Zurn v. City of Chicago

• Decision Date: 17 January 1945
• Docket Number: No. 27995.,27995.
• Citation: 59 N.E.2d 18,389 Ill. 114
• Parties: ZURN v. CITY OF CHICAGO et al.
• Court: Illinois Supreme Court

389 Ill. 114

59 N.E.2d 18

ZURN

v.CITY OF CHICAGO et al.

No. 27995.

Supreme Court of Illinois.

Jan. 17, 1945.

Appeal from Circuit Court, Cook County; Julius H. Miner, Judge.

Suit by John F. Zurn against the City of Chicago and others to enjoin use of public funds of the city for purpose of carrying out provisions of the Neighborhood Redevelopment Corporation Law. Decree for plaintiff, and defendants appeal.

Reversed and remanded with directions.

MURPHY, J., dissenting.

Barnet Hodes, Corporation Counsel, and Joseph F. Grossman, Joseph B. Fleming and William Wilson, all of Chicago, for appellants.

Sonnenschein, Berkson, Lautmann, Levinson & Morse, of Chicago (Bernard Nath and Frank C. Bernard, both of Chicago, of counsel), for appellee.

SMITH, Justice.

This is an appeal from a decree of the circuit court of Cook county. The suit was brought by appellee, a citizen and taxpayer of the city of Chicago. The purpose of the suit was to enjoin the use of public funds of the city for the purpose of carrying out the provisions of an act entitled: ‘An Act to provide for the eradication of slum and blight areas and the rehabilitation and rebuilding thereof through the medium of neighborhood redevelopment corporations, with powers of eminent domain.’ Ill.Rev.Stat.1943, chap. 32, par. 550.1 et seq.

The defendants named in the suit were the city of Chicago, the city treasurer, and the members of the Chicago Redevelopment Commission, appointed under the act. It was alleged in the complaint that the act violates various provisions of the State and Federal constitutions and is, for that reason, invalid. A motion was filed by the defendants to dismiss the complaint. The motion was denied in part. The defendants elected to stand upon their motion to dismiss the complaint in its entirety, and waived the right to file further pleadings. A decree was entered holding the act invalid, and enjoining the defendants from the use of public funds in carrying out its provisions, and from exercising any of the powers purporting to be vested in them under said act. From that decree, this direct appeal was perfected by the defendants, on the ground that constitutional questions are involved.

A somewhat detailed reference to the provisions of the act is necessary to an understanding of the issues involved and the contentions made. As the title of the act indicates, its purpose is the eradication of slum and blight areas, and the rehabilitation and rebuilding thereof through the medium of Neighborhood Redevelopment Corporations.

Section 1 provides that the act shall be known as ‘The Neighborhood Redevelopment Corporation Law.’

Section 2 sets forth the necessity and purpose of the act and contains a declaration of public policy and public use. That section is as follows:

‘There exist in certain urban areas of the State these degenerative conditions, at once both characteristic and causative of Slum and Blight Areas, namely:

‘(1) Disproportionate tax delinquency and consequent inadequacy of tax payments in relation to the cost of State and municipal services rendered;

‘(2) Economic deterioration of properties and impaired investments;

‘(3) A constant exodus of the population of such areas resulting in the further deterioration of such areas and in added costs to the municipalities of this State for the creation of new public facilities and services elsewhere;

‘(4) Age, physical deterioration or obsolescence of improvements in such areas particularly those improvements affording family accommodations, to such a degree as to render such areas unfit and unsafe for human use and habitation; and

‘(5) Prevalence of the factors conducive to ill health, transmission of disease, infant mortality, juvenile delinquency, crime and poverty.

‘Such Slum and Blight Areas are usually situated in the older and more centrally located portions of the cities, villages and incorporated towns involved and, once existing, spread unless eradicated. As a result of these degenerative conditions, the territories and properties embraced in Slum and Blight Areas fall into a state of non-productiveness, fail to share their due and proper portion of the taxes necessary for the support of the municipalities within whose boundaries they are situated, and ultimately become waste territories, economic and social, producing but a meager, while consuming a disproportionate, share of the public revenue raised by government to defray the cost of police and fire protection, to preserve the public health and to promote the general welfare. The drain upon the public revenue necessitated by Slum and Blight Areas, if they are permitted to remain and spread, will impair these indispensable governmental functions not only as to such areas but as to the municipalities and the State as well.

