Scheide v. Porstmann

• Citation: 66 F. Supp. 483
• Decision Date: 10 May 1945
• Docket Number: No. 2498.,2498.
• Parties: SCHEIDE et ux v. PORSTMANN et ux.
• Court: United States District Courts. 4th Circuit. United States District Court (Maryland)

66 F. Supp. 483

SCHEIDE et ux v. PORSTMANN et ux.

No. 2498.

District Court, D. Maryland.

May 10, 1945.

Wylie L. Ritchey and G. Dudley Iverson, both of Baltimore, Md., for plaintiff.

Francis T. Peach and John L. Askew, both of Towson, Md., for defendant.

CHESNUT, District Judge.

In this case the plaintiffs as tenants are suing the defendants, as landlords, for treble damages for an alleged overcharge for rent. The suit is based on the Emergency Price Control Act, 50 U.S.C.A.Appendix, § 901 et seq. The authority given for the particular suit is to be found in section 925(e).

On October 23, 1942, the landlords, by a written instrument, leased to the tenants "four and one-half acres, improved with an eight-room cottage known as Horn Road, Perry Hall, Md.", for the period of one year beginning on the first day of November 1942, and ending on the 31st day of October, 1943, at $35. a month rent, the premises not to be used for purposes other than those of a farm and dwelling, the agreement to continue in force from term to term after the expiration of the term provided and that the parties or either of them can terminate the same at the end of the term above mentioned or any part thereof by giving at least thirty days notice thereof in writing. The tenancy has continued until the present time; but on March 8, 1945, the tenants filed this suit for the recovery of overcharges. They specified the overcharge to have been at the rate of $10. a month for the preceding twelve months, and they claim treble this amount plus reasonable attorney's fees and costs as determined by the court. The plaintiffs' case is based on the contention that under the Emergency Price Control Act, and the Regulations thereunder, the maximum rent charge for the leased property was $25. a month. The defense to the suit is based on the contention that while the house on the property was rented on April 1, 1941 (the critical date for the freezing of rents in this case) at the rate of $25. a month, the adjoining land consisting of about four acres, was not included in the rental to the tenant at that time and therefore the $25. rate was not the maximum legal rate for the property now rented to the tenants.

The case has been submitted for decision by the court (without a jury) after hearing witnesses in open court and arguments of counsel. From the evidence in the case I find the following facts:

1. The property involved consists of four and one-half acres of ground improved by an eight-room dwelling with modern conveniences, situated in Baltimore County a few miles northeast of the Baltimore City limits and near the Belair Road. The house faces on a side road known as Horn Road and is known as No. 1 Horn Road. The house stands back from the road about fifty feet with a lawn in front, and one or two small out-buildings in the immediate rear. The main acreage of the land is in the rear of the house.

2. The plaintiff, Scheide, is and has been for some years past employed by the Glenn L. Martin Company in an important clerical capacity at a salary at the rate of about $3500 a year. The defendant Porstmann, is a locomotive engineer who has been in the service of the Baltimore & Ohio Railroad for many years past.

3. The defendants (landlords) bought this property in 1938 with the intention of occupying it as their home as soon as circumstances would permit. The capital cost with improvements shortly added, was about $4500 or more. At the time the property was purchased the house was occupied by the owner but the land had been rented by him to another person.

4. In March 1939 the landlords placed the house in the hands of a rental agent. He advertised the property for rent in a newspaper describing it as follows: "$25. Mo. Belair Road near Overlea, 7 rooms modern cottage 4½ acres. Ham. 5514." Mr. and Mrs. Porstmann, the owners, say that this advertisement was never called to their attention and they did not know that the agents had advertised the land with the house for rental. The agent, who is now deceased, obtained tenants at the rental of $25. a month. They were a Mr. and Mrs. Haeckel. Mr. Haeckel is now in the military service and did not testify as a witness. Mrs. Haeckel testified that there was no written lease for the property, but Mr. and Mrs. Porstmann testified that there was a written lease which merely described the property rented as No. 1 Horn Road, without any reference to the land. There was also to some extent corroboration of their testimony with respect to the existence of a written lease by their daughter. Mrs. Haeckel testified that the agent told her she could use the land but in fact she made no use of any of it other than the front yard, a small chicken house in the immediate rear, and a small lot nearby as a Victory garden. These tenants occupied the property until about October 1942. During their tenancy the land was not in fact used by any one. The agents for the landlord collected the monthly rent. The monthly receipts therefor were offered in evidence. Many of them recite the payment of rent for the "house". None of them makes any mention of the land as included.

