Master Royalties Corp. v. Mayor of Baltimore

Brune, C. J., delivered the opinion of the Court. The appellee, the City of Baltimore (the City) instituted condemnation proceedings in furtherance of an urban renewal plan to acquire the leasehold interests owned by the appellants in the land and improvements at 208-210 McMechen Street, Baltimore. The trial court entered a judgment of condemnation in favor of the City, which awarded damages of $38,250 to the owners of these leaseholds for the taking thereof. The owners appeal.

The appellants’ contentions cover a wide range, including: alleged invalidity of the taking and of the ordinance under which the City purported to act (Ordinance No. 912, approved July 3, 1961) by reason of asserted violations of provisions of the State or Federal Constitutions, or both; alleged conflict with State statutes; alleged conflict with provisions of the Baltimore City Charter; questions as to waiver of jury trial and as to issues which should have been submitted to the jury if there were not such a waiver; and a procedural objection because the City Department of Assessments did not join in these condemnation proceedings. The present specific provisions of the State Constitution relating to urban renewal in and by the City are contained in Article XI-B, as proposed as a constitutional amendment by Ch. 162 of the Acts of 1947. Under this Act, the amendment, if adopted, was “to supersede and stand in the place and stead of the [then] title to, and Sections 1 and 2 of, Article XIB of [the] Constitution.” It was ratified at the election of November 2, 1948, and was certified by the Secretary of State as having been so ratified on January 4, 1949, and is therefore sometimes referred to as the 1949 Amendment. Under Section 1 of Article XI-B the General Assembly of Maryland may authorize and empower the City to acquire land and property of every kind within its limits by purchase, condemnation, or other lawful means “for development or rede ⁸⁰ velopment, including, but not limited to, the comprehensive renovation or rehabilitation thereof”; and to sell, lease, convey, transfer, etc., any of such land or property, whether or not developed or redeveloped.

No property may be taken by the City through the power of eminent domain for any of these purposes or in connection with the exercise of any of the powers which may be granted to the City under Article XI-B, without just compensation as agreed upon between the parties or awarded by a jury being first paid or tendered. This section further provides that “All land or property needed, or taken by the exercise of the power of eminent domain, by the [City] for any of the aforementioned purposes or in connection with the exercise of any of the powers which may be granted to the [City] pursuant to this. Article is hereby declared to be needed or taken for a public use.” Section 2 of Article XI-B authorizes the General Assembly to grant to the City “any and all additional power and authority necessary or proper to carry into full force and effect any and all of the specific powers which the General Assembly is authorized to grant to the [City] pursuant to this Article and to fully accomplish any and all of the purposes and objects contemplated by the provisions of this Article, provided such additional power or authority is not inconsistent with the terms and provisions of this Article or with any other provision or provisions of the Constitution of Maryland.” The General Assembly is also authorized to place restrictions or limitations on the exercise of powers which it may grant to the City under this Article. Section 3 provided for continuing in existence the previously established Baltimore Redevelopment Commission and for its continued exercise of power and authority which might then or thereafter be vested in it “until such time as such power and authority * * * is validly repealed by an Act of the General Assembly * * * or by an ordinance or resolution of the [City] and a new agency of the [City] is created to carry out the objects and purposes for which the Baltimore Redevelcpment Commission was originally created; and nothing contained in this Article shall be taken or construed to the contrary.” Ch. 217 of the Acts of 1949 of the General Assembly in gen ⁸¹ eral implements Article XI-B, and. in large measure grants powers of urban renewal to the City in the terms of that Article.

It does this (by Sec. 1 of the Act) by adding a new Paragraph designated as 14(A) to Sec. 6 of the Baltimore City Charter (1946 Ed.). It also contains some specific provisions not spelled out in Article XI-B, but evidently regarded as within the additional powers and further restrictions provisions of Sec. 2 of that Article. Among these are provisions (sub-par. (f) ) authorizing the insertion of appropriate provisions in any legal instrument pertaining to the sale, lease, conveyance, transfer or other disposition of property for any of the purposes contemplated by Paragraph 14(A), to the effect that standards of population density, property maintenance, types of land use and other standards established for the particular parcel of land or property shall be maintained, and that all covenants and restrictions contained in any such legal instrument shall be binding upon subsequent purchasers, lessees, transferees or successors.

