text:
    HIGHFIELD WATER COMPANY v. PUBLIC SERVICE COMMISSION OF MARYLAND
    [No. 1485,
    September Term, 1979.]

      Decided July 14, 1980.

      The cause was argued before Moylan and Wilner, JJ., and Irving H. Fisher, Associate Judge of the District Court of Maryland for District 5, specially assigned.

      Richard N. Foltz, III, for appellant.

      James A. Pine and Kirk J. Emge, with whom was Joel M. Bright on the brief, for appellee.
   Wilner, J.,

delivered the opinion of the Court.

Appellant — Highfield Water Company (HWC) — formerly provided water service to about 300 families in a rural area of Washington County. On September 8, 1978, having previously conducted a public hearing in the matter, the Public Service Commission (PSC) issued Order No. 63332, in which it concluded that (1) HWC was not providing adequate service to its customers, (2) there was little likelihood that the company would be financially able to make the necessary improvements in order to provide adequate service, and (3) "it is consistent with the public convenience and necessity to have public ownership of the facilities necessary to provide water service to the Highfield area.”

Upon these findings, the PSC revoked HWC’s authority to exercise its franchise and requested the State Department of Health and Mental Hygiene (DHMH) and the Washington County Sanitary Commission (WCSC) to assume their respective responsibilities with respect to furnishing water service to the area. HWC appealed that order and now appeals the affirmance of it by the Circuit Court of Baltimore City. It complains (or asks) that:

"I. The lower court erred in refusing to reinvestigate and reverse the findings of the Public Service Commission. The actions of the Commission are clearly subject to review and must be reversed if it is found that the Commission acted in an improper manner.
II. The action of the Public Service Commission in issuing Order No. 63332 was improper due to the inadequate notice given to Highfield Water Company of the nature of the proceedings before the Commission.
III. Did the lower court err in failing to reverse the action of the Public Service Commission due to the Public Service Commission’s failure to give preference to Highfield Water Company’s rate case?
IV. The action of the Public Service Commission in revoking Highfield Water Company’s right to exercise its franchise exceeded the statutory authority granted to it by Md. Code art. 78, § 24(a).
V. Did the lower court err in failing to find that the actions of the Public Service Commission constitute an unconstitutional taking of Highfield Water Company’s property, because the procedure used was improper, because the Public Service Commission has no power to acquire property, and because there were means available for the proper taking of the property by authorized governmental agencies?”

A history of the proceedings that led to Order No. 63332 will facilitate our consideration of these issues.

HWC and a sister company that was incorporated in Pennsylvania jointly operated an integrated water system, supplying water in a service area that bordered the Mason-Dixon line. In 1974, the Pennsylvania company (and with it the Pennsylvania part of the integrated system) was purchased by the local public water authority and thus became lost to HWC as a steady resource. Thereafter, a number of problems developed for HWC. Customers received rusty and malodorous water, at low pressures; every now and then, there was an outright cessation of water service, on one occasion lasting several weeks.

On June 29, 1977, HWC applied for an increase in rates, apparently to take effect July 31, 1977. Pursuant to its authority under Md. Ann. Code, art. 78, § 70 (b), the PSC suspended the increased tariff for 150 days (and then for an additional 30 days) pending a determination as to the justice and reasonableness of the increase. On January 17, 1978 — within the allowable 180-day period (dating from July 31, 1977) — PSC Order No. 62835 granting a part of the requested increase took effect.

While HWC’s application for rate increase was pending, the PSC (and others) began to look into the adequacy of service provided by the company. On July 19,1977, a public meeting was held in Cascade (within HWC’s general service area) before the Washington County Commissioners. Present, among others, were a PSC Commissioner, PSC general counsel, a number of technical staff personnel from the Commission, and representatives of the Maryland Environmental Service. Based in whole or in part upon what was learned at that meeting, Joseph H. Walter, a PSC Public Service Engineer, wrote a memo to the Commission on August 10, 1977, in which he opined that the HWC water system "is not capable of providing service of acceptable standards to its present customers” and that, although the system storage was sufficient for existing customers, "the water distribution system needs improvement, specifically, replacement of smaller size mains and interconnecting various sections of main to provide more reliable service.”

Upon receipt of the Walter memo, the Commission, on August 30, 1977, opened Case No. 7099 — "In the Matter of the Investigation by the Commission on its own Motion of the Adequacy of Water Service by Highfield Water Company” — with the issuance of Order No. 62553. In its preamble, this Order recited that (1) "[i]n response to several complaints concerning the water service provided by [HWC], the Commission’s Engineering Staff conducted an investigation of that Company’s water system,” (2) the Staff Engineer (Walter) had concluded that the system was not capable of providing service of acceptable standards and made certain specific recommendations as to system improvements, (3) under Md. Ann. Code art. 78, § 28 (c), HWC had an affirmative duty to furnish its customers with safe and adequate service, and (4) in view of the deficiencies noted by Walter, the Commission believed that HWC may not be providing its customers with adequate service. Upon that premise, the Order directed HWC to show cause, within 21 days, why it should not be directed to correct the system deficiencies described in the memo, a copy of which was attached to the Order.

A copy of the Order and memo was served on HWC. On September 20,1977, counsel for the company requested that the time for answering the Order be extended until the PSC ruled on the company’s request for rate increase. He said that HWC’s financial data developed in connection with the rate case was prepared without knowledge of the "massive capital improvements” called for in the memo and did not "reflect any capital improvement costs.” He stated further that, "[r]ecognizing the possible need for capital improvements,” HWC had employed a consultant, whose report was attached to the letter. Counsel asked for time to "digest” the information in the report in order to "be in the position to outline speciñc capital improvements for review by the Commission.”

The two-page report attached to counsel’s letter was from John J. Mooney Associates. Its principal conclusions were as follows:

"The Highfield system is presently an admixture of truncated growth, unplanned extensions and dependent supply. The system has been victimized by its satellite nature between two larger water facilities (Ft. Ritchie, Md. and Blue Ridge Summit [Pa.]).
No major rebuilding is possible in this limited customer situation where revenues do not produce any borrowing power. Nevertheless, some improvements are essential. I have therefore assessed priorities and present a phased program for your consideration as follows:....” (Emphasis supplied.)

What followed then was a three-stage program of improvements involving the distribution system, well acquisitions, repairs to storage facilities, and meter testing and replacement. Mooney estimated the cost of Stage I at $70,000 but was unable, in that report, to estimate the cost of Stages II and III without "[e]xtensive additional study.”

PSC granted the requested extension, and a further extension sought on November 8, 1977. Finally, on December 15,1977, HWC filed an answer to the show cause order. Most of the answer consists of a summary of the public hearing held on July 19,1977, and the efforts being made by HWC to improve its system. The Company viewed the problem as involving supply and distribution, but not water quality. The supply problem, it suggested, had been resolved by an interconnection with the Government-operated Ft. Ritchie system, primarily serving the army base located there. Distribution problems it proposed to solve by the staged improvement plan outlined by Mooney.

Among the points made in the answer were these five:

(1) "The cost of acquiring a new water source and replacing the distribution system will be in excess of $500,000.00.”

(2) "The cost of these capital improvements will ultimately be passed on to the consumer, irrespective of public or private ownership.”

(3) "The geographic and demographic factors of the [HWC] customer service area economically prohibit an immediate total system replacement; the previously submitted and approved[] 'phased’ program is the only possible alternative.”

(4) HWC "is unable to finance any other improvements [i.e., other than those already undertaken — about $25,000] until its emergency rate increase request has been granted and additional capital financing for the next 'phased’ improvements becomes available from either public, private or commercial sources.”

(5) HWC "states its intention to continue to examine the alternate methods (including public ownership) available to finance the additional capital improvements outlined in the Company’s consulting engineers [sic] report and upon securing a rate increase and additional financing, [HWC] also states its intention to continue this 'phased’ improvement program.” (Emphasis supplied.)

