Campbell v. First Baptist Church of City of Durham
| Decision Date | 06 November 1979 |
| Docket Number | No. 42,42 |
| Citation | 298 N.C. 476,259 S.E.2d 558 |
| Parties | George Harvey CAMPBELL, Individually and as Representative of the Citizens and Taxpayers of Durham, North Carolina v. FIRST BAPTIST CHURCH OF the CITY OF DURHAM, an unincorporated association; theCity of Durham; the Redevelopment Commission of the City of Durham; and theUnited States of America, Department of Housing and Urban Development, James T.Lynn,Secretary of the Department of Housing and Urban Development. |
| Court | North Carolina Supreme Court |
Blackwell M. Brogden, Durham, for plaintiff-appellee Campbell.
Haywood, Denny & Miller by David M. Lomas, Egbert L. Haywood, Durham, for defendant-appellant First Baptist Church of the City of Durham.
William Thornton, Durham, for defendant-appellant City of Durham.
Edwards & Manson by Daniel K. Edwards, Durham, for defendant-appellant Redevelopment Commission of the City of Durham.
H. M. Michaux, Jr., Greensboro, for U. S. A.
The sole question presented for review in this case is whether the trial court erred in sustaining the validity of an exchange of real estate between the Redevelopment Commission of the City of Durham and the First Baptist Church of the City of Durham. The Court of Appeals reversed the trial court, holding the conveyance void from its inception due to the failure of the Commission to comply with certain procedural requirements set out in G.S. 160A-514(e) (formerly G.S. 160-464(e)).
Pursuant to Chapter 160A of the General Statutes, a redevelopment commission is empowered to "sell, exchange, transfer . . . or otherwise encumber or dispose of any real or personal property . . . ." G.S. 160A-512(6) (formerly G.S. 160-462(6)). This power is explicitly made "subject to the provisions of G.S. 160A-514."
The relevant portions of G.S. 160A-514 are as follows:
(c) A commission may sell, exchange, or otherwise transfer real property or any interest therein in a redevelopment project area to any redeveloper for residential, recreational, commercial, industrial or other uses or for public use in accordance with the redevelopment plan, subject to such covenants, conditions and restrictions as may be deemed to be in the public interest or to carry out the purposes of this Article; provided that such sale, exchange or other transfer, and any agreement relating thereto, may be made only after, or subject to, the approval of the redevelopment plan by the governing body of the municipality and after public notice and award as specified in subsection (d) below.
(d) Except as hereinafter specified, no sale of any property by the commission or agreement relating thereto shall be effected except after advertisement, bids and award as hereinafter set out. The commission shall, by public notice, by publication once a week for two consecutive weeks in a newspaper having general circulation in the municipality, invite proposals and shall make available all pertinent information to any persons interested in undertaking a purchase of property or the redevelopment of an area or any part thereof. The commission may require such bid bonds as it deems appropriate. After receipt of all bids, the sale shall be made to the highest responsible bidder. All bids may be rejected. All sales shall be subject to the approval of the governing body of the municipality. Nothing herein, however, shall prevent the sale at private sale without advertisement and bids to the municipality or other public body, or to a nonprofit association or corporation operated exclusively for educational, scientific, literary, cultural, charitable or religious purposes, of such property as is specified in subdivisions (1), (2), (3), or (4) of subsection (e) of this section, provided that such sale is in accordance with the provisions of said subdivisions. The commission may also sell personal property of a value of less than five hundred dollars ($500.00) at private sale without advertisement and bids.
(e) In carrying out a redevelopment project, the commission may:
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(4) After a public hearing advertised in accordance with the provisions of G.S. 160A-513(e), and subject to the approval of the governing body of the municipality, convey to a nonprofit association or corporation organized and operated exclusively for educational, scientific, literary, cultural, charitable or religious purposes, no part of the net earnings of which inure to the benefit of any private shareholder or individual, such real property as, in accordance with the redevelopment plan, is to be used for the purposes of such associations or corporations. Such conveyance shall be for such consideration as may be agreed upon by the commission and the association or corporation, which shall not be less than the fair value of the property agreed upon by a committee of three professional real estate appraisers currently practicing in the State, which committee shall be appointed by the commission. All conveyances made under the authority of this subsection shall contain restrictive covenants limiting the use of property so conveyed to the purposes for which the conveyance is made.
