Office of Price Administration, which was dated February 22, 1945.
The defendants executed leases with each of the tenants who occupied said units, in which the monthly rental value was set forth to be $ 33, and also set forth in their registration that the rental was $ 33 and that the units had not been rented prior to October 1, 1944.
It is common experience that if a person willfully fails and neglects to comply with the law with the intent to commit an unlawful act, such action is generally committed in secrecy. The defendants, no doubt, believed that as a result of the statements made by an employee at the McKeesport Office of Price Administration, that from the facts presented the units would justify a rental value of $ 35, they would be justified in renting the premises at $ 33 per month. The Court, therefore, does not believe that the actions of the defendants were willful to the extent that it was intended should exist when Congress made this provision in the Act.
However, the defendants were not entitled to rely upon the unofficial oral advice given by an employee in the McKeesport Office of Price Administration. At first blush, this may seem harsh, but obviously the Administrator cannot be bound by various oral interpretations which happen to be made by his hundreds, perhaps thousands, of employees in violation of regulations. The Administrator has prescribed a reasonable procedure by which persons subject to the regulations may obtain official interpretations or information by which all will be bound and, therefore, an individual who sells merchandise is not entitled to rely on unofficial interpretations. Wells Lamont Corp. v. Bowles, Price Administrator, Em. App., 149 F.2d page 364; Utah Power & Light Co. v. United States, 243 U.S. 389, 37 S. Ct. 387, 61 L. Ed. 791.
It is the duty of the defendants, however, to prove by a preponderance of the evidence that the violation was neither willful nor the result of failure to take practicable precautions against the occurrence of the violations. If the defendants prove each of these facts, then the amount of the recovery can only be the overcharge or $ 25, whichever is greater. Bowles v. Goebel, D.C., 58 F.Supp. 686.
The success of the war against inflation is dependent upon the patriotic co-operation of all persons to whom it is applicable, and the Court should not consider the controversy as existing merely between an agency of the Government and a defendant. Brown v. Hecht Co., 78 U.S.App.D.C. 98, 137 F.2d 689, 695; Henderson, v. C. Thomas Stores, D.C., 48 F.Supp. 295, 301.
The Administrator does not carry the sole burden of the war against inflation, and the courts should not, therefore, administer any part of the Act grudgingly. It should be administered by the courts with their due share of responsibility, and the discretion permitted to be exercised by the courts should be in the light of the large objectives of the Act. 'That of all the consequences of war' and now our period of postwar readjustment, 'inflation is the most destructive.' Bowles v. Hecht Co., 321 U.S. 321, 64 S. Ct. 587, 592, 88 L. Ed. 754; Bowles v. Montgomery Ward & Co., 7 Cir., 143 F.2d 38.
In the enforcement of the Price Control Act, the Court should, therefore, exercise its discretion in the light of the standards of public interest. If the public interest is to be protected and the statute is to have its full and proper deterring effect on prospective wrongdoers, a defendant must be discouraged from failure to comply by the imposition of an appropriate penalty. Bowles v. Hecht Co., 321 U.S. 321, 64 S. Ct. 587, 88 L. Ed. 754.
Therefore, it is the opinion of this Court that under the Emergency Price Control Act, as amended, recovery against a defendant for charging excess rentals should be limited to the amount of the overcharge only where the defendant sustains the burden of proving that the violation was neither willful nor the result of failure to take practicable precautions, and, in event the defendant has failed to sustain said burden, recovery should not be less than the overcharge and not more than three times the overcharge, or not less than $ 25 nor more than $ 50, whichever is the greater. Bowles v. Goebel, D.C., 58 F.Supp. 686; Bowles v. Krodel, 7 Cir., 149 F.2d 398; Bowles v. Hasting, 5 Cir., 146 F.2d 94; Bowles v. Ammon, D.C., 61 F.Supp. 106.
Since in this case the defendants have proven that their actions were not willful but they failed to prove that the practicable precautions intended by the Act were not exercised, the Court believes that the maximum penalty provided by the Act should not be imposed. There must be some distinction made in the imposition of the penalty where the actions were both willful and without the exercise of practicable precautions, and where the actions were only the result of failure to exercise practicable precautions. Bowles v. Hasting, 5 Cir., 146 F.2d 94.
The Court, therefore, believes that judgment should be entered in favor of the Office of Price Administration on behalf of the United States against each of the defendants, Edward Sago and Julia Sago, for double the amount of the overcharge together with the costs of this proceeding.
It is necessary that the defendants realize in the future that they must comply with all rules and regulations adopted by the Office of Price Administration, which would govern the leasing of premises in the Pittsburgh Rental-Defense Area, and it is, therefore, the belief of the Court that the request of the Government for injunctive relief should be granted.
An appropriate order directing the entry of judgment and the granting of the injunctive relief will be filed with this opinion.
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