Hirsh v. Block

267 F. 614, 50 App. D.C. 56, 11 A.L.R. 1238, 1920 U.S. App. LEXIS 2214

• Court: District Court, District of Columbia
• Decided: June 2, 1920
• Docket: No. 3372
• Status: Published

Opinions

VAN ORSDEL, Associate Justice.

This is a landlord and tenant proceeding brought by appellant, Hirsh,-plaintiff below, in the municipal court of the District of Columbia, to recover possession of certain premises held by defendant, Block, under a three year lease, which terminated on the 31st day of December, 1919.

It appears that on November 12, 1919, the owners of the reversion, Mary A. Cushing and Isabella Varney, conveyed the property in question by deed to one Sylvan J. Luchs, who, on the same day, conveyed it in fee simple to plaintiff, Hirsh. The lease was duly assigned to plaintiff. Plaintiff authorized his agents to collect from the defendant the rent accruing to the termination of the lease, the 31st day of December, 1919, which rent was paid. On December 15, 1919, plaintiff notified defendant that he- had purchased the property and would require possession at the- expiration of the lease.

Defendant refused to vacate; hence this proceeding. Erom a judgment in favor of defendant in the municipal court, plaintiff appealed to the Supreme Court of the District of Columbia, where he filed an affidavit of merit under rule 19, in which he set forth, among other things: ®

“That lie is a bona fide purchaser of the said real property for bis own occupancy and requires and intends to occupy and to use the same bimself for the conduct therein of the business of retail selling of men’s furnishings and similar merchandise.”

An affidavit of defense was filed by defendant, in which he denied plaintiff’s right to possession of the premises by reason of the termination of the lease, claiming that under the Ball Rent Daw the lease is continued in force and he is entitled to remain in possession of the premises, notwithstanding the expiration of the term fixed by the lease, and alleged that plaintiff purchased the premises and took conveyance thereof subject to the rights of the defendant under the act. It is further averred that plaintiff is required by the act to give .a 30-day notice in writing, served in the manner provided by section 1223 of the District Code, which notice has not been served, though it is made mandatory under the provisions of the act. On hearing, the court denied the motion of plaintiff for judgment, and entered judgment in favor of defendant, from which this appeal is prosecuted.

This case involves the constitutionality of the act of Congress of October 22, 1919 (41 Stat. 298), known as the “Ball Rent Daw.” The act provides for the appointment of a rent commission, consisting of three persons, who aré vested with absolute jurisdiction over landlords and tenants, the fixing of rents, and the continuing and making of leases within the District of Columbia for a period of two years, unless the act is sooner repealed by Congress. The only check upon the power of the commission is a restricted right of appeal to the Court of Appeals of the District of Columbia, in which “the commission’s determination shall not be modified or set aside by the court, except for error of law.” The act provides that the appeal shall in no manner operate as a supersedeas or stay to postpone the enforcement of the determination of the commission appealed from, and, if any finding of the commission is modified as the result of the appeal, or set aside, the difference between the amount of rent pending appeal and the amount which should have been paid under the final judgment in the case may be recovered by suit in the municipal court of the District of Columbia.

The act declares rental property, hotels and apartments, “affected with a public interest, and that all rents * * * shall be fair and reasonable; and any unreasonable or unfair provision of a lease * * * is hereby declared to be contrary to public policy.” The commission, on complaint of either the landlord or tenant, or on its own motion, is empowered to inquire into and determine w’hether the terms and conditions of any lease are fair and reasonable: Provided, however, that the landlord cannot make complaint when the tenant is in possession under an unexpired lease. On hearing, if the commission finds that the rent or terms of the lease are unreasonable or unfair, it shall determine and fix a—

“fair and reasonable rent or charge therefor, and fair and reasonable service, terms, and conditions of use or occupancy, in any suit in any court of the iJnited States or the District of Columbia involving any question arising out of the relation of landlord and tenant with respect to any rental property, apartment, or hotel, except on appeal from the commission’s determination as provided in this title, such court shall determine the rights and duties of the parties in accordance with the determination and regulations of the commission relevant thereto.”

