Eutaw Enterprises, Inc. v. Mayor of Baltimore

Hammond, J., delivered the opinion of the Court. The Mayor and City Council of Baltimore promulgated two ordinances which prospectively excluded check cashing and money changing operations from residential and office use districts, made such uses already in existence nonconforming uses and required their cessation within a tolerance or amortization period of eighteen months. The appellants, a check cashing corporation, operating in such a district, and its landlord, a nearby church, having sought unsuccessfully below to have the provisions of the ordinances requiring the discontinuance of the check cashing business within eighteen months declared unconstitutional and inoperative as to them, felt that, although ⁶⁸⁹ their hearts were sick within them, their grief need not be beyond healing if balm could be found in the Gilead of the Court of Appeals. From 1950 to 1959 Stan’s Check Cashing Service operated at 31 Hopkins Place in Baltimore, a commercial area, in order to be very close to the office of the Employment Security Board, at Hopkins Place and Lombard Street, at which each week thousands of unemployment compensation checks were distributed.

When the distribution center moved in 1959 to a new building on the west side of Eutaw Place south of Dolphin Street, Stan’s followed it, moving its place of operation to the first floor of 1202 Eutaw Place, on the west side of that street just north of Dolphin Street. The 1200 block of Eutaw Place was then and still is in a residential and office use district. On December 20, 1959, the Zoning Enforcement Officer of Baltimore issued a permit for the use of 1202 Eutaw Place for “14 apartments and first-floor office-insurance and payroll services and check exchange, and one non-illuminated name plate not exceeding one square -foot in area attached to exterior of building.” The Board of Municipal and Zoning Appeals affirmed this action, and protestants appealed to the Baltimore City Court. On May 23, 1960, Judge Harlan affirmed the Board.

He noted that check cashing businesses were not specifically excluded from residential and office use districts and considered and disposed of a contention that since the ordinance prohibited “a work or pay distribution center” in such a district the business of cashing checks should likewise be deemed to be excluded inasmuch, it was claimed, a pay distribution center and a check cashing service are virtually indistinguishable, saying that alike as the two well may be the literal words of the zoning ordinance must control. Thereupon, after the expiration of the thirty-day period during which an appeal to this Court could have been taken, Stan’s sold its check cashing business to the appellant, Eutaw Enterprises, Inc., which, since the very early summer of 1960 has continued to operate it at the same location under the same name. On February 1, 1960, months before the purchase, an ordinance then numbered 433 had been introduced in the City Council to add new §§ 9 (d) (5-b) and 13 (d-1) to Art. 40 of the ⁶⁹⁰ Baltimore City Code (1950 Ed.), title “Zoning” as said article was revised by Ordinance 711, approved May 21, 1953, to exclude “check cashing, money changing or similar types of agencies” from residential and office use districts and to require all “check cashing, money changing or similar types of agencies situated in residential or office use districts, and in residential use districts at the time this ordinance becomes effective” to remove by June 1, 1960. On March 29, 1960, the Board of Municipal and Zoning Appeals advised the City Council that the removal provision should not be passed inasmuch as the City Solicitor had given an opinion on March 11, 1960, that “a zoning ordinance may require the elimination of certain non-conforming uses but such zoning regulations must allow a reasonable time for such elimination and [that] in his opinion the ordinance * * * would not be reasonable in that respect” in that it would require elimination of check cashing, money changing or similar types of agencies by June 1, 1960, or in some three months from the likely time of passage of the ordinance.

The Zoning Commission advised the Planning Cofnmission, preparatory to the latter giving its views to the Council, that it would be desirable “to prohibit check-cashing agencies from the residential and office use districts” because it appeared to the Commission that: “check-cashing agencies, involving the exchange of money for which a charge is levied, great numbers of people congregating in the streets and coming in and out of buildings, street advertising, solicitation and other enticements, were not anticipated as an appropriate residential and office use nor is it considered a desirable use in this district.” It said also that “the original intent and purpose of the residential and office use district was to provide for professional and ordinary business offices, not involving display, sale, exchange or storage, in connection with residential use of buildings.” Despite its desire to see check cashing operations out of residential districts, the Zoning Commission felt that the termination period for existing check cashing businesses should be eliminated from the proposed ordinance because detailed and ⁶⁹¹ comprehensive recommendations for a zoning law as to the control and removal of all nonconforming uses were then under consideration and it would be advisable to deal with all such uses in a general law. The Planning Commission advised the president and members of the City Council on September 26, 1960, that it approved the proposed amendment to § 9 of the zoning ordinance and found it reasonable because “had such uses [check cashing, money changing and similar types of agencies] been prevalent when the residential and office use district section was enacted, they probably would have been excluded then.” The Commission pointed out that such “types of agencies” “have resorted to various techniques involving large and obnoxious signs, street solicitors, handbills and other enticements [handing out free cigarettes, coffee and Coca-cola to waiting patrons as did Eutaw at a yearly cost of some $2,500] * * *” but felt that the termination provisions of § 13 should be eliminated and the closing of existing businesses deferred until enactment of the proposed new comprehensive zoning plan for Baltimore, which dealt with the treatment and elimination of all nonconforming uses generally and in a detailed and sophisticated fashion. The City Council nevertheless, on November 22, 1960, enacted the ordinance as Number 465 and included an eighteen-months’ toleration period during which check cashing businesses in residential and office use districts must be closed. On March 22, 1961, the Zoning Enforcement Officer wrote Eutaw notifying it of the passage of Ordinance 465 and its provisions, including the requirement that check cashing businesses remove from a residential and office use district by June 1, 1962.

