Everly v. Zepp

• Decision Date: 02 October 1944
• Docket Number: No. 3265.,3265.
• Citation: 57 F. Supp. 303
• Parties: EVERLY v. ZEPP et al.
• Court: U.S. District Court — Western District of Pennsylvania

57 F. Supp. 303

EVERLY v. ZEPP et al.

No. 3265.

District Court, E. D. Pennsylvania.

October 2, 1944.

Herman P. Abramson and S. Regen Ginsburg, both of Philadelphia, Pa., for plaintiff.

Joseph H. Cochran and Nathan Kessler, both of Philadelphia, Pa., for Office of Price Administration.

WELSH, District Judge.

This suit was brought to recover damages, counsel fees and costs under Section 205(e) of the Emergency Price Control Act of 1942, 56 Stat. 23, 50 U.S.C.A.Appendix § 925(e), by reason of the following circumstances:

Charles M. Eismann owned a dwelling house at Ardsley, Pennsylvania, which he leased to Robert Barrett in 1939 at $26 per month, reserving for his own occupancy a room in the rear of the basement. The tenant occupied the premies until June, 1942, paying the rental of $26 per month until March 14, 1942, and thereafter at $30 per month. In June, Barrett vacated the premises, whereupon the landlord leased them to the plaintiff, a brother-in-law of the former tenant who was familiar with the premises, at $33 per month.

In August of 1942, Eismann filed the required rental registration with the Office of Price Administration Rent Area Director, reporting that the rental rate for the premises on March 1, 1942, the basic rental date, was $33 per month. The landlord died December 13, 1942, and the defendants were appointed executors of his estate. They continued to collect the monthly rent of $33 from the plaintiff. In May, 1943, the Rent Area Director advised the defendants that a complaint had been made of the violation of the ceiling price regulations, whereupon defendants remitted to the plaintiff $70 representing excessive rent received for the ten month period subsequent to the plaintiff's tenancy and advised that the rent would thereafter be payable at the rate of $26 per month. They also filed an amended registration with the correct rate.

Section 205(e) provides that a person who has been charged prices in excess of the maximum price or rental fixed under the O. P. A. Regulations "may bring an action either for $50 or for treble the amount by which the consideration exceeded the applicable maximum price, whichever is the greater, plus reasonable attorneys fees and costs as determined by the court."

Plaintiff claims $50 for each of the ten months in which excessive rentals were paid, or $500, plus reasonable attorney's fees and costs. Although some of the excess payments were made to the landlord prior to his death, the plaintiff claims the right to recover therefor from the defendant executors on the ground that the liability of the landlord passed to his estate, and that for the excessive rentals collected by the executors they are directly liable. The defendants contend that the recovery allowed by the Act is a penalty, that no cause of action therefor survived the death of the landlord, and that as executors the defendants are relieved of their own liability by virtue of their good faith and the return of the excessive charges to the plaintiff.

An examination of the law seems to leave no doubt that the recovery allowed by the act is in the nature of damages and is remedial as distinguished from penal. Pratt v. Hollenbeck, 46 Pa. Dist. & Co. R. 657; Kaplan v. Arkellian, 32 A.2d 725, 21 N.J.Misc. 209. It follows that the action might have been maintained against the decedent if he had lived, and that his executors may now be sued for the damages which would have been recoverable from him. Pa. Act July 2, 1937, P.L. 2755, 20 P.S. § 772. We conclude that the landlord and his successors charged and received from the plaintiff rent in excess of the maximum rate permitted under the regulations for ten successive months, and that the defendants are liable under the provisions of the Act.

Having determined the liability of the defendants, a question arises as to the amount of damage to be awarded to the plaintiff. Does the act require the payment of $50 for each of the ten successive overcharges or may we construe the repeated overcharge as arising out of a single transaction and make only a single assessment of the specified amount?

The circumstances of this case suggest certain possible inequities which might arise by a liberal enforcement of the act. If a consumer made a single purchase of 50 separate items of merchandise at prices slightly over the ceiling price, or if he had made many different purchases in the course of a continuing trade, would the seller be liable to pay $50 for each of said violations? And, in the present case, is the Court compelled to award $50 for each of the successive overcharges of the monthly rent? The language of the act is not entirely clear on this point. To award the maximum damages for each single successive payment may penalize an innocent or inadvertent violator and unconscionably enrich the consumer beyond the obvious intent...