The act also provides that—

“The right of a tenant to the use or occupancy of any rental property, hotel or apartment, existing at the time this act takes effect, or thereafter acquired, under any lease or other contract for such use or occupancy or under any extension thereof by operation of law, shall, notwithstanding the expiration of the term fixed by such lease or contract, continue at the option of the tenant, subject, however, to any determinal ion or regulation of the commission relevant thereto; and such tenant shall not be evicted or dispossessed so long as he pays the rent and performs the other terms and conditions of the tenancy as fixed by such lease or contract, or in case such lease or contract is modified by any determination or regulation of the commission, then as fixed by such modified lease or contract. All remedies of the owner at law or equity, based on any provision of any such lease or contract to the effect that such lease or contract shall bo determined or forfeited if the premises are sold, are hereby suspended so long as this title is in force. Every purchaser shall take conveyance of any rental property, hotel, or apartment subject to the rights of tenants as provided in this title.” (Section 109.)

The act then provides that the bona fide owner of rental property stall have the right of possession for his own use and occupancy upon giving 30 days’ notice, as provided in section 1223,of the District Code, which notice shall contain a statement of the facts upon which it is based. In case there is a dispute between the landlord and tenant as to the accuracy or sufficiency of the statement, the matters in dispute shall, upon complaint, be determined by the commission.

The act vests the commission with power to subpeena and compel the attendance of witnesses and the production of records, to fix rental rates retroactively to take effect from the date of filing the complaint, to prescribe the procedure to be followed in all proceedings under its jurisdiction, and to prescribe standard forms of leases and contracts to be used in renting property, with the provision that any lease or contract made after the form has been prescribed, regardless of its provisions, shall be interpreted, applied, and enforced by the commission, or any court of the United States or the District of Columbia, “in the same manner as if it were in the form and contained the stipulations of such standard form.”

Heavy penalties are prescribed for the collection of rent in excess of the amount fixed by the commission, or for the collection of any bonus or other consideration in addition to the fixed rental, and the assignment of leases or subletting of leased premises at a greater rental than that paid under the lease is forbidden, except by permission of the commission.

[1-4] The’right of plaintiff to question the constitutionality of the act in this proceeding is assailed. It is urged that he should have pursued the remedy prescribed in the act, and, if unsuccessful, appeal. But plaintiff would be in poor position to question the jurisdiction which he had himself invoked, merely because of an adverse decision. If he should invoke the aid of the statute, and suffer defeat before the commission', he would estop himself to seek further relief on the ground of the unconstitutionality of the act. He would not be permitted to thus experiment with the law. Electric Co. v. Dow, 166 U. S. 489, 17 Sup. Ct. 645, 41 L. Ed. 1088; Wight v. Davidson, 181 U. S. 371, 21 Sup. Ct. 616, 45 L. Ed. 900; Shepard v. Barron, 194 U. S. 553, 24 Sup. Ct. 737, 48 L. Ed. 1115; Daniels v. Tearney, 102 U. S. 415, 26 L. Ed. 187; Grand Rapids, etc., Ry. Co. v. Osborn, 193 U. S. 17, 24 Sup. Ct. 310, 48 L. Ed. 598. The sole defense interposed is the present act. If it is valid, the defense is complete, since the 30-day notice required by the act was not given, and the proceedings could only be had before the commission. If the act is void, it furnishes no defense; since, under existing law, at the expiration of a time lease, no notice is required, and the nroceedings to acquire possession must be brought, as in this case, in the municipal court of the District.

“An'unconstitutional act is not a law; it confers no rights; it imposes no duties; it affords no protection; it creates no office; it is, in legal contemplation, as inoperative as though it had never been passed.” Norton v. Shelby County, 118 U. S. 425, 442, 6 Sup. Ct. 1121, 1125 (30 L. Ed. 178).

