Muir, Donald S.

English

University of Kentucky

Kentucky Law JournalVolume 52 | Issue 2 Article 121963Constitutional Law--State Action--Real EstateDiscriminationDonald S. MuirUniversity of KentuckyFollow this and additional works at: https://uknowledge.uky.edu/kljPart of the Civil Rights and Discrimination Commons, Housing Law Commons, and theProperty Law and Real Estate CommonsRight click to open a feedback form in a new tab to let us know how this document benefitsyou.This Comment is brought to you for free and open access by the Law Journals at UKnowledge. It has been accepted for inclusion in Kentucky LawJournal by an authorized editor of UKnowledge. For more information, please contact UKnowledge@lsv.uky.edu.Recommended CitationMuir, Donald S. (1963) "Constitutional Law--State Action--Real Estate Discrimination," Kentucky Law Journal: Vol. 52 : Iss. 2 , Article12.Available at: https://uknowledge.uky.edu/klj/vol52/iss2/12REGENT CASESIf a subcontractor cannot recover as a third party beneficiary undera contractor's bond because it contains no provision for his benefit, afortiori, he cannot recover under such a contract without bond for thesame reason. The general rule is that where a contract for public workhas been let without obtaining from the contractor the statutory bond,there is no liability to the subcontractor.16 Since the contract betweenthe state and the prime contractor contained no express provision forthe benefit of the subcontractor, the court in the principal casecorrectly decided that the subcontractor was not a third party bene-ficiary. For this reason, the subcontractors action fails, and not, assuggested in the Arkansas case, because of the absence of an existingobligation to him at the time the prime contract was executed.Tommy W. ChandlerCoNsTrrrtroNAL LAw-STATE ACroN-BEAL ESTATE DrscRnvnNATIoN.-Real estate brokers in Detroit brought action to enjoin the enforce-ment of a rule of the Michigan Corporation and Securities Commis-sion,1 which prohibited discrimination by real estate brokers, sales-men, and agents because of race, color, religion, ethnic origin orancestry.2 The commission is authorized by the legislature to revokea real estate broker's license for dishonest and unfair dealings and toenumerate additional grounds of such conduct and "make rules inharmony with the subject matter legislated upon."4The basis of the action is that the commission had exceeded itsrule-making power. The Commission and amici curiae 5 contended that,because of the vital importance to the state of the functions performedby the licensed real estate brokers, discrimination on the basis of race,color, creed or ancestry constitutes discriminatory state action in viola-tion of the fourteenth amendment by not affirmatively prohibitingsuch practice. The circuit court decreed the injunction sought and the16 Annot., 64 A.L.R. 678 (1929).1 For a discussion of the rule which is the subject of this litigation, seeKinsey, Rule Nine-A Novel Approach?, 39 U. Det. L.J. 108 (1961).2 The commission is vested with responsibility for enforcing provisions of theMichigan statute which regulates licensed real estate agents and brokers.Mich. Stat. Ann. § 19.794 (1959).3 Mich. Stat. Ann. § 19.794 (1959).4 Ranke v. Corporation and Securities Commission, 317 Mich. 304, 26 N.W.2d898 (1947).5 American Jewish Congress, American Civil Liberties Union of Michigan,National Association for the Advancement of Colored People, American JewishCommittee, and the Anti-Defamation League of the B'nai B'rith.1964]KENTucKY LAw JouNAL[commission appealed. Held: Affirmed. "Unfair dealing" is not norm-ally conceived to include discrimination, but rather is intended to meanno more than good reputation for honesty and fair dealing. Thedelegation of power to make such a rule would be an unconstitutionaldelegation of legislative power to an executive agency. The failureof the state to affirmatively prohibit discriminatory practices does notconstitute state action as prohibited by the fourteenth amendment.McKibbon v. Michigan Corporation and Securities Commission, 119N.W.2d 557 (Mich. 1963).In reaching its decision, the court dealt primarily with the delega-tion of rule-making power to the defendant commission. By utilizingthe term "unfair dealing" as the foundation for making Rule 9, thecommission had gone beyond what the court felt was the legislativeintent of the statute delegating its rule-making power. "Unfair deal-ing" was held to mean no more than "good reputation for honesty andfair dealing" and was not so broad as to include the subject matterof the rule in question.0 Even if the term "unfair dealing" were con-strued as to cover the behavior forbidden by the rule, it wouldamount to an unconstitutional