Source: https://www.legalcrystal.com/case/99326/fha-vs-darlington-inc
Timestamp: 2020-01-22 22:51:21
Document Index: 392152934

Matched Legal Cases: ['§ 608', '§ 280', '§ 280', '§ 608', '§ 608', '§ 1731']

Fha Vs the Darlington Inc - Citation 99326 - Court Judgment | LegalCrystal
Fha Vs. the Darlington, Inc. - Court Judgment
LegalCrystal Citation legalcrystal.com/99326
Case Number 358 U.S. 84
Appellant Fha
Respondent The Darlington, Inc.
fha v. the darlington, inc. - 358 u.s. 84 (1958) u.s. supreme court fha v. the darlington, inc., 358 u.s. 84 (1958) federal housing administration v. the darlington, inc. no. 13 argued october 13, 1958 decided november 24, 1958 358 u.s. 84 appeal from the united states district court for the eastern district of south carolina syllabus under § 608 of the national housing act and the regulations thereunder, appellee in 1949 obtained federal housing administration insurance of its loan to finance the construction of an apartment house. both before and after enactment of the housing act of 1954, providing specifically that the intent of the national housing act has been and is to exclude the use of such housing for.....
FHA v. The Darlington, Inc. - 358 U.S. 84 (1958)
U.S. Supreme Court FHA v. The Darlington, Inc., 358 U.S. 84 (1958)
1. Though there was no express provision on the point in the Act or regulations when appellee's mortgage was insured in 1949, the purpose of the Act, its administrative construction, and the meaning which a later Congress ascribed to it lead to the conclusion that appellee then had no right to rent to transients. Pp. 358 U. S. 87 -90.
Pp. 358 U. S. 90 -92.
Appellee is a South Carolina corporation formed in 1949 to obtain FHA mortgage insurance for an apartment house to be constructed in Charleston. The insurance issued and the apartment was completed. The Regulations, promulgated under the Act (24 CFR § 280 et seq. ), provide that the mortgaged property shall be
And see H.R.Rep. No. 1429, 83d Cong., 2d Sess., p. 17; S.Rep. No. 1472, 83d Cong., 2d Sess., p. 31. [ Footnote 1 ]
We take a different view. We do not think the Act gave mortgagors the right to rent to transients. There is no express provision one way or the other, but the limitation seems fairly implied. We deal with legislation passed to aid veterans and their families, [ Footnote 2 ] not with a law to promote the hotel to motel business. To be sure, the Regulations speak of property "designed principally for residential use" (§ 280.34) -- words that, by themselves, would not preclude transient rentals. But those words,
as the Senate Report on the 1954 Amendment indicates, [ Footnote 3 ] were evidently used so as not to preclude some commercial rentals. Moreover, the Regulation goes on to describe the property that is insured as "dwelling units." Id. The word "dwelling," in common parlance, means a permanent residence. A person can, of course, take up permanent residence even in a motel or hotel. But those who come for a night or so have not chosen it as a settled abode. Yet the idea of permanency pervades the concept of "dwelling." That was the construction given to § 608 by FHA in 1947, when it issued its book Planning Rental Housing Projects. "Housing" was there interpreted to mean "dwelling quarters for families -- quarters which offer complete facilities for family life." There again, the quality of permanency is implicit. [ Footnote 4 ] And if the
a dozen or more instances where it felt the public interest required it. We need not stop to inquire whether FHA had that authority. [ Footnote 5 ] We have said enough to indicate that no right or privilege to rent to transients is expressly included in the Act nor fairly implied. The contemporaneous construction of the Act by the agency entrusted with its administration is squarely to the contrary. In circumstances no more ambiguous than the present, we have allowed contemporaneous administrative construction to carry the day against doubts that might exist from a reading of the bare words of a statute. See United States v. American Trucking Assns, 310 U. S. 534 , 310 U. S. 549 ; Norwegian Nitrogen Products Co. v. United States, 288 U. S. 294 , 288 U. S. 315 . When Congress passed the 1954 Amendment, it accepted the construction of the prior Act which bars rentals to transients. Subsequent legislation which declares the intent of an earlier law is not, of course, conclusive in determining what the previous Congress meant. But the later law is entitled to weight when it comes to the problem of construction. See United States v. Stafoff, 260 U. S. 477 , 260 U. S. 480 ; Sioux Tribe v. United States, 316 U. S. 317 , 316 U. S. 329 -330. The purpose of the Act, its administrative construction, and the meaning which a later Congress ascribed to it all point to the conclusion that the housing business to be benefited by FHA insurance did not include rental to transients.
