Gordon v. City of Baltimore

• Decision Date: 09 July 1970
• Docket Number: No. 37,37
• Citation: 267 A.2d 98,258 Md. 682
• Parties: Douglas H. GORDON v. Mayor and CITY Council OF BALTIMORE et al. (Adv.).
• Court: Maryland Court of Appeals

Page 682

258 Md. 682

267 A.2d 98

Douglas H. GORDON v. Mayor and CITY Council OF BALTIMORE et al.

No. 37 (Adv.).

Court of Appeals of Maryland.

July 9, 1970.

Robert J. Thieblot and John D. Alexander, Jr., Baltimore (Allen, Thieblot & Alexander, Baltimore, on the brief) for appellants.

Howard E. Wallin, Asst. City Solicitor (George L. Russell, Jr., City Solicitor, and Ambrose T. Hartman, Deputy City Solicitor, on the brief) for appellees Mayor and City Council of Baltimore and Enoch Pratt Free Library of Baltimore City.

Ambler H. Moss, Baltimore (William A. Fisher, Jr., Baltimore, on the brief) for appellee The Peabody Institute of the City of Baltimore.

Argued before HAMMOND, C. J., and McWILLIAMS, SINGLEY, SMITH and DIGGES, JJ.

SINGLEY, Judge.

George Peabody, one of the greatest of the nineteenth century philanthropists, cast his gift to the people of Baltimore in a form typical of his time. ¹ He determined to establish an 'institute' which would have as its purpose 'the improvement of the moral and intellectual culture of the inhabitants of Baltimore, and collaterally to those of the State; and, also, towards the enlargement and diffusion of a taste for the Fine Arts.' ²

As we shall see, nine years passed before The Peabody Institute of the City of Baltimore (the Peabody or the Institute) opened its doors on 25 October 1866, but when it did, it endeavored to adhere faithfully to the founder's desires. ³ A library had begun to be assembled in 1861; the first orchestra concert was given in 1866; public lectures were begun soon after the opening; a conservatory of music was established in 1868, and an art gallery was opened in 1881.

By the turn of the century, the public lectures had been abandoned, largely as a consequence of the founding of The Johns Hopkins University (Johns Hopkins) in 1876 and of Goucher College in 1885; in the 1960's the art collection was dispersed by sales and loans to other institutions; and by 1962 the Peabody trustees had definitely determined to dispose of the Institute's library of nearly 300,000 volumes. When the negotiations undertaken with Johns Hopkins in that year proved fruitless, the Peabody's president approached the trustees of The Enoch Pratt Free Library (the Pratt) in Baltimore. ⁴ These negotiations led to the execution of a 'memorandum of understanding' between Peabody and the Pratt on 14 February 1966 and to the execution of an instrument assigning and transferring the books in July of that year.

In September, Douglas H. Gordon, a member of the Baltimore bar and former member of the Peabody's board of trustees, filed a bill of complaint in the Circuit Court of Baltimore City against the Peabody, the Pratt and the Mayor and City

Council of Baltimore (the City). ⁵ Mr. Gordon's bill sought to enjoin the Peabody from transferring books to the Pratt; to enjoin the Pratt from receiving books from the Peabody and from making any expenditures in connection with the transfer; to enjoin the City from participating in the transfer and from contributing to the cost of the transfer; and finally, prayed that an order be passed that any Peabody books transferred to the Pratt be returned and that the instrument of assignment and transfer be cancelled. The Peabody, the Pratt and the City demurred and answered. The demurrers, which challenged Mr. Gordon's standing to sue, were overruled, and the case went to trial on the merits. From a decree dismissing the bill of complaint, Mr. Gordon has appealed.

Since at the trial below, the appellant conceded that the Peabody trustees had the power to transfer custody of the library to Pratt, there are really only two issues presented by this appeal: (i) Did Mr. Gordon have standing to sue; and, (ii) Did the terms of Mr. Peabody's gift prevent a transfer to the Pratt of title to, supervisory control over, and responsibility for, the books which comprised the Peabody Library?

(i) Did Mr. Gordon Have Standing to Sue?

Mr. Gordon advances an alternative argument in support of his standing. First, he says that he is a resident of the City and a taxpayer. His alternative proposition is that either as a former trustee of the Peabody, as a contributor to the Peabody, or as a beneficiary of George Peabody's trust, he has standing to enforce the trust.

In the hearing on demurrer below, Judge Cardin found that Mr. Gordon had standing as a taxpayer. Because we regard this conclusion as correct, it is unnnecessary for us to reach the alternative proposition. See, however, Carter v. Mayor & C. C. of Baltimore, 197 Md. 70, 83, 78 A.2d 212 (1951) and 4 Scott, The Law of Trusts § 391 (3d Ed. 1967) at 3002, ff.

