Congressional School of Aeronautics, Inc. v. State Roads Commission

²³⁹ Bruñe, C. J., delivered the opinion of the Court. A property owner, Congressional School of Aeronautics, Inc., (the School) appeals from the award made in condemnation proceedings instituted by the State Roads Commission (the Commission) in the Circuit Court for Montgomery County. The purpose of the proceedings was to acquire land for the widening of a highway, Route No. 240, in the City of Rockville. The original plats filed on July 13, 1956, showed a proposed taking of 64,722 square feet of the School’s land.

At the trial the Commission filed amended plats increasing the area to be taken to 89,343 square feet. After the filing of the original plats negotiations between the Commission and the School for the purchase and sale of the land were unsuccessful, and the matter was referred to the Board of Property Review of Montgomery County. The Board determined the fair market value of the property to be $1.25 a square foot, or $80,902.50 for 64,722 square feet. This same rate, if applied to 89,343 square feet, would have produced a valuation of $111,688.75.

The Commission appealed from the Board’s findings and award and instituted condemnation proceedings in the Circuit Court, pursuant to Code (1957), Art. 89B, Sec. 18. The trial resulted in a judgment in favor of the School, based upon the jury’s verdict, in the amount of $49,000, with interest from the date of the verdict which was January 10, 1958. This valuation works out at approximately 55^ a square foot. All of the land to be taken was zoned as residential.

This classification had been retained for a strip 100 feet wide measured from the center line of the existing road. Next to this strip was another strip 200 feet wide which was zoned as commercial, and beyond that the balance of the School’s property was zoned as light industrial. One of the Commission’s witnesses testified that the strip zoned as residential “was reserved for road widening,” and another witness for the Commission gave similar, but less positive, testimony as to the reason for the reservation. The Commission’s experts valued the land in question at $1.08 to $1.10 per square foot, if zoned commercially.

Two of them reduced their valuations by 50% because of the resi ²⁴⁰ dential zoning. The other, Mr. Dieudonne, who also took into consideration the prospect that the property might soon be taken for highway use, valued the land at approximately 40% of the $1.10 figure which he placed on it if zoned as commercial. Their respective valuations were 55^, 54^, and about 45 {5 per square foot. The School’s real estate experts valued the land at prices ranging from $1.25 to $1.50 per square foot.

One made no distinction between property zoned commercially and property zoned residentially. He did this partly on the basis of comparable sales involving tracts zoned partly as residential and partly as commercial and in part because he believed that special permits could be obtained to allow the property zoned as residential to be used for parking purposes in conjunction with adjacent land zoned as commercial. (Somewhat similar testimony with regard to obtaining special permits was also given by one or more other witnesses.) Another of the School’s experts discounted the value of the property from $1.50 per square foot for commercially zoned property to $1.42 per square foot for property zoned as residential. The School’s third expert does not appear to have made any differentiation between the land zoned as residential and that zoned as commercial.

He arrived at a valuation of $1.25 per square foot. The School sought to offer evidence of the valuation fixed by the Board of Property Review, but this evidence was excluded. The Commission sought to introduce evidence of an attempt by the School to obtain a reduction in the amount of its property assessment, but this, too, was excluded. The questions which we are asked to determine are six in number.

First, was the zoning of the strip in question as residential invalid as amounting to a taking of property without payment of just compensation? Second, if so, was the zoning of that property open to attack in this proceeding? Third, should the testimony, as to value, of one of the Commission’s witnesses have been stricken because he took into account the limited period for which the property might be available for use on account of the prospective taking for the purpose of widening the highway? Fourth, was the award ²⁴¹ of the Board of Property Review properly excluded from evidence?

Fifth, should the jury’s verdict have been set aside as inadequate and a new trial granted? Sixth, was evidence of the School’s effort to have its property assessment reduced properly excluded? Section 40 of Article III of the Maryland Constitution forbids the enactment of any law authorizing private property to be taken for public use without just compensation, and Sections 40 A and 40 B carry like prohibitions, coupled with provisions permitting takings to be effected in some circumstances and under certain safeguards before the amount of compensation is finally determined. There seems to be general agreement among the authorities which have considered the question that zoning cannot be used as a substitute for eminent domain proceedings so as to defeat the constitutional requirement for the payment of just compensation in the case of a taking of private property for public use by depressing values and so reducing the amount of damages to be paid.

See 1 Metzenbaum, Zoning (2nd Ed.), pp. 74-79; 1 Orgel, Valuation under Eminent Domain (2nd Ed.), § 1, p. 10; 1 Yokley, Zoning (2nd Ed.), § 163; Robyns v. City of Dearborn, 341 Mich. 495 , 67 N. W. 2d 718 ; Grand Trunk Western R. R. v. City of Detroit, 326 Mich. 387 , 40 N. W. 2d 195 ; State ex rel. Tingley v. Gurda, 209 Wis. 63 , 243 N. W. 317 ; Henle v. City of Euclid, 97 Ohio App. 258, 125 N. E. 2d 355 , appeal dismissed, 162 Ohio St. 280 , 122 N. E. 2d 792 . Cf. Scholl v. Borough of Yeadon, 148 Pa.

