Henderson v. Kimmel

• Decision Date: 23 October 1942
• Docket Number: No. 2049.,2049.
• Citation: 47 F. Supp. 635
• Parties: HENDERSON, Administrator, Office of Price Administration, v. KIMMEL.
• Court: U.S. District Court — District of Kansas

47 F. Supp. 635

HENDERSON, Administrator, Office of Price Administration, v. KIMMEL.

No. 2049.

District Court, D. Kansas, Second Division.

October 23, 1942.

Talbot Smith, Chief, Civil Litigation Branch, Office of Price Administration, of Washington, D. C. (David Ginsburg, Gen. Counsel, and Brunson MacChesney, Asst. Gen. Counsel, both of Washington, D. C., Jerome Walsh, State Attorney for Missouri, of Kansas City, Mo., Taylor Sandison, State Enforcement Attorney, of St. Louis, Mo., Harry W. Jones, Chief, Appellate Briefing Branch, and Wm. R. Brown, Abraham Glasser and Harry Shniderman, Attys., Office of Price Administration, all of Washington, D. C.), for plaintiff.

Austin M. Cowan, of Wichita, Kan. (Grey Dresie and Willard M. Glasco, both of Wichita, Kan.), for defendant.

Before PHILLIPS, Circuit Judge, and HOPKINS and SAVAGE, District Judges.

PHILLIPS, Circuit Judge.

Leon Henderson, as Administrator of the Office of Price Administration,¹ brought this action against Temperance Kimmel seeking both a preliminary and a permanent injunction enjoining Kimmel from directly or indirectly demanding or receiving rents in excess of those established by Maximum Rent Regulation No. 10² (7 Fed.Reg. 4069); directly or indirectly threatening to exclude or attempting to exclude R. D. Boyd and Mrs. R. D. Boyd, or any other tenants, from possession of any housing accommodations in violation of Regulation No. 10; directly or indirectly bringing, maintaining, prosecuting, or continuing any action to evict the Boyds, or any other tenants, from any housing accommodations in violation of Regulation No. 10; and from committing or continuing any acts, practices, or omissions in violation of any regulation, requirement, or order relating to rent issued by the Administrator pursuant to the Emergency Price Control Act of 1942, 50 U.S.C.A. Appendix § 901 et seq.³

Kimmel filed an answer and counterclaim in which she attacked the constitutionality of the Act and Regulation No. 10 and sought a preliminary and permanent injunction enjoining the plaintiff from enforcing against her the provisions of the Act, and from interfering with the use and occupancy of her premises, and with her right to invoke the jurisdiction of the state courts and pursue the remedies given her by the statutes of the State of Kansas, and suspending the penal provisions of the Act until she could test the constitutionality of the Act, and, in the alternative, that the court decree that the Administrator appoint appraisers to appraise the property of Kimmel and others similarly situated, and fix a fair, reasonable, and compensatory rental.

Thereupon, a three-judge court, duly constituted under 28 U.S.C.A. § 380a, convened and heard the applications for preliminary injunctions.

Affidavits were offered in behalf of the Administrator and Kimmel.

On March 2, 1942, the Administrator, having found that defense activities had resulted in increases in the rents for housing accommodations in Sedgwick County, Kansas, inconsistent with the purposes of the Act, pursuant to § 2(b) thereof, designated Sedgwick County as a defense-rental area. He recommended that within 60 days rents in the county should be stabilized and reduced by state or local regulation (7 Fed. Reg. 1684). On May 27, 1942, after the expiration of the 60-day period, the Administrator found that his recommendation of March 2, 1942, had not been complied with and thereupon he issued Regulation No. 10. It became effective on June 1, 1942, in Sedgwick County, Kansas,⁴ and froze rents in the Wichita area at July 1, 1941, figures.

