Smith v. Sherrard
| Decision Date | 02 December 1953 |
| Docket Number | No. 654,655.,654 |
| Citation | 208 F.2d 180 |
| Parties | SMITH v. SHERRARD. |
| Court | U.S. Temporary Emergency Court of Appeals Court of Appeals |
Donald MacKay, Chicago, Ill., for complainants.
Charles P. Liff, Director, Appeals Branch, Defense Rental Areas Division, Office of Defense Mobilization, Washington, D. C., for respondent.
Before MARIS, Chief Judge, and MAGRUDER and LINDLEY, Judges.
The complaints in these two causes, consolidated for hearing, were filed pursuant to the provisions of Section 408(a) of the Defense Production Act of 1950, as amended, 50 U.S.C.A.Appendix, § 2108(a), to review certain orders of respondent decreasing maximum rents for residential accommodations.
Complainant is stockholder in, president of and agent for 5100 Hyde Park Corporation, the owner and landlord of the two subject housing accommodations located in the City of Chicago, viz., an apartment at 5109 Cornell Avenue leased to Mrs. George Heyman and another at 1623 Hyde Park Boulevard leased to Ray Walker. The essential facts with respect to both apartments are identical and our comments pertain to each unless otherwise indicated.
At the commencement of rent control the maximum rent for each unit was registered as $100 per month, the landlord's registration including painting and decorating as a part of the minimum services included in the maximum rents. Thereafter, on July 28, 1947, new leases were executed and filed with the Housing Expediter, whereby the maximum rent for each unit was increased to $115 per month, as permitted by the applicable statute. On September 25, 1952 an increase in the maximum rents of $15 per month, to $130 per month, was granted by the Area Director, presumably pursuant to the provisions of Section 204(o) of the Housing and Rent Act of 1947, as amended, 50 U.S.C.A.Appendix, § 1894 (o).
On or about November 19, 1952 the tenants filed applications with the Area Director seeking a decrease in rentals on the ground that decorating had been discontinued. The application filed by Heyman stated that for some four years preceding her application all decorating had been done at her expense. Complainant was notified by the Director, on January 14, 1953, that a preliminary investigation indicated that the service of decorating had been discontinued and, unless restored, would result in a reduction of the maximum rents. Complainant was given an opportunity to answer and to present any relevant evidence. In reply to these notices, he denied that there had been any "change in decorating service since March 1, 1942," the maximum rent date. Each reply contained also an assertion that it was the tenant's duty to maintain the apartment "as he got it," reasonable wear and tear excepted, and that the tenants' grievances emanated solely from their own failure to meet this obligation. The record discloses no further evidence offered by complainant and no request for a hearing. Orders were issued on January 22, 1953, effective September 25, 1952, decreasing the maximum rents for each apartment from $130 to $119.50 per month and requiring the landlord to refund all sums collected in excess of $119.50 per month after the latter date.
The complainant filed a protest against each order and deposited in escrow funds sufficient to stay the obligation to refund pending disposition by respondent. The protests were denied May 14, 1953. Each was based on the averments, now renewed in each complaint, that there "was no hearing on the petition and answer to decrease the rents; that Harry Smith was not given an opportunity to put in evidence" tending to disprove the charge of decreasing minimum services and that the order of January 22, 1953 was entered in pursuance of consideration of the tenant's petition and complainant's answer only.
In denying the protests, respondent found that the services of "painting, decorating and interior repairs" were required to be furnished by the landlord, and that, since September 25, 1952, there had been an unauthorized decrease in such services. Although no specific finding appears with respect to complainant's averment of denial of due process of law, a finding on this issue adverse to him is implicit in respondent's orders denying the protests.
As previously noted, no hearing was requested by complainant at any stage of the administrative proceedings. No evidence, either oral or written, was offered by him at any stage. He merely denied the charge made by the tenants. Concededly he has not complied with the provisions of Sections 12 and 35 of Rent Procedural Regulation 3, promulgated July 1, 1952, relative to the grant of an oral hearing. Thus the important question before us, and the only one stressed by complainant, is whether procedural due process requires that an oral hearing be granted to a landlord in every case as a matter of right before a valid order may be entered decreasing maximum rents.
Section 12 of RPR 3 provides, in part: * * *" Section 35 makes like provision for receipt of oral testimony in protest proceedings on a like showing of a need therefor.
Since, on protest, the Director must consider the issues de novo, Dargel v. Barr, Em.App., 204 F.2d 697, these provisions afforded complainant an opportunity for an oral hearing at both the initial and protest stages, conditioned upon his showing that the proceeding could not be expedited on the consideration of written evidence alone. We think this provision is sufficient to satisfy the requirements of procedural due process, which requires only that a hearing be afforded at some stage of the administrative proceeding before the final order of the administrator becomes effective. Yakus v. United States, 321...
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