Knoxville Housing Authority, Inc. v. City of Knoxville

• Decision Date: 21 January 1939
• Citation: 123 S.W.2d 1085,174 Tenn. 76
• Parties: KNOXVILLE HOUSING AUTHORITY, Inc., v. CITY OF KNOXVILLE et al.
• Court: Tennessee Supreme Court

123 S.W.2d 1085

174 Tenn. 76

KNOXVILLE HOUSING AUTHORITY, Inc., v. CITY OF KNOXVILLE et al.

Supreme Court of Tennessee.

January 21, 1939

Appeal from Chancery Court, Knox County; A. E. Mitchell, Chancellor.

Bill filed by Knoxville Housing Authority, Incorporated, against City of Knoxville and others under Code 1932, section 8835 et seq., for a declaratory judgment concerning complainant's rights. From a decree favorable to the complainant, the defendants appeal.

Decree affirmed.

Daniel J. Kelly, of Knoxville, for complainant.

Roy H Beeler, Atty. Gen., for the State.

James G. Johnson, of Knoxville, for Knox County.

W. W Kennerly, of Knoxville, for City of Knoxville.

R. R Russell, of Knoxville, for Eugene C. Fretz.

GREEN Chief Justice.

This bill was filed by Knoxville Housing Authority under the declaratory judgments statute, Code, § 8835 et seq., seeking a judicial ascertainment of its rights in certain particulars. It is conceded that there is a real subsisting controversy and that one or more of the defendants is a proper contradictor with respect to each difference of parties presented and that the case is cognizable under the statute above mentioned. The controversies involve questions of law only and defendants interpose demurrers. The chancellor overruled the demurrers in toto and made a declaration in all respects favorable to the complainant. Defendants have appealed.

Knoxville Housing Authority was brought out under chapter 20 of the Public Acts of the First Special Session of the General Assembly of 1935, as amended by chapter 234 of the Pub.Acts of 1937. Generally speaking, these statutes provide that cities of the State may set up and procure the incorporation of an Authority with power to take over slum areas in the cities, designated after investigation, and to clear said areas, replan and reconstruct same, and provide therein housing accommodations for persons of low income. Such an Authority is empowered to issue and sell bonds under certain limitations, is endowed with the power of eminent domain, and the property of the Authority and its bonds are exempted from all taxation. An Authority set up under the statutes is authorized to contract with the United States Housing Authority with respect to financial aid from the latter source, and it appears in the case before us that such a contract has been entered into between the local Authority and the Federal Authority.

Since the enactment of the Federal Housing Act of 1937, projects like the one here involved have been undertaken in many of the cities of the country and the general scheme has become so familiar as to relieve us of the necessity of an elaborate and detailed statement here.

The points of controversy between the complainant and defendants involve the validity of the two statutes mentioned as a whole and involve the validity of certain provisions of the statutes which perhaps might be elided if such provisions were held bad. We consider these points separately, but not in the order in which they were discussed in the defendants' brief.

It is said that the Act of 1935 is wholly unconstitutional in that it embraces, both in title and body, more than one subject in violation of Section 17 of Article 2 of the Constitution of Tennessee.

The title of the Act of 1935 is as follows:

"An Act to declare the necessity of creating public bodies corporate and politic to be known as Housing Authorities to engage in slum clearance and/or projects to provide dwelling accommodations for persons of low income; to provide for the creation of such Housing Authorities; to define the powers and duties of Housing Authorities and to provide for the exercise of such powers, including acquiring property by purchase, gift or eminent domain, and including borrowing money, issuing revenue and credit bonds and other obligations, and giving security therefor; to confer remedies on obligees of Housing Authorities; to provide that the bonds of the Authority shall be legal investment; and to declare that this Act take effect from the date of its passage."

The contention is that so much of the Act, foreshadowed by the caption, as undertakes to confer remedies on obligees of Housing Authorities, is a subject distinct from that dealt with by the remainder of the statute. We think this criticism is not well founded. To enable it to function, as an incident of its creation, a Housing Authority is given power to acquire property by purchase, to borrow money, and to issue bonds. A provision for the benefit of the Authority's creditors is entirely germane to the general purpose as a means of giving the organization a financial rating and making its securities marketable.

It is argued that the Act of 1935, as amended by the Act of 1937, violates Sections 1 and 2 of Article 2 of the Constitution of the State in that it undertakes to delegate to Housing Authorities legislative power to determine the type, nature, and extent of the projects to be undertaken, and the power to determine certain other matters of detail without prescribing any definite standards to guide such Housing Authorities.

In the same connection it is said that this statute violates Sections 1 and 2 of Article 2 of the Constitution in that it delegates to the council of the city the power to declare when a Housing Authority shall be created by finding whether unsanitary dwelling accommodations exist in a particular area, etc., without prescribing any definite standards to guide the city council in making such finding.

We think there is no merit in the two objections to the Acts just stated. The discretion committed to the Housing Authority in the one instance and to the city council in the other is no broader than the discretion committed to other fact-finding bodies in laws previously sustained by this court. Instances are a delegation of the power to such a body to select text-books for the schools of the State, Leeper v. State, 103 Tenn. 500, 53 S.W. 962, 48 L.R.A. 167; a delegation of the power to such body to make exemptions or exceptions from the zoning ordinance of a city, Spencer-Sturla Co. v. City of Memphis, 155 Tenn. 70, 290 S.W. 608; delegation of the power to such a body to locate cemeteries, Mensi v. Walker, 160 Tenn. 468, 26 S.W.2d 132. Illustrations like this might be multiplied.

Another criticism is that the Act of 1935 is unconstitutional in that section 24 thereof provides that banks and trust companies are authorized to give security for deposits of the funds of a Housing Authority and that section 25 of the Act of 1935 provides that the bonds issued by a Housing Authority should be valid investments for all public bodies of the State, insurance companies, savings and loan associations, guardians, etc. It is said that these matters introduce other subjects into the Act of 1935 and are likewise beyond the scope of the caption of that Act in violation of Section 17 of Article 2 of the Constitution.

If these objections were well founded they were removed by section 4 of the Act of 1937, which repealed sections 24, 25, and 26 of the Act of 1935. A statute so framed as to be wholly or in part unconstitutional, but having a title expressing a constitutional object, can be cured by an amendment striking out the invalidating provisions. Clay v. Buchanan, 162 Tenn. 204, 36 S.W.2d 91.

It is very earnestly insisted on behalf of a property owner whose holdings are included in the area to be taken over by this Housing Authority that so much of the statutes before us as undertake to confer upon the Authority the power of eminent domain is invalid, in violation of Section 8 of Article 1 of the Constitution of Tennessee and the Fourteenth Amendment to the Constitution of the United States, U.S.C.A. for the reason that the purpose for which the property is to be taken is not a public purpose and the use to which the property is to be put is not a public use. This is a familiar objection to legislation of this character. As heretofore stated taking advantage of the Federal Housing Act, legislation has been enacted in many States authorizing the...