142 F.2d 808 (9th Cir. 1944), 10346, Taylor v. United States

Docket Nº:10346.
Citation:142 F.2d 808
Case Date:April 26, 1944
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit

Page 808

142 F.2d 808 (9th Cir. 1944)




No. 10346.

United States Court of Appeals, Ninth Circuit.

April 26, 1944

Rehearing Denied June 2, 1944.

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Walter & Brown, of Oakland, Cal., for appellant.

Frank J. Hennessy, U.S. Atty., and Valentine C. Hammack, Asst. U.S. Atty., both of San Francisco, Cal., for appellee.

Before GARRECHT and Healy, Circuit Judges, and McCORMICK, District judge.

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McCORMICK, District Judge.

Stanley Taylor appeals from a judgment of the District Court following his conviction by the jury on sixteen counts in an information containing twenty-one counts of alleged violations of Sections 4(a)1 and 205(b)2 of Public Law 421, 77th Congress, 56 Stat. 23, known also as the Emergency Price Control Act of 1942.

Appellant was sentenced to six months' imprisonment and fined in the aggregate sum of $950. The appellant will also be referred to in this opinion as the defendant. as the defendant.

Appellant's conviction was for specifically alleged violations of Maximum Rent Regulation 28, 3 issued pursuant to Section 2(b) 4 of the Emergency Price Control Act of 1942, 50 U.S.C.A.Appendix, § 902(b). This rent regulation became effective in the City and County of San Francisco on July 1, 1942, and pursuant to Section 1388.1804(a) of the regulation 5 the maximum rents for housing accommodations

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in San Francisco were 'frozen' at the rent charged for such housing accommodations on March 1, 1942. The regulation provided, however, for another basic rental in certain established instances where there was a substantial change in the housing accommodations between March 1, 1942 and July 1, 1942, the effective date of the regulation. In other words, provision is made in situations where between March 1, 1942 and July 1, 1942, a housing accommodation was change from unfurnished to fully furnished, or from fully furnished to unfurnished, or was 'substantially changed * * * by a major capital improvement as distinguished from ordinary repair, replacement and maintenance' the maximum rent should then be the first rent for such accommodations after such change. 6

Numerous errors are assigned by appellant. Grouped, they are: Insufficiency of the evidence, either factually or legally, to establish guilt or to support the verdict or judgment; denial by the court 'to quash the proceedings;' refusal of the court to charge the jury in certain particulars requested; rulings upon testimony and evidence during the trial; prejudicial statements and conduct by the court and by the United States Attorney; failure of the court to inform defendant, who was not represented by counsel, of his legal rights; the verdict and judgment and all proceedings in the court below are violative of the Constitution of the United States and, particularly, of Amendment Five, and that Emergency Price Control Act of 1942 and Maximum Rent Regulation Number 28 issued thereunder are unconstitutional.

From the record before us it substantially appears that defendant and his wife during all applicable times were owners in joint tenancy of an apartment house at 530 Larkin Street, San Francisco, California. The property had been purchased August 16, 1941, having been for some time previous in the hands of a trustee in bankruptcy.

The defendant operated the apartment house, and since about September 1, 1941, Mrs. Evelyn Flynn has been throughout employed by the defendant as manager in charge of the apartment house on a salary.

In a document prepared by the defendant and submitted by him to the Office of Price Administration for official cognizance in connection with a hearing respecting violations of rent control regulations about November 2, 1942, which document without objection was received in evidence in the court below and which document is relied upon by both parties to this appeal, it appears that as compared to rents charged for fully furnished apartments in defendant's property on March 1, 1942 (the rent 'freeze' date applicable), the tenants living in the same quarters alleged in the different counts of the information, to-wit, in October and November, 1942, were compelled by the defendant to pay charges for occupancy of their respective apartments ranging from $2 to $15 more monthly than the rentals established as of March 1, 1942. The increase so appearing amounted to a total differential of between $300 and $400 monthly over the rents for the respective apartments on the 'freeze' date in the San Francisco Bay defense-rental area.

