Opinion
No. 21789.
December 8, 1952.
APPEAL FROM THE CIRCUIT COURT, JACKSON COUNTY, JOHN R. JAMES, J.
John H. Kreamer and Gage, Hillix, Moore Park, Kansas City, for appellants.
Harry Howard, Kansas City, for respondents.
This is an action for recovery of overcharges of rent and for attorney's fees, pursuant to the provisions of the Housing and Rent Act of 1947, as amended, 50 U.S.C.A. Appendix, § 1881 et seq. The action was tried without a jury and the court entered judgment for defendant. The plaintiffs have appealed.
The court made certain findings of fact and, for brevity, we set them out:
"1. The defendant, Mrs. Margaret Landes, acted as landlord of the housing accommodations at 3533 Locust Street, first floor apartment, Kansas City, Missouri, * * * effective March 26, 1949, and continuing throughout the period involved in this proceeding.
"2. The apartment was occupied by the owner, Mrs. Landes, for an undetermined length of time prior to the period of time herein involved.
"3. The original plaintiffs herein, namely, Barbara Borden, Nancy Borden, Beola Engelhardt, Jane Cook and Wanda M. Barrett, rented these premises on oral lease on April 19, 1949, and continued in tenancy of said premises until September 25, 1949, or for a total of twenty-three weeks.
"4. The rent for this apartment demanded and received by defendant from plaintiffs during this period of time was $42.00 per week, or $182.00 per month.
"5. The apartment was never registered by Mrs. Landes with the Area Rent Director.
"6. The order of the Area Director of April 4, 1950, made pursuant to applicable law and regulations, fixed the maximum legal rent for this apartment at $85.00 per month, retroactive to July 1, 1947, and was received by Mrs. Landes. The amount of rent in excess of the maximum legal rent as fixed by said order was never refunded to plaintiffs by defendant as ordered.
"7. The plaintiffs joined in a letter dated April 12, 1950, which was addressed to and received by Mrs. Landes in which they requested a refund of the rent demanded and received by defendant which was in excess of that rent fixed by the Area Rent Director in the order of April 4, 1950, as the maximum legal rent for these accommodations, but the defendant did not reply to this letter nor did she refund the amount requested.
"8. That the excess of the rent demanded and received by the defendant from the original plaintiffs for said premises over the maximum legal rent as fixed in the order of April 4, 1950, during the aforesaid rental period, was $514.74."
The transcript does not disclose the court's reason for rendering judgment for defendant in view of the findings of fact. Defendant does contend that there was no substantial evidence that she rented the apartment to the plaintiffs. Her own testimony justified the court in so finding. She testified that plaintiff, Wanda Millsap (Barrett), discussed with her the question of renting the apartment for herself and three other girls. "Q. What was your arrangement, how many girls were to occupy the place? A. There were to be four girls, and we discussed it quite fully and she thought that $10.50 per week for each girl would be equitable rental." On cross-examination she was asked: "Q. Mrs. Landes, you never rented that first floor I believe you stated except to the plaintiffs in this case? A. That is right." In addition to this she knew the girls were occupying the premises and collected rent from each of them. There was sufficient evidence to support the court's finding No. 3. Other evidence will be considered in discussing the questions raised on this appeal.
Sec. 1895, Title 50, U.S.C.A. Appendix, substantially provides that if any person demands, accepts or receives any payments of rent in excess of the maximum prescribed under Sec. 1894 of said Title 50 he "shall be liable to the person from whom he demands, accepts or receives such payment * * * for reasonable attorney's fees and costs as determined by the court, plus liquidated damages in the amount of * * * three times the amount by which the payment or payments demanded, accepted, or received exceed the maximum rent which could lawfully be demanded * * *." It then provides that the amount of such liquidated damages shall be the amount of the overcharge only "if the defendant proves that the violation was neither willful nor the result of failure to take practical precautions against the occurrence of the violation."
It is undisputed that the plaintiffs occupied the premises from April 19, 1949, until September 25, following, or for a total of 23 weeks; that they paid defendant $182 per month as rental; that the apartment was never registered by defendant with the Area Rent Director; that the Director, after investigation and notice to defendant, issued an order reducing the rentals from the amount actually charged to $85 per month and made the same retroactive to July 1, 1947, or from the date of actual renting, whichever was later, and ordered the defendant to refund such excess rentals to the plaintiffs, but that this was never done; that plaintiffs joined in a letter to the defendant demanding the refund of such excess rental; that the excess of the rental demanded and received by the defendant from the plaintiffs over the maximum legal rent fixed by the Director, is $514.74; that defendant requested and was granted a review by the local rent advisory board of the order made by the Director; and, after a hearing, that board sustained the order of the Director. No further action was taken by the defendant.
