In Re Housing Authority of City of Charlotte.

65 S.E.2d 761 (1951)

233 N.C. 649

In re HOUSING AUTHORITY OF CITY OF CHARLOTTE.

No. 522.

Supreme Court of North Carolina.

June 7, 1951.

*764 Harry McMullan, Atty. Gen., and John H. Paylor, Asst. Atty. Gen., amicus curiae.

Elbert E. Foster, Charlotte, for respondents McKnight and Porter.

Goodman & Goodman, Sol Levine and Wendell R. Wilmoth, all of Charlotte, for respondents other than McKnight and Porter.

DENNY, Justice.

This Court upheld the constitutionality of the Housing Authorities Law enacted by the General Assembly in 1935, being Chapter 456 of the Public Laws of 1935, and codified in our General Statutes in Sections 157-1 to 157-60, inclusive, in the case of Wells v. Housing Authority, 213 N.C. 744, 197 S.E. 693. It was there decided that a housing authority created pursuant to the provisions of the Housing Authorities Law is a municipal corporation; that the act comprehends a public governmental purpose, and that the corporation is invested by it with a governmental function. This decision has been followed and approved in Cox v. City of Kinston, 217 N.C. 391, 8 S.E.2d 252, and in Mallard v. Eastern Carolina Regional Housing Authority, 221 N.C. 334, 20 S.E.2d 281.

The respondents do not contend that the proposed project is not needed in the City of Charlotte, or that the proposed construction of 400 low-rent dwelling units by the Housing Authority of the City of Charlotte is not in the public interest and necessary for public use. The findings of the petitioner in this respect are not challenged. Furthermore, it is stipulated that the Housing Authority of the City of Charlotte is a corporation, duly established and existing in conformity with the provisions of the Housing Authorities Law, and that it did pass an appropriate resolution as a prerequisite to the institution of this proceeding, as required by G.S. §§ 157-11 and 157-50. Therefore, it is conceded by all parties that the Housing Authority of the City of Charlotte has found that the acquisition of the property which it seeks to acquire by eminent domain is in the public interest and necessary for public use.

*765 However, in the hearing below, the respondents challenged the validity of the proceeding on the ground that the petitioner had failed to observe all the statutory requirements governing such project or projects. And the court concurred in this view and held the certificate of public convenience and necessity was null and void because the application of the Housing Authority of the City of Charlotte, for such certificate, did not sufficiently describe the situs of the property to be taken in the condemnation proceeding as a site for the proposed housing project; and, also held that the Utilities Commission must hold a hearing before issuing a certificate of public convenience and necessity, but that the individual respondents were not entitled to any notice with respect thereto.

The respondents base their contentions on the provision contained in the following statute: "Notwithstanding any finding of public convenience and necessity, either in general or specific, by the terms of this article, the right of eminent domain shall not be exercised unless and until a certificate of public convenience and necessity for such project has been issued by the Utilities Commission of North Carolina, and the proceedings leading up to the issuing of such certificate of public convenience and necessity, and the right to appeal therefrom shall be as now provided by law and said rights are hereby expressly reserved to all interested parties in said proceedings. In addition to the powers now granted by law to the Utilities Commission of North Carolina, the said Utilities Commission is hereby vested with full power and authority to investigate and examine all projects set up or attempted to be set up under the provisions of this article and determine the question of the public convenience and necessity for said project." G.S. § 40-53.

These identical provisions are also contained in G.S. §§ 157-28,45 and 51.

The Housing Authority of the City of Charlotte, acting in cooperation with the City of Charlotte, is subject to the provisions set forth in G.S. § 157-40 and subsequent sections in the Housing Authorities Law. In G.S. § 157-40 and in G.S. § 157-48, the Legislature of North Carolina made a finding and declaration of necessity with respect to the need for safe and sanitary dwelling accommodations for persons of low income. The Legislature also made a similar finding which is contained in G.S. § 40-31, which is a part of the Public Works Eminent Domain Law. This law defines a "public works project" as any work or undertaking which is financed in whole or in part by a federal agency, as therein defined, or by a state public body, as therein defined, G.S. § 40-32(a). While it is said in the Housing Authorities Law, G.S. § 157-3(10): "`Housing project' shall include all real and personal property, buildings and improvements, stores, offices, lands for farming and gardening, and community facilities acquired or constructed or to be acquired or constructed pursuant to a single plan or undertaking (a) to demolish, clear, remove, alter or repair unsanitary or unsafe housing, and/or (b) to provide safe and sanitary dwelling accommodations for persons of low income. The term `housing project' may also be applied to the planning of the buildings and improvements, the acquisition of property, the demolition of existing structures, the construction, reconstruction, alteration and repair of the improvements and all other work in connection therewith." And in G.S. § 157-41(4), it is provided that a "`housing project' shall mean any undertaking (a) to demolish, clear, remove, alter or repair unsafe or insanitary housing, and/or (b) to provide dwelling accommodations for persons of low income, and said term may also include such buildings and equipment for recreational or social assemblies for educational, health or welfare purposes, and such necessary utilities as are designed primarily for the benefit and use of the housing authority and/or the occupants of such dwelling accommodations."