Sub-paragraph (g) of Par. 14(A) authorizes the City to vest jurisdiction or authority “to exercise or perform” all or any of the powers granted under Par. 14(A) in any suitable board or commission, etc. then existing or thereafter created, and authorizes the City to create a board or commission, etc., for such purposes. Sec. 2 of Ch. 217 repeals the former Paragraph (25) of the City Charter, entitled “Redevelopment Commission,” and all amendments thereof (specifically including Ch. 504 of the Acts of 1947), and Sec. 3 implements Sec. 3 of Art. XI-B by providing in substance that the Redevelopment Commission shall continue in existence and may exercise its powers until it is dissolved by an ordinance of the City and the power and authority granted to the City under Ch. 217 are vested in whole or in part in a new board, commission, department, bureau or other agency of the City. It closes with the provision that “nothing contained in this Act shall be taken or construed to the contrary.” City Ordinance No. 692, approved December 31, 1956, which amended Article 14 of the Baltimore City Code, among other things, abolished the Baltimore Redevelopment Commission and ⁸² established the Baltimore Urban Renewal and Housing Agency (BURHA). It also contained a finding that there existed in the City slum, blighted, deteriorated, or deteriorating areas, which constitute a serious and growing menace, injurious and inimical to the public health, safety, morals and general welfare of the residents of the City; and it defined the meaning of a slum, blighted or deteriorated area and the meaning of a deteriorating area.

In general, it authorizes BURHA to exercise the powers conferred upon the City by Article XI-B and by Ch. 217 of the Acts of 1949, subject in some respects to approval by the Planning Commission, and subject to the approval of renewal plans by City Ordinance to be adopted only after a public hearing. A renewal plan is defined as meaning “a plan, as it exists from time to time, for the elimination, correction, or the prevention of the development or the spread of slums, blight, or deterioration in an entire Renewal Area or a portion thereof.” Such a plan must contain a land use map showing the proposed use of all land in the area and must set forth other matters, including any zoning changes and the effective date thereof, and the nature of any restrictions, conditions or covenants to be incorporated in deeds or contracts for the sale, lease, use or redevelopment of property within the area affected. (City Code, Art. 14, sec. 9-D(b).) Zoning changes require approval by an ordinance in conformity with the procedural requirements of Article 66B of the Code, the State Zoning Enabling Act, and approval by ordinance of a renewal plan constitutes authorization to BURHA to acquire by condemnation, if necessary, land and improvements and interests therein designated for acquisition in the plan. (See City Code, Art. 14, sec. 9E(d) and (e).) Ordinance 912, among other things, approves a renewal plan for Project I of the Mount Royal-Eremont Renewal Area, this being the plan here involved, and specifically authorizes the condemnation of the fee simple interest in numerous properties, including 208 and 210 McMechen Street, in which the appellants have leasehold interests.

The plan contemplates the immediate acquisition of roughly 40% of the area covered by Project I, and makes provision for the subsequent acquisition of other properties if necessary to bring them up to standards ⁸³ required by other City ordinances or regulations or the additional housing standards contained in sec. 4 of Ordinance 912 or to eliminate incompatible or nonconforming uses. Other matters pertaining to this ordinance and relevant to contentions here raised will be referred to in considering particular contentions. Sections 28 and 53 of the City Charter relate, respectively, to the title and form of ordinances and to participation by the Bureau of Assessments in condemnation cases and will be further considered in connection with the contentions to which they are directly related. We shall first take up the appellants’ contention that this condemnation proceeding is invalid because of alleged non-compliance with the provisions of Sec. 53 of the City Charter that “ [consistent with the provisions of the Charter * * *, the Department [of Assessments], pursuant to the provisions of applicable ordinances as now or hereafter enacted, shall: * * * (5) in conjunction with the Department of Law, institute and carry on all condemnation proceedings on behalf of the City.” 1 It is clear that the Department did not initiate or carry on the present proceeding, but we do not find this a fatal objection to the validity thereof.