If the question be less clear and free from doubt than we think, it is still one that lies in the periphery where vested rights do not attach. If we take as our starting point what the Court said in the Sinking-Fund Cases, 99 U. S. 700 , 99 U. S. 718 --
-- we do not see how it can be said that the 1954 Act is unconstitutional as applied. Appellee is not penalized for anything it did in the past. The new Act applies prospectively only. So there is no possible due process issue on that score. As stated in Fleming v. Rhodes, 331 U. S. 100 , 331 U. S. 107 ,
"Federal regulation of future action based upon rights previously acquired by the person regulated is not prohibited by the Constitution. So long as the Constitution authorizes the subsequently enacted legislation, the fact that its provisions limit or interfere with previously acquired rights does not condemn it. Immunity from federal regulation is not gained through forehanded contracts. [ Footnote 6 ]"
Moreover, one has to look long and hard to find even a semblance of a contractual right rising to the dignity of the one involved in Lynch v. United States, 292 U. S. 571 . The Constitution is concerned with practical, substantial rights, not with those that are unclear and gain hold by subtle and involved reasoning. Congress by the 1954 Act was doing no more than protecting the regulatory system which it had designed. Those who do business in the regulated field cannot object if the legislative scheme is buttressed by subsequent amendments to achieve the legislative end. Cf. Viex v. Sixth Ward Assn, 310 U. S. 32 ; Keefe v. Clark, 322 U. S. 393 . Invocation
of the Due Process Clause to protect the rights asserted here would make the ghost of Lochner v. New York, 198 U. S. 45 , walk again.
"Since a main purpose of these provisions [authorizations of additional insurance] is to reduce the risks assumed by builders in order to encourage a large volume of housing, the committee calls special attention to the fact that this portion of the bill places emphasis upon rental housing. It is the specific intent of the committee that those in charge of the program shall make every reasonable effort to obtain a substantial volume of rental housing -- or, in any event, housing held for rental during the emergency -- through the operation of title VI, both with respect to multifamily units and individual units. While home ownership is to be encouraged, a large percentage of veterans do not yet possess the certainty of income or of location, or the financial means, to purchase homes at this time. The bill as approved by the House of Representatives included this attention to rental housing. "
This brings me to the validity of the 1954 enactment which presents for me a much more difficult question than that of the problem of statutory construction just considered. This is so because of the very weighty presumption of constitutionality that I deem it essential to attribute to any Act of Congress. This case falls between such cases sustaining the retroactive validity of legislation adversely affecting an existing interest as Paramino Co. v. Marshall, 309 U. S. 370 , and Fleming v. Rhodes, 331 U. S. 100 , on the one hand, and Lynch v. United States, 292 U. S. 571 , on the other. While, to be sure, differentiation between "remedy" and "right" takes us into treacherous territory, the difference is not meaningless. The two earlier cases cited may fairly be deemed to sustain retroactive remedial modifications even though they affect existing "rights," while the Lynch case is a clear instance of the complete wiping out of what Mr. Justice Brandeis, in his opinion for the Court, called "vested rights." 292 U.S. at 292 U. S. 577 . Insofar as the 1954 Act applied to the earlier Darlington mortgage, it did not completely wipe out "vested rights." But on the proper construction of § 608, in the circumstances found by the District Court and not here challenged, the unavoidable application of the 1954 Act to the Darlington mortgage did substantially impair the "vested rights" of respondent. I would be less than respecting the full import of the Lynch case did I not apply it to the present situation.
A three-judge District Court, largely adopting the findings and conclusions of the single district judge before whom this case was originally heard, held that as the law stood in 1949, when the mortgage here involved was issued, Darlington was not forbidden to make occasional transient rentals, and that the Federal Housing Administrator may not now prohibit such rentals since that would involve an unconstitutional retroactive application of the relevant provisions of the Housing Act of 1954. [ Footnote 1fn2/1 ] This
Hence, I consider that the FHA's position in this case must stand or fall on whether the less-than-30-days rental provision of the 1954 Act, which in terms applies to mortgagors insured before as well as after the Act's effective date ( see 12 U.S.C. (Supp. V) § 1731b(b)), can be given application to Darlington to increase the obligations assumed by it under its 1949 contract with the United States. I do not think it can. As the District Court correctly put it:
142 F.Supp. at 351. See Lynch v. United States, 292 U. S. 571 ; Sinking-Fund Cases, 99 U. S. 700 . What was said in the Lynch case as to contracts of war risk insurance applies
292 U.S. at 292 U. S. 579 . I do not understand the Housing Administration to contend that the United States possesses general regulatory power over appellee outside the contractual relationship, and the Court has pointed to no such "paramount power" by which the imposition of the 1954 Act's prohibitions might be justified in this case. Under these circumstances, I see no reason for disregarding the principles set forth in the cases cited, particularly when the District Court, with ample justification, found that "the 1954 Act is designed to afford relief for private interests, as distinguished from public purposes. . . ." 142 F.Supp. at 353. [ Footnote 1fn2/2 ] Indeed, the Court's treatment of this case seems to reinforce my view about the 1954 Act -- else why all this straining to bring the matter under the pre-1954 statute?
[ Footnote 1fn2/1 ]
[ Footnote 1fn2/2 ]