Sec. 4 (c) of the regulations of the Housing and Rent Expediter, adopted in compliance with the Act, requires the registration of leased premises within thirty days after rental but if the landlord fails to file a proper registration within that time the rent received for any rental period shall be received subject to refund to the tenant of any amount in excess of the maximum which may later be fixed by an order; that such amount shall be refunded to the tenant within thirty days after the date of the issuance of the order unless the refund is stayed in accordance with certain provisions of the Act, not pertinent here. "The landlord shall have the duty to refund only if the order under Sec. 825.5 (c) is issued in a proceeding commenced by the Expediter within three months after the filing of such registration statement." Sec. 5 (c) of the regulations authorizes the Expediter at any time, on his own initiative or on application of the tenant, to order a decrease of the rent under certain conditions, which are not pertinent here.
Sec. 5 (d) of the regulations provides: "If the maximum rent, or any other fact necessary to the determination of the maximum rent, * * * is in dispute between the landlord and the tenant, or is in doubt, or is not known, the Expediter at any time, on his own initiative, may enter an order fixing the maximum rent by determining such facts, * * * which order shall be effective to establish the maximum rent from July 1, 1947, or the date of first renting after July 1, 1947, whichever is applicable."
The defendant contends that since she, the landlord, refused to register the premises with the rental office, then that office had nothing before it upon which to base a reduction order, and was "without authority to make an investigation of its own, * * * as a basis for fixing rentals;" that all the rental office can do under such circumstances is to proceed under Sec. 206 of the Housing and Rent Act, which authorizes a proceeding to enjoin a landlord from engaging in Acts or practices which constitute a violation of the Act.
We cannot agree with this contention. To so hold would permit a landlord, who refused to register rental premises, to escape the regulation of the Act and profit by his own wrong doing.
In Woods v. Stone, 333 U.S. 472, 68 S. Ct. 624, at page 625, 92 L.Ed. 815, the Supreme Court of the United States discussed this question and said:
"Under the system of rent control as established, a landlord is required to register rented accommodations within thirty days after they are first devoted to that use. This brings notice to the control authority that the premises are within its official responsibility and provides data for quick, if tentative, determination as to whether the rental exacted exceeds the level permitted by the policy of Congress set out in the statute.
"But when, as in this case, the landlord does not comply with this requirement, there is likelihood that, as happened here, his transaction will be overlooked for some time or perhaps escape scrutiny entirely. But the landlord is not allowed thus to profit from his own disobedience of the law. If he could keep the excess collections by thus retarding or preventing scrutiny of his contract, he would again an advantage over all landlords who complied with the Act as well as over tenants whose necessity for shelter is too pressing to admit of bargaining over price. The plan therefore provides that, despite his failure to register, the landlord may continue to collect his unapproved price, but only on condition that it is subject to revision by the public authority and to a refund of anything then found to have been excessive."
In a concurring opinion, Judge Frankfurter said, 68 S.Ct. at page 627:
"The crux of the matter is that where a landlord rents new housing accommodations but, as here, disobeys the regulatory scheme and fails to file a registration statement, if he chooses to collect the rent that he himself has fixed, he can do so only contingently. The Administrator may catch up with him and fix what was the proper amount from the beginning. The excess is illegal and must therefore be refunded.
"There is nothing novel about a regulatory scheme whereby landlords who violate the law are denied the right to profit thereby. It has consistently been upheld by the Emergency Court of Appeals [citing cases]. When Congress provided in § 2(g) of the Act that regulations `may contain such provisions as the Administrator deems necessary to prevent the circumvention or evasion thereof,' * * * it plainly authorized effective administrative remedies for dealing with evasion.
"If such an order is to be termed `retroactive,' it comes within the Court's recent ruling that `such retroactivity must be balanced against the mischief of producing a result which is contrary to a statutory design or to legal and equitable principles. If that mischief is greater than the ill effect of the retroactive application of a new standard, it is not the type of retroactivity which is condemned by law.' Securities Exchange Commission v. Chenery Corp., 332 U.S. 194, 203, 67 S.Ct. 1575, 1581 [91 L.Ed. 1995]."
