*1 ADMINISTRATION HOUSING FEDERAL DARLINGTON, INC. v. THE November 1958. 13, 1958. Decided Argued October No. appellant. argued Alan S. Rosenthal cause Rankin Solicitor him on the brief were General With Doub. Attorney General Assistant him Long argued appellee. the cause for With J. C. H. Logan Turner and Hernán W. on the brief were Higgins, Jr. Douglas opinion delivered
Me. Justice Court. *2 of 608 of the § involves a construction
This case 1743, Act, § U. S. C. Housing National Stat. Emergency Housing the by amended 10 of Veterans’ § Regulations the issued 207, 214, Act of 60 Stat. (b) (2) The aim of the Act as stated 608§ thereunder. II and for veterans of War provide housing is to World by families. That end is to be achieved their immediate Administration to insure authorizing the Federal (a). Mort- mortgages covering projects. § those approved by are to be the gagors, eligible insurance, for require is them “to be agency, empowered which to regulated sales, charges, capi- or restricted as to rents or operation.” and methods of structure, return, tal rate (b)(1). § 608 formed
Appellee corporation is a South Carolina apartment FHA for an mortgage 1949 to obtain insurance insurance house to be constructed in Charleston. The apartment completed. Regu- issued and was promulgated (24 § under the Act CFR lations, seq.), et shall be provide mortgaged property principally use, conforming for residential to “designed satisfactory to the and con- Commissioner, standards units sisting eight (8) dwelling of not less than rentable Regulations . .” further on one site . . 280.34. provide: mortgagor shall made for charge
“No be project the accommodations offered excess of a rental to be filed with the Commis- schedule him approved by duly sioner and or his constituted representative prior opening project rental, upon which schedule shall be based a max- rental fixed average prior imum the insurance of and shall not thereafter mortgage, changed to, and mortgagor application upon except the Com- by, change approval the written (a). § 280.30 missioner.” in the preference given are families their Veterans children families against discrimination rentals; and 280.24. prohibited. monthly FHA schedule submitted Appellee schedule No apartments. types its different rates nowas Indeed there supplied. for transients of rates would apartménts any of FHA representation FHA without appellee affiliate But an be furnished. and some apartments; a number knowledge furnished at rentals basis daily transients on leased were part by FHA, approved to nor submitted never Though rental.” *3 “furniture as affiliate going (f)), (§ 280.30 Regulations by the required as appellee, agency no disclosure it made FHA, reports made or rented apartments some furnished it had that either furnished to rent it continued But transients. them to after before both transients apartments 610, 12 68 Stat. Act. to the added 513 was § when contained new section 1731b. V) (Supp. C. U. S. congres- declaration following (a) in subsection purpose: sional been it has that hereby declares Congress
“The the National enactment intent since mortgages aid of built with housing Act principally used is to be Act under that insured the use this intent excludes use; and residential while purposes or hotel transient housing for such outstand- mortgage remains insurance on 2d Cong., 1429, 83d Rep. No. R. see H. And ing.” Sess., 2d Cong., Rep. No. 83d 17; S. Sess., p. 31.1 p. exceptions not relevant that, except certain provides The Act respect to which multifamily housing existing
here, no new
Appellee persisted in its rental of space to transients.
Appellant FHA
persisted
maintaining that
the prac-
tice was not authorized.
In 1955 appellee brought
this suit for a declaratory judgment
that so long
as
operates its property "principally” for
use,
residential
keeps apartments available for extended tenancies, and
complies with the terms of the Act in existence at the
túne it
obtained
insurance,
it is entitled to rent
transients. The District
gave
Court
appellee substan-
tially the relief which it demanded.
