Baltimore & Drum Point Railroad v. Pumphrey

21 A. 559, 74 Md. 86, 1891 Md. LEXIS 37

• Court: Court of Appeals of Maryland
• Decided: March 25, 1891
• Status: Published

Opinion

Alvey, C. J.,

delivered the opinion of the Court.

The hill in this case was filed by a considerable number of the taxpayers of Anne Arundel County, for the purpose of having declared inoperative and without continued effect, the Act of the General Assembly of 1872, ch. 245,- and the confirmatory Act of 1874, ch. 225; and also to have declared nugatory and void all the proceedings under those Acts taken by the board of County Oominissioners of that county, for the purpose of effecting a subscription to the capital stock of the Baltimore and Drum Point Railroad Company, for and on behalf of the county, to the extent of $200,000. The railroad company was incorporated by the Act of the General Assembly of 1868, ch. 364, to construct and operate a railroad from the City of Baltimore to Drum Point at the mouth of the Patuxent River, in Calvert County; nearly all of the location of the route of such road being" within the limits of Anne Arundel and Calvert Counties. By the 19th section of the Act of incorporation, it was provided that if the said road should not be commenced within six years from the passage of the Act of incorporation, and should not be finished within four years from the time of the commencement thereof, then the Act should be null and void.

The bill charges several grounds for impeaching the . validity and continued operation of the proceedings and resolutions of the board of County Commissioners, taken professedly under the Acts of Assembly above mentioned, and charges the same to be void and without binding effect; and the plaintiffs, by proof introduced into the-case, impeach the constitutional validity of the Confirmatory Act of 1874, ch. 225, itself. An injunction is-prayed to restrain all proceedings under the Acts, or the resolutions of the Commissioners, and also for general relief.

The County Commissioners and the Railroad Company were made defendants. The Commissioners failed to-appear and answer, and an interlocutory decree was taken as against them. They left the questions raised by the bill to be contested by the railroad company alone. The railroad company appeared and answered; and by its answer it denies and controverts all the most material allegations and conclusions of the plaintiffs. Upon proofs taken the case was brought to final hearing; and the Court below decreed in favor of the plaintiffs, and enjoined all further proceedings of the Commissioners-under the Acts of Assembly.

There is no question made, and none could be, as to-the right of the plaintiffs, as taxpayers of the county, to maintain the bill; that has been decided in several cases in this Court. Mayor, &c. of Baltimore vs. Gill, et al., 31 Md., 395; St. Mary’s Industrial School for Boys vs. Brown, et al., 45 Md., 310.

The Act of 1872, ch. 245, by its first section, authorised the County Commissioners of Anne Arundel County, in the name of and for said county, to subscribe for and hold shares of the capital stock of the Baltimore and Drum Point Railroad Company, to an amount not to-exceed $200,000 at the par value of said shares. And by the second section of the Act, the Commissioners are authorised, for the purpose of meeting said subscription, to issue bonds of the county, with interest coupons attached, to the amount of $200,000; and by the eighth section of the Act, it is provided that said bonds, so to he issued, shall be received by the railroad company at the par value thereof, in payment of the shares of stock so to be subscribed for.

By the ninth section of the Act, certain conditions are prescribed upon which the bonds may be delivered to the railroad company; all depending upon the progress of the work within the limits of the county. And in regard to the last instalment of the bonds to be issued, being the one-fourth of the whole amount authorised, it is provided that they shall be delivered to the railroad company, “when the whole of the line of the said railroad, within the limits of said county, shall have been fully built and constructed, and in running order; and that the said bonds shall not he issued or delivered to the said company in any greater instalments, nor at any earlier periods, than as above specified; and, provided, that no bonds shall be issued under this Act, unless the said company shall, by an amendment of its charter, agree and bind itself to run daily at least two through trains of passenger cars, without change of cars, between the Oity of Baltimore and Annapolis, either over its own road, or in connection with the Annapolis and Elk Eidge Eailroad, if its road shall not be extended to Annapolis. ”

