Madison Park Corporation v. Bowles
| Citation | 140 F.2d 316 |
| Decision Date | 27 December 1943 |
| Docket Number | No. 33-40.,33-40. |
| Parties | MADISON PARK CORPORATION v. BOWLES, Price Adm'r, and seven other cases. |
| Court | U.S. Temporary Emergency Court of Appeals Court of Appeals |
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S. Harold Shefelman, of Seattle, Wash., and Albert Olsen, of Spokane, Wash. (W. L. Grill, of Seattle, Wash., on the brief), for complainants.
Nathaniel L. Nathanson, Asst. Gen. Counsel, and Sol M. Linowitz, Chief, Court Review, Rent Branch, both of Washington, D. C. (George J. Burke, Gen. Counsel, Thomas I. Emerson, Associate Gen. Counsel, and Harry H. Schneider, Charles P. Liff, and Betty L. Brown, Attys., all of Office of Price Administration, all of Washington, D. C., on the brief), for respondent.
Before MARIS, Chief Judge, and MAGRUDER and LAWS, Judges.
Heard at Seattle September 20, 1943.
In these cases, eight owners of rental properties in Seattle, Washington, complain against Maximum Rent Regulation No. 20 (redesignated Rent Regulation for Housing, 8 F. R. 7322, June 1, 1943), issued by the Price Administrator pursuant to the Emergency Price Control Act of 1942. This regulation, issued May 27, 1942, and effective on June 1, 1942, established maximum rents for housing accommodations, other than hotels and rooming houses within the Puget Sound Defense-Rental Area at the rentals in effect on April 1, 1941. The area covered by the Regulation consists of the County of Kitsap and parts of the Counties of King and Pierce. Within this area are three principal cities: Seattle, Tacoma and Bremerton. No complaint is made against the Regulation as it applies to property owners in Kitsap and Pierce Counties, the challenge of the Regulation being made only as it affects property owners in King County, where Seattle is located.
With one exception, complainants are owners of apartment houses. The exception is an owner of lots which are rented to tenants who place temporary dwellings on them for occupancy during the terms of their leases. All complainants make substantially the same objections to the validity of the Regulation; there contend that if the Regulation is in conformity with the Act, the Act itself is unconstitutional.
Complainants contend that in establishing April 1, 1941, as the maximum rent date, the Administrator rolled back rents in Seattle to a point where landlords did not have the benefit of normal increases of rents which occurred after defense activities began in the Area, and that this was in violation of the Act which authorizes the Administrator to prevent only excessive increases. The Administrator, on the other hand, contends that the increases that took place where not normal and maintains, in addition, that the Act may not be construed as limiting him to the prevention only of excessive increases in rents, but if he finds inflationary tendencies exist in an area, he has the right to establish a maximum rent date which in his judgment will bring about stabilization, regardless of whether such maximum rent date allows for any increases in rents after defense activities commenced.
In Section 1(a) of the Price Control Act. 50 U.S.C.A.Appendix § 901(a), we find the language principally relied upon by complainants. It reads as follows: "* * * the purposes of this Act are, to stabilize prices and to prevent speculative, unwarranted, and abnormal increases in prices and rents; to eliminate and prevent profiteering, hoarding, manipulation, speculation, and other disruptive practices resulting from abnormal market conditions or scarcities caused by or contributing to the national emergency; to assure that defense appropriations are not dissipated by excessive prices; * * * to prevent hardships * * * which would result from abnormal increases in prices; * * *."
