Prince Heyward v. Public Housing Administration Briefs and Appendix

    M CE
HEYWARD, et a;

Y.
PUBLIC







■'■









IN THE

Itnitrii States Court at Appeals
For the Fifth Circuit

No. 16040
^  f '" f

PRINCE HEYWARD, et al.,
Appellants,

v.

PUBLIC HOUSING ADMINISTRATION, et al.,
Appellees.

APPELLANTS’ BRIEF

Constance B aker H otkey,
T hurgood Marshall,

107 West 43rd Street,
New York 36, N. Y.

A. T. W alden,
200 Walden Building,

Atlanta 3, Georgia.

F rank D. R eeves,
473 Florida Avenue,

Washington, D. C.
Attorneys for Appellants.

Supreme Printing Co., I nc., 114 W orth Street, N. Y. 13, BEekman  3-2320
49





IN D E X

Statement of the Case ................................................  1
Specification of E rro rs ................................................  5
Argument ....................................................................... ®

I. Jurisdiction.......................................................  6
II. V enue................................................................. 10

III. Justiciable Case or Controversy ................  15
A. Nature and Extent of PHA Participation

In The Limitation of Certain Projects to 
White Occupancy ......................................  15

B. By Placing Requirement of Title 42,
United States Code, §§ 1410(g) and 
1415(8) (c) in its Contract with SHA,
PHA Has Not Discharged Its Obligation 22

C. Plaintiffs Have Sufficient Legal Interest
in Expenditures of Funds By PHA To 
Give Them Standing To Challenge Vali­
dity of Such Expenditures .....................  24

1. Nature and Extent of PH A’s Financial
Assistance.................................................... 24

2. Nature of Plaintiffs’ Interest in PHA
Expenditures ..............................................  26

IV. The Separate But Equal Doctrine ..............  28

Tabe of Cases

Armstrong v. Townsend (S. D. Ind. ), 8 F. Supp. 953 7
Bitterman v. Louisville & N. R. Co., 207 U. S. 205 .. 7, 8
Bolling v. Sharpe, 347 U. S. 497 ................................  6
Buchanan v. Warley, 245 U. S. 60 ............................. 28, 29

PAGE



Chesapeake & Del. Canal. Co. v. Gring (C. A. 4th),
159 F. 662, cert, den., 212 U. S. 571 .....................  7

City of Birmingham v. Monk (C. A. 5th), 185 F. 2d
859, cert, den.., 341 U. S. 940 ....................................  29

City of Memphis v. Ingram (C. A. 8th), 195 F. 2d
338 ............................................................................... 9

Crabh v. Weldon Bros. (S. D. Iowa), 65 F. Supp. 369 
rev. on other grds., 164 F. 2d 797 .........................  23

Detroit Housing Commission v. Lewis (C. A. 6th),
226 F. 2d 180 ............................................................ 28

Doremus v. Board of Education, 342 U. S. 429 . . . .  27
Downs v. Wall (C. A. 5th), 176 Fed. 657 ...............  11
Ebensherger v. Sinclair Refining Co. (C. A. 5th), 165 

F. 2d 803, cert, den., 335 U. S. 8 1 6 .........................  7, 8
Federal Housing Administration v. Burr, 309 U. S.

242 ...............................................................................  10
Federal Trade Commission v. Winsted Hosiery Co.,

258 U. S. 483 ............................................................ 26
Giles v. Harris, 189 U. S. 475 ....................................  6
Glenwood Light & Power Co. v. Mutual Light, Heat

and Power Co., 239 H. S. 1 2 1 ................................. 7
Hague v. C. I. O., 307 U. S. 496 ........................  6
Heard v. Ouachita Parish School Board (W. D. La.),

94 F. Supp. 897 .......................................................  11
Heyward v. PHA (C. A. D. C.), 214 F. 2d 222 ___  4,16
Housing Authority of San Francisco v. Banks, 120 

Cal. App. 2d 1, 260 P. 2d 668, cert, den., 347 U. S.
974 ............................................................................... 28

Hurd v. Hodge, 334 H. S. 2 4 ..................................... 6
International Shoe Co. v. Washington, 326 H. S. 310 11,14
Joint Anti-Fascist Refugee Comm. v. McGrath, 341 

U. S. 123

11

PAGE

26



I l l

Jones v. City of Hamtramck (S. D. Mich.), 121 F.
Supp. 123 ...................................................................  28

Jones v. Fox Film Corp. (C. A. 5th), 68 F. 2d 116 .. 11
Kelley v. Lehigh Nav. Coal Co. (C. A. 3d), 151 F. 2d

743, cert, den., 327 U. S. 779 ................................. 7
Keifer v. Reconstruction Finance Corp., 306 U. S.

381 ..............................................................................  10
Lansden v. Hart (C. A. 4th), 180 F. 2d 679 .............  7
Lisle Mills, Inc. v. Arkay Infants Wear (E. D. N. Y.),

84 F. Supp. 697 .........................................................  11
Lone Star Package Car Co. v. Baltimore & Ohio R.

Co. (C. A. 5th), 212 F. 2d 1 4 7 ................................. 11
Massachusetts v. Mellon, 262 U. S. 447 .....................  27
Mississippi & Missouri R. R. v. Ward, 67 U. S.

(2 Black) 485 .............................................................  7
Nixon v. Condon, 286 U. S. 7 3 ....................................  6
Nixon v. Herndon, 273 H. S. 536 ................................... 6
Nueces Valley Townsite Co. v. McAdoo (W. D. Tex.),

257 Fed. 1 4 3 ...............................................................  9
Perkins v. Benquet Consol. Min. Co., 323 U. S. 437 . . 11
Pollack v. Public Utilities Commission (C. A. D. C.),

191 F. 2d 450 ...............................................................  20
Public Utilities Commission v. Pollack, 343 U. S.

451............................................................................ 18,19, 20
Roberts v. Curtis, 93 F. Supp. 604 ............................. 6
Scott v. Donald, 165 U. S. 1 07 ....................................  7
Seawell v. McWhithey, 2 N. J. Super. 255, 63 Atl. 2d 

542, rev. on other grds., 2 N. J. 563, 67 Atl. 2d 309 29
Seven Oaks Inc. v. Federal Housing Administration

(C. A. 4th), 171 F. 2d 947 ........................................  10
Shelley v. Kraemer, 334 U. S. 1 ................................  29

PAGE



IV

Sigora v. Slusser (D. C. Conn.), 124 F. Supp. 327 .. 10
Smith v. Adams, 130 U. S. 167 ..................................... 7
Smith v. Allwright, 321 U. S. 649 ................................. 6
Smith v. Merrill (C. A. 5th), 81 F. 2d 609 ...................  11
Swafford v. Templeton, 185 U. S. 487 .........................  6
Taylor v. Leonard, 30 N. J. Super. 116, 103 Atl. 2d,

633 ............................................................. ................  29
Travelers Health Assoc, v. Com. of Va., 339 U. S.

643 ............................................................................... 11
Vann v. Toledo Metropolitan Housing Authority

(N. D. Ohio), 113 F. Supp. 2 1 0 ............................. 28
Wiley v. Sinkler, 179 U. S. 5 7 ....................................  6
Young v. Kellex Corp. (E. D. Tenn.), 82 F. Supp.

953 ............................................................................... 23

Statutes

Title 5, United States Code, 113y-113y-16....................  10
Title 28, United States Code, § 1331...........................  1, 6
Title 28, United States Code, § 1343(3) .....................  1
Title 28, United States Code, § 1391(c).....................  10
Title 28, United States Code, § 1392 ...........................  11
Title 42, United States Code, § 1401, et seq..................  3
Title 42, United States Code, § 1403a.........................  10
Title 42, United States Code, § 1404a.........................  10,19
Title 42, United States Code, § 1405a.........................  10
Title 42, United States Code, §1409, § 1410(a),

§ 1410(c) .....................................................................  24
Title 42, United States Code, § 1410(g) ............. 1, 6,19, 22
Title 42, United States Code, § 1411(a), 1413............ 25
Title 42, United States Code, § 1415(7) (a) ...............  24
Title 42, United States Code, § 1415(7) (b) ...............  18
Title 42, United States Code, § 1415(8) (c) . . .  .1, 6,19, 22, 23

PAGE



V

PAGE

Title 42, United States Code, § 1421a.........................  26
Title 42, United States Code, § 1982 ...........................1, 6, 28
Title 42, United States Code, § 1983 ........................... 1
Housing Authorities Law of Georgia, 99 Ga. Code 

Annotated, 1101 et seq...............................................  3

Other Authorities

Annotation 30 A. L. E. 2d, 602, 621 (1953) .............  7
Annotation 30 A. L. R. 2d, 602, 619 (1953) .............  7
Form PHA-1954, Rev. July 1950 ................................  15
HHFA-PHA Low Rent Housing Manual, Feb. 21,

1951, § 102.1 ...............................................................  15
Journal of Housing Vol. 13, No. 4, April 1956, p. 134 8
Restatement of Torts, § 876 ........................................  27
Sen. Rep. No. 84, 81st Cong. 1st Sess., 2 U. S. Code

Congressional Service 1569 (1949) .........................  22
Sen. Rep. No. 84, 81st Cong. 1st Sess., 2 U. S. Code 

Congressional Service 1566, 1570 (1949) .............  23
Terms and Conditions Constituting Part II of Annual 

Contributions Contract Between Local Authority
and Public Housing Administration, Form No. 
PHA-2172, Rev. Sept. 1, 1951, §§ 107-110, 115, 118, 
123(B), 124, 204, 205, 214, 215, 305(D), 308, 404,
407 ..............................................................................  13

Terms and Conditions Constituting Part II of Annual 
Contributions Contract Between Local Authority 
and Public Housing Administration, Form No. 
PHA-2172, Rev. Sept. 1, 1951, § 106(B) ...............  12





IN THE

MnxUb States (Eourt of Appeals
For the Fifth Circuit

No. 16040

-----------------o-----------------

P rince H eyward, et al.,

v.
Appellants,

P ublic H ousing A dministration, et al.,
Appellees.

----------------------o----------------------

APPELLANTS’ BRIEF

Statement of the Case

The gravamen of the Complaint is that defendants, as 
governmental officials, are enforcing a policy of racial 
segregation in public housing projects in the City of 
Savannah, Georgia, in violation of rights secured to plain­
tiffs by the 5th and 14th Amendments to the Federal Con­
stitution and by Federal Statutes, i.e., Title 42, United 
States Code, § 1982 (formerly Title 8 U. S. C. 42) and Title 
42, United States Code, §§ 1410(g), 1415(8) (c) (R. 9-10).

The jurisdiction of the court below was invoked pursuant 
to Title 28, United States Code, §§1331 and 1343(3) and 
Title 42, United States Code, § 1983 (formerly Title 8 
U. S. C. 43) (R. 3).

Relief sought is 1) a declaration that defendants may 
not pursue a policy of racial segregation in public housing 
and a declaration regarding the legality of numerous prac­
tices and procedures inherent in the enforcement of such



2

a policy, 2) an injunction enjoining all defendants from 
enforcing the segregation policy and the practices inherent 
therein, 3) an injunction also enjoining defendant Public 
Housing Administration and its field office director, defend­
ant Hanson, from giving federal financial aid and other 
federal assistance to the Savannah Housing Authority for 
the planning, construction, operation, or maintenance of 
any project which excludes plaintiffs, solely because of 
race and color, and 4) an award of $5,000 damages to 
each plaintiff against each defendant (R. 11-14).

Plaintiffs-appellants, hereinafter referred to as plain­
tiffs, are all adult Negro citizens of the United States and 
of the State of Georgia, residing in Savannah, Georgia. 
Each plaintiff has been or will be displaced from the site of 
his or her residence to make way for construction of a 
public housing project in Savannah known as Fred Wessels 
Homes. Although each plaintiff meets all requirements 
established by law for admission to public housing, each 
was denied consideration for admission and admission to 
Fred Wessels Homes and certain other public housing 
projects limited by defendants to occupancy by white 
families (R. 6, 9-10). Each plaintiff has a statutory 
preference for admission to public housing as a displaced 
and needy family. Plaintiffs bring this action on behalf of 
themselves and all other Negroes similarly situated (R. 
5-7).

Defendant-appellee, Public Housing Administration, 
hereinafter referred to as defendant PHA, is a corporate 
agency and instrumentality of the United States. Its 
principal office is in the District of Columbia and the Com­
missioner of PHA resides there. However, pursuant to 
authority vested in it, PHA has established branch offices 
in various states. It has a branch office in Atlanta, Georgia 
known as the Atlanta Field of the PHA. Defendant- 
appellee, Arthur R. Hanson, hereinafter referred to as



3

defendant Hanson, is the director of said office. PHA 
administers the Federal low-rent housing program involved 
in this case. United States Housing Act of 1937, as amended, 
Title 42, United States Code, § 1401, et seq. (R. 8).

Defendant-appellee., Savannah Housing Authority, here­
inafter referred to as defendant SHA, is a public body 
corporate which administers the low-rent housing program 
of the City of Savannah, Georgia. Housing Authorities 
Law of Georgia, 99 Ga. Code Annotated 1101 et seq. The 
other defendants in this case are the members and the 
executive director of the SHA (R. 8).

Pursuant to provisions of the United States Housing- 
Act of 1937, as amended, and the Housing Authorities Law 
of the State of Georgia, six low-rent projects have been 
built in Savannah and are presently in operation: Fellwood 
Homes (Ga-2-1) with 176 units, Yamocraw Village (Ga-2-2) 
with 480 units, Garden Homes Estate (Ga-2-3) with 314 
units, Fred Wessels Homes (Ga-2-4) with 250 units, 
Fellwood Annex (Ga-2-5) with 127 units and Garden Homes 
Annex (Ga-2-6) with 86 units (R. 41).

At the time of the filing of the Complaint in this action, 
May 20, 1954, there were at least three remaining public 
defense housing projects in Savannah. These projects 
were built pursuant to provisions of various Federal enact­
ments. Title to these projects was in the United States. 
They were operated by the SHA under lease from the 
United States acting through the Federal Public Housing 
Authority or its successor PHA (PHA Exhibit 7). Since 
the filing of the Complaint, PHA has conveyed title to two 
of these projects to the SHA for use as low-rent projects; 
these are Nathanael Green Villa, consisting of 250 units 
(conveyed March 31, 1955) and Francis Bartow Place, 
consisting of 150 units (conveyed June 1, 1955). A third 
project, Deptford Place, was conveyed on June 17, 1953 
for the purpose of eventually removing the dwelling units



4

thereon and conveyance of the land to the city for industrial 
purposes (R. 35, 43-44).

With the exception of three of the above-named projects, 
i.e., Yamocraw Village, Fellwood Homes and Fellwood 
Annex, containing a total of 783 unite, all other public low- 
rent housing projects in Savannah, i.e., Garden Homes 
Estate, Fred Wessels Homes, Garden Homes Annex, 
Nathanael Greene Villa, Francis Bartow Place, with a 
total of 1050 units, are barred to qualified Negro families, 
solely because of race and color. In addition, Deptford 
Place is limited to white occupancy (R. 27, 31, 35).

Qualified Negro families are permitted to occupy a 
certain specified percent of the units determined by applica­
tion of an administrative formula known as the PHA 
Racial Equity Formula (R. 33, 37). The determination 
made as a result of application of this formula forms a 
part of the contracts between PHA and SHA, Heyward 
v. PHA  (C. A. D. C.) 214 F. 2d 222.

As of August 30, 1955, 73 white families, whose applica­
tions for admission have been reviewed and whose eligibility 
for public low-rent housing has been determined, were 
awaiting admission. As of the same date, 319 Negro 
families similarly situated were awaiting admission (R. 
36). Not one of the 250 families now living in Fred 
Wessels Homes is a displaced family (R. 36).

A motion for summary judgment was filed on behalf 
of PHA and Hanson (R. 38). A motion to dismiss and 
an answer were filed on behalf of SHA and the other 
defendants (R. 15, 21). Both motions were heard on Sep­
tember 30, 1955 (R. 74).

The court below granted the motion for summary judg­
ment on the following grounds: 1) the complaint fails to 
show that the matter in controversy as to each plaintiff 
exceeds $3,000.00; 2) PHA and Hanson are not acting 
under color of any state law; 3) court lacks venue of the



5

action under Title 28, United States Code, § 1391(b) in that 
PH A is not a corporation doing business in the judicial 
district within the meaning of Title 28, United States Code, 
§ 1391(c); 4) plaintiffs lack sufficient legal interest in the 
expenditure of Federal funds by PHA to give them stand­
ing to challenge the validity of such expenditures; 5) that 
PHA by placing in its annual contributions contract with 
SHA a requirement that the latter shall extend preferences 
in occupancy required by Title 42, United States Code, 
§ 1410(g) has fulfilled its obligation under that statutory 
provision; 6) in view of the fact that PHA has not pre­
scribed any policy as to whether low-rent housing in 
Savannah shall be occupied by any particular race but has 
left the determination of that policy to the SHA, there is no 
justiciable controversy between plaintiffs and PHA and 
Hanson; and 7) since Hanson as Field Office Director of 
PHA has no official function or duty with respect to dis­
pensing or withholding of Federal funds to SHA, plaintiffs 
fail to make out a claim on which any relief can be granted 
against defendant Hanson (E. 47).

The court below granted the motion to dismiss on the 
ground that “ the legal doctrine of separate but equal 
facilities is still the law of the land and controls this case” , 
135 F. Supp. 217 (R. 51, 52).

From the orders entered granting the above motions, 
plaintiffs appeal (E. 57).

Specification of Errors

The court below erred in granting the motion of defend­
ants PHA and Hanson for summary judgment on the 
grounds set forth in its order of October 15, 1955.

The court below erred in granting the motion to dismiss 
on the ground that the doctrine of separate but equal 
facilities is still the law of the land and controls this case.



6

ARGUMENT

I. Jurisdiction

One of the grounds upon which the court below granted 
the motion of defendants PHA and Hanson for summary 
judgment is that the complaint fails to show that the matter 
in controversy as to each plaintiff exceeds $3,000. as re­
quired by 28 U. S. C. § 1331.

In this action, plaintiffs allege they have been denied 
admission to Fred Wessels Homes, and certain other pub­
lic housing projects, by these defendants, solely because 
of race and color (R. 10). Plaintiffs’ right not to be 
deprived of a public housing unit by these defendants 
solely because of race and color is secured by the provi­
sions of 42 U. S. C. § 1982, the requirements of 42 U. S. C. 
§§ 1410(g) and 1415(8) (c), the due process clause of the 
Fifth Amendment to the Federal Constitution and by the 
public policy of the United States. Cf. Hurd v. Hodge, 
334 U. S. 24; cf. Roberts v. Curtis, 93 F. Supp. 604; cf. 
Bolling v. Sharpe, 347 U. S. 497.

In civil rights actions at law, as in other actions at law, 
the amount necessary for jurisdiction under § 1331 is deter­
mined by the sum claimed in good faith by the plaintiff 
seeking to redress the violation of his civil rights, Giles v. 
Harris, 189 U. S. 475; Swafford v. Templeton, 185 U. S. 
487; Wiley v. Sinkler, 179 U. S. 57. See, Hague v. C.I.O., 
307 U. S. 496, 507; cf. Smith v. Allwright, 321 U. S. 649; 
cf. Nixon v. Condon, 286 U. S. 73; cf. Nixon v. Herndon, 
273 U. S. 536.

In the Wiley case, supra, plaintiff sought redress against 
election officials claiming that they had denied him the 
right to vote in a congressional election. He sought 
damages which he alleged were $2500. At that time, $2000. 
was the required jurisdictional amount. The Supreme



7

Court held that since plaintiff alleged that his damages 
exceeded $2000., the jurisdictional requirement had been 
met.

In this case, plaintiffs allege that the amount in con­
troversy as to each plaintiff exceeds $3000. exclusive of 
interest and costs (R. 3) and pray damages in the amount 
of $5000. for each plaintiff against each and all defend­
ants (R. 13).

These allegations, as indicated by the Wiley case, clearly 
meet the jurisdictional requirements of § 1331.

In civil rights cases, as in other cases, when injunction 
is sought to restrain defendant from interfering with plain­
tiff’s right, there are two criteria which have been estab­
lished by the courts for determining amount or matter in 
controversy: 1) the value of that which the plaintiff seeks 
to gain or protect, and, 2) the value of what defendant will 
lose should requested relief be granted, Smith v. Adams, 
130 U. S. 167; Armstrong v. Townsend (S. D. Ind.), 8 F. 
Supp. 953; Cheseapeake & Del. Canal Co. v. Gring (C. A. 
4th), 159 F. 662, cert, den., 212 U. S. 571. See Annot. 30 
ALR 2d 602, 619 (1953).

The result of applying either criterion need not be the 
same. See Mississippi <& Missouri R.R. v. Ward, 67 U. S. 
(2 Black) 485, where the defendants’ criterion was adopted. 
See Kelley v. Lehigh Nav. Coal Co. (C. A. 3d), 151 F. 2d 
743, cert, den., 327 U. S. 779, where plaintiffs’ criterion 
was employed.

But the overwhelming majority of cases have employed 
the plaintiffs’ criterion, Scott v. Donald, 165 U. S. 107; 
Bitterman v. Louisville & N. B. Co., 207 U. S. 205; Glen- 
wood Light <& Power Co. v. Mutual Light, Heat and Power 
Co., 239 IT. S. 121; Ebensberger v. Sinclair Refining Co. 
(C. A. 5th), 165 F. 2d 803, cert, den., 335 U. S. 816; Lans- 
den v. Hart (C. A. 4th), 180 F. 2d 679. See also Annot. 30



8

ALR 2d 602, 621 (1953) for collection of cases employing 
the plaintiffs’ point of view criterion.

Employing plaintiffs ’ criterion to the instant case, each 
plaintiff here seeks to gain a public housing family unit. 
The value of such a unit, per se, as well as to each plaintiff, 
clearly exceeds $3,000. The record shows that maximum 
cost of construction and equipment per room in Fred Wes- 
sels Homes is to be $1,750. (See Exhibit 1. pg. 1, at­
tached to Slusser Affidavit and sent up to the court in 
original form.) A family unit would obviously consist 
of at least three rooms (R. 35). Thus construction cost 
of even the smallest family unit exceeds the jurisdictional 
amount.1

The group of cases which are perhaps most closely 
analogous to the instant case are those in which plaintiff 
has sought specific performance of a contract for the sale 
of real property. In these cases the courts have said that 
the test of jurisdiction is the value of the property which 
plaintiff seeks to acquire, and have rejected claims that 
plaintiff failed to meet the requisite jurisdictional amount 
because he did not show that his damages would exceed 
$3,000 if defendant failed to perform his contract. Ebens- 
berger v. Sinclair Refining Co., supra.

It should be noted at this point that no formal plea 
to the jurisdiction was made by defendants PHA and 
Hanson. Bitterman v. Louisville <& N. R. Co., 207 U. S. 205, 
224. The motion filed by them was a motion for summary 
judgment on the ground that there is no genuine issue as 
to any material fact (R. 38). Their motion is supported 
by an affidavit which does not challenge the jurisdictional 
amount (R. 39). These defendants raised a question re­
garding jurisdictional amount by brief and oral argument 
(R. 79). 1

1 See Journal of Housing, Vol. 13 No. 4 April 1956 p. 134 where 
it is stated that construction costs of Fred Wessels Homes were 
$1538 per room, or about $7234 per unit.



9

While it is true that where challenged the burden is on 
plaintiff to show that the amount in controversy exceeds 
$3,000, to justify dismissal where there is an adequate 
formal allegation of amount, it must appear to a legal 
certainty that the claim is for less than the jurisdictional 
amount. City of Memphis v. Ingram (C. A. 8th), 195 F. 2d 
338. Here, on the contrary, it seems clear that the amount 
in controversy exceeds the requisite $3,000.

Applying the defendants’ point of view, there appears 
to be still another basis for jurisdiction. One form of 
relief sought here is an injunction enjoining PHA and 
Hanson from giving federal financial and other federal 
assistance to SHA for projects from which plaintiffs are 
excluded solely because of race and color (R. 13). By the 
admission of these defendants at least three of these proj­
ects are limited to white occupancy (R. 78). The financial 
assistance given by PHA to the SHA is in the form of a 
loan and a subsidy (R. 78). The loan which PHA agreed 
to make to finance Fred Wessels Homes (GA-2-4), Yama- 
craw Village (HA-2-5) (Negro), and Garden Homes An­
nex (GA-2-6) (white) as of May 8, 1953 was $3,337,019.00 
(Exhibit 1, Amendatory Agreement No. 3 attached thereto). 
The rate of interest charged by PHA on this loan to SHA 
appears to be 21/2% per annum (Exhibit 1, pg. 1).

It thus appears that if plaintiffs succeed in enjoining 
these defendants from giving such financial aid in the 
future (R. 36), PHA would lose the interest it would earn 
on such loans which is clearly in excess of $3,000 per annum 
on a single project loan.

In Nueces Valley Townsite Co. v. McAdoo (W. D. Tex.), 
257 Fed. 143, the plaintiff sought to enjoin acts of a Fed­
eral governmental official, alleging that if the injunction 
was granted, the government would save $400 per month 
for 21 months. The court held that this constituted the 
requisite jurisdictional amount. Thus another view of the



10

amount in controversy may be expressed in terms of the 
amount of money which PHA would save by being enjoined 
from furnishing loans and subsidies for the construction 
of segregated projects. From the Annual Contributions 
Contracts it is clear that the amount so saved would 
exceed $3,000 (Exhibit 1).

II. Venue

PHA, being successor to the United States Housing 
Authority, is a public body corporate which Congress has 
authorized to sue and to be sued with respect to its func­
tions under the United States Housing Act of 1937 and the 
National Defense Housing Projects Acts [42 U. S. C. 1403a, 
1404a, 1405a; 5 U. S. C. 133y-133y-16, Reorganization Plan 
No. 3 effective July 27, 1947]. It may, therefore, be sued 
in the same manner as any other corporation. Sigora v. 
Slusser, (D. C. Conn.), 124 F. Supp. 327; cf. Keifer 
v. Reconstruction Finance Corp., 306 U. S. 381; cf. Federal 
Housing Administration v. Burr, 309 U. S. 242; cf. Seven 
Oaks Inc. v. Federal Housing Administration (C. A. 4th), 
171 F. 2d 947.

The court below ruled that venue was improper as to 
PHA since it is not doing business in the judicial district 
within the meaning of 28 U. S. C. § 1391(c).

There is no question raised as to the residence of defend­
ants SHA, its members, and executive director. They 
reside in the southern judicial district of Georgia. There 
is no question that defendant Hanson resides in Atlanta 
or the northern judicial district of the state. There is 
apparently no question that PHA is doing business in 
Atlanta where its Field Office is located. By virtue of an 
amendment to the Judicial Code in 1948, 28 U. S. C. 1391(c), 
the judicial district in which a corporation is doing busi­
ness “ shall be regarded as the residence of such corpora­
tion for venue purposes.”  The question raised by the



11

ruling of the court below is whether it is necessary to find 
that PHA is doing business in the southern district before 
it can become amenable to suit there.

In this action, suit is brought against different defend­
ants “ residing”  in the same state but in different judicial 
districts thereof. In such case, the Judicial Code provides, 
in language too clear to be misunderstood, that suit may be 
brought in any of such districts, escept where the suit is 
one of a local nature. 28 U. S. C. § 1392; Jones v. Fox Film 
Corp. (C. A. 5th), 68 F. 2d 116; Smith v. Merrill (C. A. 
5th), 81 F. 2d 609; Downs v. Wall (C. A. 5th), 176 Fed. 657; 
Lisle Mills, Inc. v. Arkay Infants Wear (E. D. N. Y.), 84 
F. Supp. 697; Heard v. Ouachita Parish School Board 
(W. D. La.), 94 F. Supp. 897. Therefore, in deciding 
whether venue is proper as to PHA, appellants are not 
limited to a determination whether, under the facts of this 
case, PHA is doing business in the southern district of 
Georgia. If PHA was doing business anywhere in Georgia 
at the time this suit was instituted, then venue is properly 
laid in the southern district where other defendants reside.

In this case, appellants assert rights secured by the 
Constitution and laws of the United States (R. 3). This 
is therefore not a case in which federal jurisdiction is 
founded solely upon diversity of citizenship. In such a 
case, determination as to what constitutes doing business 
by a corporation for venue purposes is to be governed ‘ ‘ by 
basic principles of fairness.”  Lone Star Package Gar Co. 
v. Baltimore & Ohio R. Co. (C. A. 5th), 212 F. 2d 147; 
International Shoe Co. v. Washington, 326 U. S. 310; 
Travelers Health Assoc, v. Com. of Va., 339 U. S. 643; 
Perkins v. Benquet Consol. Min. Co., 323 U. S. 437. Under 
the basic principles of fairness established by the United 
States Supreme Court in the International Shoe Co. case 
and followed by this Court in the Lone Star Package Car 
case, the facts of this case require that the court below 
exercise jurisdiction over PHA.



12

PHA has established in the City of Atlanta, Georgia, a 
Field Office, the director of which is defendant Hanson. 
The record in this case discloses that this office has been 
in existence at least since March 19, 1952 when an Annual 
Contribution’s Contract between SHA and PHA was en­
tered into regarding the planning, construction, operation 
and maintenance of Fred Wessels Homes and other 
projects. The agreement is signed by the then Director 
of the Atlanta Field Office for PHA, and an amendment 
thereto dated March 18, 1953 was signed by defendant 
Hanson (Exhibit 1). The record also discloses that con­
tracts between PHA and SHA have existed since November 
25, 1940 and that the latest contract between SHA and 
PHA entered into on January 21, 1954 regarding the opera­
tion of existing projects which were the subject of a 1940 
contract, was signed by the Acting Director of the Atlanta 
Field Office (Exhibit 1). It is thus clear that the function 
of the Atlanta Field Office of PHA is to enter into con­
tracts with local public housing agencies in Georgia cover­
ing planning, construction, operation and maintenance of 
low-rent projects.

Part I of the Annual Contributions Contract reveals 
the nature and extent of PHA financial involvement in the 
housing involved in this controversy (Exhibit 1).

Part II of the Annual Contributions Contract reveals 
the detailed involvement of PHA in planning, construction, 
operation and maintenance of these projects (Exhibit 1). 
Examination of this latter document demonstrates that 
SHA is subject to complete regulation and control by PHA. 
Under the terms of this agreement, for example, PHA 
approves the plans and specifications of the local authority 
for construction of the project,2 all construction contracts

2 Term and Conditions Constituting Part II of Annual Contri­
butions Contract Between Local Authority and Public Housing 
Administration. Form No. PHA-2172, Rev. Sept. 1, 1951, § 106(B).



13

including bids for same,3 prevailing wages to be paid by 
local authority to all architects, technical engineers, drafts­
men, and technicians employed in the development of the 
projects; 4 PHA prescribes the forms to be used by con­
tractors and subcontractors in preparing their payrolls and 
instructions with respect to same; 5 PHA approves form 
of contractor’s release from liability to local agency;6 PHA 
approves salaries paid to local agency personnel,7 develop­
ment cost,8 budgets,9 income limits and rent schedules; 10 11 
PHA approves acceptance of work done under construction 
or equipment contract,11 insurance coverage,12 settlement 
for damaged or destroyed project,13 and sale of excess 
property.14

On the question whether PHA does business in Savan­
nah, it should be noted that Section 121 of Part II of the 
Contract requires that “ The local authority shall provide 
and maintain or require that there shall be provided and 
maintained, during the construction of each Project, ade­
quate facilities at the site for the use of PH A’s representa­
tives who may be assigned to the review of such Project.”

It should also be noted that the affidavit of PHA Com­
missioner Slusser, which supports the motion for summary 
judgment, admits that by virtue of the contracts existing 
between PHA and SHA, PHA has control over the projects 
here in controversy to the extent indicated and that this

3 Id., §§ 107, 108, 109, 110.
4 Id., § 115.
5 Id., § 118.
6 Id., § 123(B).
7 Id., §215.
8 Id., § 404.
9 Id., § 407.
10 Id., §§ 204, 205.
11 Id., § 124.
12 Id., § 305(D ).
13 Id., § 214.
14 Id., § 308.



14

control extends to the occupancy of such projects as re­
quired by the United States Housing Act of 1937, as 
amended, and the regulations promulgated by PH A pur­
suant thereto (E. 41).

And finally, it should be noted that PH A’s Racial 
Equity Formula is the basis for the limitation of Fred 
Wessels Homes and certain other projects to white occu­
pancy (E. 27, 31, 33, 36-37).

In short, the record clearly exhibits that there are six 
projects which have been built in Savannah pursuant to 
contracts entered into by PHA and SHA (Exhibit 1); that 
since the filing of this suit PHA has turned over to SHA 
two former defense public housing projects located in 
Savannah for use as low-rent projects (R. 43); that the 
planning, construction, operation and maintenance of 
projects entails financial involvement on the part of PHA 
amounting to millions of dollars; that the PHA interest 
in these projects is substantial and continuing; that PHA 
exercises control over these projects, including occupancy; 
and that the limitation of certain projects to white occu­
pancy is a PHA determination.

In International Shoe Co. v. Washington, supra, the 
Supreme Court said at 317:

“  ‘ Presence’ in the state . . .  has never been 
doubted when the activities of the corporation there 
have not only been continuous and systematic, but 
also give rise to the liabilities sued on, even though 
no consent to be sued or authorization to an agent to 
accept service of process has been given.”



15

III. Justiciable Case or Controversy

A. Nature and Extent of PHA Participation In The
Limitation Of Certain Projects To White Occupancy.

PH A’s racial policy is as follows:
“ The following general statement of racial policy 
shall be applicable to all low-rent housing projects 
developed and operated under the United States 
Housing Act of 1937, as amended:

1. Programs for the development of low-rent 
housing in order to be eligible for PHA assistance, 
must reflect equitable provision for eligible families 
to all races determined on the approximate volume 
and urgency of their respective needs for such hous- 
ing.

2. While the selection of tenants and assigning 
of dwelling units are primarily matters for local 
determination, urgency of need and the preferences 
prescribed in the Housing Act of 1949 are the basic 
statutory standards for the selection of tenants.”  15

In accordance with this policy, the Development Pro­
gram, 16 which is a form prepared by PHA for use by SHA 
in making application for federal assistance and federal 
approval of its program, required SHA to indicate the 
racial composition of each federally-aided project and each 
proposed federally-aided project and to show, by the number 
of units alloted or to be alloted to white and non-white 
families, that equitable provision for eligible families of 
both races hfive been or will be provided, determined on 
the approximate volume and urgency of their respective 
needs for such housing. This determination must be based

15 HHFA ■ PH A Low-Rent Housing Manual, Section 102.1 
February 21, 1951.

16 Form PHA-1954 Rev. July 1950, referred to in Exhibit 1, 
Part I, Section 2.



16

solely on the volume of substandard housing occupied by 
each group. The Development Programs submitted by 
SHA for approval, and which constitute the basis upon 
which federal financial assistance is being given to Savan­
nah, indicated that Fred Wessels Homes and two other 
projects would be limited to white families and that three 
others would be limited to Negro occupancy. They also 
indicated that equitable provision for both races, determined 
on the approximate volume and urgency of their respective 
need, would require an allocation of 63.7 % of the dwelling 
units to non-white families and only 36.7% of the dwelling 
units to white families. Before any federal financial assist­
ance was granted, PHA, as required by law and its own 
rules and regulations, approved these Development Pro­
grams clearly indicating these limitations and indicating 
that PHA’s racial equity requirements would be met by 
the above-percentage allocations. These Development Pro­
grams became a part of Part One of the Annual Contribu­
tions Contracts entered into between PHA and SHA. 
Heyward v. PHA (C. A. D. C.) 241 F. 2d 222.

The nature of the role played by the PHA with respect 
to local racial policies can be pinpointed in the following 
manner: If a local authority is interested in securing 
approval for a Development Program, it has two alterna­
tives. First, it can agree to make all low-rent housing 
pi ojects to be constructed by it available for occupancy to 
all lacial gioups without discrimination or segregation of 
any kind. However, if such a plan is unacceptable to the 
local authority, it has a second alternative. It can agree  ̂
to piovide a specified number of units for the occupancy 
of white families and a specified number for the occupancy 
of egro families, the families to be housed on a racially 
segregated basis. If the percentage for white families and 
the percentage for Negro families meet the standards for 
achieving racial equity determined by the PHA, then the 
Development Program is approved insofar as this aspect 
is concerned. Once it is approved, it becomes a part of the



17

contractual relationship between PHA and SHA. There 
is, of course, logically a third possible alternative. The 
local authority could conceivably have complete freedom 
of choice. But a local housing authority has no such free­
dom, and it is the determination of PHA which deprives 
local authorities of such freedom.

In the instant case, SHA was obviously unwilling to 
agree to the first alternative noted above—i.e., open oc­
cupancy. Therefore, it was required by PHA to agree 
to the second alternative plan, i.e., segregated housing with 
a specified percentage allocation to white families and to 
Negro families. For short-hand reference, we shall term 
the second plan the “ segregation-quota”  plan. Once the 
SHA agreed to the “ segregation quota”  plan, and once 
the number of units for white and the number of units for 
Negroes was agreed upon and thus made a part of the 
contractual relationship between the parties, SHA has 
no contractual right to deviate. SHA obviously has no 
right to lease to white persons all units in all projects 
including those units designated exclusively for Negroes. 
Similarly, it has no right to lease all units in all projects 
to Negroes. In other words, SHA has no right to deviate 
in any way from the quota system agreed upon. If SHA 
decided to integrate projects designated exclusively for 
whites, while leasing projects designated exclusively for 
Negroes in conformance with the overall plan, then Negroes 
in Savannah would be securing a disproportionate number 
of units in violation of PH A’s racial equity formula. Such 
action by SHA would be in violation of its contract.

A hypothetical situation may help clarify the above 
analysis. Assume that a local housing authority chooses 
the “ segregation-quota”  plan of development. Assume 
further that the local authority agrees with PH A’s deter­
mination that an allocation of 200 units for whites and 200 
units for Negroes will provide racial equity. This agree­
ment of course becomes a part of the contractual relation­
ship between the local authority and PHA. Assume further



18

that the Negro project is completed first and that 200 Negro 
families were given occupancy. If 50 additional Negroes 
were to apply to the local housing authority and were able 
to prove that they were more qualified and had a higher 
priority than 50 white families who were scheduled to he 
given occupancy in the 200 unit white project, could the 
local housing authority admit those 50 Negro families 
along with 150 white families to the project originally 
designated for whites! Plaintiffs submit that the local 
authority would have no contractual right to admit these 
50 Negroes because such an act on the part of the local 
authority would he in violation of the racial equity formula 
agreed upon, and required by PHA. Thus, it is the PHA 
which determines whether any given Negro family can be 
admitted to Fred Wessels Homes.

Aside from PHA’s racial equity formula which resulted 
in the racial limitations complained of here, there is still 
another basis upon which this Court may find that the 
racial limitations are a result of PHA action.

