Edwards v. Housing Authority of City of Muncie

• Decision Date: 13 March 1939
• Docket Number: 27105.
• Citation: 19 N.E.2d 741,215 Ind. 330
• Parties: EDWARDS et al. v. HOUSING AUTHORITY OF CITY OF MUNCIE et al.
• Court: Indiana Supreme Court

19 N.E.2d 741

215 Ind. 330

EDWARDS et al. v. HOUSING AUTHORITY OF CITY OF MUNCIE et al.

No. 27105.

Supreme Court of Indiana

March 13, 1939

Appeal from Superior Court, Delaware County; Claud C. Ball judge.

William H. Bales, of Muncie, for appellants.

Corbett McClellan, W. A. McClellan, and L. L. Bracken, all of Muncie for appellees.

FANSLER, Judge.

This is an action by the appellants, taxpayers and property owners of the City of Muncie and Delaware County, seeking to enjoin the Housing Authority of the City of Muncie and of Delaware County and the officers of those municipalities, from operating under chapters 81, 207, and 209 of the Acts of 1937 (Acts 1937, pp. 433, 1034, 1058), upon the theory that those acts, constituting one body of law providing for slum clearance and public housing, are unconstitutional. The complaint seems to have been drawn for the purpose of questioning every provision of the acts in question and raising every conceivable constitutional objection thereto. Demurrers were sustained, and error is predicated upon the ruling.

The purposes of the acts in question, as indicated by their titles, are to provide for public bodies corporate, to be known as housing authorities, to undertake slum clearance and provide dwelling accommodations for persons of low income; to define their powers and duties, which include the acquisition of property, borrowing money, issuing bonds and other obligations; to authorize municipal corporations to give aid to the projects or similar agencies of the United States, by furnishing the usual public service facilities; and to authorize municipalities to contract with respect to the services and facilities to be provided; and requiring municipalities to make appropriations for the first year's administrative expenses of such authorities; and to exempt the property and bonds of such bodies corporate from taxation. It is declared in the acts: '(a) that there exists in the State housing conditions which constitute a menace to the health, safety, morals and welfare of the residents of the State; (b) that these conditions necessitate excessive and disproportionate expenditures of public funds for crime prevention and punishment, public health and safety, fire and accident prevention, and other public services and facilities; (c) that the public interest requires the remedying of these conditions by the creation of housing authorities to undertake projects for slum clearance and for providing safe and sanitary dwelling accommodations for persons who lack sufficient income to enable them to live in decent, safe and sanitary dwellings without overcrowding and (d) that such housing projects are for public uses and purposes and are governmental functions of State concern. As a matter of legislative determination, it is hereby found and declared that the property and bonds of a housing authority are property and bonds of a public corporation and of such character as to be exempt from taxation.' Chapter 81 section 1, p. 434. And: '(b) That there exists now and may exist at divers times in the future, conditions, due to floods, tornadoes, fires and other disasters beyond human control, which demand the re-planning and re-building of housing areas; (c) That these slum areas have not been cleared, nor can the shortage of safe and sanitary dwellings for persons of low income be relieved, through the ordinary operations of private enterprise, and that the construction of housing projects for persons of low income (as herein defined) would therefore not be competitive with ordinary operation of private enterprise; (d) That the clearance, re-planning and reconstruction of the areas in which unsanitary or unsafe housing conditions exist and the providing of safe and sanitary dwelling accommodations for persons of low income are public uses and purposes for which public money may be spent and private property acquired; that it is in the public interest that work on such projects be commenced as soon as possible in order to relieve unemployment which now constitutes an emergency; and the necessity in the public interest and welfare for the provisions hereinafter enacted, is hereby declared a matter of legislative determination.' Chapter 207, section 2, p. 1035. And again: 'It is hereby found and declared that the assistance herein provided for the remedying of the conditions set forth in the Housing Authorities Law constitutes a public use and purpose and an essential governmental function for which public moneys may be spent, and other aid given; that it is a proper public purpose for any state public body to aid any housing authority operating within its boundaries or jurisdiction or any housing project located therein; as the state public body derives immediate benefits and advantages from such an authority or project; and that the provisions hereinafter enacted are necessary in the public interest.' Chapter 209, section 2, p. 1059.

That the Legislature has power to protect public health, safety, morals, and welfare, and to exercise and to authorize the exercising of the power of taxation and eminent domain, and the raising and expenditure of public funds for such purposes, cannot be doubted. From time to time boards and commissions have been created and authorized and vested with authority to carry out projects for the protection of the public. The name given to such an instrumentality is of no significance, nor do we find any limit upon the character or number of public corporations or bodies politic, which the Legislature may authorize or create to accomplish such purposes. The facts found by the Legislature and recited, in the enactments are not disputed, or their existence denied, and, since the conditions described must be assumed to exist and to affect the public welfare, it can scarcely be doubted that there is a public interest which justifies the undertaking of the projects authorized by the enactments. The various housing authorities are not authorized to levy taxes, but municipalities are authorized to pay the first year's administrative expenses of these projects, and to furnish, and to contract to continue to furnish, certain facilities, such as streets, sanitary service, police and fire protection, street lighting, etc., which, if not necessary, are at least useful and convenient in accomplishing the principal purpose of the projects, which is to replace unsanitary, unsafe, and unhealthy dwellings which are a menace to the community. If such dwellings are a menace to the public, and their replacement necessary for the protection of the public, there is a sufficient basis for the expenditure of public funds. The amount, and manner, and method of the expenditure, unless it be shown to be entirely unreasonable, must be left to the legislative discretion.

There is no private profit involved in these enterprises. The properties to be acquired and constructed will belong to the public, and, since their purpose is a public one, the authorities may be legally invested with the power of eminent domain. There is ample precedent in the condemnation of property for drains, levees, hospitals, parks, highways, and other public purposes, to say nothing of the exercise of that power by private corporations where there is merely a public interest, as in the case of public utilities.

It is contended that the act is unconstitutional in that it attempts to grant to a class of citizens privileges or immunities which, upon the same terms, do not equally belong to all citizens; that, since the properties of the housing authorities are to be exempted from taxation, and are to be furnished for a rental sufficient only to pay costs without profit, the tax exemption inures directly to the benefit of the tenants, and that they as a class are receiving a benefit which is not enjoyed by the public generally. But the same character of private benefit is found in connection with all public, charitable, or quasi-charitable enterprises. The right to secure the benefits of such projects for the public generally cannot be denied because incidental special benefits may accrue to some individuals.

It is contended that the property and bonds involved may not lawfully be...