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Parkin v. Damen-ridge Apts.





Appeal by defendant from the Circuit Court of Cook county; the Hon. DANIEL A. ROBERTS, Judge, presiding. Heard in the third division of this court for the first district at the February term, 1952. Affirmed in part and reversed in part and remanded. Opinion filed December 3, 1952. Rehearing denied December 17, 1952. Released for publication December 18, 1952.


Rehearing denied December 17, 1952

Defendant appeals from the following: (1) a declaratory judgment entered November 20, 1951; (2) an order entered December 5, 1951, denying its motion to vacate the declaratory judgment; and (3) an order entered December 7, 1951, denying defendant's petition for leave to withdraw $9,781.63 theretofore deposited by plaintiffs with the clerk of the court.

Upon a prior appeal of this cause (344 Ill. App. 301) we reversed an interlocutory injunction restraining the prosecution and threatened prosecution of forcible entry and detainer suits in the municipal court against some of the plaintiffs. We then held that the pleadings were insufficient to justify the injunctional order.

Following the filing of the mandate in the lower court, defendant filed its suggestion of damages. It also filed its petition for leave to withdraw the fund referred to, on deposit with the clerk of the court. It was upon the hearing of the suggestion of damages and said petition, and the complaint and answer, that the court entered the three orders appealed from. No evidence was heard.

Plaintiffs' second amended complaint prayed for a judgment declaring the leases entered into by plaintiffs with defendant null and void because they allegedly violate the National Housing Act, as amended, and the regulations thereunder, passed May 22, 1946 (U.S.C.A., Title 12, par. 1743); for the injunction above referred to; an accounting as to the rentals and charges exacted in violation of the Act and regulations; and for an allowance of attorneys' fees in the prosecution of the suit.

The complaint alleged, inter alia, that defendant is a Delaware corporation, licensed to do business in Illinois; that the corporation was formed to become eligible for loan insurance under the National Housing Act, as amended, passed May 22, 1946 (U.S.C.A., Title 12, par. 1743), to enable it to construct a housing project for war veterans of World War II, as provided in the National Housing Act; that the Act created the office of Federal Housing Commissioner with specified authority over applications for loan insurance for such projects and to fix, regulate and control the rental charge to be made to veterans, to whom such project was required to be opened; that the Act, and the rules and regulations adopted by the Federal Housing Commissioner, required the applicant, in order to become eligible for such loan insurance, to submit its plans, specifications and cost of intended project construction, whereupon the Commissioner would issue to the applicant his project analysis covering each of the dwelling units, and indicating the maximum rentals that he would approve for such occupancy; that the Act and regulations further provided that the project could not be opened for leasing to veterans nor could leases be made for occupancy until a schedule of rental charges for such occupancy was filed with the Commissioner and approved by him; that during the existence of the obligation of the United States upon such loan insurance, no other charge or change in such rentals could be made by the project owner without first obtaining the approval of the Commissioner; that the project was opened for occupancy in December 1947, and leases were entered into with each of the plaintiffs, who were war veterans; that defendant did not file with the Commissioner any schedule of the rents to be charged to the plaintiffs, nor was any such schedule approved by the Commissioner up to the time of the filing of the complaint herein, all in violation of the Act and the regulations thereunder; that the leases made with plaintiffs required of them the payment of $25.91 per room per month as rent, and they did deposit as security three months' rent for their dwelling units; that defendant exacted of each of the plaintiffs a $25 charge for investigation as to the desirability of each of them as a tenant; that the requirement of deposit of three months' rent as security and the exaction of the $25 charge was not authorized or approved by the Housing Commissioner and, therefore, was in violation of the Act and regulations; that the amount of rent provided for in the lease as to each of the plaintiffs was in each instance in excess of the amount indicated by the project analysis the Commissioner would approve as the rental charge for said dwelling units. Attached to the complaint is a copy of defendant's certificate of incorporation.

It appears from the record that defendant obtained a commitment from the Housing Commissioner to insure a loan procured by defendant of approximately 90% of the cost of the project. The estimated cost in its project analysis submitted to the Commissioner was $778,089.

The declaratory judgment recites:

"The Court Doth Declare And Hold:

"(1) That the term rent includes all the matters and things comprehended within the conventional definition of rent, as well as the matters included within the term rent as used in the Housing Act in question, and that the leases are ineffective insofar as the rents in such matters are concerned;

"(2) That the parties themselves, both plaintiffs and defendant, as Signatories to the leases, had no right, power or authority to bind themselves in the absence of an approval of the rent by the Administrator;

"(3) That, inasmuch as no rent has been actually established and approved in accordance with the Housing Act in question, the Court can, for the purpose of assessing damages, fix and determine a reasonable rental for such purposes only after a hearing upon the question."

There is no merit in plaintiffs' contention before us that the foregoing declaratory judgment is not a final judgment and therefore not appealable. We think it fully declares the leases ineffective, which is equivalent to saying they are invalid, and thereby determines and grants the relief prayed for in the complaint. Such a judgment is provided for in section 57 1/2 of the Civil Practice Act (Ill. Rev. Stat. ch. 110 [1951; par. 181.1; Jones Ill. Stats. Ann. 104.057 (1)]). Altschuler v. Altschuler, 399 Ill. 559.

Whether the declaratory judgment was justified requires an understanding of the intention of Congress in enacting the National Housing Act and a consideration of the several sections of the Act. It is obvious from a reading of the Act and its preamble that it was enacted for the benefit of, and to protect, veterans of World War II, and that defendant, in order to be entitled to federal insurance, insuring the mortgage loan upon defendant's housing project in question, was in duty bound to comply with all of the provisions of the Housing Act and the regulations thereunder.

Paragraph 1738 of subchapter 6, Title 12, U.S.C.A., was inserted as an amendment in paragraph 1830, Title 50, ...

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