Opinion
Docket No. 64900.
Decided February 6, 1984. Leave to appeal applied for.
Robert E. Butcher, for plaintiff.
Thomas B. Serowik, Assistant Corporation Counsel, Otto J. Hetzel, Special Counsel, and Craig, Farber Downs (by Roger E. Craig), for defendant.
Amici Curiae:
Michigan Legal Services (by Robert F. Gillett), for Westside Mothers Welfare Rights Organization, United Community Housing Coalition, and Michigan Legal Services.
Ronald J. Palmer and David P. Trahan, for Standard Federal Savings and Loan Association.
Before: M.J. KELLY, P.J., and HOOD and SHEPHERD, JJ.
On June 3, 1982, the trial court granted partial summary judgment for plaintiff. It held that defendant's ordinance requiring an inspection for one- and two-family dwellings is unconstitutional. Defendant appeals by leave granted.
Basically, defendant's ordinance, 124-H, §§ 12-7-1 et seq., requires a valid certificate of approval or a valid inspection report from defendant before a person may sell or transfer a one- or two-family residential structure in the city. It also authorizes an inspection fee.
This ordinance is more fully explained in Brand v Hartman, 122 Mich. App. 326, 330-331, 333; 332 N.W.2d 479 (1983), held in abeyance by order of the Michigan Supreme Court, Docket No. 71359, September 15, 1983.
Plaintiff alleges that the inspection fee in her case was $110.
On June 10, 1981, plaintiff sued defendant, alleging that the ordinance is invalid for numerous reasons, including: (1) the city was without authority to regulate such sales and to demand an inspection fee; (2) the ordinance violated equal protection; (3) the ordinance amounted to an unconstitutional taking of property without due process; and (4) the ordinance authorized an unconstitutional search and seizure.
On April 23, 1982, the trial court certified this suit as a class action.
In its order granting partial summary judgment, the circuit court ruled that the ordinance:
"constituted a taking of property of plaintiff and the members of the class without due process of law, contrary to § 17 of art 1 of the Michigan Constitution of 1963 and the 14th Amendment to the United States Constitution and, further, that defendant was, under the law of the State of Michigan, without either express or implied authority or delegated authority to either regulate or restrict the sales of one or two family residential structures within its boundaries, and certainly not for the purposes which are claimed or appear on this record;"
We disagree on both counts. First, we believe that defendant does have the power to enact such an ordinance. Second, the ordinance does not constitute an unconstitutional taking of property without due process.
Although the parties, particularly plaintiff, have addressed other reasons why the ordinance is (or why it is not) invalid, we will address only the grounds ruled on by the trial court.
DEFENDANT'S AUTHORITY TO ENACT ORDINANCE 124-H, §§ 12-7-1 et seq.
Generally, "[t]he police power rests in the State". Attorney General ex rel Lennane v Detroit, 225 Mich. 631, 638; 196 N.W. 391 (1923). This power belongs to a municipality only if specifically conferred on it by statute or by the Constitution. Clements v McCabe, 210 Mich. 207, 215; 177 N.W. 722 (1920); Kalamazoo v Titus, 208 Mich. 252; 175 N.W. 480 (1919).
The 1908 Constitution, however, changed the role of the municipality in our governmental life in this state. Const 1908, art 8, § 21 stated:
"Under such general laws, the electors of each city and village shall have power and authority to frame, adopt and amend its charter and to amend an existing charter of the city or village heretofore granted or passed by the legislature for the government of the city or village and, through its regularly constituted authority, to pass all laws and ordinances relating to its municipal concerns, subject to the constitution and general laws of this state."
This section was readopted in essentially the same form in Const 1963, art 7, § 22.
The home rule act as it now stands includes: "Each city charter shall provide * * *: * * * For the public peace and health and for the safety of persons and property". MCL 117.3(j); MSA 5.2073(j). In other words, before 1908,
"municipal corporations exercised only such powers as were expressly granted to them by the legislature * * *.
* * *
"* * * [U]nder [the 1908] Constitution and our homerule cities act, cities may exercise substantially greater powers essential to local self-government than they previously were allowed to exercise." Dooley v Detroit, 370 Mich. 194, 207, 210; 121 N.W.2d 724 (1963).
Dooley in fact called it a "radical" change. 370 Mich. 208, fn 4.