On April 20, 1978, the PSC held a public hearing in the matter, notice of which was given to HWC. Although counsel for HWC was present, no officer or employee of the company attended, which precluded any direct questioning of the company as to its intentions or financial ability to make the necessary or desired improvements.

A number of HWC customers testified about the poor service they were receiving: inadequate supply manifested by a low gallonage per minute; total cessation of service during summer droughts and winter freezes; rusty and malodorous water coming from the tap requiring special filters in the home that were in need of frequent replacement. One customer, who observed the water lines while the company was working on them, stated that they were "solid rust.” Another customer complained about having to pay higher fire insurance rates because the water main serving the fire hydrants in her area was inadequate. The area was classified as "unprotected” by the insurance company due to insufficient water service.

Mr. Walter, on behalf of the Commission’s engineering staff, iterated his earlier conclusion that the HWC system had failed to provide its customers with adequate water service. He noted that, serving only about 300 customers, HWC "has practically no capability for borrowing money, especially in the amounts necessary.” Walter stated that if the system were publicly owned, federal grants sufficient to defray 50% of the total project cost were available; and that, as a result, even if HWC could borrow the necessary funds, the average annual cost to the customer would be considerably less under public ownership ($200 as opposed to $700). He advised the Commission that the State Department of Health and Mental Hygiene (DHMH) had directed the Washington County Sanitary Commission (WCSC) to perform a feasibility study of county ownership of the system. His conclusion from all this was that "public ownership and operation of this utility would be in the best interest of the customers.”

Mr. Mooney, the consultant employed by HWC, also testified about the system’s deficiencies and possible remedies. Among many other things, he observed:

"Any company that is under a thousand customers has an inherent strike against it. It is insufficient to make logical business decisions, and so forth, in the present day environment. If you are below that, the costs to the customers are very high. It almost of necessity calls for a subsidy or for the system to be integrated with an overall system.” (Emphasis supplied.)

William Sloan, of MES, then described a study he had made for that agency comparing the costs to the customer of public vs. private operation of the company. If all of the improvements recommended by Mr. Mooney were made under private ownership, the annual cost to each customer would be about $719 a year. Under public ownership, the cost would be about $319 a year, and possibly as low as $200 a year if, in addition to the Federal 50% grant, a Farmers Home Administration loan became available to finance the remaining 50% of the capital cost. In addition to the differential in capital costs, Mr. Sloan stated that the operating costs would also be less under public management ($27,490 as compared with $43,000), pointing out several specific areas of savings.

MES, said Mr. Sloan, was empowered to acquire and operate private water companies (see Md. Ann. Code, Natural Resources article, §§ 3-101(i), 3-104, 3-105), and had acquired or assumed the operation of a number of them. With respect to HWC, public ownership offered a partial solution. The system needed improvement, he said, "and public ownership will save the ratepayers 50 to 70 percent.” Sloan made clear that he had not included in his figures for public ownership the cost of acquisition because he wasn’t certain what that would be. He observed, however, that the company’s balance sheet showed a net worth of only $22,800.

Michael Wojton, a sanitarian with DHMH, testified that, based on a sanitary survey of the HWC system conducted in the summer of 1977, he believed "the system is inadequate in terms of storage, in terms of source, wells, and also condition of the mains.” Although water quality at the source was excellent, it deteriorated because of particulate matter in the lines. He saw no direct health hazard, but noted that the water might have an odor or have rust in it, and, for that reason, may be unpalatable. Indirect health problems might arise from the inability of customers to flush their toilets. As a result of the various deficiencies, DHMH had (1) sent a proposed consent order to HWC requiring prompt improvements (see Md. Ann. Code art. 43, §§ 391, 392), and (2) directed WCSC to study the feasibility of acquiring the system (see art. 43, §§ 388, 450). James Eckle, Chairman of WCSC, stated that WCSC would make every effort to comply with the DHMH order, although he preferred that HWC make the needed improvements on its own.

Following this testimony, there was some discussion between counsel and the Commission over the relative advantages and disadvantages of public ownership. Because no one from HWC (other than counsel) was present and no evidence had been offered on its behalf as to the company’s current financial status, it was unclear whether the company would be able to finance the improvements on its own. As its answer noted, the pending application for rate increase did not include any consideration of capital improvements. It was left that HWC would submit to the PSC, within 10 days, a verified statement "with respect to the present plans of the company to improve service and its capability to obtain financing to improve service....”

At the end of the hearing, counsel for HWC was asked whether he had discussed with his client its position regarding the pending investigation, and specifically whether it desired to continue operating. His response was as follows:

"I understand the company is most interested in turning over the company to some sort of public ownership subject to negotiations with Maryland Environmental Services and Washington County Sanitary Commission.
I think the first step from our point of view is we have to have some evaluation of the company. If the public agencies are going to take the position that the company is worth $30,000, they are going to base it, as the Commission did in its rate case, the value of the company is based on assets acquired in 1902 or 1900, the turn of the century, I don’t see how we can go on. I think the first step is to come to the reasonable value of the company. I think we should do that now before July 14.” (Emphasis supplied.)

On May 5, 1978 — nearly 10 months (rather than days) after the hearing — HWC submitted its affidavit. In effect, it stated that the company had committed or expended $33,000 toward the Mooney-recommended improvements, but would be unable to complete the improvements without an additional rate increase. In its concluding paragraphs, the affidavit stated:

"9. Although Highfield Water Company has the capacity to finance the additional improvements outlined in Mr. Mooney’s report and to continue to operated [sic] the Company, it recognizes that public ownership of this system may benefit its customers through federal funding of the required improvements.
10. Accordingly, Highfield Water Company is in the process of determining a fair market value of the Company and is amenable to some form of public ownership, provided a fair and reasonable price can be agreed upon.” (Emphasis supplied.)

On May 30, 1978, WCSC filed a preliminary report of its feasibility study. Based on the assumptions that (1) a $1.1 million capital improvement program would be required to upgrade the system, (2) a federal grant of $550,000 and a 40-year 5% federal loan for $550,000 were available, (3) there were 300 customers to be served, and (4) the cost of acquisition would be small, WCSC estimated that it could upgrade and operate the system under the Sanitary District Law (§ 28, Code of Public Local Laws of Washington County) "with an approximate charge of $19-$20/ month/service including operation, maintenance and debt service.” It recommended a more comprehensive study, and said that it would become involved either at the request of HWC or upon order of MES.

The last submission to PSC was a follow-up memo on August 10, 1978, from Mr. Walter. He advised that (1) HWC’s response to the DHMH order was late and unsatisfactory, (2) the Ft. Ritchie interconnection was still on an emergency basis and did not relieve the company of its responsibility to obtain an adequate source of supply, and (3) "no plans and specifications had been submitted for additional well supplies, replacement of any distribution mains or increased storage capacity.”

On September 8, 1978, the PSC issued Order No. 63332, the subject of this appeal. Its provisions are described above.

With this background, we may dispose of the issues raised by HWC.

(1) Reinvestigation of PSC Findings

Appellant argues that the trial court erred "in failing to consider seriously the numerous defects in the actions of the PSC” and complains about the court’s "deference to the PSC’s actions.”

The assertion that the court failed to give serious consideration to appellant’s complaint is simply not borne out in the record. The court did not agree with appellant’s views, but it did consider them. Insofar as the court’s "deference” to the PSC’s findings is concerned, such deference is precisely what is required. See Md. Ann. Code art. 78, § 97; Public Serv. Comm’n v. Balto. Gas & El., 273 Md. 357 (1974). Indeed, it has been said that a court "should not examine the facts in any case further than to determine whether there was substantial evidence to sustain the order. The findings of the Commission are subject to review, but when supported by evidence they are accepted as final.” Sports Daily v. Public Service Comm., 179 Md. 355, 365 (1941).

