#### ANGLIN et al. v. NASIF.

No. 7192.

Court of Appeal of Louisiana. Second Circuit.

June 28, 1948.

Rehearing Granted Sept. 15, 1948.

On Rehearing Feb. 21, 1949.

Further Rehearing Refused March 30, 1949.

Chandler, Lunn & Trichel, of Shreveport, for appellant.

Booth, Lockard & Jack, of Shreveport, for appellees.

HARDY,- Judge.

This is a suit in which the three plaintiffs, tenants of the defendant landlord,, seek to recover statutory damages resulting from payment of rent in excess of the maximum fixed by the Office of Price-Administration for the character of accommodations furnished. After trial there was judgment in the District Court in favor of plaintiffs, assessing the damages at one and one-half times the overcharges, from which judgment defendant has appealed. Plaintiffs have answered the appeal, seeking the amendment of the damages to the extent of an allowance of thrice the amount of the overcharges, together with attorney’s fees, interest and costs.

The material facts are relatively simple, and practically undisputed, with the exception of one feature. On December 6, 1945, Misses Marjorie and Marie Anglin and Frances Monk, plaintiffs herein, rented living quarters from the defendant, Mrs. Corinne Nasif, located at Municipal No. 1022 Dalzell Street in the City of Shreveport. The accommodations included a kitchen, bedroom, living room and bath, which constituted what is referred to in the record before us as the “lower left-hand apartment”. The one disputed issue of fact which has substantial bearing on *605the determination of this, matter arises from the contention of .plaintiffs that they rented the accommodations described as an “apartment”, as opposed to the equally positive and emphatic claim on the part of defendant that she rented the accommodations described to the plaintiffs as “sleeping rooms”. It is of the utmost importance to note that ■ the descriptive terms “apartment” and “sleeping rooms” are subject to certain connotations which are accorded under the regulations of the Office of Price Administration.

Plaintiffs occupied the space described from about December 6, 1945, until on or about the 1st day -of December, 1946, or a period of one year.

In September of 1945 the defendant, who had been renting the lower left apartment at the given address on the basis of a monthly rental of $75, was informed that the ceiling rental for such apartment, as fixed by the Office of Price Administration, was $45 per month. It is evident from the record that defendant immediately busied herself in the effort to ascertain some means whereby she might obtain a higher rental, and on October 26, 1945, she addressed a letter to Mr. J. S.. P. Porter, Rent Director of the Office of Price Administration, advising him of her wish to convert the apartment into sleeping rooms. The practical purpose of this request was to comply with OPA regulations to such extent as would permit the defendant to rent the living room and bedroom of the erstwhile apartment as sleeping rooms at a rate of $30 per month each. In addition permission was requested to charge $5 per month for the privilege of the use of the kitchen for each tenant of the sleeping rooms.

Defendant received a reply from Mr. Porter in which he advised that the conr version contemplated was permissible, but requested that defendant call at the local office for the purpose of registering the rooms, which formality, again according to regulations, was required to be observed within a period of thirty days subsequent to rental of the rooms. As had been noted above, the defendant rented the accommodations on or about December 6, 1945, to these plaintiffs, and on January 4, 1946, which was within the thirty-day period fixed 'by the regulations, defendant filed registration statements with the Office of Price Administration at its office, in person, on forms furnished her by the employees of said administration.

On December 31, 1945, the Office of Price Administration, ,filed an injunction suit, under, which it sought to enjoin defendant from making charges in excess of rental regulations with respect to Municipal No. 649 Dalzell Street, Shreveport. A permanent injunction having been obtained in these proceedings^ a criminal contempt proceeding for violation of the injunction was brought against this defendant by the government on April 2, 1947, and the defendant was convicted of contempt. The judgment of conviction was reversed and set aside on appeal to the United States Circuit Court of Appeal for the Fifth Circuit, Nasif v. United States, 165 F.2d 119.

The present action for damages by these plaintiffs, which appears to have been inspired by the suggestion of one of the agents of the Office of Price Administration, was filed March 6, 1947. The burden of plaintiffs’ complaint is that they paid rental for the accommodations furnished at the rate of $75 per month for a period of one year, that is, from December, 1945, to December, 1946, which payment was $30 a month in excess of the $45 fixed as the maximum rental for the “apartment” by the Office of Price Administration. For the eight-month period on which plaintiffs-would be permitted to recover, in view of the one year period of prescription, plaintiffs seek the recovery of damages in the sum of $720, aggregating thrice the amount of the overcharge, together with attorney’s fees of $150.

The record before us is made up of stipulation of counsel, certain exhibits, specifically the letter addressed to the Rent Director by this defendant, his reply, and copies of the registration forms filed in the Office of Price Administration by defendant, and th‘e transcript of testimony in the contempt hearing before the Honorable Ben C. Dawkins, Judge of the United *606States District Court, Western District of Louisiana.

