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Woods v. Durr.

decided: November 8, 1948.


Author: Maris

Before MARIS, GOODRICH and KALODNER, Circuit Judges.

MARIS, Circuit Judge.

The plaintiff, who as Housing Expediter is in charge of rent control under the Housing and Rent Act of 1947, as amended, 50 U.S.C.A.Appendix, § 1881 et seq., brought the present action in the United States District Court for the District of New Jersey against the defendant, who is the owner of certain premises used as housing accommodations at 74 Murray Street, in the City of Newark in the Northeastern New Jersey Defense-Rental Area. The plaintiff sought an injunction to restrain the defendant from prosecuting in the state courts of New Jersey an eviction proceeding against the tenant of the housing accommodations in question.

It appears that the defendant had given notice to her tenant to vacate because possession was "required for the immediate purpose of permanently withdrawing said premises from the rental market, as provided in Section 209(a)(5) of the Housing and Rent Act of 1947, as amended by Section 204(d) of the housing and Rent Act of 1948, approved March 30, 1948, which substitutes a new Section 209(a)(5)", and that the tenant had failed to comply with the notice. The plaintiff asserted that the eviction was prohibited by Section 209(a) 50 U.S.C.A.Appendix, § 1899(a) of the Housing and Rent Act and he sought and obtained a preliminary injunction against it. On final hearing, however, the district court dissolved the injunction and dismissed the complaint. Its action was based upon its conclusion that under paragraph (5) of Section 209(a) of the Housing and Rent Act of 1947, as amended, the provisions of that section do not prohibit the eviction which the defendant is seeking to accomplish in the New Jersey courts. The present appeal by the plaintiff followed.

The case thus presents the question whether Section 209(a) of the Housing and Rent Act of 1947*fn1 as amended by the Housing and Rent Act of 1948*fn2 prohibits an eviction under the circumstances of this case. Those circumstances are, as the defendant readily admitted at the hearing, that she desires possession of her property in order that she may be in a better position to sell it to a purchaser who will occupy it as his home. She further asserted, and it was not denied, that the property in question is subject to an overdue mortgage in a substantial amount and that it will be necessary for her to sell in order to pay off the mortgage. There is no suggestion that the defendant's intentions with respect to the property are not entertained in good faith.

Those provisions of Section 209(a), as amended, which are pertinent to the question, are as follows:

"Sec. 209. (a) No action or proceeding to recover possession of any controlled housing accommodations with respect to which a maximum rent is in effect under this title shall be maintainable by any landlord against any tenant in any court, notwithstanding the fact that the tenant has no lease or that his lease has expired, so long as the tenant continues to pay the rent to which the landlord is entitled unless -

(3) the landlord has in good faith contracted in writing to sell the housing accommodations to a purchaser for the immediate and personal use and occupancy as housing accommodations by such purchaser;

(5) the landlord seeks in good faith to recover possession of such housing accommodations for the immediate purpose of withdrawing such housing accommodations from the rental market and such housing accommodations shall not thereafter be offered for rent as such; or * * *."*fn3

It is the plaintiff's contention that paragraph (3) of Section 209(a) is the only paragraph of that section which permits eviction for the purpose of sale and that it is not applicable because the defendant admittedly has not entered into a written contract to sell the premises to any specific purchaser. The defendant on the other hand urges that paragraph (5) of Section 209(a) permits the eviction proceeding which she has instituted. She asserts that since she seeks in good faith to recover possession for the immediate purpose of withdrawing her property permanently from the rental market she comes within the express terms of paragraph (5) and that her purpose for doing so is immaterial so long as it involves the permanent withdrawal of the property from the rental market. In answer to this contention the plaintiff concedes, as indeed he must, that the language of paragraph (5) is broad enough to cover the defendant's case but contends that the generality of this language must be limited to cases not covered by the other paragraphs of Section 209(a). Among the other paragraphs he points to paragraph (3) which relates specifically to sales and he says that the two paragraphs must be construed in harmony with each other and accordingly paragraph (5) must be read as not applicable to the recovery of possession for the purpose of sale.

We are unable to accept the plaintiff's construction of paragraph (5). His contention that the various paragraphs of Section 209(a) must be read together so as to harmonize with each other would have greater merit if the paragraphs in question had been enacted at the same time. The fact is, however, that while paragraph (3) was included in Section 209(a) of the Housing and Rent Act of 1947 as originally enacted, paragraph (5) was added to that section by the Housing and Rent Act of 1948. The canon of construction upon which he relies is, therefore, not applicable.On the contrary the case is one for the application of the basic rule that where the language of a statute is plain and unambiguous there is no occasion for construction and it must be taken to mean what it clearly says. That, we think, is the case here.

Moreover we do not see any inconsistency between paragraph (5) as applied by the district court in this case and paragraph (3). While they may at times overlap, the reach of the two paragraphs is quite different. Paragraph (3) applies only when a sale has actually taken place to a purchaser who is a prospective occupant. Here the test of good faith is that the owner has bound himself by written contract to sell to a purchaser who intends to occupy the property as his home. There is no prohibition against subsequent renting by the owner if the purchaser defaults in his purchase or by the purchaser if, after acquiring title, circumstances so change that he finds it impossible to occupy the property himself. In the case of paragraph (5) on the other hand the test of good faith is that the owner is willing to withdraw his property permanently from the rental market.If he evicts a tenant under this paragraph Congress has made its intention quite clear that the property may not again be offered for rent at least so long as Section 209(a)(5) of the act remains in force. It will thus be seen that paragraph (3) applies only to contracted sales of a property and involves no bar to its subsequent renting while paragraph (5) applies to any sort of withdrawal of a property from the rental market, whether for purposes of sale or otherwise, when the withdrawal is to be permanent.

The legislative history of paragraph (5) supports the literal construction which the district court adopted. At the same time that Congress added paragraph (5) to Section 209(a) by the Housing and Rent Act of 1948 it also enacted Section 302 of that act, 50 U.S.C.A. Appendix, § 1903, which provides: "Nothing in this Act or in the Housing and Rent Act of 1947, as amended, shall be construed to require any person to offer any housing accommodations for rent."

As will be seen from the Senate Committee report and the statement of Senator Cain to which we shall presently refer, these two new provisions of the law were intended by Congress to be complementary. Section 302 gave assurance that no landlord would be required by the act to keep his housing accommodation in the rental market and the addition of paragraph (5) to Section 209(a) of the 1947 act implemented that assurance by making it possible for a landlord whose housing accommodation was in the rental market to withdraw it therefrom, if he desired to do so, by eviction of the tenant in possession. Without the inclusion of paragraph (5) in Section 209(a) the assurance given by Section 302 would have been of no value whatever to such landlords. And they were ...

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