We take a different view. We do not think the Act gave mortgagors the right to rent to transients. There is no express provision way one or the other; but the lim- itation seems fairly implied. We deal with legislation passed to aid veterans and their families,2 not with a law to promote the hotel or motel business. To be sure, the *4 Regulations speak of property “designed principally for residential use” (§ 280.34) that by themselves —words would not preclude transient rentals. But those words, mortgage a by is insured the FHA operated shall be for transient purposes. (b). Commissioner is authorized to define “rental for transient or purposes” hotel any but in event rental for any period less than 30 days constitutes rental for purposes. (e). §513 2S. Rep. No. 1130, 79th Cong., Sess.; 2d Rep. H. R. No. Cong., 79th 2d Sess. indicates,3 Amendment Report on as the Senate some commer- preclude to as not evidently so used were on to de- goes Regulation Moreover, rentals. cial “dwelling units.” is insured that property scribe the a means parlance in common “dwelling” word Id. The up take course can of person A residence. permanent But those in a motel hotel. even residence permanent it as a settled not chosen a or so have night for who come con- pervades the permanency idea of Yet the abode. given the construction That was “dwelling.” cept Planning book it issued its FHA in 1947 when 608§ inter- there “Housing” was Projects. Housing Rental quarters for “dwelling quarters mean preted to families — There family life.” facilities complete which offer ifAnd implicit.4 permanency quality again Sess., p. 31, states: Cong., Rep. 2d No. 83d S. spirit this intent is vio- believe the not “Your committee does included establishment operation of a commercial lated operated as residing projects rental in needs of families serve the distinguished those (as housing projects permanent residential firmly- accommodations) believes but provide transient operated to conducted should operation of such establishments any portion of the of all or use convert the manner as to in such a to a residential use permanent, project from housing in the units . . .” furnishing transient accommodations. project Reports on the the Committee is exhibited in tone same instance, reporting the Vet For various amendments on Committee of 1946 Senate Emergency Act erans’ Banking Currency stated: addi- these purpose of [authorizations a main “Since order by builders in assumed reduce the risks is to
tional insurance] special housing, calls the committee large encourage volume emphasis places' bill portion this the fact attention the committee specific intent of housing. It is upon rental effort every reasonable make shall charge program those housing any event rental volume a substantial to obtain —or operation emergency through during the housing held — multifamily and individual units respect to VI, title both *5 provisions appellee’s charter are deemed relevant, is not without interest to note the requirement “Dwelling accommodations of the corporation shall be a average per per rented at maximum room Again month. . . .” is permanency. focus on In FHA made in its application forms for estimates of annual operating expenses project. expenses None of the incident to transient accommoda- tions —such as linen supply cleaning expenses —were listed. Once may more we infer the insurance program in designed aid of transients.
In a letter to field offices 1951 explaining the criteria to be considered in passing on rent schedules and methods of the FHA operation, instructed them to: “. . . objective bear mind that of this Admin- production istration is the housing designed for occupancy of a relatively permanent nature and that transient occupancy contrary policy. is approval No will be granted respect a proposal anticipating transient occupancy.” interpretation That is the Act clear and taken unambiguous, and, with the Regulations, authority indicates that the charged with administration of the statute construed it to bar rental to transients.
Moreover, already mentioned, prior approval by FHA of all rental always schedules was required by Regulations § 280.30 of the appellee never obtained sought approval nor of a schedule of rents for transients. It is true FHA felt it authority had the approve rental schedules for gave transients. It approval units. ownership While home encouraged, large percentage to be yet possess certainty veterans do not of income or of loca- tion, or the means, purchase financial homes at this time. The approved by bill as Representatives the House of included this housing.” attention to rental Rep. Cong., Sess., S. No. 79th 2d p. (Italics added.) *6 interest public the it felt where instances more or dozen
