Decided January 3, 1927.
Municipal corporations — City not liable upon abandoning appropriation proceedings for street — Nonliability for acts done in governmental capacity — Issuing and revoking building permits a governmental function — Permit revoked after expenditures made in constructing dwelling.
1. City may abandon proceedings to appropriate property for street purposes, without being liable for damages therefor.
2. Municipalities are not liable for damages for acts done in governmental capacity.
3. Matter of issuing and revoking building permits is an exercise of governmental power by city, for which it cannot be held in damages.
4. Where plaintiff expended large sums of money toward construction of dwelling, authorized by permit duly issued by city, and city thereafter revoked permit in contemplation of construction of street which was subsequently abandoned, city was not liable in damages for sums expended toward construction of dwelling.
ERROR: Court of Appeals for Lucas county.
Mr. C.F. Watts, for plaintiff in error.
Mr. F.M. Dotson, director of law, and Mr. Martin S. Dodd, for defendant in error.
Jane L. James began the original action in the court of common pleas to recover damages against the city of Toledo. The petition was met by a general demurrer, which was sustained, and, the plaintiff not desiring to plead further, her petition was dismissed.
In order to determine whether the court committed error in sustaining the demurrer, it will be necessary to look to the averments of the petition. After pleading that the defendant is a municipal corporation, and one J.R. Hesser was and is the commissioner of inspection of the city, and that plaintiff filed her claim for damages more than 60 days prior to the filing of the petition, she avers, in substance, as follows:
That she is and has been, since March 17, 1924, the owner of lot No. 56 in Lewis Heights in the city of Toledo; that on the 2d of April she entered into a contract in writing with Carl H. Ruch for the construction of a house on said lot; that on April 11, 1924, she made application to J.R. Hesser, commissioner of inspection of the defendant, for a permit to build a house on the lot; and that on the same day the defendant, by and through said J.R. Hesser, issued to plaintiff a building permit, authorizing her to construct a dwelling house on said lot; and that she paid the price of such permit. The plaintiff further avers that prior to April 17, 1924, she had commenced to construct a dwelling house on said lot in accordance with such permit, and had purchased material, made excavations, and incurred large expense in connection therewith. She avers that about April 14, 1924, council passed a resolution declaring its intention to appropriate property for a street, and that among other property was her said lot No. 56.
The petition avers that about April 16, 1924, the city of Toledo, by and through J.R. Hesser, commissioner of inspection of the division of buildings, served on her agent, and also on the contractor above named, a notice withdrawing said permit and directing that no further work should be done thereunder. The petition avers that a copy of that order is attached and marked "B," and that, upon receipt of the notice and order, and in compliance therewith, she discontinued work on the house. She further avers that thereafter she requested the city in writing to either buy the property or appropriate it, or renew the building permit, but that the defendant took no steps so to do, and refused to reissue the permit that it had revoked. The petition further avers that on July 14, 1924, the city, through its council, passed a resolution repealing the resolution adopted April 14, 1924, for the appropriation of lot No. 56, Lewis Heights, and she prays damages from the city by reason of the foregoing facts.
The city bases its contention that the petition does not state a good cause of action on two grounds: First, that it had the right to abandon the proceedings to appropriate the property, without being liable for damages by reason of such abandonment; and, second, that mandamus would lie to compel the issuance of a building permit, and that an action for damages will not lie.
We have no doubt that the contention that the city could abandon the proceedings to appropriate this property for street purposes without being liable for damages is correct, but that does not determine the sufficiency of the averments of the petition. It is apparent from the averments that a lawful permit had been issued to the plaintiff, authorizing her to proceed with the construction of a dwelling house on her lot, and that, acting on such permit, she had in good faith expended large sums of money in proceeding with the excavation, drainage, and other work looking toward the construction of the dwelling house authorized by the permit, and the purpose of this action is to recover damages thus suffered.
Is the city liable for such damages? If the city in what it did in the premises was acting in a governmental capacity, such liability would not arise. This nonliability in damages for governmental acts of municipalities has long been established and is a fundamental principle of the law. The matter of issuing and revoking building permits is clearly an exercise of such power, as has often been held. In Clinard v. City of Winston-Salem, 173 N.C. 356, 91 S.E. 1039, this question was directly involved, and it was there held that the exercise of power by a municipality, under a valid ordinance, to grant or refuse a building permit or license, is a governmental function, for which the city cannot be held in damages. In thus acting, the city was a representative of the state, and for this reason it was held there was no liability in damages. The same principle was announced in Claussen v. City of Luverne, 103 Minn. 491, 115 N.W. 643, 15 L.R.A., (N.S.), 698, 14 Ann. Cas., 673; Edson, Receiver, v. City of Olathe, 81 Kan. 328, 105 P. 521, 36 L.R.A., (N.S.), 861; Edson, Receiver, v. City of Olathe, 82 Kan. 4, 107 P. 539, 36 L.R.A., (N.S.), 865; Davis v. Mayor, etc., of Borough of Bromley, 1 K.B., 170, 1 British Ruling Cases, 345, and annotations.
We call attention to the case of Smith v. Major, 16 C.C., 362, 8 C.D., 649. The Supreme Court of Ohio in City of Cleveland v. Ferrando, 114 Ohio St. 207, 209, 150 N.E. 747, stated that the issuing of a permit was a police regulation and governmental in character. The Supreme Court of the United States, in Village of Euclid v. Ambler Realty Co., 272 U.S. 365, 47 S. Ct., 114, decided November 22, 1926, had under consideration the exercise of similar powers.
In holding as we do, that the city of Toledo is not liable in damages for the acts averred in the petition, we are not meaning to indicate that an action of mandamus to compel the issuing of a building permit would not lie in a proper case.
For the reasons given, the judgment will be affirmed.
CULBERT and WILLIAMS, JJ., concur.