499 F.2d 819 (8th Cir. 1974), 73-1765, Williams v. Matthews Co.

Docket Nº:73-1765.
Citation:499 F.2d 819
Party Name:D. C. WILLIAMS et ux., Appellants, v. The MATTHEWS COMPANY et al., Appellees.
Case Date:June 20, 1974
Court:United States Courts of Appeals, Court of Appeals for the Eighth Circuit
 
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Page 819

499 F.2d 819 (8th Cir. 1974)

D. C. WILLIAMS et ux., Appellants,

v.

The MATTHEWS COMPANY et al., Appellees.

No. 73-1765.

United States Court of Appeals, Eighth Circuit.

June 20, 1974

Submitted March 13, 1974.

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[Copyrighted Material Omitted]

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[Copyrighted Material Omitted]

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Sylvia Drew, New York City, for appellants.

H. B. Stubblefield, Little Rock, Ark., for appellees.

Before GIBSON, BRIGHT and STEPHENSON, Circuit Judges.

BRIGHT, Circuit Judge.

D. C. Williams, a black man from North Little Rock, Arkansas, brought this civil action, individually and as a class representative for other black persons, charging defendants with racial discrimination in refusing to sell residential building lots to black people in violation of the Civil Rights Acts of 1870 and 1866 (42 U.S.C. §§ 1981, 1982) 1 and § 804 of the Civil Rights Act of 1968 (42 U.S.C. § 3604). 2 In addition to declaratory and injunctive relief, plaintiff sought compensatory damages and reasonable attorney's fees. Jurisdiction was asserted under 28 U.S.C. § 1343 3 and 42 U.S.C. § 3612. 4

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In dismissing the class action aspects of the case and denying Williams any individual relief, the trial court concluded that the defendants accorded Williams 'special handling' only for the purpose of accomplishing smoothly some integration of their all-white real estate subdivision, Lakewood, and that the defendants refused to sell Williams a real estate lot in pursuance of their valid policy of restricting sale of lots only to 'qualified' building contracts. We reverse and remand.

We think that racial discrimination by the defendants in their real estate operations is shown as a matter of fact and law. The defendants' policy of selling lots only to builders, which, under the circumstances, operated to exclude black persons from acquiring building lots in the real estate subdivision, does not afford and legal justification for defendants' conduct.

I.

The facts relating to defendants' conduct appear without substantial dispute in the record. Although defendants attacked the bona fides of Williams' proposal to purchase real estate, the trial court resolved that issue in Williams' favor in finding that 'Mr. and Mrs. Williams did in good faith attempt to purchase a lot in Lakewood with the intention of building a home valued between $30,000 and $40,000.'

'Lakewood', a large residential subdivision in North Little Rock, Arkansas, is being developed by the defendant-Matthews Company, which holds in trust a number of tracts originally part of the vast land holdings of the late Justin Matthews, Sr. Defendant-John Matthews, the son, is chairman of the board of the company; defendant-James Matthews, the grandson, is president. As was the case with four other Matthews Company subdivisions, none of the 2,000 residential lots in Lakewood were occupied by blacks as of the date of the filing of the complaint. At the trial, John Matthews testified that the company had excluded blacks from its subdivisions as an official policy since 1945, but that this policy had been abandoned in approximately 1965. He admitted that he had never notified the public of this change nor taken any affirmative steps to integrate the Lakewood community.

In March of 1970, Williams initiated his inquiry about purchasing a lot in Lakewood. He and his wife, Dinah, taught in the public school system in Little Rock and, at the time of the suit, jointly earned approximately $16,000 annually. Beginning in September 1969, the Williamses began looking for property upon which to a build a larger home for themselves and their two children. They had built their own home in Glenview (a Negro subdivision in North Little Rock) valued at $25,000, and, as a Korean War veteran, plaintiff had available to him V.A. loans. The couple planned to spend between $30,000 and $40,000 on a new home.

During this time, they looked at property in the Lakewood subdivision where they found a 'for sale' sign posted on each vacant lot. Each sign gave the price and size of the lot and listed the Matthews Company as seller, with its phone number. If a lot had been sold, the sign gave the owner's name. According to the plaintiffs, these signs remained posted up to and after the time their suit was filed on April 29, 1970. Based on their visits to Lakewood, the

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couple decided to inquire further about four particular pieces of property.

On March 16, 1970, the Williamses called to make an appointment at the matthews Company. The next day, they met with Mr. James Matthews, the president of the company, who indicated that he could neither accept nor reject their offer to purchase a lot, but would have to take the matter up with his father, John Matthews, and call them later in the week.

On March 18, 1970, James Matthews called the Williamses and for the first time informed them that the company did not sell lots to individuals, but only to builders. He informed the plaintiff that they might find an approved builder and have him purchase a lot, and further advised the couple that it would be better for them to purchase an already constructed home. He suggested that he might even make his mother's 'villa' available for $60,000. The couple restated their intention of building their own home. No list of builders was furnished to the Williamses by James Matthews nor was any further contact initiated by him or other members of the Matthews Company.

Shortly after this March 18 conversation with James Matthews, plaintiff attempted to contact several of the builders whose names had appeared on signs on other homes in Lakewood. One of the white builders to whom the couple talked indicated that he would go out of business if he built a house in Lakewood for blacks, but offered to build in a black residential area if they wished. A second white builder also refused to build for the Williamses. After these conversations, the couple approached a black builder, Joe Anderson, to visit the Matthews Company on their behalf.

In mid-April, Joe Anderson met with James Matthews and stated his desire to purchase a lot for the Williamses. Matthews stated that Anderson would have to be an 'approved builder' before he could sell a lot to him, but he did not outline any procedures for becoming an approved builder. He informed Anderson that he could not give him any answer on his request until his father, John Matthews, returned from the Orient two months later. At the trial, it appeared from defendants' testimony that the company never had any formal policies or procedures relating to approved builders. According to James Matthews, builders were approved or disapproved by the board of directors, but, according to John Matthews, who was chairman of the board, he had not made any decisions on approving builders for five years and it was his son, James, who made the decisions.

On April 24, 1970, Mrs. Williams contacted James Matthews for the last time. He informed her that he would not sell them a lot and would not give them a decision on letting their builder purchase a lot until John Matthews returned to the country in June. Five days later, the plaintiffs filed this suit.

In defense of the conduct of the Matthews Company, John Matthews introduced into evidence an office memorandum dated February 13, 1970, to demonstrate that the personnel of the Matthews Company contemplated integration of the all-white Lakewood subdivision. This memorandum, while espousing the principle of integration as 'morally right', ordered special treatment of any black person seeking entry into the subdivision, to be handled personally by the senior Matthews, John. 5

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John Matthews, at trial, testified that the corporation could not sell Williams a lot in the subdivision without violating a firm policy to sell lots only to approved building contractors. That policy had allegedly been adopted in late 1969 as a means of insuring an orderly development of the subdivision since approved contractors would undertake prompt construction on those building...

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