a FHA whether inquire stop to not need it. We required indicate enough to said have authority.5 We that had ex- is transients to rent to privilege right no that The con- implied. fairly nor the Act in included pressly agency by the Act the construction temporaneous the con- to squarely is administration its entrusted the than ambiguous more no In trary. circumstances administrative contemporaneous allowed we have present might that doubts day against carry the construction See a statute. words the bare reading of a exist Assns., S.U. Trucking 310 American States v. United United Co. v. Products Nitrogen Norwegian 549; 534, the passed Congress When States, 294, 315. S. 288 U. prior construction accepted the it Amendment, legisla- Subsequent transients. rentals bars which Act not, law earlier of an intent the declares tion which previous the determining what in course, conclusive weight entitled law is later But the Congress meant. United See construction. problem to the comes it when Tribe v. United Sioux 480; 477, S. Stafoff, 260 U. States v. Act, purpose The 329-330. States, 316 U. S. a meaning which and construction, administrative conclu- to the point all ascribed Congress later FHA by benefited to be housing business that sion transients. not include did insurance than from doubt free clear less question If the where periphery lies in one is still think, it we starting as our take If we attach. do rights vested Cases, Sinking-Fund in said the Court what point inis presumption “Every possible S. 99 U. 718 — until this continues statute, validity favor power gave FHA expressly Amendment (b). See 513§ limited situations. certain a rational doubt” —we do beyond contrary is shown the 1954 Act is unconstitu said that it can be
not see how anything penalized is not Appellee applied. tional as applies prospectively Act new past. it did process due issue on possible is no only. So there Rhodes, Fleming 100, 107, S. v. U. score. As stated upon rights action based of future regulation “Federal pro is not person regulated acquired previously as the Constitution long So hibited the Cpnstitution. the fact legislation, enacted subsequently authorizes the *7 previously limit or interfere with its Immunity from condemn it. does not acquired rights through forehanded gained is not regulation federal contracts.”6 a long and hard to find even
Moreover, one has to look dignity to the right rising a contractual semblance of States, 292 Lynch v. United S. involved in U. of the one practical, is sub- 571. The Constitution concerned gain that are unclear and stantial not with those rights, by the by reasoning. Congress hold subtle and involved protecting regula- no more than doing 1954 Act was Those who do busi- tory system designed. which it had legislative if the object ness in field cannot regulated amendments subsequent scheme is buttressed Assn., Veix v. Sixth Ward legislative achieve the end. Cf. Clark, 322 Invocation 32; S. v. U. S. U. Keefe Fleming judgment in a In had obtained a of eviction a landlord prior Control Extension state court to the enactment of Price prohibit promulgated rules Act, under which the Administrator had grounds ing premises on the of the tenants from the leased removal It was held that the landlord could asserted the landlord. any evicting judgment, enjoined the tenants under the state acquired rights by judgment were sub reason of the state “vested” through Congress’ ject possibility dilution exercise to the of their regulatory power. paramount asserted rights protect Clause Due Process York, New Lochner v. ghost make the here would again. walk S.U.
Reversed. part in the consideration took no Mr. Stewart Justice this case. or decision Frankfurter, dissenting.
Mr. Justice broad, gen- some application have not Here we nature, like statutory of a conception, either legal eralized a constitu- Law, in the of trade” Sherman “restraint equal or “the process like “due of law” provision, tional carry conceptions do not Such of the laws.” protection very they imply nature fixity. By their contemporaneous content. unfolding process a pre- problem quite different. immediate Our judicial at large Act not leave us does light legislative policy generalized of a application statute deals pre-1954 developing circumstances. way. It particularized particularized problem awith statutory construction presents question the usual *8 preclude human language enough is not clear where It is outside the ingenuity creating ambiguity. scope legislation. to add to the of judicial function contemporaneous imaginatively extrapolate task is Legislature given have to an un- answer that would rentals to question; here, considered whether transients It not until 1954 that totally prohibited. were of question right apart- did deal with the of the Congress rent a small number of ment-house owners to even remotely seeking apartments to transients without even disadvantage the interests of veterans in to evade or to through the Federal Hous- Government, whose behalf ing Administration, mortgages private insured the opinions my District Court and owners. brother Harlan seem me compelling on the construc- tion pre-1954 legislation.