Super. 601 , 26 A. 2d 135 , (ordinance requiring set-backs, where the purpose was to effect a street widening more cheaply). See also In re Gibson, 28 Ont. L. R. 20, 11 D. L. R. 529 (1913), in which a city by-law classified certain property as residential and imposed a set-back restriction. The court there said that if the sole purpose of these restrictions was to prevent any building on the property pending its condemnation for use as a street, then the by-law should be treated as a part of the expropriation proceeding.

The court went on to say that there were certain difficulties in so treating the restrictive bylaw, but did not elaborate as to what they were. The School relies as to this matter very heavily upon ²⁴² Moale v. Baltimore, 5 Md. 314 , decided in 1854. That was, of course, long before zoning came into existence. One of the principal questions involved in the Moale case was the validity of a proviso contained in Ch. 148 of the Acts of 1817 which undertook to deny damages upon condemnation for any improvement built in the bed of any projected street shown on a certain plat of the City of Baltimore, unless such improvement had been built before the laying out or locating of such street.

When, and indeed whether, the streets shown on the plat would be opened was left entirely to the discretion of the municipality. This proviso was held to deny to the proprietor the use of his land and to amount to confiscation in violation of the constitutional provision requiring the payment of just compensation for private property taken for public use. It has been held by this court that a zoning ordinance which permanently so restricts the use of property that it cannot be used for any reasonable purpose goes beyond permissible regulation and must be regarded as a taking of property without compensation. City of Baltimore v. Cohn, 204 Md. 523, 530 , 105 A. 2d 482 ; Northwest Merchants Terminal, Inc. v. O’Rourke, 191 Md. 171 , 60 A. 2d 743 ; Hoffman v. M. & C. C. of Baltimore, 197 Md. 294 , 79 A. 2d 367 .

See also Nectow v. City of Cambridge, 277 U. S. 183; Arverne Bay Construction Co. v. Thatcher, 278 N. Y. 222 , 15 N. E. 2d 587 . Cf. Walker v. Talbot County, 208 Md. 72 , 116 A. 2d 393 , certiorari denied 350 U. S. 902 . This court has not previously been called upon to decide the question here raised as to the validity of a zoning classification which is claimed to have been made or retained in order to hold down the cost of the subsequent acquisition of a tract through condemnation proceedings for highway use or other public purposes.

In the instant case we think that the question is not so presented as to require its determination. The Commission asserts that the action of Montgomery County in retaining the hundred-foot strip of the School’s property in a residential classification was' proper. It also asserts that the School is not entitled to challenge that classification in this proceeding. Montgomery County, as amicus ²⁴³ curiae, takes the same position on both of these questions, and states that it has no interest in the other issues.

We understand that the residential strip reservation was made by Montgomery County several years prior to the taking here involved, and that this occurred before the School’s property was annexed to the City of Rockville. The evidence shows that in October, 1957, about fifteen months after the institution of this suit, the City rezoned as commercial that portion of the hundred-foot strip previously zoned as residential which was not taken by the Commission in this proceeding. The joint record extract gives us little information as to the zoning proceedings several years before the taking, but it is to be assumed that the School was fully cognizant of those proceedings. Neither Article 66 B of the Code of Public General Laws (1951), nor what is now Chapter 107 of the Montgomery County Code (1955), entitled “Zoning”, as then in force provides for appeals to the Circuit Court or to this court in cases involving changes or refusals of changes in zoning classifications.

See Bogley v. Barber and Ertter v. North Washington Cemetery, Inc., infra. There was thus no statutory remedy for the School to pursue. On the other hand, it is well established in this State that “In the absence of statutory provision for appeal or other adequate judicial review of administrative (or legislative) action the proper remedy is by bill in equity to enjoin enforcement of the action alleged to be unconstitutional or (in the case of administrative action) arbitrary or otherwise illegal.” Bogley v. Barber, 194 Md. 632, 640 , 72 A. 2d 17 , (another zoning case which originated in that part of the Mary land-Washington Regional District which is in Montgomery County) ; Ertter v. North Washington Cemetery, Inc., 200 Md. 251 , 88 A. 2d 578 (another Montgomery County zoning case); Heaps v. Cobb, 185 Md. 372, 378-381 , 45 A. 2d 73 . No explanation is offered for the School’s not having sought such a remedy.

That was the course of action pursued in the Michigan, Ohio, Pennsylvania and Wisconsin cases cited above. The School sought an instruction that if the jury should find that the “zoning authority” restricted the zoning of the ²⁴⁴ land taken to residential use in order that it might be acquired for highway use at a lower price, the jury should disregard this “restrictive zoning.” The School also sought a binding instruction to like effect. These instructions were refused, and the School excepted to the court’s charge because of their rejection. The evidence is scanty on the reservation of the residential strip.