We think the finding of public convenience and necessity, either in general or specific terms, as pointed out in G.S. § 40-53, has reference to any finding made "either in general or specific" terms by the Legislature and set forth in the Housing Authorities Law, which finding shall not *766 be sufficient to warrant the exercise of eminent domain in connection with any project authorized thereby. But a certificate of public convenience and necessity for such project must be obtained from the Utilities Commissionthat is, the public need for such a project in a particular community must be made to appear and a certificate of public convenience and necessity must be obtained before the petitioner may proceed to condemn property for such a project. We do not think, however, that it was the legislative intent to require a petitioner to select and describe in detail the land it might need for the construction of a proposed project before it ascertained whether or not it would be permitted to proceed with the project.

It is contended by the respondents that if the petitioner was not required to inform the Utilities Commission as to the specific property it proposed to condemn as a site for its housing project, at the time it applied for a certificate of public convenience and necessity, it is conceivable that the Housing Authority of the City of Charlotte, after obtaining such certificate, might have proceeded to condemn the property surrounding the intersection of Trade and Tryon Streets in the City of Charlotte, as a site for its housing project, if it had so desired. However it would be difficult to conceive how the officials of the Housing Authority of the City of Charlotte could find in good faith that the acquisition of such property was in the public interest and necessary for public use. Moreover, there is a presumption that public officials will discharge their duties in good faith and exercise their powers in accord with the spirit and purpose of the law. Kirby v. Stokes County Board of Education, 230 N.C. 619, 55 S.E.2d 322; 31 C.J.S., Evidence, § 146, p. 799, et seq., and cited cases.

We know of no statutory requirement to the effect that the application of a housing authority for a certificate of public convenience and necessity in this State must contain a description of the property upon which the low-rent dwellings are to be located, or to require notice to the owners of such property of the filing of an application for such certificate. The statute does not provide for the North Carolina Utilities Commission to select or approve the selection of the site for a housing project. On the contrary, the selection of a site for such project is vested in the housing authority. In State ex rel. Porterie v. Housing Authority, 190 La. 710, 182 So. 725, 740, the court, in considering the resolution to the effect that certain realty was necessary for a housing project, said: "What this provision means is that a housing authority, and not the administrative or executive department of a city, is to determine the propriety of locating a project in any particular part of the city, and that, as to that, the decision of the housing authority is conclusive."

It is our opinion, however, and we so hold that if a local housing authority should act in bad faith in the selection of a site for a housing project, that is, if it should act arbitrarily, capriciously or fraudulently in making such selection, such action may be challenged in the proceedings to condemn the property. G.S. § 40-36. But in the absence of an allegation charging that the action of the local housing authority was arbitrary, capricious or fraudulent, the selection of a site for a housing project will not be disturbed. Brammer v. Housing Authority, 239 Ala. 280, 195 So. 256. And it will be noted that in this proceeding the court below found as a fact that the action taken by the Housing Authority of the City of Charlotte was not arbitrary, capricious or fraudulent, nor was it an abuse of discretion, and there is no exception to such finding.

A housing authority must do two things before it may institute a proceeding for the taking of property under the right of eminent domain, pursuant to the provisions of the Public Works Eminent Domain Law. G.S. §§ 40-30 to 40-53, inclusive. It must obtain a certificate of public convenience and necessity from the North Carolina Utilities Commission and it must adopt a resolution "declaring that the acquisition of the property described therein is in the public interest and necessary for public use." G.S. §§ 157-11 and 157-50. When *767 these requirements have been met, the housing authority is empowered by statute to acquire by the right of eminent domain any real property, including fixtures and improvements thereon, described in its resolution passed pursuant to the provisions of G.S. § 157-11. G.S. § 157-50.

