Gottlieb-Knabe & Co. v. MacKlin

Pearce, J., delivered the opinion of the Court. The Mayor and City Council of Baltimore owns a lot of ground on Eayette Street in said city, improved by a building constructed and used for a number of years, as the Western Female High School of said city, but in 1896 its use for this purpose was abandoned, and during the same year the Mayor and City Council, through its then Comptroller, Charles D. Fenhagen, acting under Ordinance Ho. 155 of said Mayor and City Council, leased said lot and building to certain persons then constituting the Field Officers of the Fourth Regiment Infantry, Maryland Hational Guard, and their successors in office, “for the purpose of an armory for said regiment, for the term of five years, from March 11th, 1896, for the sum of one dollar per annum rent,” and in further consideration of the performance of certain covenants contained in said lease, as to which covenants no question arises. The successors of the Field Officers named in said lease are the defendants in this case, the present Field Officers, other than the Mayor and City Council, and are lessees holding over under said lease. The plaintiffs, Gottlieb-Emabe Company of Baltimore City, ⁴³¹ and Germania Maennerchor of Baltimore City, are both private corporations under the laws of Maryland, owning and maintaining buildings rented by them for profit, for concerts, exhibitions, entertainments and public meetings; are both substantial taxpayers in said city, the first-named plaintiff being the owner of the building on Mount Boyal Avenue known as “The Lyric,” and the latter being the owner of a large building and hall on West Lombard Street, in said city, both of which buildings have been long used for the above-mentioned purposes.

The bill charges that the “present Field Officers by and with the consent and concurrence of the Mayor and City Council, for the purpose of providing money for the said Fourth Begiment, in addition to that appropriated by the State, in maintaining that branch of the militia, and for adding to the revenues of the city, have entered into contracts for the rental of said armory building for concerts, meetings and other gatherings by organizations of private citizens desiring such use of said building, and have heretofore actually rented said building for said purposes, and have entered into contracts for still further rentals of that character, in the months of October, FTovember and December, 1907, and January, 1903, under an agreement that part of said rentals shall be paid to said Field Officers, and part to the Mayor and City Council.” The bill further charges that still other contracts of like character are being sought by other organizations, none of which have any connection with any branch of the State Militia, or with the municipality of Baltimore, but are exclusively devoted to private purposes, and intend to devote said armory, when so rented to them, exclusively to concerts, entertainments, etc., for the private profit of said organizations. The bill further charges that such use of said armory is ■an unauthorized and unlawful use of the property of the taxpayers, and endangers the said property and the equipment and personal property of the State for which said building is provided as a storehouse; that such rentals for such private purposes deprive the plaintiffs and others owning like prop ⁴³² erty of opportunity to rent their buildings for similar purposes and of deriving from them income which would otherwise be assured, and if allowed will deprive the plaintiffs of profitable customers of long standing—one of which, “The Harmonie Singing Society,” is now advertising numerous entertainments to be held in said armory; that it is impossible for plaintiffs and others in like situation to enter into competition with said defendants, they being exempt from all taxes and cost of maintenance, while plaintiffs are not only subjected to these charges upon their properties, but are compelled as taxpayers to bear their proportion of what is devoted to the maintenance of said armory; that protest against this alleged injustice has been made to the Governor of the State, by whom'said protest was referred to the Adjutant-General of the State, who has replied that he is without power to act in the premises. The prayer of the bill is for an injunction restraining the defendants, their agents and officers, and their successors in office, from letting or renting the said armory, or any part thereof, for the use of meetings, concerts, exhibitions or entertainments, to any person or persons, organization or organizations, other than the officers or organizations of the Militia of the State of Maryland, and for such other and further relief as their case may require. A preliminary injunction was issued, and both defendants demurred to the bill on the ground that no ease was stated therein entitling either plaintiff to relief in equity, and on the hearing the demurrer was sustained, the injunction was. dissolved and the bill of complaint dismissed.

This case has been argued by all the counsel with much ability, and by the distinguished counsel for the appellants with unusual fullness and earnestness. If the matter could be reduced to a question of public policy properly determinable by this Court, our conclusion might, perhaps, be different, though we are not to be understood as so stating. The inquiry, however, is one of power, and it is not claimed that ⁴³³ the renting complained of can be restrained unless the act is ultra vires. After a careful examination and consideration of the briefs in the case we think the questions necessary for determination may be reduced to two: 1st.