There is, as demonstrated above, a sufficiently close 
relationship between PHA and SHA to make it necessary 
for this Court to consider whether PHA has violated 
rights secured to plaintiffs by the Constitution and laws of 
the United States, cf. Public Utilities Commission v. 
Pollack, 343 U. S. 451. Here we have a public corporation 
which has a monopoly on all decent, safe and sanitary 
housing available in Savannah at rents charged for public 
housing. [There must be a gap of at least 20 per cent 
between the upper rental limits for admission to public 
housing and the lowest rents at which private enterprise 
unaided by public subsidy is providing housing. Title 42 
U. S. C. 1415(7)(b)]. This monopoly position is made 
possible by financial assistance from the federal govern­
ment [annual contributions are given to SHA by PHA to 
help maintain the low rent character of the projects]. This 
public corporation is closely regulated by a federal agency,



19

as demonstrated, supra. It is closely regulated by PHA 
in order to assure that this housing is made available only 
to qualified low income families. The federal agency in 
this case has the duty, imposed upon it by the federal act, 
to protect eligible low income families, e.g., it must insert 
in its contract with SHA a provision requiring SHA to 
abide by the statutory preferences for admission [Title 42 
U. S. C. 1410(g), 1415(8) (c)]. The federal agency in this 
case has the power to make all rules and regulations neces­
sary to carry out its functions, powers and duties [Title 42 
U. S. C. 1404(a)]. Finally, the federal agency is under 
a duty, imposed by the Constitution, laws, and public policy 
of the United States, to prevent discrimination wherever 
the federal authority extends. It is under a duty imposed 
by Congress to enforce the requirements of 42 U. S. C. 
§§ 1410(g) and 1415(8) (c). Yet, despite this relationship, 
PIIA has permitted, and has specifically approved the racial 
segregation policy. Plaintiffs contend that under these 
circumstances, the action of PHA in permitting and approv­
ing this policy must be regarded as the action of PHA. 
cf. Public Utilities Commission v. Pollack, supra.

The Pollack case arose out of the practice of Capital 
Transit Co., a street railway company, in receiving and 
amplifying radio programs through loud-speakers in its 
passenger vehicles. Capital Transit is a privately owned 
public utility owning an extensive railway and bus system 
which it operates in the District of Columbia under a 
franchise from Congress. Its services and equipment are 
subject to the regulation of the Public Utilities Commis­
sion of the District of Columbia. On its own motion, the 
Commission ordered an investigation of Capital Transit’s 
practice in order to determine whether the use of such 
receivers was “ consistent with public conveniences, public 
comfort and safety.”  Two protesting passengers were 
allowed to intervene. The Commission found that the use 
of these radios was not inconsistent with public conveni-



20

ence, comfort, etc., and dismissed its investigation. The 
two protesting passengers appealed. The District Court 
denied relief, but on appeal the Court of Appeals reversed. 
The latter court held that this forced listening deprived 
passengers of liberty without due process of law in viola­
tion of the Fifth Amendment. In order for the court to 
reach such a conclusion, however, it was necessary for it 
to find governmental action rather than mere private 
action. The Court of Appeals found the necessary gov­
ernmental action in the action of Congress in giving Capital 
Transit a franchise to use the streets and a virtual mon­
opoly of the entire local business of mass transportation 
of passengers in the District of Columbia. In this way, 
Congress was really forcing persons dependent on Capital 
Transit to listen to the radio. In addition, the Court of 
Appeals found governmental action in the fact that the 
Commission had sanctioned the conduct of Capital Transit 
by dismissing its investigation and failing to take action 
to prohibit the broadcasts. Pollack v. Public Utilities Com­
mission (C. A. D. C.), 191 F. 2d 450.

On certiorari, the Supreme Court reversed on the 
ground that no constitutional right of the passengers had 
been violated. From plaintiffs point the important part 
of the opinion is that dealing with the presence of govern­
mental action. The Supreme Court agreed with the con­
clusion of the Court of Appeals that there was a sufficiently 
close relationship between the Federal Government and 
the radio services to make it necessary to consider whether 
the 1st and 5th Amendments had been violated. The perti­
nent part of the Supreme Court’s opinion is set forth 
below:

“ We find in the reasoning of the court below a 
sufficiently close relation between the Federal Gov­
ernment and the radio service to make it necessary 
for us to consider those Amendments. In finding this 
relation we do not rely on the mere fact that



21

Capital Transit operates a public utility on the 
streets of the District of Columbia under authority 
of Congress. Nor do we rely upon the fact that, 
by reason of such federal authorization, Capital 
Transit now enjoys a substantial monopoly of street 
railway and bus transportation in the District of 
Columbia. We do, however, recognize that Capital 
Transit operates its service under the regulatory 
supervision of the Public Utilities Commission of 
the District of Columbia which is an agency author­
ized by Congress. We rely particularly upon the 
fact that that agency, pursuant to protests against 
the radio program, ordered an investigation of it 
and, after, formal public hearings, ordered its inves­
tigation dismissed on the ground that the public 
safety, comfort and convenience were not impaired 
thereby”  (at 462).

A close reading of the above passage yields the follow­
ing interpretation: The Court gave either no considera­
tion or minimal consideration to the fact that Capital 
Transit used the streets of the District of Columbia under 
authority of Congress and the fact that, by reason of such 
authorization, Capital Transit enjoyed a substantial mon­
opoly. Substantial consideration, however, was given to 
the fact that Capital Transit operates under the regulatory 
supervision of a governmental commission. And greatest 
weight was given to the fact that a governmental agency, 
with power to prohibit or to permit this activity, permitted 
it to continue.



22

B. By Placing Requirements of Title 42, United States 
Code, §§ 1410(g) and 1415(8) (c) in its Contract with 

SHA, PHA Has Not Discharged Its Obligation.

PHA contended in the court below that its only obliga­
tion under Title 42, United States Code, §§ 1410(g) and 
1415(8) (c) is to insert these provisions in its contract with 
SHA. This contention, although contrary to the state­
ments made by PHA Commissioner Slusser in his affidavit 
in support of motion for summary judgment (R. 41, 44) 
and the regulations promulgated by PHA itself (R. 37), 
was sustained by the Court below (R. 47).

Title 42 U. S. C. 1410(g) provides that every contract 
made by PHA with a local agency for annual contributions 
shall require that the local agency, as among eligible low 
income families for occupancy, shall extend first preference 
to displaced families, with priority among such families to 
disabled veterans. PHA argued below that Congress in­
tended nothing by this requirement except a mere direc­
tive to PHA as to the expenditure of federal funds, and it 
was not intended by Congress to create any legal rights in 
third persons such as plaintiff. Not only was it the express 
intention of Congress by this requirement to give first 
preference for admission to displaced families, but it was 
the express intention of Congress that PHA have the 
duty to see to it that this requirement is complied with 
by the local authority.

A ith respect to this requirement the Senate Committee 
said:

Families who are displaced or are about to be 
displaced by public slum-clearance or redevelopment 
projects will be given a first preference for admis­
sion to low-rent housing.” 17

17 Sen Rep. No. 84, 81st Cong., 1st Sess., 2 U. S. Code Con­
gressional Service 1569 (1949).



23

With respect to this requirement and PH A’s duty the 
Committee said:

“ The prime responsibility for the provision of 
low-rent housing is thus in the hands of the various 
localities. The role of the Federal Government is 
restricted to the provision of financial assistance to 
the local authorities, the furnishing of technical aid 
and advice, and assuring compliance with statutory 
requirements.”  18 (Emphasis added.)

Title 42 U. S. C. § 1415(8) (c) requires that PH A’s 
contract with SHA provide that in initially selecting ten­
ants, SHA shall be required to give preference to families 
with the most urgent housing needs and that thereafter 
consideration must be given to the urgency of such needs.

With respect to this requirement the Senate Committee 
had this to say:

“ Moreover, in the initial selection of tenants for 
a project, the local authority will be required to give 
preference to families with the most urgent housing 
needs. Thereafter, consideration must be given to 
the urgency of such needs.” 18 19

Therefore, it is clear that Congress intended to confer 
a right on displaced and needy families, i.e., a right to a 
first preference to admission to low-rent housing. It se­
cured this right by requiring that it be made a part of 
PHA’s contract with every local agency. The legal sig­
nificance of this is that by so requiring, the plaintiffs and 
other displaced families could sue as third party bene- 
ficiai’ies of the provision. In this case PHA had admittedly 
inserted this requirement in its contract with SHA. cf. 
Young v. Kellex Corp. (E. D. Tenn.), 82 F. Supp. 953; 
cf. Crabb v. Weldon Bros. (S. D. Iowa), 65 F. Supp. 369, 
rev. on other grds., 164 F. 2d 797.

18 Id. at 1566.
19 Id. at 1570.



24

C. Plaintiffs Have Sufficient Legal Interest In Ex­
penditure Of Funds By PH A  To Give Them Standing 
To Challenge Validity of Such Expenditures.

1. Nature and Extent of PHA’s Financial Assistance.

PHA’s financial assistant to a project in Savannah may 
precede the actual construction of a project and continue 
for as long a period as sixty years after its construction.

PHA is authorized to make loans to local public housing 
agencies.20 These loans may be made for the purpose of 
assisting the local agency in defraying the costs involved 
in developing, acquiring or administering a project.21 PHA 
may therefore commence involving the federal government 
financially by making a preliminary loan to the local agency 
in order that it may have the funds with which to proceed 
to make plans for the proposed project and to conduct any 
necessary surveys in connection therewith.22 PHA may 
then make a further loan which enables the local agency 
to meet the cost of construction and to repay the prelimi­
nary loans.23 It may even loan money to pay any costs 
in administering the project.24

PHA is authorized by the basic enactment to specify 
in a contract with a local agency that it will contribute a 
fixed sum annually over a predetermined period of years 
“ to assist in achieving and maintaining the low-rent char­
acter”  of the project.25 PHA may therefore commit the 
federal government to financially subsidizing a project, 
after it is constructed, for a period as long as sixty years.26

20 Title 42 U. S. C. § 1409. Loans may not exceed 90% of 
development or acquisition cost.

21 Ibid.
22 Title 42, U. S. C. § 1415(7) (a).
28 Ibid., and Title 42, U. S. C. §1409.
24 Id., § 1409.
25 Id., § 1410(a).
26 Id., § 1410(c).



25

From this subsidy the local agency may presumably repay 
any monies loaned to it by the federal government for 
construction of the project or in connection with its admin­
istration.

The annual contribution made by PHA is one of two 
methods provided whereby the federal government may 
subsidize a public housing project. The alternate method 
of effecting a federal subsidy provided for in the act pro­
vides for a capital grant to a local agency in connection 
with the development or acquisition of a project which 
will thereby enable it to maintain the low rent character 
of the project.27 PHA may make a capital grant in any 
amount which it considers necessary to assure the low rent 
character of the project.28 It may, therefore, make a capi­
tal grant to a local agency which will pay the entire cost 
of development or acquisition of a project.

In addition to this financial assistance which may be 
given to a local agency, PHA is further authorized to in­
volve the federal government financially in the event of 
any foreclosure by any party on, or in the event of any sale 
of, any project in which the federal government has a 
financial interest.29 In the event of foreclosure, PHA may 
bid for and purchase such project, or it may acquire and 
take possession of any project which it previously owned 
or in connection with which it has made a loan, annual 
contribution or capital grant. In such case it may com­
plete the project, administer the project, pay the principal 
of and interest on any obligation issued in connection with 
the project, thus further involving the federal government 
financially.

Finally, in the event of any substantial contractual 
default on the part of the local agency, PHA may involve

27 Id., § 1411(a).
28 Ibid.
29 Id., § 1413.



26

the federal government to the extent of taking title or 
possession of a project as then constituted and must involve 
the federal government further financially by continuing 
to make annual contributions available to such projects to 
pay the principal and interest on any obligation for which 
these contributions have been pledged as security.30

2. Nature of Plaintiffs’ Interest In PHA Expenditures.

There can be no doubt that Fred Wessels Homes and 
the other all-white projects involved here were made pos­
sible by PHA expenditures and by PHA agreements to 
make further expenditures (Exhibit 1). A part of the 
relief against PHA and Hanson which is sought is a pro­
hibiting injunction against the use of federal funds for 
the construction and maintenance of such projects. The 
court below ruled that plaintiffs do not have standing to 
challenge such expenditures (R. 47).

The expenditures by PHA constitute more than minor 
assistance—the expenditure of federal funds makes the 
illegal projects possible. By these expenditures, PHA 
knowingly supplies the state agency with the means whereby 
the latter can effectively discriminate in violation of the 
Fourteenth Amendment. In doing so, PHA flagrantly vio­
lates plaintiffs’ rights and the public policy of the United 
States. There is a firm basis in the common law to support 
plaintiffs’ contention that a justiciable case or controversy 
exists. See Joint Anti-Fascist Refugee Comm. v. McGrath, 
341 U. S. 123, 159. For example, it has long been the law 
of unfair competition that one who furnishes another with 
the means of consummating a fraud is also guilty of unfair 
competition. See, Federal Trade Commission v. Winsted 
Hosiery Co., 258 U. S. 483, 494. Section 876 of the Restate­
ment of Torts expresses general principles which are firmly 
imbedded in the common law.

30 Id., § 1421a.



27

“  Section 876. Persons Acting in Concert
For harm resulting to a third person from the 

tortious conduct of another, a person is liable if
he * * *

“ (b) knows that the other’s conduct constitutes 
a breach of duty and gives substantial assistance or 
encouragement to the other so to conduct himself, or

“ (c) gives substantial assistance to the other in 
accomplishing a tortious result and his own conduct, 
separately considered, constitutes a breach of duty 
to the third person.’ ’

The above principles can be used by analogy to demon­
strate that even if the injury which plaintiffs receive origi­
nates from the unlawful conduct of the SHA, PH A’s par­
ticipation nevertheless can be considered a legal cause of 
plaintiffs’ injury.

As a result of the expenditure of funds for an all-white 
housing project in Savannah, plaintiffs are deprived of 
federally-aided housing solely because of their race and 
color. Plaintiffs can therefore show ‘ ‘ a direct dollars-and- 
cents injury”  from the mere disbursement of federal funds. 
Doremus v. Board of Education, 342 U. S. 429, 434. If 
plaintiffs were suing here as mere taxpayers, then it might 
be said that their interest in the expenditures are too con­
tingent and infinitesimal to be the subject of judicial action. 
Massachusetts v. Mellon, 262 U. S. 447. But plaintiffs do 
not sue as mere taxpayers here. They bring this action on 
behalf of themselves and on behalf of all other qualified 
low-income Negro families similarly situated. Their in­
terest is that of families who would suffer a direct pecuni­
ary loss by the improper expenditure of federal funds 
which Congress intended be used to provide housing for 
the class 'which plaintiffs represent, i.e., qualified low in­
come families. In addition, this deprivation of federally-



28

aided housing, solely because of race and color, violated 
rights secured to these plaintiffs by Constitution and laws 
of the United States.

The fact that the funds involved are not actually dis­
pensed by defendant Hanson or his office, hut by the Wash­
ington office of PHA is not a material. The fact is that 
defendant Hanson must approve all requests made by 
SHA before the Washington office will pay (Exhibit 2 
attached to Slusser affidavit and sent up to this Court in 
original form).

IV. The Separate But Equal Doctrine

The court below ruled that the complaint be dismissed 
as to defendants SHA, its officers and members on the 
ground that “ the legal doctrine of separate but equal 
facilities is still the law of the land and controls this case.”  
This ruling is clearly erroneous. The separate but equal 
doctrine has never been extended to property rights. 
Buchanan v. War ley, 245 U. S. 60, 81. Application of the 
separate but equal doctrine here deprives plaintiffs of the 
right to lease certain units of public housing, which are 
leased to qualified applicants by public officials, solely 
because of plaintiffs’ race and color.

The right to lease real property free from govern- 
mentally imposed racial restrictions is a right not only 
secured by the due process and equal protection clauses of 
the Fourteenth Amendment to the Federal Constitution 
but is secured by a specific Federal Civil Rights Statute, 
Title 42 U. S. C. § 1982. Detroit Housing Commission v. 
Lewis (C. A. 6th), 226 F. 2d 180; Jones v. City of Ham- 
trarnck (S. D. Mich), 121 F. Supp. 123; Vann v. Toledo 
Metropolitan Housing Authority (N. D. Ohio), 113 F. Supp. 
210; Housing Authority of San Francisco v. Banks, 120 
Cal. App. 2d 1, 260 P. 2d 668, cert, den., 347 U. S. 974;



29

Seawell v. McWhithey, 2 N. J. Super. 255, 63 Atl. 2d 542, 
rev. on other grds., 2 N. J. 563, 67 Atl. 2d 309; Taylor v. 
Leonard, 30 N. J. Super. 116, 103 Atl. 2d 633.

Cf. Buchanan v. Warley, 245 U. S. 60; City of Birming­
ham v. Monk (C. A. 5th), 185 F. 2d 859, cert, den., 341 U. S. 
940; Shelley v. Kraemer, 334 U. S. 1.

CONCLUSION

For the foregoing reasons, appellants submit that the 
judgments below granting motion for summary judg­
ment and motion to dismiss should be reversed.

Respectfully submitted,

Constance B aker Motley,
T hurgood Marshall,

107 West 43rd Street,
New York 36, N. Y,

A. T. W alden,
200 Walden Building,

Atlanta 3, Georgia.

F rank D. R eeves,
473 Florida Avenue,

Washington, D. C.
Attorneys for Appellants.









IN THE

MxuUb Court of Apprala
For the Fifth Circuit

No. 16040

PRINCE HEYWARD, et al,

v.
Appellants,

PUBLIC HOUSING ADMINISTRATION, et al,

Appellees.

REPLY BRIEF FOR APPELLANTS

A. T. W alden
200 Walden Building 

Atlanta, Georgia

F rank D. R eeves
473 Florida Avenue, N. W. 

Washington, D. C.

Constance B aker Motley 
T htjrgood Marshall 

107 West 43rd Street 
New York 36, New York

Supreme Printing Co., I nc., 114 W orth Street, N. Y. 13, BEekman 3 - 2320





TABLE OF CONTENTS

PAGE

I. Jurisdiction ........................................................  1

A. The Court Below Erred In Ruling That It
Was Without Jurisdiction As To Appellees 
PHA and Hanson Under Title 28 U. S. C. 
§1343(3) ........................................................  1

B. The Court Below Erred In Granting Motion
For Summary Judgment On Ground That 
Requisite Jurisdictional Amount Was Not 
Shown .............................................................  7

II. Venue ..................................................................  9

III. Justiciable Case Or Controversy.......................  12
A. There Is Injury To Appellants’ Rights As

A Result Of Action By P H A .....................  12
B. There Is A Duty On PHA To Secure Observ­

ance Of The Statutory Preferences For 
Admission ......................................................  12

C. PHA Has The Power To Prevent The Viola­
tion Of Appellants’ R ights........................... 12

D. Federal Action Is Involved H e re ...............  13

IV. Indispensable Parties..........................................  16
A. There Is No Problem Of Indispensable Par­

ties Involved In This C ase........................... 16

V. Sufficiency Of The Complaint............................  17
A. The Allegations Of The Complaint Are Suffi­

cient To State A Cause Of A ction ...............  17

Conclusion 19



IV
PAGE

Terry v. Adams, 345 U. S. 461 (1953) .......................  5
Topping v. Fry, 147 F2d 715 (C. A. 7th 1945) ........ 8
Truax v. Raich, 239 U. S. 33 (1915) ........................ 5
Valle v. Stengel, 176 F2d 697 (C. A. 3rd 1949)........  5
Van Deman v. United States, 119 F. Supp. 599, 601 

(N. D. Ind. 1948)....................................................... H
Williams v. Yellow Cab Co., 200 F2d 302, 307 (C. A.

3rd 1952) ................................................................... 4, 6

Other Authorities

Federal Rules of Civil Procedure, Rule 1 9 (b ) .......... 16

99 Ga. Code Ann. § 1131, 1155, 1160 ........................... 2
6 Moore’s Federal Practice, 2025-2026 .....................  7
Sen. Rep. No. 84, 81st Cong., 1st Sess., 2 U. S. Code 

Congressional Service 1566 (1949) .......................  2
Title 8, United States Code, § 4 3 ................................  2
Title 28, United States Code, § 1331........................... 1
Title 28, United States Code, §1343(3) ............. 1, 2, 3, 4, 7
Title 28, United States Code, § 1391(c) ...................  10
Title 42, United States Code, § 1410(g) and 

1415(8) (c) ................................................................7,17,18



IN THE

luttefc Court of Appeals
For the Fifth Circuit

No. 16040

----------------------o----------------------
P rince H eyward, et al.,

Appellants,

v.

P ublic H ousing A dministration, et al.,

Appellees.
•— ------------------o----------------------

REPLY BRIEF FOR APPELLANTS 

I

Jurisdiction

A. The Court Below Erred In Ruling That It Was 
Without Jurisdiction As To Appellees PHA and 
Hanson Under Title 28 U. S. C. § 1343(3).

The plaintiffs relied not only upon Title 28, United 
States Code, § 1331 as the basis for invoking the jurisdic­
tion of the court below, but also upon Title 28, United 
States Code, §1343(3) 1 (R-. 3).

1 “The district courts shall have original jurisdiction of any civil 
action authorized by law to be commenced by any person:

* * * *
(3) To redress the deprivation, under color of any state law, 

statute, ordinance, regulation, custom or usage, of any 
right, privilege or immunity secured by the Constitution 
of the United States or by any Act of Congress providing 
for equal rights of citizens or of all persons within the jur­
isdiction of the United States.”



2

The Complaint alleges in paragraph 2 that jurisdiction 
was “ invoked pursuant to Title 28, United States Code, 
§1343(3), this being a suit in equity, authorized by law, 
Title 8, United States Code, § 43, to be brought to redress 
the deprivation under color of state law, statute, ordinance, 
regulation, custom or usage of a right, privilege or immu­
nity secured by the Constitution and laws of the United 
States or any act of Congress providing for equal rights 
of citizens”  (R. 3). The specific rights which are secured 
by the Constitution and laws of the United States and which 
plaintiffs sought to have redressed are thereupon set forth 
(R. 3).

The Complaint alleges in paragraph 18 that, “ The en­
tire public housing program in the City of Savannah, 
Georgia, has been jointly planned, constructed, operated 
and maintained by the defendant Housing Authority of 
Savannah, Georgia, and the defendant Public Housing Ad­
ministration, pursuant to the provisions of the United 
States Housing Act of 1937, as amended, and Title 42, 
United States Code, § 1501, et seq., and the laws of the 
State of Georgia”  (R. 9).

The laws of the State of Geor gia specifically authorize 
cooperation with federal authorities in providing public 
housing. 99 Ga. Code Ann. §§ 1131, 1155, 1160.

The first federal statute referred to authorizes Public 
Housing Administration (PHA) to enter into contracts 
only with a “ state or state agency”  which, “ under the 
applicable laws of the state,”  is to develop and administer 
the projects. Title 42, United States Code, § 1402(11). The 
express purpose of this provision was to prevent federal 
authorities from constructing and operating low cost public 
housing within a state without state involvement and re­
sponsibility.2

2 Sen. Rep. No. 84, 81st Cong., 1st Sess., 2 U. S. Code Con­
gressional Service 1566 (1949).



3

In paragraph 19 it is alleged that ‘ ‘ The defendant Hous­
ing Authority of Savannah, Georgia, and defendant Public 
Housing Administration in administering* the entire public 
housing program of the City of Savannah, Georgia, have 
determined upon and presently enforce an administrative 
policy of racial segregation in public housing in the City 
of Savannah, Georgia”  (R. 9).

In paragraph 24 it is alleged that “ Plaintiffs and each 
of them have suffered and will continue to suffer irrepa­
rable injury for which there is no adequate remedy at law 
by the enforcement of the racial segregation policy of these 
defendants in public housing projects in the City of Savan­
nah, Georgia, by being denied certain housing for which they 
are otherwise eligible and for which they have a preference 
for admission and for which they are more qualified for 
admission than the white families admitted thereto, and 
will be denied their civil and constitutional right not to be 
discriminated against by the state and federal governments, 
solely because of race, in leasing an interest in real prop­
erty, unless this court grants injunctive relief”  (R. 11-12).

It is thus clear from the allegations of the Complaint, 
and the laws referred to therein, that in invoking the 
court’s jurisdiction under §1343(3), appellants’ conten­
tion is that all appellees, including PHA and Hanson, are 
acting “ under color of state law”  in enforcing the segre­
gation policy, and that such action is state action violative 
of the Fourteenth Amendment and laws passed pursuant 
thereto.

In granting the motion for summary judgment, the 
court below ruled that it was without jurisdiction under 
§1343(3) as to appellees PHA and Hanson because these 
appellees were “ not acting under color of any state law”  
(R. 47). The court below did not write an opinion in grant­
ing the motion of these appellees. In their brief on page 9, 
footnote 3, these appellees assert that “ appellants appear



4

to have abandoned that ground here, since it is plain that 
appellees Public Housing Administration and Hanson did 
not act under color of state law.”  Appellants have not 
abandoned this ground. On the contrary, appellants assert 
here that there was in the court below adequate jurisdic­
tional ground under §1343(3) as to all appellees, i. e., 
Savannah Housing Authority (SHA) and its officials as 
well as PHA and Hanson.

The assertion that “ it is plain that appellees Public 
Housing Administration and Hanson did not act under 
color of state law”  is apparently predicated on the notion 
that the phrase “ under color of state law”  contemplates 
only action by state officials, qua officials, or persons spe­
cifically authorized by state law or persons acting pursuant 
to state law. Three cases are cited by PHA and Hanson 
on page 9, footnote 3, in support of their assertion. Wil­
liams v. Yellow Cab Co., 200 F2d 302, 307 (G. A. 3rd 1952); 
Love v. Chandler, 124 F2d 785 (C. A. 8th 1942) and Johnson 
v. Levitt <& Sons, 131 F. Supp. 114,116-117 (E. D. Pa. 1955). 
These cases are not apposite here.

In the Williams case plaintiff cab drivers, who were 
Negroes, sued the cab company and plaintiffs’ union alleg­
ing discrimination. These defendants were clearly not 
state officers. Plaintiffs contended, however, that the union 
acted under color of law, i. e., the Pennsylvania Labor 
Relations Act which gave the union power to act as exclu­
sive bargaining representative. The court held that the 
union was acting as bargaining agent for its members, in­
cluding the Negro members, pursuant to “ their consent”  
as members and not by virtue of any power conferred by 
statute.

In the Love case plaintiff sought redress against defend­
ants, state and federal officers, under the Civil Rights Con­
spiracy Statute on the ground that defendants conspired to 
prevent plaintiffs employment on the WPA. Plaintiffs’ 
right to bring the action was denied on the ground that no



5

federally protected right was involved and plaintiff sought 
damages against these defendants as individuals, and not 
as state or federal officials.

In the Johnson case the Negro plaintiffs sought to en­
join a private housing corporation from refusing to sell 
homes to them. Federal FHA and YA officials were joined 
as defendants against whom the relief sought was an injunc­
tion enjoining insurance of the mortgages involved in the 
sale of the homes, as long as the corporation refused to sell 
to Negroes. The court ruled that the corporation’s refusal 
was admittedly its alone and not that of the federal officials, 
and since Congress had not put any duty on the federal offi­
cials to enjoin the discrimination, no relief could be had 
against these defendants. As to the private corporation 
the court ruled that there was “ no suggestion”  that the 
private corporation acted under color of state law, but on 
the contrary it was alleged that this defendant was acting 
in violation of state law.

Thus, in two of the cases cited by PHA and Hanson, it 
was clear that defendants were sued as individuals only, 
and not as persons acting under color of state law; and in 
the other case defendant was acting pursuant to plaintiffs’ 
authority rather than that of the state. None of these 
factors is involved here.

The concept of action “ under color of state law”  is by 
no means limited to action of state officials, qua officials, 
or to persons specifically authorized by state law or per­
sons acting pursuant to state law. It includes the wrongful 
acts of individuals, corporations or officials other than state 
officials which are supported in some way by “ State au­
thority in the shape of laws, customs, or judicial or execu­
tive proceedings ” , or “  sanctioned in some way by the State, 
or done under State Authority” , or “ protected in these 
wrongful acts by some shield of State law or State author­
ity. ”  See, Civil Bights Cases, 109 U. S. 3, 17 (1883); Shel­



6

ley v. Kraemer, 334 U. S. 1 (1948). It includes such acts 
when they are in fact a part of a state function, Smith v. 
Allwright, 321 U. S. 649 (1944); Rice v. Elmore, 165 F2d 
387 (C. A. 4th 1947), cert, denied 333 U. S. 875; Kerr v. 
Enoch Pratt Free Library, 149 F2d 212 (C. A. 4th 1945), 
or permitted or condoned by the state in connection with 
such function. Terry v. Adams, 345 F. S. 461 (1953). It 
includes such wrongful acts when committed in connection 
with property merely leased from the state. Muir v. Louis­
ville Park Theatrical Association, 347 U. S. 971 (1954), 
reversing 202 F2d 275 (C. A. 6, 1954); Department of Con­
servation & Development v. Tate, 231 F2d 615 (0. A. 4th 
1956) affirming 133 F. Supp. 53 (E. D. Va. 1955). It in­
cludes wrongful acts “ coerced”  by the state, Barrows v. 
Jackson, 346 U. S. 249, 258 (1953); Truax v. Raich, 239 
U. S. 33 (1915), or which are “ aided and abetted”  by the 
state, Valle v. Stengel, 176 F2d 697 (C. A. 3, 1949), or 
which result from conspiracy with state officials, Picking 
v. Penn. R. Co., 151 F2d 240 (C. A. 3,1945); Condra v. Leslie 
& Clay Coal Co., 101 F. Supp. 774 (E. D. Ky. 1952).

In short, it is only where it is found that there is in 
fact no state involvement in action allegedly violative of 
federally protected rights that one is precluded from invok­
ing the jurisdiction of a district court pursuant to § 1343(3). 
Williams v. Yellow Cab Co., supra; Love v. Chandler, supra; 
Johnson v. Levitt & Sons, Inc., supra.

On page 19 of the brief filed by PHA and Hanson they 
there define and interpret their role in the racial policies 
enforced by SHA as follows:

Apart from the preferences in occupancy pre­
scribed by the Housing Act itself (see page 14, 
above), as to which appellants make no complaint, 
the only policy requirement imposed by appellee 
Public Housing Administration is that the Housing 
Authority of Savannah must make ‘ equitable pro­



7

visions for eligible families of all races determined 
on the approximate value [sic] and urgency of their 
respective needs for such housing’.

Thus it is the PHA Racial Equity Formula which calls 
for the limitation of a specified number of units for white 
families and a specified number of units for Negro families 
which is enforced by the state officials in this case (R. 33, 
36-37). It is PH A’s Racial Equity Formula, which must 
be enforced by SHA, which prevents SHA from selecting 
persons on a first come first serve basis, subject only to 
the provisions of Title 42, United States Code § 1410(g) 
and 1415(8) (c) and which, as appellees put it, on page 19 
of their brief, prevents the SHA from leasing its dwelling' 
units to either whites or Negroes exclusively. Thus, we 
clearly have in this case a PHA determination which is 
enforced “ under color of state law”  and which violates 
rights secured to appellants by the Constitution and laws 
of the United States. The appellants, therefore, properly 
invoked the jurisdiction of the court below pursuant to 
§1343(3) as to all defendants.

B. The Court Below Erred In Granting Motion For 
Summary Judgment On Ground That Requisite 
Jurisdictional Amount Was Not Shown.

Appellees PHA and Hanson claim that the jurisdic­
tional amount was properly raised by their motion for 
summary judgment (Brief p. 9). But it is well established 
that a motion for summary judgment is not the proper 
method of raising the issue of lack of jurisdiction over sub­
ject matter. 6 Moore’s Federal Practice, 2025-2026 and 
cases cited therein. While, in some circumstances, this 
error in pleading may be rectified simply by treating the 
motion for summary judgment as a motion to dismiss for 
lack of jurisdiction, this cannot be the solution in the case 
at bar, where appellees did not support their motion by



8

affidavits directed to jurisdictional amount and appellants 
received no opportunity to offer proof of the amount.

Where a plaintiff alleges the existence of the requisite 
amount in controversy and defendant by a proper plea puts 
the matter in issue, plaintiff must be given an opportunity 
to establish the jurisdictional facts at a hearing. Topping 
v. Fry, 147 F2d 715 (C. A. 7th 1945); Moehl v. E. I. Dupont 
De Nemours & Co., 84 F. Supp. 427 (N. D. 111. 1947). Juris­
diction cannot be destroyed by an ex parte showing. Jew 
May Lune v. Dulles, 226 F2d 796 (C. A. 9th 1955). Some 
courts, in fact, will defer a decision on the jurisdictional 
issue until trial on the merits is had. Moehl v. E. 1. Dupont 
De Nemours Co., supra; Scott v. Pennsylvania JR. Co., 
8 F. R. D. 548 (E. D. Pa. 1949); cf. Gulbenkian v. Gulben­
kian, 33 F. Supp. 19 (S. D. N. Y. 1940).

Thus, even if it were assumed, arguendo, that appellees 
properly traversed appellants’ allegation of jurisdictional 
amount and offered evidence to support their plea, the grant­
ing of summary judgment would still have been error be­
cause appellants were not given an opportunity to sustain 
their burden of proof (and also because a genuine issue of 
jurisdictional fact existed).

Cases cited by appellee on page 11 are irrelevant to a 
proper determination of the amount in controversy. All of 
these cases deal with the proper measure of damages to be 
awarded in condemnation proceedings to a party whose 
land has been taken by eminent domain. It is well settled 
that in a proceeding where the relief sought is something 
other than money damages, the amount in controversy is 
not limited to the amount of monetary damage that is 
threatened by the acts of defendant. Scott v. Donald, 165 
F. S. 107; Bitterman v. Louisville & N. R. Co., 207 U. S. 205; 
Kelly v. Lehigh Nav. Coal Co., 151 F2d 743 (C. A. 3rd 
1945); Ebensberger v. Sinclair Refining Co., 165 F2d 803 
(C. A. 5th 1948).



9

On page 12 of their brief PHA and Hanson say that 
appellants are not aided on the question of amount in con­
troversy by virtue of the fact that each appellant is claim­
ing $5,000 for the reason that the rule that the amount of 
damages claimed in good faith is sufficient to establish jur­
isdiction, has no application here, because it is obvious that 
these appellees, having acted under color of their govern­
mental functions, are immune from personal liability. Per­
sonal immunity, of course, does exist where an officer acts 
under color of his authority, but subject to the well-estab­
lished exception that where an officer acts under an uncon­
stitutional statute or where his actions violate constitu­
tional rights this immunity is not available to him. Georgia 
R. R. and Banking Co. v. Redwine, 342 U. S. 299 (1952); 
see, Larson v. Domestic & Foreign Commerce Corp., 337 
U. S. 682, 689-690 (1949); Ex parte Young, 209 U. S. 123 
(1908).

II

Venue

None of the cases cited by PHA and Hanson in connec­
tion with the question of venue are helpful to its cause and 
several, in fact, are extremely helpful to appellants.

Blackmar v. Guerre, 342 U. S. 512 is totally irrelevant. 
There the court held that sovereign immunity for the Civil 
Service Commission had not been waived by Congress; thus 
the commission could not be sued as an entity in any juris­
diction. The court specifically stated that no question of 
venue arose.

No case cited by appellee supports its artificial distinc­
tion between “ sue and be sued”  clauses and “ sue and be 
sued in any court of competent jurisdiction . . provi­
sions. In fact, Keifer & Keifer v. Reconstruction Finance



10

Corp., 306 U. S. 381 and Federal Housing Administration 
v. Burr, 309 U. S. 242, stand for the proposition that waivers 
of sovereign immunity will he liberally construed. In the 
Burr case, the Court said at p. 245:

[W]e start from the premise that such waivers 
by Congress of governmental immunity in cases of 
such federal instrumentalities should be liberally 
construed . . . Hence, when Congress establishes 
such an agency, authorizes it to engage in commer­
cial and business transactions with the public and 
permits it to ‘ sue and be sued’ it cannot be lightly 
assumed that restrictions are to be implied.

In that case the Court held the FHA subject to garnish­
ment proceedings for sums due to its employees. And see 
Reconstruction Finance Corp. v. J. G. Menihan Corp., 312 
IT. S. 81 where the same rule of liberal construction was 
applied to require the Reconstruction Finance Corporation 
to pay costs in a suit which it had begun and lost.

Seven Oaks v. Federal Housing Administration, 171 
F2d 947 (C. A. 4th 1948) not only fails to support appel­
lee’s artificial distinction, but is totally destructive to its 
argument that venue cannot be sustained under 28 IT. S. C. 
1391(c). For in that case, the court of appeals said that 
even if proper venue was not established by the statute 
authorizing suit against the FHA,

we think that suit within the district was author­
ized on the ground that the administration is to be 
regarded as a public corporation within the meaning 
of the venue statutes and was suable within the dis­
trict because engaged in business there (p. 949). I

I he case appellee cites to prove that it is not a corpora­
tion distinguishes itself. Breen v. Housing Authority of 
City of Pittsburgh, 119 F. Supp. 320 (W. D. Pa. 1954).



11

There the court held that in disposing of property under 
the Lanham Act, PHA was an unincorporated agency for 
which Congress had not waived sovereign immunity. But 
the court specifically noted that suit against PHA was au­
thorized by Congress under sections of the law dealing with 
low rent housing (at 323). The distinction is made more 
pointedly in Van Deman v. United States, 119 P. Supp. 599 
(N. D. Ind. 1948) upon which the court in Breen relied. In 
that case, the court while reaching the same conclusion with 
respect to the functions of PHA under the Lanham Act, 
noted that in its low-rent housing duties, PHA is a cor­
poration for which the government had waived sovereign 
immunity (at 601).

While Isner v. Interstate Commerce Commission, 90 P. 
Supp. 361 (E. D. Mich. 1950) may stand for the proposition 
that the ICC, in performing its regulatory functions, is not 
“ doing business,”  it has no applicability to the instant 
case. In Federal Housing Administration v. Burr, supra, 
the Court said that in the absence of a showing that Con­
gress used the words of a waiver of immunity clause in a 
narrow sense;

it must be presumed that when Congress launched 
a governmental agency into the commercial world 
and endowed it with authority to ‘ sue and be sued, ’ 
that agency is not less amenable to judicial process 
than a private enterprise under like circumstances 
would be (p. 245).

See also Seven Oaks v. Federal Housing Administration, 
supra; Reconstruction Finance Corp. v. Langham, 208 F2d 
556, 559 (C. A. 6th 1953).

Federal Crop Insurance Corporation v. Merrill, 332 
U. S. 380, cited by appellees, held merely that a federal 
agency was not estopped to assert as a defense a federal 
regulation which its agents had previously disregarded. 
Note that plaintiff had no difficulty in suing the agency in 
the jurisdiction in which it was doing business.



12

I I I

Justiciable Case Or Controversy

A. There Is Injury To Appellants’ Rights As A  Result 
Of Action By PHA.

As set forth above, on page 19 of the brief filed by PHA 
and Hanson these appellees admit that they impose upon 
the SHA a requirement that there be “ equitable provision 
for eligible families of all races determined on the approxi­
mate value [sic] and urgency of their respective need for 
such housing. ’ ’ As demonstrated on pages 15-18 of appel­
lants ’ brief, this requirement results in the limitation of a 
specified number of units for white families and a specified 
number of units for Negro families.

B. There Is A  Duty On PHA To Secure Observance 
Of The Statutory Preferences For Admission.

On page 19 of their brief these appellees also say that 
the statutory preferences for admission constitute another 
policy requirement imposed by them upon the SHA. This 
policy requirement undoubtedly stems from the intent of 
Congress that these federal agents have the duty to secure 
“ compliance with statutory requirements” , as indicated 
on page 23 of appellants’ brief. This policy requirement 
tacitly admits this duty, as claimed by appellants. There­
fore, Public Utilities Commission v. Pollack, 343 U. S. 451 
(1952) is not distinguishable as claimed by appellees on 
the ground that there is no duty on PHA comparable to thf’t 
imposed by Congress on the Public Utility Commission of 
the District of Columbia.

