Elmwood Park Project Section 1, Group B, In re, 37

• Decision Date: 04 October 1965
• Docket Number: No. 37,37
• Citation: 376 Mich. 311,136 N.W.2d 896
• Parties: In the Matter of the Acquisition of Land for Urban Renewal, ELMWOOD PARK PROJECT SECTION 1, GROUP B, etc. CITY OF DETROIT, a Municipal Corporation, Plaintiff and Appellee, v. Joseph A. CASSESE, Administrator of the Estate of Sam Palazzolo, Deceased, Defendant and Appellant.
• Court: Michigan Supreme Court

Page 896

136 N.W.2d 896

376 Mich. 311

In the Matter of the Acquisition of Land for Urban Renewal ELMWOOD PARK PROJECT SECTION 1, GROUP B, etc CITY OF DETROIT, a Municipal Corporation, Plaintiff and Appellee, v. Joseph A. CASSESE, Administrator of the Estate of Sam Palazzolo, Deceased, Defendant and Appellant.

No. 37.

Supreme Court of Michigan.

Oct. 4, 1965.

Robert Reese, Corp. Counsel, Edward M. Welch, Ronald R. Sogge, Geraldine B. Ford, Assts. Corp. Counsel, Detroit, for petitioner and appellee.

Irving B. Ackerman, Detroit, for respondent and appellant.

Before the Entire Bench.

ADAMS, Justice.

On June 7, 1950, form letters advising that condemnation was about to be started were sent by the City of Detroit to defendant, the owner of two properties, and to all other persons having an interest in properties in an area slated for urban renewal. Suit followed and lis pendens were filed. Ten years later the city abandoned the project and discontinued suit.

This condemnation action was begun February 1, 1962, pursuant to P.A.1945, No. 344 (C.L.1948 & C.L.S.1961, § 125.71 et seq., as amended [Stat.Ann.1948 Rev. & 1963 Cum.Supp. § 5.3501 et seq.]). On trial, appellant contended the taking occurred in 1950. Testimony was allowed to show that news of the first condemnation proceeding and acts of the city depressed values in the area. The city claimed the reduction in values was due to age of the buildings, stringent economic conditions, automation and mass exodus to suburbia.

Evidence concerning appellant's Parcel 495 showed that there was due in 1950 on a land contract $3,200.41. It was later foreclosed and the property repossessed. The property was vandalized, and, in 1959, upon directive from the Buildings & Safety Engineer's Department of the City of Detroit either to restore and recondition the building or tear it down, it was dismantled. The city's appraiser evaluated the parcel as a vacant lot worth $525. Parcel 663, a 4-family flat, was estimated by appellant to have a cash market value of $8,500. Rentals from the property declined from a gross of $956 in 1951 to $25 in 1962. The city appraiser's valuation was $4,600.

The trial judge instructed the jury:

'* * * your duty is to find the value of the property at the time of taking, which is the time of your verdict and at no other time.' (Emphasis supplied.)

The jury's verdict for Parcel 495 was $800. The verdict for Parcel 663 was $5,500.

Both parties agree that value should be fixed as of the time of taking; but the city contends that in Michigan, as well as in other jurisdictions, the time of taking is that time when necessity is determined and compensation made or secured. Michigan Constitution 1908, art. 13, § 1; Anderson Trust Co. v. American Life Insurance Co., 302 Mich. 575, 5 N.W.2d 470; Steadman v. Clemens, 321 Mich. 54, 32 N.W.2d 45; St. Louis Housing Authority v. Barnes (Missouri), 375 S.W.2d 144. Mere announcement of a proposed interstate highway is not a taking of property. Compensation is fixed only when property is actually taken or damaged. Bakken v. State of Montana, 142 Mont. 166, 382 P.2d 550.