Plaintiff in this action seeks to have the conveyance set aside because of the failure of the Commission to comply with the hearing and appraisal requirements of G.S. 160A-514(e)(4). Plaintiff maintains, and correctly so, that subsection (c) by its terms authorizes a commission to sell or exchange real estate, "provided that such Sale, exchange or other transfer . . . may be made Only . . . After public notice and award as specified in subsection (d) below." (Emphasis added.)
Subsection (d) states the general rule that no sale is valid unless the statutory requirements of notice, solicitation of bids, and award are followed. The section does provide, however, that in the case of a "private sale" to a nonprofit corporation the commission need not comply with the advertisement and bid requirements but may, in the alternative, comply with the provisions of subsection (e).
Plaintiff contends that even though subsection (d) refers only to "sales," that term incorporates the term "exchanges" by virtue of the proviso of subsection (c) which requires that sales and exchanges comply with subsection (d). Plaintiff further argues that the "proviso" at the end of subsection (d) mandates compliance with the provisions of subsection (e) in any case involving a nonprofit association. He relies on the following statutory language in support of this contention:
Nothing herein, however, shall prevent the sale at Private sale without advertisement and bids . . . to a Nonprofit association . . . of such property as is specified in subdivisions (1), (2), (3), or (4) of subsection (e) of this section, provided that such sale is in accordance with the provisions of said subdivisions. (Emphasis added.)
In short, plaintiff's position is that subsection (c) authorizes exchanges so long as they meet the requirements of subsection (d) and that subsection (d) requires compliance with subsection (e) where the exchange is between the Commission and a nonprofit association.
Plaintiff argues alternatively that subsection (d) is irrelevant and that when religious organizations are involved, conveyances are governed solely by the provisions of subsection (e). Plaintiff notes that while subdivisions (1), (2), and (3) of subsection (e) refer explicitly to "private sales," subdivision (4) speaks only of "conveyances." Since the term "conveyance" also obviously encompasses an "exchange," plaintiff submits that this subdivision, standing alone, covers any exchange between a commission and a nonprofit association and mandates compliance with the procedural provisions therein.
Defendants, on the other hand, point to the language in subsection (e) which states that, "(i)n carrying out a redevelopment project, the commission May . . . ." They contend that the use of the word "may" renders the section non-obligatory. While conceding that they did not comply with the provisions of subsection (e), they maintain that subsection (e) is an alternative to the procedural requirements of subsection (d) and that they were free to choose not to proceed under the provisions of subsection (e) and instead to elect to exchange properties pursuant to subsections (c) and (d). Defendants submit that subsection (d) by its own terms refers only to "sales" and to "private sales" and does not mention "exchanges" of property. For this reason, they maintain that the requirements of subsection (d) are not applicable to this transaction. They urge strongly that solicitation of bids is inappropriate in cases where an exchange of specific properties is contemplated and that they have complied with the requirements of subsection (d) insofar as publication and approval by the governing board of the municipality are concerned.
The Court of Appeals held that the exchange of properties in this case "must be in compliance with all of the requirements of (subsection (e))." We agree.
Subsection (d) states clearly that "No sale of any property by the commission or agreement relating thereto Shall be effected except after advertisement, bids and award as hereinafter set out." (Emphasis added.) The proviso in subsection (c) states just as clearly that exchanges, as well as sales, must comport with the procedural requirements of subsection (d). In only two instances does subsection (d) permit a departure from the general rule requiring advertisement and bids. One of those exceptions, and the only one which concerns us here, permits a commission to engage in a private sale with a nonprofit association "without advertisement and bids . . . Provided that such sale is in accordance with the provisions of (subsection (e))." (Emphasis added.)
It is also pertinent to note that two subsections, (a) and (b), outline certain other instances where advertisement and bids are not required. Under the doctrine of Expressio unius est exclusio...
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