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WOODS v. PALUMBO

September 17, 1948

WOODS, Housing Expediter,
v.
PALUMBO



The opinion of the court was delivered by: MURPHY

Petitioner seeks under Section 206(b) to enjoin respondent from alleged violation of Sections 206(a), 209(a) of the Housing and Rent Act of 1947, as amended. *fn1" Respondent moved to dismiss the complaint and restraining order issued pursuant thereto on the ground that no claim was stated upon which relief could be granted, and lack of jurisdiction of the subject matter and the person. Respondent contended that, since prior to filing the complaint herein eviction proceedings had been commenced in the Pennsylvania State Court, this court was without jurisdiction by virtue of 28 U.S.C.A. § 2283

We denied the motion to dismiss because the complaint stated an enjoinable violation. Porter, Price Administrator v. Lee, 1946, 328 U.S. 246, 66 S. Ct. 1096, 90 L. Ed. 1199; Porter Price Administrator v. Dicken, 1946, 328 U.S. 252, 66 S. Ct. 1094, 90 L. Ed. 1203; Fleming Temporary Controls Administrator v. Rhodes, 1947, 331 U.S. 100, at pages 104, 107, 67 S. Ct. 1140, 91 L. Ed. 1368.

 From the answer filed, stipulations at the hearing on the merits, and the testimony, we find the parties are in agreement as to the facts. The difference between them is one of law.

 It was agreed that the parties named were tenants by virtue of written leases; that the defendant was the landlord of the housing accommodations in question; that the tenants had complied with their obligations under the respective leases as to payment of rent; and that the premises involved are defense-rental area housing accommodations.

 It was also agreed that on April 16, 1948, the respondent landlord sent to the tenants involved a notice to vacate, purporting to comply with Section 209(a)(5) of the Act. However, on the same date a letter was sent to the respective tenants by counsel for the respondent, the same counsel that represented him throughout these proceedings. It will be noted that whereas the letter from the landlord stated that: 'Possession is requested pursuant to Section 209(a)(5) * * * which relates to the withdrawing of the housing accommodations from the rental market'; the letter sent by counsel for respondent stated inter alia:

 'Mr. Palumbo regrets the giving of this notice, however, he desires to sell the property and that can be best done by being able to sell a house without occupancy.

 'If there are any questions on this matter may I suggest that you consult an attorney or the local rent office because it would be unfortunate if it will become necessary to institute legal proceedings, involving an ejectment by the Sheriff which will only mean added expenses and costs to you.'

 The defendant was bound by the act of his counsel. Lenox Clothes Shops, Inc. v. Commissioner, 6 Cir., 1943, 139 F.2d 56, at page 59; Oscanyan v. Winchester Repeating Arms Co., 1880, 103 U.S. 261, at page 263, 26 L. Ed. 539; Clark & Wilson Lumber Co. of Delaware v. McAllister, 9 Cir., 1939, 101 F.2d 709, at page 713.

 When the matter was called to the attention of the Area Rent Director, notice was sent June 8, 1948, to the landlord advising him that he was attempting to evict contrary to the provisions of Section 209 aforesaid. Notwithstanding said notice, respondent on July 7, 1948, commenced eviction proceedings in the State court, following which the complaint herein involved was filed.

 Respondent testified that he was engaged in the business of buying and selling real estate; that he purchased the property and thereafter attempted to sell it; that he could not sell it with the tenants occupying it. In answer to a question by the court, 'Do you want to remove them as tenants in order to make it (the property) more readily salable?' respondent answered, 'Yes'. Although there was nothing to that effect in the answer respondent later testified that if he was unable to sell the property he intended to convert it from two into four apartments.

 Section 209 of the Act permits an action or proceeding to recover possession of controlled housing accommodations for various reasons, e.g., Section 209(a)(2) when the landlord seeks in good faith to recover possession for his immediate and personal use and occupancy, or that of a member or members of his immediate family; Section 209(a)(3) where 'the landlord has in good faith contracted in writing to sell the housing accommodations to a purchaser for the immediate and personal use and occupancy as housing accommodations by such purchaser;' section 209(a)(4) 'the landlord seeks in good faith to recover possession of such housing accommodations (A) for the immediate purpose of substantially altering or remodeling the same for continued use as housing accommodations, or for the immediate purpose of conversion into additional housing accommodations, and the altering, remodeling, or conversion cannot practically be done with the tenant in occupancy, and the landlord has obtained such approval as may be required by Federal, State, or local law for the alterations, remodeling, or any conversion planned, or (B) for the immediate purpose of demolishing such housing accommodations'; Section 209(a)(5) 'the landlord seeks in good faith to recover possession of such housing accommodations for the immediate purpose of withdrawing such housing accommodations from the rental market, and such housing accommodations shall not thereafter be offered for rent as such'; Section 209(c) 'No tenant shall be obliged to surrender possession of any housing accommodations pursuant to the provisions of paragraph (2), (3), (4), (5), * * * of subsection (a) until the expiration of at least sixty days after written notice from the landlord that he desires to recover possession of such housing accommodations for one of the purposes specified in such paragraphs.'

 Obviously respondent did not comply with the provisions of subsection (a)(2, 3), (4)(A) or (4)(B), and did not comply with subsection (c). Respondent contends that he did comply with the provisions of subsection (a)(5) and subsection (c). But the letter written by his counsel and by which respondent is bound negatives the existence of the good faith requirement.

 Respondent's notice advised the tenants he intended to remove the housing accommodations from the rental market, and that they would not thereafter be offered for rent as such. He had a right to do so providing he was acting in good faith. If, as his counsel stated, he desired to 'sell the property and that could be best done by being able to sell a house without occupancy', or as respondent stated that he wanted to remove the tenants in order to make the property more salable, the proceeding purporting to be under Section 209(a)(5) was not in good faith because there was no bona fide intention to remove the housing accommodations from the rental market.

 He could obtain possession for sale, only by compliance with the conditions of Section 209(a)(3). If he desired to increase the number of apartments, and this could not be done while the premises were occupied, respondent could obtain ...


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