McNulty v. Owens

• Citation: 199 S.E. 425,188 S.C. 377
• Decision Date: 13 October 1938
• Docket Number: 14753.
• Parties: McNULTY v. OWENS, Mayor, et al.
• Court: United States State Supreme Court of South Carolina

199 S.E. 425

188 S.C. 377

McNULTY v. OWENS, Mayor, et al.

No. 14753.

Supreme Court of South Carolina

October 13, 1938

Appeal from Common Pleas Circuit Court of Richland County; G. Duncan Bellinger, Judge.

Action by W. E. McNulty, taxpayer of the city of Columbia, suing for himself and for and on behalf of all other taxpayers of the city of Columbia, against L. B. Owens, Mayor of the City of Columbia, and others to enjoin the proposed action of the Columbia Housing Authority and of the City of Columbia in erecting a housing project, and to enjoin the demolition of certain slum areas. From a decree dismissing the complaint plaintiff appeals.

Affirmed. [Copyrighted Material Omitted]

The decree of Judge Bellinger, which is requested to be reported follows:

This action was brought by a taxpayer representing himself and others similarly situated against the City of Columbia and the Columbia Housing Authority asking for an injunction against the proposed action of the Columbia Housing Authority and of the City of Columbia in erecting in Columbia a housing project to provide housing for persons of low income and to enjoin the demolition by the Housing Authority of certain slum areas in the City.

The plaintiff in addition to being a taxpayer is the owner of rental property leased for residential purposes in the City, with which property he claims the project to be built by the Columbia Housing Authority will compete.

The validity of the action of the defendants is questioned on a number of grounds which are set out in paragraph 8 of the complaint. Returns and answers were filed in behalf of the defendants admitting that they proposed to erect in the City of Columbia, pursuant to valid legislation, a project to provide housing for persons of low income, pursuant to certain proposed agreements between the United States Housing Authority and the Columbia Housing Authority and certain proposed agreements between the Columbia Housing Authority and the City of Columbia. The defendants deny the illegality of the proposed project.

The proposed contracts, the resolutions of the Columbia Housing Authority and other exhibits were offered in evidence, and oral testimony taken before me in response to a rule issued with the summons and complaint.

The testimony shows that pursuant to an Act of the General Assembly of 19th of March, 1934 (38 Stat. 1368), providing for the creation of public authorities to engage in slum clearance projects and for the construction and acquisition of housing accommodations for families of low income, the City of Columbia, by proper resolution dated April 10, 1934 created a housing authority for the City of Columbia. Promptly thereafter, as authorized by statute, the Mayor of the City of Columbia named E. C. Coker, W. S. Hendley, L. Cooper Smith, S. L. Latimer, Jr., and G. H. Crawford as members of the Columbia Housing Authority. These citizens of Columbia qualified as members of the Authority and are still acting in that capacity.

The Congress of the United States by its Act of September 1, 1937 (42 U.S.C.A. § 1401, et seq.), set up the United States Housing Authority for the purpose of helping in the financing of these low-cost housing projects. The Columbia Housing Authority has been negotiating with the United States Housing Authority in connection with the financing of projects in the City of Columbia.

Immediately preceding the institution of this suit the United States Housing Authority submitted to the Columbia Housing Authority drafts of certain proposed contracts which have been approved by the Columbia Housing Authority, but which have not been executed by any of the parties thereto. These contracts were offered in evidence and provide substantially the following:

The Columbia Housing Authority will erect in the City of Columbia at a total cost of $560,000 a slum clearance and low-cost housing development, which will be financed by the issuance by the Columbia Housing Authority of 3% serial bonds maturing over a period of about sixty years, totaling $560,000. Of these bonds the Columbia Housing Authority proposes to sell to the United States Housing Authority an aggregate amount of between $458,000 and $504,000, selling the remaining bonds locally or to the City of Columbia.

The proposed contracts between the City of Columbia and the Columbia Housing Authority permit the City of Columbia to give to the Columbia Housing Authority any land which the City might own which may be useful to the project, or the services of the City of Columbia, such as engineering services, the use of the facilities of the Columbia Street Department, or other things which the City might contribute. Such property or services as may be contributed by the City are to be deducted from the total amount of bonds to be issued and will reduce the amount of bonds which will have to be financed locally.