In our opinion, the North Carolina Utilities Commission has only one question to consider and determine in connection with an application of a housing authority for a certificate of public convenience and necessity, and that is whether the area within the jurisdiction of the particular housing authority is eligible for the construction of the low-rent dwellings proposed, within the purview of the Housing Authorities Law. The statute only empowers the Utilities Commission to investigate and examine all projects set up or attempted to be set up under the provisions of the Housing Authorities Law to determine "the question of the public convenience and necessity for said project." G.S. §§ 40-53, 157-28, 157-45 and 157-51. It is true these statutes provide for an appeal from the ruling of the Commission, on an application for a certificate of public convenience and necessity, by interested parties. The question then arises as to who are interested parties. The answer is found in G.S. § 62-26.6, which provides for an appeal from a determination or decision made by the Utilities Commission by any party affected thereby. However, such affected party must file exceptions to the determination or decision within ten days after notice of the determination or decision. And it has been repeatedly held by this Court that an appeal from the Utilities Commission is limited to parties to the proceeding, North Carolina Utilities v. City of Kinston, 221 N.C. 359, 20 S.E.2d 322; Corporation Commission v. Southern R. Co., 196 N.C. 190, 145 S.E. 19; North Carolina Corporation Commission v. Winston-Salem Southbound R. Co., 170 N.C. 560, 87 S.E. 785; North Carolina Corp. Comm. v. Southern R. Co., 147 N.C. 483, 61 S.E. 271, 273; and a party is not affected by a ruling of the Utilities Commission unless the decision "affects or purports to affect some right or interest of a party to the controversy, and in some way determinative of some material questions involved." N. C. Corporation Comm. v. Southern R. Co., supra; Chicago, B. & Q. R. Co. v. Cavanagh, 278 Ill. 609, 116 N.E. 128, 129; Zurn v. City of Chicago, 389 Ill. 114, 59 N.E.2d 18. And the issuance of a certificate of public convenience and necessity for the construction of low-rent dwellings in the City of Charlotte is in no way determinative of any right of these respondents. Such certificate does not give a local housing authority any right, title or interest in real estate, even though the property may be described in the petition for the certificate of public convenience and necessity.

In the case of Chicago, B. & Q. R. Co. v. Cavanagh, supra, the State Public Utilities Commission, after an investigation of existing conditions, found that public convenience and safety required a relocation of the petitioner's railroad tracks between certain points. The petitioner was directed to make such changes in the location of its existing right of way as might be necessary to comply with the order, and to acquire, either by purchase or the exercise of eminent domain, whatever property might be necessary for the purpose. The defendants contended, just as the respondents do in the proceeding before us, that since they were not served with notice of the hearing or investigation, nor with a certified copy of the order, so that they might contest it before the Commission and appeal from the order, that it was not binding on them and that the petitioner was, therefore, not entitled to take their property under the right of eminent domain. The lower court concurred in this view and dismissed the proceeding, but upon appeal to the Supreme Court, the lower court was reversed. The Supreme Court of Illinois held that the statute requiring notice and giving the right of appeal applied only "to notice or service of an order upon some person or corporation either complained of or required to do something or to comply with some order, rule, or regulation. The order of the Commission did not amount to an appropriation of the defendants' property or any interest in it, which could only *768 be accomplished by the filing of a petition and the ascertainment and payment of compensation for the property, so that there was no violation of the due process provision of the Constitution. The defendants were not deprived of their property, nor of any interest therein, by the mere making of the order, which neither gave the petitioner any interest in or right to possession of the property. "The General Assembly has unlimited power to take private property for public use, or to authorize it to be taken, upon making compensation, reserving to the property owner the right to contest the question whether the proposed use is public or private, and whether the power is to be exercised for the purpose for which it was conferred." [378 Ill. 609, 116 N.E. 129.]

In Zurn v. City of Chicago, supra, the statute provided that Neighborhood Redevelopment Corporations, which were only semi-public, in applying for a certificate of convenience and necessity should contain a description of the property to be obtained, and, further provided that "No steps may be taken by a redevelopment corporation, in the process of slum clearance and rehabilitation, until its development plans have been approved by the commission and the commission has issued its certificate of convenience and necessity, as provided in the act." [389 Ill. 114, 59 N.E.2d 23.] The plaintiff contended that since the Neighborhood Redevelopment Corporation Law did not provide for notice to the property owners of the application for a certificate of convenience and necessity, the act was invalid. Other provisions in the act were also attacked. Judgment was entered holding the act invalid and enjoining the defendants from using any public funds in carrying out its provisions. The judgment was reversed on appeal and the Court, with respect to lack of notice complained of by the property owners, said: "It is argued that the failure of the act to provide for actual notice of such hearing to the property owners constitutes a denial of due process of law. It should be kept in mind that this hearing is merely an application for a certificate of convenience and necessity. * * * It is argued that when the commission issues its certificate of convenience and necessity, this authorizes the corporation to proceed with the project and to acquire the property located within the development area by eminent domain. It is obvious, however, that no property or property interests are to be taken or interfered with on this hearing. It is simply one of the steps prescribed by the act in the chain of events authorizing the redevelopment corporation to proceed with the development and to acquire property by voluntary conveyance and by eminent domain for that purpose."