‘The elimination of these degenerative conditions, and the rehabilitation and rebuilding of Slum and Blight Areas, is in the best interests of health, morals, safety and general welfare of the citizens of the State. The accomplishment of these ends by private initiative, through Neighborhood Redevelopment Corporations, supervised and regulated by the public, should be fostered, encouraged and aided. Accordingly, such elimination and rehabilitation and rebuilding, through the activities of Neighborhood Redevelopment Corporations as provided by this Act, are hereby declared to be a public use, and Neighborhood Redevelopment Corporations, for these purposes, are hereby authorized to be created with the powers and subject to the public supervision and regulation as hereinafter set forth.’

Section 3 is a glossary.

Section 4 provides for the creation of Redevelopment Commissions in cities, villages and incorporated towns. It confers upon cities the power to provide by ordinance for the creation of a Redevelopment Commission to supervise and regulate Neighborhood Redevelopment Corporations, under the act, such Redevelopment Commissions to consist of not less than three nor more than five members, to be appointed by the mayor, by and with the advice and consent of the city council.

Section 6 provides that Neighborhood Redevelopment Corporations may be organized in the manner provided in the act, with power ‘to acquire Real Property, to alter, renovate, demolish or rebuild existing improvements thereon, and to construct, maintain and operate a Development therein, when authorized by and subject to the supervision of the Redevelopment Commission of the city, village or incorporated town wherein the Development Area is located, for the purpose of effecting the Redevelopment of Slum and Blight Areas,’ in the manner provided in the act. That section further provides that the business and conduct of each Neighborhood Redevelopment Corporation, until the redevelopment of its development area has been achieved, shall be subject to the supervision and regulation of the Redevelopment Commission of the city, village or incorporated town wherein its development area is located.

Section 9 defines the powers of Neighborhood Redevelopment Corporations. It provides that the corporate life of such corporations shall not exceed sixty years. Section 7 contains a like limitation and further provides that such corporate existence shall not be extended. Among other powers conferred on such corporations, by section 9, is the power, ‘(5) To acquire, own, use, convey and otherwise dispose of and deal in Real Property, however acquired, subject to the conditions and restrictions of this Act; Provided, that no single sale, mortgage, lease or conveyance of two-thirds or more of the corporate assets shall be made, except within a period of one year immediately preceding the expiration by lapse of time of the corporate charter, without the consent of the holders of two-thirds of all the outstanding capital stock of the corporation at any annual meeting to at any special meeting called for that purpose; Provided further, that no Real Property shall ever be acquired, owned or used by such corporation outside its Development Area. * * * (8) Subject to the provisions of this Act, to acquire Real Property by exercise of the power of eminent domain in the manner provided by the general laws of the State relating thereto.’

Section 10 contains an enumeration of the powers which shall not be exercised by Neighborhood Redevelopment Corporations.

Section 12 enumerates certain reports, papers and documents of Neighborhood Redevelopment Corporations, which shall not be filed by the Secretary of State, unless accompanied by the certificate of the Redevelopment Commission.

Section 13 provides for the voluntary dissolution of Neighborhood Redevelopment Corporations, provided the intention to dissolve is accompanied by a certificate of the Redevelopment Commission, as therein provided.

Section 17 is a limitation on the right of Neighborhood Redevelopment Corporations to acquire property. It provides that no such corporation shall acquire title to any real property or any interest therein, except by way of unexercised option or of any development without first making application to the Redevelopment Commission for approval of the proposed development plan in the manner prescribed in the act, and without securing the certificate of convenience and necessity to be issued by the Redevelopment Commission upon the conditions specified in said section. That section further provides for supervision over the activities of Neighborhood Redevelopment Corporations by the Redevelopment Commission in connection with the acquisition of property, the rehabilitation and rebuilding of slum and blight areas and supervision over the plans for such rebuilding.

Section 26 provides for the termination of control over Neighborhood Redevelopment Corporations by the Redevelopment Commission. That section reads as follows:

‘(1) Anything in this Act to the contrary notwithstanding, the supervision and regulation of any parcel of the Development Area by the ...