(2) Inadequate Notice

Appellant complains that the notice it received (presumably Order No. 62553) directed it only to show cause why it should not be required to correct certain system deficiencies and gave no warning that its "right” to exercise its franchise was in jeopardy or that public ownership might be considered. In light of the ultimate action of the PSC, it therefore claims a lack of due notice, and thus a lack of fairness and due process.

Most of appellant’s argument in this regard is in support of the maxim that a person is entitled to fair and adequate notice of administrative proceedings that will likely affect him in order that he may have a reasonable opportunity to defend his position and protect his rights. There is really no question about the validity of that maxim or about the possible sanctions for its violation. The problem for appellant is that it was not contravened in this instance.

Order No. 62553 was not issued in a vacuum, nor was the hearing held in one. The adequacy of HWC’s service, the extent of improvements needed, its willingness and ability to undertake and complete those improvements, and the possible benefits of public ownership had apparently been discussed at some length at the July 19 hearing before the County Commissioners. The Mooney report made clear that a major capital improvement program was impracticable "in this limited customer situation where revenues do not produce any borrowing power.” Appellant’s own answer to the show cause order recognized the dilemma and noted its intention to examine "alternate methods (including public ownership). . . .” The hearing was full of testimony and discussion concerning public ownership and the inability of HWC to provide adequate service. Counsel’s closing statement is perhaps the clearest (and most damaging) expression of what the only feasible alternative seemed to be, followed closely by the post-hearing affidavit stating that the company was "amenable to some form of public ownership, provided a fair and reasonable purchase price can be agreed upon.”

In light of all this, it is specious for HWC to claim surprise at the Commission’s ultimate decision, to claim an unawareness that it might be found in violation of its statutory obligation (art. 78, § 28 (c)) to furnish adequate service, or that the Commission might conclude that the company was (and would continue to be) financially unable to provide adequate service, and as a result determine to pave the way for public ownership by revoking its right to exercise its franchise. We would observe, in this regard, that no objection was made by HWC to either the testimony or the discussion at the hearing about public ownership on the ground of inadequate notice; no request for rehearing on that ground was made at any time during the nearly 17-month period between the hearing and the order; and no request for rehearing or reconsideration was made after Order No. 63332 was issued.

(3) Failure to Give Preference to HWC’s Rate Case

Appellant claims that the PSC erred in proceeding with the instant case without granting it a rate increase. The argument is based on a number of false premises.

We note first, as conceded several times by HWC, that its petition for rate increase did not include any consideration of capital improvements. Surely after the July 19 hearing in Washington County, if not before, HWC was aware of the need for such improvements and yet it declined to include the cost of them in its proposed rate structure. We may only assume from this that the company made a deliberate decision to divorce the two matters, and not have the adequacy of its service become an issue in the rate case. In any event, since the data supplied in the rate case took no account of any capital improvements, we fail to see how a determination of that case could significantly affect appellant’s ability to complete the needed improvements. Secondarily, we observe that the rate case was, in fact, decided by the Commission on January 17, 1978 — nearly eight months prior to its final order in this case; and yet no request was made by HWC to reopen this case in order to take account of the decision in the rate case.

The evidence before the Commission from virtually every witness, including Mr. Mooney, was to the effect that absent truly exorbitant rates there was no practicable way in which HWC could finance the necessary improvements with only 300 customers being served. From all of this, we fail to see any merit to appellant’s claim of improper scheduling of the two cases.

(4) Authority to Revoke Right to Exercise Franchise

In revoking HWC’s authority to exercise its franchise, the PSC acted pursuant to Md. Ann. Code art. 78, § 24 (a), which states that "[h]ereafter, no public service company shall exercise any franchise granted by law except to the extent authorized by the Commission.”

Appellant makes a two-fold attack on the Commission’s action. It argues first that the effect of the order was to revoke the franchise itself which the Commission has no authority to do, and second, that § 24 (a) applies only to a previously unexercised franchise — i.e., to prior approval before commencement of the exercise — and does not permit revocation of authority where the franchise is currently being exercised. We see no merit in either argument.

It is true that a franchise itself, being a legislative grant, may not be revoked by the PSC, which is a regulatory body. Charles Co. San. v. Charles Util., 267 Md. 590 (1973). Controlling the exercise of a franchise is not the same as revoking the franchise itself, however. As stated by the Court in Worcester Elec. Co. v. Hancock, 151 Md. 670, 678 (1927):

"The powers conferred upon the commission are of a regulatory nature. They do not include either the granting or withdrawal of franchises, although the exercise of rights under franchises duly acquired by private corporations and of powers acquired by municipalities under legislative grants may be permitted or prohibited by the commission, subject to the right of appeal, in cases provided for by the Public Service Commission Acts.” (Emphasis supplied.)

Although the economic effect of an order revoking a utility’s right to exercise a franchise could, in some instances, be tantamount to revocation of the franchise itself, it is not necessarily so. The franchise remains as a valuable asset which, under certain conditions, may be sold and which, in other hands, may again be exercisable. See art. 78, § 24 (b); Crisfield v. Public Service Comm., 183 Md. 179, 192, et seq. (1944). It may thus have an intrinsic value apart from the ability to exercise it. There is nothing in the record before us to show that such is not the case here, and, even if the result would be otherwise under other circumstances, there is no basis here for us to conclude that the Commission’s action was, in effect, the same as a revocation of the franchise itself.

Appellant’s second line of attack proceeds from a misreading of Jeweler v. Potomac Elec. Pow. Co., 217 Md. 458 (1958), which is not at all in point. Jeweler was a condemnation case in which the utility’s right to condemn land for an extension of its lines was challenged. The Court held that the company had previously been authorized to exercise franchises that included the construction of transmission lines and thus did not need additional or specific authority from the PSC under § 24 (a) to construct or extend the particular lines in question.

Art. 78, § 1 (a) provides that the jurisdiction and power of the PSC extends to all public service companies "engaged in or operating a utility business in this State ... to the full extent permitted by the Constitution and laws of the United States.” These powers, the statute says, "shall be liberally construed; and the Commission shall have the powers specifically conferred by this article and by any other law, and also all implied and incidental powers necessary and proper to carry out effectually [sic] the provisions of this article.” The purpose (and effect) of this broad grant, said the Court of Appeals shortly after its enactment, "was to place all corporations handling public utilities under the supervision and control of the Public Service Commission....” Gregg v. Public Service Commission, 121 Md. 1, 30 (1913).

Supplementing § 1 (a) is § 56 of art. 78:

"The Commission shall supervise and regulate all public service companies subject to its jurisdiction to assure their operation in the interest of the public and to promote adequate, economical, and efficient delivery of utility services in the State without unjust discrimination, giving consideration to the public safety, the economy of the State, the conservation of natural resources, and the preservation of environmental quality. To these ends, the Commission shall enforce compliance by such companies with all the requirements of law, including, but not limited to requirements with respect to financial condition, capitalization, franchises, plant, manner of operation, rates, and service. The powers and duties enumerated specifically in this subtitle are not intended to limit the scope of the general powers and duties of the Commission provided for by this article.”

It would be incongruous, in light of this broad mandate to superintend to the fullest extent the operations of public utilities, to construe § 24 (a) in the narrow context suggested by appellant. To conclude, as appellant would have us do, that once the PSC authorizes the exercise of a franchise it loses all control over that exercise would be to remove its ultimate ability to enforce its orders and thus to emasculate its ability to regulate, to perform its legislative duties. Neither the wording of § 24 (a), nor its purpose, would require or permit such a strained construction.

Accordingly, we conclude that the Commission did not exceed its statutory authority in passing Order No. 63332.

(5) Improper Taking of Property

This is, in effect, a restatement of the themes argued above — that the revocation of the exercise of the franchise amounted to a taking of appellant’s property in the absence of proper procedure and without just compensation. Restatement of the arguments does not enhance their validity, however.