C. PHA Has The Power To Prevent The Violation 
Of Appellants’ Rights.

On page 19 of their brief PHA and Hanson also say:
In other words, appellee Public Housing Admin­

istration would not permit the Housing Authority



13

of Savannah to lease its low-rent dwelling units 
either exclusively to whites or exclusively to Negroes 
[emphasis added].

Appellants rely on the Pollack case for the proposition 
that where a governmental agency has the power to either 
prohibit or to permit certain conduct, if that agency per­
mits that conduct after notice to it, then such conduct must 
be deemed governmental action. To this crucial question 
of power to prevent the discrimination of which complaint 
is here made, these appellees do not address themselves— 
for the obvious reason that this goes to the very essence 
of the claim made by appellants against the federal offi­
cials here.

D. Federal Action Is Involved Here.

If action may be challenged as governmental when it 
takes the form of discrimination by persons who have 
merely leased government property, Muir v. Louisville Park 
Theatrical Association, supra; Department of Conservation 
and Development v. Tate, supra, then clearly appellants 
may challenge as federal action, discriminatory action on 
the part of the lessors of property made possible by federal 
financing. An apparently contrary decision, Dorsey v. 
Stuyvesant Town, 299 N. Y. 512, 87 N. E. 2d 541, cert, denied, 
339 U. 8. 981, cited by appellees, was decided long before 
the United States Supreme Court’s decision in the case of 
Muir v. Louisville Theatrical Ass’n., supra, and the Fourth 
Circuit’s ruling in Department of Conservation and Devel­
opment v. Tate, supra. More important, however, is the 
fact that the Supreme Court did not review the Dorsey 
case. It should be noted also that in this case, contrary to 
the contention of appellees, the role of PHA in connection 
with the housing here is far more pervasive than that of 
the state in the Dorsey case. In addition to federal financ­
ing, there is complete regulation of all significant activity



14

by the federal agents and control over the racial policy 
determination.

In Johnson v. Levitt & Sons, supra, another case cited 
by PHA and Hanson for the proposition that there is no 
justiciable controversy, the district court found that the 
“ financing”  in that case (mortgage insurance) was given 
to banks which granted the mortgages and not to the cor­
poration which discriminated against the plaintiffs; and 
that incidental to the mortgage insurance granted by the 
federal officials and for the purpose of minimizing the risk 
of loss to the government were the prescribing of conditions 
upon which the bank loans were to be insured which touched 
the Levittown project at many points (at 116). The dis­
trict court ruled that this involvement of the government 
could not be deemed to make the private corporation the 
government of the United States or the government the 
builder of the Levittown project. This conclusion of course 
can not readily be reconciled with the broadened concept 
of governmental action which has emerged from recent 
cases referred to supra. However, in the Levitt case the 
policy of excluding Negroes was concededly that of Levitt 
alone. The district court said at page 116 “ The plaintiffs 
concede that the government defendants have not exercised 
or attempted to exercise any control over the sales policy 
adopted by Levitt.”  As pointed out supra the federal 
officials here on page 19 of their brief admit that they have 
exercised control over the racial policies of the SHA.

Appellees rely on Offutt Housing Company v. County of 
Sarpy, — U. S. —, 100 L. ed. 658 which involved the ques­
tion of the power of a state to tax certain property in an 
area over which Congress has exclusive legislative power. 
The court held at page 663: “ We hold only that Congress, 
in the exercise of this power, has permitted such state 
taxation as is involved in the present case.”  The court



15

also said at page 664, “ In the circumstances of this case, 
then, the full value of the buildings and improvements is 
attributable to the lessee’s interest”  (for tax purposes, 
as in the case of an owner and mortgage company). Ap­
pellants submit that the narrow holding and reasoning in 
this case is without influence in the instant case.

Appellees also cite Employers Group of Motor Freight 
Carriers v. Nat’l War Labor Board, 143 F. 2d 145 (C. A. 
D. C.) and Nat’l War Labor Board v. Montgomery Ward 
& Co., 144 F. 2d 528 (C. A. D. C.) for the proposition that 
there is no controversy between them and appellants. In 
the former case the court held 1) War Labor Board orders 
were not reviewable and 2) Even under general equity 
principle no review of the order involved was warranted 
because “ No money, property, or opportunity has been 
taken or withheld from the appellants, and no one threatens 
any such act”  (at 147). In the latter case the court held 
as in the former that 1) War Labor Board orders were 
not reviewable and 2) The complaint alleged no facts 
which indicate more than a possibility of any action by 
defendants which might cause injury to the plaintiff plus 
the fact that in that case one of the chief defendants filed 
an affidavit in which he set forth that he had neither threat­
ened to take action nor taken any action to effectuate com­
pliance with the “ directive”  order of the Board sought 
to be reviewed. In the instant case suit against the PH A 
with respect to low rent public housing projects is specifi­
cally authorized by statute. Action against appellants, in 
the form of imposing its Racial Equity Formula upon the 
SHA, has already been taken by PHA resulting in the ex­
clusion of appellants from units limited to white families. 
No affidavit has been filed in this cause setting forth that 
the PHA will not continue to require SHA to abide by the 
Racial Equity Formula. The statement in the affidavit 
of Commissioner Slusser to the effect that the determina­
tion as to racial matters is left entirely to the local author­



16

ity is contradicted by the record bere which shows the 
PHA Racial Equity Formula as controlling (R. 36-37) and 
by the self-evident fact that the statutory preferences for 
admission cannot operate in conjunction with the Racial 
Equity Formula. Thus the holding and facts of the last 
cases cited are not controlling here.

I V

Indispensable Parties

A. There Is No Problem Of Indispensable Parties
Involved In This Case.

PHA claims that the holders of notes and bonds issued 
by SHA are indispensable parties to this action. Reliance 
is placed on Heyward v. Public Housing Administration, 
214 F. 2d 222 (C. A. D. C. 1954). However, it should be 
noted at the outset that the court did not hold that the 
SHA was an indispensable party to the suit brought by 
these appellants against PHA in an attempt to enjoin PHA 
from advancing funds to SHA for the all-white projects. 
The court ruled, in the face of argument by PHA that 
SHA was indispensable, that SHA was “ a conditionally 
necessary party within the meaning of Rule 19(b) Fed. 
R. Civ. P .”  (at p. 224).

It should also be noted that the relief sought here is 
an injunction which can only operate against future ad­
vances of federal funds. The funds sought to be enjoined 
are those going to the SHA (R. 12-13). In his affidavit 
Commissioner Slusser sets forth that, “ Monies to pay de­
velopment costs of low-rent housing projects under the 
United States Housing Act of 1937, as amended, are ad­
vanced by the Public Housing Administration directly to 
the local authority after the request by the local authority 
tor such funds has been initially reviewed and approved



17

by the Public Housing Administration Field Office and 
finally approved by the Public Housing Administration 
Central Office in Washington. The payment of such ad­
vance is made directly by the Central office to the local 
authority”  (R. 39-40). It is the advance of these funds 
which, if enjoined, will prevent the development of future 
projects limited to white occupancy. No third parties are 
involved in this preliminary advance of funds to SHA. 
Bonds may be sold by SHA to repay the preliminary ad­
vance made by PHA (R. 40). It is at this point that third 
parties who have an interest in future contributions to 
be made by PHA enter the picture. Thus complete relief 
between the parties may be afforded here without affecting 
the rights of third parties whose property rights are in­
volved. Therefore, since it appears that no injunction 
could be granted prohibiting the payment of Annual Con­
tributions already committed for payments to bondholders, 
since no injunction operates retrospectively, and since it 
further appears that no such relief is sought, as indicated 
supra, the sole relief sought being against the future 
advance of funds to SHA for the development of all-white 
projects in which no third parties are involved, there are 
no parties indispensable to this suit. V

V

Sufficiency Of The Complaint

A. The Allegations Of The Complaint Are Sufficient
To State A  Cause Of Action.

Appellees SHA and its officials contend that the lower 
court’s order granting their motion to dismiss should be 
sustained on the ground that appellants failed to allege 
in their complaint that they ever applied for admission 
to Fred Wessels Homes as required by Title 42, United 
States Code, § 1410(g). Appellants have read Title 42,



1 8

United States Code, § 1410(g) but are unable to discover 
any requirement therein that applications for public hous­
ing be made in a certain form by all applicants for public 
housing.

In the court below, on the hearing of the motion of 
these appellees to dismiss and in support of appellants’ 
motion for summary judgment which was filed but not 
heard, appellants offered to prove that they had attempted 
to make application for Fred Wessels Homes (R. 97). The 
court below ruled that this evidence could not be accepted 
at that time (R. 54). It is thus clear that if this were an 
essential allegation of the complaint which appellants had 
failed to make, appellants’ complaint was not subject to 
dismissal for such failure but merely subject to amend­
ment. Mitchell v. Wright, 154 F. 2d 924 (C. A. 5th 1946).

But this was not an essential allegation of appellants’ 
complaint since appellants ’ grievance is that they were not 
permitted to make application for Fred Wessels Homes 
or any other project limited to white occupancy. In ac­
cordance with this fact the complaint clearly alleges that 
appellants are persons who “ . . . have been denied con­
sideration for admission and admission to the Fred Wes­
sels Homes and certain other public housing projects in 
the City of Savannah, Georgia . . (R. 6) and further
alleges that “ . . . no eligible Negro is considered for or 
admitted to a project designated by defendants for occu­
pancy by low-income white families”  (R. 10).

The contention of these appellees is, therefore, clearly 
without merit.



19

Conclusion

For the foregoing additional reasons which supplement 
the reasons advanced in appellants’ brief, the orders of 
the court below granting motion for summary judgment 
and the motion to dismiss should he reversed.

A. T. W alden-
200 Walden Building 

Atlanta, Georgia

F rank D. R eeves
473 Florida Avenue, N. W. 

Washington, D. C.

Constance B aker Motley
T htjrgood Marshall 

107 West 43rd Street 
New York 36, New York









BRIEF FOR APPELLANTS

lutteii States Court of Appeals
For the District of Columbia Circuit

No. 11,865

PRINCE F. HEYWARD, et ad.,

Appellants,
v.

PUBLIC HOUSING ADMINISTRATION, et ad.,

Appellees.

A ppear prom the United States D istrict Court por the 
D istrict op Codumbia

F rank A. D idworth, III,
458% West Broad Street, 

Savannah, Georgia;
T hurgood Marshadd,
Constance Baker Motdey,

107 West 43rd Street,
New York 36, N. Y.;

F rank D. R eeves,
2000 Ninth Street, N. W., 

Washington 1, D. C.,
Attorneys for Appellants.

S u p r e m e  P r in t i n g  C o., I n c ., 41 M u r r a y  S t r e e t , N. Y., B A r c l a y  7-0349





Question Presented

Whether it constitutes a violation of rights secured by 
the Constitution, Laws and Public Policy of the United 
States for the Federal Government to require or sanction 
racial segregation in low rent public housing projects, 
provided separate but equal facilities for eligible white 
and non-white families are furnished.





I N D E X

Jurisdictional Statement............................................................... 1

Statement of C ase .........................................................................  1

Statutes Involved...........................................................................  3

Statement of Points .....................................................................  4

Summary of Argument................................................................. 6

Argument .......................................................................................  7

I. The Federal Program Involved in this A ction ............  7

A. The Basic Statute................................................... 7

B. The Role of Appellee PH A as Determined by
the Basic Statute..................................................... 8

C. The Role of Appellee PHA as Evidenced by
Basic Rules and Regulations and Administra­
tive Provisions Adopted by the Appellee Com­
missioner of P H A ................................................... 11

1. The Role of PHA as Defined by Part Two
of the Annual Contributions Contract........  11

2. Special Role of PH A with Respect to Local
Racial Policies Described in Agency Manual 
of Policy and Procedure, Low Rent Housing 
Manual and Special Policy Directives..........  13

II. The Establishment of Fred Wessels Homes as a Project 
Limited to Occupancy by White Low Income Families 
Violates Rights Secured to Appellants by the Laws, 
Constitution and Public Policy of the United States ..  18

A. The Right Conferred on Appellants by the Basic
State ......................................................................... 18

B. Protection Afforded by the Federal Civil Rights
Statutes..................................................................... 19

PAGE



11

PAGE

C. Protection Afforded by the Constitution of the
United States...........................................................  21

1. The Fourteenth Amendment ....................... 22
a. The Separate but Equal D octrine........  25
b. Police Power and Property Values . . . .  31

2. The Fifth Amendment...................................  32

D. Protection Afforded by Consideration of Public
Policy .......................................................................  35

III. Congress Intended that there be no Segregation..........  36

A. Legislative History— Senate ................................. 36

B. Legislative History—H ou se ................................... 39

IV. Appellants have Standing to S u e .....................................  40

A. Relief Sought...........................................................  40

B. This is not a Taxpayer’s A ction ............................. 41

C. The Justiciable Issue...............................................  43

Conclusion..........................................................................  46

TABLE OF CASES

A llen  v. Oklahom a C ity, 17S Okla. 421, 52 Pac. 1054 (1935) .............. 25
Banks, e t al. v. San F rancisco  H ou sing  A u th o r ity , No. 420534, Oct. 1,

1952, Superior Court in and for San Francisco County ...............  26, 30
B a rrow s v. Jackson, United States Supreme Court, Oct. Term, 1952,

No. 517 decided June 15, 1953, — U. S. —, 97 L. ed. (advance
P- 961) ....................................................................22, 25, 35, 45, 46

Buchanan v. W a rley , 245 U. S. 60, 62 L. ed. 149 (1917) . . .20, 22, 23, 24, 27, 
. 28, 31, 35, 46

C ity o f  B irm ingham  v. M on k , 185 F. 2d 859 (1951), cert. den. 341 U. S.
940, 95 L. ed. 1367 (1951) .....................................................  24

C ity o f  R ichm ond v. D ean s, 281 U. S. 704, 74 L. ed. 1128 (1930) ........ 24
Crabb v. W eld cn  B ros., 65 F. Supp. 369 (S. D. Iowa, C. D.) (1946) ... 19
C rom pton v. Z abrisk ie, 101 U. S. 601, 25 L. ed. 1070 (1880) 44
E x  parte V irginia, 100 U. S. 339, 25 L. ed. 676 (1880) .. 23
F a vors  v. Randall, 40 F. Supp. 743 (E. D. Penn.) (1941) ...............  27, 28
Froth ingham  v. M ellon , 262 U. S. 477, 67 L. ed. 1078 (1923) .............. 41, 42
H arm on  v. T yler , 273 U. S. 6 6 8 , 71 L. ed. 830 (1927) .....................  24
H irabayashi v. United S ta tes, 320 U. S. 81, 87 L. ed. 1774 (1943) . . . 32, 33
H u rd  v. H od g e, 334 U. S. 24, 92 L. ed. 1187 (1948) . . . .20, 32, 33, 34, 35, 36, 46 
Illinois e x  rel. M cC ollu m  v. Bd. o f  Education , 333 U. S. 203 92 L ed649 (1948) ...........................................................................  44
Joint A n ti-F a scist R e fu g ee  C om m ittee v. M cG ra th , 341 U. S. 123. 95L. ed. 817 (1951) ..................................... ....................... 45



Ill

K orem atsu v. U nited  S ta tes, 323 U. S. 214, 89 L. ed. 194 (1944) .......  32, 33
M assachusetts v. M ellon , 262 U. S. 447, 67 L. ed. 1078 (1923) ..........  41, 42
P lessy v. F erg u son , 163 U. S. 537 (1896) .................................... 26, 27, 28
Seaw ell et al. v. M a c W ith e y , 2 N. J. Super. 255, 63 Atl. 2d 542 (1949)

rev’d on other grds. 2 N. J. 563, 67 Atl. 2d 309 (1949) ............  26
Shelley v. K ra em er , 334 U. S. 1, 92 L. ed. 1161 (1948)....... 20, 22, 24, 28, 32,

33 34 35 45 46
Strauder v. W e s t  V irgin ia , 100 U. S. 303, 25 L. ed. 664 (1880) .......  22
Vann, et al. v. T oled o  M etrop o lita n  H ou sin g  A u th o r ity , (U. S. D. C.

N. D. Ohio) Civil Action No. 6989, July 24, 1953 ....................21, 25, 29
W on g Y im  v. U nited  S ta tes, 118 F. 2d 667 (1949), cert. den. 313 U. S.

589, 85 L. ed. 1544 (1941) ................................ ............... 32
W oodbridge, e t al. v. T h e H ou sin g  A u th o r ity  o f  E vansville , Iruliana,

et al. (U. S. D. C. Ind.) Civil Action No. 618, July 6, 1953 . .19, 20, 25, 29, 36 
Young v. K e l l e x  C arp., 82 F. Supp. 953 (E. D. Tenn. N. D.) (1948) . . 19

PA G E

STATUTES

Act of Sept. 1, 1937, c. 896, 50 S'tlat. 888, as amended by Aqt of 
July 15, 1949, c. 338, Title III, 63 Stat. 422, Title 42, U. S. C„
Sections 1401 .........................................................................  1,2, 7, 8

1402(11) ...................................................................  7,19
1404(a)   11
1409 .........................................................................  19
1410 .........................................................................  19
1410(a) .....................................................................  8.10
1410(c) ..................................................................... 9
1410(f) ..................................................................... 10
1410(g) ....................................................................2,3,5,6,18
1410(h) ...................................................................  8,10
1411 .........................................................................  19
1413(a) ..................................................................... 10
1415(5) ..................................................................... 9
1415(7) (a) .................................................................8,9,22,23
1415(7) (b)   8,9
1415(8)(a)   9
1415(8)(b)   9
1415(8) (c) ..............................................................  19
1421(a)(1)   0
1433 ..................................................     10

Act of April 9, 1866, c. 31, Sec. 1, 14 Stat. 27, Title 8, U. S. C.,
Sec. 42 . . . . . . . . . . ...................................... 1,4, 5,6,19,20,27,33,34,35,46

Act of June 25, 1948, c. 646, Sec. 1, 62 Stat. 930, Title 28, U. S. C.,
Section 1331 ...........................................................................  1

Act of June 25, 1948, c. 646, Sec. 1, 62 Stat. 929, Title 28, U. S. C„
Section 1291 .........................................................................

CONSTITUTION

United States Constitution:
Fifth Amendment ..............................................................  1, 5,6,32
Fourteenth Amendment ........................................................  22



IV

OTHER AUTHORITIES

Congressional Record, Vol. 95, Part 4, 81st Cong., 1st Sess.
pages 4791 ..........................................................................  36

4851 ..........................................................................  37
4852 ..........................................................................  37
4853 ......................................................................... 37,38
4855 ..........................................................................  37,38
4856 ..........................................................................  37
4857 ..........................................................................  37
4858 .........................................................................  37

Congressional Record, Vol. 95, Part 7, 81st Cong., 1st Sess.
pages 8554 ..........................................................................  39

8555 ..........................................................................  39
8656 ..........................................................................  40
8657 ..........................................................................  40

Terms and Conditions, Constituting Part Two of an Annual Con­
tributions Contract between Local Authority and Public Housing 
Administration, Form PHA-1996, June 1950, Secs. 102(B) ........ 12

102(C) ........ 12
102(D) ........ 12
102(E) ........ 12
102(F) ........ 12
103 ..............  12
104 .............. 12
113 .............. 17
115 .............. 12
118 .............. 12
122 .............. 12
126   12
127 .............. 12
128 .............. 12
130 ..............  13
131 ..............  13
132 ..............  13
pp. 13-21 ......  13
304 ..............  13
305 .............. 13
306 .............. 13
308(D) ........ 13
308  ̂ ........... 13
309(C) (D) .. 13
325 .............. 13

HHFA PHA Manual of Policy and Procedure, Secs. 3911:10 ......... 16
3112:18........ 16
3812:1   16
3810:1 ........ 17
3110:1 ........ 17
6110:1   17

Low Rent Bulletin 12 (June 1950) ..............................................  16
Form PHA-1922 (2/15 /50) ...................................................... 17
Form PHA-1954 (Rev. July 1950) 101 ........................................  17

103 ......................................  17
201 ......................................  17
203 ......................................  17
207 ......................................  17
224 ......................................  17

HHFA-OA No. 470, January 17, 1953 ........................................ 14-15
HHFA PHA Low Rent Housing Manual, Secs. 102.1 .................  14

207.1 .................  16
208.1 .................  17
208:16...............  17

PAGE



Initpi* Status (ta rt nf Appeals
For the District of Columbia Circuit

No. 11,865

----------------------o------- ---------------
Prince F. H eyward, E rsaline Small, W illiam Mitchell, 

W illiam Golden, Mike Maitstipher, W illis H olmes, 
A lonzo Sterling, Martha Singleton, I rene Chisholm, 
J ohn F uller, B enjamin E. Simmons, J ames Y oung, 
Ola Blake,

Appellants,
v.

Public H ousing A dministration, body corporate; J ohn 
T. E gan, Commissioner, Public Housing Administra­
tion,

Appellees.
----------------------o------ ----------------

A ppeal from the; U nited States D istrict Court for the 
D istrict of Columbia

BRIEF FOR APPELLANTS





1

Jurisdictional Statement

Appellants filed their Complaint in the United States 
District Court for the District of Columbia, the court below, 
on September 8, 1952, pursuant to Act of June 25, 1948, c. 
646, Sec. 1, 62 Stat. 930, Title 28, United States Code, 
Sec. 1331, this being a suit which arises under the Con­
stitution and Laws of the United States, that is, the 
Fifth Amendment to the Constitution of the United States 
and Act of September 1, 1937, c. 896, 50 Stat. 888, as 
amended by Act of July 15, 1949, c. 338, Title III, 63 
Stat. 422, Title 42, United States Code, Secs. 1401-1433, 
and Act of April 9, 1866, c. 31, Sec. 1, 14 Stat. 27 
(R. S. Sec. 1978), Title 8, United States Code, Sec. 42, 
wherein the matter in controversy as to each of the Appel­
lants exceeds three thousand dollars exclusive of interest 
and costs (Joint Appendix 6).

The court below, on April 28, 1953, after hearing 
Appellees’ Motion for Summary Judgment, filed December 
22, 1952, entered an Order granting Appellees’ Motion for 
Summary Judgment and dismissing the Complaint herein 
on the ground that Plaintiffs, Appellants here, failed to 
state a claim upon which relief can be granted (Joint 
Appendix 15, 1).

From this Order, Appellants duly filed a Notice of 
Appeal on May 25, 1953 and prosecuted the appeal herein 
pursuant to Act of June 25, 1948, c. 646, Sec. 1, 62 Stat. 
929, Title 28, United States Code, Sec. 1291.

Statement of the Case

In their Complaint, Appellants allege that:
They are adult Negro citizens of the United States and 

of the State of Georgia, residing in the City of Savannah 
on a site commonly known as the “ Old Fort”  area (Joint 
Appendix 8).



2

Each of them will be displaced from such site by reason 
of the fact that the site has been condemned by or on 
behalf of the Housing Authority of Savannah, Georgia, a 
public agency, for the purpose of constructing thereon a 
low rent housing project pursuant to the provisions of Act 
of Sept. 1, 1937, c. 896, 50 Stat, 888, as amended by Act of 
July 15, 1949, 63 Stat. 422, Title 42, U. S. C., Secs. 1401- 
1433 (Joint Appendix 8).

Each of them meets the requirements established by 
law for consideration and admission to the said low rent 
public housing project (Joint Appendix 8).

Each of them is entitled by law, Act of Sept. 1, 1937, 
c. 896, 50 Stat. 888, as amended by Act of July 15, 1949, 
c. 338, Title III, Sec. 302(a) (g), 63 Stat. 423, Title 42, 
U. S. C. Sec. 1410(g), to a preference for consideration and 
admission to any public low rent housing project built in 
the City of Savannah, Georgia, and initiated after January 
1, 1947, by reason of the fact that his or her family will be 
displaced from a site on which a low rent public housing 
project will be built (Joint Appendix 8).

Appellees, the Public Housing Administration and 
John T. Egan, Commissioner of the Public Housing 
Administration, administer the Act of Congress pursuant 
to which the low-rent housing project in controversy will 
be constructed and operated, Act of Sept. 1, 1937, c. 896, 50 
Stat. 888, as amended by Act of July 15, 1949, c. 338, Title 
III, 63 Stat. 422, Title 42, United States Code, Secs. 1401- 
1433 (Joint Appendix 9).

In accordance with the provisions of said Act, the Appel­
lee, Public Housing Administration, has entered into a 
contract with the Housing Authority of Savannah, Georgia, 
pursuant to which contract said Appellee has agreed to 
give federal financial assistance and other federal assistance 
to the Housing Authority of Savannah, Georgia, for the 
construction, operation and maintenance of said housing 
project (Joint Appendix 9-10).



3

The housing project in controversy will be known as the 
Fred Wessels Homes, is also designated as GA-2-4, and 
will be limited to occupancy by eligible low income white 
families (Joint Appendix 10).

The Appellants, although meeting all the qualifications 
established by law for admission to the project and although 
having a preference for admission conferred by law, will 
be denied consideration for admission and admission to the 
said project solely because they are not white families 
(Joint Appendix 8, 11).

In response to Appellants’ Complaint, the Appellees, 
Defendants below, filed a Motion for Summary Judgment 
which was heard on April 21, 1953 (Joint Appendix 15).

On May 8, 1953 the court below rendered its opinion 
(Joint Appendix 2).

On April 28, 1953, the court below, entered an Order 
granting the Motion for Summary Judgment and dismiss­
ing the Complaint herein on the ground that the Complaint 
fails to state a claim upon which relief can be granted 
(Joint Appendix 1).

From this Order Appellants appeal.

Statutes Involved

Act of Sept. 1, 1937, c. 896, 50 Stat. 888, as amended 
by Act of July 15, 1949, c. 338, Title III, Sec. 302(a) (g), 63 
Stat. 423; Title 42, U. S. C. Sec. 1410(g):

“ Veterans’ preference: Every contract made pur­
suant to this Act (§1401 et seq. of this title) for 
annual contributions for any low-rent housing proj­
ect shall require that the public housing- agency, as 
among low-income families which are eligible appli­
cants for occupancy in dwellings of given sizes and 
at specified rents, shall extend the following prefer­
ences in the selection of tenants:



4

“ First, to families which are to be displaced by 
any low-rent housing project or by any public slum- 
clearance or redevelopment project initiated after 
January 1, 1947, or which were so displaced within 
three years prior to making application to such 
public housing agency for admission to any low-rent 
housing; and as among such families, first preference 
shall be given to families of disabled veterans whose 
disability has been determined by the Veterans’ 
Administration to be service-connected, and the 
second preference shall be given to families of de­
ceased veterans and servicemen whose death has 
been determined by the Veterans’ Administration to 
be service-connected, and third preference shall be 
given to families of other veterans and servicemen;

“ Second, to families of other veterans and ser­
vicemen and as among such families first preference 
shall be given to families of disabled veterans whose 
disability has been determined by the Veterans’ Ad­
ministration to be service-connected, and second 
preference shall be given to families of deceased 
veterans and servicemen whose death has been de­
termined by the Veterans’ Administration to be 
service-connected. ’ ’

Act of April 9, 1866, c. 31, Sec. 1, 14 Stat. 27, Title 8, 
U. S. C., Sec. 42:

“ Property rights of citizens. All citizens of the 
United States shall have the same right, in every 
State and Territory, as is enjoyed by white citizens 
and thereof to inherit, purchase, lease, sell, hold, 
and convey real personal property. (R. S. § 1978.) ”

Statement of Points

1. The court below erred in dismissing the Complaint 
on the ground that it fails to state a claim upon which 
relief can be granted.



5

2. The court below erred in ruling that “ it is entirely 
proper and does not constitute a violation of Constitutional 
rights for the Federal government to require people of 
white and colored races to use separate facilities, provided 
equal facilities are furnished to each.”

3. The court below erred in ruling that “ The Congress 
has conferred discretionary authority on the administra­
tive agency to determine for what projects Federal funds 
shall be used. There are very few limitations in the statute 
on the power of the administrator, and there is no limitation 
as to racial segregation.”

4. The court below erred in granting Appellees’ Motion 
for Summary Judgment on the ground that the Complaint 
fails to state a claim upon which relief can be granted.

5. The court below erred in refusing to rule that Appel­
lees in giving Federal financial assistance and other Fed­
eral assistance, provided for by Act of Congress, for the 
construction, maintenance, and operation of a public low- 
rent housing project from which the Appellants will be 
excluded and denied admission, solely because of their race 
and color, are violating rights secured to Appellants by 
the due process clause of the Fifth Amendment to the Fed­
eral Constitution, and by Act of April 9, 1866, c. 31, Sec. 42, 
14 Stat. 27, Title 8 U. S. C. Sec. 42 and Act of September 
1, 1937, c. 896, 50 Stat. 888, as amended by Act of July 
15, 1949, c. 338, Title III, Sec. 302(a)(g), 63 Stat. 423, 
Title 42, U. S. C. Sec. 1410(g), and are violating the public 
policy of the United States.

6. The court below erred in refusing to rule that Ap­
pellants, and all other Negroes similarly situated, cannot be 
denied consideration for admission and/or admission to 
the Fred Wessels Homes or any other federally-aided hous­
ing project solely because of their race and color.



6

7. The court below erred in refusing- to rule that the 
preference for admission to the Fred Wessels Homes or 
any other federally-aided low rent housing project initiated 
after January 1,1947 in the City of Savannah, Georgia, con­
ferred on Appellants, and all other Negroes similarly situ­
ated, by Act of Sept. 1,1937, c, 896, 50 Stat. 888*, as amended 
by Act of July 15, 1949, c. 338 Title III, 63 Stat. 423 Title 
42, U. S. C. Sec. 1410(g) may not be qualified or limited 
by race or color.

Summary of Argument

The Federal Government may not require or sanction 
racial segregation in low-rent public housing, provided 
separate but equal facilities for white and non-white fami­
lies are furnished, since such a requirement or sanction 
violates property rights secured to Appellants by the due 
process clause of the Fifth Amendment to the Federal 
Constitution and by Act of April 9, 1866, c. 31, Sec. 1, 14 
Stat. 27, Title 8 U. S. C. Sec. 42 and denies to Appellants 
rights conferred by Act of Sept. 1, 1937, c. 896, 50 Stat. 888, 
as amended by Act of July 15, 1949, c. 338, Title III, Sec. 
302(a)(g), 63 Stat. 423, Title 42 U. S. C. Sec. 1410(g) and 
violates the public policy of the United States.

Appellants have standing to sue and may maintain this 
action which they bring against Appellees as persons ag- 
rieved by Appellees’ unlawful administration of a federal 
statute enacted for the specific benefit of a class, low income 
families, of which Appellants are members, and as persons 
whose constitutionally and legislatively protected property 
rights have been violated by the racial segregation policy 
of which Appellants' complain, and as persons and mem­
bers of a class, displaced families, whose right to a prefer­
ence for admission conferred by statute has been denied 
by Appellees.



7

ARGUMENT

I. The Federal Program Involved In This Action.

The federal program involved in this action is low-rent 
public housing.

A. The Basic Statute

The basic statute providing for this program is com­
monly referred to as The Housing Act of 1937, as amended 
by Title III of the Housing Act of 1949.1

The Appellee Public Housing Administration is au­
thorized by the basic statute to enter into contracts for 
federal financial assistance only “ with a state or a state 
agency where such state or state agency makes application 
for such assistance for an eligible project which, under the 
applicable laws of the state, is to be developed and admin­
istered by such state or state agency. ’ ’ 1 2 The basic statute 
declares that it is “ the policy of the United States to 
promote the general welfare of the Nation by employing 
its funds and credit * * * to assist the several states and 
their political subdivisions * # * to remedy the unsafe and 
unsanitary housing conditions and the acute shortage of 
decent, safe, and sanitary dwellings for families of low 
income, in urban and rural non-farm areas, that are 
injurious to the health, safety and morals of the citizens

1 Act of Sept. 1, 1937, c. 896, 50 Stat. 888, as amended by Act 
of July 15, 1949, c. 338, Title III, 63 Stat. 422, Title 42, U. S. C„ 
§ 1401-1433. The Housing Act of 1937 provided for the first exten­
sive program of federal financial assistance for low-rent public hous­
ing. Prior to 1937, federal financial assistance for low-rent public 
housing had been made available under the provisions of the National 
Industrial Recovery Act. Title 40, United States Code, §401, 48 
Stat. 200.

2 Ibid, Title 42, U. S. C. § 1402 (11), 63 Stat. 429.



8

of the Nation.” 8 The basic act also provides that the 
determination that there is a need for such housing for low 
income families in a particular locality must be made by 
the political subdivision of the state which seeks the federal 
assistance, by providing that the local governing body must, 
by resolution, approve the application of the public housing- 
agency for the financial assistance sought from the federal 
government and must enter into an agreement with the 
public housing agency providing for cooperation on its 
part with such agency.3 4 5 In addition, the local governing- 
body must provide for the exemption from local taxation 
of all projects assisted under the basic act,6 and must agree 
with the public housing agency that within five years after 
the completion of a project it' shall have eliminated an 
equivalent number of slum dwelling units.6

The basic act thus effects federal-state character, making 
the housing made available to low income families as a 
result of this program distinctly public—the product of 
joint federal-state action.

B. The Role Of Appellee Public Housing
Administration As Determined By The
Basic Statute

Several provisions of the basic statute determine that 
the dominant role in this federal-state program shall be 
assumed by the federal agency by effecting complete federal 
involvement in, with veto power over, every major deter­
mination made with respect to the planning, construction,

3 Act of Sept. 1, 1937, c. 896, SO Stat. 888, as amended by Act 
of July IS, 1949, c. 338, Title III, 63 Stat. 429, Title 42, U. S. C., 
§ 1401.

4 Ibid, 63 Stat. 422, Title 42, U. S. C , § 1415(7) (a) (i)  (b ) (i).
5 Ibid, 63 Stat. 428, Title 42, U. S. C„ § 1410(h).

6 Ibid, SO Stat. 891, as amended by Act of July 15 1949, c. 338, 
63 Stat. 430, Title 42, U. S. C., § 1410(a).



9

operation and maintenance of a project assisted under the 
act.

Although the basic statute provides, for example, that 
the need for public housing shall be determined by the local 
housing authority and approved by the local governing 
body, it requires that the locally determined need be ap­
proved by PH A.7 PHA is authorized by the basic statute 
to require a cooperation agreement between the local public 
agency and the local governing body before any contract 
for loan or annual contribution is entered into.8 The basic 
statute requires that PHA be satisfied “ that a gap of at 
least 20 per centum has been left between the upper rental 
limits for admission to the proposed low rent housing and 
the lowest rents at which private enterprise unaided by 
public subsidy is providing * * * housing * * *.” 9 The 
basic law further provides that the income limits of tenants 
and all revisions thereof be approved by PH A;10 11 that 
periodic written statements be sent PHA concerning 
investigations, made by a duly authorized official of the 
local agency of each family admitted to the project;11 that 
PHA approve the cost amounts of the main construction 
contracts; 12 that PHA determine the purposes for which 
excess receipts of the local agency shall be used;13 that 
PHA may defer the requirement of elimination of the

7 Ibid, 63 Stat. 422, Title 42, United States Code, Sec. 1415(7) (a ) .

8 Ibid, 63 Stat. 422, Title 42, United States Code, Sec. 1415(7) (b ) .

0 Ibid, 63 Stat. 422, Title 42, United States Code, Sec. 1415(7) (b ).

10 Ibid, 63 Stat. 422, Title 42, United States Code, Sec.
1415(8)(a).

11 Ibid, 63 Stat. 422, Title 42, U. S. C., Sec. 1415(8) (b ).

12 Ibid, 50 Stat. 896, as amended by Act of Tuly 15, 1949, c. 338, 
63 Stat. 424, Title 42, U. S. C., Section 1415(5).

18 Ibid, 50 Stat. 892, as amended by Act of July 15, 1949, c. 338, 
63 Stat. 426, Title 42, U. S. C., Sec. 1410(c).



10

equivalent number of unsafe or insanitary dwellings situ­
ated in the locality, where there is an acute shortage of 
decent, safe, or sanitary housing available to families of 
low income ;14 * that PHA may require that payments under 
annual contributions contracts be pledged as security for 
any loan obtained by the local agency to assist the develop­
ment or acquisition of any project to which the annual 
contribution relates;16 that PH A’s contract with the local 
agency provide for tax exemption of the project or pay­
ments by the local agency in lieu thereof;16 that PHA may 
foreclose on any property or commence any action to 
protect or enforce any of its rights and may bid for and 
purchase at any other foreclosure or acquire or take posses­
sion of any project which it previously owned or in connec­
tion with which it made any loan, annual contribution, or 
capital grant; and in such case may complete, administer, 
pay the principal of and interest on any obligations issued 
in connection with such project, dispose of, or otherwise 
deal with such projects;17 and that PHA may approve 
certain state low rent or veterans projects as low rent 
housing projects to be aided under the basic act.18 Finally, 
the basic statute provides that PHA, upon the occurrence 
of any substantial default by the local agency with respect 
to any of the covenants or conditions to which the local 
agency is subject, at its option, may take title or possession 
of any project as then constituted.18*

14 Ibid, 50 Stat. 891, 893, as amended by Act of July 15, 1949, 
c. 338, 63 Stat. 428, 430, Title 42, U. S. C„ Sec. 1410(a).

18 Ibid, 50 Stat. 892, as amended by Act of June 21, 1938, c. 554, 
52 Stat. 820, as amended by Act of July 15, 1949, c. 338, 63 Stat. 424, 
Title 42, U. S. C., Sec. 1410(f).

16 Ibid, Note 5.

17 Ibid, 50 Stat. 894, Title 42, United States Code, Sec. 1413(a).

18 Ibid, as amended by Act of Julv 15, 1949, c. 338, Title VI, 
63 Stat. 440, Title 42, U. S. C. Sec. 1433.

18a Ibid, as amended by Act of July 15, 1949, c. 338, Title III, 
Sec. 307(h), 63 Stat. 431, Title 42, U. S. C., Sec. 1421(a)(1).



1 1

PH A has no rule or regulation or policy directive which 
requires open occupancy in any project taken over and 
operated by it.

C. The Role Of Appellee Public Housing 
Administration As Evidenced By Basic Rules 
And Regulations And Administrative Pro­
visions Adopted By The Appellee Commis­
sioner of PH A

In order to implement the dictates of the basic statute 
with respect to its role, Appellee Commissioner of PHA 
has, pursuant to his statutory rule making power, adopted 
agency rules and regulations, and administrative pro­
visions which bind and determine PH A’s relationship with 
the local agency.19 These administrative edicts are con­
tained in several basic documents: The Manual of Policy 
and Procedure (9/5/51), The Low Rent Housing Manual 
(2/2/52), and Part Two of every Annual Contributions Con­
tract, copy of the latter being attached to appellees ’ Motion 
for Summary Judgment in the court below. (Joint Ap­
pendix 60).