Section twelve of the Act directs that the question of the approval or disapproval of the Act should be submitted to the legally qualified vqters of the county, at an election to be held on the fourth Monday of April then next; and as the Act declared that it should take effect from the date of its passage, and it was approved by the Governor on the first day of April, 1872, it spoke from that date, and the election provided for should have been held on the fourth Monday of April, 1873. But, according to the proclamation of the clerk made as required by the provision of the 12th section of the Act, the election was held on the fourth Monday of April, 1872, a year in advance of the proper time. The confirmatory Act of 1874, ch. 225, which professed by its title to be passed in pursuance of section 54 of Article 3 of the Constitution, was passed, doubtlessly, upon the assumption that the popular election required by the Act of 1872 had been regularly held, and that the Act of 1872 had been duly published as required by the constitutional provision referred to, in the newspapers of the county, “for two months before the election for members of the House of Delegates,” which was held on the 4th day of November, 1873. But it now appears, by the production of the county newspapers in Court, under an agreement, that in neither of the two news* papers so produced^was the Act of 1872, ch. 245, published for the full period of two months before the day of election of members to the then next House of Delegates. In the one paper the first insertion of the Act was on. the 6th day of September, 1873, and in the other the first insertion was on the 9th of September, 1873. It is therefore clear, that the Act of 1872 was not duly published for two months before the election held on the 4th day of November, 1873.

It is proper to notice in passing that the railroad company applied to and procured from the Legislature of 1876, an Act amendatory of its charter, (Act, 1876, ch. 337,) by which the time for the completion of the road was extended for the period of five years from the first of January, 1877. This Act was approved on the 8th of April, 1876, and it took effect from the date of its passage. It was therefore in operation, as part of the charter of the company, on the 6th of June, 1876, when the County Commissioners first attempted to exercise the power that was supposed to have been delegated to them by the Acts of the General Assembly of 1872, ch. 245', and of 1874, ch. 225.

It is also proper to notice the Act of 1874, ch. 433, whereby the City of Baltimore was authorised to subscribe to the capital stock of this railroad' company, or to indorse its first mortgage bonds, to an amount not exceeding $500,000, upon such terms and conditions as the Mayor and City Council might by ordinance prescribe. That Act was also in force at the time when the County Commissioners attempted to make the subscription on the 6th of June, 1816; but the authority conferred by this Act of 1814 has never been exercised by the city authorities. ■ ^

As we have just stated, the first proceeding taken by the County Commissioners, under the Act of 1812, to make the subscription on behalf of the county, was on the 6th of June, 1816. Rut it appears that before that time the railroad company, by its president and directors, had become anxious and active in the matter, and proceeded so far as to consider and determine upon the terms and conditions of the subscription that they sought to obtain from the county, and actually formulated, in the shape of a resolution, the subscription, with the exact terms and conditions therein, as those'subsequently adopted by the County Commissioners. This resolution of the board of directors was passed on the 10th of March, 1816, and it was declared, by the same resolution, that the railroad company would, and did theréby agree, to accept the subscription for the county, on the terms and conditions thus formulated and set forth in the resolution; and which resolution was transmitted to the County Commissioners, and became the basis of the subscription made by them on the 6th of June, 1816. The terms and conditions thus proposed were adopted, and the subscription ordered to be made accordingly. The order directing the subscription was made matter of record; and it was thereby resolved that the subscription of $200,000 be made in the name of and for Anne Arundel County; “and that the said subscription be made upon the books of the said company, and signed by the president and other members of this board, or by a majority thereof, and attested by the clerk of the hoard, with the corporate seal of the board affixed; and that the said subscription' be made upon the following-terms and conditions, to wit:

