Clarence E. PHILBROOK, Henry Royall, G. A. White, Jr., and Mrs. Louise H. Hayes, Individually and as Representatives of Others Similarly Situated, and Lonas A. Williams and Elizabeth R. Williams and James C. Brown and Diane D. Brown, Additional Plaintiffs,
v.
CHAPEL HILL HOUSING AUTHORITY.
No. 848.
Supreme Court of North Carolina.
March 8, 1967.*158 Haywood, Denny & Miller, Egbert L. Haywood, Chapel Hill, for plaintiff appellants.
James C. Harper, Chapel Hill, for defendant appellee.
BOBBITT, Justice.
Plaintiffs base their alleged right to maintain this action solely on their status as residents and property owners. Their alleged grievance is that the construction by defendant of low rental public housing apartments on the Abernethy tract will seriously and adversely affect the desirability of their property for residential use and substantially depreciate its value.
The cause of action consists of the facts alleged. G.S. § 1-122; Lassiter v. Norfolk & C.R.R., 136 N.C. 89, 48 S.E. 642. The facts alleged, but not the pleader's conclusions, are deemed admitted where the sufficiency of a complaint is tested by demurrer. Stamey v. Rutherfordton Electric Membership Corp., 247 N.C. 640, 101 S.E.2d 814; 3 Strong, N.C. Index, Pleadings § 12. The facts considered below are alleged by plaintiffs.
Defendant was created and organized pursuant to the provisions of G.S. Chapter 157, Article 1, entitled "Housing Authorities Law." Hence, all housing projects of defendant are "subject to the planning, zoning, sanitary and building laws, ordinances and regulations applicable to the locality in which the housing project is situated." G.S. § 157-13. Plaintiffs do not allege or contend that the contemplated construction of low rental public housing apartment units on the Abernethy tract would violate any zoning or other governmental regulation applicable to the locality. Nor do they allege or suggest that the Abernethy tract is subject to any covenant imposed by deed or contract purporting to *159 prevent its use for the contemplated purpose.
In view of the references to racial integration in plaintiffs' stricken allegations, it is noted that a zoning ordinance purporting to restrict the occupancy and use of property solely on the basis of race is unconstitutional and void. Clinard v. City of Winston-Salem, 217 N.C. 119, 6 S.E.2d 867, 126 A.L.R. 634 (1940). A covenant in a deed or contract purporting to impose such a restriction is not enforceable in equity by injunction. Shelley v. Kraemer, 334 U.S. 1, 68 S. Ct. 836, 92 L. Ed. 1161, 3 A.L.R. 2d 441. A breach thereof is not ground for the recovery of damages in an action at law. Barrows v. Jackson, 346 U.S. 249, 73 S. Ct. 1031, 97 L. Ed. 1586.
Under the facts alleged, plaintiffs would have no right to restrain an individual or private corporation from acquiring the Abernethy tract and constructing thereon low rental apartment units.
The constitutionality of said "Housing Authorities Law" was upheld when challenged by taxpayers in Wells v. Housing Authority, 213 N.C. 744, 197 S.E. 693, and in Cox v. City of Kinston, 217 N.C. 391, 8 S.E.2d 252, and in Mallard v. Eastern Carolina Regional Housing Authority, 221 N.C. 334, 20 S.E.2d 281. No provision of said "Housing Authorities Law" is challenged by plaintiffs as being unconstitutional or otherwise void. Plaintiffs assert defendant's selection of the Abernethy property as a site for the construction of low rental housing apartments is "arbitrary" and "capricious" and constitutes "an abuse of discretion" by defendant.