1. The Role Of PHA As Defined By Part Two 
Of The Annual Contributions Contract

Part II of the Annual Contributions Contract is that 
part of the basic agreement between the federal agency 
and the local authority which contains the terms and con­
ditions upon which the two agencies will operate and co­
operate in the joint program. The role of PHA as dictated 
by various provisions of the basic statute is described 
supra. Study of Part II demonstrates even more conclu­
sively PH A’s role in planning, development and manage­
ment of local program. Under this part of the contract, 
PHA approves contracts for services of experts for land

19 Ibid, as amended by Act of Aug. 10, 1948, c. 832, 62 Stat. 1284, 
Title 42, U. S. C., Sec. 1404(a).



12

surveys, title information, legal services, land acquisition, 
appraisals;20 options accepted by the local authority, the 
institution of condemnation proceedings, acquisition of 
project site;21 use restrictions on site;22 title vesting of 
site in local authority;23 giving of financial assistance to 
persons displaced from site;24 the plans and specification 
of the local authority for construction of the project;25 all 
construction contracts including bids for same;26 PHA 
determines prevailing wages to be paid by local authority 
to all architects, technical engineers, draftsmen, and techni­
cians employed in the development of the projects;27 PHA 
may waive requirement that only domestic materials be 
used in construction;28 PHA prescribes the forms to be 
used by contractors and sub-contractors in preparing their 
payrolls and issues instructions with respect to same;29 
PHA has the right to inspect the construction work 30 and 
the completed project when ready for occupancy;31 PHA 
approves any further development work;32 PHA approves

20 Form PHA-1996, Part Two, June 19S0, pg. 1, Sec. 102(B).
21 Ibid, Sec. 102(C)

22 Ibid, Sec. 102(D)

23 Ibid, Sec. 102(E)

24 Ibid, pg. 2, Sec. 102(F).

25 Ibid, Sec. 103

26 Ibid, Sec. 104

27 Form PHA-1996, Part Two, June, 1950, pg. 7, Sec. 115.
28 Ibid, pg. 8, Sec. 118.

28 Ibid, pg. 8, Sec. 122.

30 Ibid, pg. 9, Sec. 126.

31 Ibid, pg. 10, Sec. 127.

32 Ibid, pg. 10, Sec. 128.



13

development cost;33 PHA approves all financial arrange­
ments ;34 PHA approves management program,35 budgets,36 
income limits and rent schedules;37 standards of dwelling 
size;38 insurance coverage;39 supervises and approves or 
itself repairs, reconstructs or restores any damaged or de­
stroyed project;40 PHA periodically reviews all manage­
ment operations and practices.41

These references demonstrate that the role of PHA is 
not a passive one—PHA has veto power with respect to 
practically every determination made hy the local agency, 
whose role would appear to be that of agent for the fed­
eral agency. These terms and conditions make self-evident 
that the predominant role in the planning, construction and 
operation of projects is assumed by the federal agency.

2. Special Role Of PHA With Respect To Local
Racial Policies Described In Agency Manual
Of Policy And Procedure, Low Rent Housing
Manual And Special Policy Directives

In the agency’s Manual of Policy and Procedure and 
Low Pent Housing Manual most of the provisions of Part 
Two of the Annual Contributions Contract are reiterated 
and embellished with agency directives, but, in addition, 
these documents, including Part Two, contain special con-

33 Ibid, pg. 11, Secs. 130, 131, 132.
34 Ibid, pg. 13-21.

35 Ibid, pg. 22, Sec. 304.

36 Ibid, pg. 22, Sec. 305.

37 Ibid, pg. 22, Sec. 306.

38 Ibid, pg. 25, Sec. 308(D ).

39 Ibid, pg. 25, Sec. 308)4-

40 Ibid, pg. 27, Sec. 309(C) (D).

41 Ibid, pg. 33, Sec. 325.



14

siderations and requirements with respect to local racial 
policies and determinations, none of which adhere to the 
constitutional, legislative or public policy mandate dis­
cussed infra that there be no discrimination, including no 
racial segregation, with respect to selection of tenants for 
the housing accommodations made available as a result of 
this federal-state program.

The basic racial policy consideration, commonly referred 
to as PHA Racial Equity Formula, provides as follows:

Racial Policy
The following general statement of racial 

policy shall be applicable to all low-rent housing 
projects developed and operated under the United 
States Housing Act of 1937, as amended:

1. Programs for the development of low-rent 
housing in order to be eligible for PHA assistance, 
must reflect equitable provision for eligible families 
of all races determined on the approximate volume 
and urgency of their respective needs for such hous­
ing.

2. While the selection of tenants and assigning 
of dwelling units are primarily matters for local 
determination, urgency of need and the preferences 
prescribed in the Housing Act of 1949 are the basic 
statutory standards for the selection of tenants.42

In addition to this basic policy statement there is a 
recent policy directive which more clearly reveals PH A’s 
racial policy. This latest statement of racial policy pro­
mulgated by PHA is contained in a release issued January 
17, 1953 (HHFA-OA No. 470) and provides, insofar as 
material to the low-rent housing program, as follows:

42 HHFA PHA Low-Rent Housing Manual, Sec. 102.1, Febru­
ary 21, 1951.



15

Low-Rent Public Housing
The United States Housing Act of. 1937, as 

amended, and as perfected by Title III of the Hous­
ing Act of 1949, authorizes the Public Housing Ad­
ministration to make loans and annual contributions 
to local communities to assist them in remedying 
unsafe and insanitary housing conditions and in 
providing safe, decent and sanitary dwellings for 
families of low income. Its primary and principal 
objective is the improvement of the housing condi­
tions of American families of low income. Many of 
the low-rent public housing projects assisted under 
the Act, however, are constructed on slum sites. In 
such cases * * * such clearance of slum areas occupied 
by Negro or other racial minority families could 
result in worsening, instead of the desired improve­
ment, of the housing conditions of such families, 
because of the limited living space generally available 
to such families as well as their inability to pay the 
rents required for decent, safe, and sanitary housing.

Accordingly, in the course of actual operating ex­
perience, general procedures * * * have developed 
from the joint efforts of the local and Federal agen­
cies to assure that, in the selection of sites for low- 
rent public housing projects assisted under the United 
States Housing Act of 1937, as amended, the living 
space presently available to Negro and other racial 
minority families is not reduced. These general pro­
cedures are based upon the following:

A slum or blighted area presently occupied in 
whole or in part by a substantial number of Negro or 
other racial minority families may be cleared and 
redeveloped with low-rent public housing i f :
1. The low-rent public housing is to be available for 

occupancy by all racial groups, or
2. The low-rent public housing available for occu­

pancy by Negro or other racial minority families 
is to be constructed in the area in an amount 
substantially equal to the number of dwelling 
units in such area which were occupied by Negro 
or other racial minority families prior to its re­
development, or



16

3. The low-rent public housing is not to be available 
for occupancy by all racial groups or for occu­
pancy by Negro or other racial minority families, 
and

A. Low-rent public housing available for occu­
pancy by Negro or other racial minority families 
(in an amount substantially equal to the number 
of dwelling units in such area which were occupied 
by Negro or other racial minority families prior 
to its redevelopment is made available through 
the construction of low-rent public housing in 
areas elsewhere in the community, which areas 
are not generally less desirable than the area to 
be redeveloped, and

B. Representative local leadership among 
Negro or other racial minority groups in the 
community has indicated that there is no sub­
stantial objection thereto.

In addition to these major policy statements and direc­
tives there are numerous requirements imposed by PHA 
on the local agency with regard to race. For example: 
the rules and regulations define the organization and func­
tion of the Racial Relations Branch of P H A ; 43 set forth 
the requirement that local public agencies compile minority 
employment data; 44 define racial relations activities in 
in management45 and in construction; 46 require that the 
housing provided for all racial groups be of substantially 
the same quality, service, facilities and conveniences with 
respect to all standards and criteria for planning and 
design; 47 require a no discrimination provision with respect 
to employment in all construction contracts; 48 the same

43 HHFA PHA Manual of Policy & Procedure (9 /5 /5 1 ), Sec. 
3911:10.

44 Ibid, Sec. 3112:18.

45 Ibid, Sec. 3812:1.

46 Ibid, Sec. 3812:1.

47 Low Rental Housing Manual (12/13/49), Sec. 207.1.

48 Low Rent Bulletin 12 (June 1950) Construction Contract.



17

for architects; 49 the same for all contracts for services 
and supplies; 50 the same with respect to all leases of fed­
erally-owned housing projects;51 the same with respect to 
the hiring policies and procedures of the local authority; 52 
the same with regard to the personnel actions of PH A 
itself; 53 require that racial factors he taken into considera­
tion in connection with selection of sites; 54 55 require that the 
land area available to minority groups not to be reduced; 65 
require no discrimination with respect to persons to- be 
employed by the local authority for the purpose of con­
ducting surveys.56

The Development Program, which is a form prepared 
by PHA for use by the local authority for presentation 
of all relevant data in connection with application for fed­
eral assistance and which must be approved by PHA before 
such assistance is given, requests, for example, relevant 
data concerning the local agency’s present program,57 site 
occupants,58 neighborhood characteristics,59 proposed proj­
ect occupants,60 and displaced families,61 separately for 
white and non-white families.

49 Ibid, these requirements made pursuant to Executive Orders.
50 Manual of Policy & Procedure (5 /25 /49 ), Sec. 3810:1, Pur­

suant to Executive Order.
61 Manual of Policy & Procedure (5 /25/49), Sec. 3810.1.
52 PHA Form-1996 (June 1950) Annual Contribution Contract, 

Sec. 113.
58 Manual of Policy & Procedure (9 /25 /50), Sec. 3110:1, 

6110:1.

54 Low Rental Housing Manual (7 /28 /50), Sec. 208.1 3 B.

55 Low Rent Housing Manual (7 /14 /50), Sec. 208:16.
56 Form PHA-1922 (2/15/50) Proposal for Survey.
57 Form PHA-1954, Rev. July 1950. 101.
58 Ibid, 201, 203.
59 Ibid, 207.
60 Ibid, 103.
61 Ibid,224.



18

These considerations and requirements imposed by'PHA 
on the local agency, with respect to its determinations and 
policies involving race, bespeak PH A’s authority and the 
extent of its involvement in such local considerations and 
determinations.

II. The Establishment Of Fred Wessels Homes As 
A  Project Limited To Occupancy By White Low In­
come Families Violates Rights Secured To Appellants 
By The Laws, Constitution And Public Policy O f The 
United States.

A. The Right Conferred On Appellants By
The Basic Statute

Appellants are low income families meeting all require­
ments established by law for admission to the low rent 
project here in controversy, which is being built on the 
site of their present or former residence and from which 
they will be excluded and denied admission solely because 
they are not white families. The limitation to occupancy 
by white families is a determination which Appellees con­
tend the local agency, the Housing Authority of Savannah, 
Georgia, is permitted to make. But this determination has 
been specifically approved by Appellees (Appellants’ Ap­
pendix 10-11).

Under the basic statute, Appellants have a preference 
for admission to low rent housing by virtue of the fact that 
they are families which are to be displaced and which have 
been displaced to make way for the construction of a proj­
ect initiated after January 1, 1947.62 The act requires 
that every contract for annual contributions between PHA 
and the local agency “ shall require that the public housing 
agency, as among low-income families which are eligible

t5- Act of Sept. 1, 1937, c. 896, 50 Stat. 888, as amended by Act 
of July 15, 1949, c. 338, Title III, 63 Stat. 423, Title 42, United States 
Code, Sec. 1410(g).



19

applicants for occupancy in dwellings of given sizes and at 
specified rents, shall extend”  this preference in the selec­
tion of tenants.621

The contract between Appellees and the local housing 
authority in this instance contains this provision, which 
Congress obviously intended be included for the specific 
benefit of displaced families, and which displaced families 
may sue to enforce. Compare Young v. Kellex Corp., 82 F. 
Supp. 953 (U. S. D. C. E. D. Tenn.); Crabb v. Welden Bros., 
65 F. Supp. 369 (U. S. D. C. S. D. Iowa), reversed on 
other grounds, 164 F. 2d 797.

A federal district court has ruled enforcement of 
racial segregation in housing developments aided under this 
act, violates urgency of need preference rights, 63 Stat. 
422, Title 42, U. S. C. § 8(c), secured to qualified low 
income families by this provision. Woodbridge, et al. V . 

Housing Authority of Evansville, et al., Civil No. 619. 
U. S. D. C. S. D. Ind. (Findings of Fact and Conclusions 
of Law, filed July 6, 1953.)

The right of Appellants to a preference for considera­
tion for admission and admission to Fred Wessels Homes 
is thus violated by Appellees through their sanction of the 
limitation to white occupancy.

B. Protection Afforded By The Federal Civil
Rights Statutes

The basic Federal legislative safeguard against segre­
gation in Federally-aided low rent public housing projects 
is one of the Federal Civil Rights Statutes passed by the 
Congress to implement and give effect to the Fourteenth 
Amendment to the Federal Constitution. This provision, 
as presently contained in the United States Code, Title 8, 
Section 42 (14 Stat. 27) provides as follows:

“ All citizens of the United States shall have the 
same right in every state and territory, as is en-

628 Ibid.



2 0

joyed by white persons thereof, to inherit, purchase, 
lease, sell, hold, and convey real and personal prop­
erty.”  [Act of April 9, 1866, c. 31, Sec. 1 ('ft. S. 
1978).]

The United States Supreme Court in its decisions has 
noted that Congress considered the right to acquire an 
interest in real property so vital to the enjoyment of all 
other liberties that it first enacted this provision in 1866 
before the adoption of the Fourteenth Amendment.63 64 * In 
invoking the protection afforded by this provision, the 
Supreme Court has held, Buchanan v. War ley, 245 U. S. 60, 
79 (1917), that it operates “ to qualify and entitle a colored 
man to acquire property without state legislation discrim­
inating against him solely because of color.”  Accord: 
Shelley v. Kraemer, 334 U. S. 1, 11-12 (1948). The high 
Court has also held that this provision protects the right 
of Negroes to acquire an interest in real property free 
from discriminatory action on the part of the Federal gov­
ernment. Hurd v. Hodge, 334 U. S. 24 (1948).

In Woodbridge, et al. v. The Housing Authority of 
Evansville, et al.,6i a Federal district court ruled that the 
right to “ lease”  property is a civil right protected by 
this enactment from discrimination on the basis of race 
or color. In that case, qualified low income Negro families 
had been denied consideration for admission and admis­
sion to a new low rent project built pursuant to the pro­
visions of the basic statute involved in this case. The de­
fendant local housing officials had defended on the ground 
that separate facilities ( a PWA project built 16 years prior 
thereto) had been provided, and would be provided by 
the proposed program, for low income Negro families. The

63 Shelley v. Kraemer, 334 U. S. 1, 10-11 (1948). This statute 
was reenacted by the Congress after the Fourteenth Amendment was 
adopted. Act of May 31, 1870, Sec. 18 (16 Stat. 140, 144, c. 114).

64 U. S. D. C. S. D. Ind. Civil Action No. 618, Findings of Fact
and Conclusions of Law, filed July 6, 1953.



2 1

district court ruled that the denial of consideration for 
admission and the denial of admission, solely because of 
race and color, violated this provision. Likewise with re­
gard to the policy of enforced racial segregation “ in public 
housing financed by public funds and supervised and con­
trolled by public agencies.”

In Vann et al. v. Toledo Metropolitan Housing Author­
ity, a case similar to the Woodbridge case, another federal 
district court made similar rulings with regard to this 
Civil Eights Statute.65

Thus the right of Negroes to “ lease”  or to acquire any 
interest in real property, including Federally-aided low 
rent public housing, free from restrictions imposed by the 
State or Federal governments which are based upon race 
and color is specifically protected by Federal legislation.

C. Protection Afforded By The Constitution Of
The United States

PHA is authorized by the basic statute to make loans,68 69 
annual contributio66 ns,67 and capital grants68 to public 
housing agencies which have been established pursuant to 
state enabling legislation.60 One of the basic amendments 
to the 1937 Act by the 1949 Act is an amendment which 
requires that there be local determination of the need for

66 U. S. D. C. N. D. Ohio, Civil Action No. 6989 Journal Entry 
and Memorandum Opinion filed June 24, 1953.

66 Act of Sept. 1, 1937, c. 896, 50 Stat. 891, as amended July 15, 
1949, c. 338, Title III, 63 Stat. 425, 426, Title 42, U. S. C., Sec. 1409.

67 Ibid, 50 Stat. 892, as amended by Act of July 15, 1949, c. 338, 
Title III, 63 Stat. 427, Title 42 U. S. C., Sec. 1410.

68 Ibid, 50 Stat. 891, 893, as amended by Act of July 15, 1949, 
c. 338, Title III, 63 Stat. 430, Title 42, U. S. C„ Sec. 1411.

69 Ibid, 50 Stat. 889, as amended by Act of July 15, 1949, c. 338, 
Title III (11), 63 Stat. 429, Title 42, U. S. C., Sec. 1402(11).



22

low-rent housing in the community involved.70 It provides 
that the local governing body must, by resolution, approve 
the application of the local public agency for a preliminary 
loan and must enter into a cooperation agreement with the 
local public agency. In other words, the project must be 
the result of state as well as federal action. No provision 
of the basic statute requires or permits local public agencies 
or PHA to determine by which race or color of low income 
families a particular project assisted under the Act shall 
be occupied. PHA permits local authorities to decide the 
racial occupancy patterns which shall obtain in the various 
projects of the local program. This determination is set 
forth in the Development Program, the basic document sub­
mitted to the PHA by the local agency for PH A’s approval 
of the local program. Once PHA approves the Develop­
ment Program, the local program then becomes a joint 
venture or partnership arrangement whereby the state 
government, through one of its subdivisions or agencies, 
and the federal government, through PHA, jointly carry 
out the planning, construction, operation, and maintenance 
of the projects. The housing unit made available to a 
qualified low income family is therefore distinctly public— 
the product of combined federal-state action, to which 
federal constitutional proscriptions are applicable.

1. The Fourteenth Amendment

The Fourteenth Amendment to the Federal Constitution 
has consistently been construed by the United States 
Supreme Court as prohibiting discriminatory state action 
based solely on race and color, and has been held to enjoin 
such action on the part of the state, ■whether the result 
of action on the part of its legislative arm, Strauder v. 
TFest T irginia, 100 U. S. 303 (1880); Buchanan v. Warley, 
245 I . S. 60 (1917); its judicial arm, Shelley v. Kraemer, 
334 I . S. 1 (1948); Barrows v. Jackson, United States

70 Ibid, 63 Stat. 422, Title 42, U. S. C„ Sec. 1415(7).



23

Supreme Court, Oct. Term, 1952, No. 512 decided June 
15, 1953; or its administrative arm, Ex parte Virginia, 
100 U. S. 339 (1880).

In cases involving suits against local housing authorities 
to enjoin racial discrimination in low rent public housing 
where the local authority has determined upon a policy 
of racial discrimination, including racial segregation 
policies, the constitutional question which arises is whether 
the defendant members of the local authority, who are the 
administrative or executive arm of the state, may enforce 
a policy which results in denying the Negro plaintiffs, who 
are qualified low income families, the right to occupy real 
property, a unit in a public housing project, solely because 
of race and color.

In Buchanan v. Warley, supra, the United States 
Supreme Court declared unconstitutional action on the part 
of the legislative arm of the state, a city ordinance, designed 
to bar Negroes from occupying as homes houses in blocks 
where the majority of residences were occupied by white 
families. The ordinance similarly denied white persons 
the right to occupy houses in blocks where the majority 
of houses were occupied by Negro families. In striking 
down this legislative fiat the court said, at page 79:

“ The Fourteenth Amendment and these statutes 
enacted in furtherance of its purpose operate to 
qualify and entitle a colored man to acquire property 
without State legislation discriminating against him 
solely because of color.”

The court said that the “ concrete question”  before it 
was, at page 75:

“ May the occupancy, and necessarily, the pur­
chase and sale of property of which occupancy is an 
incident, be inhibited by the State or by one of its 
municipalities, solely because of the color of the 
proposed occupant of the premises?”



24

The precise question decided by the court in this case, 
however, was whether the white seller, who brought the 
action for specific performance of the contract for the sale 
of his property to the Negro contract vendee, had the right 
to dispose of his property free from racial restrictions 
imposed by the state. The court held that the ordinance in 
question deprived the white seller of his right to dispose 
of his property in violation of due process clause of the 
Fourteenth Amendment.

But in Shelley v. Kraemer, supra, at page 12, the court 
again pointed out that such legislative restrictions are also 
constitutionally invalid when applied to bar a Negro who 
seeks to occupy real property in certain residential areas. 
The court said that this was made clear by its disposition 
of the cases of City of Richmond v. Beans, 281 U. S. 704 
(1930) and Harmon v. Tyler, 273 U. S. 668 (1927). In 
both cases the high Court reversed lower court decisions 
upholding legislative restrictions on Negro occupancy by 
merely citing Buchanan v. Warley, supra. Since Shelley 
v. Kraemer, supra the Supreme Court has denied certiorari 
in City of Birmingham v. Monk, 185 F. 2d 859 (1951), cert, 
den. 341 U. S. 940 (1951) where a similar legislative restric­
tion against Negro occupants was struck down by the United 
States Court of Appeals for the Fifth Circuit.

In Shelley v. Kraemer, supra, the United States Supreme 
Court held violative of the equal protection clause of the 
Fourteenth Amendment action on the part of the judicial 
arm of the state which resulted in prohibiting Negroes from 
occupying homes in certain residential areas from which 
private individuals sought to exclude them by private race 
restrictive covenants. In order to be effective against 
breach, these agreements required action on the part of 
the state’s judiciary. The court held that where the 
judiciary took action to enforce the discriminatory covenant, 
the discrimination ceased to be private action and became 
the action of the state. The court said, at page 10:



25

‘ ‘ It cannot be doubted that among the civil rights 
intended to be protected from discriminatory State 
action by the Fourteenth Amendment are the rights 
to acquire, enjoy, own and dispose of property.”

In Barrows v. Jackson, supra, the United States 
Supreme Court ruled that a state court could not, consistent 
with the same constitutional prohibition on state action, 
award damages for breach of a private racial restrictive 
covenant designed to bar Negroes from occupying certain 
residential property, since such action on the part of a 
state court deprives Neg*roes of the right secured to them 
by the equal protection clause of the Fourteenth Amend­
ment to occupy real property free from state-imposed 
restrictions based solely upon race and color. The Court 
had previously ruled in Shelley v. Kraemer, supra, that a 
state court could not, consistent with the same constitutional 
proscription, give effect to or enforce such covenants by 
the issuance of any injunction.

Thus, the United States Supreme Court has specifically 
struck down action on the part of both the legislative and 
judicial arm of the state which results in denying Negroes 
the right to occupy certain real property, holding such 
action violative of rights secured to Negroes by the Four­
teenth Amendment to the Federal Constitution. The ques­
tion in each of these cases was state action. The result 
did not turn on the fact that a particular arm of the state, 
legislative or judicial, was involved.

In Allen v. Oklahoma City, 175 Okla. 421, 424, 52 Pac. 
1054, 1058 (1935), the Supreme Court of Oklahoma struck 
down as invalid and void an executive order issued by the 
Governor of the State of Oklahoma requiring racial segre­
gation in residential areas.

In Vann, et ai. v. Toledo Metropolitan Housing Au­
thority, supra, and Woodbridge, et al. v. The Housing 
Authority of Evansville,, et al., supra, two federal district 
courts have squarely held that local public housing au­



26

thorities may not, consistent with the Fourteenth Amend­
ment, enforce a policy of racial segregation in federally- 
aided low rent public housing projects.

A similar ruling involving federally-aided projects was 
made by the Superior Court of San Francisco in Banks, 
et al. v. San Francisco Housing Authority11 and by the 
Superior Court of Essex County, New Jersey in Seawell, 
et al. v. MacWithey, et al.,12 involving a state-aided veterans 
public housing project.

The effect of these rulings is to bring the State’s execu­
tive or administrative arm under constraint of Fourteenth 
Amendment prohibitions, where property rights are in­
volved.

a. The Separate But Equal Doctrine

In Favors v. Randall, 40 F. Supp. 743 (1941), a federal 
district court applied the separate but equal doctrine in a 
case involving racial segregation in Federally-aided low 
rent public housing projects. In that case, the complaint 
alleged that Negroes were being discriminated against by 
the certification of tenants for occupancy on the basis of 
race and color. The court in denying a temporary injunc­
tion found that Negroes were to receive a larger propor­
tionate share of the available units than their propor­
tionate need determined. The court concluded from this 
fact that there was no discrimination, as alleged, and ruled 
that since the Fourteenth Amendment required a “ legal” 
equality as distinguished from “ social”  equality, no Con­
stitutional rights of the plaintiffs had been violated. The 
court, relying on Plessy v. Ferguson13 expressly rejected * 73

“ Superior Court in and for San Francisco Countv. No. 420534, 
October 1st, 1952.

-  N. J. Super. 255, 63 Atl. 2d 542 (1949) ; reversed on other 
grounds, 2 N. J. 563, 67 Atl. 2d 309 (1949).

73 163 U. S. 537 (18% ).



27

the argument of the attorneys for the plaintiffs that “ equal 
rights”  could be secured only by “ enforced commingling 
of the two races” .

In Plessy v. Ferguson, supra, the United States Supreme 
Court for the first time specifically upheld the doctrine of 
separate but equal. The Court ruled in that case that the 
state’s requirement of separate but equal railroad facilities 
for Negro and white passengers did not violate any rights 
secured to the individual by the equal protection clause of 
the Fourteenth Amednment to the Federal Constitution. 
Twenty-one years later the hig*h Court was asked to hold the 
same with respect to the state’s requirement of racial 
segregation in housing in Buchanan v. Warley, supra, but 
the Court expressly refused to do so. The Court said, at 
page 79 :

“ The defendant in error insists that Plessy v. 
Ferguson, * * * is controlling in principle in favor 
of the judgment of the court below * * * it is to be 
observed that in that case there was no attempt to 
deprive persons of color of transportation in coaches 
of the public carrier, and express requirements were 
for equal though separate accommodations for white 
and colored races * *

“ As we have seen, this court has held laws valid 
which separated the races on the basis of equal 
accommodations in public conveyances, and courts of 
high authority have held enactments lawful which 
provide for separation in the public schools of white 
and colored pupils where equal privileges are given. 
But, in view of the rights secured by the Fourteenth 
Amendment to the Federal Constitution, such legis­
lation must have its limitations, and cannot be sus­
tained where the exercise of authority exceeds the 
restraints of the Constitution. We think these limi­
tations are exceeded in laws and ordinances of the 
character now before us”  (p. 81).

In Favors v. Randall, supra, the court made no refer­
ence to Buchanan v. Warley, supra, or to Title 8, Section



2 8

42, United States Code. Instead of following the Buchanan 
case, the court in the Favors case reverted to Plessy v. 
Ferguson and held separate but equal applicable. This 
may have been due to the fact that plaintiff did not argue 
that property rights protected by the Fourteenth Amend­
ment and Title 8, U. S. C., Sec. 42, were involved, but 
argued that “ social rights”  or the right of persons to 
“ commingle”  was at stake.

Since the decision of the federal district court in the 
Favors case, the United States Supreme Court has decided 
the Restrictive Covenant Cases where it expressly affirmed 
Buchanan v. Warley, supra, and again rejected a separate 
but equal argument. In Shelley v. Kraemer, supra, the 
Court was asked by the covenantors to consider that Ne­
groes might enter into restrictive agreements barring- 
whites from their neighborhoods. In rejecting this argu­
ment, the Court said, at pages 21-22:

“ Respondents urge, however, that since the 
state courts stand ready to enforce restrictive cove­
nants excluding white persons from the ownership 
or occupancy of property covered by such agree­
ments, enforcement of covenants excluding colored 
persons may not be deemed a denial of equal pro­
tection of the laws to the colored persons who are 
thereby affected. This contention does not bear 
scrutiny. The parties have directed our attention 
to no case in which a court, state or federal, has been 
called upon to enforce a covenant excluding members 
of the white majority from ownership or occupancy 
of real property on grounds of race or color. But 
there are more fundamental considerations. The 
rights created by the first section of the Fourteenth 
Amednment are, by its terms, guaranteed to the 
individual. The rights established are personal 
rights. It is, therefore, no answer to these peti­
tioners to say that the courts may also be induced 
to deny white persons rights of ownership and oc­
cupancy on grounds of race or color. Equal pro­
tection of the laws is not achieved through indis­
criminate imposition of inequalities.”



29

In Woodbridge et al. v. The Rousing Authority of 
Evansville, Indiana, et al., supra, the federal district court 
ruled the separate but equal doctrine inapplicable to prop­
erty rights.

The court, in its Conclusions of Law, said:
“ That the defendants’ theory of defense, namely 

that plaintiffs and members of their class are not 
being discriminated against due to the defendants’ 
furnishing ‘ separate but equal ’ low rent public hous­
ing facilities to plaintiffs and members of their class, 
is not tenable in view of the weight of authority as 
expressed in a large majority of recent decisions. 
As stated in a decision rendered June 24, 1953 by 
Judge Frank L. Kloeb of The United States District 
Court for the Northern District of Ohio, in an action 
involving a similar situation, ‘You must bear in mind 
here that we have projects erected with public funds, 
erected by the Government of the United States, and 
the Government does not segregate its tax receipts. 
* * * We are here dealing with property rights as 
distinguished from the mere right to a public service.’

“ It is the conclusion of this court, that the case 
of Plessy v. Ferguson, 163 U. S. 537, decided in 1895, 
on which defendants heavily rely to sustain their 
‘ separate but equal’ theory of defense, has, by many 
decisions of the Supreme Court of the United States 
in recent years, lost most, if not all, its weight as a 
guide in cases concerning ownership or occupancy of 
real property as distinguished from those cases in­
volving a public service.

‘ ‘ In the case at hand, we have more than a public 
service. Here we have a contractual relation in­
volving a lease of real property for which the tenant 
must pay a valuable consideration in the form of 
monthly rent.”

In Vann, et al. v. Toledo Metropolitan Housing Author­
ity, supra, the federal district court said in its Memo­
randum Opinion:



30

“ The trend of all of the later cases involving 
property rights is to conform, strictly with the re­
quirements of the Fourteenth Amendment and of the 
Civil Rights Statutes.”

In Banks, et al. v. San Francisco Housing Authority, 
supra, the Superior Court of San Francisco said:

“ The main question posed, then, at this stage by 
demurrer, is whether or not this public agency can 
exclude Negro persons solely because they are 
Negroes, from five of these projects and segregate 
them into the sixth. Is such segregation unlawful 
discrimination ?

“ The Fourteenth Amendment to the Constitu­
tion of the United States has uniformly been held to 
protect all persons, white or colored, against dis­
criminatory legislation or action by the states or its 
agencies. It is the contention of the Housing Au­
thority that they comply with this basic law in offer­
ing Negroes equal accommodations and facilities 
separately at Westside, even though they deprive 
them of the right to admission at the five other 
developments.

“ However, it is clear to the Court that although 
at one time the ‘ separate but equal’ doctrine’ was 
upheld as not being discriminatory treatment and 
followed in certain types of activities, nevertheless, 
since it was first enunciated in the Plessy v. Fergu­
son case (163 U. S. 537) (1895), it has in later years 
lost its force by reason of the holdings in many other 
cases showing that it has no application to owner­
ship or occupancy of real property. Discrimination 
by segregation of housing facilities and attempts to 
control the same by restrictive covenants have been 
outlawed by our Supreme Court. * * *

“ By extension of the logic and reason of those 
cases, it is apparent that that doctrine should not 
apply to a public housing project, financed by public 
funds and supervised and controlled by a public 
agency. ’ ’



31

b. Police Power And Property Values

In Buchanan v. Warley, supra, justification for the city 
ordinance requiring residential racial segregation was 
sought on several grounds. One ground was that the state 
had the power to pass such an ordinance in the exercise of 
the police power “ to promote the public peace by prevent­
ing racial conflict” .

In response to this argument the Court said, at pages 
74-75:

“ The authority of the state to pass laws in the 
exercise of the police power, having for their object 
the promotion of the public health, safety, and wel­
fare, is very broad, as has been affirmed in numerous 
and recent decisions of this court. * * * But it is 
equally well established that the police power, broad 
as it is, cannot justify the passage of a law or ordi­
nance which runs counter to the limitations of the 
Federal Constitution; * * *

“ True it is that dominion over property spring­
ing from ownership is not absolute and unqualified. 
The disposition and use of property may be con­
trolled, in the exercise of the public health, con­
venience, or welfare. * * * Many illustrations might 
be given from the decisions of this court and other 
courts, of this principle, but these cases do not touch 
the one at bar.

“ The concrete question here is: May the occu­
pancy, and, necessarily, the purchase and sale of 
property of which occupancy is an incident, be in­
hibited by the states, or by one of its municipalities, 
solely because of the color of the proposed occupant 
of the premises!”

*  *  #

“ That there exists a serious difficult problem 
arising from a feeling of race hostility which the law 
is powerless to control, and to which it must give a 
measure of consideration, may be freely admitted. 
But the solution cannot be promoted by depriving 
citizens of their constitutional rights”  (at pp. 80-81).



32

Another ground was that in the exercise of the state’s 
police power, the state had the power to pass the ordinance 
since “ it tends to maintain racial purity.”

In response to this argument the court said, at page 81:
‘ ‘ Such action is said to be essential to the main­

tenance of the purity of the races, although it is to 
be noted in the ordinance under consideration that 
the employment of colored servants in white families 
is permitted, and nearby residences of colored per­
sons not coming within the blocks, as defined in the 
ordinance, are not prohibited.

“ The case presented does not deal with an 
attempt to prohibit the amalgamation of the races. 
The right which the ordinance annulled was the civil 
right of a white man to dispose of his property if 
he saw fit to do so to a person of color, * * * ”

Another ground on which justification for the ordinance 
was sought was that colored purchases depreciated prop­
erty in white neighborhoods.

In response to this argument the court said, at page 82:
“ But property may be acquired by undesirable 

white neighbors, or put to disagreeable though law­
ful uses with like results.”

2. The Fifth Amendment

The due process clause of the Fifth Amendment to the 
Federal Constitution has been construed as affording pro­
tection against discriminatory action on the part of the 
national government if based solely upon race, color or 
ancestry. See, Hirabaya-sJii v. United States, 320 IJ. S. 81, 
100 (1943); Korematsu v. United States, 323 U. S. 214, 216 
(1944); Wong Tim v. United States, 118 F. 2d 667, 669 
(1941) cert. den. 61 S. Ct. 1112 (1941). It is clear from 
these decisions that the Court’s statements regarding 
racially discriminatory governmental action portends its 
decision in this case. In two cases, the Court said:



33

“ Distinctions between citizens, solely because of 
their ancestry, are by their very nature odious to a 
free people whose institutions are founded upon the 
doctrine of equality.”  Hirabayashi v. United States, 
supra.

“  * * * all legal restrictions which curtail the 
civil rights of a single racial group are immediately 
suspect. That is not to say that all such restrictions 
are unconstitutional. It is to say that courts must 
subject them to the most rigid scrutiny. Pressing 
public necessity may sometimes justify the existence 
of such restrictions; racial antagonisms never can.”  
Korematsu v. United States, supra.

In Hurd v. Hodge, and Urciolo v. Hodge, 334 U. S. 24 
(1948), two District of Columbia cases involving federal 
judicial enforcement of private race restrictive covenants, 
heard and determined at the same time that the United 
States Supreme Court heard and determined Shelley v. 
Kraemer and Sipes v. McGhee, 334 U. S. 1 (1948), involv­
ing state judicial enforcement of such agreements, the 
United States Supreme Court simply found it unnecessary 
to invoke the due process clause of the Fifth Amendment 
to protect the right of Negroes to occupy real property 
without discriminatory interdiction on the part of the fed­
eral judiciary. The Court had, in the Shelley case, supra, 
ruled that the right of Negroes to occupy real property 
was protected against discriminatory action by the state’s 
judiciary by the equal protection clause of the Fourteenth 
Amendment to the Federal Constitution. In the Buchanan 
case, supra, the Court held that the enforcement of the 
ordinance interfered with the white seller’s right to dispose 
of his property in violation of the due process clause of the 
Fourteenth Amendment.

If the right to acquire, occupy and dispose of real prop­
erty is protected by the equal protection and due process 
clauses of the Fourteenth Amendment to the Federal Con­
stitution, is not this basic civil right, which is also given 
supplementary protection by Title 8, U. S. C., Sec. 42, like­



34

wise protected against discriminatory federal action by the 
due process clause of the Fifth Amendment? Certainly it 
cannot be presumed that such a basic right is protected 
against discriminatory governmental action by the due 
process clause of the Fourteenth Amendment but not by 
the identical clause of the Fifth Amendment against federal 
action. Such a presumption would indeed be a legal 
anomaly.

In Hurd v. Hodge, supra, the Supreme Court said, with 
respect to discriminatory federal action and the due process 
clause of the Fifth Amendment, at page 30:

“  * * * we have found it unnecessary to resolve 
the constitutional issue which petitioners advance; 
for we have concluded that judicial enforcement of 
restrictive covenants by the courts of the District of 
Columbia is improper for other reasons * * * ”

—for the reason that Title 8, U. S. C., Sec. 42 is directed 
against governmental action.

In deciding whether judicial enforcement of such cove­
nants by the District Court for the District of Columbia was 
governmental action prohibited by Title 8, U. S. C., Sec. 42, 
the Court said that it must refer to :

“  * * * the scope and purpose of the Fourteenth 
Amendment; for that statute and the Amendment 
were closely related both in inception and in the 
objectives which Congress sought to achieve”  (at 
p. 32).

The Court concluded that its holding in Shelley v. Krae- 
mer, supra, is :

“  * * * clearly indicative of the construction to 
be given to the relevant provisions of the Civil 
Eights Acts in their application to the courts of the 
District of Columbia”  (at p. 33).

The Court concluded:
“  * * * the explicit language employed by Con­

gress to effectuate its purposes, leaves no doubt that



3 5

judicial enforcement of tlie restrictive covenants by 
the courts of the District of Columbia is prohibited 
by the Civil Rights Act, That statute, by its terms, 
requires that all citizens of the United States shall 
have the same right ‘ as is enjoyed by white per­
sons * * * to inherit, purchase, lease, sell, hold and 
convey real and personal property’

By the same method of reasoning, this court should have 
no difficulty in finding a violation of the due process clause 
of the Fifth Amendment in federal administrative require­
ment or sanction of racial segregation in public housing.

D. Protection Afforded By Considerations Of
Public Policy

In addition to finding in Hurd, v. Hodge, supra, that 
Title 8, U. S. C., Sec. 42 had been violated by federal court 
enforcement of private racial covenants, the United States 
Supreme Court said, at page 34:

“ But even in the absence of the statute, there 
are other circumstances which would indicate that 
enforcement of restrictive covenants in these cases 
is judicial action contrary to the public policy of the 
United States.”

“ The power of the federal courts to enforce the 
terms of private agreements is at all times exercised 
subject to the restrictions and limitations of the 
public policy of the Unted States as manifested in 
the Constitution, treaties, federal statutes and appli­
cable legal precedents.”

The United States Supreme Court has held, as pointed 
out above, that the Fourteenth Amendment to the Federal 
Constitution protects the right of Negroes to occupy real 
property free from discriminatory state action. Buchanan 
v. Worley, supra, Shelley v. Kraemer, supra, Barrows v. 
Jackson, supra. In Hurd v. Hodge, supra, and Shelley case, 
the court held that Title 8, U. S. C., Sec. 42, clearly entitles 
Negroes to protection against governmental action which



36

would deprive them, solely because of race or color, of 
the right to occupy real property. Therefore, the Consti­
tution, laws and applicable legal precedents make manifest 
that the public policy of the United States is one which 
prohibits federally imposed or sanctioned racial restric­
tions upon the occupancy of real property.