This brings me to the validity the 1954 enactment presents which for me a much more difficult question problem than that of the of statutory just construction considered. This is so because very weighty pre- sumption of constitutionality I deem it essential to attribute to any Act of Congress. This case falls between cases sustaining the retroactive validity legisla- tion adversely an affecting existing interest as Paramino Marshall, Co. v. S. 370, Rhodes, U. and Fleming v. 331 U. S. on the one hand, Lynch v. United States, 292 S. 571, U. on the other. While, sure, differentiation between “remedy” and “right” takes us into treacherous territory, the difference is not meaning- less. The two earlier cases may cited 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 what Mr. Justice Brandéis, opinion his for the Court, called rights.” “vested S., U. at 577. Insofar as the 1954 Act applied to the earlier Darlington mortgage, did completely wipe out rights.” “vested But on proper construction of the circumstances found the District Court and not here challenged, the application unavoidable of the 1954 Act to the Darlington mortgage did substantially impair the rights” “vested respondent. I would be less than respecting the full import Lynch did I case not apply it present to the situation. join
Accordingly, I opinion. Mr. Justice Harlan's Mr. whom Mr. Justice Frankfurter Harlan, Justice and Mr. Justice Whittaker join, dissenting.
The question in this case is appellee whether Darlington is entitled to rent to (that transients is, so far as this case 94 a small days) than of less periods for concerned,
is covered is building, which in its apartments of number FHA Darlington’s FHA. by the insured by mortgage in December insured and consummated was mortgage statute, 608§ controlling the time neither At that 1949. amended, as 303, 56 Stat. Housing Act, the National of thereunder, issued regulations nor the S. C. U. prohibit- any provision contained seq., et 280§ 24 CFR for are found provisions Such transients. rentals ing 1954, 68 Stat. of Housing Act in 513 of first time five some passed 1731b, V) § (Supp. S. C. U. made. was mortgage after this years the find- adopting Court, largely District three-judge A before judge district single ings and conclusions the law heard, held originally this case was whom here involved mortgage 1949, when stood in to make occasional forbidden Darlington was issued, Adminis- Housing rentals, Federal and transient would since that such rentals may prohibit not now trator application retroactive an unconstitutional involve This Act of 1954.1 relevant heard this case judge who first opinion the district The Subsequent references to decision Supp. reported F. 341. at 142 opinion. to that below are Supp. reported at F. opinion is three-judge District The Court’s following Darlington (plaintiff) the imposed on Its decree conditions: leasing, for lease, available “(a) or make The shall not plaintiff number days thirty more than total than terms of less 15% project. apartments in rents and schedule of increase its “(b) plaintiff shall not thirty apartments for less than charges in effect for now rentals supplied furnishings offered other incidentals days connection therewith. ‘hotel’, nor shall as a “(c) advertise itself plaintiff shall not advertising medium, the circulation any through use of the business of solicit signs, or otherwise letters, the maintenance
95 regulations the statute and holds that under Court now to in was never entitled they Darlington as stood any event the any rentals, transient and that make may applied prohibitory provisions of the Act I holdings such rentals. From these must prevent to dissent. my opin- construing Court,
In the earlier statute the premise. on an erroneous Court ion, proceeded has rent to transients is right privilege that “no to holds fairly Act nor [pre-1954] included expressly In the true issue is not implied.” my view, however, Darlington’s mortgage under whether the statute which an gave right mortgagor insured to FHA-insured prohibited rather it rentals, to make such but whether mortgagor making them. Given this as the compelling against it to that the record is issue, seems me as the Court’s conclusion applied Darlington’s
the 1954 Act cannot be to one in position, clearly right. and that the decision below was already noted, regulations imple-
1. As 608 and the any barren of menting provision excluding were Darlington’s rentals to transients at the time mortgage was insured the FHA.