5. In accordance with section 7 of the O.P.A. Rent Regulations for "housing", with amendments to March 29, 1945, (1388.-1181 — Document No. 44936), the landlord filed a registration statement for the house. This statement described the house as No. 1 Horn Road, consisting of a single unit with eight rooms with two units therein. The rent on April 1, 1942 was $25. a month. The equipment and services were specified in detail on the printed form. No mention was made of the land. Under the item on the form reading "List any other services", the specification was "None". A copy of this registration statement was presumably mailed to the tenants by the Administrator as required by section 7 of the Regulations above referred to. There is no evidence that the tenants at any time took exception to the description of the property rented.

6. During the tenancy of the Haeckels the landlords learned that the tenants had sublet a portion of the house, as they contended without permission, and for this and other assigned reasons, Mr. Porstmann filed a petition with the O.P.A. Administrator asking an increase in the rental. No mention was made in this statement of the land as a part of the premises rented. Permission to increase the rent was denied by the Administrator without assigning reasons therefor.

7. After Mr. and Mrs. Haeckel vacated the property in 1942 the landlords executed a lease to the plaintiffs as tenants, describing the property as four and one-half acres improved with an eight-room cottage known as No. 1 Horn Road, Perry Hall, Md., for $35. a month. Before making this new lease Mr. Portsmann consulted a reputable attorney of Baltimore County informing him that previously the house without the land had been rented at $25. a month, and asking his advice whether the new lease to Scheide at $35. a month was proper. The attorney advised him that it would be. Section 7 of the Regulations above referred to provides that upon renting to a new tenant the landlord shall file a notice with the O.P.A. Office on the form provided therefor, and containing the new tenant's statement that the Regulation has been exhibited to him and that the rent for such accommodations is in conformity therewith. Mr. Porstmann did not comply with this Regulation if it is applicable in the particular case.

8. On February 13, 1945 the landlords gave written notice to the tenants of termination of the lease on March 31, 1945, and apparently sent a copy of this notice to the O.P.A. Office. See Regulations s. 6(a). The tenants at first refused to vacate the property in accordance with the notice, contending that the lease could not be terminated prior to the expiration of the current year, and it appears litigation thereon is now pending in Baltimore County. But at the trial here Mr. Scheide testified that he had now secured other property and expected to vacate the premises shortly. In the meantime, however, it appears that the tenants had obtained a copy of the original registration statement for the house with rental at $25. a month and had questioned or were proposing to question the amount of the rental.

9. The Emergency Price Control Act, 50 U.S.C.A.Appendix, § 942(f), defines housing accommodations as follows:

"The term `housing accommodations' means any building, structure, or part thereof, or land appurtenant thereto, or any other real or personal property rented or offered for rent for living or dwelling purposes * * * together with all privileges, services, furnishings, furniture, and facilities connected with the use or occupancy of such property."

The Regulations s. 13(6) contain a similar definition for housing accommodations. An important question in the case is whether the four acres of land included in the lease to the Scheides was land "appurtenant" to the house within the meaning of this definition and under the facts of the case. The principal issue of fact is whether the lease to the first tenant at $25. a month included the four acres of ground in the rear of the house. On this issue I find from the preponderance of evidence in the case, that it did not include the land.

The Emergency Price Control Act and the Regulations thereunder in general with respect to maximum rentals, have recently been upheld by the Supreme Court of the United States as valid emergency war legislation. Bowles v. Willingham, 321 U.S. 503, 64 S.Ct. 641, 88 L.Ed. 892. And the Emergency Court of Appeals provided for in the Act has likewise so upheld them in a number of decisions. Northwood Apts., Inc., v. Brown, Adm'r, Em.App., 137 F.2d 809 (dealing with the Baltimore Defense Housing Area); Hillcrest Terrace Corp. v. Brown, Em.App., 137 F.2d 663; Taylor v. Brown, Em.App., 137 F.2d 654; Lakemore Co. v. Brown, Em.App., 137 F.2d 355; Bibb Mfg. Co. v. Bowles, Em.App., 140 F.2d 459; ...