Kimmel owns an apartment building containing eight apartments, located at 236 South Hydraulic Avenue, Wichita, Kansas. On July 1, 1941, she rented four of such apartments at rentals of $35 per month each, and three at rentals of $37.50 per month each. She lives in one of the apartments and gives most of her time to taking care of the apartments. Raymond D. Boyd, an inspector of spot welding at one of the Boeing plants, occupies one of the $35 apartments. On June 8, 1942, he tendered Kimmel the sum of $17.50 in payment of rental for the 15-day period beginning June 8, 1942, the rent being payable on the 8th and 23rd days of each month. The rent for the preceding month had been $45 per month. Kimmel refused to accept the rental and demanded the sum of $22.50. On June 11, 1942, Kimmel agreed to accept the sum of $17.50, but thereupon served notice on Boyd to quit the premises on June 26, 1942. On June 23 and 24, Boyd made offers to pay the rental of $17.50 for the period beginning June 23 and ending July 7, but both offers were rejected. Kimmel offered to accept four days rent on the basis of $35 per month for the period between June 22 and June 26. On June 27, 1942, Kimmel served Boyd with a three-day notice to quit the premises. On July 1, 1942, Kimmel filed a complaint in the City Court of Wichita for recovery of the apartment occupied by Boyd. On July 6, 1942, the matter came on for hearing. On July 9, 1942, the City Court gave judgment for Kimmel, and on the following day, Boyd received a copy of a writ of restitution which ordered him to vacate the premises immediately. Boyd moved for a new trial on July 13, 1942, and on July 14, 1942, the City Court vacated the judgment on the ground that the notice to terminate the tenancy was insufficient.

The Administrator instituted the instant suit on July 15, 1942. On July 16, 1942, Judge Hopkins granted the Administrator's application for a temporary restraining order, which was extended by further order until the hearing on the applications for preliminary injunctions. The matter came on for hearing before the three-judge court on August 27 and 28, 1942. At the conclusion of the hearing, the court awarded a preliminary injunction against Kimmel as prayed for by the Administrator and gave the parties leave to file written briefs.

The affidavits established that the fair and reasonable value of the apartment building and the furniture therein is $22,500; that the maximum annual rent fixed under Regulation No. 10 for the apartments is $2,950; that the operating expenses, including taxes, upkeep, and obsolescence is $2,786.44, leaving a net annual income of $163.56, exclusive of the use of one apartment occupied by Kimmel; that since July 1, 1941, there has been an increase in upkeep costs as follows: labor 50%, wall paper 25%, paint 12%, and oils 33 1/3 %; that real estate taxes from July 1, 1941, to July 1, 1942, increased 16 per cent in the Wichita area; that it has been the custom and practice in Wichita for a number of years to charge a lower rental for apartments and houses during the months of June, July, and August than during the remaining nine months in the year; that Kimmel, without avail, sought relief from the alleged confiscatory schedule from the Rent Administration Office of Wichita.

Kimmel has not sought relief pursuant to the provisions of §§ 203 and 204 of the Act or Procedural Regulation 3 (7 Fed.Reg. 3936).

Section 1 (a) of the Act declares it to be in the interest of the national defense and security and necessary to the effective prosecution of the war, inter alia, to stabilize prices and to prevent speculative, unwarranted, and abnormal increases in prices and rents; to eliminate and prevent profiteering, speculation, and other disruptive practices resulting from abnormal market conditions or scarcities caused by or contributing to the national emergency, to assist in securing production of commodities and facilities, and to prevent a post emergency collapse of values, and that such, among other purposes stated, are the objectives of the Act.

Section 1(b) of the Act limits the time the Act shall remain in force.

Section 2(a) of the Act authorizes the Administrator to establish maximum prices for commodities which in his judgment will be fair and equitable and will effectuate the purposes of the Act.

Section 2(b) of the Act provides that whenever, in the judgment of the Administrator, such action is necessary or proper in order to effectuate the purposes of the Act, he shall issue a declaration setting forth the necessity for, and recommendations with reference to, the stabilization or reduction of rents for any defense-area housing accommodations within a particular defense-rental area; that if within 60 days after the issuance of any such recommendations, rents for any such accommodations within such defense-rental area have not, in the judgment of the Administrator, been stabilized or reduced by state or local regulation, or otherwise, in accordance with the recommendations, the Administrator may, by regulation or order, establish such maximum rent or rents for such accommodations as, in his judgment, will be generally fair and equitable and will effectuate the purposes of the Act.

Section 2(b) further provides that the Administrator shall ascertain and give due consideration to the rents prevailing for such accommodations or comparable accommodations, on or about April 1, 1941, or if, prior or subsequent to that date, defense activities shall have resulted or threatened to result in increases in rents for such accommodations in such area inconsistent with the purposes of the Act, then on or about a date, not earlier than April 1, 1940, which in the judgment of the Administrator does not reflect such increases.

Section 2(b) further provides that the Administrator shall make adjustments for such relevant factors as he may determine and deem to be of general applicability in respect to such accommodations, including increases or decreases in property taxes and other costs.

Section 2(c) of the Act provides that any regulation or order may be established in such form and manner, may contain such classifications and differentiations, and may provide for such adjustments and reasonable exceptions as, in the judgment of the Administrator, are necessary or proper to effectuate the purposes of the Act.

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