The PSC did not "take” appellant’s property, and thus owes it no compensation. After proceedings that dragged on for over a year, it became convinced that appellant was not providing adequate service, was making no reasonable effort to do so, and was not financially able to do so. It therefore revoked the company’s authority to provide an inadequate service.

The Commission’s order does not amount to a condemnation. Should MES or WCSC acquire the HWC operation, it will be required to pay the fair market value for it. See Md. Ann. Code, Natural Resources article, § 3-104; art. 43, §§ 409, et seq.; Code of Public Local Laws of Washington County, § 28-20. What that value may be is not now before use.

Judgment affirmed; appellant to pay the costs.

      . In describing the Stage II improvements to the distribution system, Mooney noted, with respect to the line serving Royer and Ridge Road: "Royer Mt. Zion portion of 1700' serves only 5 customers!.] Despite complaints during extreme freeze conditions, replacement of 2" line cannot be economically justified.” The report did not suggest any other form of relief to these five customers, who apparently were without water during cold spells.

      . The Company neglected to mention that this was a temporary arrangement and that no contract for a permanent connection had been negotiated, much less executed.

      . The record does not reveal that the "phased” program suggested by Mooney was ever approved by the PSC.

      . The answer gave no indication of (1) what the difference was between private and commercial sources or (2) whether there was any reasonable expectation that sufficient capital funds could be generated from any of the three sources.

      . There is no mention in the Mooney report about public ownership. It was apparently discussed at the July 19 public hearing, however. It is highly significant that HWC recognized that option as a possible solution to the existing service problems.

      . The PSC was obviously not pleased with the absence of company personnel, and directed counsel to attempt to locate the company president. Counsel reported that he had made the attempt, but was unsuccessful.

      . In making these calculations, Sloan accepted Mooney’s estimates for Stages I and II (updated by 29% for contingencies, engineering, and inflation) and developed his own estimates for Stage III. The total cost he estimated at about $1,000,000. A Farmers Home Administration loan would apparently have permitted amortization of the non-grant portion of the cost over a 40-year period at 5% interest, which would lessen the annual debt service as compared with the requirements of a commercial loan.


source: Caselaw Access Project

author: Wilner, J.,

license: Public Domain

text:
    ANNE ARUNDEL COUNTY, MARYLAND v. THE BALTIMORE AND ANNAPOLIS RAILROAD COMPANY et al.
    [No. 1488,
    September Term, 1979.]

      Decided July 15, 1980.

    The cause was argued before Melvin and Wilner, JJ., and J. Louis Boublitz, Associate Judge of the District Court of Maryland for District 11, specially assigned.

      John M. Court, Assistant County Solicitor, with whom was Richard Lazer Hillman, County Solicitor, on the brief, for appellant.

      Joseph I. Huesman, with whom were Lerch & Huesman on the brief, for appellee The Baltimore and Annapolis Railroad Company. James P. Bennett, with whom were James A. Biddison, Jr., and C. Fred Delavan on the brief, for appellee Baltimore Gas and Electric Company.
   Wilner, J.,

delivered the opinion of the Court.

As one might reasonably surmise from its corporate name, the Baltimore and Annapolis Railroad Company (B & A) once ran a railroad between Baltimore and Annapolis. It has not done so, however, since 1969 — not regularly, not at all. For at least four years, Anne Arundel County (the county), wherein most of the track is located, has been vainly seeking an authoritative determination from someone that the line has been abandoned in order that some more constructive use might be made of the right-of-way. It has done, it thinks, all that it could do before the Interstate Commerce Commission (I.C.C.), and thus turned to the State courts for more complete relief. Believing that the matter still rested within the exclusive jurisdiction of the I.C.C., however, the Circuit Court for Anne Arundel County, by granting a motion raising preliminary jurisdiction under Maryland Rule 323 (a) (10), declined to entertain the county’s Petition for Declaratory Judgment. The county has appealed.

(1) The County’s Position

The county’s claim rests upon a reverter clause in the deed by which the B & A’s predecessor in title received part of its right-of-way. There were actually two deeds — one in 1888 and one in 1905 — but the latter, for all practical purposes, is the critical one. In that deed, the Curtis Creek Mining, Furnace and Manufacturing Company (Curtis Creek), a Maryland Corporation, granted the right-of-way in question to B & A’s predecessor subject to the following proviso:

"that if the land hereby conveyed shall ever be used for any other than legitimate railroad purposes or in case the said Railroad Company, its successors or assigns, shall at any time cease active operation as a freight and passenger carrying railroad for the space of one year, then the land hereby conveyed shall revert to the said party of the first part [i.e., Curtis Creek], its successors or assigns. . ..”

The county’s interest in this condition emanates from a quitclaim deed dated August 7, 1978, in which Francis C. Harwood, representing himself to be the sole surviving director of Curtis Creek, conveyed to the county "whatever right, title and interest grantor may have” in the 66-foot wide right-of-way in question. The county thus claims the right to "enforce” the reverter clause, and, by it, to assert the extinguishment of the right-of-way granted in that deed, its own title to the fee simple estate, and its right of exclusive possession of the land and "whatever railroad paraphernalia may remain” upon it.

The county’s petition alleged, in relevant part, that (1) the 1888 and 1905 deeds conveyed "easements for railroad purposes only and become extinguished when railroad operations cease for the period of one (1) year over the property of the grantor,” (2) after Hurricane Agnes in 1972, "all use of the aforesaid easement for railroad purposes ceased and has not been since resumed,” and (3) B & A had challenged the existence and validity of the county’s asserted interest in the property. Upon this basis (supplemented by other averments), the county asked the court to declare that "use of the right of way” in question "has been terminated and abandoned,” that the county, as successor in title to Curtis Creek, "now holds said fee under the right of way and is entitled to its exclusive possession” subject to certain rights of the Baltimore Gas and Electric Company, and that the county "is entitled to possession of whatever railroad paraphernalia may remain in the said easement. ...”

In dismissing this petition, the court concluded that to do otherwise would require it to decide whether the right-of-way had been "abandoned by the railroad,” which would "infringfe] upon the jurisdiction of both the [I.C.C.].. . and the Federal District Court.” The court did allow the county, however, to file an amended action "raising the issue of whether the right of way has reverted to [the county],.. .” The county, to date, has declined that invitation.

(2) The Issue

The issue before us is clearly a jurisdictional one: did the circuit court have "subject matter” jurisdiction to entertain the county’s petition and to declare what, if any, rights it has in the property. In this regard, there is no doubt as to the court’s statutory jurisdiction to make a declaration of the county’s rights or status under a deed. See Md. Ann. Code, Courts article, §§ 3-403, 3-406, 3-409. The question is whether that jurisdiction may be exercised in this case — whether it has been superseded, and thus suspended, by a conflicting and superior jurisdiction of the I.C.C.

Unfortunately, this question is not a simple one; it is made complex in part because of the intricate procedural background of this dispute, in part because the relevant Federal law has been twice amended during the course of the various proceedings, and in part because the full scope of the Federal preemption with respect to the title questions raised in this case is not altogether clear.

(3) Procedural Background

The procedural antecedents of this case began in or before January, 1973, with an application to the I.C.C. by one of B & A’s customers (Alco-Gravure, Inc.) for an order requiring the railroad to restore service on the six-mile segment of its line running from Baltimore City to Glen Burnie. Service on that portion of the line had apparently ceased in 1972 as the result of flooding and other damage wrought by Hurricane Agnes. B & A responded, in part, with its own application of January 11, 1973, for authority to abandon operations over its entire 21.4-mile line, including, we presume, the right-of-way at issue in this case. In the course of the ensuing administrative proceedings on these two applications, which were consolidated by the I.C.C., a question arose as to whether B & A had, in fact, already abandoned operations on the line (or at least the six-mile segment of it) without I.C.C. approval, in violation of then 49 U.S.C. § 1(18). The question was serious enough to cause the I.C.C. to commence an action against B & A in the U. S. District Court alleging that an illegal abandonment had occurred and seeking injunctive relief. See former 49 U.S.C. § 1(20).

