United States v. Waters, 10479.

• Decision Date: 17 March 1952
• Docket Number: No. 10479.,10479.
• Citation: 194 F.2d 866
• Parties: UNITED STATES v. WATERS et al.
• Court: U.S. Court of Appeals — Seventh Circuit

194 F.2d 866 (1952)

UNITED STATES v. WATERS et al.

No. 10479.

United States Court of Appeals, Seventh Circuit.

March 17, 1952.

Morris A. Haft, Chicago, Ill. (Charles D. Snewind, Chicago, Ill., of counsel), for appellant.

Ed Dupree, Gen. Counsel, Leon J. Libeu, Asst. Gen. Counsel and William A. Moran, all of Washington, D. C., Isadore A. Honig, Special Litigation Atty., Washington, D. C., for appellee.

Before KERNER, DUFFY and SWAIM, Circuit Judges.

SWAIM, Circuit Judge.

This was an action brought by the United States of America under the provisions of the Housing and Rent Act of 1947, 50 U.S.C.A.Appendix, § 1881 et seq., against Joseph Waters and Anthony Trella, as the owners, and Victor J. Kozelka and Frank J. Kozelka, as the agents, of certain housing accommodations located at 4830-4832 West Cermak Road in Cicero, Illinois. The plaintiff alleged violation of the Act in charges made against the four defendants. Victor J. Kozelka, as attorney, entered appearance for himself and for Frank J. Kozelka but neither appeared either pro se or by counsel at any time during the trial.

The complaint alleged that Guido Peri, the tenant in Apartment 1, paid, and the defendants accepted, $40.00 per month rent for an apartment the maximum legal rental on which had been fixed at $36.50 per month, and that Peri was also required to pay, and the defendants accepted, a bonus of $400 as a condition precedent to the occupancy of said apartment. It was also alleged that the defendants required Jerry Simpson to pay a bonus of $200 as a condition precedent to the occupancy of the apartment he rented. The complaint further alleged that Michael Burke, another tenant, paid $115 per month for an apartment the maximum legal rental on which had been fixed at $40 per month, and that the overcharge collected by the defendants on this apartment amounted to $600 during the period in which Burke occupied the apartment.

The District Court found that the alleged overcharges and bonuses paid by the tenants had all been collected and received by Frank J. Kozelka, contrary to the provisions of the Housing and Rent Act of 1947, while Joseph Waters and Anthony Trella were the owners of the premises. The Court also found that during said time Waters and Trella had engaged Victor Kozelka as their agent; that Frank J. Kozelka, acting for and on behalf of Victor J. Kozelka and the owners, Waters and Trella, rented apartments and collected the rentals from the tenants; and that Waters and Trella accepted as tenants the persons placed in occupancy of apartments by Frank Kozelka and accepted the rentals collected by him.

The District Court concluded, inter alia, that the two Kozelkas were the agents of the defendants Waters and Trella; that the defendants Waters and Trella ratified the acts of Frank J. Kozelka in renting apartments and collecting rents therefor; that the defendants Waters and Trella were responsible and liable for the acts of their agents in regard to the renting of the apartments; that the defendants Waters, Trella, Victor Kozelka and Frank Kozelka violated the provisions of the Housing and Rent Act by demanding and receiving rent in excess of the legal maximum rent or by permitting such excess rent to be collected; and that each of the four defendants was jointly and severally liable for the overcharges. The District Court entered a judgment ordering refunds of $400, $200, and $600 paid to the three tenants, Peri, Simpson and Burke, respectively, and enjoining further violations of the Act. From this judgment the defendants Waters and Trella are prosecuting this appeal.

The appellants' principal contentions are that, upon their purchase of the premises here in question, they employed only the defendant Victor J. Kozelka, through whom they had purchased the property, as their agent to manage the building, to rent the apartments therein and to collect the rents therefrom. They insist that they never employed defendant Frank J. Kozelka as their agent; that they did not know that Frank J. Kozelka was renting apartments and collecting rents from the premises; that they did not know of the overcharges and bonuses which he collected; and that they did not receive the same.

As we have pointed out above, the District Court not only found that Waters and Trella had clothed both of the Kozelkas with apparent authority, but also found that they were agents of Waters and Trella. While there is some conflict in the testimony, we are of the opinion that there was sufficient evidence to sustain the finding of the District Court as to the agency of both Victor J. Kozelka and Frank J. Kozelka.

Defendants Waters and Trella purchased the property here in question on May 1, 1948, through Victor J. Kozelka, a real estate agent whose office was located at 2341 Clinton Avenue, Berwyn, Illinois. Frank J. Kozelka was the brother of, and worked with, Victor J. Kozelka. Defendant Trella testified that he left the management of the building up to Waters but admitted that he and Waters had...