In each of the counts upon which the jury rendered the verdict against the defendant he was charged with unlawfully, knowingly and willfully demanding and receiving higher rents after the effective date of the regulations than the specifically alleged rents charged for the same apartments on March 1, 1942.

Appellant interposed in the District Court and now argues in this court upon the record before us two principal defenses: First, that between March 1, 1942 and July 1, 1942, the regulation's effective date, he had sold the furniture in the apartment house to his manager, Mr. Flynn, and as a consequence there had been effected a change in the housing accommodations from fully furnished to unfurnished apartments. Thus the claim is made that appellant by his contractual arrangement with Mrs. Flynn was entitled under the regulation 7 to base its future rents upon the first rent charged after the Taylor-

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Flynn deal from fully furnished housing accommodations to unfurnished ones. appellant also and secondly contends that between March 1, 1942 and July 1, 1942, he had made major capital improvements to the respective housing accommodations in the Larkin Street property, i.e., a complete rehabilitation of the apartments specified in the respective counts of the information as distinguished from ordinary repairs, replacements and maintenance and was therefore entitled to invoke Section 1388.1804(d) of Regulation 28. Neither contention under the record before us has any merit.

In relation to the asserted sale of the furniture to appellant's manager the record shows that prior to the establishment of rent control in the San Francisco Area Taylor was apprised by representatives of the Price Administration at a meeting of landlords and was fully aware at that time that rent control was presently to be governmentally applied in the San Francisco Bay Area. On June 6, 1942, he and Mrs. Flynn entered into a written 'Agreement of Sale' wherein it was stated that Taylor sold the furniture and furnishings in the apartment house to Mrs. Flynn for $15, 000, with a down payment of $1, and in which it was further provided that the purchase price which was to be turned over to the defendant should consist solely of charges to be thenceforth imposed upon tenants of the apartments for the use of the furniture and furnishings during their occupancy of apartments. By this agreement the utilization of the furniture and furnishings by Mrs. Flynn for any purpose was restricted to the Larkin Street apartment house of defendant. None of the furniture or furnishings was moved from the premises and the physical aspects in the apartment house remained unchanged after execution of the sale agreement.

Moreover, provisions were inserted in the June 6, 1942 agreement by a supplementary document dated July 31, 1942, forbidding the removal of furniture from the Larkin Street premises until such time as the purchase price was fully paid, and it was also provided that the agreement could not be assigned without first obtaining the consent of Taylor. The supplementary instrument also contained this illuminating and significant paragraph: 'It is further agreed that if due to governmental interference or for any other cause the purchaser (Evelyn Flynn) finds it impossible to carry out the terms of the purchase, that the return of the furniture and furnishings then in her legal possession to the sellers thereof, shall constitute full payment of any claim against her by the sellers on account of contract of sale of June 6, 1942, or as amended.'

It thus appears that the transaction between defendant and Mrs. Flynn reflected by the two instruments of agreements originating as the record shows it did in an environment of opposition and resistance by the defendant to oncoming rent control in San Francisco, is more in the nature of a contrivance to circumvent the operation of the Emergency Price Control Act in the Larkin Street apartment house than of a forthright sale of the furniture and furnishings in such property.

It is conceded that the only monies paid on the furniture transaction consisted of those amounts assessed individual tenants for the use of the furniture and furnishings and included within their increased charges for the occupancy of their apartments.

Subsequent to the effective date of the regulations each of appellant's tenants received statements and receipts 8 setting forth each factor of the tenant's increased cost for the occupancy of the apartment. Such items, previously included and absorbed in the rent charged for the apartments, but after July 1, 1942, specified in the statements and receipts given to tenants, included water, gas, electricity, use of furnishings, insurance and inspection of furnishings, cleaning, administration and maintenance, and the 'basic rent' for the apartment. Upon such statements and receipts delivered to tenants there appeared the cautionary statement: 'Remember this when checking your O.P.A. registration blank.'

Maximum Rent Regulation Number 28, Section 1388.1813, paragraph (6) defines the term 'housing accommodations' as follows: 'The term 'housing accommodations' means any building, structure, or part thereof, or land appurtenant...

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