“The County Commissioners of Anne Arundel County agree to subscribe to the capital stock of the Baltimore and Drum Point Railroad Company to the amount of two hundred thousand dollars, tipon the following terms and conditions, to wit: First, upon the terms and conditions prescribed by the said Act of 1872, ch. 245, authorising such subscription to be made; and, second, upon the further condition that the said company shall comply in all respects with the requirements of its charter and every amendment thereto in reference to the construction of said road, and that the said company shall locate and construct its railroad through the town of Brooklyn,, in Anne Arundel County; and provided further, that no part of the said bonds shall be issued or delivered to the said company until the Mayor and City Council of Bal7 timore shall have, by ordinance, provided for an endorsement of the bonds of the said company to the amount of five hundred thousand dollars; and that no part of •said bonds shall be delivered to the said company until the said railroad shall be built and equipped from the City of Baltimore to the Annapolis and Elkridge Railroad; and that the said subscription shall not taJce effect until these terms and conditions are accepted by the president and directors of said company; and unless these several terms and conditions shall be complied with, the said subscription shall be null and void; otherwise to be and remain in full force and virtue in law.”

This resolution was duly signed and attested; and it was the final resolve of the board upon the subject of the subscription, and what remained to be done was simply of a clerical or ministerial character. We must take the whole proceeding together; and when we consider the action of the railroad company that jmeceded and formed the basis, and indeed a principal inducement, of the resolution of the County Commissioners, there would seem to be no room for question that the subscription was made by the Commissioners and accepted by the railroad company, upon the terms and conditions particularly set forth in the resolutions passed by the board of directors and the board of County Commissioners, respectively; and it does not matter in what form the entry of subscription was afterwards made in the books of the railroad company. Bates County vs. Winters, 112 U. S., 325, 327. All the terms and conditions embodied in the resolution of subscription formed parts of the contract; and non constat that the contract of subscription would ever have been made without such conditions. Indeed, it is expressly declared that the subscription should not talce effect until those terms and conditions were accepted by the railroad company. And there would seem to be no ground to question the competency of the railroad company to bind itself by the acceptance of such subscription. 1 Moraw. Corp., secs. 78 to 86.

At the time this subscription was made, the railroad company, by an amendment to its charter, had until the first of January, 1882, within which .to complete its road. But at the expiration of that time not one of the conditions mentioned in the resolution of subscription, with respect to the construction of the road, had been complied with. And even at the present moment there has been but a part of the grading for the road done within the limits of Anne Arundel County, with no well grounded prospect that the railroad company will be able to proceed with and complete the road — certainly not within any reasonable time to come. In that state of affairs, the Act of 1880, ch. 200, amendatory of the charter of the company, was passed; and among the provisions of the Act there is one extending the time for the completion of the road, to the first day of Majq 1885. But, by the 3rd section of the Act, it is expressly provided, that the extension of the time for the completion of the road should not be construed, “in any way, as to bind the County of Anne Arundel for its subscription to the capital stock of said company, unless the Gounty Commissioners give their consent to a continuance of said subscription.” In inserting this provision in the Act the Legislature manifestly acted upon the assumption that the limitation of time for the completion of the road was of the essence of the contract of subscription by the county; and hence the consent of the Commissioners was required to the continuation of the subscription. That consent, however, was never given to the particular subscription of June 6th, 1876.

It is unnecessary to make further reference to the facts of the case as detailed in the record; those that we have stated being sufficient to present the questions that, in our judgment, are decisive of the case. We shall therefore proceed <to consider briefly the propositions, or rather the most material of them, that were made and urged at the bar with great ingenuity and ability.

