Woods v. Benson Hotel Corporation, 13894.

• Decision Date: 11 November 1949
• Docket Number: No. 13894.,13894.
• Citation: 177 F.2d 543
• Parties: WOODS, Housing Expediter, v. BENSON HOTEL CORPORATION.
• Court: U.S. Court of Appeals — Eighth Circuit

177 F.2d 543 (1949)

WOODS, Housing Expediter, v. BENSON HOTEL CORPORATION.

No. 13894.

United States Court of Appeals Eighth Circuit.

November 11, 1949.

Hugo V. Prucha, Assistant General Counsel, Office of the Housing Expediter, Washington, D. C. (Ed. Dupree, General Counsel, and Cecil H. Lichliter, Special Litigation Attorney, Office of the Housing Expediter, Washington, D. C., were with him on the brief) for appellant.

Rolf Ueland, Minneapolis, Minn. (Marcus G. Sundheim, Minneapolis, Minn., was with him on the brief), for appellee.

Before GARDNER, Chief Judge, and WOODROUGH and COLLET, Circuit Judges.

COLLET, Circuit Judge.

This appeal involves the question of whether the Hotel Leamington was decontrolled by the Housing and Rent Act of 1947, 50 U.S.C.A.Appendix, § 1881 et seq., which became effective July 1, 1947. This Act was subsequently amended, effective April 1, 1948, but no change was made in the provisions which are controlling here.

On January 21, 1948, upon a showing made in support of an application for a preliminary injunction, such an injunction was issued enjoining the appellee-defendant from charging greater rentals in the Hotel Leamington than the ceiling prices theretofore fixed for that dwelling accommodation called for. There was an appeal from that order. This court in Benson Hotel Corporation v. Woods, 168 F.2d 694, affirmed the issuance of the temporary injunction upon the ground that at that stage of the proceedings, under the facts disclosed by the record, the issuance of the injunction was discretionary with the trial court and would not be disturbed. Our opinion expressly reserved any decision on the merits. Thereafter the defendant filed a motion for an order dissolving the preliminary injunction, contending that the hotel had been decontrolled by the Act of July 1, 1947.¹ The plaintiff also filed a motion for summary judgment to require defendant to refund excessive rentals collected from July 1, 1947, to and including March 31, 1948, upon the premise that the housing accommodation was under control from July 1, 1947, until April 1, 1948. Upon a consideration of these motions, the trial court dissolved the preliminary injunction and denied plaintiff's motion for summary judgment by an order entered on September 7, 1948. See D.C., 81 F.Supp. 46. The cause was heard on the merits and upon such hearing the action was dismissed by an order made November 16, 1948. From the judgment of dismissal, this appeal is prosecuted. The facts are fully set out in the memorandum opinion accompanying the order of the trial court, reported in 81 F.Supp. 46, and need not be repeated at length.

The material facts found by the trial court are that the Hotel Leamington is a ten-story building, occupying a city block in Minneapolis, Minnesota; that it has always been commonly known in that community as a hotel; that it has always been operated for both transient and resident, or permanent, guests. It consists of a total of 338 units, all of which, except 190, had concededly been decontrolled on or before July 1, 1947. These 190 units which are alone involved in this action each consist of a room or group of rooms occupied by a single guest, family, or group. Each of them comprises a kitchen and bath and one or more additional rooms. In these 190 units all of the services which are ordinarily or customarily provided by hotels in the community in which the Hotel Leamington was situated were either furnished or were available to the occupants upon demand within a reasonable time. On June 30, 1947, seven of these 190 units received the regular maid service; 31 of them were furnished with linens and laundry service; 190 of them received telephone and secretarial or desk service; 66 of them were completely furnished with furniture and fixtures; 115 of them were partially furnished, i. e., with cooking stoves, electric refrigerators, and window curtains; all received bellboy service; some received both furniture and fixtures and linen service; some were fully furnished and received maid service; and still others were both furnished and received maid service and also linen service. The significant fact involved on this appeal is that none of the units were being furnished all of the services mentioned in the Act of July 1, 1947; but all of such services were, as heretofore stated, available to each and every one of the occupants of these 190 units upon demand within a reasonable time.