On April 29, 1975, while B & A’s application for permission to abandon was still pending before the I.C.C., the U. S. District Court concluded that there had indeed been an unlawful abandonment within the meaning of § 1(18) of title 49. See I.C.C. v. Baltimore and Annapolis Railroad Company, 398 F. Supp. 454 (D. Md. 1975). The Court specifically found not only a cessation of operations on the six-mile segment commencing from 1972 but also an intention on the railroad’s part to cease service "permanently or indefinitely.” See 398 F. Supp. at 462. Upon these findings, on May 12, 1975, the Court enjoined B & A from further violation of § 1 (18) "in regard to the abandonment of the operations of a line of railroad” — i.e., the six-mile segment — until it "has received a certificate of public convenience and necessity from the Interstate Commerce Commission authorizing such abandonment....” 398 F. Supp. at 470. These findings, and the order emanating from them, were affirmed on appeal. See Interstate Commerce Commission v. Baltimore and Annapolis Railroad Company, 537 F.2d 77 (4th Cir.), cert. den. 429 U.S. 859 (1976).

Following the Order of the District Court, B & A, on June 9, 1975, petitioned the I.C.C. to expedite proceedings on its abandonment application, contending that it would be wasteful to require it to expend vast sums to restore service over a six-mile segment of the line "when there is ripe for decision by this Commission the question of whether the present or future public convenience and necessity permit abandonment of operations over that line____” On May 26, 1976, the Commission issued an order concluding that B & A had provided no service south of Glen Burnie (i.e., covering the right-of-way in question here) since 1969. It stated, however:

"Because no application for authority to abandon the entire right-of-way and no agreement to amend the instant application to cover a line abandonment has been reached, we cannot at this time approve an abandonment of the B&A right-of-way south of Glen Burnie. If at some time in the future such an application is filed we will incorporate the record herein, including the environmental impact statement, into that proceeding. Our present analysis of the limited record herein, without the advantage of B&A’s evidence on a line abandonment, indicates that an abandonment of the entire right-of-way between Glen Burnie and Annapolis has been justified.” (Emphasis supplied.)

On October 1, 1976, the county, joined by the City of Annapolis, applied to the Commission for a certificate of convenience and necessity permitting that which the May 26 order declined to determine: abandonment of the 15.4-mile right-of-way between Glen Burnie and Annapolis. This was a quite different type of application from that which the B & A had filed; and it raised, for the first time, the real economic issue at stake here. The Interstate Commerce Act draws a rather clear distinction between the abandonment of service on a line and abandonment of the line itself. This was manifest in former § 1(18), and is equally clear from amendments enacted by Congress in 1976 and 1978. The railroad was seeking only to discontinue operations over the line, not the right-of-way itself. It desired to keep the valuable right-of-way, but to be excused from the obligation of running trains over it. The county, on the other hand, recognizing that there will be no service, wants the right-of-way. This, as we have said, is the heart and soul of this case. B & A, quite naturally, opposed the county’s application while pressing its own.

The county’s application was docketed as part of the pending proceedings (Docket AB-71), and thus was treated under § 1(18) notwithstanding the enactment of § la in the interim. This was in accordance with a form of "grandfather” clause enacted as part of the 1976 law. After considering the record in the consolidated proceeding and such additional evidence submitted by the parties, the Commission, by Report dated June 20, 1977, determined:

"The evidence of record is that no operations have been conducted over this line of railroad since 1969. Further, the Commission has found that the present and future public convenience and necessity permitted abandonment of operations by B&A over its line of railroad between Glen Burnie and Annapolis, Maryland. Id, at 43, and protestant has presented no evidenc [sic] as to wny [sic] abandonment of the line should not be permitted. We conclude, the[n], that the evidenc [sic] of record is sufficient to show the abandonment of said line of railroad to be permitted by the present and future public convenience and necessity.” (Emphasis supplied.)

Under former 49 U.S.C. § 1(20), the Commission was authorized to "attach to the issuance of the certificate such terms and conditions as in its judgment the public convenience and necessity may require.” In that regard, the county, desiring to use the "abandoned” right-of-way as a recreational corridor for hiking, bicycling, and horseback riding, asked the Commission, as a condition of the certificate, to require B & A to negotiate exclusively with it with respect to the disposition of the right-of-way. This, the Commission declined to do, noting prophetically:

"In weighing whether or not to impose the requested conditions, the practical aspects of such conditions must be considered. Conditions that are imposed on the certifícate of abandonment must be complied with in order for the carrier to abandon the line of railroad. However, the authority granted in a certifícate is merely permissive, not mandatory. Thus, if a carrier, in whose name a certifícate is issued, does not wish to comply with the condition, it simply will not effect the abandonment. Hence, were we to impose conditions on the certificate sought by applicants which B&A found distasteful, that carrier could refuse to abandon the line, frustrating the imposition of conditions on the certificate.
Although the conditions sought by applicants are for a valid public purpose, it is in the Commission’s discretion to impose such conditions. We do not see how issuing a certificate of public convenience and necessity containing the conditions requested by applicants would achieve their purpose, since B&A opposition thereto raises the strong probability that it would simply fail to take any action under the permissive certificate. Therefore, we believe imposition of conditions on the certificate in this unusual factual situation would frustrate, rather than promote, the purposes of applicants and the Act.” (Emphasis supplied.)

The next relevant action occurred on February 21, 1978, when the Commission issued its "Second Corrected Certificate and Order” — this being, in effect, the certificate of convenience and necessity permitting abandonment of the 15.4-mile section of line. The Order implicitly required B & A to cancel the tariffs applicable to the line as a condition of abandonment, and explicitly stated:

"(2) If the authority granted by this certificate and order is exercised, the railroad shall submit two copies of the journal entries showing the retirement of the line from service, and shall advise this Commission in writing, immediately after abandonment of the line of railroad, of the date on which the abandonment actually took place.
(3) If the authority granted in this certificate and order is not exercised within one year from its effective date, it shall be of no further force and effect.”

B & A treated this order with silence and inaction. It did nothing with respect to canceling its tariffs and took no other action to consummate the abandonment. It did, however, on March 28, 1978, express in a letter to the State Secretary of Transportation, its desire and intent "to sell or otherwise dispose of the 15.4 miles of property over which said rail line is constructed, and the rights and easements appurtenant thereto.”

In December, 1978, the county returned to the I.C.C. with a petition to extend the efficacy of the previous order granting permission to abandon. It noted that there was then pending a condemnation action, and that the county needed more time to prosecute it. On February 23,1979, the Commission extended the certificate for an additional year — until February 20, 1980; but, in doing so, it also stated:

"The Commission’s original grant of authority to abandon was permissive as is this extension of time to consummate. A failure by B&A to abandon will not be a violation of the certificate. The petitioners’ request that we certify that any jurisdiction retained shall not interfere with the exercise of its power of eminent domain will be denied. Until such time as the B&A elects to exercise the permissive authority to abandon, it remains subject to our authority, which we cannot waive.” (Emphasis supplied.)

The record before us does not indicate what, if anything, became of the condemnation action. In May, 1979, the proceeding now before us was filed, and in November the county sought another extension from the I.C.C., which, on February 27, 1980, it received.

(4) Was the Court Right in Granting B & A’s Motion?

As we earlier observed, the issue before us is a jurisdictional one. The court did not declare that the county was not entitled to the relief it sought; the court declined even to consider the question, believing that it had no power to adjudicate whether the right-of-way had been abandoned. We think it erred.