In Woodbridge, et al. v. Rousing Authority of Evans­
ville, et al., supra, the court ruled that the action of the 
Public Housing Administration, similar to its action in the 
instant case, in approving the limitation in that case of a 
new federally-aided project to white occupancy violated 
the public policy of the United States.

Certainly it could not be seriously contended that the 
public policy of the United States “ manifests a lesser con­
cern for the protection of such basic rights against dis­
criminatory action of federal”  administrative officials 
“ than against such action taken by the courts of the 
States”  or by State-administrative officials, cf. Hurd v. 
Hodge, supra, at 35-36. III.

III. Congress Intended That There Be No Segre­
gation.

A. Legislative History— Senate

Congress did not expressly provide, in the Housing 
Act of 1949, that there shall be no discrimination or segrega­
tion. Hid Congress intend to permit such segregation and 
discrimination! It is true that at the time that the Housing 
Act of 1949 was before Congress for consideration, an 
attempt was made to include an amendment prohibiting 
‘ ‘ discrimination ’ ’ and ‘ ‘ segregation. ”  74 This attempt was 
defeated. But the truly decisive question in this connection 
is “ Why the noes!”  The answer to this question was

74 Congressional Record, Vol. 95, Part 4 (Page 4791), 81st Con­
gress, 1st Sess.



37

articulated in the Senate by Senator Douglas (D-Ill.) who, 
in his remarks opposing the Amendment introduced by 
Senators Bricker (R-O) and Cain (E-Wash.), challenged 
the sincerity of the Senate proponents of the Amendment.75

Debate over the Cain-Bricker Amendment reveals that 
it was introduced by Senator Bricker who was on record 
as opposed to public housing and who would not have 
voted for public housing even if his Amendment to the 
Act had been adopted.76 It, therefore, became apparent to 
the so-called liberal northern and western Senators, the 
civil rights proponents, that the Cain-Bricker anti-discrimi­
nation amendment was in reality a sinister political strata­
gem for ultimately defeating the public housing program. 
The Congressional Record discloses that the plan to kill 
public housing was as follows: Senator Bricker and other 
northern Republicans who were opposed to public housing 
would vote with civil rights northern and western senators 
to carry the Amendment. Once the Amednment had been 
incorporated into the Bill by this coalition, Senator Bricker 
and his Republican foes of public housing would then form 
a coalition with southern Democratic senators who would 
then vote against the public housing provisions of the A ct; 
the southern Democrats voting against the Bill because it 
required “ no discrimination or segregation” , and Senator 
Bricker, plus other Republican public housing adversaries, 
voting against public housing.

If Senator Douglas had not brought out into the open the 
fact that Senator Bricker was using the anti-discrimination 
amendment as a calculated device for defeating the public

75 Congressional Record, Volume 95, Part 4 (pages 4851-4858) 
81st Congress 1st Sess.

76 Congressional Record, Volume 95, Part 4 (pages 4851-4852) 
Cong. 1st Sess. April 11th, 1949 to May 4th, 1949:

“ Mr. Bricker: My position was made clear yesterday.
I am in favor of the slum elimination section. I am opposed 
to the public housing section, and I am opposed to the farm 
housing section.”



38

housing program and if he, and other civil rights senators 
had not been willing to jeopardize their own political 
futures, they would have been forced, by self-serving poli­
tical considerations, to vote for the Amendment, and then 
see that Amendment become the major cause for defeat­
ing the entire public housing section of the Housing Act 
of 1949. Senator Douglas and other northern and western 
Senators, expressly for the record, made it clear that they 
were in favor of prohibiting segregation and discrimination 
in federally-aided public housing projects, and that it was 
not their intention by voting “  no ”  on the anti-discrimina­
tion amendment to indicate that they were in favor of dis­
crimination or segregation. These senators, who were for 
both public housing and safeguarding the rights of minority 
groups, realized that in putting themselves squarely on 
record they would preclude possible future judicial or 
administrative determination that their failure to adopt the 
anti-discrimination amendment meant they favored segre­
gation or discrimination.77

Finally, it was the understanding of the Senate that not 
only was the Cain-Bricker Amendment a cunning device 
for defeating public housing, but it was further the under­
standing of the Senate, as pointed out by Senator Hum­
phrey (D-Minn.), that such an amendment would have been 
superfluous in view of the protective civil rights measure 
in the United States Code which expressly applied (Title 
8, United States Code, Sec. 42).78 Thus, neither distortion

77 Congressional Record, Volume 95, Part 4 (page 4855) 81st 
Cong., 1st Sess.

78 Congressional Record, Volume 95, Part 4 (page 4853) 81st 
Cong. 1st Sess.:

“ Mr. Humphrey: Is it not true that under the statutes
of our Nation, under the United States Code, we have basic 
civil-rights protections which can be applied, by the Courts 
of the United States, and by die executive departments ?”

Air. Douglas: I think there was a civil-rights law in
1886 on this issue.”



39

nor exaggeration is the basis for Appellants’ assertion that 
it was not the intention of the Congress of the United States 
in failing to adopt the anti-discrimination amendment to 
permit adoption of segregation policies by the PHA or by 
local public agencies.

B. Legislative History— House

An attempt to include an anti-discrimination amendment 
in the Housing Act of 1949 was also made in the House 
by Representative Fulton (R-Pa.).79

An amendment was also introduced by Representative 
Marcantonio (A. L. P.-N. Y.). Although there was no 
direct attack upon the motives of Representative Fulton 
(R-Pa.), or Representative Marcantonio (A. L. P.-N. Y.), 
Representative Buchanan (D-Pa.) who spoke in opposition 
to the Marcantonio amendment pointed out that the issue 
before the House was identical with the one before the 
Senate which, on the previous day, had defeated the Cain- 
Bricker amendment. Mr. Buchanan said, “ The issue is 
whether we shall have an effective national-housing pro­
gram offering decent shelter for underprivileged low-income 
families of every race, creed, or color, or whether we shall 
sacrifice the opportunity for such a program for an empty 
prohibition against racial segregation in low-rent public 
housing.”  * * *

“ I want to make my own position very clear. I am 
personally opposed to racial segregation in housing. I 
know that many of my colleagues from the North and West 
share my views on the matter * * * ”

“  * * * Without impugning anyone’s motives or sin­
cerity, I must point out that this amendment is the favorite 
secret weapon of the real estate lobby to kill this bill. That 
issue was well-aired in the other body when a similar 
amendment was voted down after extensive debate, * * * ”

79 Congressional Record, Vol. 95, Part 7 (pages 8554-8555),
81st Cong. 1st Sess.



4 0

“  * * * I challenge the members on the other side of 
the aisle who will support this amendment to make clear 
whether they do so in support of an effective housing pro­
gram, or in an effort to kill the housing bill and at the same 
time gain a supposed political advantage by giving lip 
service to non-segregation. ’ ’ 80

IV. Appellants Have Standing To Sue.

A. The Relief Sought

In their prayer for relief Appellants seek first a declara­
tory judgment declaring (a) that the Defendants, Appel­
lees here, cannot give federal financial assistance or other 
federal assistance to the Housing Authority of Savannah, 
Georgia, for the construction and/or operation of a project 
built pursuant to the provisions of the basic statute in­
volved in this case, from which Appellants will be excluded 
and denied consideration for, and admission to, solely 
because of race and color, in violation of the Constitution, 
laws and public policy of the United States; (b) that Appel­
lants, and all other Negroes similarly situated, cannot be 
denied consideration for admission and/or admission to 
the Fred Wessels Homes or any other federally-aided hous­
ing project solely because of their race and color; (c) that 
the preference for admission to the Fred Wessels Homes 
or any other federally-aided low rent housing project in 
the City of Savannah, Georgia, conferred on Appellants, 
and all other Negroes similarly situated, by Section 1410(g) 
of Title 42, U. S. C. may not be qualified or limited by race 
or color (Joint Appendix 12-13).

In addition to a declaratory judgment declaring the 
foregoing, Appellants pray an injunction enjoining Appel­
lees from giving federal financial and/or other assistance

80Congressional Record, Volume 95, Part 7 (pp. 8656-8657),
81st Cong. 1st Sess.



41

to the local authority for the construction and operation 
of the project, and for such other and further relief as to the 
Court shall seem just and proper (Joint Appendix 13-14).

B. This Is Not A  Taxpayer’s Action

The court below expressed doubt whether Appellants 
have standing to maintain this action in view of the doctrine 
enunciated in Mass. v. Mellon, supra.

Mass. v. Mellon, supra, was an original suit in the United 
States Supreme Court brought by the State of Massachu­
setts against Andrew W. Mellon, then Secretary of the 
Treasury, and other government officials to enjoin them 
from enforcing the provisions of an act of Congress known 
as the Maternity Act. This act provided for financial 
assistance to the states to assist in a program to reduce 
maternal and infant mortality. Although Massachusetts 
had not accepted any of the benefits offered by the federal 
government and had therefore not accepted the operations 
of the act within its borders, it nevertheless complained that 
its constitutional rights were infringed by the mere passage 
of the act.

The case of Mass. v. Mellon, supra, was decided and 
considered with the case of Frothingham v. Mellon, 262 
U. S. 447 (1923). The Frothingham case was brought in 
the Supreme Court of the District of Columbia by Harriet 
A. Frothingham against the same defendants similarly 
seeking to enjoin the enforcement of the Maternity Act. 
Frothingham alleged that she was a taxpayer of the United 
States and that the effect of the statute would be to take her 
property, under guise of taxation, without due process of 
law.

The United States Supreme Court ruled that both cases 
must be dismissed for want of jurisdiction, without con­
sidering the merits of the constitutional questions, since no 
justiciable case or controversy was presented.



I

With respect to Massachusetts the court ruled that it 
presented no justiciable controversy either in its own behalf 
or as the representative of its citizens. The Court ruled 
that since the statute imposed no obligation, but simply 
extended an option which the State was free to accept or 
reject, the powers of the States were not invaded. The 
burden, if any, the Court declared, was one of taxation 
and that would fall on the citizens of the State and not 
on the State—the citizens being within the taxing power of 
Congress. Since the real contention of the State was that 
Congress by the mere enactment of the statute, had usurped 
the power of the State, the Court ruled that it was clear 
that the question as presented was “ political”  rather than 
“ judicial” . The Court held, finally, with respect to Massa­
chusetts that it was without power to represent its citizens 
in a suit involving the relations of its citizens with their 
federal government.

With respect to the Frothingham case, the Court ruled 
that the Appellant had “ no such interest in the subject- 
matter, nor is any such injury inflicted or threatened, as 
will enable her to sue.”  The Court said that the interest 
of a taxpayer of the United States “ in the moneys of the 
Treasury—partly realized from taxation and partly from 
other sources—is shared with millions of others; is com­
paratively minute and indefinite; and the effect upon future 
taxation of any payment out of the funds so remote, fluctuat­
ing, and uncertain that no basis is afforded for an appeal 
to the preventive powers of a court of equity.” 81 The 
Court said further that it has “ no power per se to review 
and annul acts of Congress on the ground that they are 
unconstitutional. That question may be considered only 
when the justification for some direct injury suffered or 
threatened, presenting a justiciable issue, is made to rest 
upon such an act. Then the power exercised is that of 
ascertaining and declaring the law applicable to the eon-

42

81 Massachusetts v. Mellon, 262 U. S. 447, 487.



4 3

troversy. * * * The party who invokes the power must be able 
to show not only that the statute is invalid, but that he has 
sustained or is immediately in danger of sustaining, some 
direct injury as the result of its enforcement, and not merely 
that he suffers in some indefinite way in common with people 
generally” .82

In the instant case, Appellants obviously do not bring 
this action as or on behalf of the State of Georgia. Neither 
do they bring this action to enjoin the expenditure of fed­
eral funds, per se, for low rent housing as taxpayers of 
the United States. They do not even allege in their com­
plaint that they are taxpayers of the United States. They 
do not allege, as Frothingham did, that the effect of the 
basic statute involved in this case will be to take their 
property without due process of law. It is therefore clear 
that they do not bring this action in their capacity as tax- 
paying citizens seeking to enjoin the expenditure of federal 
funds for low rent public housing, per se, in which case 
they would not present a justiciable controversy. Froth­
ingham v. Mellon, supra.

C. The Justiciable Issue

Appellants bring this action, first, as persons speci­
fically aggrieved by the administration of the Federal Gov­
ernment’s low rent housing program by the Appellees, 
that is, as persons whose constitutionally and legislatively 
protected property rights are being violated by Appellees.

Secondly, they bring this action as members of a class, 
low income families, for whose specific benefit the federal 
government’s low rent housing program has been provided 
and which they will be illegally denied the benefits of by 
Appellees.

Thirdly, they bring this action as persons and as mem­
bers of a class, displaced families, whose right to a prefer­

82 Ibid, 488.



4 4

ence for admission to any federally-aided low rent housing 
project in Savannah initiated after January 1, 1947 is being 
denied by Appellees.

Fourthly, they bring this action to redress the violation 
of their constitutionally and legislatively protected prop­
erty right, which is the right not to be denied occupancy of 
real property solely because of race and color, by having 
the court declare as prayed in their prayer for relief and 
by having the court enjoin Appellees from giving the 
necessary federal financial assistance and other assistance 
for the construction, operation, and maintenance of the 
project from which they will be excluded and denied admis­
sion solely because of race and color in violation of their 
constitutionally and legislatively protected property right.

Appellants do not seek to enjoin the expenditure of 
federal funds for low rent housing, per se. In fact, they 
greatly desire, need, and seek admission to decent, safe, 
and sanitary housing which would be within their reach 
financially. They seek to enjoin expenditures for an illegal 
project, i. e., one from which they shall be excluded and 
denied admission, solely because of race and color, on the 
ground that such an expenditure by Appellees is illegal and 
may be enjoined. Compare Crampton v. Zabriskie, 101 
U- S. 601 (1880) where the United States Supreme Court 
affirmed the exercise of equity powers by a federal court 
to enjoin the illegal expenditure of municipal funds in an 
action by resident taxpayers. Compare also Illinois ex rel. 
McCollum v. Bd. of Education, 333 U. S. 203 (1948) where 
appellant taxpayer and parent of child attending the public 
schools was able to enjoin the use of public school property 
for religion instruction in violation of the First Amend­
ment to the Federal Constitution.

The expenditure of funds for the illegal project makes 
the illegal project possible, thus making possible the denial 
of Appellants’ right by Appellees and the Housing Au­
thority of Savannah, Georgia. The fact that the expendi­



4 5

ture, per se, may be an indirect injury or “ does not fall 
into any familiar category’ ’, or has never before been 
asserted, is not determinative of the issue of justiciability, 
cf Joint Anti-Fascist Refugee Committee v. McGrath, 341 
U. S. 123,157 (1951). Shelley v. Kraemer, supra-, Barrows 
v. Jackson, supra. “ Only on the ground that * * * no 
interest protected in analogous situations at common law, 
by statute or by the Constitution * * * can plausible chal­
lenge to”  Appellants standing to sue be made. Joint Anti- 
Fascist Refugee Committee v. McGrath, supra, at 159. “ The 
touchstone to justiciability is injury to a legally protected 
rights * * * ”  Joint Anti-Fascist Refugee Committee v. 
McGrath, supra, at 140-141. Here Appellants assert that 
their right not to have their Federal Government or one of 
its agencies participate in, by giving financial and other 
assistance to the project in controversy, thus giving effect 
to the discrimination against them, is a right protected 
by the Constitution, laws and public policy of the United 
States. Shelley v. Kraemer, supra-, Barrows v. Jackson, 
supra. The United States Supreme Court said in Joint 
Anti-Fascist Refugee Committee v. McGrath, supra, at 140- 
141, in an analogous situation involving indirect injury:

“ It is unrealistic to contend that because the 
respondents gave no orders directly to the petition­
ers to change their course of conduct, relief cannot 
be granted against what the respondents actually did. 
We long have granted relief to parties whose legal 
rights have been violated by unlawful public action, 
although such action made no direct demands upon 
them. Columbia Broadcasting System v. United 
States, 316 U. S. 407 * * # ; Pierce v. Society of Sis­
ters, 268 U. S. 510 * * *; Buchanan v. Warley, 245 
U. S. 60; * * * Truax v. Raich, 239 U. S. 239.”



46

Conclusion
Restrictions on the right of Negroes to occupy certain 

real property were first imposed by racial zoning ordi­
nances of the type held constitutionally invalid in Buchanan 
v. Warley, supra. After the decision in the Buchanan 
case, these restrictions were effected through judicial en­
forcement of private racial restrictive covenants. This 
form of state action was held violative of constitutional 
rights of Negroes in the Restrictive Covenants Cases, 
Shelley v. Kraemer, supra; Hurd v. Hodge, supra; Barrows 
v. Jackson, supra. With this high Court intervention re­
straining state and federal action restricting occupancy of 
real property because of race, it would appear that the 
housing supply had been freed of governmentally imposed 
racial restrictions.

But since the early 1930’s, the United States Govern­
ment with its extensive funds, credits and powers has 
become increasingly involved in the planning, development, 
marketing and management of dwellings. Through direct 
loans, grants and subsidies, as in this case, Federal assist­
ance has become involved in the development of a significant 
part of the housing supply, i.e., housing available to fami­
lies of low income. The Federal assistance is granted, not 
directly to individual residents or private developers but 
to local public agencies. In no instance is this aid made 
contingent upon meeting the requirements of the 14th 
Amendment or Section 42 of Title 8 of the United States 
Code; rather, the decision as to whether or not Negroes 
shall be completely excluded from federally-aided projects 
or segregated within them or otherwise discriminated 
against is left almost entirely to the discretion of the local 
public agency. The result is that racial discrimination in 
housing is now effectuated by administrative action under



4 7

sanction of the Federal Government itself. The involve­
ment of the Federal housing agency in this case is so 
extensive as to negate the assertion that it is a local deter­
mination devoid of Federal involvement. Federal involve­
ment in the determination has the effect of voiding court 
decisions prohibiting legislative or judicial enforcement of 
racial restrictions upon occupancy of residential property. 
Thus, the administrators of this governmental agency have 
become primary agents in the establishment and extension 
of segregated living. The objective, then, of this action is 
to deprive the executive and administrative arm of the Fed­
eral Government of its sanction for exclusion of Negroes 
from or their segregation in this segment of the housing 
supply.

When the Eestrictive Covenant Cases were before the 
United States Supreme Court for decision, the United 
State Government, by the Attorney General and the Solici­
tor General, filed a brief in support of Petitioners, asking 
the Court to hold judicial enforcement of private racial 
restrictive covenants constitutionally prohibited. In its 
brief the United States said, at pages 1-2, with regard to 
the interest of the Federal Government :

“ The Federal Government has a special respon­
sibility for the protection of the fundamental civil 
rights guaranteed to the people by the Constitution 
and laws of the United States.—

“  * * * It is fundamental that no agency of gov­
ernment shall participate in any action which will 
result in depriving any person of essential rights 
because of race or color or creed.”



4 8

For these and the foregoing reasons, Appellants respect­
fully urge the reversal of the judgment and order of the 
court below.

Respectfully submitted,

F rank A. D ilworth, III,
458 West Broad Street, 

Savannah, Georgia;
T hurgood Marshall,
Constance B aker Motley,

107 West 43rd Street,
New York 36, New York;

F rank R eeves,
1901 Eleventh Street, N. W., 

Washington 1, D. C.,
Attorneys for Appellants.









\







REPLY BRIEF FOR APPELLANTS

luttrd States Court of Apjirals
For the District of Columbia Circuit

No. 11,865

PRINCE F. HEYWARD, et al.,
Appellants,

v.

PUBLIC HOUSING ADMINISTRATION, et al.,
Appellees.

A ppeal from the U nited States D istrict Court for the 
D istrict of Columbia

P rank A. D ilworth, III, 
458^2 West Broad Street, 

Savannah, Georgia;

T hurgood Marshall, 
Constance B aker Motley, 

107 West 43rd Street, 
New York 36, N. Y .;

F rank D. R eeves,
2000 Ninth Street, N. W., 

Washington 1, D. C.;

David E. P insky,
of Counsel.

Attorneys for Appellants.

Supreme Printing Co., I nc., 114 W orth Street, N. Y. 13, BEekman  3 - 2320
a^ ^ r.4 9





I N D E X

PAGE

I. The Action is Not Premature by Appellees’ Own Admis­
sion .......................................................................................... 1

II. There is a Justiciable Controversy Between These 
Appellees and Appellants ...................................................  1

III. Appellees Have Injured Appellants By Denying Them
The Statutory Preference For Adm ission.......................  9

IV. The Savannah Housing Authority is Not An Indis­
pensable Party .....................................................................  10

Conclusion .......................................................................................... 15

TABLE OF CASES

Ainsworth v. B a rn  B a llroom  C om pany, 157 F. 2d 97 (C. A. 4th, 1946) .. 14
Balter v. Ick es , 89 F. 2d 856 (C. A. D. C. 1937) ................................ 13
Barrow  v. S hields, 17 How. (U. S.) 130 ............................................ 14
Berlinsky v. W o o d , 178 F. 2d 265 (C. A. 4th, 1949) ............................. 13
Blank v. B itker , 135 F. 2d 962 (C. A. 7th, 1943) ................................ 15
Bourdien v. P acific  W e s te r n  O il C om pany, 299 U. S. 65 ....................... 14
Daggs v. K lein , 169 F. 2d 174 (C. A. 9th, 1948) ................................... 13
Federal T rade C om m ission  v. W in sted  H o s ie ry  C o., 258 U. S. 483 .......  7
Franklin T ow nship  in S om erse t C oun ty  v. T u gw ell, 85 F. (2d) 208 (C. A.

1). C. 1936) .............................................................................  11
Frothingham  v. M ellon , 262 U. S. 447 ................................................  8
Fulton Iron  C om pany v. L arson , 171 F. 2d 994 (C. A. D. C. 1946) .......  14
H oward v. U nited  S ta tes  e x  rel A lex a n d er , 126 F. 2d 667 (C. A. 10th,

1942)   15
Jacobs v. O ffice o f  H ou sin g  E x p ed iter , 176 F. 2d 338 (C. A. 7th, 1949) 13
Joint A n ti F ascist R e fu g ee  Com m , v. M cG ra th , 341 U. S. 123 .............  7
Massachusetts v. M ellon , 262 U. S. 447 ............................................... 8
M oney v. W allin , 186 F. 2d 411 (C. A. 3rd, 1951) ...............................  13
National L ico rice  C om pany v. N ationa l L a b or R ela tions B oard , 309

U. S. 350 ............................................................................... 12,13
Payne v. F ite, 184 F. 2d 977 (C. A. 5th, 1950) ....................................  13
Rorick v. B rd o f  C om m ’rs, E verg la d es  D rainage D istr ict, 27 F. 2d 377,

381 (N. D. Fla. 1928) ..............................................................  11
Smart v. W o o d s , 184 F. 2d 714 (C. A. 6th, 1950) ...............................  13
State o f  W a sh in gton  v. U nited S ta tes, 87 F. 2d 421 (C. A. 9th, 1936) .... 14



11

STATUTES
PAGE

Act of Sept. 1, 1937, c. 896, 50 Stat. 888, as amended by Act of 
July 15, 1949, c. 338, Title III, 63 Stat. 442, Title 42, U. S. C.,
Sections 1409 ............................................................................ 7

1410(a) .......................................................................  7
1410(c) ........................................................................ 7
1410(g) .......................................................................  7,10
1411(a) .......................................................................  7
1413 ............................................................................ 7
1415(7)(c) .................................................................  7
1421(a)(1) .................................................................. 7

Act of April 9, 1866, c. 31, Sec. 1, 14 Stat. 27, Title 8, U. S. C. § 42.......  10

OTHER AUTHORITIES

Restatement of Torts, Section 876 .....................................................  7-8
Memorandum of Jan. 12, 1954 of Secretary of Defense Charles E.

Wilson ..................................................................................... 11



Hutteb States (Emtrt of Appeals
For the District of Columbia Circuit

No. 11,865

----------------------o----------------------

Prince F. H eyward, E rsaline Small, W illiam M itchell, 
W illiam Golden, M ike Maustipher, W illis H olmes, 
A lonzo Sterling, Martha S ingleton, Irene Chisholm, 
John F uller, B enjamin E. Simmons, J ames Y oung, 
Ola B lake,

Appellants,
v.

Public H ousing A dministration, body corporate; J ohn 
T. E gan, Commissioner, Public Housing Administra­
tion,

Appellees.

Appeal from the U nited States D istrict Court for the 
D istrict of Columbia

----------------------o----------------------

REPLY BRIEF FOR APPELLANTS





1

I. This Action Is Not Premature By Appellees’ 
Own Admission.

Appellees in their motion for summary judgment in 
the court below said in Paragraph 5 that: “ This project 
will not be ready for occupancy until approximately March, 
1954”  (Joint Appendix 16). Therefore, Appellees’ argu­
ment in their brief in this court that the order below dis­
missing the complaint should be affirmed on the ground 
that the action is premature is no longer valid by Appellees ’ 
own statement and admission with respect to completion 
of Fred Wessels Homes, the project under construction 
at the time this complaint was filed. The court below, upon 
hearing the Appellees’ motion for summary judgment, 
refused to sustain Appellees’ contention that the action 
is premature (Joint Appendix 63).

II. There Is A  Justiciable Controvery Between 
These Appellees And Appellants.

Appellees’ argument that there is no justiciable case 
or controversy rests primarily on the contention that it 
is the local authority which leases the housing units and 
it alone determined that this project will be occupied by 
white families. Thus, the basis of this argument is that 
Appellees have done no act which can be considered the 
legal cause of Appellants ’ injury. This contention, Appel­
lants submit, is wholly specious. In Appellants’ brief, 
the nature and extent of the Public Housing Administra­
tion’s involvement in the local program has been related 
in detail (Appellants’ brief pp. 8-18). The bulk of this 
factual material thus need not be reiterated here. The 
inescapable conclusion, however, is that the Public Housing 
Administration’s involvement is so extensive and com­
plete in the planning, construction and operation of each 
project that it cannot be seriously contended that this low-



2

Of particularly crucial importance is the special role 
played by the Public Housing Administration with respect 
to local racial policies. In Appellants’ brief (p. 14) there 
is set forth the Public Housing Administration’s so-called 
“ racial equity formula”  and the more recent policy direc­
tive promulgated in a release issued January 17, 1953 
(HHFA-OA No. 470) (pp. 14-16). The significance of the 
Appellees’ racial equity formula and related policy is 
candidly admitted in the affidavit of Mr. John T. Egan, 
the Commissioner of the Public Housing Administration, 
which is attached to Appellees’ motion for summary judg­
ment. He states that:

“ (b) The regulations of the Public Housing 
Administration further require that programs for 
the development of low-rent housing must reflect 
equitable provision for eligible families of all races 
determined on the approximate volume and urgency 
of their respective needs for such housing (Low- 
Rent Housing Manual, Section 102.1, a copy of which 
is attached to this affidavit as Exhibit 2) ”  (emphasis 
supplied) (Joint Appendix p. 20).

The nature of the role played by the Public Housing 
Administration with respect to local racial policies can 
be pinpointed in the following manner. If a local authority 
such as the Savannah Housing Authority is interested in 
securing approval for a development program, it has two 
alternatives. First, it can agree to make all low-rent 
public housing projects to be constructed by it available 
for occupancy to all racial groups without discrimination 
or segregation of any kind.

However, if such a plan is unacceptable to the local 
authority, it has a second alternative. It can agree to pro­

rent public housing p rogram  is a local undertaking devoid
o f any m ajor fed eral control.



3

vide a specified number of units for the occupancy of white 
families and a specified number for the occupancy of Negro 
families, the families to be housed on a racially segregated 
basis. If the percentage for white families and the per­
centage for Negro families meet the standards for achiev­
ing racial equity determined by the Public Housing Admin­
istration, then the Development Program is approved in so 
far as this aspect is concerned. (See affidavit of John T. 
Egan, Joint Appendix pp. 23-24). In the instant case, the 
percentages approved by the Public Housing Administra­
tion were 36.7% of the dwelling units for whites and 63.3% 
of the units for Negroes. This overall percentage allocation 
must be approved by the Public Housing Administration. 
And once it was approved, it became a part of the con­
tractual relationship between the Public Housing Adminis­
tration and the Savannah Housing Authority.

There is, of course, logically a third possible alterna­
tive. The local authority could conceivably have complete 
freedom of choice. But a local housing authority has no 
such freedom, and it is the determination of the Public 
Housing Administration which deprives local authorities 
of such freedom.

In the instant case, the Savannah Housing Authority 
was obviously unwilling to agree to the first alternative 
noted above—i.e., open occupancy. Therefore, it was 
required by the Public Housing Administration to agree 
to the second alternative plan, i.e., segregated housing, 
with a specified percentage allocation to white families and 
to Negro families. For short-hand reference, we shall term 
the second plan the “ segregation-quota”  plan. Once the 
Savannah Housing Authority agreed to the “ segregation- 
quota”  plan and once the number of units for whites and 
the number of units for Negroes was agreed upon and thus 
made a part of the contractual relationship between the



4

parties, the Savannah Authority had no contractual right to 
deviate. The Savannah Authority obviously has no right to 
lease to white persons all units in all projects including 
those units designated exclusively for Negroes. Similarly, 
it has no right to lease all units in all projects to Negroes. 
In other words, the Savannah Authority has no right to 
deviate in any way from the quota system agreed upon, 
i.e., 36.7% of the dwelling units for whites and 63.3% of 
the dwelling units for Negroes. Thus, the statement in 
Appellees’ brief that they would have no objection if the 
local authority were to decide to admit Negro occupants 
(p. 13) is a flagrant distortion. If the Savannah Authority 
decided to integrate projects designated exclusively for 
whites, while leasing the projects designated exclusively 
for Negroes in conformance with the overall plan, then 
Negroes in Savannah would be securing a disproportionate 
number of units in violation of the Public Housing Adminis­
tration’s racial equity formula. Such action by the Savan­
nah Authority would thus clearly be in violation of the 
contractual relationship between it and the Public Housing 
Administration.

Plaintiffs are individual Negroes who claim that on the 
basis of their qualifications (and with the factor of race 
excluded) that they are entitled to be admitted to the Fred 
Wessels Homes. The Savannah Authority cannot admit 
these plaintiffs, for its contractual relationship with the 
Public Housing Administration requires it to allocate only 
63.3% units to Negro families and 36.7% to white families. 
For the Savannah Authority to admit. Negroes to the Fred 
Wessels Homes would thus destroy the elaborate quota 
system set up and as required by the Public Housing 
Administration. The Savannah Authority has no contrac­
tual right to do this.

A hypothetical situation may help clarify the above 
analysis. Assume that a local housing authority chooses 
the “ segregation-quota”  plan of development. Assume



5

further that the local authority agrees with the Public 
Housing Administration’s determination that an alloca­
tion of 200 units for whites and 200 units for Negroes will 
provide racial equity. This agreement of course becomes 
a part of the contractual relationship between the local 
authority and the Public Housing Administration. Assume 
further that the Negro project is completed first and that 
200 Negro families are given occupancy. If 50 additional 
Negroes were to apply to the local housing authority and 
were able to prove that they were more qualified and had 
a higher priority than 50 white families who were scheduled 
to be given occupancy in the 200 unit white project, could 
the local housing authority admit these 50 Negro families 
along with 150 white families to the project originally 
designated for whites? Appellants submit that the local 
authority would have no contractual right to admit these 50 
Negroes because such an act on the part of the local au­
thority would be in violation of the racial equity formula 
agreed upon by the local authority and required by the 
Public Housing Administration. Thus, it is the Public 
Housing Administration which determines whether any 
given Negro family can be admitted to Fred Wessels Homes. 
It is these Appellees who have made the determination to 
limit Fred Wessels Homes to occupancy by white families 
to the injury of these Appellants.

It is Appellants’ position that Appellees here do con­
siderably more than supply funds to the local authority. 
On the contrary, the Appellees exercise complete super­
visory control and participate in every material determi­
nation. However, even if this court should conclude that 
the role played by the Appellees is limited to the expendi­
ture of funds, Appellants contend that such expenditures 
here are unlawful and violative of their rights and that 
Appellants, therefore, have a justiciable case or contro­
versy.



6

The equal protection clause of the Fourteenth Amend­
ment prohibits the Savannah Housing Authority, a state 
agency, from leasing housing units on the basis of race or 
color. See cases cited in Appellants’ brief, pages 22-30. 
The expenditures by the Public Housing Administration 
constitute more than minor assistance—-the expenditure of 
federal funds makes the illegal project possible.1 By these

1 Federal financial involvement in a project may precede the 
actual construction of the project and may continue for as long a 
period as sixty years after its construction.

The federal agency administering the basic act is authorized by 
it to make loans to local public housing agencies. These loans may 
be made for the purpose of assisting the local agency in defraying 
the costs involved in developing, acquiring or administering a project. 
PH A  may therefore commence involving the federal government 
financially by making a preliminary loan to the local agency in order 
that it may have the funds with which to proceed to make plans for 
the proposed project and to conduct any necessary surveys in connec­
tion therewith. PHA may then make a further loan which enables 
the local agency to meet the cost of construction and to repay the 
preliminary loans. It may even loan money to pay any costs in 
administering the project.

PHA is, in addition, authorized by the basic enactment to specify 
in a contract with a local agency that it will contribute a fixed sum 
annually over a predetermined period of years “ to assist in achieving 
and maintaining the low-rent character” of the project. PHA may 
therefore commit the federal government to financially subsidizing 
a project, after it is constructed, for a period as long as sixty years. 
From this subsidy the local agency may presumably repay any monies 
loaned to it by the federal government for construction of the project 
or in connection with its administration.

The annual contribution made by the federal agency is one of 
two methods provided whereby the federal government may subsidize 
a public housing project. The alternate method of effecting a federal 
subsidy provided for in the act provides for a capital grant to a local 
agency in connection with the development or acquisition of a project 
which will thereby enable it to maintain the low rent character of the 
project. PHA may make a capital grant in any amount which it 
considers necessary to assure the low rent character of the project. 
1 he PHA may, therefore, make a capital grant to a local agency 
which will pay the entire cost of development or acquisition of a 
project.



7

expenditures, the Public Housing Administration know­
ingly supplies the state agency with the means whereby 
the latter can effectively discriminate in violation of the 
Fourteenth Amendment. In so doing, Appellees flagrantly 
violate Appellants’ rights and the public policy of the 
United States.

Further, there is a firm basis in the common law to 
support our contention that a justiciable case or contro­
versy exists. See Joint Anti-Fascist Refugee Comm. v. 
McGrath, 341 U. S. 123, 159. For example, it has long been 
the law of unfair competition that one who furnishes 
another with the means of consummating a fraud is also 
guilty of unfair competition. See, Federal Trade Commis­
sion v. Winsted Hosiery Co., 258 U. S. 483, 494. Section 
876 of the Restatement of Torts expresses general prin­
ciples which are firmly imbedded in the common law.

In addition to this financial assistance which may be given to a 
local agency, PH A is further authorized to involve the federal gov­
ernment financially in the event of any foreclosure by any party on, 
or in the event of any sale of, any project in which the federal gov­
ernment has a financial interest. In the event of foreclosure, PHA 
may bid for and purchase such a project, or it may acquire and take 
possession of any project which it previously owned or in connection 
with which it has made a loan, annual contribution or capital grant. 
In such case it may complete the project, administer the project, pay 
the principal of and the interest on any obligation issued in connec­
tion with the project, thus further involving the federal government 
financially.

Finally, in the event of any substantial contractual default on the 
part of the local agency, PH A may involve the federal government to 
the extent of taking title or possession of a project as then consti­
tuted and must involve the federal government further financially 
by continuing to make annual contributions available to such project 
to pay the principal and interest on any obligation for which these 
contributions have been pledged as security.

It is, therefore, quite possible for the financial involvement of the 
federal government to constitute at some point the entire financial 
investment in a project. [Title 42 U. S. C. Secs. 1409, 1410, 1411, 
1413, 1415, 1421.]



8

“ Section 876 Persons Acting In Concert 
For harm resulting to a third person from the tor­
tious conduct of another, a person is liable if he * * *

“ (b) knows that the other’s conduct consti­
tutes a breach of duty and gives substantial 
assistance or encouragement to the other so to 
conduct himself, or

“ (c) gives substantial assistance to the other 
in accomplishing a tortious result and his own 
conduct, separately considered, constitutes a 
breach of duty to the third person.”

The above principles can be used by analogy to demon­
strate that even if the injury which Appellants receive 
originates from the unlawful conduct of the Savannah 
Housing Authority, Appellees’ participation nevertheless 
can be considered to be a legal cause of Appellants’ injury.

Massachusetts v. Mellon and Frothingham v. Mellon, 
262 U. S. 447, upon which Appellees rely in Point Y  of their 
brief, present merely one aspect of the general problem of 
justiciable issue. The Frothingham case, which is the one 
more pertinent here, decided merely that federal taxpayers 
have too remote an interest in the expenditure of fed­
eral funds to be deemed legally injured by such expendi­
ture. Appellants here do not sue as taxpayers. On the 
contrary, Appellants sue as low-income families for whose 
specific benefit the federal government’s low rent housing 
program was enacted and as displaced families who, by 
express statutory provisions, must be granted preference 
for admission to Fred Wessels Homes. Hence, the doc­
trine of Massachusetts v. Mellon is not applicable and the 
question of justiciable case or controversy must be deter­
mined on the basis of principles already discussed.



9

III. Appellees Have Injured Appellants By Deny­
ing Them The Statutory Preference For Admission.

In the preceding section of this brief Appellants have 
demonstrated that it is Appellees who are responsible for 
the Fred Wessels Homes racial policy. Since it is Apelllees 
who require that Fred Wessels Homes be limited to white 
occupancy, it is Appellees who are denying displaced Negro 
families their statutory preference for admission.

Congress has imposed upon Appellees the duty to see to 
it that every contract for annual contributions contains a 
clause requiring the local authority to extend preference 
to displaced families for admission to any low-rent housing- 
project initiated after January 1, 1947. Appellees’ conten­
tion that their sole duty is to place the preference provision 
in each annual contributions contract is weak and uncon­
vincing. Certainly Congress intended to give those for 
whom it intended a preference a more substantial right than 
that. It must necessarily have been the intention of Con­
gress that the federal agency administering the Act should 
have the duty to enforce this provision. Appellees’ failure 
to require the Savannah Authority to grant Appellants the 
preference to which they are entitled is the proximate legal 
cause of Appellants’ injury.

If the statutory preference has any meaning, then cer­
tainly the holder of the preference has the right to receive 
occupancy as soon as it is available, consistent with the 
rights of others with a higher priority. It is indeed a rare 
species of preference which grants the holder occupancy in 
1955, while others with no preference obtain occupancy 
in 1954.



10

IV. The Savannah Housing Authority Is Not An 
Indispensable Party.

Appellees in their motion for summary judgment urged 
that the Savannah Housing Authority is an indispensable 
party. However, the court below, upon hearing Appellees’ 
motion, refused to sustain this contention (Joint Appendix 
63).

Appellees on this appeal renew this contention, urging 
that the lower court’s dismissal of the complaint be affirmed 
on this ground. Appellees here contend that the Savannah 
Authority is indispensable for two reasons: 1) that it is 
the Savannah Authority and not these Appellees which is 
proposing the occupancy policy which Appellants challenge, 
and 2) that Appellants seek to invalidate Savannah’s con­
tractual rights in this action.

