Fairmac Corp. v. Roberts

67 A.2d 684, 1949 D.C. App. LEXIS 222
CourtDistrict of Columbia Court of Appeals
DecidedJuly 12, 1949
DocketNo. 790
StatusPublished
Cited by2 cases

This text of 67 A.2d 684 (Fairmac Corp. v. Roberts) is published on Counsel Stack Legal Research, covering District of Columbia Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Fairmac Corp. v. Roberts, 67 A.2d 684, 1949 D.C. App. LEXIS 222 (D.C. 1949).

Opinion

HOOD, Associate Judge.

This case is here on petition to review orders of' the Administrator of Rent Control dismissing a landlord’s petitions for increases in rent. The property involved is a part of what is known as McLean Gardens. This development, consisting of apartment buildings and residence halls or dormitories, was erected by Defense Homes Corporation and was first occupied in March 1943. Petitioner, present landlord, purchased the entire development from Defense Homes Corporation in 1947. Only the residence halls are involved here. They consist of nine 'three-story buildings, each containing about 132 rooms. Six buildings are occupied by women and three by men. The rooms are of the furnished non-housekeeping type, are largely of single occupancy, and are supplied with a limited type of hotel service.

A preliminary question is whether the review brought here on a single petition properly includes-all the tenants. The proceedings were commenced by the filing of 1173 petitions with the Rent Administrator. Over five hundred of the tenants were represented by counsel appearing here for the respondents. The other tenants had no representation and took no part in the proceedings. There was a single hearing on all the petitions and although the Administrator issued an order on each petition, the. orders were substantially identical and the proceedings were treated in the Administrator’s office for practical purposes as one case. A single petition for review was filed here, but it specifically stated that it sought review of the orders in the 1173 cases and that a copy of the petition was being served upon each tenant. Under these circumstances we think, the petition for review properly brings before us the orders in all the cases.

The requested increases in rents were sought on the basis that the existing rents are, “due to peculiar circumstances affecting said housing accommodations, substantially lower than the rent generally prevailing for comparable, housing accommodations.” 1 To support this claim of peculiar circumstances the landlord offered evidence that the buildings were erected by Defense Homes Corporation with funds supplied by Reconstruction Finance Corporation; that the purpose of the buildings was to supply housing accommodations to workers engaged directly in the war effort; and that a brochure issued by Defense Homes Corporation described McLean Gardens as '“one of the country’s outstanding residential communities,” with “modest” rentals, and “available only to those who have come to Washington to engage directly in the war, effort.” The present landlord’s general manager, formerly supervisor of management of Defense Homes Corporation, testified that the original rent schedules, which are the existing schedules, were not fixed by Defense Homes Corporation with a view to obtaining a fair return on the investment, but were fixed to fit the pocketbooks of prospective tenants with comparatively modest earnings.

The examiner’s findings, later approved by the Administrator, stated:

“5. That the petitioner has requested an adjustment of the maximum'rent ceiling pertaining to this housing accommodation on the ground that due to peculiar circumstances the maximum rent ceiling now in effect is less than that for comparable housing accommodations basing such request on the original purpose of the Defense Homes Corporation in providing housing accommodations at- a level commensurate with certain wage rates then in effect for the Federal Government. (See transcript of proceedings page 58.)
“6. That these facts do not constitute peculiar circumstances and no finding is therefor made, as to whether or not the maximum rent ceiling now in effect is less than that of comparable housing accommodations in the District of Columbia.”

The examiner actually made no findings of fact and merely concluded “these facts” do not constitute peculiar circumstances. No reasons for this conclusion were given and there is no administrative interpretation of peculiar circumstances by which we could assume the- ..examiner was guid[686]*686ed. We can only conclude that “these facts” refer to the landlord’s evidence and that the examiner, accepting such evidence, ruled as a matter of law that it did not make out a case of peculiar circumstances within the meaning of the Rent Act.

The question of what constitutes peculiar circumstances, as that term is used in the District of Columbia Emergency Rent Act, has never been squarely before this Court, but in Bailey v. Maple, D.C.Mun.App., 63 A.2d 333, 335, we quoted with approval from Read v. Gerstenfeld, 72 W.L.R. 563, decided by a three-judge court of the Municipal Court, which formerly reviewed orders of the Rent Administrator, the following: “ ‘The phrase, “peculiar circumstances,” as here used obviously means unusual or special circumstances which kept the landlord and tenant from bargaining freely.’ ”

The same general idea has been expressed in cases coming under the National Rent Act, 50 U.S.C.A.Appendix, § 901 et seq., it being said that peculiar circumstances are those which negate the existence of ordinary bargaining considerations, or are abnormal circumstances not generally present in a normal rental bargain. Expressed in the negative it is said that peculiar circumstances are lacking when the circumstances are the normal ones of bargaining between landlord and tenant, or, when the landlord is a free agent dealing in an open market. Rockcliffe Realty Corporation v. Bowles, Em.App., 151 F.2d 339; Kuskin & Rotberg, Inc., v. Porter, Em.App., 153 F.2d 1016; Longmoor Corporation v. Creedon, Em.App., 162 F.2d 747.

In the instant case the landlord was a defense agency2 operating with funds obtained from another governmental agency. The buildings were erected for the benefit of a favored class of tenants, namely, war workers. Whether or not the testimony of the former employee of Defense Homes Corporation be accepted as completely accurate, the purpose for which the buildings were erected and the circumstances under which they were rented indicate plainly that the profit motive existing in normal operations of this kind was absent here. The transaction was not one where the landlord intended to secure to itself the greatest possible economic benefit. In fixing the rents there were present factors which prevented a bargaining valuation of the property for rental purposes under the then existing market conditions. Cf. Northwood Apartments, Inc., v. Brown, Em.App., 137 F.2d 809; Bibb Mfg. Co. v. Bowles, Em.App., 140 F.2d 459. In our opinion the evidence established that present rentals were fixed under peculiar circumstances affecting the housing accommodations and the Administrator was in error in holding otherwise.

Whether as a result of those peculiar circumstances the rent ceilings are today substantially lower than the rent generally prevailing for comparable housing accommodations is a question to be decided by the Administrator.

After the foregoing was written the Supreme Court of the United States on June 13, 1949, rendered its decision in United States v.

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Bluebook (online)
67 A.2d 684, 1949 D.C. App. LEXIS 222, Counsel Stack Legal Research, https://law.counselstack.com/opinion/fairmac-corp-v-roberts-dc-1949.