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Small v. Schultz

March 21, 1949


Author: Major

Before MAJOR, Chief Judge, KERNER, Circuit Judge, and LINDLEY, District Judge.

MAJOR, Chief Judge.

This is an action by plaintiff, a tenant, against defendant, a landlord, for the recovery of damages pursuant to Section 205 of the Housing and Rent Act of 1947, effective June 30, 1947, Title 50 U.S.C.A.Appendix, ยง 1895, and Regulation Section 8 (a and b), promulgated thereunder by the Housing Expediter.

The complaint consists of two counts. The first count alleges that the rent demanded and received exceeded the maximum legal rent established therefor in the amount of $10.00 per month for three months. The second count alleges that the defendant as a condition of renting said housing accommodation required plaintiff to purchase furniture for the sum of $1900, which sum plaintiff paid to defendant, and that the defendant failed to secure the prior consent of the Expediter, as provided by Regulation Section 8(b). Recovery was sought for three times such amount, or in the sum of $5700, together with attorney fees and costs.

On motion of plaintiff, the court on March 12, 1948, prior to a hearing on count 2, entered a judgment on count 1 in the amount of $50. The judgment order provided "that execution be and it is hereby stayed until all proceedings herein are determined * * *." The court, after a hearing on count 2, made its findings of fact and conclusions of law and, on June 23, 1948, entered a judgment in favor of the plaintiff in the amount of $1900, and allowed plaintiff's attorneys the sum of $250 as reasonable attorney fees. This judgment also included $50, the amount claimed under count 1, for which judgment had theretofore been tentatively allowed.

Defendant in No. 9679 appeals from the judgment of June 23, 1948, and plaintiff in No. 9689 cross-appeals, on the ground that the court erroneously refused to allow a judgment for $5700, or three times the amount of the alleged overcharge.

Notwithstanding that defendant criticizes certain of the findings made by the court below, we are convinced from a study of the record that they are substantially supported and must be accepted. Thus, the problem before this court is legal, and its solution depends upon the construction to be given to the relevant provision of the Act and the regulation.

The facts as found, upon which the legal issues rest, may be briefly stated. Plaintiff, on October 16, 1947, rented an apartment for dwelling purposes (housing accommodation) from the defendant (owner) at a rental of $50 per month. Such apartment, on October 12, 1947, was advertised for rent in the classified section of the Chicago Tribune, and in connection therewith furniture was advertised for sale. Relative to the transaction between the parties, so far as now material, the court found:

"That the plaintiff replied to the advertisement, and as a condition to the leasing of the aforesaid apartment did pay to the defendant, Catherine R. Schultz, the sum of $1900.00 for certain furniture located within the said apartment. As a condition to the renting and leasing of the said apartment the defendant sold to the plaintiff the said furniture. * * *

"That the said sale and purchase of the furniture in connection with the rental of the premises occupied by the plaintiff constitutes a 'tying agreement,' and that said defendant did on or about October 16, 1947 demand and receive the sum of $1900.00 for the use and occupancy of the apartment * * * through the subterfuge and scheme of selling furniture within said apartment, and said sum was in excess of the maximum legal rent established under and pursuant to the 'Act' and the rent regulations issued thereunder in force and effect at the time of the transaction.

"That the defendant did not obtain the prior written consent of the Expediter approving the sale of the said furniture as a condition to the leasing of the apartment by the plaintiff.

"The defendant did not introduce evidence proving that the violation was neither wilful nor the result of failure to take practicable precautions against the occurrence of the violation."

Thereupon, the court concluded as a matter of law that the sum of $1900 received by the defendant in payment for the furniture was an amount in excess of the maximum rent allowed by law.

The issue thus presented under both appeals is the amount of recovery to which plaintiff is entitled. Plaintiff contends, as is shown by his cross-appeal, that it was mandatory upon the court to award damages in the amount of $5700, or three times the amount which was paid for the furniture, and this irrespective of its value. The defendant contends that plaintiff was entitled to recover no more than the amount of the overcharge and that such overcharge is ...

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