The court’s principal error was in misconstruing the nature of the county’s request. Given (1) the statutory authority of the I.C.C. to impose conditions on an abandonment and to require satisfaction of those conditions as a prerequisite to a lawful abandonment, (2) the fact that the I.C.C. has, pursuant to that authority, actually imposed certain conditions on B & A’s abandonment of the 15.4-mile segment which have not been satisfied, and (3) the Commission’s clear and repeated expression of its continuing jurisdiction over the B & A until the conditions it established for abandonment have been satisfied, the court would clearly have had no authority to act in a contrary manner and declare that a portion of the line had, in fact and in law, been abandoned by B & A. That does not mean, of course, that the court was without jurisdiction, on these facts, to determine that it had not been abandoned.

But that is not what the county asked the court to do, at least not in its first prayer for relief. B & A emphasizes the distinction between discontinuance of service and abandonment of the line, a distinction, as we have noted, which is both valid and significant. That distinction applies equally to the petition at issue here.

The reverter clause sought to be enforced by the county does not require an abandonment of the line — only the cessation of "active operation as a freight and passenger carrying railroad for the space of one year.” If the reverter is still viable — a point in sharp dispute — there is little question that its condition has been satisfied. The I.C.C. has so held, and B & A does not dispute the matter. The county’s petition alleges that "all use” of the easement has ceased, and seeks, in its first prayer, a declaration that the "use of the right of way” has been terminated and abandoned. There is no allegation that the line itself has been abandoned, and we see no request for a declaration to that effect. In short, it would seem that the petition, to that extent, and as presently worded, does indeed raise the very issue that the court initimated that it could consider — "whether the right of way has reverted. .. .”

A declaration by the court as to the county’s rights under the quitclaim deed, the viability and validity of the reverter clause, and ultimately the respective interests (if any) of each party in the property, of itself, would serve neither (1) to eject B & A from the property (should the declaration be adverse to it), (2) to effect, cause, or constitute an abandonment of the line, nor (3) to infringe upon the jurisdiction of the I.C.C. or detract from the conditions it has established for a lawful line abandonment. We see no reason, therefore, why the first prayer sought by the county could not be considered and determined. Such a determination would do no more than adjudicate, as a matter of State law, what, if any, effect the undisputed cessation of railroad operations by B & A has on the title to the property in question. There is no lack of subject matter jurisdiction in that regard.

The second and third prayers, however, raise a more difficult question, for they seek to exclude B & A from possession of the land and the railroad fixtures on it. Ordinarily, of course, such relief would naturally flow if the county were successful in establishing title to the fee and extinguishment through reversion of the right-of-way. Such an ejectment would be tantamount to a forced, involuntary, abandonment of that portion of the line itself, however, in that it would preclude B & A from ever again using the land for railroad purposes. That type of order or judgment would cross the line between discontinuance of operations and abandonment of the line itself. It would serve to effect a line abandonment without regard to or compliance with the I.C.C. conditions, and it would therefore be in derogation of the prevailing jurisdiction of that Federal agency. This, it would appear, the court is preempted from doing. See Smith v. Hoboken R. W. & S. C. Co., 328 U.S. 123 (1946).

We cannot, of course, presume or predict what ruling the court might make as to the county’s interest in the property or as to the validity or enforceability of the reverter clause. If the county loses that issue, the question of ejectment becomes moot. If the county prevails, it may (absent some further action by the I.C.C.) be unable to eject B & A, but it will have established its title and thus deprived B & A of any right to transfer that part of the right-of-way. The issue, in that event, would not be moot.

For the reasons stated above, we believe that the court erred in dismissing the petition outright under Maryland Rule 323 (a) (10).

Judgment reversed; case remanded to Circuit Court for Anne Arundel County for further proceedings; appellees to pay the costs.

      . This is but one of several unusual features of this case. The normal posture of an abandonment case has the railroad seeking abandonment and the affected political subdivision opposing it. As will become apparent, however, the dispute here is not over service, which does not exist, but over the valuable right-of-way which the railroad has and the county wants.

      . The right-of-way in question here covers only a small part of the 21.4-mile line, the 1905 deed indicating an area of 1.2 acres.

      . The utility also has certain easements in the right-of-way for its transmission lines. Although made a party defendant, none of its rights or property appear to be in jeopardy by this proceeding.

      . That section then provided, in relevant part, that no railroad subject to I.C.C. jurisdiction "shall abandon all or any portion of a line of railroad, or the operation thereof, unless and until there shall first have been obtained from the Commission a certificate that the present or future public convenience and necessity permit of such abandonment.” (Emphasis supplied.)

      . In relevant part, § 1(20) provided that any abandonment in violation of § 1(18) may be enjoined “by any court of competent jurisdiction” at the suit of the United States, the I.C.C., or any State regulatory commission.

      . The relevant portions of § 1(18) are set out in footnote 4, supra. P.L. 94-210 (the Railroad Revitalization Act), effective February 5, 1976, repealed §§ 1(18) and 1(20) of title 49 and enacted in their place a new § la. Subsection (1) thereof stated that no railroad "shall abandon all or any portion of its lines of railroad (hereinafter in this section referred to as 'abandonment’) and no such carrier shall discontinue the operation of all rail service over all or any portion of any such line (hereafter referred to as 'discontinuance’), unless such abandonment or discontinuance is described in and covered by a certificate” issued by the I.C.C. declaring that the present or future public convenience and necessity require or permit "such abandonment or discontinuance.” P.L. 95-473, effective October 17, 1978, substantially rewrote the entire Interstate Commerce Act. Section la(l) now appears as § 10903(a): "A rail carrier [subject to I.C.C. jurisdiction] may (1) abandon any part of its railroad lines; or (2) discontinue the operation of all rail transportation over any part of its railroad lines; only if the Commission finds that the present or future public convenience and necessity require or permit the abandonment or discontinuance.”

      . Section la(8), enacted as part of P.L. 94-210, provided that petitions for abandonment or discontinuance which were filed and pending before the Commission prior to the effective date of the Act or regulations of the I.C.C. required under it "shall be governed by the provisions of section 1 of this Act which were in effect on such date of enactment. . .with two exceptions not relevant here.

      . This authority to attach conditions to the abandonment was continued by the 1976 amendments in § la(4), and now appears in § 10903(b)(1).

      . The Commission, in its Report, and subsequent Order of June 20,1977, did attach two other conditions no longer relevant here — one permitting postponement of the certificate if an "offer of financial assistance” to B & A was forthcoming and the other imposing certain "labor protections” set forth in § 405 of the Rail Passenger Service Act. Compare § la(10) as enacted by P.L. 94-210: "If the Commission finds that the properties proposed to be abandoned are suitable for other public purposes, it shall order that such properties not be sold, leased, exchanged, or otherwise disposed of except in accordance with such reasonable terms and conditions as are prescribed by the Commission....”

      . This letter, written "under protest” was prompted by Md. Ann. Code, Transportation article, § 2-105. Subsection (a) thereof authorizes the Secretary of Transportation to acquire "any railroad corridor property over which transportation has been provided and abandonment has been approved by the [I.C.C.].” Subsection (b) provides that "[i]f a railroad company intends to sell or otherwise dispose of any railroad corridor property that is located in this State and for which the company has received permission from the [I.C.C.] ... to abandon transportation services, the company shall notify the Secretary of its intent to sell or otherwise dispose of the property.”

      . At oral argument, we were advised that the action, which involves other portions of the right-of-way (and not that at issue here), was still pending.

      . The lower court decided this case on December 20, 1979, before this last extension was granted (also before it became necessary). The I.C.C. decision again noted that the action was "permissive only” and that "the railroad can more or less ignore it because the railroad would not have to abandon the line based on the certificate.” There was added, however, this additional comment: "However, a certificate allowing abandonment of the right-of-way is evidence in any court proceeding, that the line is not required.”
      The Commission chairman, in dissent, observed that B&A had in fact abandoned the line — at least the 15.4-mile segment from Glen Burnie to Annapolis — and that it "is simply trying to hide behind our jurisdiction in order to hinder and defeat the efforts of the civic parties to acquire its abandoned right-of-way under ordinary state-ordained procedures.”