[5] Coming to the validity of the act, we have held in the recent case of Willson v. McDonnell, 49 App. D. C. 280, 265 Fed. 432, considering an act of Congress similar to the one before us, that the'provisions of the Constitution which protect persons and property are uniform in their operation throughout the United States. In this respect, there is no distinction between the District.,of Columbia and the states of the Union.

“There is nothing in the history of the Constitution or of the original amendments to justify the assertion that the people of this District may be lawfully deprived óf the benefit of any of the constitutional guaranties of life. liberty, and property.” Callan v. Wilson, 127 U. S. 540, 550, 8 Sup. Ct. 1301, 1304 (32 L. Ed. 223).

[6] But what are the rights of which plaintiff has been divested, if the present act is held to constitute a valid defense to his action for possession? Plaintiff had a vested estate and reversion in fee in the property in question to come into possession on January 1, 1920. Defendant’s right of possession terminated on December 31, 1919, by the express terms of his lease, a contract valid and existing when this act was passed. This right of reversion is a property right, of which plaintiff cannot be divested, except by due process of law. The act gives defendant the option of retaining possession of the property at the rental fixed in the lease, which is continued in force; or, if dissatisfied, he may apply to the commission for a reduction of the rent. If reduced by the commission, plaintiff is powerless to have a review of the facts upon which the action of the commission is based. Not only is plaintiff denied any remedy for this continued detention of his property, but he is forbidden to sell his property, except subject to and burdened by the option of the tenant. It would seem, therefore, that if the property clauses of the Constitution are longer to have any restraining power over Congress, the case here presented is one within the inhibition of the Fifth Amendment.

[7] Nor does this amount to the taking of private properly for public use. Plaintiff and defendant are private citizens, engaged in private business. If the government needed the use of this property for the better conduct of the war, it had a remedy, plain and adequate, by the exercise of the power of eminent domain. But, as was said by Mr. Justice Story, speaking for the court in Wilkinson v. Leland, 2 Pet. 627, 658 (7 L. Ed. 542):

“We know of no ease, in which a legislative act to transfer the property of A. to B., without his consent, has ever been held a constitutional exercise of legislative power, in any state in the Union. On the contrary, it has been itonstantly resisted, as inconsistent with just principles, by every judicial tribunal in which it has been attempted to be enforced.”

[8] The power to fix rental rates between private individuals is not analogous to nor controlled by the decisions which have upheld the power of the Legislature to fix rates for service where the owner has devoted the business affected to a public use. In Munn v. Illinois, 94 U. S. 113, 24 L. Ed. 77, the owner of the grain elevator had for years devoted it to a public use in handling grain for the public generally. The court, upholding the power of the Legislature of Illinois to fix rates for the service thus rendered the public, announced the rule authorizing this exercise of legislative power, as follows:

“To limit the rate of charge for services rendered in a public employment, or for the use of property in which the public has an interest, is only changing a regulation which existed before. It establishes no new principle in the law, but only gives a new effect to an old one.”

The same principle runs through the Railroad Rate Cases, the Insurance Case (German Alliance Ins. Co. v. Lewis, 233 U. S. 389, 34 Sup. Ct. 612, 58 L. Ed. 1011, L. R. A. 1915C, 1189), the Bank Guaranty Decision (Noble State Bank v. Haskell, 219 U. S. 104, 31 Sup. Ct. 186, 55 L. Ed. 112, 32 L. R. A. [N. S.] 1062, Ann. Cas. 1912A, 487), the. Irrigation Cases (Clark v. Nash, 198 U. S. 361, 25 Sup. Ct. 676, 49 L. Ed. 1085, 4 Ann. Cas. 1171, and Strickley v. Highland Boy Mining Co., 200 U. S. 527, 26 Sup. Ct. 301, 50 L. Ed. 581, 4 Ann. Cas. 1174), the Wharf Case (Weems Steamboat Co. v. People’s Steamboat Co., 214 U. S. 345, 29 Sup. Ct. 661, 53 L. Ed. 1024, 16 Ann. Cas. 1222) and the Pipe Line Case (Producers’ Transp. Co. v. Railroad Commission, 251 U. S. 228, 40 Sup. Ct. 131, 64 L. Ed.-).

