Anderson v. City of Olivette

• Decision Date: 13 January 1975
• Docket Number: No. 1,No. 58324,58324,1
• Parties: Robert F. ANDERSON et al., Respondents, v. CITY OF OLIVETTE et al., Appellants
• Court: Missouri Supreme Court

Page 34

518 S.W.2d 34

Robert F. ANDERSON et al., Respondents, v. CITY OF OLIVETTE et al., Appellants.

No. 58324.

Supreme Court of Missouri, Division No. 1.

Jan. 13, 1975.

Samuel B. Murphy, Robert J. Koster, Cook, Murphy, Lance & Mayer, St. Louis, for respondents.

Carroll J. Donohue, Shulamith, Simon, Husch, Eppenberger, Donohue, Elson & Cornfeld, St. Louis, for appellants.

WELBORN, Commissioner.

Action to enjoin enforcement of ordinance of City of Olivette, regulating activities of real estate brokers doing business within Olivette. Trial court found ordinance invalid and city appealed.

On February 22, 1972, the City Council of the City of Olivette, a city of the third class, adopted Ordinance No. 998, establishing certain requirements applicable to real estate brokers doing business within the city. Appellants' brief has fairly summarized the ordinance as follows:

'The legislative findings incorporated in the ordinance are that 'the provision of real estate brokerage services must be provided to all prospective sellers, purchasers and renters of housing within the City of Olivette on a non-discriminatory basis' and that it is 'necessary to regulate real estate brokerage activities in order to insure that said activities do not foster discrimination and thereby damage the public health, welfare, safety and morals of the citizens and prospective citizens of the City of Olivette.'

'The requirements imposed on each broker doing business within Olivette, as set out in Section 2 of the Ordinance, are to:

'(a) Include a statement of non-discrimination on all of its listing contracts which are used or available for use in connection with real estate located on Olivette.

'(b) Prominently post a Fair Housing notice at each of its offices at which business in connection with real estate located in Olivette is transacted.

'(c) Indicate its fair housing policy on all brochures and pamphlets which are used or are available for use in connection with real estate located in Olivette.

'(d) Develop and implement non-discriminatory objective written procedures and standards to insure that all persons inquiring about available property and houses for sale or rent are made aware of all known listings available in the desired price range and type of home, regardless of location, and that each prospective customer shall, regardless of race, color, religion or national origin have the same opportunity to use the real estate broker's services and facilities to purchase or rent any listed dwelling. A copy of such written procedures and standards is to be filed with the City of Olivette.

'(e) Instruct all of its employees, salesmen and agents as to the broker's non-discriminatory policies and practices and as to the non-discriminatory policies and practices and as to the non-discriminatory procedures and standards. Each such employee is to sign and file with the broker a statement indicating that such employee has been apprised of such policies and practices. Such statements are to be made available for inspection by Olivette officials upon reasonable notice.

'(f) Maintain on a current basis records showing: the name and address (unless the person does not give such information when asked), race and date of inquiry of each person inquiring in person at any of the real estate broker's offices about property or houses for sale or rent within Olivette and the name of the broker's employee or representative handling such inquiries; similar information as to every person shown any residential property in Olivette, and as to the buyer and seller of homes in Olivette sold by the broker. Such records are to be preserved for a period of three years and to be available to Olivette officials for inspection and copying at any reasonable time upon reasonable notice.'

Ten real estate brokers who had handled transactions involving real estate located in Olivette, but who had no place of business within the city, brought suit to enjoin enforcement of the ordinance, contending it was invalid because the city lacked authority to enact such ordinance. The petition also alleged invalidity on numerous constitutional grounds. At the trial of the cause, two of the plaintiffs testified that they had received summons in proceedings charging violation of the ordinance. Evidence was introduced that Olivette had enacted another ordinance, prohibiting discrimination in the sale or rental of housing. The city also showed that the Real Estate Board of Metropolitan St. Louis, of which the two plaintiffs who testified were members, had adopted a Code of Fair Housing Practices with which members were pledged to comply. The code embodied practically all of the provisions of the ordinance, except for the records-keeping requirement. The city showed that such requirement was based upon a consent decree, entered by the United States District Court for the Eastern District of Missouri, Eastern Division, in the case of United States of America v. John H. Armbruster and Company, et al., No. 70 C 108(4). That case was an action under the Federal Fair Housing Act against realtors, members of the Real Estate Board of Metropolitan St. Louis.