Had the city the right to rent this building as it did ? 2nd. If it had such right, what is there, if anything, in the character of the Field Officers, as lessees, to affect their power of subletting in the manner, and for the purposes, which they have been, and are, doing? 1st—By section 1, of Article 4, Public Local Laws—City Code—the Mayor and City Council are expressly authorized “to purchase and hold real, personal and mixed property, and dispose of the same for the benefit of the city as hereinafter provided.” By section 13 of the same Article it is declared: “Hothing contained in this Article shall prevent the Mayor and City Council of Baltimore from disposing of any building or parcel of land no longer needed for public use; provided that such disposition shall be approved of by the Finance Commissioners by their uniting in the conveyance thereof, and shall be made at public sale and be provided for by ordinance; nor from the renting for fixed and limited terms of any of its property not needed for public purposes, on approval of the Commissioners of Finance.” Under this section, absolute disposal must be provided for by ordinance, and must be at public sale, and the Finance Commissioners must unite in the conveyance as the evidence of their approval. There is no limitation upon the power of renting for fixed and limited terms, except the approval of the Finance Commissioners, the mode of approval not being specified. The lease to the Field Officers in this case, however, recites the fact that it was made in pursuance of Ordinance Ho. 155 of the Mayor and City Council, approved May 12th, 1893, so that it appears to have been made in accord with the strictest construction of section 13 of Article 4.

In Davidson v. Mayor and City Council, 96 Md. 509 , ⁴³⁴ under an ordinance of the Mayor and City Council of Baltimore, a lot was acquired and a building erected thereon for the use of English-German School Eo. 1, and it was so used for a number of years, when the Board of School Commissioners of the City determined to use it for a colored high school, which change of use certain taxpayers of the city sought to restrain by injunction. In refusing the injunction on appeal this Court referring to section 1 of the City Chai’ter, supra, said: “By the first and second sections of that instrument all the property of the city is vested in them with full power of disposition of it in the manner and terms therein provided. Under the lease the Mayor and City Council became the owner of the premises, and by reason thereof had full power to designate from time to time the uses to which it could be put. * * * The terms of the charter, and the Acts of Assembly, if there were any, determine what should be the measure of their power and duty. * * * It could not have been intended that for all time the premises could be used only for the uses of that school. If it could be available for no other use than that specifically mentioned, it could well happen that after the location had ceased to be available for the specified use, and there was no power in the corporation to designate any other employment of the premises, the property would remain idle and worthless, and become a mere incumbrance on the city.” This case is cited to show the broad and emphatic language used in considering the power of the city to determine the uses to which its property of that description can be put, though the case did not involve the precise questions here presented, of property no longer needed for public uses.

But, as we shall see later, there are abundant-authorities from other Courts of high repute sustaining the lease to the Field Officers in this case. We have not overlooked, though we cannot agree with the ingenious argument of the appellants, by which they seek to take this case out of the operation of section 13 of the Charter, They contend that “letting” for entertainments for one or more evenings, however definitely ascertained, is ⁴³⁵ not a “renting for a fixed and limited term.” We think it is apparent that the meaning and purpose of the requirement that, the renting allowed should be for a fixed and limited term—and with the approval of the Finance Commissioners—was that no such indefinite or renewable contracts should be made as would interfere with the probability of an early absolute disposal of unused property of the city, no argument being required to show that when real property, or buildings belonging to the city are no longer available for its public uses, the financial interests of the city demand that the cost of maintenance be gotten rid of as promptly as possible by absolute sale; and we are of opinion that, the term “renting” as here used embraces the power to let or hire the use for a single evening or any number of evenings—whether consecutive or not. A liberal construction of such a charter power is required to enable the city, in the interest of its general taxpayers, to minimize the loss of revenue upon its unused property. Again the appellants contend that this building - is not “property not needed for public use,” as those words are used in section 13, because it is as they say, “in the custody and regular use of a branch of the government as its only habitation.” But why is it in such use and custody ?

Clearly only because the city its owner does not need it for any of its own public uses. Can it be supposed that if the city could adapt it to any substantial and valuable public use of the municipality, it would so recklessly neglect its duty to the taxpayers as to rent it to the Field Officers as they did for one dollar a year and a covenant to maintain an insurance for $10,000 ? The question answers itself, and must satisfy anyone who will consider it impartially, that it is now, notwithstanding its occupancy under the terms of this lease, as clearly unused property so far as the city is concerned, as it was before this lease was made. Referring now to the authorities which we have said are abundant to sustain this lease, we cite the following: In French v. Quincy, 3 Allen. 9, the town erected a town ⁴³⁶ hall on a lot held under a deed conveying the title for that specific use, with condition for reverter to the grantor or his heirs on breach of condition as to use.

The building was so constructed as to contain in the first story a bank, a clothing store, and a lockup, and in the second story a hall for town meetings, also used as a theatre and for entertainments and dances. Upon a writ of re-entry, it was held that the town having authority to construct the building, and not having occasion to use parts of it for the time being, is not obliged to keep them unoccupied but may derive a revenue from them by renting them-—notwithstanding this interfered with the business of the plaintiffs tavern. In Bates v. Bassett, 60 Vermont,