In support of her argument defendant cites Mason v. Woods, Em.App., 172 F.2d 857; Reines v. Woods, Em.App., 192 F.2d 83, and Rhodes v. Hanschl, D.C., 94 F. Supp. 1009. We have considered those cases and do not understand that any of them hold that where a landlord has refused to register rental premises with the Rent Office, he can escape the effect of this Act. They deal with situations arising where the landlord had registered the premises after the 30-day period. In Mason v. Woods the court held that where a proper registration is timely filed the order of the Rent Director reducing the maximum rent operated prospectively, but "If, on the other hand, the landlord failed to file a proper registration statement within the time specified, he ought not to gain by his own default." [172 F.2d 859.]
In Barrett v. Landes, D.C., 100 F.Supp. 175, Judge Reeves considered a state of facts substantially the same as we have in this case and where, at least, one of the plaintiffs was the same as in this case and the defendant is the same landlord, but the leased premises was a different unit from the one now in issue, and held that the order of the administrator made on April 4, 1950, was valid and that the plaintiffs were entitled to recover treble damages for violation thereof. It is true that case is pending on appeal and is not final, but we think Judge Reeves' reasoning is persuasive.
We hold that defendant's failure to register the premises did not deprive the Director of jurisdiction to make the order reducing the rent.
Defendant also contends that the order reducing the rent was the result of bias and prejudice on the part of Deputy Rent Collector Jarmon. The same contention is made in the Barrett case, supra, and Judge Reeves held that there was no evidence to support such a contention and we agree with his conclusion. In the first place, the order was made by Area Rent Director Robertson and not by Jarmon. Furthermore, defendant admitted that she was thoroughly familiar with the provisions of this Act, and the registration thereunder because she had other rental property which had been rented and she had made many visits to the office of the Director and conferred with him many times. The controversy that the defendant had with Jarmon principally concerned the Ward Parkway property and not the unit here involved.
Defendant next contends that this is a joint cause of action and, before judgment was entered, one of the plaintiffs died and another gave a release in full and withdrew as a plaintiff and, therefore, the cause of action was destroyed.
The record discloses that after the filing of the suit plaintiff, Jane Cook, married one Donald A. Lundahl and that she had died before the day of trial and the cause was revived, without objection, in the name of her husband as administrator of her estate; and that some time after the rental contract was made Wanda Millsap married one Barrett and, after trial and while the cause was under submission, she executed a release to the defendant for any and all liability which may have accrued in her favor because of said overcharge and withdrew as a party plaintiff in said pending suit. This instrument recited: "This release and withdrawal is made by the undersigned solely as her own action and in her own behalf and is not intended to and does not affect in any way the rights, if any, which the remaining plaintiffs in said cause may have against the above named defendant." Upon the filing of this withdrawal she was, by order of court, made a party defendant and entered her appearance therein, and the cause proceeded to judgment.
The parties agree that the suit was brought as a joint cause of action; therefore, it is unnecessary for us to decide whether it could have been brought differently. Defendant contends that, under the circumstances, the suit cannot be maintained except with all the claimants, and that the death of one and the withdrawal of another, destroyed the cause of action.
It is well settled that all to whom a joint obligation is due must be joined as parties, which is the holding in the various cases cited by the defendant. In the instant case all joint owners were made plaintiffs, which met the requirement of that rule. The question is, did the death of one of the plaintiffs and the withdrawal of another, under the circumstances referred to, supra, destroy the whole cause of action? None of the cases cited by the defendant supports that conclusion. It would be unthinkable to hold that when Mrs. Barrett executed a release to the defendant of whatever interest she had in the cause of action and withdrew as a plaintiff and was promptly made a defendant, that such procedure would destroy the entire cause of action.
Section 507.030 RSMo 1949, V.A.M.S., provides: "1. Subject to the provisions of section 507.070, persons having a joint interest shall be made parties and be joined on the same side as plaintiffs or defendants. When a person who should join as a plaintiff refuses to do so, or his consent cannot be obtained, he may be made a defendant."
Under this section it was the duty of the court to make Mrs. Barrett a party defendant and thus retain jurisdiction of all necessary parties. Furthermore, her release did not purport to release the defendant from all liability, but only of any liability of the defendant to Mrs. Barrett.