      . B & A argues that since the deed containing the reverter clause was granted after the enactment of the original Interstate Commerce Act, the reverter clause itself is subject to paramount Federal jurisdiction and may not be enforced for that reason. In support of this proposition, it cites Whalen v. Balto. & Ohio R. Co., 108 Md. 11 (1908); Schnepfe v. Consol. Gas Etc. Co., 164 Md. 630 (1933); and Brehm v. State Roads Commn., 176 Md. 411 (1939). We do not view those cases as establishing any such proposition or as even being relevant. Neither Federal jurisdiction nor the Interstate Commerce Act were mentioned, much less at issue. To the extent the argument may have some validity, however, it relates only to the validity and enforceability of the reverter clause, a matter which the circuit court is competent to consider on the merits.


author: Lowe, J.,

text:
    FREDA S. MOY v. RALPH L. BELL et al.
    [No. 1499,
    September Term, 1979.]

      Decided July 15, 1980.

    The cause was argued before Lowe and Wilner, JJ., and James S. Getty, Associate Judge of the Fourth Judicial Circuit, specially assigned.

      Terrell N. Roberts for appellant.

      Michael J. Budow, with whom were Richard E. Schimel and Clancy & Pfeifer on the brief, for appellee John M. Dixon. James P. Nolan, with whom were Serio, Carmody, Nichols & Childs on the brief, for appellees Ralph L. and Virginia M. Bell. Frank R. Weathersbee on the brief for appellees John and Mary Jane Hardwick.
   Lowe, J.,

delivered the opinion of the Court.

In Goldstein v. Potomac Elec. Power Co., 285 Md. 673 (1979), the United States Court of Appeals for the Fourth Circuit asked the Maryland Court of Appeals to explain the effect of the statute of limitations (Md. Code, Cts. & Jud. Proc. Art., § 5-101) upon a suit for damages caused by a nuisance. An appeal from the Circuit Court for Anne Arundel County asks us to explain that explanation.

A number of building lots in a subdivision in Anne Arundel County were established upon very low, poorly drained land. Since 1966 appellant has owned one of these sites which had been improved with a house that she has occupied since 1968. Adjacent lots were subsequently owned by appellees Ralph and Virginia Bell (Bell) and John and Mary Jane Hardwick (Hardwick). In late 1973 and early 1974 the Bells built a house upon their excavated site. A year later the Hardwicks did the same.

According to appellant, that excavation of appellees’ lots soon brought on her problems.

"In late 1973 and early 1974, surface water began to flood Appellant’s lots. Water flowed over the septic drain fields in Appellant’s yard, and she began to experience problems with her septic system. Initially the toilet would not flush. She found that emptying the tank seemed to remedy the problem. However, as the ground later became more and more saturated with water, fluids from the septic began to back up through the toilet and bathtub, forcing Appellant to have the tank emptied more frequently. A few years [sic] later, during a period in 1974 when the ground was completely saturated, the septic ceased to operate altogether and Appellant and her family had to use facilities in other homes. At same time, water also flowed under the house, which sat above ground on masonary [sic] piers. Water flowed under the house directly from [the Bell] lots . . .; after the Hardwicks altered their land, [an adjoining vacant] lot .. . began to collect water during the rainy season, and when it reached saturation, it spilled over onto Appellant’s land and flowed under her house and onto the front yard. At times water collected to a depth of 7 Vz inches next to Appellant’s front door step. Recurrent flooding under Appellant’s house caused the wood structure to rot.
To keep the water off of her property so that she could use her backyard, Appellant filled in portions of her backyard. This reduced the flow of water onto the rear of her lots. Nevertheless all four lots — 52 through 55 — collectively continue to obstruct the natural flow of surface water, causing the water to run to the east and north side of Appellant’s lots.
In December 1976, the Bells sold lots 54 and 55 to John Dixon, Appellee. Since Dixon’s ownership of the land, the land continues to obstruct the natural flow of surface water and cause water buildup on Appellant’s land.”

Appellant first sued the Bells on September 26, 1977, subsequently joining the Hardwicks March 9, 1978 and on May 3, 1978 joined the Dixons. Essentially, the declaration (as amended five times) sought damages for, and injunctive relief from, the injurious results of wrongful diversions of surface water. Dixon’s demurrer to the final damages count was sustained without leave to amend as to him and, at the conclusion of the trial, Dixon was dismissed when appellant elected not to pursue an injunction but "limited the relief requested to damages”, conceding that in light of that election,

"... I have no further claim against [D]ixon.”

The trial judge then heard arguments of counsel on the motions to dismiss by appellees Bell and Hardwick, after which he granted them on the ground that the statute of limitations was a bar to recovery. He added:

". . . I think that even if it were not a bar, that the — the damages that have been alleged have not really been shown to be the direct result of— of any surface water flowing from the Bell or Hardwick property, anymore than there’s surface flow going the other way. I think there’s a low point on the property line, by the testimony of the engineer, and that this water comes from three directions to get there, and it’s all going to have to go down somehow or other by cooperation of the various property owners in there to get it out of the center of the property and out to a street in some direction. It’s obviously going to cost some money, but it’s going to cause a problem until somebody does that as a cooperative effect [sic]. Because I don’t think it’s a practical thing to try to take right angle turns at property lines and have the very little percentage of decline that would be possible in this relatively flat area. So I think you, from the testimony, it appears that the best solution is to go out the middle line out to the intersection of the street, even though that might entail getting an easement from somebody. But there’s only one other lot down, that goes all the way out to Cedar Road. I don’t know who owns that — 42 — but that can get all the way out that way. But I don’t see that this whole problem can be solved without a cooperative effort. But I will grant the motion of— the motion of the defendant to dismiss on the grounds that the statute of limitations is a bar.”

It seems the judge was not convinced that a nuisance was caused by appellees but decided even if it was, appellant had waited too long to seek redress.

Appellant’s relatively short question on appeal,

"[wjhether seasonal surface water flooding of Appellant’s land caused by raising adjoining land to construct private home sites, was a permanent or temporary nuisance?”,

raises interesting tangential legal issues in the light of Goldstein, supra, which limits, but does not resolve, issues necessary to the answer of appellant’s question. It would appear that no purpose would be served by this Court resolving those issues since the trial judge, who was the factfinder, had already factually decided the case. Appellees contend that even if the limitations holding was not correct, the error is harmless in light of the factual findings of the trial judge.

Since our conclusion, after addressing the legal issue, will bring us to a comparable result, it is unfortunate that we cannot arrive more quickly by taking the factual path. The Court of Appeals has made it clear, however, that we may not.

Our system of jurisprudence, much like our language, is affected more by exceptions than by rules. Upon deciding a motion to dismiss under Md. Rule 535, the trial judge is compelled to view the evidence solely for its legal sufficiency in the light most favorable to the plaintiff just as he would in a jury case on motion for directed verdict. Isen v. Phoenix Assurance Co., 259 Md. 564, 571 (1970). He may not weigh the testimony as though he was acting in his role as the trier of fact, Hooton v. Kenneth B. Mumaw P. & H. Co., 271 Md. 565, 572 (1974). However, if the defendants rest their case without putting on any evidence, immediately after denying the motion to dismiss, the judge as factfinder may weigh the evidence to find which side preponderates, and may draw whatever inference he chooses, whomever it favors, so long as it is legitimately perceived.

There is, however, an exception, even upon motion to dismiss. If there is a legal question raised, which would end it if factually found to apply in the plaintiffs own case, the judge, while still in his judicial capacity, is charged with deciding the appropriate facts necessary to deciding that legal issue. Here, when the motion to dismiss was offered raising the statute of limitations as a bar, the trial judge sat in both seats simultaneously. Our review on appeal then must carefully differentiate the purposes for which the facts were found. Because the ultimate issue to be decided on the motion was the applicability of the statute of limitations, we may not set aside the facts found by the trial judge in relation thereto unless he was clearly in error. Md. Rule 1086.