Appellants, in section II of this brief, have demonstrated 
that it is these Appellees by their own admission in Mr. 
Egan’s affidavit who required, proposed, and approved the 
occupancy policy of which Appellants complain. Appellees’ 
first reason for urging that the Savannah Housing Author­
ity is an indispensable party is therefore without substance.

The Savannah Housing Authority has a contractual 
right to receive from Appellees federal funds for the con­
struction and operation of Fred Wessels Homes. But 
Savannah’s contractual right to receive such funds is obvi­
ously contingent upon its and Appellees’ compliance with 
the Housing Act of 1937, as amended, specifically section 
1410(g) of Title 42, United States Code. This right is 
further conditioned upon compliance with the Fifth Amend­
ment to the Constitution of the United States by Appellees, 
and upon compliance by both Appellees and the Savannah 
Authority with the provisions of Title 8 Section 42 of the 
United States Code. Appellees, as federal administrative 
officials, are subject to federal constitutional and statutory



11

proscriptions on their right to contract. They are under a 
duty to administer the federal program involved here in 
conformity with the Constitution, laws and public policy of 
the United States.2 The Savannah Housing Authority is 
likewise subject to federal constitutional and statutory pro­
scriptions on its right to contract. Neither these Appellees 
nor the Savannah Authority can lawfully contract to violate 
rights secured to Appellants by the Constitution and laws 
of the United States or in violation of the public policy of 
the United States.

Appellants in their brief have demonstrated that the law 
is clearly established that the Savannah Authority may not, 
under the equal protection clause of the Fourteenth Amend­
ment, enforce a policy of racial segregation in public hous­
ing. Since the Savannah Authority does not have the right 
to enforce racial segregation in public housing, it cannot 
have a right to receive federal funds from Appellees for 
the operation of a project from which Appellants will be 
excluded and denied admission solely because of race and' 
color under the “ segregation-quota”  plan. Therefore, no 
legally protected right of the Savannah Authority could be 
adversely affected by a judgment for the Appellants in this 
action. Thus, the Savannah Authority is not an indispen­
sable party. Franklin Township in Somerset County, 
N. J. v. Tugwell, 85 F. 2d 208 (C. A. D. C. 1936); Rorick v. 
Brd. of Comm’rs, Everglades Drainage District (N. D. Fla., 
1928), 27 F. 2d 377, 381.

2 The most recent evidence of the public policy of the United States 
government is contained in a Memorandum issued January 12, 1954 by 
Secretary of Defense Charles E. Wilson barring racial segregation in 
schools operated by local public agencies on military posts. In Secre­
tary Wilson’s Order the policy of the United States government in 
cases involving the use of federal funds is made clear and unequiv­
ocal. The public policy issue in the instant case is identical with the 
public policy issue in the Wilson Order.



12

In addition, a judgment for Appellants, as a practical 
matter, will not result in any real injury to the Savannah 
Authority, since despite a judgment for the Appellants, it 
can nevertheless receive the money contracted for by simply 
adopting an open occupancy policy. In other words, the 
money contracted for can always be obtained by Savannah 
by complying with the law.

The public policy issue here asserted by Appellants 
supercedes any contract rights of the Savannah Housing 
Authority alleged to be at stake in this action. In fact, even 
in purely private litigation, where the rights asserted arise 
independently of any contract which the adverse party may 
have made with another, not a party to the suit, many courts 
have allowed the suit to be maintained if the absent party 
to the contract could not be joined. See, National Licorice 
Company v. National Labor Relations Board, 309 U. S. 350, 
363-364, and cases cited therein.

If the Housing Authority of Savannah is an indispen­
sable party to the instant case, it follows that Appellees 
here would be indispensable to a suit in Savannah against 
the Savannah Authority because Appellees’ contractual 
rights would be equally affected in such an action. The 
Savannah Authority, as Appellees point out, may not be 
joined in this action because it is outside the jurisdiction 
of the court below. Similarly, Appellees could not be joined 
in an action in Savannah since they would be outside the 
jurisdiction of both the state and federal courts in Savannah. 
The suggestion, therefore, that Savannah is an indispen­
sable party, if sustained, would render these Appellants 
remediless in a case where federal constitutional and statu­
tory rights are sought to be secured and where vindication 
of the public policy of the United States is sought. Where 
the public interest or public policy is involved and parties 
deemed proper or even necessary cannot be brought before 
the court, a federal court should not refuse to proceed to



13

judgment without such parties. National Licorice Company 
v. National Labor Relations Board, 309 U. S. 350.

Balter v. Ickes, 89 F. 2d 856 (C. A. D. C. 1937), relied 
on by Appellees in urging lack of indispensable party, 
involved three factors not present in the instant case. First, 
in that case, the defendant federal official held the property 
of the City of St. Louis, the party not before the court. In 
ruling that St. Louis was an indispensable party, the court 
was simply following the settled line of decisions that where 
there is property to be disposed of the court cannot do so in 
the absence of those parties whose interest in such property 
will be determined by its decree. In this case Appellees 
hold no property of the local authority.

The second factor is that the plaintiffs sought to annul 
the contract between the federal officers and St. Louis. 
Here Appellants do not seek, as Appellees contend, to 
have the contract between them and Savannah Housing" 
Authority annulled, per se. They seek to have the perform­
ance of the contract conditioned on securing their constitu­
tional and statutory rights and seek to have the contract 
carried out in accordance with the public policy of the 
United States.

The third factor is that the court was of the opinion that 
the plaintiffs were “ third parties, asserting a somewhat 
questionable interest.”  Balter v. lckes, supra, at 359. The 
plaintiffs in that case failed to show legal injury inflicted 
by either the federal officials or the City of St. Louis. The 
Balter case therefore was one in which there was no real 
controversy between the plaintiffs and defendants.

Appellees cite Money v. Wallin, 186 F. 2d 411 (C. A. 3rd, 
1951); Payne v. Fite, 184 F. 2d 977 (C. A. 5th, 1950); Daggs 
v. Klein, 169 F. 2d 174 (C. A. 9th, 1948); Smart v. Woods, 
184 F. 2d 714 (C. A. 6th, 1950); Berlinsky v. Wood, 178 
F. 2d 265 (C. A. 4th, 1949); Jacobs v. Office of Housing



14

Expeditor, 176 F. 2d 338 (C. A. 7th, 1949), and Ainsworth v. 
Barn Ballroom Company, 157 F. 2d 97 (C. A. 4th, 1946), 
all of which involved the question whether the defendants’ 
superior officer was an indispensable party. Since this 
question is not involved in this action, these cases are clearly 
inapplicable.

Appellees also rely on Fulton Iron Company v. Larson, 
171 F. 2d 994 (C. A. D. C. 1948), and State of Washington v. 
United States, 87 F. 2d 421 (C. A. 9th, 1936). In the Larson 
case the real basis of the decision was that the plaintiff was 
a mere member of the public who had no right which had 
been violated by the federal officer. An alternative basis of 
the decision was that the case was in fact a suit against the 
United States. In State of Washington v. United States, 
supra, the situation there was quite different from the one 
presented in the instant case. There suit was brought by 
the United States against two private companies to obtain 
title and to be adjudged owner of certain lands between the 
States of Washington and Oregon. The private companies 
were the lessees of the States. The States had been denied 
the right to intervene and on appeal the court held that the 
States were indispensable parties to such an action. In the 
instant case, title to property is not in dispute.

It is only where a decree would do violence to equity 
and good conscience that a court should refuse to proceed 
to judgment without an absent party. Barrow v. Shields, 
17 How. (U. S.) 130, 139. In Bourdien v. Pacific Western 
Oil Company, 299 U. S. 65, 70-71, the Court said:

“ The rule is that if the merits of the cause may be 
determined without prejudice to the rights of neces­
sary parties, absent and beyond the jurisdiction of 
the court, it will be done; and a court of equity will 
strain hard to reach that result. (Citing cases.)

“ We refer to the rule established by these authori­
ties because it illustrates the diligence with which



15

courts of equity will seek a way to adjudicate the 
merits of a case in the absence of interested parties 
that cannot be brought in. ’ ’

It should be noted, further, that if, as Appellees contend, 
the Savannah Housing* Authority has such an interest in 
this case that it ought to be brought in, there is nothing 
which prevents the said Authority from voluntarily appear­
ing in this action. Matters of jurisdiction and venue may 
always be waived. See, Howard v. United States ex rel. 
Alexander, 126 F. 2d 667 (C. A. 10th, 1942) ; and Blank v. 
Bitker, 135 F. 2d 962 (C. A. 7th, 1942).

Appellants therefore urge that the lower court be sus­
tained in its view that the Savannah Authority is not an 
indispensable party.

Conclusion

For the foregoing reasons, Appellants urge that the judg­
ment of the court below be reversed.

Respectfully submitted,

F rank A. D ilworth, III,
458)/2 West Broad Street, 

Savannah, Georgia;
T hurgood Marshall,
Constance B aker Motley,

107 West 43rd Street,
New York 36, N. Y .;

F rank D. R eeves,
2000 Ninth Street, N. W., 

Washington 1, D. C.;
Attorneys for Appellants.

David E. P insky,
of Counsel.









No. 16040

In the United States Court of Appeals 
for the Fifth Circuit

P bince H eyward, et al., appellants

v.

P ublic H ousing A dministration, et al ., appellees

A P P E A L  F R O M  T H E  U N I T E D  S T A T E S  D I S T R I C T  C O U R T  F O R  
T H E  S O U T H E R N  D I S T R I C T  O F  G E O R G I A ,  S A V A N N A H  D I V I ­

S IO N

BRIEF FOR APPELLEES PUBLIC HOUSING 
ADMINISTRATION AND ARTHUR R. HANSON

GEORGE COCHRAN DOUB,
A ss is ta n t  A t t o r n e y  G en era l.

PAUL A. SWEENEY,
DONALD B. MacGUINEAS,

A tt o r n e y s ,  D e p a r tm e n t  o f  J u s tic e .

A t t o r n e y s  f o r  A p p e l l e e s ,
P u b l ic  H o u s in g  A d m in is tra t io n

a n d  A r th u r  R . H a n so n .





I N D E X
Page

Statement of the ease ..................................................................  1
The Low-Rent Housing Program ........................................... 3
The Defense Housing Program ............................................  6
Proceedings in the Court Below ..........................................  7

Argument .................................................................................... 8
I. The District Court lacked jurisdiction of the action under

28 U.S.C. 1331 ............................................................ 8
II. As to appellee Public Housing Administration venue did

not lie in the District Court......................................... 12
III. The complaint was properly dismissed since there is a lack

of indispensable parties .............................................. 14
IV. The complaint was properly dismissed on the ground that

there is no justiciable controversy between appellants 
and appellees Publiq Housing Administration and Han­
son ............................................................................. 17

V. Appellees Public Housing Administration and Hanson
have not denied appellants any statutory preference in
occupancy to which they may be entitled......................  23

Conclusion ..................................................................................  26
Appendix .................................................................................... 27

CITATIONS
C ases:

A la b a m a  P ow er} C o . v. Ic lc es , 302 U.S. 464............................. 18
B la ck m a r v. G u er r e , 342 U.S. 512..........................................  13,23
B o esch  v. B y r o m , 83 S.W. 18 (Tex. Civ. App.)......................  16
B oa rd  v. T e x a s  a n d  P a c if ic  B . W . C o ., 46 Tex. 316 17
B reen  v. H o u s in g  A u t h o r i t y  o f  C ity  o f  P it t s b u r g h , 110 F. Supp.

320 (W.D. Penn.) .....................................................  14
B ro w n  v. B o a rd  o f  E d u ca t io n , 347 U.S. 483...........................  5
C en tra l M e x ic o  L ig h t  &  P o w e r  C o . v. M u n ch , 116 F. 2d 85

(C.A. 2) .........................................................................  9,10.
C ity  o f  A n th o n y  v. S ta te  e x  re l . B e e b e , 49 Kan. 246, 30 Pac.

488 .................................................................................... 17
C lark  v. P a u l G r a y , I n c ., 306 U.S. 583...................................  10
C o o p er  v. O ’ C o n n o r , 99 F. 2d 135 (C.A.D.C.)........................ 12
D o rem u s  v. B o a r d  o f  E d u ca tio n , 342 U.S. 429........................ 18
D w y er  v. H a c k w o r th , 57 Tex. 245............................................  17
D e B u s k  v. JE a rv in , 212 F. 2d 143 (C.A, 5) 12
D o r s ey  v. S tu y v e s a n t  T o w n  C o r p ., 299 N.Y. 512, 87'N.E. 2nd

541, cert. den. 339 U.S. 981.......... .....................................  20
E b e n s b e r g e r  v. S in c la ir  R e fin in g  C o ., 165 F. 2d 803

(C.A. 5) ........................................................................... 11
E llio t t v. B o a r d  o f  T r u s te e s  o f  O v a lo  R u ra l H ig h  S ch o o l

D ie t., 53 F. 2d 845 (C.A. 5). ..........................................  10
E m p lo y e r s  G r o u p  o f  M o to r  F r e ig h t  C a rr ie rs  v. N a tio n a l W a r

L a b o r  B o a r d , 143 F. 2d 145 (C.A. D.C.)................................  20
F ed e ra l  C r o p  In s u r a n c e  C o r p . v. M er r il l , 332 U.S. 380..........  14 (l)

( l )



Cases—Continued Page
F e d e r a l  H o u s in g  A d m in is tr a t io n  v. B u r r , 309 U.S. 242..........  13
F e d e r a l  T ra d e  C o m m iss io n  v. W in s te a d  H o s ie r y  C o ., 258 U.S.

483 ....................................................................................  18
F ir s t  N a tio n a l B a n k  o f  C o lu m b u s  v. L o u is ia n a  H ig h w a y  C o m ­

m ission j, 264 U.S. 308 ......................................................... 10
F u lt o n  I r o n  C o . v. L a r s o n , 171 F. 2d 994 (C.A. D.C.)............ 25
G r a te r  v. L o g a n  C o u n ty  H ig h  S ch o o l  D is t ., 64 Colo. 600, 173

Pac. 714 ............... ............................................................. 16
G r e g o ir e  v. B id d le , 177 F. 2d 579 (C.A. 2 ).............................  12
H a g u e  v. C o m m itte e  f o r  I n d u s tr ia l  O rg a n iz a tio n , 307 U.S.

496 ....................................................................   9,10
H a y w a r d  & C la rk  v. M cD o n a ld , 192 Fed. 890 (C.A. 5 )..........  10
H e a ly  v. B a tta , 292 U.S. 263.................................................. 9,11
H e y w a r d  v. P u b l ic  H o u s in g  A d m in is tr a t io n , 214 F. 2d 222

(C.A. D.C.) ......................................................................  17
H o p e  v . M a y o r ,  e tc . o f  G a in esv ille , 72 Ga. 246......................  17
I s n e r  v. I n te r s ta te  C o m m erce  C o m m iss io n , 90 F. Supp. 361

(E.D. Mich.) ....................................................................  14
J o h n s o n  v. L e v i t t  & S o n s , 131 F. Supp. 114 (E.D. Pa.).......9, 21, 22
J o in t  A n t i -F a s c is t  R e fu g e e  C o m m itte e  v. M cG ra th , 341 U.S.

123 ...................... ' ............................................................  18
J o n e s  v. C la rk , 250 S.W. 217 (Tex. Civ. App.)......................  16
J o n e s  v. K e n n e d y , 121 F. 2d 40 (C.A. D.C.).......................... 12
K e i f e r  & K e i f e r  v. R e c o n s t r u c t io n  F in a n c e  C o r p ., 306 U.S.

381 .................................................................................... 13
K im b a ll  L a u n d r y  C o . v. U n ited  S ta te s , 338 U.S. 1 ................... 11
K v o s , I n c . v. A s s o c ia te d  P r e s s , 299 U.S. 269.......................... 9,10
L e w is  v. C ity  o f  D e t r o i t  (E.D. Mich., Civil Action No. 9505). . 14
L o v e  v. C h a n d ler , 124 F. 2d 785 (C.A. 8 )............................... 9
M a ssa ch u se tts  v. M ello n , 262 U.S. 447.................................... 18,25
M c N u tt v. G en era l M o to r s  A c c e p t a n c e  C o r p ., 298 U.S. 178. ... 9,10
N a tio n a l W a r  L a b o r  B o a rd  v. M o n tg o m e r y  W a r d  & C o ., 144

F. 2d 528 (C.A. D.C.) ......................................................  20
N e w  H a v e n  P u b l ic  S ch o o ls  v. G en era l S e r v ic e s  A d m in is tr a t io n ,

214 F. 2d 592 (C.A. 7) .....................................................  23
O ffu tt  H o u s i n g  C o m p a n y  v. C o u n ty  o f  S a r p y , — U.S ■— (No.

404, Oct. Term, 1955, decided May 28, 1956)......................  21
P a y n e  v. F i t e , 184 F. 2d 977 (C.A. 5 ) .................................... 23
P e r k in s  v. L u k e n s  S te e l  C o ., 310 U.S., 113.............................  18,25
P u b l ic  U tili tie s  C o m m iss io n  v. P o lia k , 343 U.S. 351............. . 21,22
R a m sa y  v. T o w n  o f  M a r b le  R o c k , 123 Iowa 7, 98 N.W. 134. ... 16
S t. L o u is -S a n  F r a n c is c o  R y .  C o . v. B la k e , 36 F. 2d 652 (C.A.

10) .............................. ..................................................... 16
S e v e n  O a k s v. F e d e r a l  H o u s in g  A d m in is tr a t io n , 171 F. 2d

947 (C.A. 4) ..................................................  13
S ig o n a  v. S lu ss e r , 124 F. Supp. 327 (D. Conn.)................... 13
S lu t ts  v. D a n a , 109 N.W. 794 (Iowa) .................................... 16
S p a ld in g  v. V ila s , 161 U.S. 483................................................ 12
S ta llcu p  v. C ity  o f  T a co m a , 13 Wash. 141, 42 Pae. 541..........  “16
S ta te  e x  r e l . H a ll v. C o u n ty  C o u r t  o f  M e r c e r , 100 W. Ya. 11,

129 S.E. 712 .....................................................................  16

II



Ill
Cases—Continued

S tr a tto n  v. C o m m iss io n er ’ s C o u r t  o f  K i n n e y  C o u n ty , 137; S.W.
1170 (Tex̂  Civ. App.) ......................................................  16

T en n ess ee  E le c tr i c  P o w e r  C o . v. T e n n es s ee  V a lle y  A u t h o r i t y ,
306 U.S. 118 ...................................................................... 18

T h o m so n  v. C o  sk ill. 315 U.S. 442.......................................... 9,10
U n ited  S ta te s  v. G en era l M o to r s  C o r p ., 323 U.S. 373................... 11
U n ited  S ta te s  v. P e t t y  M o to r  C o m p a n y , 327 U.S. 372............ 11
U n ited  S ta te s  D e p a r tm e n t  o f  A g r ic u l tu r e  v. R em u n d , 330 U.S.

539 .................................................................................... 23
V ic k s b u r g , S . &  P .  R y .  C o . v. N a ttin , 58 F. 2d 979* (C.A. 5) . 10,12
W illia m s  v. Y e llo w  C ab C o ., 200 F. 2d 302 (C.A. 3 )...............  9
Y a se ll i v. G o ff , 12 F. 2d 396 (C.A. 2 ).................................... 12

S ta tu te s :

Civil Rights Act (R.S. 1978, 42 U.S.C. 1982).........................  2
Housing Aet of 1937, as amended (Act of September 1, 1937,

50 Stat. 888, asi amended, 42 U.S.C. 1401-30 .................... Passim
Housing Authorities Law of Georgia (Ga. Code Anno.

§ 99-1101 et seq.) .............................................................  6
Lanham Act (Act of October 14, 1940, 54 Stat. 1125, as

amended, 42 U.S.C. 1520-24)...................................  2, 6, 22, 23, 26
28 U.S.C. 1331 ....................................................................7, 8,12
28 U.S.C. 1343(3) ...............................................................  7,9,12
28 U.S.C. 1391 (b) ............................................................... 7,12
28 U.S.C. 1391(c) ...............................................................7,13,14
28 U.S.C. 1392(a) ................................................................. 13
42 U.S.C. 1401-30 ................................................................  2
42 U.S.C. 1401 ...................................................................... 3
42 U.S.C. 1402 ...................................................................... 3
42 U.S.C. 1404-(a) ...............................................................  13,23
42 U.S.C. 1409-11 ................................................................  3
42 U.S.C. 1410(g) ........................................................2,4,8,24,26
42 U.S.C. 1414 ...................................................................... I®
42 U.S.C. 1415(8) (a) .......................................................... 4
42 U.S.C. 1415(8) (c) ...................................................... 2,4,24,26
42 U.S.C. 1420 ...................................................................... 1°
42 U.S.C. 1421a ....................................................................  4
42 U.S.C. 1501-1505 .............................................................  23
42 U.S.C., Chapter 8 ...........................................................  26
42 U.S.C., Chapter 9 ...........................................................  26
42 U.S.C.A. (1955 Pocket Part) 1410 (e )............................. 16

C o n s t itu t io n :

Fifth Amendment .. . .  
Fourteenth Amendment

M isce lla n eo u s  :

30 A.L.R. 2d 621, 628...................................................-  ■
Reorganization Plan No. 3 of 1947, 5 U.S.C. 133y-16, p. 147. 
Restatement of Torts, 5 376...............................................





In the United States Court of Appeals 
for the Fifth Circuit

No. 16040

P rince H eyward , et al ., appellants

v.

P ublic H ousing A dministration, et al ., appellees

A P P E A L  F R O M  T H E  U N I T E D  S T A T E S  D I S T R I C T  C O U R T  F O R  
T H E  S O U T H E R N  D I S T R I C T  O F  G E O R G I A ,  S A V A N N A H  D I V I ­

S IO N

BRIEF FOR APPELLEES PUBLIC HOUSING 
ADMINISTRATION AND ARTHUR R. HANSON

STATEMENT OF THE CASE

This is an appeal by the plaintiffs below from orders 
of the District Court (1) dismissing the complaint as 
to the appellees Public Housing Administration and 
Hanson, upon their motion for summary judgment 
(R. 47) ; and (2) dismissing the complaint as to ap­
pellees Housing Authority of Savannah and its mem­
bers upon their motion to dismiss (J. A. 48-52).

This brief is filed on behalf of appellees Public 
Housing Administration and Arthur R. Hanson only. 
Appellees Housing Authority of Savannah and its mem­
bers are represented by other counsel.

Appellants are Negro residents of Savannah, Georgia, 
who have been or will be displaced from the site of a

(i)



2

low-rent housing project in Savannah known as “ Fred 
Wessels Homes”  which is owned and operated by 
appellee Housing Authority of Savannah (R. 6, 41). 
Appellee Housing Authority of Savannah leases dwell­
ing units in this particular project to white persons 
only, with other similar projects in Savannah being 
occupied by Negroes exclusively (R. 6, 9-10, 35).

Appellee Public Housing Administration is an agency 
in the executive branch of the Federal Government and 
administers the low-rent housing program provided 
by the Housing Act of 1937, as amended (Act of Sep­
tember 1,1937, 50 Stat 888, as amended, 42 U.S.C. 1401- 
30), under which the Federal Government provides 
financial assistance to local housing authorities such 
as appellee Housing Authority of Savannah to con­
struct and operate such projects (R. 39). Appellee 
Public Housing Administration also administers the 
defense housing program under the so-called “ Lanham 
A ct”  (Act of October 14,. 1940, 54 Stat. 1125, as amended, 
42 U.S.C. 1521-24) to provide housing for persons en­
gaged in national defense activities (R. 43). Appellee 
Hanson is the Director of Public Housing Adminis­
tration’s field office in Atlanta, Georgia (R. 8).

Appellants claim that the leasing of particular proj­
ects by appellee Housing Authority of Savannah to 
white persons only, and the financing of such projects 
by appellee Public Housing Administration is a viola­
tion of their rights under the Fifth and Fourteenth 
Amendments, the Civil Rights Act (R. S. 1978, 42 
U.S.C. 1982) and provisions of the Housing Act giving 
preference in project occupancy to persons displaced 
from project sites and persons most urgently in need of 
housing (42 U.S.C. 1410(g), 1415(8) ( c ) ) .  The com-



3

plaint prays for an injunction, declaratory judgment 
and money damages (R. 11-13).

THE LOW-RENT HOUSING PROGRAM

The general nature of the program.. The Housing 
Act of 1937, as amended, declares it to be the policy of 
the United States to promote the general welfare by 
employing its funds to assist the States and their 
political subdivisions to alleviate unemployment, and 
to remedy insanitary housing conditions and the short­
age of decent dwellings for low-income families that are 
injurious to health, safety, and morals of the Nation’s 
citizens (42 U.S.C. 1401).

Under the Act low-rent housing projects for occu­
pancy by low-income families are constructed, owned 
and operated by local housing authorities (such as 
appellee Housing Authority of Savannah) created as 
municipal corporations under State law. The only 
function of the federal agency, appellee Public Hous­
ing Administration, is to provide financial assistance 
to such local authorities, pursuant to contracts (called 
“ Annual Contributions Contracts” ) in the develop­
ment and administration of such projects. This fed­
eral financial assistance takes the form of either a 
loan or a capital grant to the local authority to provide 
funds for the construction of the projects, and annual 
contributions to the local authority to enable it to main­
tain the rents at levels payable by low-income families 
and still have funds to repay the interest and amortiza­
tion on the money borrowed by the local authority to 
construct the project (42 U.S.C. 1402, 1409-11; R. 39).

Instead of securing money directly from appellee 
Public Housing Administration, the local authority 
may, with the approval of appellee Public Housing



4

Administration, borrow funds from the public by the 
sale of its short term notes. In the event these short 
term notes are not refunded, appellee Public Housing 
Administration makes payment o f such notes directly 
to a bank designated in the notes as paying agent for 
the holders (R. 40).

The local housing authority may also issue, with the 
approval of appellee Public Housing Administration, 
bonds which are sold to the public to finance the develop­
ment costs of its projects. Such bonds designate a bank 
as fiscal agent for the bondholders (42 U.S.C. 1421a; 
R. 40, 42).

The annual contributions by appellee Public Hous­
ing Administration are paid by it directly to the bank 
which is the fiscal agent for the bondholders (R. 40; 
Ex. 1, Terms and Conditions Constituting Part Two 
of Annual Contributions Contract, Sec. 415(H ).1

Policy as to occupancy of projects. Under the Hous­
ing Act appellee Public Housing Administration is 
required to put in its Annual Contributions Contract 
with the local authority provisions obligating the latter 
to fix maximum income limits for tenants (42 U.S.C. 
1415(8) (a) ) ; to give preference in occupancy, as among 
eligible low-income families, to families displaced by 
any low-rent or slum clearance project, and as among 
such families to give relative preferences to specified 
categories of veterans (42 U.S.C. 1410(g)); and to 
give preference in occupancy to eligible persons most 
urgently in need of housing (42 U.S.C. 1415(8) (c )) .

1 Exhibit references are to the exhibits attached to the affidavit 
of Charles E. Slusser filed in support- of appellees’ motion for sum­
mary judgment. These exhibits are not printed in the record but 
the originals have been filed with this Court-. See R. 58.



5

The Housing Act contains no other provisions as to 
classifications in tenant occupancy.

Regulations promulgated by appellee Public Hous­
ing Administration provide:

The following general statement of racial policy 
shall be applicable to all low-rent housing projects 
developed and operated under the United States 
Housing Act of 1937, as amended.

1. Programs for the development of low-rent 
housing, in order to be eligible for PH A  assistance, 
must reflect equitable provisions for eligible fam­
ilies of all races determined on the approximate 
volume of their respective needs for such housing.

2. While the selection of tenants and the assign­
ing of dwelling units are primarily matters for 
local determination, urgency of need and the pref­
erence prescribed in the Housing Act of 1949 are 
the basic statutory standards for the selection of 
tenants. R. 36, 37.)2

Except as provided in the Annual Contributions Con­
tracts, appellee Public Housing Administration has no 
control over the local authorities (R. 41). The policy 
of Public Housing Administration with respect to 
occupancy of any low-rent housing project is that de­
cisions as to occupancy are the administrative responsi­
bility of the local housing authority, subject only to the 
provisions of the Housing Act and regulations pro­
mulgated by appellee Public Housing Administration 
thereunder (R. 41).

The low-rent housing program in Savannah. In 
Savannah the low-rent housing program is carried out

2 These regulations were promulgated prior to the decision in 
Brown v. Board oj Education, 347 U.S. 483.



6

by appellee Housing Authority of Savannah, a munici­
pal corporation organized under the Housing Author­
ities Law of Georgia (Ga. Code Anno. § 99-1101 et 
seq.). It owns and operates six low-rent housing proj­
ects with a total of 1,433 rental units, one of which is 
Fred Wessels Homes (R. 41).

Appellee Housing Authority of Savannah has sold 
to the public its temporary notes in a total principal 
amount of $4,831,000 covering the six low-rent housing 
projects, for which the paying agents are the Chemical 
Corn Exchange Bank of New York City and the First 
National City Bank of New York. These notes are 
secured by a covenant of appellee Public Housing Ad­
ministration to pay them (R. 42).

Appellee Housing Authority of Savannah has also 
sold to the public its bonds in a total principal amount 
of $3,120,000 for which the Citizens and Southern Na­
tional Bank, of Savannah, is the fiscal agent. These 
bonds are secured by a pledge of the annual contribu­
tions payable by appellee Public Housing Administra­
tion under its Annual Contributions Contract with 
appellee Housing Authority of Savannah. In the 
Annual Contributions Contract appellee Public Hous­
ing Administration has covenanted that it will continue 
to make annual contributions as long as any of the bonds 
remain outstanding (R. 42).

Appellee Housing Authority of Savannah leases units 
in Fred Wessels Homes, from the site of which appel­
lants were displaced, to white persons only (R. 6, 10, 
27, 35).

THE DEFENSE HOUSING PROGRAM

Under the so-called “ Lanham A ct”  (42 U.S.C. 1521- 
1524) the Federal Government, acting through appellee



7

Public Housing Administration, constructed bousing 
projects for persons engaged in national defense activ­
ities where necessary housing was not otherwise avail­
able (R. 43). All of the four such Lanham Act projects 
in Savannah have either been conveyed by appellee 
Public Housing Administration to appellee Housing 
Authority of Savannah or have been demolished (R. 
35, 43). Appellee Housing Authority of Savannah pro­
poses to convert two of these into low-rent housing proj­
ects and proposes to remove the dwelling units from a 
third and convey the land to the city for industrial pur­
poses (R. 35). Appellee Public Housing Administra­
tion does not make any financial contributions with re­
spect to these Lanham Act projects, and decisions as 
to occupancy of these projects are solely the responsi­
bility of the Housing Authority of Savannah (R. 43-44).

PROCEEDINGS IN THE COURT BELOW

The District Court granted the motion of appellees 
Public Housing Administration and Hanson for sum­
mary judgment and dismissed the complaint as to them 
on the following grounds: (1) the Court lacks juris­
diction under 28 TT.S.C.1331 because the complaint fails 
to show that the matter in controversy as to each plain­
tiff exceeds $3,000; (2) the Court lacks jurisdiction 
under 28 U.S.C. 1343(3) because those appellees were 
not acting under color of State law; (3) the Court lacks 
venue of the action under 28 U.S.C. 1391(b) in that 
appellee Public Housing Administration is not a cor­
poration doing business in that judicial district within 
the meaning of 28 U.S.C. 1391(c) ; (4) plaintiffs lack 
sufficient legal interest in the expenditure of federal 
funds by appellee Public Housing Administration to 
give them standing to challenge the validity of such



8

expenditure; (5) appellee Public Housing Administra­
tion, by placing in its Annual Contributions Contract 
with appellee Housing Authority of Savannah a require­
ment that the latter shall extend the preference in occu­
pancy required by 42 U.S.C. 1410(g) has fulfilled its 
obligation under that statutory provision; (6) in view 
of the fact that appellee Public Housing Administration 
has left to the determination of appellee Housing Au­
thority of Savannah the policy as to whether low-rent 
housing projects shall be occupied by any particular 
race, there is no justiciable controversy between appel­
lants and appellees Public Housing Administration and 
Hanson; and (7) since appellee Hanson has no official 
function or duty with respect to dispensing to or with­
holding federal funds from appellee Housing Authority 
of Savannah, the complaint fails to state a claim against 
him (R. 47).

The District Court also dismissed the complaint as 
to appellees Housing Authority of Savannah and its 
members on the ground that the constitutional rights 
of appellants were not infringed since they were pro­
vided separate but equal low-rent housing facilities 
(R. 48-52).

ARGUMENT

I

The District Court Lacked Jurisdiction of the Action Under 
28 U.S.C. 1331.

Jurisdiction of this action is alleged under 28 U.S.C. 
1331, which requires the matter in controversy to 
exceed the sum or value of $3,000 and to arise under the 
Constitution, laws or treaties of the United States (R.



9

3).8 The District Court properly held that appellants 
had failed to establish that the required jurisdictional 
amount is involved (R. 47).

This jurisdictional issue was properly raised by our 
motion for summary judgment (R. 38). The burden 
rested on appellants to establish jurisdiction by com­
petent and substantial proof. McNutt v. General 
Motors Acceptance Corp., 298 U.S. 178, 189; Thomson 
v. Gashill, 315 U.S. 442, 446; Hague v. Committee for 
Industrial Organization, 307 U.S. 496, 507-8; Kvos, Inc. 
v. Associated Press, 299 U.S. 269, 277-9; Central Mexico 
Light & Power Co. v. Munch, 116 F. 2d 85, 87 (C.A. 2). 
Yet appellants made no effort whatever to meet their 
burden of proof.

Furthermore, the statutory requirement that the 
jurisdiction of the district courts be limited to matters 
of value exceeding $3,000 is to be strictly construed 
against appellants. “ Due regard for the rightful in­
dependence of state governments, which should actuate 
federal courts, requires that they scrupulously confine 
their own jurisdiction to the precise limits which the 
statute has defined.”  Healy v. Ratta, 292 U.S. 263, 
270; Thomson v. Gashill, 315 U.S. 442, 446.

Since the claimed right of each appellant is individual 
and separate, their claims may not be aggregated to 
endeavor to reach the jurisdictional amount, notwith­
standing that they present common questions of fact 3

3 Although the complaint also alleges jurisdiction under 28 U.S.C. 
1343(3), to redress the deprivation, under color of state law, of a 
right secured by the Constitution or Act of Congress (R. 3), ap­
pellants appear to have abandoned that ground here, since it is 
plain that appellees Public Housing Administration and Hanson 
did not act under color of state law. See Williams v. Yellow Cab 
Co., 200 F. 2d 302, 307 (C.A. 3 ); Love v. Chandler, 124 F. 2d 
785 (C.A. 8 ); Johnson v. Levitt & Sons, 131 F. Supp. 114, 116-7 
(E.D. Pa.).



1 0

and law. Thomson v. Gaskill, 315 U.S. 442, 446-7;
Hague v. Committee for Industrial Organization, 307 
U. S. 496, 508; Clark v. Paul Gray, Inc., 306 U.S. 583, 
588-9; Vicksburg, S. & P. Ry. Co. v. 'Nattin, 58 F. 2d 
979 (C.A. 5) ; Elliott v. Board of Trustees of Ovalo 
Rural High School Hist., 53 F. 2d 845 (C.A. 5) ; Central 
Mexico Light & Power Co. v. Munch, 116 F. 2d 85, 88 
(C.A. 2). Appellants apparently do not contest this.

Jurisdiction “ is to be tested by the value of the object 
or right to be protected against interference”  and “ may 
be measured by the loss, if  any, which would follow 
enforcement of the rules prescribed.”  McNutt v. Gen­
eral Motors Acceptance Corp., 298 U.S. 178, 181; Kvos 
v. Associated Press, 299 U.S. 269, 280; First National 
Bank of Columbus v. Louisiana Highway Commission, 
264 U.S. 308, 310.

Although a few cases have held that the jurisdictional 
amount can be established by the value of what the de­
fendant would lose if relief were granted, that is dis­
tinctly a minority view and is not in accord vTith the 
more recent rulings of either the Supreme Court (see 
the cases just cited) or this Court. See Elliott v. Board 
of Trustees of Ovalo Rural High School Hist., 53 F. 2d 
845 (C.A. 5) ; Hayward & Clark v. McDonald, 192 Fed. 
890, 892 (C.A. 5) ; 30 A.L.R. 2d 621, 628.4

4 Even if the “ defendant’s test” were to be applied here, the ju­
risdictional amount is not established. Appellants argue (Brief, 
p. 9) that if these appellees are enjoined from financing these 
projects they would “ lose” the interest on the loans to the Housing 
Authority of Savannah, which, at the rate of 2% %  per year, 
amounts to more than $3,000 per year. This argument overlooks 
the fact that the money which appellee Public Housing Adminis­
tration lends to the Housing Authority of Savannah is obtained 
from the Treasury (42 IT.S.C. 1420). The current rate (May 
1956) paid by Public Housing Administration is 2 % % . See Ap­
pendix, page 29, infra. Hence, if the loan to Housing Authority



1 1

The matter in controversy here is the claimed right 
of each appellant to become a tenant in a low-rent hous­
ing project. So the question is whether the right to 
occupy a dwelling unit in such a project is worth $3,000. 
Appellants offered no proof whatever on that issue but 
now argue merely that the construction cost of a dwell­
ing unit is more than $3,000 (Appellants’ Brief, p. 8). 
But appellants are not claiming the right to buy dwell­
ing units, so Ebensberger v. Sinclair Refining Co., 165 
F. 2d 803 (C.A. 5), is inapplicable here.

We have found no case applying the $3,000 require­
ment to a claim of right to rent property. It is, how7- 
ever, established that the value of a lessee’s interest for 
condemnation purposes is the value of the use and occu­
pancy of the property for the tenant’s term, less the 
agreed rent. Kimball Laundry Co. v. United States, 
338 U. S. 1, 7; United States v. Petty Motor Co., 327 
U.S. 372; United States v. General Motors Corp., 323 
U.S. 373. That would seem to be a proper standard 
to apply here. But the record is barren of any evidence 
on that issue. It does not even appear whether tenants 
in these projects are given annual leases, or occupy 
dwelling units on a month-to-month basis, or merely 
under a tenancy terminable at will.

Furthermore, in evaluating appellants ’ claimed right 
to occupy these low7-rent housing projects, it cannot be 
assumed that they will continue to have incomes suffi­
ciently low to be eligible for occupancy, or even that 
they will continue to desire occupancy for the indefinite 
future. Cf. Healy v. Ratta, 292 U.S. 263, 270-1. Thus, 
the value of appellant’s claimed right to occupy these

of Savannah were enjoined, Public Housing Administration would 
not “ lose” anything; it would save the expense of borrowing the 
money.



1 2

projects is a matter of pure speculation, and speculation 
will not do to establish the jurisdictional amount. 
Vicksburg, S. & P. By. Go. v. Nattin, 58 F. 2d 979 
(C.A. 5).

Nor are appellants aided on this issue by the fact 
that each is claiming $5,000 damages against each ap­
pellee (R. 3, 13). The rule that the amount of dam­
ages claimed in good faith is sufficient to establish juris­
diction has no application here because it is obvious 
that appellees Public Housing Administration and 
Hanson, having acted under color of their governmental 
functions, are immune from personal liability. De Busk 
v. Harvin, 212 P. 2d 143, 147 (C.A. 5) ; Gregoire v. 
Biddle, 177 P. 2d 579 (C.A. 2 ) ; Yaselli v. Goff, 12 P. 2d 
396 (C.A. 2 ); Jones v. Kennedy, 121 P. 2d 40 (C.A. 
D.C.) ; Cooper v. O’Connor, 99 P. 2d 135 (C.A. D .C .); 
Spalding v. Vilas, 161 U. S. 483. Accordingly, the cases 
in appellants’ brief sustaining jurisdiction on the basis 
of a claim of damages exceeding the jurisdictional 
amount have no application here.