In the first place, it is at least doubtful that this provision, according to its own terms, has any application to the present case where, under Sec. 14(A) (g) of the City Charter, as enacted by Ch. 217 of Acts of 1949, the City may vest jurisdiction or authority in any suitable board, * * * department * * * or other agency to exercise the powers conferred by section 14(A), which include the power of condemnation, and the City has authorized BURHA to exercise this power. Even if applicable, which we do not decide, we think it directory, rather than mandatory. It was so held by Judge Byrnes in the Superior Court of Baltimore City in Mayor & City Council of Baltimore v. Gilmor, decided May 19, 1954 ⁸⁴ (Docket 1953, Folio 1012, File No. 31598), where he said: “* * * this requirement is merely directory, especially in redevelopment projects, where the contribution of the Department of Assessments could not be substantial.” Cf. Flaccomio v. City of Baltimore, 194 Md. 275, 281 , 71 A. 2d 12 .

Cf. also Marchant v. Mayor & City Council of Baltimore, 146 Md. 513, 126 A. 884 . We note that here no prejudice whatever to the appellants is shown as a result of the non-participation of this Department in the proceedings. A similar situation existed in the cases just cited. The appellants’ first attack on the constitutionality of Ordinance 912 and the taking thereunder is that they are claimed to go beyond the authorization of the present Article XI-B, which is the 1949 Amendment.

That Amendment superseded the original XI-B, which was proposed by Ch. 649 of the Acts of 1943, and was ratified at the November, 1944 election, and is referred to below as the 1944 Amendment. The appellants point out that prior to the 1944 Amendment, provisions for taking by eminent domain in Baltimore City were governed by Secs. 40 and 40A of Article III of the Maryland Constitution and that the test of “public use” under those sections was and is use by the public, rather than use benefiting the public. See Perellis v. Mayor & City Council of Baltimore, 190 Md. 86 , 57 A. 2d 341 (1948) ; Riden v. Philadelphia, B. & W. R.R., 182 Md. 336 , 35 A. 2d 99 (1943). We think that the 1944 and 1949 Amendments embody a broader concept of public use, and it is clear that under the express language of each the power of eminent domain may be exercised by the City (if authorized by the General Assembly) to acquire property for redevelopment, the provisions of the later amendment being somewhat broader.

Such provisions of the State Constitution could not be unconstitutional unless they were in conflict in some way with the Federal Constitution, a matter which we shall refer to below. The appellants’ effort to show that Ordinance 912 and the taking thereunder go beyond the authorization of Article XI-B rests largely upon the contention that Sec. 3 of the 1949 Amendment limits the purposes of that Amendment to those of the 1944 Amendment. This contention is based upon the provisions ⁸⁵ of Sec. 3 under which the Baltimore Redevelopment Commission [the creation of which was permitted under the 1944 Amendment] may continue in existence and may exercise the powers now or hereafter vested in it until its power and authority are repealed by the General Assembly or by an ordinance or resolution of the City “and a new agency of the [City] is created to carry out the objects and purposes for which the Baltimore Redevelopment Commission was originally created; and nothing contained in this Article shall be taken or construed to the contrary.” (Italics supplied.) The appellants argue that the 1944 Amendment authorized condemnation only in slum or blighted areas and that Sec. 3 of the 1949 Amendment imposes a like limitation upon the otherwise broader terms of that Amendment. We find this argument wholly untenable.

The fundamental reason for our rejection of it is that the 1949 Amendment was obviously intended to change and broaden the 1944 Amendment. The appellants’ contention would render these broadening changes in scope of Article XI-B utterly nugatory and meaningless. Sec. 3 is simply a saving clause to provide for continuity and transition, not a clause to nullify changes otherwise made by the Amendment. Returning to the main question of public purpose, we refer again to the provisions of Sec. 1 of Article XI-B to the effect that all property needed or taken by eminent domain for purposes authorized by that Article is “declared to be needed or taken for a public use.” This, we think, plainly indicates that the Article sets up a standard of what constitutes public use which is not limited to the test stated in the Riden case.

