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BURNS v. DONOHUE

July 29, 1948

BURNS
v.
DONOHUE et al.



The opinion of the court was delivered by: MADDEN

MADDEN, District Judge.

This is treble damage action for overceiling charge of rent commenced under the Emergency Price Control Act, Title 50 U.S.C.A.Appendix, § 901 et seq., and in particular, under Sec. 205(e), Title 50 U.S.C.A.Appendix, § 925(e). The matter was tried by the court.

 The suit was instituted by the individual plaintiff, Delia Burns, for $ 5,586, being three times the alleged overcharge of $ 1,862 for the rental of premises 13 South Maryland Avenue, Atlantic City, New Jersey.

 The facts briefly are these. On May 7, 1946, the defendant, Catherine E. Donohue, by written lease (Exh. P. 2) leased premises 13 South Maryland Avenue, Atlantic City, New Jersey, to plaintiff, Delia Burns, for a term beginning May 20, 1946 and ending September 30, 1946, for a price or rental of $ 2,100.

 The premises in question consists of a furnished dwelling containing fourteen rooms, two baths and lavatory, and the lease, among other things, provides as follows: 'and the said Lessee does hereby covenant and agree to and with the said Lessor * * * not to * * * use nor permit any part thereof to be used for any other purpose than rooming house and apartment.'

 On February 21, 1947, the area rent director, after complaint to him and hearings thereon, made an order (Exh. P. 1) decreasing the maximum legal rent from $ 484.60 per month to $ 55 per month, effective as of May 7, 1946, and directed the landlord, Catherine E. Donohue, to refund the difference to the tenant within 30 days of the date of the order. The defendant landlord did not comply and the tenant instituted this suit.

 At the conclusion of the plaintiff's case the court dismissed the action as to the defendant, Frank J. Donohue, there being no connection between that defendant and the transaction.

 There are many arguments raised in defense of the suit, one of which the court feels disposes of the question and will, therefore, limit the discussion to that particular issue, which is, that under the facts of the case, the plaintiff is not qualified to institute the suit because she rented the premises for use in trade or business. The statute, Sec. 925(e), giving the right to institute treble damage action, provides:

 'If any person selling a commodity violates a regulation, order, or price schedule prescribing a maximum price or maximum prices, the person who buys such commodity for use or consumption other than in the course of trade or business may, within one year from the date of the occurrence of the violation, except as hereinafter provided, bring an action against the seller on account of the overcharge. * * *

 'For the purpose of this section the payment or receipt of rent for defense-area housing accommodations shall be deemed the buying or selling of a commodity, as the case may be.' (Italics ours.)

 It is agreed on both sides that Atlantic City, New Jersey was in defense area and the facts in the case, coupled with the lease itself, leads the court to the conclusion that plaintiff rented the premises in question for the purpose of operating a boarding house, and that she did, during the term of such rental, publicly advertise and operate the premises as a boarding house.

 Does this disqualify her from maintaining this suit? As can be seen by the Act one who is overcharged in price for a commodity can maintain an action individually against the guilty party, and that rent is a commodity, according to the terms of the Act, is not open for dispute. However, does the proviso in the Act, 'the person who buys such commodity for use or consumption other than in the course of trade or business may, within one year * * * bring an action * * * ,' disqualify the tenant under this penal statute? Does the rental for re-rental in a boarding house operation take plaintiff outside the bounds of the statute?

 In the case of Bowles v. Chew, D.C., 53 F.Supp. 787, 790, speaking of this section of the Act, Judge Goodman said:

 'Congress said: 'the person who buys such commodity for use or consumption, other than in the course of trade or business may bring an action * * * .' (Emphasis supplied.) Thus is described the person who may sue. If the buyer of merchandise is not in the above described category, then 'the Administrator may bring such action * * * on behalf of the United States.' Thus is described the circumstances whereby the Administrator is empowered to sue. The Senate Report on the ...


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