Kaplan v. Arkellian.

• Decision Date: 26 June 1943
• Parties: KAPLAN v. ARKELLIAN.
• Court: New Jersey District Court

32 A.2d 725

KAPLAN

v.ARKELLIAN.

Second District Court of Paterson, New Jersey.

June 26, 1943.

Action at law by Milton Kaplan against Mardich Arkellian to recover damages in pursuance of the Emergency Price Control Act because of excess rent collected. On defendant's motion to strike plaintiff's state of demand and dismiss action for want of jurisdiction.

Motion denied.

Lawrence Diamond, of Paterson, for plaintiff.

Heyman Zimel, of Paterson, for defendant.

William E. Sandmeyer, of Newark, for Prentiss Brown, Administrator of Office of Price Administration.

SIBERMAN, District Judge.

This is an action at law instituted by the plaintiff, Milton Kaplan, against the defendant, Mardich Arkellian, to recover damages in pursuance to Section 205(e) of the Emergency Price Control Act of 1942, 50 U.S.C.A.Appendix, § 925(e). The facts as set forth in the state of demand allege that, on or about September 14, 1940, the defendant rented to the plaintiff under a month to month tenancy, certain housing accommodations at an agreed monthly rental of $30; that for the month of August, 1942, the defendant landlord demanded and received from the plaintiff the sum of $33 or an excess of $3 over and above the maximum legal rent. Damages are then claimed by the plaintiff in the sum of $50 together with reasonable attorney's fees and costs of suit. The second count of the state of demand claims the sum of $3 as moneys had and received by the defendant landlord for the month of July, 1942. This count likewise alleges that the sum of $33 was collected for that month by the defendant.

This cause is now before the Court upon motion of the defendant to strike the plaintiff's state of demand and dismiss the action on the ground that the Second District Court of the City of Paterson is without jurisdiction to hear and dispose of the purported cause of action.

The memorandum of the defendant sets forth the following queries:

1. Did said Court have jurisdiction to enforce penalties arising under the laws of the United States?

2. Does the Second District Court of the City of Paterson have jurisdiction to enforce penalties arising under the laws of the United States?

3. Is the action brought under Section 205(e) of the Emergency Price Control Act of 1942 an action for a penalty?

In deciding this matter the Court shall first discuss question number three, which to the Court is essentially the beginning point.

Section 205(e) of the Emergency Price Control Act, under which the case at bar is brought, provided as follows: ‘If any person selling a commodity violates a regulation, order, or price schedule prescribing a maximum price or maximum prices, the person who buys such commodity for use or consumption other than in the course of trade or business 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 attorney's fees and costs as determined by the court. For the purposes of this section the payment or receipt of rent for defense-area housing accommodations shall be deemed the buying or selling of a commodity, as the case may be. If any person selling a commodity violates a regulation, order, or price schedule prescribing a maximum price or maximum prices, and the buyer is not entitled to bring suit or action under this subsection, the Administrator may bring such action under this subsection on behalf of the United States. Any suit or action under this subsection may be brought in any court of competent jurisdiction, and shall be instituted within one year after delivery is completed or rent is paid. The provisions of this subsection shall not take effect until after the expiration of six months from the date of enactment of this Act.’ (Italics mine.)

The plaintiff contends that a consumer action brought under Section 205(e) of the Emergency Price Control Act is not an action for penalty and cites the leading case of Huntington v. Attrill, 1892, 142 U.S. 657, 13 S.Ct. 224, 227, 36 L.Ed. 1123. The court in that case said: ‘Penal laws, strictly and properly, are those imposing punishment for an offense committed against the state, and which, by the English and American constitutions, the executive of the state has the power to pardon. Statutes giving a private action against the wrongdoer are sometimes spoken of as penal in their nature, but in such cases it has been pointed out that neither the liability imposed nor the remedy given is strictly penal.’ (Italics mine.)

In Brady v. Daly, 1899, 175 U.S. 148, 20 S.Ct. 62, 44 L.Ed. 109, which was an action to recover a minimum amount of damages fixed by statute, the Court, citing Huntington v. Attrill, supra, emphasized that the action was brought by the person damaged and not by the public. In reaching its decision the Court said at page 154 of 175 U.S., at page 64 of 20 S.Ct., 44 L.Ed. 109: ‘The further provision in the statute, that those damages shall be at least a certain sum named in the statute itself, does not change the character of the statute and render it a penal instead of a remedial one. The...