The first proposition urged on the part of the defendant, the railroad company, is, that the subscription of the County Commissioners to the capital stock of the company, authorised by the Act of 1872, ch. 245, is not within the meaning of the terms of section 54 of Article 3 of the Constitution; and therefore the failure to publish that Act two months before the then next election for members of the House of Delegates, as required by the provision of the Constitution and the 13th sec. of the Act of 1872, - is immaterial and irrelevant to the question now involved. Of course, if this contention were maintainable, .the question whether the Act of 1872 had been published as required by the section of the Constitution would be immaterial; the subsequent Act of 1874 would cure such defect or omission, so far as the mere requirement in the Act of 1872 is concerned. But the Acts of the Legislature, both that of 1872, ch. 245, and of 1874, ch. 225, contemplated the power delegated as being within the provision of the Constitution; and we think the Legislature clearly right in so regarding the power.

The argument in support of this proposition is founded upon the particular terms of the section of the Constitution; that no county shall contract any debt or obligation. in the construction of any railroad, canal, or other works of internal improvements, nor give, or loan, its credit to or in aid of any association or corporation, unless authorised by an Act of the General Assembly, &c. The language of this section of the Constitution is very broad and' comprehensive; and with a common knowledge possessed by the whole people of the State, we cannot fail to understand what was intended to be accomplished by this constitutional restriction.' It was intended as a constitutional limitation of power, not only of the local authority, but of legislative power itself; and all such cases as the present were manifestly contemplated as being within the constitutional restriction or limitation, being wdthin the evils intended to be restrained. The Act of 1872, authorising the subscription to the capital stock of the railroad company, also authorised, for the purpose of meeting such subscription, the County Commissioners to issue coupon bonds, which of course would be negotiable; and, in another section, such bonds are required to be received by the railroad company, in payment of the subscription of stock. The. primary object of this subscription, and the issue of bonds therefor, was to enable the railroad company to avail itself of the credit of the county to raise funds with which to prosecute its works; and it «was therefore a loan of the credit of the county, in a constitutional sense, that the bonds were to be issued upon the subscription. Hill vs. Memphis, 134 U. S., 198, 205.

The power intended to be conferred by the Act of 1872, ch. 245, being within and subject to the constitutional restriction, it is next contended on the part of the railroad company, that the term “months,” as used in the section of the Constitution referred to, should he taken to mean lunar months, and not calendar months; and if that construction be not adopted, then the terms “two months” should be construed as being directory only. But we are unable to adopt either of these constructions. It is established in this State, as it is in many others, that the word “month,” when used in a statute, and of course the same when used in a Constitution, means calendar month, unless words be added to show that lunar month -was intended. Rawlings vs. Adams, 7 Md., 27; Glenn, Adm’r, &c. vs. Hebb’s Adm’r, 17 Md., 260, 282; Snyder vs. Warren, 2 Cow., 518; Bish. Writ. Laws, sec. 105, and the cases there cited. And to hold that the terms, as employed in the Constitution, are merely directory and not mandatory, as contended by the defendant, would not only be introducing a lax rule of construction of the Constitution, but such construction would virtually nullify and destroy a valuable safeguard intended as means of bringing to the notice and consideration of the people to be affected, contemplated burdens upon them and their property. For if the constitutional requirement be held to he directory only, the publication might be for half the time prescribed, or it might be omitted altogether, and yet the power would be effective. This was never the design of the constitutional provision; and therefore all the conditions prescribed should be strictly observed; they are all equally essential to the authority attempted to be conferred. Or, as said by the Supreme Court, in Young vs. Clarendon Township, 132 U. S., 349, “ they are of equal import•anee under the law, and one cannot he dispensed with more than another. Neither is directory, hut all are mandatory. ’ ’ The question is not what, in the absence of a constitutional restriction, would constitute a valid legislative grant of power, but what the Constitution itself requires; and as the two months publication of the Act of 1872 was essential, as one of the conditions precedent to a valid confirmatory Act, and that publication was not duly made, as required by the constitutional provision, all the constitutional requirements were not complied with, and therefore there was no legal or valid authority conferred and confirmed by the Acts of 1872 and of 1874.