"In the selection of a location for a housing project as authorized under the Housing Authorities Law, the project may be built either in a slum area which has been cleared, or upon other suitable site. The housing authority is given wide discretion in the selection and location of a site for such project." In re Housing Authority of City of Charlotte, 233 N.C. 649, 660, 65 S.E.2d 761, 769, and cases cited. "There is nothing in the law in this jurisdiction that requires housing projects to be located only where slum districts exist." Housing Authority of City of Wilson v. Wooten, 257 N.C. 358, 367, 126 S.E.2d 101, 107. Defendant's primary objective is to make low rental public housing available to persons who are now living in "substandard, unsafe and unsanitary dwelling structures."
"In determining what property is necessary for a public housing site, a broad discretion is vested by statute in housing authority commissioners, to whom the power of eminent domain is delegated. GS § 157-11; GS § 157-50; GS § 40-37. Indeed, so extensive is this discretionary power of housing commissioners that ordinarily the selection of a project site may become an issuable question, determinable by the court, on nothing short of allegations charging arbitrary or capricious conduct amounting to abuse of discretion." In re Housing Authority of City of Salisbury, etc., 235 N.C. 463, 70 S.E.2d 500. In that case a jury found the selection of a part of the campus of Livingstone College as a site for a housing project to be arbitrary and capricious, considering the present and future needs of the college and the availability of other suitable sites nearby. This Court held there was ample evidence to warrant submission of the issue, and to support the verdict.
Each of the three cases last cited was a proceeding by a Housing Authority, in the exercise of the power of eminent domain conferred by G.S. § 157-11, to condemn land for use as a site for the construction of low rental public housing apartments. In the present action, defendant (Housing Authority) does not seek to condemn or otherwise acquire any property owned by any of the plaintiffs. There is no controversy between it and the owner of the Abernethy tract. It is not alleged or contended that the Abernethy tract is not suitable for use as a site for low rental *160 public housing. The gist of the complaint is that plaintiffs do not want low rental public housing apartments in close proximity to their residences and property. While plaintiffs' apprehensions are understandable, the complaint alleges no facts sufficient to show the selection of the Abernethy tract was "arbitrary" or "capricious" or "an abuse of discretion." Defendant's failure to select a site in an area in which the present dwelling structures are substandard, unsafe and unsanitary cannot be considered arbitrary or capricious or an abuse of discretion.
We have not overlooked plaintiffs' contention that the Abernethy property was selected in order to meet the requirments or approval of the United States Public Housing Administration, created and established pursuant to U.S.C.A. Title 42, Chapter 8. Plaintiffs' allegations imply that defendant depends wholly or largely on federal financial assistance for the acquisition of land and the construction of public housing thereon. There being no factual allegations sufficient to show the Abernethy tract is not suitable for use as a site for low rental public housing, whether defendant was induced to select it to meet the requirements or approval of the Public Housing Administration is immaterial. If suitable for the contemplated use, the selection thereof is not subject to successful challenge by searching the motives either of defendant or of the Public Housing Administration. Cf. Clark's Greenville, Inc. v. West, 268 N.C. 527, 151 S.E.2d 5.
With reference to the alleged second cause of action: Defendant's exercise of the option, if not properly authorized at a duly constituted meeting of the Commission, is ratified by defendant's pleadings and position in this action. Assuming the Commission could set aside unauthorized action or rescind previously authorized action, the internal affairs and functioning of the Commission are not subject to challenge by plaintiffs. Cf. State ex rel. Carringer v. Alverson, 254 N.C. 204, 118 S.E.2d 408.
It is unnecessary to pass upon whether Judge Mallard erred in any of his rulings with reference to striking portions of the amended complaint. In our view, the amended complaint fails to state facts sufficient to constitute a cause of action either including or excluding these allegations. Accordingly, exercising our supervisory jurisdiction (N.C.Const. Art. IV, Sec. 10), we consider the case as if a demurrer ore tenus to the amended complaint in its entirety had been lodged in this Court; and, when so considered, such demurrer is sustained. This ruling, of course, necessarily includes an affirmance of Judge Hall's order sustaining the demurrer ore tenus to the amended complaint exclusive of the portions previously stricken therefrom.
Affirmed.