessarily an exercise of the entire franchise, and I see no logical escape from that conclusion. And as the power company through its constituents had actually exercised such franchise prior to the Public Service Commission Act of 1910, for that reason it was not affected by it, and had on March 7th, 1927, the right to extend its lines outside or inside the limits of Havre de Grace without the consent of the Public Service Commission, because at that time the State had never required as a condition precedent to such extension the consent of the Public Service Commission.

For these reasons I feel constrained to dissent from the very careful and able opinion filed for the court by Judge Sloan.