It is urged by zealous counsel for defendant in support of this appeal that it is necessary to determine as a fact of violation of existing regulations of the Office of Price Administration by this defendant in order to establish a basis for recovery of judgment in favor of these plaintiffs. We are entirely and completely in agreement with this proposition.

Careful examination of the record before us fails to disclose any facts which would support a finding that this defendant has violated regulations of the Office of Price Administration. It is obvious from the record and it is, in effect, conceded on behalf of defendant that she was motivated in her negotiations and dealings with these plaintiffs by the desire to charge and collect the maximum amount permissible under OPA regulations for the rental of her property. If in her pursuit of this purpose defendant violated the laws or regulations of the administrative bureau involved, then clearly she is liable for damages as fixed by such law and regulations. But we are unable to point out any facts which would justify a conclusion that defendant has been guilty of such infraction.

Learned counsel for plaintiffs strenuously urges that plaintiffs rented the accommodations as an “apartment” and that the rental charged was $30 per month in excess of ceiling prices for such accommodations when classed by the OPA as an “apartment”. The testimony of Misses Marjorie Anglin and Frances Monk is stressed with reference to this point. Without detracting one whit from the credibility of the young ladies in question, we are impressed with the fact that the testimony of the defendant is equally as positive, and, in the light of surrounding circumstances, more persuasive. It is inconceivable to our minds that this defendant, called to account for what was apparently a-t that time an unintentional violation of price ceilings on the basis of an “apartment”, would take the trouble to determine the means and methods of procuring a reclassification of the accommodations as “sleeping rooms” and then rent them to these plaintiffs as an “apartment”. The effect of this consideration is strengthened by the further fact that the defendant registered the accommodations as sleeping rooms a little less than thirty days later, which registration was made in person on forms furnished by employees in the local Office of Price Administration in Shreveport.

In support of the claim that defendant misrepresented an alleged conversion of the apartment into sleeping rooms, counsel for plaintiffs urge, as did the government in the contempt proceeding, that the defendant made no changes in the appearance of the rooms nor in the fixtures and furnishings thereof. While this argument may possibly be persuasive as bearing upon the good faith and sincerity of the defendant, we do not find that it has any effect upon a determination of this matter, inasmuch as neither the government nor the witnesses for the government in the contempt proceeding, nor the plaintiffs in this cause, have pointed out any requirement of law or of the regulations of the Office of Price Administration which necessitated the actual accomplishment of .physical changes as a condition precedent to a reclassification of the accommodations.

We refer particularly to a question and answer which were read by the Rent Attorney of the Office of Price Administration, a witness for the government in the contempt proceeding, from a pamphlet designated “Questions and Answers on Federal Rent Control”, as follows:

> “A. (reading) ‘Question: I want to rent out all the rooms in my apartment as sleeping rooms only. Can I do this?

> “A. Generally, if your apartment is vacant, you may rent out rooms for sleeping purposes only. However, you must register under the Hotel and Rooming-house Regulation, and you are subject to its provisions if you rent to more than two paying tenants.’ ”

Further reference to the testimony on the trial of the contempt proceeding reveals the following testimony, on direct examination, by the Rent Director himself:

> “Q. In other words, in this case, Mrs. >Nasif could rent the lower left apartment for Forty-five ($45.00) Dollars as an apart*607ment, and she could also, if she chose, o. found tenants who wanted rooms, she coula rent the two rooms for Thirty ($30.00) Dollars apiece under the two separate registrations and she could do it under either one?

> “A. This is correct.”

There appears to be no room for doubt, in. view of the above quoted observations, that this defendant had the right, by the simple act of registration, to convert her apartment into sleeping rooms at a permissibly higher rental ceiling and that she had the further right, subsequent to registration, to rent the accommodations to tenants under either classification. To conclude that a landlord would go to all of this trouble and effort to comply with regulations which would permit the receipt of an advanced rental, only to forego such an advantage on the occasion of the first opportunity to profit therefrom, would be, in our opinion, a reductio ad absurdum.

Acknowledging with the greatest respect the force of the statement of Judge Dawkins at the conclusion of the trial of the contempt proceedings, which statement is set forth in the record, and which is reiterated in brief of plaintiffs’ earnest counsel, we are unable to agree with the conclusion reached by the eminent jurist. We concede the obvious correctness of his assertion that he was impressed with the fact that this defendant was “doing her best to get around the law”. But, to our minds, the question before us does not concern the defendant’s motives nor the proposition of good faith, vel non, on her part, but simply and solely a determination as to whether she has been guilty of a violation of the regulations controlling. We are firm in the belief that plaintiffs have failed to show any violation which would entitle them to the statutory penalty.

