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Kress, Dunlap & Lane v. Downing

December 21, 1960

KRESS, DUNLAP & LANE, LTD., PETITIONER-APPELLANT,
v.
CARLOS A. DOWNING, AS COMMISSIONER OF PROPERTY AND PROCUREMENT, GOVERNMENT OF THE VIRGIN ISLANDS.



Author: Kalodner

Before GOODRICH, KALODNER and STALEY, Circuit Judges.

KALODNER, Circuit Judge.

The Virgin Islands Code*fn1 fixes the rent chargeable for real property in the Virgin Islands at the rent prevailing on July 1, 1947, if then rented, or, if not then rented, at the first rent charged thereafter or a rental administratively determined.

As we recently stated,*fn2 the "* * * obvious aim [of the Code] is to stabilize rentals at or about the level prevailing on the critical date [July 1, 1947]".

The Code establishes administrative procedures,*fn3 which are judicially reviewable,*fn4 for the upward adjustment of rents on petition by landlords but only "to compensate for a substantial major capital improvement or structural change as distinguished from repair, replacement, or maintenance."*fn5

Section 846 of Title 28 of the Code provides that its rent control provisions "* * * shall remain in force and effect only for the duration of the public emergency with respect to the shortage of housing and business accommodations [existing on July 1, 1947]." It further provides that "upon declaration by Resolution or Act of the Legislature that such emergency has ceased to exist, the [rent control] provisions * * * shall have no further application."

In the instant case Kress, Dunlap & Lane, Ltd., the petitioner-appellant ("petitioner"), raised the monthly rentals of three tenants of a property which it owns in the Virgin Islands. One of the tenants, Amandeo A. Forbes, complained to the Price and Rent Control Agency which, following an investigation, entered an Order fixing maximum rentals for each of the tenants at the levels prevailing before the rent increases.

Petitioner appealed to the Commissioner of Property and Procurement ("Commissioner") on the grounds that (1) it had not been afforded a proper hearing by the Price and Rent Control Officer; (2) improper standards had been applied in fixing maximum rentals; (3) the 'fireezing' of rents at 1947 levels "is unrealistic and constitutes the taking of property without due process of law", and (4) "the 'emergency' upon which the so-called 'Rent Control Law' is founded has ceased to exist and is therefore no longer enforceable."

The Commissioner, after hearing, rendered a Decision in which he made factfindings rejecting the first three grounds of appeal and stated his Conclusion with respect to the petitioner's fourth contention that "neither the Rent Control Officer nor the Hearing Officer in this appeal can assume powers which the law does not grant" and "Title 28, Section 846 of the Virgin Islands Code, answers this question when it stated that, 'Upon decclaration by resolution or Act of the Legislature that such emergency has ceased to exist, the provisions of this chapter (Rent Control Law) shall have no further application'." The Decision was accompanied by an Order affirming the maximum rental as to the tenant Forbes, and for reasons not here pertinent, set aside that portion of the Rent Control Officer's Order relating to the rentals of the two other tenants of petitioner's property and remanded for further hearing as to them.

Petitioner then instituted proceedings for review in the District Court of the Virgin Islands raising the same points presented in its appeal to the Commissioner. The Commissioner did not answer the petition for review but moved for summary judgment, filing, with his motion, a certified copy of the transcript of the proceedings before him. No affidavits were filed by either party.

The District Court granted the Commissioner's motion for summary judgment and entered a Decree dismissing the petition for review. It made Findings of Fact which merely constituted an outline of the proceedings before the Rent Control Officer and the Commissioner and stated the petitioner's contentions.

In its Conclusions of Law the District Court stated "That a review of the record does not show that the Price and Rent Control Officer or the Commissioner acted arbitrarily or contrary to law, or that any fundamental rights have been denied the landlord-plaintiff"; and "That the provisions of Chapter 31 of Title 28 of the Virgin Islands Code, known as the Rent Control Law, are valid and that the revision of same is a matter within the competence of the Legislature."

On this appeal the petitioner urges that the record is bare of any evidence on the score of the existence of an "emergency" in the Virgin Islands with respect to "housing and business accommodations." The fact is, says the petitioner, no emergency now exists "so far as commercial space is concerned" and for that reason the Virgin Islands Rent Law is invalid at least to the extent of its provisions affecting such accommodations. Petitioner further contends that the Rent Law is unconstitutional insofar as it provides that it shall continue in effect until the Legislature by Resolution or Act declares that the public emergency which prevailed at the time of its enactment has ceased to exist. Additionally, petitioner urges that the Rent Control Law, as written and administered, is unconstitutional in that no provision is made for a reasonable return on their investment to property owners.

Although petitioner does not here spell it out in so many words it nevertheless effectively presents the issue as to whether the District Court erred in granting summary judgment in view of the circumstance that the petitioner had below denied the existence of an "emergency" with ...


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