Appellant has focused her entire appeal to convince us that the nuisance causing the damage was temporary (despite having labelled it permanent in her first amended declaration) because

"where the nuisance sued upon is only temporary, successive actions may be brought for damages for each invasion of the plaintiffs land until the period of prescription has elapsed, but recovery may only be had for damages actually sustained, other than permanent reduction in the market value of the property, within three years of the filing of the action.” Goldstein, supra at 690, n. 4.

See also Aberdeen v. Bradford, 94 Md. 670 (1902). Perhaps because the question of permanency for some purpose unrelated to limitations is essentially a factual one, appellant argued upon the premise that our standard of review of the court’s factual conclusion for limitations purposes was the same as upon reviewing a motion to dismiss, i.e., whether a prima facie case had been established when the evidence is reviewed in a light most favorable to her. Mrs. Moy stated in her brief that:

"If the lower court had correctly viewed all of the evidence and inferences in Appellant’s favor, it would have concluded that change of the natural flow of surface water itself was not permanent.”

But as we have pointed out the standard is quite the contrary in this case where the determination of permanency also determines whether the. statute of limitations applies. The application of a statute of limitations is strictly a legal question and it is apparent that the facts necessary to determine its application, such as when a cause of action accrues, if a cause of action accrues, etc., must be made by the judge in his judicial role. See Harig v. Johns-Manville Products, 284 Md. 70, 74-75 (1978); Waldman v. Rohrbaugh, 241 Md. 137, 145 (1966). The obvious significance of that conclusion is that we do not review the evidence in the light most favorable to appellant to determine whether there was any evidence from which a factfinder could have reached a conclusion contrary to the court’s; rather, our review must decide if there was any evidence, however slight, to support the limitations-related factual findings of the judge.

— the issue —

The factors to be considered in determining whether a nuisance is permanent or temporary was obviously a parenthetical reference in Goldstein, supra at 682-683. The Fourth Circuit, in certifying its question to the Court of Appeals had presupposed the nuisance in that case to have been permanent. The Court of Appeals made it clear that in acting on that presupposition, it was not to be interpreted as having determined that the nuisance there was permanent. It stated that

"... the nuisance here alleged may not be of permanent duration, but may be abated. . . . [A]lso ... it ... is subject to abatement through the injunctive process by the State Department of Health and Mental Hygiene and the Public Service Commission. See Baltimore Gas & Elec. v. Department, 284 Md. 216, 395 A.2d 1174 (1979), and Maryland Code (1957, 1978 Cum. Supp.) Art. 43, §§ 701 and 703.” Id. at 683.

This observation was in accord with the encyclopedic distinction indicating that the difference between a permanent and a temporary nuisance is that a temporary one can be abated, while a permanent nuisance will be presumed by its character and circumstance to continue indefinitely. 66 C.J.S. Nuisances § 5 (1950); 58 Am. Jur. 2d Nuisances §§ 117, 118 (1971). Recognizing, however, that any nuisance man creates, man can abate, it seems clear that the question being considered in Goldstein is not the possibility of abatement but rather its likelihood. That nuance is recognized expressly in the encyclopedias cited, and borne out in Goldstein’s allusion to the State departments’ authority (and impliedly their responsibility) to abate nuisances of the type in Goldstein by injunctive power statutorily granted.

Applying the wrong standard of review, appellant here initially argues that the evidence "in a light most favorable” to her indicates that the nuisance was temporary because it could be

1) enjoined by a court,
2) abated by appellant by raising or grading her lot, or
3) abated by the county with storm water drains.

As to appellant’s third contention, there was no evidence whatsoever that the county was considering storm drains of any type, let alone something that would alleviate appellant’s problem, only that the possibility existed that The county could do so. The possibility of abatement by public authority without evidence thereof would hardly suffice by her standard of review. It clearly is not so compelling that we must hold the trial judge’s factual finding was clearly in error for not having concluded that the county was likely to abate the nuisance.

Her first contention, that the nuisance could be abated by injunction, is belied by her own election at trial. In electing to go forward on her damages claim and discarding injunctive relief, she said:

"I’m not sure that an injunction really would — would do much good. I think that there’s no assurance that it would really be — could be enforced and there would be a lot of associated problems with that, whereas the remedy that was selected by our expert would be a way of alleviating Mrs. Moy’s problems and at the same time not causing any surface water to anybody else.”

In addition to her own recognition of the unlikelihood of obtaining injunctive relief because of its unenforceability, we note that the evidence does not show that the diversion was caused by intentional misconduct, or that it could be compulsorily abated without disproportionate and excessive economic hardship upon appellees, who inferentially would be compelled to remove the very landfills upon which their homes were built. Prosser Torts (4th ed. 1971) at 603-604 points out that

"... even where there is an existing nuisance and present harm, the equity court may in its discretion deny the injunction where the balance of the equities involved is in favor of the defendant. It may take into consideration the relative economic hardship which will result to the parties from the granting or denial of the injunction, the good faith or intentional misconduct of each, and the interest of the general public in the continuation of the defendant’s enterprise.” (Footnotes omitted).

It would appear in the absence of evidence in the case of some solution other than reexcavating to its former dishlike surface, injunctive relief would have been denied even if a nuisance was found to exist. Surely the judge who has the injunction question before him when hearing the evidence, is best able to consider the likelihood of its being enjoined. But see Turner v. Wash. Sanitary Comm., 221 Md. 494, 506 (1960).

Finally, appellant contends that she could have abated the nuisance herself by raising and grading her lot. Even if likely, this would have been at her own risk in further diverting the water to some other hapless owner. The privilege of abatement must be exercised within a reasonable time after knowledge of the nuisance is acquired, or should have been acquired, by the person entitled to abate. Prosser at 605. If there has been a sufficient delay to allow a resort to legal process, the reason for the privilege fails and the privilege with it. Ibid.

Furthermore, we look at the evidence and find that appellant had begun to attempt such self-help but abandoned her attempt to abate by raising and grading her land, inferentially indicating the impracticability or ineffectiveness of self-help. Again, the evidence is not compelling that she could have abated by raising and grading; rather it negates that contention. The expert testimony of what would have had to be done showed the cost to be so substantial that she sought the remedy of damages before the likelihood of completion was feasible.

This brings us to the type of damages sought by appellant, i.e., the septic system costs, the cost of raising her house, and repair of wood rot. Since she did not sue for, or seek to prove, diminution of the market value of her land, she argues that the nuisance could not be permanent. While permanency of the nuisance is prerequisite for diminution damages, diminished value is not a prerequisite element of proof of permanency. That contention is specious.

We conclude from our review of the record that the trial judge was not clearly in error in his factual findings on the limitations issue; that he properly applied the limitations law; and, that his discretion as exercised (in granting the motion to dismiss as barred by limitations) was not abused.

Judgment afGrmed.

Costs to be paid by appellant.

      . We will grant Mr. Dixon’s motion to dismiss the appeal as to him since appellant has limited this argument here to a single question relating only to the reason given by the trial judge for dismissing the other two appellees. The failure to comply with Md. Rule 1031 c 5 waives appellant’s appeal as to Dixon. Ricker v. Abrams, 263 Md. 509 (1971).

      . The trial judge found that the cause of action accrued when Mrs. Moy was damaged in late 1973 and early 1974 since she was at that time aware of the cause of the damage. The original action here was filed in September of 1977 which the judge found well beyond the three year limitations period. Md. Code, Cts. & Jud. Proc. Art., § 5-101.

      . The distinction appears to be another archaic judicial distinction of limited purpose which might best be abolished. Unfortunately for Mrs. Moy, the Court of Appeals does not agree. See Goldstein v. Potomac Elec. Power Co., 285 Md. 673 (1979).

      . An injunction may be denied solely on the ground of impossibility of enforcement. Bank v. Bank, 180 Md. 254, 263-264 (1942).