Keiger v. Winston-Salem Board of Adjustment , 281 N.C. 715 ( 1972 )

190 S.E.2d 175 (1972)

Charles F. KEIGER and Mamilee Enterprises, Inc.
v.
The WINSTON-SALEM BOARD OF ADJUSTMENT et al.

No. 40.

Supreme Court of North Carolina.

July 31, 1972.

R. Kason Keiger, Winston-Salem, for petitioner appellees.

Womble, Carlyle, Sandridge & Rice by Roddey M. Ligon, Jr., and Zeb E. Barnhardt, Jr., Winston-Salem, for respondent appellants.

SHARP, Justice.

The trial judge concluded that a rezoning ordinance, instigated after petitioners' application for a permit to construct a mobile home park on their 14.5-acre site, could have no effect whatever upon their right to the permit. Therefore, he did not adjudicate the validity or invalidity of the ordinance purporting to change the classification of petitioners' property.

It is the rule in this State that the issuance of a building permit, to which the permittee is entitled under the existing ordinance, creates no vested right to build contrary to the provisions of a subsequently enacted zoning ordinance, unless the permittee, acting in good faith, has made substantial expenditures in reliance upon the permit at a time when they did not violate declared public policy. Warner v. W & O, Inc., 263 N.C. 37, 138 S.E.2d 782 (1964). See In re Appeal of W. P. Rose Builder's Supply Co., 202 N.C. 496, 163 S.E. 462 (1932). See 101 C.J.S. Zoning § 243 (1958); 58 Am.Jur. Zoning § 185 (1948). When, at the time a builder obtains a permit, he has knowledge of a pending ordinance which would make the authorized construction a nonconforming use and thereafter hurriedly makes expenditures in an attempt to acquire a vested right before the law can be changed, he does not act in good faith and acquires no rights under the permit. Town of Hillsborough v. Smith, 276 N.C. 48, 170 S.E.2d 904 (1969); Stowe v. Burke, 255 N.C. 527, 122 S.E.2d 374 (1961).

The foregoing rule determines the effect of a rezoning ordinance upon a permit previously issued in conformity with the applicable law. This case, however, involves the right to a permit which was never issued, a permit which was unlawfully refused at a time when no zoning change affecting the property was impending. Thereafter—within the time the law allowed petitioners to apply to the court for a review of the Board's refusal—owners of land adjacent to petitioners' 14.5 acres filed a request for the rezoning of a substantial part of the property. While petitioners awaited judicial review by the Superior Court of the Board's refusal to issue the permit they could not, of course, make "substantial expenditures" or otherwise change their position in reliance upon a permit they did not have. In the meantime, the Planning Board reviewed the proposed amendment to the zoning ordinance and recommended its passage. Three days after that report and recommendation was filed, on 3 November 1969, the Board of Aldermen purported to adopt the requested amendment in a manner which ignored the law applicable to changes in the zoning ordinance.

G.S. § 160-176 (1964) provides that a zoning ordinance may, from time to time, be "amended, supplemented, changed, modified or repealed" upon compliance with the requirements of G.S. § 160-175 (1964) "relative to public hearings and official notice." G.S. § 160-175 provides that no zoning regulation, restriction or boundary —or change therein—shall become effective until after a public hearing of which notice "shall be given once a week for two successive calendar weeks in a newspaper published in such municipality, or, if there be no newspaper published in the municipality, by posting such notice at four public places in the municipality, said notice to be published the first time or posted not less than fifteen days prior to the date fixed for said hearing."

Winston-Salem Code, Section 29-20 AMENDMENTS provides: "In no case shall final action by the Board of Aldermen be taken amending, changing, supplementing, modifying, or repealing the regulations established by this ordinance or changing the district boundaries hereby established until a public hearing has been held by the Board of Aldermen at which parties in interest and citizens shall have an opportunity to be heard. A notice of such public hearing shall be given once a week for two successive calendar weeks in a newspaper published in Winston-Salem, the first publication of said notice being not less than ten (10) days prior to the date fixed for the hearing."

Since the ordinance of 3 November 1969 was passed within three days after the Planning Board filed its recommendation with the Board of Aldermen, that board obviously made no pretense of complying with the notice provisions of G. S. § 160-175 or its own Code Section 29-20.

A municipality's authority to enact and amend zoning ordinances "is subject to the limitations imposed by the enabling statute and by the Constitution. These limitations forbid arbitrary and unduly discriminating interference with property rights in the exercise of such power.... Thus, a zoning ordinance or an amendment thereto which is not adopted in accordance with the enabling statute is invalid and ineffective." Heaton v. City of Charlotte, 277 N.C. 506, 513, 178 S.E.2d 352, 356 (1970). Accord, Walker v. Elkin, 254 N.C. 85, 118 S.E.2d 1 (1960); Kass v. Hedgpeth, 226 N.C. 405, 38 S.E.2d 164 (1946).

The stipulated facts clearly prove the invalidity and ineffectiveness of the ordinance of 3 November 1969.

Where a permit has been illegally withheld from an applicant entitled to it under the existing zoning law, the effect of a subsequently enacted restrictive amendment upon the applicant's right to the permit varies from state to state. The decisions are conflicting; the situations and solutions are many and varied. See 101 C.J. S. Zoning § 221 (1958) and (Supp.1972); 58 Am.Jur. Zoning § 182 (1948) and (Supp.1972); 3 Anderson, Am. Law of Zoning § 21.22 (1968); 8 McQuillin, Mun. Corp. § 25.155 (3d Ed.1965); Annot., 75 A. L.R.2d 168, 236 (1961); Annot., 169 A.L.R. 584 (1947); Annot., 138 A.L.R. 500, 505 (1942); Annot., 40 A.L.R. 928, 934 (1926). For an opinion collecting authorities and discussing the effect of a rezoning ordinance, instigated and passed after the unlawful denial of a permit, upon applicant's rights see Ben Lomond, Inc. v. City of Idaho Falls, 92 Idaho 595, 448 P.2d 209 (1968).

In this case we do not reach the question of what effect a validly enacted rezoning ordinance would have had on petitioners' right to construct the mobile home park. For decision here it suffices to say that an applicant's right to a permit, denied under an existing valid ordinance which entitled him to it, may not be defeated by a purported amendment which was void ab initio because it was not adopted as required by the enabling statute. We hold that petitioners are entitled to the permit for which they applied. Accordingly, the judgment of the Superior Court is

Affirmed.