The findings of the trial court of the foregoing facts are presumptively correct and should not be set aside on appeal unless clearly erroneous. And due regard must be given to the opportunity of the trial court to judge the credibility of the witnesses. Woods v. Western Holding Corporation, 8 Cir., 173 F.2d 655, 656. The record contains adequate evidentiary support for the trial court's findings. In fact the findings of fact are not seriously challenged.

The Housing Expediter contends that the trial court was in error in dissolving the preliminary injunction and dismissing the action on the merits because during the period from July 1, 1947, until April 1, 1948, the original regulations, as amended August 8, 1947,² and the Expeditor's interpretations of the 1947 Act were still in effect; under that regulation the hotel must have furnished and the tenants actually utilized all of the services named in the Act;³ and since the hotel did not do so, it was, according to that regulation, under control until the regulation was changed April 1, 1948. He argues that the regulation was not an unreasonable interpretation of the Act and should be given effect during the time of its existence as an administrative construction of the Act. By his amended regulation of April 1, 1948, and the Housing and Rent Memorandum No. 44, April 19, 1948, the Expediter changed his previous construction of the Act of July 1, 1947. Under the regulation of April 1, 1948, and the interpretation thereof, he construes the Act of July 1, 1947, to mean that it does not require that all of the services mentioned in that Act be provided in order that the hotel be decontrolled, but that it is sufficient for decontrol in that regard if enough of the services of the nature of those described in the Act are provided to constitute customary services usually supplied in establishments commonly known as hotels in the community.⁴ He further concedes by the amendment of his regulations made on April 1, 1948, and his interpretations thereof, that it was not the intention of Congress by the Act of July 1, 1947, to require that all of the services mentioned in the Act must actually have been utilized in order to have been "provided", but that it was sufficient under the Act if those services were "available" to the guest with or without extra cost.⁵

The Expediter argues that his original regulations and interpretations should be given effect because administrative regulations and interpretations of an Act of Congress should be given great weight. We readily concede that the Housing Expediter's interpretation of the Act of Congress should be given great weight. But it must be as readily conceded that the construction of and interpretation of a statute as applied to justiciable controversies is a judicial function; and when administrative interpretation and judicial construction conflict, the latter must prevail. Woods v. Petchell, 8 Cir., 175 F.2d 202, 206.

The intent of an Act of Congress may be gathered not only from the language of the Act but also from contemporaneous legislative history. In Woods v. Western Holding Corporation, 8 Cir., 173 F.2d 655, 660, the intent of this same Act was under consideration. We there referred to the legislative history of the Act as reflected by the Committee Report, 173 F.2d loc. cit. 660:

"The Legislative history disclosed by the Congressional Committee report in connection with the 1948 Act reflects the congressional interpretation of the Act of 1947. When the 1948 Act was under consideration, Senator Cain, reporting for the Committee on Banking and Commerce, said, among other things: `One of the difficulties grew out of the issuance by the Housing Expediter of a regulation which substituted the word "including" for the words "such as" used in the Act, in referring to the several types of services used for the purpose of determining what constitutes "customary hotel services." The effect of this regulation, of course, was to require that all the services specified in the law must be present before the housing accommodations were decontrolled. It is submitted this was not the intent of Congress when the 1947 Act was passed. For example, it was not intended that the failure to provide telephone service, or a bellboy, would necessarily prevent an establishment from being decontrolled. It may be fairly said that the intent of Congress was that it was only necessary to see whether the services of the general character specified were available and if the hotel was, in general, a "furnished service establishment," it would be decontrolled.'

"When the 1948 Act was under consideration by Congress, the Acting Housing Expediter was called before the committee considering the bill. Referring to this fact, Senator Cain, in his report, said: `It is entirely likely that the Committee would have recommended further changes in the existing Federal rent-control law but for the fact that during the hearings on this matter, the Acting Housing Expediter agreed to change his instructions and procedures in such a manner as to carry out what the Committee feels was the intent of Congress in adopting the Housing and Rent Act of 1947.'

"Following, and apparently prompted by, the consideration of the 1948 Housing and Rent Act by Congress, the Housing Expediter issued his interpretation of Section 202(c), * * *."

The Expediter's Amended Regulation of April 1, 1948, and his interpretation thereof, dated April 19, 1948, followed this Committee Report...