Eutaw says that it was not until receipt of this letter that it knew anything of Ordinance 465. On April 4, 1962, the City Council enacted a comprehensive zoning law, Ordinance 1162, dealing with all nonconforming uses. The removal provisions of Ordinance 465 were repealed and in lieu thereof the provisions of § 13.F.7 of Ordinance 1162 were made applicable to provide the following: “Termination. Check-cashing, money-changing and similar types of agencies operated primarily for the cashing of checks or changing of money and situated ⁶⁹² in residential and office use districts and residential use districts shall be discontinued and cease not later than June R 1962.

Provided, further,' that when any district is hereafter reclassified as residential and office use or residential use, any such check-cashing, money-changing or similar type of agency situated in such reclassified district shall he discontinued and cease not later than twelve months after the effective date of the ordinance reclassifying the district.” On May 31, Eutaw and the Pentecostal Faith Church, Inc., the landlord of Stan’s place of business, filed a bill alleging that Eutaw had bought the check cashing business in reliance on the judicially established right of such a business to operate in a residential and office use district and had paid $10,000 for it, “virtually all of which was for good will,” that Eutaw pays more rent to the Church than it could get from another tenant and the Church needs the extra money, that Eutaw operates in a law-abiding and quiet manner, that Eutaw was at the time of the enactment of the ordinances and still is the only check cashing business operating in a residential and office use district, that Ordinances 465 and 1162 are unconstitutional as to Eutaw and the Church because they are discriminatory, destroy vested rights, and seek to terminate a use which is not detrimental to the public health, safety or welfare and because they are directed at but one such business. They asked the court “to judicially declare, as applied to each of the Complainants herein,” that § 13 (d-1) (the termination provisions) of Ordinance 465 and § 13.F.7 (the same provisions) of Ordinance 1162 are invalid and of no effect. After a hearing, Judge Sodaro on January 28, 1965, held that “Ordinance No. 465 and Ordinance No. 1162, insofar as they apply to the complainants, are valid and constitutional” and added: “In lieu of filing a formal opinion, I am adopting the Memorandum of Raw filed by the City Solicitor * * Before stating our reasons for agreeing with the conclusions of Judge Sodaro, two preliminary matters may appropriately be mentioned. No point is raised as to the right of Eutaw and the Church to seek relief in a court of equity before they had exhausted ⁶⁹³ the administrative remedies under the zoning laws, in all likelihood because their claims were that the ordinances were fundamentally and wholly unconstitutional, and heretofore in such instances direct attacks in a court of equity have been permitted.

Poe v. Mayor and City Council of Baltimore, 241 Md. 303 (recognizing the rule but finding it inapplicable on the facts). Eutaw and the Church did not pray that the chancellor declare the challenged ordinances unconstitutional on the ground that check cashing agencies could not validly be excluded prospectively from residential and office use districts, nor do they make this contention here. We see no sound basis on which they could do so. The Zoning Enabling Act, delegating zoning powers to Baltimore, Code (1957), Art. 66B, §§ 1-9, makes this plain.

Section 1 authorizes the Mayor and City Council to “regulate and restrict * * * the location and use of buildings, structures, and land for trade, industry, residence, or other purposes.” Section 2 provides that the Council may divide the city into districts “and within such districts it may regulate and restrict the * * * use of buildings, structures, or land.” Section 3 provides that “such regulations shall be made with reasonable consideration, among other things, to the character of the district and its peculiar suitability for particular uses * * Generally, a law that draws lines or makes classifications, is safe from attack on the ground that it discriminates or violates the constitutional requirement of equal protection because the courts consistently have held that the legislative body “* * * has the widest discretion in classifying those who are to be regulated and taxed. Only if the grouping is without any reasonable basis, and so entirely arbitrary, is it forbidden. * * * If any state of facts reasonably can be conceived that would sustain a classification, the existence of that state of facts as a basis for the passage of the law must be assumed. The burden is on him who assails a classification to show that it does not rest on any reasonable basis.” Allied American Co. v. Comm’r, 219 Md. 607, 623 . The same tests have been applied to general classifications made by zoning laws under the delegations of the Enabling ⁶⁹⁴ Act.

In Grant v. City of Baltimore, 212 Md. 301, 316 , we said that the City Council could have found that billboards in residential areas so seriously incommoded the health, comfort and general welfare that the benefit to the public good brought about by their removal from such areas substantially outweighed the resulting harm to individuals, and added: “If it does not clearly appear that this legislative finding was unreasonable and arbitrary—almost demonstrably wrong from the