In Herzinger v. City of Baltimore, 203 Md. 49 , 98 A. 2d 87 , a contention was made that the provisions of Article XI-B (the 1949 Amendment) were “so sweeping as to authorize a taking for any purpose, whether public or not.” In answering this contention Judge Henderson said first that: “The words ‘development or redevelopment, including but not limited to, the comprehensive renovation or renewal thereof’ [i.e., properties acquired], might well be construed, in the light of their general acceptation, as importing a public purpose.” ( 203 Md. at 61 .) It was found unnecessary to construe those words in that case, ⁸⁶ because the ordinances under which the City was there proceeding sufficiently indicated a public purpose and set up adequate standards to guide the administrative body in exercising the powers conferred, citing as to the latter question Matthaei v. Housing Authority, 177 Md. 506 , 9 A. 2d 835 . The appellants here set up rather similar contentions to those in the Hersinger case. Ch. 217 of the Acts of 1949 was also there relied upon by the City, but the ordinances were different from those here involved. We think, however, that the principles established by the Her singer and Matthaei cases are applicable here; and here, too, it seems unnecessary to determine finally that the construction of Article XI-B suggested in Her-singer is the correct one, because the applicable provisions of the City Code enacted by Ordinance 692, the provisions of Ordinance 912 and the evidence in this case show that the urban renewal plan here under attack is for a public purpose.

We think that the taking is clearly within a proper and valid authorization of Article XI-B (even if, as the appellants contend, the terms of Article XI-B with regard to public purpose are broader than they should be) and of Ch. 217 of the Acts of 1949. The definition of a “slum, blighted or deteriorated area” contained in Sec. 8(e) of Article 14 of the City Code as enacted by Ordinance 692 is in part as follows: “an area in which a preponderance of the structures therein is detrimental to the public health, safety, or general welfare by reason of age, dilapidation, depreciation, overcrowding, excessive land coverage, faulty arrangement, lack of ventilation or sanitary facilities, failure to conform with the provisions of the ordinances or regulatory codes of the City of Baltimore relating to building, housing, or sanitation, neighborhood obsolescence or deterioration, inadequate open space, parking, or access to transportation; or in which there is a preponderance of defective or inadequate street layouts, or of faulty lot layouts in relation to size, adequacy, accessibility or usefulness, or of unsanitary or unsafe conditions, or of deteriorated or inadequate site improvements or community facilities, ⁸⁷ or of conditions which endanger life or property by fire or other cause or which retard development of the area, or any combination of these factors; * * *” Ordinance 912 is closely correlated with Ordinance 692. It recites in the second clause of the preamble that under Ordinance 692 BURHA was authorized to prepare Renewal Plans and to undertake Renewal Projects in Renewal Areas, in the third clause that BURHA has prepared such a Plan for Project I of the Mount Royal-Fremont Urban Renewal Area (which Area had been designated as a Renewal Area by City Ordinance No. 875, approved May 22, 1957), and in the fourth clause the Planning Commission had approved and recommended the Renewal Plan prepared by BURHA. Sec. 1 of Ordinance 912 identifies and approves this Plan, and Sec. 9 contains a waiver of compliance with some provisions of Ordinance 692.

The testimony of Mr. Singh, who is the Principal Planner at BURHA and the head of the Project Planning Division, showed that there was excess coverage of land by buildings, that the area which the City was acquiring was “heavily dilapidated and blighted,” that in many cases walls were cracked, that there was excessive crowding in dwelling units, and that there was “improper street layout for the kind of new developments we have today.” It was his opinion that the area met the definition of a slum, blighted or deteriorated area under Ordinance 692. His testimony was supported by reports of building inspections which classified 524 of the 787 structures inspected in the Mount Royal-Fremont Development Area as deficient. The evidence warranted the trial court’s finding that the area was a slum, blighted or deteriorated area. We think that the development or redevelopment of this area, including but not limited to the comprehensive renovation or rehabilitation thereof constitutes a public purpose within the meaning of both Article XI-B of the State Constitution and the Due Process Clause of the Fourteenth Amendment to the Constitution of the United States.

The Due Process Clause of the Fourteenth Amendment does embody a requirement of a public purpose where a taking by a ⁸⁸ State under the power of eminent domain is involved. Missouri Pacific Railway Co. v. Nebraska, 164 U. S. 403 . The “public purpose” requirement in condemnation cases has been recognized in a number of other decisions of the Supreme Court, and in most of them it has been found to have been met. See Fall Brook Irrigation District v. Bradley, 164 U. S. 112, 158 (decided two weeks before the Missouri Pacific case); Chicago, Burlington & Quincy Ry. v. Chicago, 166 U. S. 226, 236 ; Clark v. Nash, 198 U. S. 361, 367-68 ; Hawston v.