See also Gallup v Saginaw, 170 Mich. 195; 135 N.W. 1060 (1912). The home rule act is to be liberally construed. Mikelsavage v Detroit, 343 Mich. 566; 73 N.W.2d 266 (1955); 1426 Woodward Avenue Corp v Wolff, 312 Mich. 352; 20 N.W.2d 217 (1945); Detroit v Recorder's Court Judge, 104 Mich. App. 214; 304 N.W.2d 829 (1981), lv den 413 Mich. 866 (1982). In People v Sell, 310 Mich. 305, 315; 17 N.W.2d 193 (1945), the Supreme Court ruled that "[e]xcept as limited by the Constitution or by statute, the police power of Detroit as a home rule city is of the same general scope and nature as that of the State". See also Tally v Detroit, 54 Mich. App. 328, 334; 220 N.W.2d 778 (1974). In Cady v Detroit, 289 Mich. 499, 514; 286 N.W. 805 (1939), app dis 309 U.S. 620; 60 S Ct 470; 84 L Ed 984 (1940), the Supreme Court defined police power expansively:
"Ordinances having for their purpose regulated municipal development, the security of home life, the preservation of a favorable environment in which to rear children, the protection of morals and health, the safeguarding of the economic structure upon which the public good depends, the stabilization of the use and value of property, the attraction of a desirable citizenship and fostering its permanency are within the proper ambit of the police power. Changes in such regulations must be sought through the ballot or the legislative branch." (Emphasis added.)
In Cady, the Supreme Court upheld an ordinance prohibiting the parking of occupied trailers in trailer camps for more than 90 days per year. If it had interpreted Clements the way that plaintiff now requests us to, the Supreme Court in Cady could not possibly have upheld the ordinance.
The police power is elastic and changes shape as varying social conditions demand. Michigan Canners Freezers Ass'n, Inc v Agricultural Marketing Bargaining Bd, 397 Mich. 337; 245 N.W.2d 1 (1976); Sell, supra, 310 Mich. 316.
Although even a home rule city does not have power concurrent with the Legislature and in fact needs at least statutory authorization to pass such ordinances, we rule that defendant does generally have the power to require an inspection before a home owner may sell his one- or two-family residence. Such an inspection deters fraud and helps enforce the city's building code. Both the means and goals are validly within defendant's police power. The home rule act by itself is specific enough to grant defendant the authority to enact such an ordinance.
Cases like Detroit v Recorder's Court Judge, supra, Lennane, supra, and Titus, supra, amply illustrate this point.
OAG, 1977-1978, No 5280, p 393 (March 23, 1978), reached the same conclusion.
Not only does defendant normally have the power to enact an ordinance such as 124-H, §§ 12-7-1 et seq., but the ordinance does not conflict with any statute. Michigan's first housing code, 1917 PA 167, contained the following provision:
"The provisions of the act shall be held to be the minimum requirements adopted for the protection of health, welfare and safety of the community. Nothing herein contained shall be deemed * * * to prevent any city * * * from enacting and putting in force from time to time ordinances and regulations imposing requirements higher than the minimum requirements laid down in this act; nor shall anything herein contained be deemed to prevent * * * such ordinances and regulations, remedies and penalties similar to those prescribed herein. And every such city * * * is empowered to enact such ordinances and regulations and to prescribe for their enforcement." § 8. Every housing code since has had a similar provision. Clearly, under the standard enunciated in People v Llewellyn, 401 Mich. 314; 257 N.W.2d 902 (1977), cert den 435 U.S. 1008; 98 S Ct 1879; 56 L Ed 2d 390 (1978), there has been no pre-emption.
The latest code, enacted by 1978 PA 368, contained the following provision: "This part shall be construed to supplement and not to supersede any powers otherwise vested in local governments. Local governments may adopt ordinances deemed necessary or appropriate to promote the health, safety and welfare of the people of this state." MCL 333.12222; MSA 14.15(12222), repealed by 1980 PA 431.
Plaintiff takes the position that the ordinance conflicts with the statutes in two ways. First, she argues that the ordinance is invalid because the standards used for the point-of-sale inspections are lower than those required by MCL 333.12211; MSA 14.15(12211). We disagree. The city may continue to enforce state-mandated requirements by other, more standard means. The particular inspection method challenged here is aimed at the specific practice of fraudulent conveyance of homes with serious structural and other deficiencies. This supplemental form of housing regulation is not expressly forbidden by statute. Such fraudulent transactions pose an obvious threat to the health and welfare of defendant's citizens, and an ordinance directed against them is within the authority of the City of Detroit.