Appellant concedes that generally the 'taking' is construed in its literal sense, that is, after verdict is confirmed, the deed executed and award paid; but contends that there are unusual situations where the action of the city or other governmental body is such as to amount to a taking of private property, even though there is no eminent domain proceeding, and that in such situations compensation is given for the taking when it occurs. He cites Pearsall v. Board of Supervisors of Eaton County, 74 Mich. 558, 42 N.W. 77, 4 L.R.A. 193, a road closing case ¹; Ranson v. City of Sault Ste. Marie, 143 Mich. 661, 107 N.W. 439, 15 L.R.A.,N.S., 49, a similar case in which the city restricted access to plaintiff's property; Grand Trunk Western Railroad Company v. City of Detroit, 326 Mich. 387 ², 40 N.W.2d 195, a case where the city attempted to reduce the value of land by restrictive zoning; and Long v. City of Highland Park, 329 Mich. 146, 45 N.W.2d 10, a similar zoning case.

Appellee concedes that in cases where property has been flooded because of public construction, the use and enjoyment of land reduced because of ear-rending noise of jet propulsion flights, or where ingress and egress has been made impossible by highway improvements, a taking will be held to have occurred. Ceregkino v. State Highway Commission, 230 Or. 439, 370 P.2d 694; Bacon v. United States, 295 F.2d 936, 155 Ct.Cl. 441; Johnson v. Airport Authority of the City of Omaha, 173 Neb. 801, 115 N.W.2d 426.

Appellant claims that the following acts by the city constituted a taking:

'1) Sent letters to tenants, occupants, etc., causing them to move; creating vacancies, forcing reduction in rents as inducements for occupants to stay; difficulty in acquiring new tenants;

'2) Filing lis pendens, thereby impairing the sales of properties, reducing values and sales prices;

'3) Refusal of the building department to issue permits for substantial improvements;

'4) Vacancies followed by lax police protection, causing vandalism;

'5) Reduction in refuse collections, street cleaning and street repairs and other city services, giving a slum appearance to the neighborhood;

'6) Intense building department in spection and citations against owners for any violations of the building code '7) Notices by the building department to repair, board up or tear down vandalized buildings;

'8) Razing of buildings vacant and vandalized, or boarding them up, giving the area a blighted, deserted and waste land appearance;

'9) Refusal by governmental agencies to permit long established licensed businesses to continue in the same building while awaiting the condemnation trial;

'10) Delaying the trial for over 10 years, then discontinuing the same, followed by new proceedings with appraisals based on 1962 values of now vandalized properties in now ruined areas.'

The principle is firmly established in Michigan law by Pearsall, Ranson, Grand Trunk and Long, supra, that a city may not by deliberate reduce the value of private property and thereby deprive the owner of just compensation. Some of the acts charged against the City of Detroit, such as lax police protection, reduction in refuse collections, street cleaning and street repair, go merely to the performance of city services of a general nature. The issue of satisfactory performance of such services would not be relevant in the absence of proof of calculated action or specific directive by city officials for the purpose of reducing the value of appellant's properties. On the other hand, many of the acts alleged by appellant, if so performed,--such as sending letters to tenants, filing lis pendens, intense building department inspection and citations against owners for any violations of the building code, and, finally, refusal to permit a long established business to continue in a building because it was going to be condemned--would fall within the same category as the acts in Pearsall, Ranson, Grand Trunk and Long, supra, and would constitute a taking.

After 1950, appellant continued to rent Parcel 663 and to collect payments on the land contract. Evolutionary changes in the neighborhood, as claimed by the city, may have occurred since institution of the first condemnation proceeding. Such facts could disprove appellant's claims and support the city's position that there was no taking until the second condemnation proceeding. When the taking occurred, whether in 1950 or at some later date, is a question of fact which should be determined by the jury. The value of the properties should then be ascertained as of the time of taking.

This result is supported by such cases as City of Cleveland v. Carcione, et al., 118 Ohio App. 525, 190 N.E.2d 52, and Foster v. Herley, Director of the Detroit Housing Commission, 6 Cir., 330 F.2d 87, which recognize that, where condemnation proceedings are protracted, the whole character of an area may be changed to the detriment of the property owner during the course of the proceedings. If an area has been made a wasteland by the condemning authority, the property owner should not, be obliged to suffer the reduced value of his property. The converse is also true. Where condemnation proceedings tend to increase the value of property, the property owner is not entitled to the increased value. See Anderson v. United States, 5 Cir.,...