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January 25, 1950


The opinion of the court was delivered by: GOURLEY

This is a civil action brought by the Housing Expediter against the defendant, Charles J. Schwartz. The preceding is instituted under and pursuant to the provisions of Sections 205(a) and 205(e) of the Emergency Price Control Act of 1942, as amended, 50 U.S.C.A.Appendix, § 901 et seq.

Jurisdiction of this action is conferred upon the court by Sections 205(a) and 205(c) of the Act.

 The defendant violated the provisions of Section 4(a) of the Act, as amended by the Stabilization Extension Act of 1944, 50 U.S.C.A.Appendix, § 901 et seq. Rents were charged in excess of the maximum rent regulation (8 F.R. 7322) as provided for housing accommodations in the Erie Defense Rental Area.

 The maximum legal rent for the premises was $ 25.00 per month. The defendant charged and received from May 1, 1945 to June 30, 1946, and from August 1, 1946 to August 31, 1946, inclusive, rental in the amount of $ 40.00 per month, the total overcharges during said period being $ 225.00.

 The Expediter demands:

 (a) Judgment in favor of the United States and against the defendant for overcharges received during the month of August, 1946.

 (b) Defendant be directed to make restitution to the tenants.

 The premises were rented by the defendant in response to an advertisement which related to a six room house and ten acres of land. The defendant required the tenants to execute two leases; one related to the dwelling house on a lot 100 x 150 feet, at a rental of $ 25.00 a month, and the other to ten acres of land which adjoined the dwelling house, at a rental of $ 15.00 per month.

 Considerable difference of opinion exists as to whether the two leases were executed prior to the time that tenants took possession of the premises, or whether they were executed three to four weeks subsequent thereto. It does not make any material difference when the leases were executed since the premises were, in part, registered with the Area Rent Director as a dwelling unit and four acres of land, at a monthly rental of $ 25.00.

 The defendant contends:

 (a) The lease which relates to ten acres of land was not controlled by the rent regulations since the premises were leased as farm lands and for pasture purposes.

 (b) In addition thereto the defendant was advised by his counsel of record, who was then acting as Chief Rent Attorney for the Erie County Defense Rental Area, that it was lawful for him to lease said ten acres as lease-land and not as services adjunct to the dwelling. (Counsel for the defendant in his brief makes this positive representation to the Court. It was not developed at trial.)

 No extended discussion appears necessary to support the proposition that exceptions in a statute are to be strictly construed and that one claiming the exemption has the burden of proving that he is entitled to it. Walling v. General Industries Co., 6 Cir., 155 F.2d 711, 712, affirmed 330 U.S. 545, 67 S. Ct. 883, 91 L. Ed. 1088; Phillips, Inc., v. Walling, 324 U.S. 490, 65 S. Ct. 807, 89 L. Ed. 1095, 157 A.L.R. 876; Smith v. Porter, 8 Cir., 143 F.2d 292, 294; Schmidt v. Emigrant Industrial Sav. Bank, 2 Cir., 148 F.2d 294.

 Regardless of whether the burden is on the defendant in this case to prove the land is exempt or whether it is on the Housing Expediter to prove that the land is not farm land and is subject to control, the acreage herein involved was definitely not a farm and the tenants were not farming tenants within the contemplation of the Regulation.

 The additional acreage which had been uncultivated for some time was of little value. It is of little significance in this case whether the land was or was not of value. If the rental of the house was tied-in-with, or conditioned upon a rental of the land, it constituted a subterfuge and evasion of the Regulation even if the land had value. United States v. DePorceri, 2 Cir., 161 F.2d 526; Anchor Liquor Company v. United States, 10 Cir., 158 F.2d 221; Coffin-Redington v. Porter, 9 Cir., 156 F.2d 113; Woods v. Edwards, D.C.E.D. Mo., 74 F.Supp. 534; Edwards v. Woods, 8 Cir., 168 F.2d 827; Rosenfeld v. United States, D.C.E.D. S.C., affirmed 4 Cir., 167 F.2d 222.

 Section 13(a)(6) of the Housing Regulation defines 'housing accommodations' as any building, structure or part thereof, or land appurtenant thereto, or any other real or personal property rented or offered for rent for living or dwelling purposes.

 The housing accommodations subject to the regulation therefore included the ten acres as land appurtenant thereto. The maximum rent for the premises having included both the dwelling house and the land, rental could not be charged except upon application of the landlord and authorization of the Area Rent Director pursuant to Section 5 of the Regulation. Thierry v. Gilbert, 1 Cir., 147 F.2d 603; Bowles v. Meyers, 4 Cir., 149 F.2d 440, 441.

 Defendant did not avail himself of the procedure provided by law until after the expiration of the renting of the premises by the tenants who had possession thereof. The defendant's charge of $ 40.00 a month was $ 15.00 in excess of the maximum legal rent regulation, and constituted an overcharge.

 Defendant, through his counsel, claims that he had placed absolute reliance on the advice given to him while his present counsel was acting as Chief Attorney for the Erie Rental Defense Area, which was given sometime during the year 1942.

 The Act provides, inter alia, that the Administrator may not institute an action, and if such action has been instituted, the Administrator shall withdraw the same (1) if the violation arose because the person who violated the Act relied upon or acted upon the written advice and instructions of the Administrator or any Regional Administrator, or Director of the Office of Price ...

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