It is xirged, however, that it is not charged in the bill as one of the groxmds for impeaching the subscription made under those Acts, that due publication had not been made of the Act of 1872, prior to the election of the 4th of November, 1873, and therefore no notice should be taken of such defect. It is true, there is no such specific charge in the hill; but there has been no exception to the sufficiency of the averments of the hill, as could have been taken, (1 Code, Art. 5, sec. 34,) and the proof has been introduced by agreement, without exception thereto upon the ground that there was no corresponding allegation in the hill, to which the proof could be applied. In such case this Court is required to decide the questions raised by the proof.

But if that question were out of the case, as the defendant contends it should be, the next question raised is equally decisive against the defendant, and that is, as to the continuing operation and force of the subscription of June 6th, 1876, upon which the defendant insists the county remains bound.

It is contended on behalf of the railroad company that the terms and conditions of the subscription, additional to those prescribed in the 9th section of the Act of 1872, cli. 245, were unauthorised, and should he regarded as nugatory and void, and that, without those terms and conditions, the subscription would stand valid, notwithstanding anything that has subsequently occurred. But in this we cannot concur.

In the first place, looking to the circumstances under which the subscription was made, it is very clear the railroad company is not in a position to insist upon the repudiation of the terms and conditions objected to. It was largely instrumental in, having those terms and conditions incorporated into the contract of subscription; and good faith requires that it should not take the benefit of the subscription'without complying with or fulfilling the conditions. Nor do we concur in the contention that the County Commissioners were without warrant in insisting upon such terms and conditions in the subscription made by them. By the act of subscription a large debt was to be imposed upon the people of the county, ■whom the Commissioners represented; and the only security and relief from the burden thus imposed, was in the speedy construction and operation of the road. The authority delegated to the Commissioners was of a discretionary nature, leaving them to determine, in view of all the facts and circumstances of the case, whether the power should be exercised or not. Of course, they could add no condition that was in conflict or inconsistent with the terms prescribed by the Act of the Legislature; but there is nothing in the Act to negative the right of the Commissioners to add such terms and conditions as would consist with the terms of the power, and were proper for the protection and security of the rights and interests of the community that they represented. The Commissioners are county officials representing the interests of the people of the county, and are clothed with large powers, both of a discretionary and a quasi judicial character, in respect of the general administration of county affairs, to be exercised in the interest of and for the promotion of the public good. It may be reasonably supposed that it was because of this representative relation of the Commissioners to the people of the county, and the nature of the powers that they exercised, that the power óf subscription was delegated to them rather than to any other agency. It plainly appears that the conditions added were all of a character to protect and secure the rights and interests of the county, and were strictly in accord with the reason and- policy of the constitutional provision under which the Commissioners supposed they derived 'their power. In such case, both reason and principle would seem to warrant the conditions upon which the subscription was made (Nor. Cent. R. Co. vs. Baltimore City, 21 Md., 93); and the history of the projected road, and the facts as disclosed in this record, well illustrate the wisdom with which the conditions were incorporated into the contract of subscription.

Assuming, then, that the, Acts of 1812 and 1814 were free of all constitutional objection, the conditional subscription of the Commissioners was a valid contract; and as such exhausted the power of the Commissioners to make any further subscription. And when in 1880, before any of the more important conditions of the subscription had been complied with by the railroad company, the latter applied for and obtained an amendment of its charter, and accepted the same, extending the time for the completion of the road, with the condition that it should not, in any way, be so construed as to bind the county for its subscription, unless the County Commissioners should give their consent to the continuation thereof, the railroad company thereby, in effect, released the subscription. The County Commissioners have never given their consent to a continuation of the original subscription as made, and had no power so to do, the power conferred having been exhausted; and the attempt to make a new subscription on tlie 21st of January, 1890, on different and conflicting terms and conditions, was simply a nugatory act.

(Decided 25th March, 1891.)

It follows that the decree of the Court below must be affirmed; and we so order, with costs to the appellees.

Decree affirmed, with costs.