The judgment of the District Court dismissing the 
complaint as to appellees Public Housing Administra­
tion and Hanson should be affirmed on the ground that 
appellants have failed to establish that the value of the 
matter in controversy exceeds $3,000.

II.
As to Appellee Public Housing Administration Venue Did Not 

Lie in the District Court.

The complaint invoked the jurisdiction of the District 
Court under 28 U.S.C. 1331 and 28 U.S.C. 1343(3) (R. 
3). The action is hence one where jurisdiction is not 
founded solely on diversity of citizenship. By virtue 
of 28 U.S.C. 1391(b), such an action “ may be brought 
only in the judicial district where all defendants reside,



13

except as otherwise provided by law.”  By virtue of 28 
U.S.C. 1392(a), this action, not being “ of a local na­
ture” , could be brought in any district in Georgia, pro­
vided all the defendants are “ residing”  in Georgia.

We submit that the court below correctly ruled (B. 
47) that appellee Public Housing Administration does 
not “ reside”  in Georgia and hence is not subject to 
suit in the court below. The Housing Act provides that 
with respect to certain of its functions (including the 
low-rent housing program involved here) Public Hous­
ing Administration “ shall sue and be sued”  (42 U.S.C. 
1404a). In our view this does not authorize suit against 
the Administration outside the District of Columbia. 
Compare Blackmar v. Guerre, 342 U.S. 512. The “ sue 
and be sued”  clause is a waiver of sovereign immunity, 
not a general grant of venue to, the district courts. 
When Congress chooses to make a federal agency suable 
outside the District of Columbia, it expresses that in­
tent by providing that the agency may sue and be sued 
in any court of competent jurisdiction, state or federal. 
See Keifer & Keifer v. Reconstruction Finance Corp., 
306 U.S. 381, 392; Federal Housing Administration v. 
Burr, 309 U.S. 242, 244; Seven Oaks v. Federal Hous­
ing Administration, 171 F. 2d 947, 948 (C.A. 4). Sigona 
v. Slusser, 124 F. Supp 327 (D. Conn.), admittedly 
contra to our position, is, we submit, erroneous in its 
failure to distinguish between the two types of “ sue and 
be sued”  clause.

Appellants rely on the provision of the venue statute 
that a corporation may be sued in any judicial district 
in which it “ is doing business”  (28 U.S.C. 1391(c)). 
It is, we believe, inapplicable. Appellee Public Hous­
ing Administration, although the successor to the 
United States Housing Authority (a government cor­
poration) is not a government corporation, hut is rather



1 4

an unincorporated agency of the Government within the 
Housing and Home Finance Agency (Reorganization 
Plan Ho. 3 of 1947, 5 U.S.C. 133y-16, p. 147). Breen v. 
Housing Authority of City of Pittsburgh, 119 F. Supp. 
320, 323 (W.D. Pa.). Even if  appellee Public Housing 
Administration were regarded as a “ corporation” 
within the meaning of the venue statute (28 U.S.C. 
1391(c)), it is not “ doing business”  in Georgia within 
the meaning of that section. It performs governmental 
functions in Georgia, acting through appellee Hanson. 
But “ doing business”  means the carrying on of com­
mercial functions, not the performance of the functions 

 ̂ of government. Isner v. Interstate Commerce Com­
mission, 90 F. Supp. 361, 364-5 (E.D. Mich.).5 Com­
pare the ruling in Federal Crop Insurance Corp. v. 
Merrill, 332 U.S. 380, 383-4, that governmental func­
tions do not partake of the nature of commercial un­
dertakings.

Accordingly, as to appellee Public Housing Admin­
istration the District Court lacked venue of the action 
and the court below properly dismissed the complaint 
on that ground.

III.

The Complaint Was Properly Dismissed Since There Is a Lack 
of Indispensable Parties.

Although not a ground relied upon by the court below, 
its judgment dismissing the complaint may be sus­
tained because there is a lack of indispensable parties.

5 In an unreported decision the District Court for the Eastern 
District of Michigan in 1950 dismissed a complaint substantially 
identical with the present one on the ground that Public Housing 
Administration is not suable in a district court outside the District 
of Columbia. Lewis v. City of Detroit (E.D. Mich., Civil Action 
No. 9505).



15

As to appellees Public Housing Administration and 
Hanson, the object of the action (apart from the claim 
of damages, which cannot be maintained, see page 12, 
supra,) is to enjoin them from advancing any federal 
funds for the maintenance and operation of any low- 
rent housing projects in Savannah to which Negroes 
are not admitted as tenants (R. 12, 13).

Under the Annual Contributions Contracts in effect 
between Public Housing Administration and the Hous­
ing Authority of Savannah the payments which the 
former makes to the latter are annual contributions in 
such amount as may be necessary to pay the interest 
and amortization on the bonds of the Housing Au­
thority of Savannah outstanding in the hands of the 
public. The Housing Authority of Savannah has 
pledged these annual contributions as security for the 
payment of its bonds. Appellee Public Housing Ad­
ministration makes the annual contributions directly 
to the designated fiscal agent of the bond holders, which 
is the Citizens and Southern National Bank, of Sa­
vannah (R. 42; Ex. 1, Terms and Conditions Consti­
tuting Part Two of Annual Contributions Contract, 
Secs. 415, 416, 420; Exs. 3, 5).

Similarly, the temporary notes issued to the public 
by the Housing Authority of Savannah are secured by 
a covenant of appellee Public Housing Administration 
to pay them; and in the event these notes are not re­
funded, appellee Public Housing Administration would 
make payment of them directly to the paying agents 
for the holders, which are the Chemical Corn Exchange 
Bank of New York City and the First National Bank 
of New York (R. 40, 42).

The Housing Act itself prohibits the impairment of 
the rights of the holders of notes and bonds for which



16

annual contributions have been pledged (42 U.S.C. 
1414). “ The faitli of the United States is solemnly 
pledged to the payment of all annual contributions .. 
and the bondholders are specifically given the right to 
sue appellee Public Housing Administration to enforce 
that obligation (42 U.S.C.A. (1955 Pocket Part) 
1410(e); Ex. 1, Terms and Conditions Constituting 
Part Two of Annual Contributions Contract, Secs. 
424, 510(A )).

Although appellants are thus seeking an injunction 
which would prevent the note and bond holders from 
receiving from appellee Public Housing Administra­
tion the federal funds which the holders look to for 
payment of their securities, neither the holders of the 
notes and bonds nor the banks which are their fiscal 
agents have been joined as parties to the action. Since 
the contract rights of the note and bond holders would 
be vitally affected by the injunction sought here, they, 
or at least the banks which are their representatives, 
are indispensable parties.

Thus, in St. Louis-San Francisco By. Co. v. Blake, 
36 E. 2d 652, 655 (C.A. 10), a suit challenging the crea­
tion of a sinking fund for the payment of town bonds, 
the court held that the bond holders were indispensable 
parties because a decision for the plaintiff “ would nec­
essarily injure, if  not wholly destroy, the value of the 
bonds and judgments, and would prejudice the rights 
of such holders and owners.6

6 Similar cases in the State courts are Grater v. Logan High 
School Dist., 64 Colo. 600, 173 Pac. 714; Jones v. Clark, 250 S.W. 
217 (Tex. Civ. A pp .); State ex rel. Hall v. County Court of Mercer, 
100 W. Va. 11, 129 S.E. 712; Slutts v. Dana, 109 N.W. 794 (Iowa); 
Ramsay v. Town of Marble Rock, 123 Iowa 7, 98 N.W. 134; Boesch 
v. Byrom, 83 S.W. 18 (Tex. Civ. A pp .); Stratton v. Commissioners’ 
Court of Kinney County, 137 S.W. 1170 (Tex. Civ. A pp .); Stall-



17

This same principle was applied in Heyward v. Pub­
lic Housing Administration, 214 F. 2d 222 (C.A. D.C.), 
where the Court of Appeals for the District of Co­
lumbia directed the dismissal of a complaint brought by 
the appellants here attempting to raise the same issues 
involved here, on the ground that the Housing Au­
thority of Savannah was a necessary party since its 
contractual arrangements with the Public Housing 
Administration were challenged by the suit.

Accordingly, the judgment of the court below dis­
missing the complaint as to appellees Public Housing 
Administration and Hanson may be sustained on the 
additional ground of lack of indispensable parties.

IV.
The Complaint Was Properly Dismissed on the Ground That 

There Is No Justiciable Controversy Between Appellants and 
Appellees Public Housing Administration and Hansen.

The court below correctly dismissed the complaint 
as to appellees Public Housing Administration and 
Hanson on the ground that there is no justiciable con­
troversy between them and appellants (B. 47).

Appellants are seeking to enjoin the advance of fed­
eral funds to appellee Housing Authority of Savannah 
to assist it in the maintenance and operation of those 
of its low-rent housing projects which it makes avail­
able for occupancy by whites only. Appellants have 
no justiciable controversy with appellees Public Hous­
ing Administration and Hanson unless they can estab­
lish that the mere advance of federal funds to the Hous-

cup V. City of Tacoma, 13 Wash. 141, 42 Pac. 541; City of An­
thony v. State ex rel. Beebe, 49 Kan. 246, 30 Pac. 488; Hope v. 
Mayor, etc., of Gainesville, 72 Ga. 246; Dwyer v. Hackworth, 57 
Tex. 245; Board v. Texas and Pacific R.W. Co., 46 Tex. 316.



18

ing Authority of Savannah violates some legal right of 
theirs to their actual injury. Alabama Power Go. v. 
I  ekes, 302 U.S. 464, 478-9; Tennessee Electric Power 
Co. v. Tennessee Valley Authority, 306 U.S. 118, 137; 
Perkins v. Lukens Steel Co., 310 U.S. 113,125.

Obviously the mere advance of federal funds to the 
Housing Authority of Savannah cannot in itself in­
jure plaintiffs. Is is only the refusal of the Housing 
Authority of Savannah to accept them as tenants that 
can possibly injure them. Consequently, since the 
mere advance of federal funds does not of itself in­
jure appellants, they have no standing to challenge its 
validity. Thus, in Massachusetts v. Mellon, 262 U.S. 
447, 482, it was held that the state had no standing to 
challenge an expenditure of federal funds, since it was 
not required “ to do or yield anything.”  Since appel­
lants cannot show “ a direct dollars-and-cents injury” 
from the mere disbursement of federal funds, there is 
no justiciable controversy with respect to such dis­
bursement. Doremns v. Board of Education, 342 U.S. 
429, 434.

Joint Anti-Fascist Refugee Committee v. McGrath, 
341 U.S. 123, on which appellants rely, is distinguish­
able because there the act which in itself allegedly in­
jured the plaintiffs—their designation as communist 
organizations—was done by the federal official sued— 
the Attorney General. Federal Trade Commission v. 
Winstead Hosiery Co., 258 U.S. 483, held merely that 
it was an unfair method of competition for a manufac­
turer to sell goods under false labels even though the 
practice was so common that it did not deceive retailers 
of such goods. Restatement of Torts, § 876, cited by 
appellants, is merely an application of the rule that 
one “ whose tortious conduct is a substantial factor in



19

causing a harm is liable therefor in the absence of a 
superseding cause.”  It does not suggest that a bank 
which lends money to finance a business enterprise is 
liable for the torts which that enterprise commits, 
which is essentially appellants’ contention here.

Apart from the preferences in occupancy prescribed 
by the Housing Act itself (see page 14, above), as to 
which appellants make no complaint, the only policy 
requirement imposed by appellee Public Housing Ad­
ministration is that the Housing Authority of Savannah 
must make “  equitable provision for eligible families 
of all races determined on the approximate value and 
urgency of their respective needs for such housing”  
(R. 36-7). In other words, appellee Public Housing Ad­
ministration would not permit the Housing Authority 
of Savannah to lease its low-rent dwelling units either 
exclusively to whites or exclusively to Negroes.

Appellee Public Housing Authority has not, how­
ever, prescribed any policy as to whether a particular 
project shall or shall not he occupied exclusively by 
members of any one race. It is the Housing Authority 
of Savannah alone which has determined that Fred 
Wessels Homes is to be occupied by white families only. 
Appellee Public Housing Administration did not make 
that determination and would have no objection if the 
Housing Authority of Savannah were to decide to admit 
Negro occupants to that project. Indeed, under the 
existing contracts in effect between appellee Public 
Housing Administration and the Housing Authority of 
Savannah the former has no right to dictate to the 
latter that Negroes shall be permitted to occupy this 
project (R. 41-2).

Since it is apparent that the policy of excluding Ne­
groes from this project has been established not by ap-



2 0

pellee Public Housing Administration but by tbe Hous­
ing Authority of Savannah, appellants’ real contro­
versy is with tbe Housing Authority of Savannah, not 
with these appellees (R. 41-2). Employers Group of 
Motor Freight Carriers v. National War Labor Board, 
143 P. 2d 145 (C.A. D.C.) ; National War Labor Board 
v. Montgomery Ward & Co., 144 P. 2d 528 (C.A. D.C.).

An analogous situation was presented in Dorsey v. 
Stuyvesant Town Corp., 299 N.Y. 512, 87 N.E. 2d 541, 
cert. den. 339 H.S. 981. In that case Negroes whose 
applications for apartments in a housing project were 
refused sought to enjoin the corporation which operated 
the project and the Metropolitan Life Insurance Co., 
which financed its construction, from denying accom­
modations to any person on account of race or color. 
The project was developed under a New York housing 
statute with assistance given by the State in the form 
of tax exemptions, use of the power of eminent do­
main, and the closing of public streets. The plaintiffs 
there contended, like appellants here, that this gov­
ernmental assistance in the development of a project 
leased on a segregated basis constituted governmental 
action prohibited by the Fourteenth Amendment. Tbe 
New York Court of Appeals held, however, that not­
withstanding the governmental assistance in the de­
velopment of the project and the deliberate refraining 
by the State from imposing any requirement of non­
discrimination as a condition to granting such gov­
ernmental assistance, the racial discrimination was ex­
ercised not by the State but by the private corporation 
operating the project (299 N.Y. at 533-6, 87 N.E. 2d 
at 550-1).

Here the role o f appellee Public Housing Adminis­
tration in assisting in the development of these low-rent 
housing projects is less pervasive than was that of the



2 1

state in the Dorsey case. While the approval of ap­
pellee Public Housing Administration is required for 
various aspects of the project, such approval is merely 
reasonably appropriate to protect the Government’s 
financial investment in the project and to assure com­
pliance with statutory requirements.

Johnson v. Levitt & Sons, 131 P. Supp. 114 (E.D. 
Pa.), is directly in point. In that case Negroes sought 
to enjoin Federal Housing Administration from as­
sisting in the financing of a housing project, through 
the guaranteeing of mortgages on it, because the owner 
of the project would not sell housing units to Negroes. 
There, as here, the government agency had not adopted 
any policy as to sales of the units to particular races 
but had left that up to the owner of the project. The 
court dismissed the action on the ground that the policy 
about which the plaintiffs complained was not that of 
the government agency and hence there was no jus­
ticiable controversy with the federal agency. See also 
Offutt Housing Company v. County of Sarpy, — U.S. 
— (No. 404, Oct. Term, 1955, decided May 28, 1956), 
holding that for tax purposes no part of the value of a 
housing project should be allocated to the United States, 
where the project was leased to and operated by a pri­
vate company, even though the government had title, 
financed the project, fixed maximum rents, and desig­
nated the occupants.

Accordingly, any bar to occupancy of particular 
projects by appellants is attributable to the Housing 
Authority of Savannah, not to these appellees, and no 
justiciable controversy exists between appellants and 
these appellees as to the legality of that policy.

Appellants rely heavily upon Ptihlic Utilities Com­
mission v. Poliak, 343 U.S. 451. That was a statutory 
review of a determination by the Public Utilities Com-



2 2

mission of the District of Columbia that the public 
safety, comfort and convenience were not impaired by 
the street car company, a public utility operating under 
a franchise from Congress, in its playing radios on the 
street cars. Protesting passengers intervened before 
the utilities commission on the ground that forced 
listening violated their rights under the First and 
Fifth Amendments. Since those amendments relate 
only to governmental, not private action, the issue was 
raised as to whether governmental action was respon­
sible for the radio playing.

Although the Supreme Court ruled on the constitu­
tional issues in that case, it is not clear that its opinion 
constitutes a square holding on the justiciable con­
troversy question, since it said: “ We, therefore, find it 
appropriate to examine into what restriction, if any, 
the First and Fifth Amendments place upon the Fed­
eral Government under the facts of this case, assuming 
that the action of Capital Transit in operating the radio 
service, together with the action of the Commission in 
permitting such operation, amounts to sufficient Fed­
eral Government action to make the First and Fifth 
Amendments applicable thereto.”  [Italics supplied] 
(343 U.S. at 462-3).

In any event, if  the Poliak decision amounts to a rul­
ing on the justiciable controversy issue, it is distinguish­
able. There the Government agency, the utilities com­
mission, had a statutory duty to protect the public from 
impairment of its public safety, comfort and con­
venience. No corresponding duty is placed upon ap­
pellee Public Housing Administration by the Housing 
Act. Johnson v. Levitt & Sons, supra, distinguished the 
Poliak case on that ground (131 F. Supp. at 116).

Since appellee Public Housing Administration has



23

disposed o f all defense housing projects built under the 
Lanham Act and is not imposing any policy as to their 
occupancy or giving any financial assistance with re­
spect to them (R. 35, 43-4), appellants obviously have 
no justiciable controversy with Public Housing Admin­
istration as to those projects. Furthermore, as to its 
functions in connection with Lanham Act projects the 
Public Housing Administration is not subject to suit. 
The Congressional grant of permission to sue the Public 
Housing Administration extends only to its functions 
under the low-rent housing program (42 U.S.C. 1404a) .7 
Consequently, insofar as the complaint challenges acts 
of the Public Housing Administration in connection 
with Lanham Act defense housing projects, it was 
properly dismissed as a suit against a Federal agency 
which is not subject to be sued. Blackmar v. Guerre, 
342 U.S. 512; United States Department of Agricul­
ture v. Bemund, 330 U.S. 539; New Haven Public 
Schools v. General Services Administration, 214 F. 
2d 592 (C.A. 7).

Finally, the court below correctly dismissed the com­
plaint as to appellee Hanson, Public Housing Admin­
istration’s Field Office Director (R. 47), since he does 
not disburse funds to or withhold them from the Hous­
ing Authority of Savannah (R. 40-1). Blackmar v. 
Guerre, 342 U.S. 512, 515; Payne v. Fite, 184 F. 2d 977, 
980 (C.A. 5).

Accordingly, the complaint was correctly dismissed 
as to appellees Public Housing Administration and 
Hanson for lack of a justiciable controversy as to them.

7 42 U.S.C. 1404a also makes Public Housing Administration 
suable with respect to housing projects established pursuant to 42 
U.S.C. 1501-1505. These are a different type of project, however, 
and there are none such in Savannah.



24

V.

Appellees Public Housing Administration and Hanson Have 
Not Denied Appellants any Statutory Preference in Occu­
pancy to Which They May Be Entitled

The court below correctly held that appellee Public 
Housing Administration had fulfilled its obligation 
under the preferential occupancy provisions of the 
Housing Act (42 U.S.C. 1410(g), 1415(8) ( c ) )  by plac­
ing in the Annual Contributions Contracts with the 
Housing Authority of Savannah a requirement that 
the latter shall give such preference in occupancy in its 
projects (R. 47).

The Housing Act provides that “ Every contract * * * 
for annual contributions”  made between Public Hous­
ing Administration and the local authority “ shall re­
quire that the public housing agency [i.e., the local 
housing authority] * * *, shall extend”  a specified pref­
erence in occupancy to families displaced from low- 
rent housing project sites, with preferences within that 
group to veterans’ families (42 U.S.C. 1410(g)).

Another section of the Housing Act provides that 
every such contract between Public Housing Adminis­
tration and the local authority ‘ 1 shall provide that * * * 
the public housing agency shall * * * give preference to 
families having the most urgent housing needs”  (42 
U.S.C. 1415(8) (c ) ) .  The complaint alleges in general 
terms that appellants have been or will be displaced 
from the site of a housing project and “ meet all the 
requirements established by law ’ ’ for admission to such 
projects (R. 6). Assuming that these allegations are 
sufficiently specific to allege that appellants are entitled 
to the statutory preferences described above, it is plain 
that the complaint does not show any denial of these 
statutory preferences by appellees Public Housing Ad­
ministration or Hanson.



25

It will be observed that these provisions of the Hous­
ing Act by their terms impose no obligation upon Pub­
lic Housing Administration except to see to it that the 
Annual Contributions Contract which it enters into 
with the local housing authority (here, the Housing 
Authority of Savannah) does contain the provision that 
the local housing authority shall grant such preferences 
in occupancy. It might well be argued that this is 
merely a directive to the federal housing agency as to 
the expenditure of federal funds and was not intended 
by Congress to create any legal rights in third persons 
such as appellants. Perkins v. Lukens Steel Co., 310 
IT.S. 113; Massachusetts v. Mellon, 262 U.S. 447; Fulton 
Iron Co. v. Larson, 171 P. 2d 994, 997-8 (C.A. D.C.).

In any event the Annual Contribution Contracts 
covering low-rent housing projects in Savannah con- 
cededly do contain a covenant by the Savannah Au­
thority to grant the tenant preferences, in the language 
of the statute (Ex. 1, Terms and Conditions Constitut­
ing Part Two of Annual Contributions Contract, Sec. 
209). Since the inclusion of that provision in the An­
nual Contributions Contracts satisfies the only obliga­
tion imposed upon appellee Public Housing Adminis­
tration by the statute, appellants plainly fail to make 
out any case against these appellees of non-compliance 
with the statute.

By the tenant preference provisions in the Housing 
Act the obligation to grant such preference is imposed 
upon the local housing authority, not upon the federal 
housing agency, as a condition to its obtaining a con­
tract for federal financial assistance. I f  appellants can 
show that the Housing Authority of Savannah is fail­
ing to grant them the statutory preference, appellants 
may have a case for relief against that Authority. They 
would not, however, even in that situation have any



2 6

case against these appellees, since they' have carried out 
in full their obligation under the statute. As shown by 
the cases cited in appellants’ brief (page 23), if  appel­
lants are regarded as third party beneficiaries of the 
statutory preference as embodied in the Annual Con­
tributions Contracts, their claim is against the party 
allegedly denying the preference (the Housing Au­
thority of Savannah), not the Public Housing Admin­
istration.

Insofar as the Lanham Act projects in Savannah are 
concerned, appellants obviously can have on case of 
denial of the statutory preferences in occupancy. For 
these preferences are applicable only to every contract 
for annual contributions “ made pursuant to this chap- 
ter” 1 (42 U.S.C. 1410(g), 1415(8)). “ This chapter”  is 
Chapter 8 of Title 42, “ Low-Rent Housing” . Lanham 
Act projects are provided for by Chapter 9 of Title 42, 
“ Housing of Persons Engaged in National Defense.”

CONCLUSION

For the reasons stated above the judgment of the 
court below dismissing the complaint as to appellees 
Public Housing Administration and Hanson should be 
affirmed.

Respectfully submitted,
George Cochran D oub,

Assistant Attorney General;
P aul A. S w eeney ,
D onald B . M acGuineas,

Attorneys, Department of Justice; 
Attorneys for Appellees Public 

Housing Administration and 
Arthur R. Hanson.



27

APPENDIX

PUBLIC HOUSING ADM INISTRATION
Housing and Home Finance Agency 

Washington 25, D. C.
May 24,1956

George Cochran Doub, Esquire 
Assistant Attorney General 
Department of Justice 
Washington 25, D. C.
Attention: Donald B. MacGuineas

R e : Prince Heyward v. PH  A 
Dear Mr. Doub:

This is in reply to Mr. MacGuineas’ informal inquiry 
concerning the amount of interest paid on loans by the 
Public Housing Administration from the Treasury De­
partment.

Monies loaned by the PH A  to local authorities are 
borrowed from the Secretary of the Treasury pursuant 
to 42 U.S.C. 1420. While our contracts with local hous­
ing authorities require the local authority to pay a fixed 
interest rate on monies borrowed from the PHA, the 
interest rate paid to the Secretary of the Treasury by 
PHA may fluctuate each month. In September of 1954 
the PH A and the Secretary of the Treasury signed a 
letter of agreement fixing the terms of future borrow­
ings. Enclosed is a copy of this letter. Pursuant to 
42 U.S.C. 1420 and the letter of agreement the Secre­
tary of the Treasury fixes the interest rate to be borne 
by PH A borrowings on the basis of current quotations 
on government securities as of the last day of the month 
preceding such borrowings. Since September 1954



28

these rates have ranged from 1% to 2% % . The rates 
for the first five months of 1956 are as follows:

January 1956 ............................ 2%%
February 1956 .......................... 2 ^ %
March 1956 .............................. 2%;%
April 1956 ................................ 2 ^ %
May 1956 .................................. 2%%

Enclosed also is a copy of the letter setting forth the 
rate established by the Secretary of the Treasury for 
P H A  borrowings during May of 1956.

While the New York Times carries a composite of 
closing quotations on government securities the yield 
basis is not always stated. However, we are pleased to 
enclose a statement of the closing quotations of one of 
the New York investment banking houses. This state­
ment sets forth the price at which the particular house 
will buy or sell the securities on a given day, and will, 
of course, vary among investment dealers.

I  trust this information will be helpful. I f  we can 
be of further assistance to you, please do not hesitate 
to call on us.

Sincerely yours,
B en  W. Carter, 

Litigation Counsel.
Enclosures.



29

TREASU RY DEPARTM ENT

Eiscal Service 
Washington 25

My dear Mr. Slusser:
May 4,1956

Reference is made to your letter dated September 17, 
1954, and approval by the Acting Secretary of the 
Treasury with respect to loans to the Public Housing 
Administration. The Secretary of the Treasury has 
determined the rate to be 2%% per annum on the out­
standing loans on May 1, 1956, and on advances made 
during the month of May, 1956, pursuant to the above 
agreement.

Very truly yours,
M artin C. M oore,

Assistant to the Fiscal Assistant Secretary.

H onorable Charles E. Slusser 
Commissioner
Public Housing Administration 
Housing and Home Finance Agency 
Washington 25,1). C.

U. S. GOVERNMENT PRINTING OFFICE: 1958 887797 1877





*









stn 9
w e n

BRIEF FOR APPELLEES

Unttcb States Court of Appeals
FOB THE DISTKICT OF COLUMBIA CIBCUII

No. 11,865

P rince  F . H eyw ard , et a l ., appellan ts

v.

P ublic  H ousing  A d m in istr a tio n , et a l ., appellees

A P P E A L  F R O M  T H E  U N I T E D  S T A T E S  D I S T R I C T  C O U R T  F O R  

T H E  D I S T R I C T  O F  C O L U M B I A

WARREN E. BURGER,
A s s is ta n t  A t t o r n e y  G en era l ,

LEO A. ROVER,
U n ited  S ta te s  A t t o r n e y ,

EDWARD H. HICKEY,
A t t o r n e y ,  D e p a r tm e n t  o f  J u s tic e ,

DONALD B, MAC GUINEAS,
A t t o r n e y ,  D e p a r tm e n t  o f  J u s tic e ,

D e p a r tm e n t  o f  J u s tic e ,
W a s h in g to n  2 5 , D . C ., 

A t t o r n e y s  f o r  A p p e l l e e s .





QUESTIONS PRESENTED

In the opinion of appellees the questions presented are:
(1) Whether this action to restrain federal officials from 

advancing funds to a local housing authority to construct 
a housing project, where the local authority has expressed 
its intention to lease dwelling units therein to white tenants 
only, in claimed violation of plaintiff’s rights, is premature, 
since the project is not ready for occupancy.

(2) Whether there is any justiciable controversy between 
plaintiffs and the federal housing agency, since the tenant 
selection policy for this project is set not by the federal 
agency, but by the local authority.

(3) Whether the local authority is an indispensable party, 
since it is responsible for the challenged tenant selection 
policy, and the action seeks to invalidate its contract rights 
with the federal agency.

(4) Whether the federal agency has denied plaintiffs the 
preference in occupancy granted by the Housing Act, where 
its contract with the local authority requires it to grant such 
preference.

(5) Whether plaintiffs have standing to challenge the 
mere expenditure of federal funds to build the project.

(i)





I N D E X
Page

Counterstatement of Case: ...........................................................  1
A. General nature of the low-rent housing program...............  2
B. Policies as to occupancy of projects...................................  3
C. The low rent housing program in Savannah.......................  4
D. The grounds advanced in support of appellees’ motion for

summary judgment ......................................................  6
E. The ground of decision by the court below.........................  7

Statutes Involved .........................................................................  8
Summary of Argument................................................................  8
Argument: .................................................................................. 10

I. The order dismissing the complaint should be affirmed be­
cause the action is premature.......................................  10

II. The order dismissing the complaint should be affirmed be­
cause there is no justiciable case or controversy between 
appellants and appellees as to appellants’ right to 
occupy Fred Wessels Homes ....................................... 12

III. The order dismissing the complaint should be affirmed on
the ground of lack of an indispensable party—the 
Housing Authority of Savannah..................................  15

IV. Appellees have not denied appellants the preference in
occupancy granted by 42 U.S.C. 1410(g)...................... 17

V. Appellants have no standing to challenge the expenditure
of Federal funds for this project.................................. 19

Conclusion .................................................................................. 20

AUTHORITIES CITED
Cases:

A in s w o r th  v. B a rn  B a llr o o m  C o ., 157 F. 2d 97 (C.A. 4 )............ 17
A ir c r a f t  &  D ie s e l  C o r y . v. H irs c h , 331 U.S. 752...................... 6
A la b a m a  S ta te  F e d e r a t io n  o f  L a b o r  v. M c A d o r y , 325 U.S.

450 ...................................................................................  6>12
A lm a  M o to r  C o . v. T im k en  C o ., 329 U.S. 129........................... 6
A n g il l y  v. U n ited  S ta te s , 199 F. 2d 642 (C.A. 2 )....................  17
B a lte r  v. I c k e s , 67 App. D.C. 112, 89 F. 2d 856 16
B a n k s  v. S a n  F ra n c is c o  H o u s in g  A u t h o r i t y  (Superior Court,

San Francisco County, Ho. 420534)...................................  15
B a r r o w s  v. J a c k s o n , 346 U.S. 249..........................................  15
B e r a n e k  v. W a lla c e , 25 F. Supp. 841 (N.D. Ind.)................... 11
B e r l in s k y  v. W o o d s ,  17 8  F. 2d 265 (C.A. 4 )........................... 17
B la n k  v. B it k e r , 135 F. 2d 962 (C.A. 7 ).................................  17
C o ffm a n  v. B r e e z e  C o r p o r a tio n s , 323 U.S. 316.........................  12
C o llin s  v. H a r d y m a n , 341 U.S. 651..........................................  H
C ra m p to n  v. Z a b r isk ie , 101 U.S. 601....................................... 14) 20
D a g g s  v. K l e i n , 169 F. 2d 174 (C.A. 9 )...................................  17
D o e h le r  M e ta l  F u r n i tu r e  C o . v. W a r r e n , 76 App. D.C. 60,

129 F. 2d 43 ................. .......... ■....................................  12
D o r e m u s  v. B o a r d  o f  E d u ca tio n , 342 U.S. 429.........................  20

(m )



Cases—Continued _Page
D o r s e y  v. S tu y v e s a n t  T o w n  C o r p o r a tio n , 299 N.Y. 512, 87

N.E. 2d 541, cert. den. 339 U.S. 981...................................... 13
E c c le s  v. P e o p le s  B a n k , 333 U.S. 426..................................... 6,11,12
E m p lo y e r s  G r o u p  o f  M o to r  F r e ig h t  C a rr ie r s  v. N a tio n a l

W a r  L a b o r  B o a rd , 79 App. D.C. 105,143 F. 2d 145.............  13
F u lto n  I r o n  C o . v. L a r s o n , 84 App. D.C. 39, 171 F. 2d 994....... 16,18
G r e a t  L a k e s  D r e d g e  <L D o c k  C o . v. H u ffm a n , 319 U.S. 293......  12
G r e es o n  v. I m p e r ia l  I r r ig a t io n  D is t . , 55 F. 2d 321 (S.D. Cal.),

ail'd 59 P. 2d 529.................................................................  11
H o w a r d  v. U n ited  S ta te s  e x  r e l . A le x a n d e r , 126 F. 2d 667

(C.A. 10) .........................................................................  17
J a co b s  v. O ffice o f  H o u s in g  E x p e n d i t e r , 176 P. 2d 338

(C.A. 7) ...........................................................................  17
J o h n s o n  v. M a y o r  a n d  C ity  C o u n c il  o f  B a lt im o r e , 158 Md. 93,

148 Atl. 209........................................................................ 11
J o in t  A n t i -F a s c is t  C o m m itte e  v. M cG ra th , 341 U.S. 123..........  14
K a n s a s  v. C o lo r a d o , 206 U.S. 46..............................................  11
M a ssa ch u se tts  v. M ello n , 262 U.S. 447....................................8,10,19
M o n e y  v. W a ll in , 186 F. 2d 411 (C.A. 3 )................................  17
N a tio n a l W a r  L a b o r  B o a r d  v. M o n tg o m e r y  W a r d  <& C o ., 79 App.

D.C. 200, 144 P. 2d 528....................................................... 13
N e w  Y o r k  v. I l l in o is , 274 U.S. 488........................................... 11
O y a m a  v. C a lifo r n ia , 332 U.S. 633.........................................  11
P a y n e  v. F i t e , 184 F. 2d 977 (C.A. 5 ) .....................................  17
.P erk in s  v. L u k e n s  S te e l  C o ., 310 U.S. 113..............................  18
B e d  S ta r  Y e a s t  <& 'P ro d u c ts  C o . v. L a B u d d e , 83 P. 2d 394

(C.A. 7) ...........................................................................  11
R e s c u e  A r m y  v. M u n ic ip a l  C o u r t , 331 U.S. 549......................  6,12
S ea w e ll v. M a c W i th e y , 2 N.J. Super. 255, 63 A. 2d 542, reversed,

2 N.J. 563, 67 A. 2d 309...................................................... 15
S c r e w s  v. U n ited  S ta te s , 325 U.S. 91.......................................  11
S h e lle y  v . K r a m e r , 334 U.S. 1.................................................  15
S h e lly  O il C o . v. P h il l ip s  P e t r o le u m  C o ., 339 U.S. 667............ 12
S m a r t v. W o o d s , 184 P. 2d 714 (C.A. 6 )................................  17
S ta te  o f  W a s h in g to n  v. U n ited  S ta te s , 37 P. 2d 421 (C.A. 9) 16
T e n n es s e e  E le c tr i c  P o w e r  C o . v. T .V .A . , 306 U.S. 118...............  14
T e n n e y  v. B r a n d h o v e , 341 U.S. 367........................................ 11
U n ited  P u b lic  W o r k e r s  v. M itch e ll , 330 U.S. 75...................... 6,12
U n ited  S ta te s  v. C la ssic , 313 U.S. 299.....................................  11
U n ited  S ta te s  v. P e tr i l l o , 332 U.S. 1 .......................................  6
V a n n  v. T o le d o  M e tr o p o l i ta n  H o u s in g  A u t h o r i t y  (N.D. Ohio,

Civil No. 6989) ..................................................................  15
W o o d b r id g e  v. H o u s in g  A u t h o r i t y  o f  E v a n s v il le  (S.D. Ind.,

Civil No. 619) ................................................................... 15,18

Statutes Involved:
Civil Rights Act (8 U.S.C. 42).............................................2,8,11
Housing Act of 1937, as amended (42 U.S.C. 1401-33)............ 2
Housing Authorities Law of Georgia (Act No. 411, Georgia 

Laws of 1937, as amended).................................................. 4

IV



Statutes Involved—Continued Page
42 U.S.C. 1401-33..................................................................
42 U.S.C. 1401 ......................................................................
42 U.S.C. 1402, 1409-11 ........................................................
42 U.S.C. 1404a ....................................................................
42 U.S.C. 1410(g) ..............................................................2,3,7,
42 U.S.C. 1415(8) (a) ..........................................................

Miscellaneous:
95 Cong. Bee. 4791-8, 4850-61, 8554-5, 8656-8.........................  7
Rule 4(f), F.B.C.P.................................................................  17

V

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Untteb H>tateg Court of Appeals!
FO E  T H E  D IS T B IC T  OF C O L U M B IA

No. 11,865

P rin ce  F . H eyw ard , et  a l ., appellants

v.

P ublic  H ousing  A d m in istra tio n , et  a l ., appellees

A P P E A L  F R O M  T H E  U N I T E D  S T A T E S  D I S T R I C T  C O U R T  F O R  

T H E  D I S T R I C T  O F  C O L U M B I A

B R IE F  F O R  A P P E L L E E S

COUNTERSTATEMENT OF CASE

This counterstatement is deemed necessary because the 
statement of the case in appellants’ brief omits certain 
material facts.

This is an appeal by the plaintiffs below from an order 
granting the motion of defendants below for summary 
judgment and dismissing the complaint for failure to state 
a claim upon which relief can be granted (J.A. 1).

Appellants are Negro residents of Savannah, Georgia, 
who have been displaced from the site of a low-rent housing 
project being constructed in Savannah by the Housing 
Authority of Savannah (a housing corporation organized 
under Georgia law). Appellees are the Public Housing 
Administration and its Administrator. They administer 
the Federal Government’s low-rent housing program under

(1)



2

the Housing Act of 1937, as amended (42 U.S.C. 1401-33) 
(J.A. 7-9, 18).1

The Housing Authority of Savannah (which is not a party 
to the action) owns the project in question, is constructing 
it, and will, upon its completion, lease dwelling units in it 
to eligible low-income families. This particular project is 
one of seven comprising the housing program of the Savan­
nah Authority (J.A. 23). It has announced its intention to 
lease units in this particular project to white families only, 
and appellants assert that this is a violation of their 
rights under the Fifth Amendment, certain sections of the 
Civil Rights Acts (8 U.S.C. 41, 42), and a provision of the 
Housing Act giving preference in occupancy in projects to 
persons displaced from project sites (42 U.S.C. 1410(g)) 
(J.A. 7-8, 11-12).

A. General Nature of the Low-Rent Housing Program

The Housing Act of 1937, as amended, declares it to be 
the policy of the United States to promote the general 
welfare by employing its funds to assist the States and 
their political subdivisions to alleviate unemployment and 
to remedy insanitary housing conditions and the shortage 
of decent dwellings for low-income families that are in­
jurious to the health, safety, and morals of the nation’s 
citizens (42 U.S.C. 1401).

Under the Act low-rent housing projects for occupancy 
by families of low income are constructed, owned and oper­
ated by local housing authorities set up as municipal cor­
porations under State law. The only function of the federal 
agency, the Public Housing Administration, is to provide 
financial assistance to those local authorities (pursuant to 
contracts entered into upon their applications) in the devel­
opment and administration by them of such projects. This

1 With respect to this program, the Public Housing Administration 
is made a suable entity. 42 U.S.C. 1404a. The motion for summary 
judgment and affidavit of the Administrator of the Public Housing 
Administration in support thereof do not dispute any of the facts (as 
distinguished from the legal conclusions) alleged in the complaint.