The only case to which we have been cited or which we have been able to find dealing with this question, is Lalance Grosjean Mfg. Co. v. Haberman Mfg. Co., C.C., 93 F. 197. In that case the plaintiffs were co-owners of a patent right and sued for an accounting. After the suit was instituted, one of the co-owners settled with the defendants and signed a release and it was contended that this defeated the right of the other to recover. In discussing this question, the court said, 93 F. 198: "It is not thought that the execution of an assignment and a release by one of the joint owners destroys the co-owner's right to recover his damages from the defendant. * * * Upon the precise question now presented, viz. the power of one co-owner to destroy the other's accrued right to damages, the opinion of Romilly, M. R. * * (In re Horsley Knighton's Patent, L.R. 8 Eq. 475), seems to characterize the proposition quite correctly as `a violation of the fundamental principles of law, and contrary to natural justice.'"
We hold that the settlement made by Mrs. Barrett with the defendant and of her withdrawal as a party plaintiff, did not destroy the cause of action of the other plaintiffs.
Defendant next contends that a suit to recover excess rent is a statutory cause of action and does not survive the death of a tenant; and that upon the death of plaintiff, Jane Cook Lundahl, her cause of action could not be revived in the name of her administrator. In support of this contention she cites Clark v. Kansas City, St. L. C. Railroad Co., 219 Mo. 524, 118 S.W. 40; Gantt v. Brown, 244 Mo. 271, 149 S.W. 644; and Selden v. Illinois Trust Savings Bank, 239 Ill. 67, 87 N.E. 860. In the Clark case the question of survival of a cause of action was not directly involved. The court was concerned with the effect of non-joinder of a party specifically required by statute. The mother had brought suit for the statutory penalty for the death of her minor child without joining the father, and the court held she could not do so. The Gantt case concerned an election contest, but Judge Gantt died before the contest was concluded and the court held that his right to the office did not survive. We do not believe those cases are conclusive on the question confronting us.
If defendant is correct in her contention that this is a joint cause of action then, certainly, the cause of action would survive to the other plaintiffs. See Section 507.100 (2) RSMo 1949, V.A.M.S.; Keyser v. Rawlings, 22 Mo. 126, 127, and 1 C.J.S., Abatement and Revival, § 121, p. 170.
However, we are of the opinion that the death of Mrs. Lundahl did not extinguish her claim. Said Section 507.100 (1) provides: "If a party dies and the claim is not thereby extinguished, the court shall on motion order substitution of the proper parties." We are cited to no case which has specifically held that a plaintiff's cause of action for recovery of excess rent under this act abates upon her death, but it has been held that it does not abate on the death of the landlord. In Popplewell v. Stevenson, 10 Cir., 185 F.2d 111, the court held that a suit brought by a tenant under this Act was one for compensation for the injury suffered as the result of the exemption of rent above the ceiling, and that it did not abate on the death of the defendant. It is our conclusion that the cause of action of Mrs. Lundahl was not extinguished by her death and could be revived in the name of her administrator.
It follows, from what we have said, that the court, under the findings of fact made by it, should have entered judgment for the remaining plaintiffs for the excess of the rent charged them by the defendant, and should have allowed them a reasonable attorney's fee.
The remaining question is whether the court should have assessed penalty of three times the amount of the overcharge, as provided by Sec. 1895, supra. It will be remembered that that section provides that the amount of damages recoverable shall be the amount of the overcharge only "if the defendant proves that the violation was neither willful nor the result of failure to take practicable precautions against the occurrence of the violation."
It appears from the record that the defendant had been occupying these premises as her home for a number of years prior to the time of renting the same to the plaintiffs; that she rented them by the week and moved to other premises, but within less than 30 days she became dissatisfied with her new quarters and requested the plaintiffs to surrender possession of the premises as soon as they could make other arrangements, which they agreed to do, but because of the housing shortage they were unable to find other quarters until September. In the meantime, defendant moved to a third floor apartment in the same building; that she was expecting them to vacate the property at an early date so that she could move into the same, and did not consider this as rental property. She consulted her attorney and he advised her that it was not necessary to register the premises with the Director. The notice to register the property was not given until long after the plaintiffs had surrendered possession of the premises and defendant had moved in with her family.
Under the facts in this case, we do not believe the damages should be trebled. We have examined the cases cited by plaintiffs and, while some of the facts are quite similar to the facts in the instant case, we do not consider them controlling.
The judgment should be reversed and the cause remanded with directions to the trial court to enter judgment for the remaining plaintiffs for the excess rent paid by them, and for reasonable attorney fees.
It is so ordered.
All concur.