delegation of legislative powers inviolation of article 4 of the Michigan constitution.7The right of the commission to revoke or suspend the license of areal estate agent for failure to submit to his customer all offersreceived is not involved in this decision. The court accepted ascontrary to the laws of agency a unilateral assumption of right on thepart of a real estate agent to determine suitability of a prospectivepurchaser." Rule 9, however, was construed as covering discrimination,whether or not such was directed by the client.9 This would be, ineffect, denying a private seller the services of a real estate agent if heshould wish to discriminate in entertaining offers.It was the contention of the amici curiae that a eral estate agentshould not be part of a discriminatory transaction, and that the stateis guilty of discriminatory state action in violation of the fourteenthamendment if it fails to forbid his participation. The amici rely heavilyon the recent case of Burton v. Wilmington Parking Authority'0 andthe concurring opinion of Justice Douglas in Garner v. Louisiana."The Burton case was concerned with the question of whether thefailure of a governmental body to expressly prohibit discrimination in6 119 N.W.2d 557, 561 (1963).7 Id. at 563.8 Id. at 558.9 ibid.103 65 U.S. 715 (1961).11368 U.S. 157 (1961).[Vol. 52,1RECENT CASESa lease of space to a restaurant in a publicly owned building con-stituted state action. The Supreme Court, in reversing the decisionof the Delaware Supreme Court, supported the opinion with theproposition that, since a large percentage of the income in the parkingauthority enterprise was derived from leases of space to private con-cerns within the building, the state was placed in a position of eco-nomic interdependence with the private restaurant. Discriminationby the restaurant in refusing to serve Negroes was, therefore, stateaction as prohibited by the fourteenth amendment. Garner v. Louisi-ana was a case in which Garner had been convicted of breach of thepeace as a result of a nonviolent lunch counter sit-in. The majorityopinion, in reversing, held that Garner had been denied due processof law. Mr. Justice Douglas concurred with the result on othergrounds. Though private enterprises, reasoned Mr. Douglas, restaurantsare public facilities in which the states may not enforce a state policyand custom of segregation. Restaurants have "public consequence"and affect the community at large.12 The Michigan court distinguishedGarner on the grounds that, while the state was enforcing a Louisianapolicy of segregation, Michigan has no such policy or custom. Mich-igan has, in fact, a manifested legislative policy against discrimi-nation.'3The amici curiae contended that failure of the state to forbid itslicensed real estate agents from engaging in transactions involvingdiscriminatory conduct would amount to discrimination by the stateand, therefore, violate the fourteenth amendment. The equal protec-tion clause of the fourteenth amendment is directed to the states andnot to private individuals.14 The amici argued that not only can thestate not actively discriminate, but that it must affiatively take actionto prevent discrimination by real estate agents and deny their servicesto private sellers who practice discrimination.The states are told by the fourteenth amendment what they mustnot do, not what they must do.15 Mr. Justice Bradley, in the CivilRights Cases,'0 stated:The wrongful act of an individual unsupported by any such authority[by the state] is simply a private wrong, or a crime of that individual,an invasion of the rights of the injured party, it is true whether they121d. at 183.13 E.g., Mich. State Fair Employment Practices Act, Mich. Stat. Ann. § 17.458(160); Equal Accomodations Act, Mich. Stat. Ann. § 28.343 (1962).'4 U.S. Const. amend. XIV, § 1.15 Henkin, Shelley v. Kraemer: Notes For A Revised Opinion, 110 U. Pa. L.Rev. 473, 479 (1962).10 109 U.S. 3 (1883).1964]KENTucKY LAw JoTJNALVaffect his person, property, or his reputation; but if not sanctioned insome way by the state, or not done under state authority, his rights re-main in full force .... 