In no case where the legislative power to regulate and fix rates has been upheld' has the power to continue existing contracts in force after the time fixed by the parties for their termination, or to require the owner of the 'property to continue the business, been sustained. In the Noble Bank Case, supra, the court held, on petition for rehearing (219 U. S. 575, 31 Sup. Ct. 299, 55 L. Ed. 341), that,’ if the law was obnoxious to any one engaged in the banking business, “the payment can be avoided by going out of the banking business, and is required only as a condition of keeping on, from corporations created by the state.” But in the present case the landlord is not only prevented from going out of the renting business, but is required to continue it upon the terms fixed by the act.

[9-12] The renting of property in the District of Columbia is a private business, whether the tenant be an employe of the government or not. A private business cannot be made-public, or impressed with a public interest, merely by legislative fiat. A public interest cannot be thus created, or property rights be divested, by an arbitrary exercise ‘of the police power. In both instances, the power resides in the judiciary to restrain the law-making • pdwer within constitutional limitations. In the Producers’ Transportation Case, Mr. Justice Van Devanter, speaking for the court, said:

“It is, of course, true that if tire pipe line was constructed solely to carry oil for particular producers under strictly private contracts, and never was devoted by its owner to public use — that is, to carrying for the public — the state could not, by mere legislative fiat or by any regulating order of a commission, convert it into a public utility or make its owner a common carrier; for that would be taking private property for public use without just compensation, which no state cán do consistently with the due process of law clause of the Fourteenth Amendment.”

[13] More potent still, as affecting the constitutionality of the present act, is the fact that landlords and tenants in the District of Columbia are, by its express terms, deprived of the right of trial by jury in cases involving the right to possession of real estate. Though a writ undoubtedly may be obtained in the municipal court upon the determination of -the rent commission that the owner is entitled to possession, the finding of fact by the commission is binding and conclusive upon the court and the parties, which, of course, forecloses the intervention of a jury. In Whitehead v. Shattuck, 138 U. S. 146, 151, 11 Sup. Ct. 276, 277, 34 L. Ed. 873, the court, holding that the action for the recovery of possession of real estate is at law, and not by suit in equity, said:

“The Seventh Amendment of the Constitution of the United States declares that ‘in suits at common law, where the value in' controversy shall exceed twenty dollars, the right of trial by jury shall bo preserved.’ * * * The right which in this case the plaintiff wishes to assert is his title to certain real property; the remedy which he wishes to obtain is its possession and enjoyment; and in a contest over the title both parties have a constitutional right to call for a jury.”

[14] Section 122 of the act provides as follows:

“It is hereby declared that the provisions of this title are made necessary by emergencies growing out of the war with the Imperial German government, resulting in rental conditions in the District of Columbia dangerous to the 'public health and burdensome to public officers and empJoyGs whose duties require them to reside within the District and other persons whose activities are essential to the maintenance and comfort of such officers and employes, and thereby embarrassing the federal government in the transaction of public business. It is also declared that this title shall be considered temporary legislation, and that it shall terminate on the expiration of two years from the date of the passage of this act, unless sooner repealed.”

A similar statement was contained in the Saulsbury Resolution (40 Stat. 593). In the Willson Case, holding the resolution void, we said:

•*Tiio Constitution is not superseded by a declaration of war, and experience has demonstrated that ample provision may be made for ‘the national seeurily and defense’ without overstepping its limitations.”

And Mr. Justice Brandéis, in the recent case of Hamilton v. Kentucky Distilleries & Warehouse Co., 251 U. S. 146, 40 Sup. Ct. 106, 64 L. Ed.-, said:

“The war power of the United States, like its other powers and like the police power of the states, is subject to applicable constitutional limitations.”

