Fulton R. Gordon Inc. v. Schram, 316.

• Decision Date: 19 November 1945
• Docket Number: No. 316.,316.
• Citation: 44 A.2d 662
• Parties: FULTON R. GORDON, Inc., v. SCHRAM et al.
• Court: D.C. Court of Appeals

44 A.2d 662

FULTON R. GORDON, Inc.,

v.SCHRAM et al.

No. 316.

Municipal Court of Appeals for the District of Columbia.

Argued Oct. 8, 1945.

Decided Nov. 19, 1945.

Rehearing Denied Nov. 30, 1945.

Appeal from the Municipal Court for the District of Columbia, Civil Division.

Action by Jack Schram and Edna S. Schram against Fulton R. Gordon, Inc., and Fulton R. Gordon for double the amount of rent allegedly collected in excess of rent ceilings. Directed verdict in favor of individual defendant and against corporate defendant, and corporate defendant appeals.

Reversed with instructions.

Marcus Borchardt, of Washington, D. C., for appellant.

Louis Rothschild, of Washington, D. C., for appellees.

Before RICHARDSON, Chief Judge, and CAYTON and HOOD, Associate Judges.

CAYTON, Associate Judge.

Appellees (plaintiffs below) sued Fulton R. Gordon, Inc., a corporation, and Fulton R. Gordon, individually, for double the amount of rent allegedly collected in excess of the ceiling fixed by the District of Columbia Emergency Rent Act, Code 1940, § 45-1610. The trial court directed a verdict in favor of Fulton R. Gordon and against the corporate defendant in the sum of $3,038. ¹ The corporation appeals.

Plaintiffs alleged that on March 1, 1943 they leased from defendant Gordon, acting as agent for the corporation, a dwelling house, for the term of one year at $200 per month; that on March 5, 1944 they entered into a new lease for the term ending July 15, 1944 at the same amount (less a $5-per-month credit allowed for the nonuse of a garage); that on the statutory freeze date of January 1, 1941 the rent for the premises was $107 per month, which automatically became the maximum rent ceiling; that they paid and defendants collected $1,519 in excess of the legal rent ceiling. Defendants admitted that the corporation owned the premises and that defendant Gordon acted as its agent; but they claimed that the furnishings were the property of Mrs. Dillon, a former tenant; that plaintiffs leased these furnishings from Mrs. Dillon, defendant Gordon acting as agent in collecting rentals thereon; that in both transactions Gordon was agent for the corporation as owner of the premises, and agent for Mrs. Dillon as owner of the personal property.

The evidence showed that Mrs. Dillon had rented the property in its unfurnished state at $107 per month and later wished to move, leave her furniture on the premises and obtain a tenant for the property as a furnished dwelling; that she obtained the owner's consent to this arrangement and inserted an advertisement in a local newspaper; that in response thereto Mrs. Schram (one of the plaintiffs) agreed to rent the house, furnished, for $200 per month, and made a deposit of $200 with Mrs. Dillon; that on March 1, 1943 at the office of defendant Gordon a lease was signed wherein Gordon was named as lessor, Mrs. Schram as lessee and at the foot of the instrument were affixed the signatures of the lessor and lessee, and also that of Mrs. Dillon; that the lease described the property demised as premises ‘5312-28th Street, N. W. and furnishings, as per list of furniture which has been signed and approved between Mrs. Schram and Mrs. Dillon.’ Together with the lease there was offered in evidence a three-page list of furniture also dated March 1, 1943 and bearing the signatures of Mrs. Dillon and Mrs. Schram. The renewal lease of March 5, 1944 contains the same description of the property, to which is added ‘with the understanding that Mrs. Dillon is to take out the rug in the living room and put in another to take its place.’

By his testimony Mr. Gordon attempted to establish the defense that he was acting as dual agent and that the lease had been executed by him as agent of the owner of the house, and as agent of Mrs. Dillon, the owner of the furniture. The court ruled the evidence inadmissible, because it covered an arrangement made out of plaintiffs' presence. The defense then attempted to show that the monthly rent was collected by Gordon and the manner in which he remitted it. This evidence was also excluded, the court holding that it was an attempt to vary the contents of the lease by parol evidence. These rulings seemingly furnished the pattern for others having the same general effect. Thus we find that the trial judge rejected evidence as to the ownership of the furniture; as to the preliminary agreements and discussions as to payments for the house and furniture; as to Gordon's employment as agent for Mrs. Dillon; as to whether Gordon was to transmit monthly payments to Mrs. Dillon; and as to whether Mrs. Dillon received any payments for the use of the furniture after the lease was executed. In short, the trial judge drew the curtain on every attempt to show the true relationship of the three parties, what the monthly payments covered, and who received them. We think the rulings were erroneous.

If the landlord had rented the premises to plaintiffs furnished, then proof of the ownership of the furniture would probably be irrelevant; for a landlord may not increase the rent without prior approval of the Rent Administrator. ² But if plaintiffs were renting only the unfurnished premises from the landlord, and renting the furniture from a third person, the landlord would have a valid defense against a claim of violation of the Rent Act (assuming of course that the...