2. The District Court found that (1) Darlington’s height rentals to transients even at the of Charleston’s transient season percent constituted no more than ten building’s (2) per- total available occupancy; “no priority son entitled to has ever been rejected, and no one desiring 'permanent’ so-called occupancy apart- of an thirty days occupancy, general transients for less than or advise the public willingness provide of its accommodations for transients for periods thirty days occupancy. of less than
"(d) plaintiff provide occupants project shall not of its beverage service, regular boy food or roofn or maintain bell service.” jurisdiction The District Court retained of the cause for the purpose effectuating its decree. same”; to obtain time any wait required has been
ment has hotel, aas advertise Darlington “does (3) indicating appear signs no such, and license no at 349. Supp., F. transients.” accept willingness purpose to the conceded effect utmost According the II veterans War housing World provide of § *11 regulations in the recitals to the and families, their and mortgages FHA subject to property that the effect to (italics use” for residential principally “designed be shall Darlington’s why understand I am unable supplied), regarded court, should by the lower as found practices, statutory of these spirit or letter the of either as violative the passage Not until provisions. regulatory or the words any suggestion find Act do we in were, use” residential principally “designed pre- not so as “evidently used Court, language from transient] distinguished commercial [as some clude rentals.” found, Court District conceded
3. As the FHA mortgage, bylaws, charter, Darlington’s in nothing FHA’s subject were all of which note, mortgage right its “to lease restricted expressly approval, advance thirty than of less periods in project its apartments appear- limitation only period (30) days.” following, con- these instruments was any of ing in “Dwelling accommoda- charter: Darlington’s tained period for a be rented shall not [appellee] tions It at 346. 142 F. Supp., . . . .” years in excess of three “dwelling,” to the word much attribute is too implied prohibition less- does, an in effect now Court rentals. than-30-days instances before in a number of had
4. The FHA less-than-30-days approval specific given actually demand for veteran where mortgagors by insured rentals in- Darlington in 1955 off, when housing had fallen its less-than- position the basis of the FHA quired 30-days by mortgagors rentals permissible were not agency simply appellee referred to the Act of conclusively 1954. These events the Housing show Administration did not construe regulations the statute or before 1954 to tran- prohibit sient altogether. rentals
5. There is nothing this record to indicate that Dar- lington engaged in any kind of a scheme to subvert the purposes of housing this federal legislation. Its occa- sional transient rentals seem to have been nothing more than an plug effort to gap left revenues falling off of the long-term demand for apartment space, and do depict a sub rosa operation. hotel
Upon these undisputed facts, which are reinforced other factors detailed in the opinions two I below, can find no basis for impugning the soundness of the District Court’s holding that under the law as it existed at the time Darlington upon embarked project pro- this nothing *12 making hibited it from the occasional transient rentals shown this record. The 1954 Act was new, and not merely confirmatory, legislation. I
Hence consider the FHA’s position this case must stand or fall on whether the less-than-30-days rental provision of 1954 the which in Act, applies terms mortgagors insured before as well as after the Act’s (see effective date 12 S. C. (Supp. V) U. 1731b (b)), can be given application Darlington to increase the obligations assumed by it under its 1949 contract with the I United States. do not think it can. As the Dis- trict correctly put Court it: “When the United States enters into relations, contractual its rights and duties therein are governed generally by the law applicable to contracts private between individuals.” 142 F. at Supp., States, Lynch 351. See v. United 292 Sinking- U. S. 571; Cases, Fund 99 U. S. 718. What was said the Lynch case as to contracts of war-risk insurance applies them, the issue . . to . power the had Congress “As here: an- from States the United prohibits clause process due within falls taken the action indeed, unless, them, nulling power.” paramount or some other police power federal the the not understand I do at 579. S., 292 U. pos- States the United contend Administration the outside appellee over power regulatory general sesses to no pointed has the Court relationship, and contractual of the imposition by which power” “paramount case. in this justified might be prohibitions Act’s disregarding reason I no see these circumstances Under when cited, particularly cases forth set principles found justification ample Court District private relief to afford designed Act is “the . . . .” purposes public distinguished interests, treatment Court’s 353.2 Indeed at Supp., F. Act; the 1954 about my view reinforce this case seems matter under bring straining this why all else pre-1954 statute? affirm.
I would provision unusual the rather is demonstrated This fact right owners operators and gives hotel which 1954 Act of the tran against violations injunctions court to seek federal 611, 12 S. C. U. 68 Stat. the statute. prohibition of sient Packard testimony Arthur J. V) (i). See also (Supp. 1731b Board respectively Chairman Johnson, Earl M. *13 congressional Association, before American Hotel Treasurer of Housing Act of became considering bills which committees Banking and Cur on Committee the Senate Hearings before 654M361; 2949, 2938, pp. S-. Sess., S. S. Cong., on rency, 2d 83d Currency, Banking and on Committee House Hearings before pp. 507-515. Sess., H. R. Cong., on 2d 83d