for furniture now being used in the hotel operation.
31. The instant action was instituted by the Commissioner of FHA on July 11, 1955, following refusal by defendant to cease its hotel and transient operations as ordered by the Commissioner in his letter of April 20, 1955.
Conclusions of Law
(1) The operation of a hotel is a business other than the operation of a rental housing project.
(2) The defendant's hotel operations are contrary to that provision of its charter which restricts its business activity to the operation of a rental housing project -- so long as FHA insurance on mortgages on its project is outstanding.
(3) From the beginning, transient rentals were not within the scope of defendant's permitted activity under its charter except with the consent of FHA since the charter expressly declares that without FHA approval the corporation 'shall not * * * require as a condition to the occupancy or leasing of any unit in the project the payment * * * of any amount other than the payment of the first month's rent' plus a specified security deposit 'to guarantee the performance of the covenants of the lease.' The quoted charter provision contemplates that any rental of a unit in defendant's project shall be for at least one month.
(4) Such right as defendant had to conduct transient operations in its project was dependent solely upon the permission given by FHA in the agreement of August 1952 between FHA and defendant.
(5) After the agreement of August 1952 was made it was not thereafter modified by acquiescence of the parties or otherwise.
(6) The contract of August 1952 between defendant and FHA has been substantially breached in that defendant has used bellboys and has advertised as a hotel and the contract is found to have been legally terminated by FHA.
(7) The defendant is now eligible under the new zoning regulations to operate the premises involved without a hotel license, and it was implicit in the agreement of August 1952 that in the event of such an amendment, defendant would apply for permission to operate its commercial adjuncts thereunder. The defendant's failure and refusal to apply is not made in good faith and was also a substantial violation of the agreement of August 1952, justifying plaintiff's termination of the contract.1a
(8) The Board of Zoning Adjustment has jurisdiction to consider an appeal by the defendant under the amended zoning regulations.
(9) The method employed by the Board of Zoning Adjustment to determine the distance from the principal entrance of The Woodner to the nearest principal business street frontage, to wit, scaling the plat of the area, was reasonable and proper.2a
(10) The method employed by the Surveyor of the District of Columbia to determine the distance from the principal entrance to the business street frontage age was reasonable and proper.
(11) The prohibitions against hotel operations and transient rentals in Section 513 were (in effect) included in defendant's charter adopted in 1949, and properly so in view of the purpose of Section 608 of the National Housing Act, as amended in 1946, to provide apartments during an unprecedented emergency shortage of housing and to give preference in the occupancy of the apartments to World War II veterans and their immediate families and to 'hardship cases'.3a Section 513 does not, as to defendant, create a new restriction with respect to a past transaction and accordingly, this section is applicable to defendant.4a
(12) Section 513 provides that project owners who had secured written permission to rent to transients prior to May 28, 1954, could continue to rent to transients. However, this provision was intended by Congress to confirm, not to abrogate, existing written agreements between FHA and Section 608 mortgagors, and, interpreting the section in accordance with the declared legislative intent, it did not liquidate the agreement then in effect between FHA and defendant.5a
(13) There are no equities in favor of the defendant which commend themselves to the conclusion of this Court, it appearing that defendant engaged in a pattern of conduct which was calculated to defeat the purposes of the National Housing Act.
(14) An injunction against use of defendant's premises for transient and hotel purposes shall issue. Counsel for plaintiff will submit a proposed decree with provision for an appropriate stay in case of the timely filing of notice of appeal, and also with provision for a reasonable period of transition from transient to residence use of the apartments involved.