This section deals exclusively with purposes of the Act, making no reference to the manner in which the Price Administrator shall bring about accomplishment of such purposes. It is in Section 2, 50 U.S. C.A.Appendix § 902, that the conditions under which the Administrator shall act are set forth. Subsection 2(a) deals with commodities and provides that "whenever in the judgment of the Price Administrator * * * the price or prices of a commodity or commodities have risen or threatened to rise to an extent or in a manner inconsistent with the purposes of the Act, he may * * * establish such maximum price or * * * prices as in his judgment will be generally fair and equitable and will effectuate the purposes of this Act." Subsection 2(b) deals with rents. Its language is slightly different. It provides that: "Whenever in the judgment of the Administrator such action is necessary or proper in order to effectuate the purposes of this Act," he shall declare the necessity for stabilization or reduction of rents in any defense-rental area, and make recommendations with respect to their stabilization or reduction; then, if within sixty days, in his judgment they have not been stabilized or reduced as recommended, he may establish such maximum rent or rents as in his judgment will be generally fair and equitable and will effectuate the purposes of the Act. In selecting the date on which to base maximum rents, he is directed to consider the time when "defense activities shall have resulted or threatened to result in increases in rents for housing accommodations in such area inconsistent with the purposes of this Act."
It will be noted that the Administrator is limited, both with respect to fixing maximum prices of commodities and with respect to stabilizing or reducing rents, to the establishment of such prices or rents "as in his judgment will be generally fair and equitable and will effectuate the purposes of this Act." There is no express provision in this language, or in the language of Section 1(a) setting forth the purposes of the Act, which compels the Administrator to allow normal increases in prices or rents. But it is contended that since the Act expresses a purpose "to prevent speculative, unwarranted, and abnormal increases in prices and rents" and since it contains other similar language, all relating to abnormal and excessive prices, it follows by necessary implication that the Act does not authorize interference with small or normal increases.
There can be no question that the Court must be guided by the elementary rule of construction, that wherever possible, the language will be interpreted so as to give effect to the objects sought to be accomplished. The intent may be gathered from words used, but in some instances the Court must look beyond isolated words to the dominating purposes of the legislation.1 Here the object of the legislation clearly is to combat the inflationary effects of increasing prices and rents, in the interest of sound economy throughout the nation during and after a period of war. As we previously have pointed out,2 one of the recognized principles of economics is that in time of threatened inflation, any increase of price, however small, tends to accelerate the upward surge which brings about inflation. Sound economics, it is true, also requires that industry, business and investors be given generally fair and equitable treatment, so that their enterprises will not suffer unduly and possibly be abandoned. But there is a clear distinction between dealing with investors on a fair and equitable basis, which permits reasonable profits, and dealing with them on a basis which, by permitting increases in prices and rents during a period when there are heavy demands in the market, enables them to make exorbitant profits. Increased volume of sales in commodities and increased occupancy of demised premises in many instances will permit fair and reasonable returns to business and investors without any rise in prices.3
Under these circumstances, should this Court imply from a stated purpose "to prevent speculative, unwarranted, and abnormal increases in prices and rents" and the use of other similar language the requirement that "normal" increases must be permitted? It seems to us obvious that we should not. The accomplishment of a declared purpose to prevent abnormal increases in prices and rents may be attained, indeed in some instances may only be attained when no increases whatever in charges are permitted after inflationary pressure is threatened in an area. The program of stabilization well might be defeated if the Administrator were required, in every instance in which he established a price or rent level, to give effect to what were claimed to be normal increases in charges. Where the language used does not clearly compel it, courts will not read into legislation mandates which may prove disastrous to the objects sought to be attained. In this instance, the language of the law not only does not compel the result contended for by complainants, but appears to compel otherwise. The statute refers not only to "abnormal" increases, but also to those which are "unwarranted". If "normal" increases in prices and rents are found to be not warranted in a community because they threaten to cause inflation, it follows in logical sequence that they must be suppressed. Indeed in an area strongly affected by abnormal defense and war activities, even very small increases in prices and rents may be described as abnormal.4
Our views in this connection are supported by the unlikelihood that Congress would impose upon the Price Administrator, whose duties otherwise are most difficult and complex, the intolerable, if not impossible, burden of fairly and reasonably distinguishing between what would constitute normal and what would constitute abnormal increases in prices and rents after defense activities had begun in an area. This is particularly so when in many instances the granting of so-called normal increases would not be required for the protection of investors, but would simply make possible the yielding of large increases in profits. It need not be...
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