These contracts further provide that the United States Housing Authority will make an annual contribution to the Columbia Housing Authority of approximately $19,000 to help defray the operating costs and interest and principal requirements in accordance with the bond maturities. The City of Columbia will also agree to accept the sum of $500 annually in lieu of all taxes and assessments. The bonds and operating expenses will be paid out of this government subsidy and from the rents collected from the project.

The Columbia Housing Authority and the City of Columbia by these agreements will obligate themselves to demolish as many dwelling units as are erected. If, therefore, the property on which the housing project is built does not contain as many dwelling units as would be erected on the property, the City is obligated to tear down a sufficient number of units on property owned by it or to use its police powers to accomplish the demolition of unsanitary dwellings on private property so as to make the demolition equivalent to the number of dwelling units erected.

As has been said heretofore these contracts have not been actually executed but the proposed plan is sufficiently definite to permit the Court to pass upon the validity thereof.

Several questions raised in the taxpayer's complaint present for the consideration of the Court the question of whether the elimination of slum areas and the building of low rent housing units is a public municipal purpose within the meaning of the State Constitution, article 10, § 4.

Under the division of the powers provided in our State Constitution the question of whether an act is for a public purpose is primarily one for the Legislature and this Court will not interfere with the legislative finding unless the determination of that body is clearly wrong. Riley v. Charleston Union Station Co., 71 S.C. 457, 51 S.E. 485, 110 Am.St.Rep. 579; Park v. Greenwood County, 174 S.C. 35, 176 S.E. 870. In the Park Case the Court had this to say [page 872]: "The question of whether an act is for a public purpose is primarily one for the Legislature; and this court will not interfere unless the determination by that body is clearly wrong. Poulnot v. Cantwell, 129 S.C. 171, 123 S.E. 651. We find in the case before us that the General Assembly has by the Act of May 8, 1933 (38 Stat. at Large, p. 411), expressly authorized a county to build a plant for the generation and distribution of electric current. This act has been amended twice since that time (38 Stat. at Large, p. 1306, 38 Stat. at Large, p. 1392). Another act (38 Stat. at Large, p. 299), as amended in 1934 (38 Stat. at Large, p. 1302), permitted counties to erect, maintain, and operate electric light plants. It will therefore be seen that the Legislature has, at least four times during the past two years, found as a fact that the erection and operation of such a plant by a county is a proper public purpose. This finding, while not conclusive, is entitled to much weight."

We find in the Act setting up the Housing Authority adopted May 19, 1934, a declaration of public interest in the following language: "Declaration of Public Interest.-It is hereby declared as a matter of legislative determination that in order to promote and protect the health, safety, morals and welfare of the public, it is necessary in the public interest to provide for the creation of public corporate bodies to be known as housing authorities, and to confer upon and vest in said housing authorities all powers necessary or appropriate in order that they may engage in low-cost housing and slum clearance projects; and that the powers herein conferred upon the housing authorities including the power to acquire property to remove unsanitary or substandard conditions, to construct and operate housing accommodations and to borrow, expend, lend and repay moneys for the purposes herein set forth, are public objects essential to the public interest." 38 St. at Large, p. 1370, § 2.

This finding by the General Assembly has been reaffirmed in numerous amendments to the Act passed at subsequent sessions of the General Assembly. Act of May 17, 1935 (39 Stat. 424), Act of June 5, 1935 (39 Stat. 500, 501), Act of April 17, 1937 (40 Stat. 267), Act of May 10, 1937 (40 Stat. 431), Act of May 10, 1937 (40 Stat. 1426), and Act of the most recent General Assembly ratified May 6, 1938 (40 Stat. 1819), further amending the 1934 Act. In addition thereto we find similar public purposes declared in the Limited Dividend Housing Act of 1933 (38 Stat. 176).

Similar findings by the Congress of the United States are also entitled to great weight here. Thus we see that the Congress in creating the United States Housing Authority by its Act of September 1, 1937, declared in 42 U.S.C.A. § 1401: "§ 1401. Declaration of policy. It is hereby declared to be the policy of the United States to...