The case of Mayor & C. C. of Baltimore v. Gill, 31 Md. 375 (1869) first identified the elements which will support the bringing of a taxpayer's suit. In that case the City wished to raise money to assist the Western Maryland Railroad in the completion of its Williamsport line. The City proposed to do this by borrowing $1,000,000 and pledging as security certain Baltimore and Ohio Railroad Company stock which it owned. This Court held this to be in violation of Art. XI, § 7 of the Maryland Constitution, which prohibits the creation of debt by the City without the authorization of the General Assembly and approval by the voters. The complainants, who were taxpayers, had sought to enjoin the borrowing. In discussing their standing this Court said:

'* * * (T)hese complainants, as taxpayers of the city, and others similarly situated, in whose behalf as well as their own the bill is filed, constitute a class specially damaged by the alleged unlawful act of the corporation, in the alleged increase of the burden of taxation upon their property situated within the city.'

'In this State the courts have always maintained with jealous vigilance the restraints and limitations imposed by law upon the exercise of power by municipal and other corporations; and have not hesitated to exercise their rightful jurisdiction for the purpose of restraining them within the limits of their lawful authority, and of protecting the citizen from the consequence of their unauthorized or illegal acts.' 31 Md. 394, 395.

Other cases where taxpayers were recognized to have standing because of a clear showing of potential pecuniary damage are Masson v. Reindollar, 193 Md. 683, 69 A.2d 482 (1949), where the plaintiffs used to enjoin the State Roads Commission from awarding contracts for the building of the Chesapeake Bay Bridge until it had sought bids to determine the cost of a tunnel as an alternative, and Pressman v. Barnes, 209 Md. 544, 121 A.2d 816 (1956), where the plaintiff attacked an ordinance creating the position of Baltimore's Director of Traffic and authorizing him to promulgate traffic regulations.

Perhaps the most liberal application of the test may be found in Castle Farms Dairy Stores, Inc. v. Lexington Market Authority, 193 Md. 472, 67 A.2d 490 (1949). There, the plaintiffs were taxpayers and stall owners who unsuccessfully sought to have the Act establishing the Lexington Market Authority declared unconstitutional. The Court held that they had standing as taxpayers:

'If the Act is unconstitutional, the project is unlawful, and even though the City would not be obligated for the project, it presumably would incur some expense or loss in extricating itself and its property. As taxpayers, therefore, plaintiffs, are entitled to sue to enjoin such an unlawful project.' 193 Md. at 482, 67 A.2d at 493.

A contrary result was reached in Ruark v. International Union of Operating Engineers, 157 Md. 576, 146 A. 797 (1929). There, the plaintiffs sued to enjoin the City from permitting certain contractors on City jobs to violate the maximum hours and minimum wage laws. Their standing, if any, was as taxpayers, but the Court held that since no pecuniary loss to the taxpayers of the City was alleged or proved, the standing must be denied and any redress against the violators would have to be obtained through criminal prosecutions.

'The special damage which the taxpayer of the political division sustains in a public wrong is the prospective pecuniary loss incident to the increase in the amount of taxes he will be constrained to pay by reason of the illegal or ultra vires act of the municipality or other political unit. Hence, the taxpayer's interest in the subject matter is not general, but special only, because of the future individual monetary burden cast upon him or his property.' 157 Md. at 589, 146 A. at 802.

A similar result was reached in Citizens' Comm. of Anne Arundel County, Inc. v. County Comm'rs, 233 Md. 398, 197 A.2d 108 (1964) where no monetary damage was shown.

The appellees make much of the fact that the Pratt, like the Peabody, is a private institution and that the City's obligation toward the support of its operation is limited by contract to an annual appropriation of $100,000. ⁶ We find this argument both unrealistic and unpersuasive. The simple facts are that except for the Peabody, the Pratt is Baltimore's only public library, which was found to be a 'public or municipal purpose,' in Johnson v. Mayor & C. C. of Baltimore, 158 Md. 93, 148 A. 209, 66 A.L.R. 1488 (1930), where a similar point was made. Its buildings are owned by the City, as are the books in its collection, other than those purchased from the Pratt's limited endowment; and finally, and most significantly, the City's annual appropriation in support of the Pratt is in the area of $6,000,000, and there is no suggestion that this pattern is likely to change. There is testimony in the record before us that by accepting the Peabody collection, the Pratt has assumed an annual obligation of some $100,000 for salaries alone. For reasons to be developed later, the cost of preserving the collection itself may exceed $1,000,000. That these expenses are and will be borne by the City's taxpayers, including Mr. Gordon, is beyond question. In fact, the memorandum of understanding provides...