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RUDQUIST v. BELLEMORAL

July 22, 1948

RUDQUIST
v.
BELLEMORAL, Inc. et al.



The opinion of the court was delivered by: BLACK

The plaintiff in this action, occupying apartment #206 in the Bellemoral Apartments, Seattle, as a month-to-month tenant, by her amended complaint seeks a declaratory judgment under 28 U.S.C.A. §§ 2201, 2202, to the effect that the efforts of defendants above-named to evict her are unlawful and also for an injunction restraining the defendants from making further efforts to evict plaintiff except by means prescribed in the Housing and Rent Act of 1947, 50 U.S.C.A.Appendix, § 1881 et seq. The defendants in May, 1948 answered plaintiff's amended complaint dated April 1, 1948, the original complaint having been filed and served about the middle of March of 1948. Thereafter, and about June first of this year, the parties entered into an agreed statement of facts, which agreed facts were thereafter supplemented by further agreements between the parties and further admissions by defendants through their counsel in open court. After the submission of such agreed facts and oral argument the parties filed written briefs, and at the invitation of the court attorneys C. E. Knowlton, Jr., and Clinton J. Crandall as amici curiae served and filed brief and citations. During the pendency of the action and before its presentation to the court the Housing and Rent Act of 1947 was amended by the 'Housing and Rent Act of 1948,' effective in April of this year.

Such Housing and Rent Act of 1947 as amended by the Housing and Rent Act of 1948 provides, in part, as follows:

 '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 * * *

 '(2) the landlord seeks in good faith to recover possession of such housing accommodations for his immediate and personal use and occupancy as housing accommodations, or for the immediate and personal use and occupancy as housing accommodations by a member or members of his immediate family, * * * Provided, That in the case of housing accommodations in a structure or premises owned or leased by a cooperative corporation or association no action or proceeding under this paragraph or paragraph (3) to recover possession of any such housing accommodations shall be maintained unless stock in the cooperative corporation or association has been purchased by persons who are then stockholder tenants in occupancy of at least 65 per centum of the dwelling units in the structure or premises and are entitled by reason of stock ownership to proprietary leases of dwelling units in the structure or premises, but this proviso shall not apply where such corporation or association acquires or leases such structure or premises after the effective date of the Housing and Rent Act of 1948 pursuant to a contract entered into prior to such date;

 '(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'.

 It is agreed that Mrs. H. Gangmark is the owner of the Bellemoral Apartment premises, including the apartment rented by plaintiff, and that prior to the effective date of the Housing and Rent Act of 1948 she entered into an executory contract with Bellemoral Incorporated, a corporation, for the subsequent purchase of the apartments at an agreed purchase price of about $ 85,000.00. It is further agreed that some time prior to February 9, 1948 the plaintiff was offered the opportunity to purchase a membership and a proprietary lease to her apartment by the Merry Investment Company, representing the Bellemoral Incorporated, and that when she refused to purchase the same her said apartment unit was offered for sale on the open market and that the defendant, Oscar Peterson, made an earnest money payment upon an agreement for the purchase of a membership in the defendant, Bellemoral Incorporated, and for the delivery to him when he should complete such purchase of a ninety-nine year proprietary lease to such apartment occupied by plaintiff.

 Under date of February 9, 1948 all of the defendants joined in a notice to quit and surrender the premises addressed to plaintiff, requiring her to quit the premises on February 29, 1948 and surrender and deliver same to the above-named Merry Investment Company. Included in such notice was the statement 'that the owners of said property have in good faith contracted in writing to sell subject property to Mr. Oscar Peterson for his (their) immediate and personal use and occupancy as housing accommodations for him (them).'

 From the exhibits introduced it appears that said Oscar Peterson is a bachelor and that he has paid $ 403.00 as earnest money and has paid no more upon an agreed total purchase price of $ 4,103.00 payable $ 1,500.00 in cash at time of closing and the balance in installments of not less than $ 22.81 per month with 5% interest from March 31. In such earnest money receipt the following is found:

 'The property is to be conveyed by the issuance of a certificate of membership in Bellemoral Incorporated and the execution of a proprietary lease for a term of 99 years in the form used by said corporation. The lease is to be subject to all encumbrances placed on the above described real property to finance purchase thereof by seller.

 'It is understood that purchaser is buying a membership in a mutual housing project and by virtue thereof will secure a 99-year proprietary lease of the above mentioned apartment unit. Of necessity the financing of this project depends upon the sale of all apartment units in the apartment building.

 'Under these circumstances it is agreed that in the event that substantially all of the apartment units are not sold on or before June 1st 1948 this agreement, at the option of either party, may be cancelled and terminated without liability to either party.'

 Such earnest money receipt was issued by the Merry Investment Company and signed in behalf of such investment company and by the said Oscar Peterson.

 It further appears that to date Mrs. H. Gangmark is the owner of said premises, that the title is in her, that the Bellemoral Incorporated has not as yet completed the proposed purchase nor acquired or leased said premises and further that neither Oscar Peterson nor any other person has obtained other than an earnest money receipt nor has made more than an earnest money down payment.

 It further appears that none of the tenants in occupancy entered into such earnest money transactions but that probably about fifteen out of nineteen units are covered ...


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