The declaration here amounts merely to a statement of the inducement or reason for the enactment of the statute. It affects no change in the method of acquiring private property for public use. It adds nothing to the constitutional power of Congress. The only exception to the rule that, in the case of “war emergency,” private property must be taken under the power of eminent domain, is where private property may be impressed into the public service, or seized for a public use, by a military officer in the field, either to prevent it from falling into the hands of the public enemy, or for the use of the army to meet an immediate and pressing necessity. But this is taking for public use, and not for private use. Such action, however, is only justified where the emergency is too great to admit of delay to await the sanction of the civil authorities. In all such cases, the government is hound to make full compensation. Mitchell v. Harmony, 13 How. 115, 14 L. Ed. 75.

[15] Nor can Congress, by a mere legislative declaration, convert a private use into a public use; nor, by such a declaration, create an arbitrary exercise of the police power, or make an act constitutional which otherwise would be unconstitutional. Undoubtedly, in the exercise of the power of eminent domain, Congress has the power to designate the public use for which private properly may be taken, and, if found by the courts to be, in fact, a public use, the courts are then powerless to question the wisdom of the legislative decision.

“The adjudicated casos likewise establish the proposition that while the courts have power to determine whether the use for which private property is authorized by the Legislature to be taken, is in fact a public use, yet, if this question is decided in the affirmative, the judicial function is exhausted; that the extent to which such property shall be taken for such use rests wholly in the legislative discretion, subject only to the restraint that just compensation must be made.” Shoemaker v. United States, 147 U. S. 282, 298, 13 Sup. Ct. 361, 390 (37 L. Ed. 170).

[16] And the courts are not estopped by any legislative declaration from inquiring into the nature of the use to determine whether it is, in fact, public or private.

“The nature of the use for which land is to be taken necessarily appears on the face of the proceeding; and, if it is not a public one, the condemnation cannot be sustained, no matter' what the Legislature may have declared.” Coe v. Aiken (C. C.) 61 Fed. 24, 32.

In Palairet’s Appeal, 67 Pa. 479, 5 Am. Rep. 450, the court considered an act of the Legislature of Pennsylvania in which it was attempted to extinguish irredeemable rents. The act provided for just compensation to be fixed by a jury, and, as here, contained a declaration of public use as a matter of public policy. Mr. Justice Sharswood, in an able opinion, declaring the act unconstitutional, said:

“No doubt the right of eminent domain, being for the safety and advantage of the public, overrides all rights of private property. But for what public use has this estate of the appellants been taken and applied? It has been contended, as tlie preamble of the act declares, that ‘the policy of this commonwealth has always been to encourage the free transmission of real estate, and to remove restrictions on alienation, so that it is, and is hereby declared to be, necessary for the public use to provide a method of extinguishing such irredeemable rents, having a due regard for private rights.’ But if this is the kind of public use for which a man’s property can be taken, there is practically no limit * * to the legislative power. It would result that, whenever the Legislature deem it expedient to transfer one man’s property to another upon a valuation, they can effect their object.”

In other words, whatever power Congress may possess to take private property for a public use upon just compensation, it has no power, under any circumstances, to take private property for a private use, as is attempted under the present act. Here, however, the individual litigant invokes the aid of the statute, not for the public use, but for his own private benefit. Though Congress may have had power, in the exercise of the right of eminent domain, as a war emergency, to take over rental property in the District of Columbia, to devote it to the public use of accommodating its ejnployés and officials, it has not power to take the private property of one individual and turn it over to the use of another private individual. As we said in the Willson Casé:

“In the present case, for example, by the exercise of the power of eminent domain, the government might have checked' and thwarted any tendency on the part" of landlords toward extortion, and, at the same time, have satisfied the due process clause of the Constitution.”

The judgment is reversed, with' costs, and the cause remanded for further proceedings not inconsistent with this opinion.

Reversed and remanded.