No official who was concerned with that matter was called to testify with regard thereto. Article 66B of the Code (1957), entitled “Zoning and Planning”, commonly spoken ■of in zoning matters as “the Enabling Act”, recognizes the close relationship between planning and zoning, as does the opinion of this court in Zinn v. Board of Zoning Appeals, 207 Md. 355, 114 A. 2d 614 . See also Schiff v. Board of Zoning Appeals, 207 Md. 365, 114 A. 2d 644 . Section 16 of Article 66B specifies “adequate provisions for traffic” as one of the items to be considered in the formulation of a master plan.

Section 19 confers the power of eminent domain, inter ■alia, for street or highway purposes upon planning commissions established under Article 66B. This seems consonant with the rule elsewhere recognized and above stated that zoning cannot be used as a substitute for eminent domain so as to defeat the constitutional requirement for the payment of just compensation for private property taken for public use. At the argument in this court the Commission stated that it followed the practice of informing local planning or zoning bodies of contemplated highway improvements and the proposed routes thereof, in order that such anticipated improvements could be taken into account and the cost of the acquisition of land for highway use could be held down. Montgomery County and the Commission urge that such a program is necessary if costs of land acquisition are not to soar to such heights as to be prohibitive.

The Commission asks us to pass upon the validity of its policy just outlined. We are not prepared to do so on the scanty record before us. In the whole complex process of planning and zoning, including passing upon plans for new developments or subdivisions of one kind or another, there may be considerations affecting particular situations which ²⁴⁵ would have a material bearing upon the applicability of the general rule that zoning cannot be used to depress values in order to make condemnation less costly. For example, if a property owner or developer seeks present reclassification of a tract in anticipation of the construction of a new or improved highway, it might well be that he would be quite willing either to agree to dedicate some of his land for use of the new highway or to assent to the retention of an existing classification of land in its expected path in the hope and for the purpose of inducing the proper public authorities definitely to locate the proposed new or widened highway on a part of his land for the obvious benefit and enhancement in value of the balance of his tract.

Plainly, the owner would derive benefit rather than sustain loss in such circumstances. We cannot say, in vacuo, how far it might be permissible for public authorities to proceed along such lines. Such considerations as those above suggested seem to be involved in Sections 31 and 32 of Article 66B of the Code of 1957, which were enacted by Ch. 599 of the Acts of 1933. These Sections deal with planning and the reservation of locations of mapped streets for future acquisition.

Under Section 31 the reservation of land for streets “for future taking or acquisition for public use” for a period of time to be fixed by the council, may be required. That Section authorizes the planning commission to negotiate or secure releases of claims, for damages or compensation for such reservations, or indemnity agreements against such claims. Section 32 prohibits (subject to exceptions in some cases where hardship would otherwise result) the issuance of permits for any building within an area so reserved during the period of reservation. No case involving these Sections has been decided by this court.

Provisions relating to planning and reservations for future street opening or widening somewhat similar to those contained in Sections 31 and 32 of Article 66B have been held not subject to successful constitutional attack in the absence of a showing that the complaining party has suffered loss or damage through the mere existence of restrictive provisions-against building within the lines of a proposed street widen ²⁴⁶ ing as shown on a city official plan approved by the planning commission. Headley v. City of Rochester, 272 N. Y. 197 , 5 N. E. 2d 198 , in which the full and unanimous opinion of the Court of Appeals of New York was written by Judge Lehman. In that case the plaintiff sought a declaratory judgment that the ordinance and map were unconstitutional. The trial court dismissed the complaint, the Appellate Division reversed and entered judgment that the ordinance, map and plan were void and ineffectual to create any limitations or restrictions on the use or conveyance of the plaintiff’s property.

The Court of Appeals reversed that judgment. At p. 209 of 272 N. Y., the latter court said: “Whether the State may impose conditions for the issuance of permits in order to protect the integrity of the plan of a city where it appears that such conditions interfere with a reasonable use to which the land would otherwise be put or diminishes the value of the land, should not now be decided. Without proof that the imposition of such conditions has deprived an owner of land of some benefit he would otherwise derive from the land, there can be no deprivation of property for which compensation should be made.” Cf. Vangello v. Rochester, 190 Misc. 128 , 71 N. Y. S. 2d 672.

In State ex rel. Miller v. Manders (Wis.), 86 N. W. 2d 469 , the question (which we do not undertake to answer here) was decided. There a statute based upon the New York statute involved in the Headley case and the map ordinances of the City of Green Bay enacted thereunder, were held to be constitutional as a valid exercise of the police power. Some of Judge Lehman’s language in the Headley case was cited on the main constitutional question in support of the proposition