The trial court held the ordinance invalid on the grounds that the city had no authority to enact Ordinance No. 998. It also found the ordinance invalid as attempting to control activities of real estate brokers outside of the City of Olivette. It also concluded that the ordinance might be subject to attack on constitutional due process grounds, although the court did not finally rule such issues. Because the first finding is decisive, the other bases of the trial court's decree are not reached.

The trial court's finding on the lack of authority was premised primarily upon the fact that § 94.110, RSMo 1969, V.A.M.S., authorizes a city of the third class to license real estate agents and the court concluded that the general grant of authority to such cities, found in §§ 77.260 and 77.590, RSMo 1969, V.A.M.S., to enact ordinances 'for the good government of the city, the preservation of peace and good order, the benefit of trade and commerce, and the health of the inhabitants thereof, * * *' did not authorize the regulation of real estate brokers, undertaken by the ordinance.

Appellants first attack the trial court's viewing this ordinance as one regulating a particular business. Appellants assert:

'* * * The Ordinance is not an exercise of authority to regulate a particular business. Rather, it is the implementation of the City's police power conferred by Sections 77.260 and 77.590, R.S.Mo. in carrying out the constitutional doctrine of prohibiting discrimination in the sale or rental of residential real estate. Accordingly it falls within the acknowledged category of authority of a municipality, as the exercise of a power which is essential to the purposes of a municipal corporation.'

The best source for determination of the nature of this ordinance is the ordinance itself. The council in its legislative findings declared: 'It is necessary to regulate real estate brokerage activities * * *.' Appellants' jurisdictional statement opens with this sentence: 'This is an action involving the validity of an ordinance of the City of the City of Olivette, regulating the activities of real estate brokers doing business within Olivette.'

Justification for the regulation would arise from the police power. The regulation would require a relationship to the preservation of health, safety and welfare of the citizens of Olivette. Protection of the constitutional right of citizens to be free from racial discrimination is a proper function of the police power. Marshall v. Kansas City, 355 S.W.2d 877 (Mo. banc 1962). That fact makes this ordinance none the less a regulation of the real estate brokerage business as the ordinance itself declared. Therefore, the trial court properly considered the question before it as one of the authority of the City of Olivette to regulate real estate brokers.

Section 94.110, relied upon by the trial court, confers upon cities of the third class three areas of authority with respect to businesses and occupations in such cities. The first power granted is 'to levy and collect a license tax' upon some 79 businesses and callings, including 'real estate agents.' The second grant of authority is 'to levy and collect a license tax and regulate' some 86 businesses and classes of vehicles. The third grant of authority is 'to levy and collect a license tax, regulate, restrain, prohibit and suppress' some 50 businesses and callings.

As the trial court noted, statutes dealing with cities of the first (§ 73.110), second (§ 75.110) and fourth (§ 94.270) classes include real estate agents among the callings which such cities are empowered to license and regulate. The absence of such provision with respect to third class cities and the terminology employed in § 94.110 precludes any finding of express authority in such cities to regulate real estate agents.

What is the effect to be given §§ 77.260 and 77.290, relied upon by appellants?

Section 77.260 provides:

'The mayor and council of each city governed by this chapter shall have the care, management and control of the city and its finances, and shall have power to enact and ordain any and all ordinances not repugnant to the constitution and laws of this state, and such as they shall deem expedient for the good government of the city, the preservation of peace and good order, the benefit of trade and commerce, and the health of the inhabitants thereof, and such other ordinances, rules and regulations as may be deemed necessary to carry such powers into effect, and to alter, modify or repeal the same.'

Section 77.290 provides:

'The mayor shall, from time to time, communicate to the council such measures as may, in his opinion, tend to the improvement of the finances, the police, health,...