Mayor of Baltimore v. United Five & Ten Cent Stores, Inc.

Smith, J., delivered the opinion of the Court. The Mayor and City Council of Baltimore condemned property of appellee in the “Madison Park North” Urban Renewal area. This area was part of the overall Mount Roj^al-Fremont Renewal Area encompassing a total of 925 acres approved by the Mayor and City Council of Baltimore as a “renewal” area by Ordinance No. 875 on May 22, 1957. The court below instructed the jury that it should add to the current fair market value of the property the amount of any diminution in value occurring subsequent to May 22, 1957, the ³⁶³ date of the adoption of Ordinance 875 which designated the area as one for renewal.

Specifically, the court instructed as follows: “I instruct you that the Ordinance of the Mayor and City Council dated April 16, 1963, known as Ordinance No. 1594 was the legislative authority by which the City of Baltimore was allowed to acquire this piece of property. I instruct you further that Ordinance No. 875 passed on May 22, 1957 described the overall area, including 925 acres, as an Urban Renewal Area and was an announcement by the Mayor and City Council approving the actions of the Planning Commission of Baltimore in designating the overall Mount Royal-Fremont Renewal Area within which this property was located. “If you find from the evidence that there was a diminution of value occurring subsequent to the enactment of either Ordinance 875 or Ordinance 1594, or that there was a diminution of value by any acts of a public nature or any announcement made by the May- or and City Council or its officials, or by the Urban Renewal, or any of its officials, and that these enactments or these announcements or acts proximately caused any diminution of value to the subject property then you must consider such diminution of value under the instructions given you and add that amount to any amount which you find to be a fair market value as of today if you find that the fair market value today has been diminished in that interval and was caused by either of the legislative enactments or any announcement or any acts by the public officials in connection with the project.” (Emphasis supplied.) The above instruction was based upon the court’s interpretation of the statutory definition of “fair market value” found in Article 33A, § 6, of the Annotated Code of Maryland (1967 Repl. Vol.), which reads in pertinent part: “The fair market value of property in a proceeding for condemnation shall be the price as of the valuation ³⁶⁴ date . . . plus the amount, if any, by which such price reflects a diminution in value occurring between the effective date of legislative authority for the acquisition of such property and the date of actual taking if the trier of facts shall find that such diminution in value was proximately caused by the public proj ect for which the property condemned is needed, or by announcements or acts of the plaintiff or its officials concerning such public project * * The city took exception to the portion quoted above because it allowed the jury to take into account diminution in value occurring prior to April 16, 1963, the effective date of Ordinance No. 1594, the legislative authority for the city’s acquisition of the subject property. The exception was denied.

A motion for a new trial was also denied. The problem here arises as to the proper construction of § 6 of Article 33A. In effect, the city requests that the statute be construed to read: “The fair market value of property in a proceeding for condemnation shall be the price as of the valuation date * * * plus the amount, if any, by which such price reflects a diminution in value occurring between the effective date of legislative authority for the acquisition of such property and the date of actual taking if the trier of facts shall find that such diminution in value was proximately caused by: A. The public project, or B. Announcements of plaintiff or its officials concerning such public project, or C. By acts of plaintiff or its officials concerning such public project.” The purpose of the enactment here is made clear by its legislative history. The Legislative Council recognized that public acts or announcements by the condemnor may have a significant influence on the property concerned.

Such acts or announcements might cause property to be vacated or vandalized with a resultant depreciation in value. There may be, as there was here, a lapse of years between the initial project announcement ³⁶⁵ and enactment of specific authority for the taking. It is here conceded that the actual diminution of value occurred in this interim period. The Legislative Council Committee “To Revise the Condemnation Laws of Maryland” recognized the above inequity.

To protect the property owner in this situation, it recommended in its report that there be compensation for diminution in value. Senate Bill No. 8 was introduced in 1963 in which § 6 read as follows: “The fair market value of property in a proceeding for condemnation shall be the price as of the valuation date for the highest and best use of such property which a seller, willing but not obligated to sell, would accept for the property, and which a buyer, willing but not obligated to buy, would pay therefor excluding any increment in value proximately caused by the public project for which the property condemned is needed, plus the amount, if any, by which such price reflects a diminution in value proximately caused by the public project for which the property condemned is needed, or by announcements or acts of the plaintiff or its officials concerning such public project.” (Emphasis supplied.) While Senate Bill No. 8 was in committee, the Mayor and City Council of Baltimore suggested that § 6 be amended by the insertion of the italicized language set forth below: “The fair market value of property in a proceeding for condemnation shall be the price as of the valuation date for the highest and best use of such property which a seller, willing but not obligated to sell, would accept for the property, and which a buyer, willing but not obligated to buy, would pay therefor excluding any increment in value proximately caused by the public project for which the property condemned is needed, plus the amount, if any, by which such price reflects a diminution in value occurring between the effective date of legislative authority for the acquisition of such property and the date of actual taking if ³⁶⁶ the trier of facts shall find that such diminution in value was proximately caused by the public project for which the property condemned is needed, or by announcements or acts of the plaintiff or its officials concerning such public project, and was beyond the reasonable control óf the property owner. “If the condemnor is vested with a continuing power of condemnation, the phrase ‘the effective date of legislative authority for the acquisition of such property,’ as used in this section, shall mean ‘the date of specific administrative determination to acquire such property.’ ” As finally enacted, the statute reads as hereinbefore set forth. The interpretation given by the lower court gives the most general remedy, Rogan v. B. & O. R. R. Company, 188 Md. 44, 53 , 52 A. 2d 261, 266 (1947), and most effectually carries out the legislative purpose. Liquor Dealers v. Comptroller, 241 Md. 656, 660 , 217 A. 2d 571, 574 (1966).

The case of Webb v. City of Baltimore, 179 Md. 407 , 19 A. 2d 704 (1941), is