Carmelly v. Hanson

• Decision Date: 31 July 1945
• Docket Number: No. 403.,403.
• Citation: 43 A.2d 685,133 N.J.L. 180
• Parties: CARMELLY et al. (BOWLES, Adm'r, Office of Price Administration, Intervener) v. HANSON et al.
• Court: New Jersey Supreme Court

133 N.J.L. 180

43 A.2d 685

CARMELLY et al. (BOWLES, Adm'r, Office of Price Administration, Intervener)

v.HANSON et al.

No. 403.

Supreme Court of New Jersey.

July 31, 1945.

Action by John Carmelly and another against A. Joseph Hanson and another to recover excess rental, attorney's fees, and costs, and $50 on each of six counts for overcharges for rent under the Emergency Price Control Act of 1942, § 205(e), 50 U.S.C.A.Appendix § 925(e), wherein Chester Bowles, Administrator, Office of Price Administration, intervened. From a judgment for plaintiff for excess rentals, attorney's fees, and costs only, plaintiffs and intervener appeal and defendants cross-appeal.

Reversed.

Appeal from Camden City District Court.

May term, 1945, before CASE, BODINE, and PERSKIE, JJ.

Charles A. Rizzi and Joseph Tomaselli, both of Camden, for John Carmelly and Carmelly.

Bryan B. McKernan, of Camden, for Chester Bowles, Adm'r, Office of Price Administration, intervenor-appellant.

John Henry Reiners, Jr., of Camden, for defendants-respondents.

CASE, Justice.

There are appeals by the plaintiffs below and by the intervenor and a cross-appeal by the defendants below from a judgment entered in the Camden City District Court under sec. 205(e) of the Federal Emergency Price Control Act of 1942, effective Jan. 30, 1942, c. 26, 56 Stat. 23, 50 U.S.C.A.Appendix § 901, et seq. Therefore, each party is an appellant and a respondent. Defendants below also represent themselves as counterclaimants, but we find no counterclaim printed in the record of the District Court proceedings and we are unable to consider the merits, or the lower court's disposition, of a claim that is not before us. For clarity we shall refer to the parties by their designation in the court below.

The action grounds in the receipt, by the defendants, of rental in excess, by $2 per month, of the maximum rental allowed by regulations. Plaintiffs sued for the sum of $2, said to have been paid as excess rental on or about July 15, 1942, and for the sum of $300, consisting of $50 per month for the excessive collection of $2 per month rent for each of the months beginning on the fifteenth day of August, September, October, November, December, 1942, and January, 1943, respectively, making a total demand of $302 together with reasonable attorney's fees and costs according to the said act and regulations. Up to and including the month running from February 15 to March 15, 1942, plaintiffs, as monthly tenants, had paid to the defendants, as owners, a monthly rental of $18. On February 15th the owners gave notice to the tenants that the rent would be increased on March 15th to $20 per month and rental at that rate was actually paid by the tenants from March 15, 1942, until and including the month from December 15, 1942, until January 15, 1943.

Meanwhile, on July 1, 1942, the Administrator of the Office of Price Administration made an order fixing the maximum rentals in the area where the property was located at the rentals in force on March 1, 1942. That ruling, as applied to the property of which the plaintiffs were then tenants and the defendants were the owners, fixed a ceiling rental of $18 a month, although there was, on March 1, 1942, and had been since February 15th, the outstanding notice of increase. Defendants placing their own interpretation upon the legal status, filed with the Office of Price Administration, on August 12, 1942, a rental registration which stated that the maximum legal rent on March 1st was $20. The Office, according to practice, forwarded a copy of the registration to the tenants, who, in turn, reported that the maximum rental as of that date was $18. Thereupon the Office called in the parties, had a hearing and determined that the increase in rental was a violation. The defendants immediately made the reduction and offered to refund the total sum of the overcharge in settlement. That offer was refused. The suit followed.

The amount of $50 per month is, of course, a purely arbitrary recovery under the statute. Whether it be penal, punitive or compensatory, it is allowed because of the overcharge of $2 and is to be multiplied by the number of months in which there was a $2 overcharge. The District Court found that the owners had acted in good faith in an honest misunderstanding of the law. The court said: ‘Throughout the course of the trial, I was impressed with the fact that the defendants attempted to comply with rent regulations enforceable in that area and substantially did so. Their honesty and sincerity of purpose cannot...