Second, plaintiff claims that the ordinance violates MCL 565.5; MSA 26.524 by imposing an implied warranty "that the dwelling conforms with the inspection guidelines". In her complaint, plaintiff alleged that she had contracted to sell her property and that the implied warranty had thus arisen from the sale. However, such contracts are specifically excluded from the definition of "conveyance" as used in MCL 565.5; MSA 26.524. Weeks v Slavik Builders, Inc, 24 Mich. App. 621, 628; 180 N.W.2d 503 (1970), aff'd 384 Mich. 257; 181 N.W.2d 271 (1970).
Plaintiff also argues that defendant lacks authority to collect its inspection fee. However, MCL 438.31a; MSA 19.15(1a) expressly authorizes it: "A charge for inspection required by a local unit of government shall be paid by the seller and shall not be charged to the borrower."
Plaintiff's arguments are therefore unconvincing.
DUE PROCESS — UNCONSTITUTIONAL TAKING OF PROPERTY
The term "property" as used in the Due Process Clause "includes not only title and possession, but also the rights of acquisition and control, the right to make any legitimate use or disposal of the thing owned, such as to pledge it for a debt, or to sell or transfer it". Rassner v Federal Collateral Society, Inc, 299 Mich. 206, 214; 300 N.W. 45 (1941). The mere fact that property itself has not been physically taken does not necessarily mean that the Due Process Clause has not been violated: "[W]here the value is destroyed by the action of the government, or serious injury is inflicted to the property itself, or exclusion of the owner from its enjoyment, * * * it is a taking within the * * * Constitution." Pearsall v Board of Supervisors of Eaton County, 74 Mich. 558, 561; 42 N.W. 77; 4 LRA 193 (1889). See also Buckeye Union Fire Ins Co v Michigan, 383 Mich. 630, 641-642; 178 N.W.2d 476 (1970).
On the other hand:
"'not every destruction or injury to property by governmental action has been held to be a "taking" in the constitutional sense." Armstrong v United States, 364 U.S. 40, 48; 80 S Ct 1563; 4 L Ed 2d 1554 (1960). Rather, the determination whether a state law unlawfully infringes a landowner's property in violation of the Taking Clause requires an examination of whether the restriction on private property 'forc[es] some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.' Id. [p 49; 80 S Ct 1563; 4 L Ed 2d 1554]. This examination entails inquiry into such factors as the character of the governmental action, its economic impact, and its interference with reasonable investment-backed expectations. * * * When 'regulation goes too far it will be recognized as a taking.'" Prune Yard Shopping Center v Robins, 447 U.S. 74, 82-83; 100 S Ct 2035, 2041-2042; 64 L Ed 2d 741, 753 (1980). (Footnote omitted.)
In the present case, the ordinance neither destroys nor reduces the property's value. In fact, if anything, by requiring post-inspection repairs, it enhances value. Rather than preventing the owner from enjoying his or her property, it merely imposes an inspection and a fee. Such a burden on the property holder is light. The inhibition is not on the transfer of property but upon the failure to have the home inspected.
On the other hand, the ordinance ensures that one- and two-family dwellings meet certain minimum requirements. The ordinance is defendant's way of ensuring that a buyer has more recourse on buying a house less valuable than anticipated than merely stoically accepting the saw "caveat emptor". Moreover, the ordinance helps combat housing deterioration.
In summary:
"Rights of property, like all other social and conventional rights, are subject to such reasonable restraints and regulations established by law as the legislature, under the governing and controlling power vested in it by the Constitution, may think necessary and expedient. Holden v Hardy [ 169 U.S. 366; 18 S Ct 383; 42 L Ed 780 (1898)]. Where the question of the facts established is a fairly debatable one, courts accept and carry into effect the opinion of the legislature. Old Dearborn Distributing Co v Seagram-Distillers Corp [ 299 U.S. 183; 57 S Ct 139; 81 L Ed 109; 106 ALR 1476 (1936)]. Courts cannot substitute their opinions for that of the legislative body on questions of policy." Cady, supra, 289 Mich. 508 -509.
The ordinance does not amount to an unconstitutional taking of property without due process.
Reversed and remanded.