It appears from the record in this proceeding that the Utilities Commission found the facts, upon which it issued the certificate of public convenience and necessity, from the duly verified petition of the Housing Authority of the City of Charlotte, and from representations of counsel for the petitioner. By consent of counsel for all parties the petition of the Housing Authority of the City of Charlotte was not made a part of the record. However, the findings of fact and conclusions of law are set out in the order of the Commission, and they are sufficient to support the order. Among other things, the Commission found that the City of Charlotte, after having made due investigation, found and determined that there exists in the City of Charlotte a need for an additional 600 units of decent, safe and sanitary low-rent dwellings, and adopted a resolution to that effect in a regular meeting on 21 December, 1949; and that the City of Charlotte had entered into a cooperative agreement with the Housing Authority of the City of Charlotte, as required by the Public Housing Administration. And since the evidence upon which the Utilities Commission made its findings of fact is not brought forward, it will be presumed that there was competent evidence to support its findings, Carter v. Carter, 232 N.C. 614, 61 S.E.2d 711; Hughes v. Oliver, 228 N.C. 680, 47 S.E.2d 6; Roach v. Pritchett, 228 N.C. 747, 47 S.E.2d 20; Radeker v. Royal Pines Park, Inc., 207 N.C. 209, 176 S.E. 285; and the order of the Utilities Commission *769 granting the certificate of public convenience and necessity may not be attacked in this proceeding.

In our opinion the record supports the view that the petitioner herein complied with the preliminary requirements of the Housing Authorities Law prior to the institution of the proceeding for the condemnation of the respondents' parcels of land. And since it is conceded that the notices required by the Public Works Eminent Domain Law, G.S. § 40-36, have been given in accordance with the provisions of the statute, the judgment dismissing the proceeding should be reversed.

We have in effect heretofore considered and passed upon all but two of the exceptions entered by the respondents to the court's conclusions of law, made in the hearing below, in our consideration of the petitioner's appeal.

The respondents excepted to and assign as error the ruling of the court below to the effect that the right of eminent domain provided for in G.S. §§ 40-30 to 40-53, inclusive, may be exercised for the purpose of constructing low-rent dwellings despite the fact that the area sought to be condemned may not be a slum area.

In the selection of a location for a housing project as authorized under the Housing Authorities Law, the project may be built either in a slum area which has been cleared, or upon other suitable site. The housing authority is given wide discretion in the selection and location of a site for such project. Housing Authority v. Higginbotham, 135 Tex. 158, 143 S.W.2d 79, 130 A.L.R. 1053; Riggin v. Dockweiler, 15 Cal. 2d 651, 104 P.2d 367; Chapman v. Huntington, W. Va. Housing Authority, 121 W.Va. 319, 3 S.E.2d 502; Stockus v. Boston Housing Authority, 304 Mass. 507, 24 N.E.2d 333; Housing Authority of the City of Oakland v. Forbes, 51 Cal. App. 2d 1, 124 P.2d 194. And the fact that a few isolated properties in an area may be taken and dismantled which are above the standard of slum properties, or that some few desirable homes will be taken, will not affect the public character of the condemnation proceeding. Blakemore v. Cincinnati Metropolitan Housing Authority, 74 Ohio App. 5, 57 N.E.2d 397; In re Edward J. Jeffries Home Housing Project of Detroit, 306 Mich. 638, 11 N.W.2d 272.

The respondents also except to the ruling of the court below to the effect that G.S. § 40-10 does not apply to this proceeding, and that the Housing Authority of the City of Charlotte may condemn, without the consent of the owners, their dwelling houses, yards, kitchens, gardens, or burial grounds.

We concur in the ruling of the court below. The Housing Authorities Law expressly gives the housing authority, created pursuant to the act, the power to obtain by eminent domain any real property, including the improvements and fixtures thereon, which it may deem necessary for the construction of a housing project. G. S. §§ 157-11 and 157-50.

All the exceptions of the respondents to the court's conclusions of law are hereby overruled, and the judgment from which the petitioner appeals is reversed and remanded for further proceedings in accord with this opinion.

Reversed and Remanded.

BARNHILL and ERVIN, JJ., dissent.