17This traditional concept of state action, however, has been expand-ing. In 1948, the Court, in the case of Shelley v. Kraemer,'8 held thatenforcement by state courts of contracts restricting the sale of propertyto certain races was state action. The Supreme Court, in Barrows v.Jackson,9 in 1953, held that the awarding of damages for breach ofsuch contracts similarly constituted state action. Administrative actionof a city board of trustees carrying out the provisions of a will whichestablished a school, to be operated by the city, for "poor whiteorphans" was held to be state action.20In the area of inaction amounting to state action, the concept wasfurther broadened by the decision of the Supreme Court in the Burtoncase. The failure of the state to forbid discrimination by its lessee wasa violation of the fourteenth amendment. The earlier cases in this areahad been generally limited to situations involving a public official'srefusal or culpable failure to perform his duties.21 Usually, the casesholding inaction by the state as amounting to forbidden state actionhave been restricted to this type of situation. The interdependenceof enterprises in the Burton case weighed heavily in the SupremeCourt's decision. It was felt by the court in Michigan, in distinguishingBurton, that the Supreme Court has been expanding the concept ofstate action, but not to the extent of the facts of the McKibbon casenor "has even intimated it could do so."22In considering a problem such as is presented in the McKibboncase, the court must look beyond a technical mold and carefullyconsider the delicate balance of interests involved. The freedom tomake private contracts and the freedom to use and enjoy property areprecious rights, as is the right to be free from discrimination.23 It hasbeen said that the notion of state action is useful in dividing theresponsibilities of the state and federal governments.24 In this age,however, of ever expanding state and federal influence, the question17 Id. at 17.18 334 U.S. 1 (1948).19856 U.S. 249 (1953).2 0 Pennsylvania v. Board of Directors of the City Trusts of the City ofPhiladelphia, 350 U.S. 230 (1957).2 Lynch v. U.S., 189 F.2d 476 (1951); Picking v. Pennsylvania R.R. Co.,151 F.2d 240 (1945); Catlette v. U.S., 132 F.2d 902 (1943).22 McKibon v. Michigan Corporation and Securities Commission, supra note6 at 566.23 In O'Meara v. Washington State Board Against Discrimination, 365 P.2d 1(Wash. 1961), it was held that an anti-discrimination statute violated the rightsof the property seller.24 Lewis, The Meaning of State Action, 60 Colum. L. Rev. 1083, 1121 (1960).[Vol. 52,RECENT CASESof whether state action is involved becomes a very close and crucialdelineation. Federal Housing Administration home loans, urban re-newal, the licensing of real estate agents by the state, building codes,and zoning ordinances are but a few facets of public dominion in thefield of housing alone. The using of state action as the ultimate test isbecoming, at the least, somewhat tenuous, since it is possible to findstate action in a case such as this by seizing on the licensing aspectonly. By balancing the interests involved, the court determineswhether there is or is not state action to the extent thus far determinedby the Supreme Court as being in violation of the fourteenth amend-ment and reaches a desired result.Donald S. MuirCanumAL PRocEDun - EvmENcE - Wu=APPnG - ADmissmILrrY NSTATE CouRTs.-Defendant's conversation with the prosecuting witnesswas recorded by an officer who attached a tape recorder microphoneto the witness' telephone receiver. The recording was made with theaid and consent of the prosecuting witness, but without the knowledgeof the defendant. In a criminal action for obtaining money under falsepretenses, the trial court refused to allow the introduction of thisrecording as evidence. The Commonwealth appealed to the court ofappeals, seeking a certification of law on the issue of admissibility.Held: The recording is admissible. The recording of the conversationis not a violation of the federal statutory prohibition of wiretapping,and the federal rule excluding evidence obtained in violation of afederal statute does not apply to the states. Commonwealth v.Brinkley, 362 S.W.2d 494 (Ky. 1962).As early as 1914, the United States Supreme Court held, in Weeksv. United States,' that evidence obtained by an unreasonable searchand seizure was not admissible in a federal court. The court reasonedthat to hold otherwise would defeat the fourth amendment's protec-tion against such searches and seizures. But in the case of Olmsteadv. United States,2 the Supreme court refused to apply this doctrine toa victim of wiretapping, holding that wiretapping is not an illegalsearch and seizure within the meaning of the fourth amendment. Inresponse to this case, Congress enacted the Federal CommunicationsAct, which provides that no person shall intercept and divulge anycommunication without the consent of the sender.3 Since the enact-1232 U.S. 883 (1914).2277 U.S. 438 (1928).847 U.S.C. § 605 (1934).19641

Constitutional Law--State Action--Real Estate Discrimination

https://uknowledge.uky.edu/cgi/viewcontent.cgi?article=3066&amp;context=klj

Constitutional Law--State Action--Real Estate Discrimination

Abstract

Similar works

Full text

Available Versions

University of Kentucky