For the reasons assigned, the judgment appealed from is reversed and set aside, and there is now judgment in favor of defendant rejecting plaintiffs’ demands at their cost.

On Rehearing.

KENNON, Judge.

This is a suit for the return of triple the overcharges in rent, allegedly collected by defendant above the ceiling fixed by OPA regulations, and for attorney’s fees. Our original opinion reversed a judgment of the District Court in plaintiffs’ favor. See opinion of this Court rendered June 28, 1948.

Prior to October, 1946, defendant was lessor of an apartment consisting of a kitchen, bedroom, living room and bath at $75 per month. After an OPA ceiling of $45 was put on this apartment, defendant, when the occupying tenant left the city, rented the premises to the three young ladies who are plaintiffs in the case before us. Plaintiffs’ contention is that the three of them rented the apartment at a price of $75 per month. Defendant’s contention is that she ceased, after October 1, 1946, to rent the apartment as a unit and that she rented the living room to one of the plaintiffs and the bedroom to another— each as a separate sleeping room.

The District Court decided that excessive rentals amounting to $2-10 had been collected and gave judgment for one and a half times this amount, together with interest and costs.

The evidence is extremely conflicting. The record shows that the defendant, after a $45 ceiling had been placed on the apartment, registered the bedroom and living room as sleeping rooms (with the Shreveport OPA) at a rate of $30 each and her testimony is that the $75 paid by plaintiffs consisted of $30 rental on each of the two sleeping rooms with an additional $15 paid for kitchen privileges at the rate of $5 per person. The plaintiffs testified that they rented the premises as an apartment; that the three of them paid $25 each; that often all three slept in the bedroom and that on occasions, one or the other did use the living room couch, which could be converted into a bed by unfolding and the use of a pad. The defendant — although she registered the living room and bedroom as being rented one room each to two of the plaintiffs — testified that she knew that all three of the plaintiffs were her tenants and that each made use of both rooms and that the' plaintiffs took turns in using the less comfortable living room sleeping facilities.

*608The apartment had but two entrances, both of these through the kitchen and its physical set-up is that of an apartment, and while defendant may have made a strenuous effort to evade the regulations setting a ceiling of $45 on the apartment by registering the two rooms as separate sleeping rooms, the fact remains that she made no physical changes and she in fact rented the premises to the three plaintiffs and accepted the $75 payments, knowing that the three people, each and all used the premises as an apartment unit.

There is evidence in the record that immediately after plaintiffs vacated, defendant rented the premises to a man and wife at a rental of $75 a month. Even granting that it was within the letter of the regulations for her to rent the living room and bedroom as separate rooms to the man and his wife at $30 each with $5 a month charged to each for kitchen privileges, the total allowed would be only $70 and this charging of the $75 rental to two people takes weight from defendant’s testimony that she rented the premises as separate sleeping rooms.

Section 91 of the Federal regulations for housing provides: “The maximum rent, and other requirements provided in this regulation shall not be evaded, either directly or indirectly, in connection with the renting or leasing, or the transfer of a lease of housing accommodations by way of absolute or conditional sale, sale with purchase money or any other form of mortgage, or sale with option to purchase, or by modification of the practices relating to the payment or commission of other charges, or by modification of the service furnished with housing accommodations, or by particular agreement, or otherwise.”

Granting, for the sake of argument, that defendant told plaintiffs at the time she rented the apartment that she was renting the living room and bedroom separately as sleeping rooms at the rate of $30 per month each and that the remaining $5 was for kitchen privileges at the rate of $5 per month, and, even granting the mutual consent of lessor and lessee, the fact remains that the whole arrangement was obviously an evasion, either directly or indirectly, of the maximum rental ceiling of $45 placed on the apartment by the regional director, and the collection of rentals above the ceiling was in violation of Section 91 above quoted.

After reconsideration, and in the light of Section 91 above quoted, we have concluded that even though defendant made considerable progress toward meeting the letter of the law, there is ample evidence in the record to sustain the finding of the District Court that she in fact rented the premises as an apartment and did collect a rental in excess of the ceiling fixed.

The statute permits recovery by the tenant of an amount to be fixed by the Court, up to three times the excess paid. The District Court gave judgment for one and a half times the overcharge, and denied plaintiffs’ claim for the statutory attorney’s fees. Plaintiffs have asked that the judgment be amended by increasing this amount to triple the excess paid and for an award of $150 in attorney’s fees.

We have concluded to- amend the judgment by limiting plaintiffs’ recovery to the $240 overpayment and to allow $100 for attorney’s fees.

The judgment appealed from is now amended by reducing the award to plaintiffs to $240 and to allow $100 additional to plaintiffs as attorney’s fees, and as amended, same is affirmed. Costs of appeal to be paid by plaintiffs, other costs to be paid by defendant.

HARDY, J. dissents, adhering to the conclusions reached on original hearing hereof.