Beatty v. United States

• Decision Date: 06 September 1951
• Docket Number: No. 14198.,14198.
• Citation: 191 F.2d 317
• Parties: BEATTY v. UNITED STATES.
• Court: U.S. Court of Appeals — Eighth Circuit

191 F.2d 317 (1951)

BEATTY v. UNITED STATES.

No. 14198.

United States Court of Appeals Eighth Circuit.

September 6, 1951.

John Connolly III, Des Moines, Iowa (Connolly, O'Malley & McNutt, Des Moines, Iowa, on the brief), for appellant.

Cecil H. Lichliter, Sp. Litigation Atty., Office of the Housing Expediter, Washington, D. C. (Ed Dupree, Gen. Counsel, and Leon J. Libeu, Asst. Gen. Counsel, Washington, D. C., on the brief), for appellee.

Before SANBORN, WOODROUGH and JOHNSEN, Circuit Judges.

JOHNSEN, Circuit Judge.

The United States brought suit, under the provisions of the Housing and Rent Act of 1947, as amended in 1949, 50 U.S.C.A., Appendix, § 1895, against the owner-landlord of an apartment building in the rent-controlled Des Moines (Iowa) Defense Rental Area, 12 F.R. 4331, 14 F.R. 1570, for injunction, restitution and damages, based on the making of alleged rental overcharges from four tenants for the months of March and April, 1949. The trial court granted an injunction against any further rental overcharges as to the particular property or any other housing accommodation owned or controlled by the landlord and also against violation generally of any provision of the Act; made an order of restitution in favor of the tenants for the amounts of the overcharges found; and gave judgment in damages to the United States for twice the amount of these overcharges. The landlord has appealed.

The first contention urged for reversal is that the amounts collected from the tenants during the period involved did not constitute rent but were damages allowed by the statutes of Iowa for a tenant's unlawful occupancy of property, and so were outside the operation of the Housing and Rent Act.

Code of Iowa, 1946, § 562.2, I.C.A., provides that "* * * a tenant or his assignee willfully holding over after the term, and after notice to quit, shall pay double the rental value thereof during the time he holds over to the person entitled thereto."

The term "willfully", as used in this section of the statute, has been held by the Iowa Supreme Court to mean "deliberately, with bad or evil purpose, contrary to known duty. * * * the disregard of the rights of others knowingly and with a stubborn purpose, or contrary to a known duty or without authority, and careless whether he have a right or not." Nelson v. Deering Implement Co., 241 Iowa 1248, 42 N.W.2d 522, 527. Cf. also Stewart v. Burlington & M. R. R. Co., 32 Iowa 561, 563. In short, for purposes of the statute, the term has the significance of obstinately or defiantly, with lack of reasonable regard on all the circumstances for the question of legal right or wrong.

The trial court held that the evidence did not bring the tenants' occupancy here within this definition, so that the statute could not possibly have any application, even if it might properly otherwise be entitled to operation as against the rent-control policy and prescription of the Housing and Rent Act.

It was undisputed that defendant had served each of the tenants with a 60-day notice of his desire to obtain possession and of termination of their tenancies, on the ground of his alleged intention to make substantial alterations or a remodelling of the premises. This he followed with a 30-day notice of termination and a 3-day notice to quit, under the requirements of Iowa law. Before the time fixed for quitting had arrived, however, he unsuccessfully sought to interest the tenants in buying the property from him for a cooperative housing venture. Later he advised them that he would not compel them to get out by the notice date, if they would pay him damages under the Iowa statute, instead of rent, during such period as they might stay over until they were able to locate satisfactory accommodations.

He requested each of them to sign a stipulation which was legally captioned as if it were a part of a forcible entry and detainer suit against the particular tenant in the municipal court of Des Moines. The stipulation contained a recitation of the facts as to the notices given, an admission that the landlord was entitled to possession and that the tenant was wrongfully holding over, an agreement to vacate the premises "on or before the .. day of ......., 1949," and a consent to the entry of a judgment of ouster "at any time after the .. day of ......., 1949." Three of the four tenants involved signed such a stipulation, with the date provisions as set out above left blank, and they also made endorsement of approval, on a purported judgment entry based on the stipulation. No action had then been, or as far as the record shows ever actually was, commenced against these tenants. When the fourth tenant refused to sign the stipulation, a forcible entry and detainer suit was commenced against him but this was later withdrawn and voluntarily dismissed, with the tenant allowed to continue in occupancy, the same as the other three.

All of the tenants remained in the property until around the 1st of July, 1949. The amount which it had been agreed orally between the landlord and each tenant, under the circumstances above set out, that the tenant should pay while he remained in possession of the premises, was $75 per month, which was approximately $14 more than the rent previously paid and thus not "double the rental value thereof", or which the Iowa damage statute provided. The tenants thereafter paid in this manner the sum of $75 on the first day of March and the first day of April, respectively, in advance, for a month's occupancy, in accordance with the oral agreement which they had made. Some time during April, however, the landlord's attorney notified the tenants that commencing May 1st they would not be required to pay the sum of $75 as damages but only the same amount as they had been paying prior to March 1st, which was the maximum legal rent that had been fixed for the apartments.

Under the Iowa Supreme Court's definition of what constitutes "willfully holding over after the term", as set out above, it is difficult to see how it can be contended that we are entitled to declare that the trial court was clearly erroneous in holding that the facts found did not constitute "willful conduct on the part of said tenants such as could justify a court to apply the double rent penalty."

The trial court further held, however, that even if the situation had been one to which the Iowa statute could have applied, it would not be possible for it to have operation under federal rent control, because any state statute "authorizing the collection of double rent from tenants holding over is superseded by the Federal Housing and Rent Act." Since the Iowa statute was in any event inapplicable to the factual situation found by the court, we do not think it necessary or appropriate to pass upon that question here.

Whether such a damage or penalty statute, administered as a judicial sanction in a case of obstinate withholding of premises — not involving a situation of personal agreement and permitted occupancy on the basis thereof, as here — conflicts with the federal rent-control act has been the subject of divergent opinion. See Stovall v. Gardner, 203 Miss. 527, 36...