3

financial assistance takes the form of either a loan or a 
capital grant to the local authorities to provide funds for 
the construction of the projects and annual contributions 
to the local authorities to enable them to maintain the rents 
at levels payable by low-income families and still have 
funds to repay the interest and amortization on the money 
borrowed by the local authorities to construct the projects 
(42 U.S.C. 1402, 1409-11) (J.A. 9, 18, 19).

B. Policies as to Occupancy of Projects

Under the Housing Act, the Public Housing Administra­
tion is required to see to it that the projects are occupied 
by tenants within maximum income limits (42 U.S.C. 1415 
(8) (a)). The local housing authority is required to give 
preference in occupancy, as among eligible low-income fam­
ilies, to families displaced by any low-rent or slum clearance 
project, and as among such families relative preferences 
must be given to specified categories of families of veterans 
(42 U.S.C. 1410(g)).

The regulations of the Public Housing Administration 
require that where a local authority submits to the Admin­
istration a development plan for a low-rent housing program 
which involves the displacement of site occupants, the local 
authority must demonstrate to the satisfaction of the Public 
Housing Administration that displaced families apparently 
eligible for public low-rent housing can be offered dwelling 
quarters in low-rent housing projects, either at the time of 
displacement or at a later time (J.A. 19, 26-32).

These regulations also require that development pro­
grams must reflect equitable provision for eligible families 
of all races determined on the basis of their respective needs 
for such housing and that the sites for such projects shall 
be selected so as to permit this policy to be carried out 
(J.A. 19-20, 33-4). Subject to the prescribed statutory 
standards for tenant selection, “ the selection of tenants and 
the assigning of dwelling units are primarily matters for 
local determination”  (J.A. 33).



4

The Public Housing Administration thus requires the 
local housing authorities to make equitable provision for 
eligible families of all races. But it is the policy of that 
Administration to leave entirely to the determination of 
the local authority the question as to whether or not any 
particular project is occupied by members of one race only. 
Public Housing Administration has no objection if the local 
authority determines to lease any project to members of 
more than one race.

C. The Low-Rent Housing Program in Savannah

In the City of Savannah the low-rent housing program 
is carried out by the Housing Authority of Savannah, a 
municipal corporation organized under the Housing Au­
thorities Law of Georgia (Act No. 411 of the Georgia Laws 
of 1937, as amended). Five such projects have been com­
pleted and are being operated by the Savannah Authority, 
of which three are occupied by Negroes and two by whites 
(J.A. 21).

The particular project involved in this suit is No. GA-2-4, 
known as “ Fred Wessels Homes”  (J.A. 7, 10). In Sep­
tember 1949 the Savannah Authority filed with the Public 
Housing Administration an application for a, program 
reservation for four projects totaling 800 dwelling units, 
consisting of two of the projects now completed, plus Proj­
ect GA-2-4 (the one here involved) to contain 250 units 
which the Savannah Authority proposes to have occupied 
by whites, and GA-2-7 to contain 337 units which the Savan­
nah Authority proposes to have occupied by Negroes. In 
October 1951 the Public Housing Administration issued a 
program reservation in accordance with this application 
(J.A. 21).

In September 1950 the Savannah Authority and the 
Public Housing Administration entered into a preliminary 
loan contract under which the Administration agreed to 
lend to the Savannah Authority up to $210,000 for pre­
liminary surveys and planning (J.A. 21-2, 35-49).

In March 1952 the Administration and the Savannah 
Authority entered into an annual contributions contract



5

under which the Administration agreed to lend to the 
Savannah Authority $2,292,000 bearing interest at 2%% 
per annum, to cover the estimated development cost of 
Project GA-2-4, and agreed to make annual contributions 
to the Savannah Authority of amounts necessary to meet 
the annual payments of interest on and amortization of 
the funds borrowed by the Savannah Authority for the 
development of the project. In July 1952 this agreement 
was amended to increase the principal amount of the loan 
to $2,792,000. There is no provision in these contracts 
which would permit the Public Housing Administration to 
forbid the Savannah Authority from limiting occupancy 
of this particular project to members of any one race 
(J.A. 22, 50-60).

In May 1952 the Savannah Authority entered into a con­
tract with a construction company in Savannah to construct 
Project GA-2-4, with provision for a construction period of 
460 days after issuance of a notice to proceed. Work was, 
however, held up because of difficulty in obtaining the ap­
proval of the City Council of Savannah to the layout of the 
project. At the time the case was submitted to the court 
below on our motion for summary judgment the only work 
done consisted of work in connection with the assembling 
and clearing of the site. The earliest likely date on which 
this project will be completed and ready for occupancy is 
the latter part of March 1954 (J.A. 22-3).

The low-rent housing program of the Savannah Authority, 
including projects completed and planned, consists of the 
following:

Dwelling Units Dwelling Units
Project No. for Whites for Negroes
GA-2-1, Completed 176
GA-2-2, Completed 480
GA-2-3, Completed 314
GA-2-4, Uncompleted 250

127GA-2-5, Completed
GA-2-6, Completed 86

337GA-2-7, Uncompleted

Totals 650 1,120
Percentage of Total 
. 23.)

36.7% 63.3%



6

The ratio of need for low-rent housing, based on the esti­
mated volume of substandard housing in Savannah, is white 
33.7%, Negro 66.3%. In addition to these seven projects, 
the Savannah Housing Authority contemplates submitting 
an application for another project to consist of 800 dwelling- 
units for Negroes (J.A. 23-4).

The displaced occupants of the site of the project involved 
in this action are 78% Negroes and 22% white. The five 
completed housing projects of the Savannah Authority are 
available for occupancy by low-income families displaced 
from the site of Project GA-2-4 and the additional uncom­
pleted projects of the Savannah Authority will likewise be 
available to such persons upon their completion (J.A. 24).

D. The Grounds Advanced in Support of Appellees’ Motion for 
Summary Judgment

The Supreme Court has of course repeatedly emphasized 
that in an action such as this for injunction and declaratory 
judgment the courts should not pass on a constitutional 
issue or an issue of public law if the case before them can 
possibly be decided on any other ground. Rescue Army v. 
Municipal Court, 331 U.S. 549, 568-85; Alabama State Feder­
ation of Labor v. McAdory, 325 U.S. 450, 461; United Pub­
lic Workers v. Mitchell, 330 U.S. 75, 89-91; Eccles v. Peoples 
Bank, 333 U.S. 426, 431-2; Alma Motor Co. v. Timken Co., 
329 U.S. 129; United States v. Petrillo, 332 U.S. 1, 5; Air­
craft & Diesel Corp. v. Hirsch, 331 U.S. 752, 763, 771-3.

Appellees, having regard to this basic principle of juris­
diction, considered that the constitutional and Civil Rights 
Act issues sought to be injected by appellants were not ripe 
for decision on the motion for summary judgment. Con­
sideration of these issues might involve a question of the 
constitutionality of the Housing Act, since although the 
Act contains no express provision as to racial segregation 
in housing projects, it must be construed in the light of the 
rejection by both houses of Congress of proposed amend­
ments explicitly prohibiting such segregation (95 Cong. 
Rec. 4791-8, 4850-61, 8554-5, 8656-8) (see appellants’ brief, 
pp. 36-40). Accordingly, appellees advanced no argument



7

on the constitutional or Civil Rights Act issues but confined 
themselves to non-constitutional defenses going to the fail­
ure of the complaint to state a claim upon which relief could 
be granted. These defenses were in essence the following:

1. The action is premature in that the project will not be 
ready for occupancy until March 1954, appellants can not 
suffer any injury until that time, and, hence, are not 
threatened with any immediate irreparable injury (J.A. 
15-6).

2. There is no justiciable case or controversy between 
appellants and appellees with respect to the constitutional 
issue sought to be tendered by appellants because appellees 
take no position as to whether appellants do or do not have 
a right to occupy units in this project; appellees do not im­
pose any restrictions upon the occupancy of the project by 
appellants, but, on the contrary, such restrictions are im­
posed solely by the Savannah Authority, so that appellants’ 
complaint is against acts of the Savannah Authority, not 
against any acts performed or threatened by appellees 
(J.A. 15-6).

3. For the same reason, there is a lack of an indispensable 
party, the Savannah Authority, which is the real party 
against which appellants have a complaint, but which is not 
a party to this action and is not subject to suit within the 
jurisdiction of the court below (J.A. 17).

4. Appellants are not and will not be denied any prefer­
ence in occupancy of low-rent housing projects to which 
they, as displaced occupants of the site, may be entitled 
by 42 U.S.C. 1410(g) (J.A. 16).

5. Appellants have no legal interest in the expenditure 
of federal funds for this project and hence no standing to 
sue to enjoin such expenditure (J.A. 17).

E. The Ground of Decision by the Court Below

District Judge Holtzoff, rejecting certain of the grounds 
advanced by appellees in support of their motion for sum­
mary judgment (J. 63), rested his decision on the ground 
that the “ separate but equal”  doctrine is applicable to



8

public bousing and hence that appellants’ constitutional 
contention was not well founded. Judge Holtzoff passed 
on the constitutional issue, notwithstanding that “ The 
Court has grave doubt whether this action lies in the light 
of the doctrine enunciated in the case of Massachusetts v. 
Mellon, 262 U.S. 447 * * * ”  (J.A. 2-3).

We do not in this appeal reach the constitutional ground 
for Judge Holtzoff’s decision. We adhere to our position 
below that the District Court should have granted the mo­
tion for summary judgment on the several non-constitutional 
defenses advanced and should not have reached the consti­
tutional issue.

Accordingly, since in our opinion appellants ’ claim under 
the Constitution and under the Civil Rights Act is not 
properly presented for decision by this Court, this brief does 
not discuss those issues, but confines itself to the non-consti­
tutional contentions which in our view warrant affirmance 
of the judgment below.

STATUTES INVOLVED

Appellants’ brief (pp. 3, 4) sets forth the provisions of 
the Civil Rights Act (8 U.8.C. 42) and the preference in 
occupancy provision of the Housing Act (42 U.S.C. 1410(g)) 
upon which appellants rely.

SUMMARY OF ARGUMENT

The Court is not called upon to reach the issues tendered 
by appellants as to the alleged infringement of their rights 
under the Constitution and the Civil Rights Acts (8 U. S. C. 
42), because there are several reasons why the complaint 
fails in any event to state a claim upon which relief can be 
granted. The order dismissing the complaint should be af­
firmed on one or more of those grounds. Of course this 
Court will not decide a constitutional issue or an issue of 
public law unless the case cannot be disposed of on any 
other ground. 1

1. The action is premature. The housing project involved 
will not be ready for occupancy until at least March, 1954. 
Until then appellants cannot be injured. Injunctive relief



9

should not be granted unless the threatened injury is im­
mediate, particularly where, as here, governmental action 
is involved and constitutional issues are sought to be 
raised.

Since appellants have no case for injunctive relief, they 
equally fail to make out one for a declaratory judgment.

2. There is no justiciable case or controversy between 
appellants and appellees as to appellants’ right to occupy
the project. Appellees have no policy limiting occupancy 3 . £ 
of any housing project to members of any one race. The 
occupancy policy here is solely that of the Housing Author­
ity of Savannah, which owns the project, is building it, and 
will lease out dwelling units in the project upon its comple­
tion. Appellants’ controversy is therefore with the Savan­
nah Authority, not with appellees. If appellants are ag­
grieved by the Savannah Authority’s announced occupanv 
policy for this project, their proper remedy is to proceed 
against that Authority, not against appellees, who are 
not responsible for the policy.

3. There is a lack of an indispensable party—the Housing 
Authority of Savannah. As stated above, it is the Savannah 
Authority, not appellees, which is proposing the occupancy 
policy which appellants challenge.

Furthermore, appellants seek to enjoin the carrying out 
of the contract between appellees and the Savannah Au­
thority under which appellees have agreed to advance 
federal funds to construct the project. The Savannah 
Authority is an indispensable party to this action seeking 
to invalidate its contractual rights. The Savannah Author­
ity is suable in Georgia, not here.

4. Appellants have not been denied the preference in 
occupancy granted by 42 U. S. C. 1410(g ). The provision of 
the Housing Act giving persons displaced from a project 
site preference in occupancy of low rent housing projects 
merely requires appellees to prescribe such preference in 
their contracts with the local authorities. This may be said 
to be merely a Congressional directive to the federal hous­
ing agency, not intended to confer legal rights upon third 
persons such as appellants.



10

In any event appellees have put the statutory preference 
provision in their contract with the Savannah Authority. 
Hence they have discharged any statutory obligation they 
may have.

If the Savannah Authority is not living up to the prefer­
ence provision, appellants may have a complaint against it, 
but not against appellees.

Actually the record shows that the Savannah Authority 
is giving the statutory preference. Of the seven low rent 
projects in Savannah, four (containing 1,120 dwelling units) 
are available to appellants. The statute does not require 
that displaced site occupants be given preference in accom­
modations in any particular project of the Savannah Au­
thority.

5. Appellants have no standing to challenge the expendi­
ture of Federal funds for this project. The mere advance 
of federal funds by appellants to the Savannah Authority 
cannot in itself injure appellants. The doctrine of Massa­
chusetts v. Mellon, 262 U. S. 447, is applicable here and 
establishes appellants’ lack of standing to maintain this 
action.

ARGUMENT

I
The Order Dismissing the Complaint Should Be Affirmed 

Because the Action Is Premature

The gravamen of the complaint is that appellants will 
be denied the right to occupy dwelling units in Fred Wessels 
homes on account of their race and color, in alleged viola­
tion of their constitutional and statutory rights. Obviously 
appellants cannot actually suffer this injury until this 
housing project is completely constructed and ready for 
occupancy. When the case was decided by the Court below, 
however, construction of the project had scarcely begun and 
the earliest probable date on which it can be ready for 
occupancy is March 1954 (J.A. 22-3). It may be that be­
fore this project is ready for occupancy the Savannah 
Authority may revise its present program and make this 
particular project available for occupancy by appellants.



11

Under such circumstances the complaint is premature and 
should have been dismissed on that ground.

It is elementary that an action for an injunction can be 
maintained only where the irreparable injury complained 
of is imminent and certain. Under the circumstances pres­
ent here the injury of which appellants complain is not 
sufficiently immediate to justify equitable relief. Greeson 
v. Imperial Irrigation Dist.,-55 F. 2d 321, 323 (S.D. Cal.), 
affirmed 59 F. 2d 529; Red Star Yeast & Products Co. v. 
LaBudde, 83 F. 2d 394, 396 (C.A., 7) ; Beranek v. Wallace, 
25 F. Supp. 841 (N.D. Ind.). See also Kansas v. Colorado, 
206 U. S. 46, 117-8.

“ Especially where governmental action is involved, 
courts should not intervene unless the need for equitable 
relief is clear, not remote or speculative * * * Courts 
should avoid passing on questions of public law even short 
of constitutionality that are not immediately pressing. 
Many of the same reasons are present which impel them 
to abstain from adjudicating constitutional claims against 
a statute before it effectively and presently impinges on 
such claims.”  Eccles v. Peoples Bank, 333 U. S. 426, 431, 
432.2 Where, as here, there is no “ actual or presently 
threatened interference with the rights of another”  a suit 
for injunction will not lie. New York, v. Illinois, 274 U. S. 
488, 489-90.

See also Johnsonv. Mayor and City Council of Baltimore, 
158 Md. 93, 148 Atl. 209, holding that a contention that it 
was illegal for the city to turn over to a private corpora­
tion a library which it was building could not be raised in 
an action to condemn land for the project but could only 
be asserted in a later action if the city should actually so 
turn over the library after it was built.

Since no case for equitable relief exists because of pre-

2 The difficulties which would be involved if the Court had to pass 
on appellants’ claim under the Civil Rights Act (8 U.S.C. 42) are 
illustrated by the decisions under other sections of the Civil Rights 
Acts. Tenney v. Brandhove, 341 U.S. 367; Collins v. Handyman, 341 
U.S. 651; Oyama v. California, 332 U.S. 633; Screws v. United States, 
325 U.S. 91; United States v. Classic, 313 U.S. 299.

t



12

maturity, appellants equally fail to make out a case for 
declaratory judgment. “ The requirements for a justiciable 
case or controversy are no less strict in a declaratory 
judgment proceeding than in any other type of suit.” 
Alabama State Federation of Labor v. McAdory, 325 U. S. 
450, 461; Doehler Metal Furniture Co. v. Warren, 76 App. 
D. C. 60, 62, 129 F. 2d 43, 45. See also Rescue Army v. 
Municipal Court, 331 U. S. 549, 572-3; United Public 
Workers v. Mitchell, 330 U. S. 75, 89; Eccles v. Peoples 
Bank, 333 U. S. 426, 431-2; Coffman v. Breeze Corporations, 
323 U. S. 316, 324; Great Lakes Dredge (& Dock Co. v. Huff­
man, 319 U. S. 293, 299-302. The jurisdiction of the federal 
courts “ was not altered by the Declaratory Judgment Act.” 
Skelly Oil Co. v. Phillips Petroleum Co., 339 U. S. 667, 671.

The requirement that the injury complained of must be 
immediate in order to justify equitable intervention should 
be applied with particular strictness in a case such as this 
seeking to raise constitutional issues, since the courts will 
not consider a constitutional issue unless there is a strict 
necessity for doing so. See the authorities cited at page 
6, above.

Significantly appellants’ brief presents no argument 
whatever in opposition to our contention that the action is 
premature. The order of the court below dismissing the 
complaint should be affirmed upon the ground that the 
action is premature.

II

The Order Dismissing the Complaint Should Be Affirmed 
Because There Is No Justiciable Case Or Controversy Between 
Appellants and Appellees as to Appellants’ Right to Occupy 
Fred Wessels Homes

As we have stated, the gravamen of the complaint is 
that appellants are being deprived of their constitutional 
and statutory rights in not being permitted to occupy this 
project (upon its completion) because of their race and 
color. However, any such deprivation will not be by appel­
lees but will be by the Savannah Authority. It is the local 
housing authority 'which owns and which will lease this



13

project to low-income families. It is the local authority 
alone which has determined that this project will be occupied 
by white families. Appellees did not make that determina­
tion and would have no objection if the local authority were 
to decide to admit Negro occupants (J.A. 20, 24). Indeed 
under the contracts in effect between the Public Housing 
Administration and the Savannah Authority appellees have 
no right to dictate to the local authority that Negroes shall 
be permitted to occupy this project.

The complaint itself shows that the exclusion of Negroes 
from this project is the “ policy, program, and plan of the 
Housing Authority of Savannah, Georgia”  (J.A. 7, 11). 
As to appellees the complaint alleges merely that they 
have “ approved”  this policy of the local authority and have 
agreed to finance the construction and operation of the 
project (J.A. 7, 9-11). In truth appellees have taken no 
position on this local policy (J.A. 20, 24).

Since it is apparent that the policy of excluding Negroes 
from this project has been established not by appellees but 
by the local authority, appellants’ real controversy is with 
the Savannah Authority, not with appellees (J.A. 24). 
Hence, appellants have no case or controversy with appel­
lees. Employers Group of Motor Freight Carriers v. Na­
tional War Labor Board, 79 App. D.C. 105, 143 F. 2d 145; 
National War Labor Board v. Montgomery Ward & Co., 79 
App. D.C. 200, 144 F. 2d 528.

An analogous situation was presented in Dorsey v. Stuy- 
vesant Town Corporation, 299 N.Y. 512, 87 N.E. 2d 541, 
cert. den. 339 IJ.S. 981. In that case Negroes whose appli­
cations for apartments in a housing project were refused 
sought to enjoin the corporation which operated the project, 
and the Metropolitan Life Insurance Company, which 
financed its construction, from denying accommodations to 
any person on account of race or color. The project was 
developed under a New York housing statute with assist­
ance given by the State in the form of tax exemptions, use 
of the power of eminent domain, and the closing of public 
streets. The plaintiffs contended, like appellants here, that



this governmental assistance in development of a project 
leased on a segregated basis constituted governmental 
action prohibited by the Fourteenth Amendment. The 
New York Court of Appeals held, however, that notwith­
standing the governmental assistance in development of 
the project and the deliberate refraining by the State from 
imposing any requirement of non-discrimination as a con­
dition to granting such governmental assistance, the racial 
discrimination was exercised not by the State but by the 
private corporation operating the project (299 N.Y. at 533, 
535; 87 N.E. 2d at 550-1).

Here the role of the appellees in assisting in the develop­
ment of Fred Wessels Homes is less pervasive than was 
that of the State in the Dorsey1 case. Although appellants 
catalogue the various aspects of the project which require 
appellees’ approval (appellants’ brief, pp. 8-18), the fact is 
that such approval is merely reasonably appropriate to 
protect the Government’s financial investment in the project 
and to assure compliance with statutory requirements. The 
control exercised by appellees is no more than that which 
a bank or insurance company financing a comparable project 
might be expected to exercise.

Accordingly, the policy of racial segregation adopted by 
the Savannah Housing Authority is not attributable to 
appellees and no justiciable controversy exists between 
them and appellants as to the legality of that policy.

The type of cooperation between Federal and State agen­
cies shown here cannot form the basis of a justiciable con­
troversy between appellants and appellees. Tennessee 
Electric Power Co. v. T.V.A., 306 U.S. 118, 146-7.

The cases cited in appellants’ brief (pp. 44-5) miss the 
point of our contention. In all those cases the injury com­
plained of was inflicted by the defendants before the court. 
Thus in Joint Anti-Fascist Committee v. McGrath, 341 U.S. 
123, 141, the plaintiffs were seeking relief “ against what 
the respondents actually did.”  Furthermore Crompton v. 
Zabriskie, 101 U.S. 601, was a municipal taxpayer’s action, 
whereas here appellants’ brief (p 41) asserts that “ This



15

Is Not A Taxpayer’s Action.”  In Shelley v. Kramer, 334 
U.S. 1, no case or controversy issue was involved at all. 
In Barrows v. Jackson, 346 U.S. 249, a justiciable contro­
versy was found in the light of the “ unique situation”  that 
unless that action was maintainable “ it would be difficult 
if not impossible for the persons whose rights are asserted 
to present their grievance before any court”  (p. 257). 
Here, on the contrary, appellants can assert their claim in 
the courts in Georgia against the Savannah Authority, the 
party really responsible for their grievance.

Significantly, in the only cases cited by appellants which 
specifically involved low-rent public housing limited in 
occupancy to one race,3 (appellants’ brief, pp. 19-21, 25-6, 
29-30) the defendants were the local housing authorities, 
not the federal housing agency.

In contrast to the cases relied on by appellants, here the 
Savannah Authority, the only party which can inflict upon 
appellants the injury they seek to avert—denial of occu­
pancy of Fred Wessels Homes—is not before the Court and 
is not subject to suit in this jurisdiction. In short, appel­
lants’ controversy is with the Savannah Authority, not with 
appellees, and the judgment below should be affirmed on the 
ground of a lack of a justiciable controversy between the 
parties to the action.

I ll

fti!, Ca t -® -  /za *-

> r  ^
r± -tr*/wwM

The Order Dismissing the Complaint Should Be Affirmed On 
the Ground of Lack of an Indispensable Party— the Housing 
Authority of Savannah

As we have shown above, it is the Housing Authority of 
Savannah, not appellees which will lease Project GA-2-4 
and which has decided that it will be occupied by white 
families only. Hence, appellants’ real complaint is against

3 Woodbridge v. Housing Authority of Evansville (S.D. Ind., Civil 
No. 619); Vann v. Toledo Metropolitan Housing Authority (N.D. 
Ohio, Civil No. 6989); Banks v. San Francisco Housing Authority 
(Superior Court, San Francisco County, No. 420534); Seawell v. 
MacWithey, 2 N.J. Super. 255, 63 A. 2d 542, reversed, 2 N.J. 563, 
67 A. 2d 309.



16

the Savannah Authority and effective relief can be granted 
only against it.

Furthermore, appellants are in effect seeking a declara­
tory judgment that the contract between appellants and the 
Savannah Authority is illegal and an injunction prohibiting 
its being carried out. Certainly the Savannah Authority 
is an indispensable party to this action directly attacking 
its contractual rights. Balter v. Ickes, 67 App. D.C. 112, 
114-5, 89 F. 2d 856, 858-9 is precisely in point. In that case 
residents of St. Louis brought suit here against federal 
officials for a declaratory judgment and an injunction to 
restrain the defendants from expending federal funds in 
the development of a park project in St. Louis under a con­
tract between the Government and the city of St. Louis. 
The plaintiffs challenged the constitutionality of the Act 
under which the federal funds were being spent as well as 
the statutory authority for the contract. This Court held 
that the city of St. Louis was an indispensable party and 
that the suit could not be maintained, stating:

W  J r

0 ^  A 
V- fr

‘ ‘ The test in the instant case is whether a final decree 
can be entered without affecting the interest of the city 
of St. Louis. The interest of the city here unquestion­
ably is to have the United States carry out its part of 
the agreement, and while the city could not obtain spe­
cific performance against the United States, as it might 
against a private individual, its interest remains and 

i ,  might be vitally affected by any decree which might be 
entered in this case.

* # # # # # #
'G /  “ This is not a suit by one of the parties to the con- 

/  tract, seeking to annul it, but by third parties, asserting 
v /  a somewhat questionable interest, who attempFtb^He- 

feat the carrying duUdf the agreement. It follows, we 
think, that before any final decree adjudicating the 
issues can be entered, all the parties to the contract 
must be before the court and be given an opportunity 
to be heard.”

See also Fulton Iron Co. v. Larson, 84 App. D.C. 39,43,171 
F. 2d 994, 998, and State of Washington v. United States, 
87 F. 2d 421 (C.A. 9), both of which hold that in a suit



1 7

attacking the legality of a contract, the parties to the con­
tract are indispensable parties and in their absence the suit 
must be dismissed.4

The Housing Authority of Savannah, a municipal corpo­
ration organized under the laws of Georgia is, of course, not 
subject to suit in this district. Rule 4(f), F.R.C.P.; Howard 
v. United States ex rel. Alexander, 126 F. 2d 667 (C.A. 10); 
Blank v. Bitker, 135 F. 2d 962 (C.A. 7); and the authorities 
cited in footnote 4, below.

As noted above (p ./6 " ), all of the cases cited by appel­
lants specifically involving public housing limited in occu­
pancy to one race named as defendants the local housing 
authorities, not the federal housing agency. These decisions 
impliedly recognize that the local housing authority is the 
indispensable party in actions of this type.

Appellants’ brief offers no argument on this point. The 
order dismissing* the complaint should be affirmed on the 
ground of lack of an indispensable party.

IV
Appellees Have Not Denied Appellants the Preference in Oc­

cupancy Granted by 42 U.S.C. 1410(g)

The provision of the Housing Act (42 U.S.C. 1410(g)) 
giving low income families displaced from a housing project 
site preference in occupancy in low rent housing projects is 
quoted in appellants’ brief (pp. 3-4). The complaint alleges 
that appellants have the qualifications prescribed and are 
entitled to the preference (J.A. 7, 8).

It will be observed that the only requirement imposed by 
the statute is that “ Every contract * * * for annual
contributions”  made between the Public Housing Admin­
istration and the local authority “ shall require”  that the

4 Other cases applying the indispensable party doctrine are Money 
v. Wallin, 186 F. 2d 411 (C.A. 3 ); Angilly v. United States, 199 F. 
2d 642, 644 (C.A. 2) ; Payne v. Fite, 184 F. 2d 977, 980 (C.A. 5 ); 
Daggs v. Klein, 169 F. 2d 174 (C.A. 9 ); Smart v. Woods, 184 F. 2d 
714 (C.A. 6 ); Berlinsky v. Woods, 178 F. 2d 265 (C.A. 4 ); Jacobs 
v. Office oj Housing Expediter, 176 F. 2d 338 (C.A. 7 ); Ainsworth 
v. Bam Ballroom Co., 157 F. 2d 97, 101 (C.A. 4).



18

latter “ shall extend”  the prescribed preference. The stat­
ute imposes no obligation upon appellees except to see to it 
that the annual contributions contract does contain such a 
provision. It might be argued that this is merely a directive 
to the Federal housing agency as to the expenditure of Fed­
eral funds and was not intended by Congress to create any 
legal rights in third persons such as appellants. Perkins v. ^  
Lukens Steel Co., 310 U.8. 113; Fulton Iron Co. v. Larson,
84 App. D.C. 39, 42-3, 171 F. 2d 994, 997-8.

But, in any event, the annual contributions contract cov­
ering Fred Wessel Homes does contain such requirement ! 
for tenant preference in the language of the statute (J.A.
60, Ex. 6, Sec. 209, p. 15). Since the inclusion of that pro­
vision in the annual contributions contract satisfies the obli­
gation imposed upon the Federal housing agency by the 
statute, appellants plainly fail to make out any case against 
appellees of non-compliance with the statute.

If appellants could show that the Savannah Authority is 
(notwithstanding its obligation in the annual contributions 
contract) failing to grant the statutory preference, appel­
lants might then have a case for relief against the Savannah 
Authority. They would not, however, even in that situation, 
have any case against appellees, since they have carried out 
their obligation under the statute. Thus, in Woodbridge v. 
Housing Authority of Evansville, (S. D. Ind., Civil No. 
619), relied upon by appellants, it was the local housing 
authority, not the Federal housing agency, which was found 
to have denied the plaintiffs in that case the preference 
provided by the Housing Act.

Even if 42 U.S.C. 1410(a) were construed as imposing 
upon the federal housing agency an obligation to see to it 
that the local authority grants the prescribed preference, 
it clearly appears that appellants are being given by the 
Savannah Authority whatever statutory preference to 
which they may be entitled with respect to the projects 
in Savannah operated by that Authority (J.A. 10). Of 
the five such projects already completed, three are avail­
able for occupancy by appellants. Of the two uncompleted



19

projects (G-A-2-4 and GA-2-7), GA-2-7 will be available for 
occupancy by appellants (J.A. 21).

Thus, of the seven projects constituting the present pro­
gram of the Savannah Authority, four are (or will upon 
completion be) available for occupancy by appellants with 
a total of 1,120 dwelling units. The additional project of 
800 dwelling- units contemplated by the Savannah Author­
ity will, if it is completed, be available for appellants (J.A. 
23-4).

The statutory preference merely requires the local hous­
ing authority to extend to persons displaced from a proj­
ect site a preference in occupancy of housing projects. It 
does not require that site occupants be given preference in 
occupancy of the particular project from the site of which 
they are displaced, since it refers to those displaced persons 
who make application for admission to “ any low-rent 
housing. ’ ’

Since appellants are therefore being given the statutory 
preference by the Savannah Authority, they obviously make 
out no case of any violation of their claimed statutory right 
to preferential treatment by the local Authority, much less 
by appellees.

V
Appellants Have No Standing To Challenge the Expenditure of 

Federal Funds for This Project
Appellants are challenging the legality of the use of Fed­

eral appropriated funds to finance the construction of this 
project, provided for by the contracts between appellees and 
the Savannah Authority. We submit that appellants lack 
sufficient legal interest in such expenditure to give them 
standing to sue.

The court below recognized that there is “ grave doubt 
whether this action lies in the light of the doctrine enunci­
ated in the case of Massachusetts v. Mellon, 262 U.S. 447, but 
assuming, arguendo, that the action may be maintained,’ ’ 
went on to rule on the constitutional issue (J.A. 2). In any 
case an assumption arguendo is scarcely an adequate predi­
cate for a judicial decision on a constitutional question. In 
this case appellants’ lack of standing to sue is apparent, and



20

the court below should have granted our motion for sum­
mary judgment on that ground.

Appellants attempt to distinguish Massachusetts v. Mel­
lon, on the ground that they are not suing as taxpayers (al­
though they inconsistently rely upon Crumpton v. Zabriskie, 
101 U.8. 601, a taxpayer’s action). But a basic ground of 
Massachusetts v. Mellon was that the plaintiff failed to show 
that “ he has sustained or is immediately in danger of sus­
taining some direct injury as a result of its [the statute’s] 
enforcement”  (p. 488) . Likewise here appellants cannot 
suffer any immediate injury merely from appellees ’ advanc­
ing Federal funds to the Savannah Authority. It is only a L 
denial of occupancy by the Savannah Authority after the f  
project is completed that can conceivably injure appellants. ! 
In all the other cases cited in appellants’ brief (pp. 44-5) the 
plaintiffs were suffering immediate injury at the hands of 
parties before the court.

Since appellants cannot demonstrate “ a direct dollars- 
and-cents injury”  from the mere advance of Federal funds 
by appellees, they have no standing to challenge it here. 
Doremus v. Board of Education, 342 U.S. 429-434.

Accordingly, the order dismissing the complaint should 
be affirmed on the ground that appellants lack standing 
to sue.

CONCLUSION

For the reasons stated above, the order dismissing the 
complaint should be affirmed, without reaching the consti­
tutional and Civil Rights issues sought to be raised by 
appellants.

Respectfully submitted,
W arren E. B urger,
Assistant Attorney General,
L eo A. R over,

United States Attorney,
E dward H. H ickey ,
D onald B. M acG-uineas,

Attorneys, Department of Justice,
Attorneys for Appellees.

■fc U. S. GOVERNMENT PRINTING OFFICE: 1953 272510 315











JOINT APPENDIX

Ittttpfr Gkwrt at Appeals
For the District of Columbia Circuit

No. 11,865

PRINCE F. HEYWARD, et al .,

Appellants,

v.

PUBLIC HOUSING ADMINISTRATION, et al .,

Appellees.

A ppeal from the  U nited S tates D istbict Coubt fob the 
D isteict of Columbia

HON. HOLMES BALDRIDGE, 
A ss ’ t A lt .  G en era l;

CHARLES M. IRELAN,
U. S . A t to r n e y ;

ROSS O’DONOGHUE,
A ss ’ t U . S . A t to r n e y ;

EDWARD H. HICKEY,
A tt. D ep t, o f  J u stice ;

DONALD B. MacGUINEAS,
A tt. D ep t, o f  J u stice ;

Washington 25, D. C.,
A tto r n e y s  f o r  A p p ellees.

FRANK A. DILWORTH, III,
45 8%  West Broad Street, 

Savannnah, Georgia;

THURGOOD MARSHALL, 
CONSTANCE BAKER MOTLEY, 

107 West 43rd Street,
New York 36, N. Y.;

FRANK D. REEVES,
2000 Ninth Street, N. W., 

Washington 1, D. C.,
A tto rn ey s  f o r  A ppellants.

Supreme Printing Co., Inc., 41 M urray Street, N. Y„ BA rclay 7-0349 
<^>49





APPENDIX

PAGE

Order...................................................................................................  1

Opinion............................................................................................... 2

Complaint........................................................................................... 4

Defendants’ Motion For Summary Judgment ............................  15

Affidavit of John T. E gan ................................................................  18

Exhibit 1 ................................................................................... 26

Exhibit 2 ................................................................................... 33

Exhibit 3 ................................................................................... 34

Exhibit 4 ..................................................................................  35

Exhibit 5 ..............   50

Exhibit 6 ..................................................................................  60

Exhibit 7 ..................................................................................  62

Excerpt From Transcript of Hearing on Motion For Summary 
Judgment .......................................................................................  63





1

JOINT APPENDIX

Order

IN THE UNITED STATES DISTRICT COURT 

F ob the D istrict of Columbia

Civil Action No. 3991—52

(Filed April 28, 1953)

----------------o----------------

H eyward, et al.,

v.
Plaintiffs,

H ousing an d  H ome F inance A gency, et al.,
Defendants.

o-

This cause having come on to be heard on defendants’ 
motion for summary judgment, and it appearing that there 
is no genuine issue as to any material fact and that the 
defendants are entitled to a judgment as a matter of law 
in that the complaint fails to state a claim upon which 
relief can be granted, it is this 28th day of April, 1953

Ordebed, that defendants ’ m otion fo r  summary ju d g­
ment is hereby granted and the com plaint is hereby dis­
missed.

A lexander H oltzoff,
District Judge.



2

Opinion

IN THE UNITED STATES DISTRICT COURT

F or the  D istrict of Columbia 

Civil Action No. 3991—52 

(Filed May 8, 1953)

----------- o-----------
H eyward, et al.,

v.
Plaintiffs,

H ousing and H ome F inance A gency, et al.,
Defendants.

-o

The Court: This is an action to restrain the Commis­
sioner of the Public Housing Administration from advanc­
ing any funds under the United States Housing Act of 1937, 
as amended, and otherwise participating, in the construc­
tion and operation of certain housing projects in the City 
of Savannah, Georgia.

These projects are being constructed and will be 
operated by local authorities with the aid of Federal Funds.

The basis of the action is that it has been officially 
announced that the project referred to in the complaint 
will be open only to white residents. The plaintiffs are 
people of the colored race who contend that such a limita­
tion is a violation of their Constitutional rights.

The Court has grave doubt whether this action lies in 
the light of the doctrine enunciated in the case of Massa­
chusetts v. Mellon, 262 U. S. 447, but assuming, arguendo, 
that the action may be maintained, the Court is of the 
opinion that no violation of law or Constitutional rights 
on the part of the defendants has been shown.



3

Opinion

It appears from the affidavit submitted in support of the 
defendants’ motion for a summary judgment that there 
are several projects that have been or are being con­
structed in the City of Savannah under the Housing Act, 
some of which are limited to white residents and others to 
colored residents, and that a greater number of accom­
modations has been set aside for colored residents. In 
other words, we have no situation here where colored people 
are being deprived of opportunities or accommodations 
furnished by the Federal Government that are accorded to 
people of the white race. Accommodations are being ac­
corded to people of both races.

Under the so-called “ separate but equal”  doctrine, 
which is still the law under the Supreme Court decisions, 
it is entirely proper and does not constitute a violation 
of Constitutional rights for the Federal Government to 
require people of the white and colored races to use separate 
facilities, provided equal facilities are furnished to each.

There is another aspect of this matter which the Court 
considers of importance. The Congress has conferred 
discretionary authority on the administrative agency to 
determine for what projects Federal funds shall be used. 
There are very few limitations in the statute on the power 
of the administrator, and there is no limitation as to racial 
segregation.

The Congress has a right to appropriate money for such 
purposes as it chooses under the General Welfare clause 
of Article I, Section 8, of the Constitution. It has a right 
to appropriate money for purpose “ A ”  but not for pur­
pose “ B ” , so long as purpose “ A ”  is a public purpose.

Under the circumstances, the Court is of the opinion 
that the plaintiffs have no cause of action and the defend­
ants’ motion for summary judgment is granted.

(Thereupon, the above entitled matter was concluded.)

A lexander. H oltzoff,
District Judge.



4

UNITED STATES DISTRICT COURT 

F oe the  D istrict op Columbia 

Civil Action No.............

---------------------------o---------------------------

1. P rince F. H eyward 
230 Reynolds Street 
Savannah, Georgia

2. E rsaline S mall
650 E. Oglethorpe Avenue 
Savannah, Georgia

3. W illiam  M itchell  
226 Arnold Street 
Savannah, Georgia

4. W illiam  Golden 
230 Arnold Street 
Savannah, Georgia

5. M ike  M austipher
656 E. Oglethorpe Avenue 
Savannah, Georgia

6. W illis H olmes
321 E. Boundary Street 
Savannah, Georgia

7. A lonzo S terling
158 E. Boundary Street 
Savannah, Georgia

8. M artha S ingleton 
156 E. Boundary Street 
Savannah, Georgia

9. I rene C hisholm
623 E. Oglethorpe Avenue 
Savannah, Georgia

Complaint



5

Complaint

10. J ohn  F uller
170 E. Boundary Street 
Savannah, Georgia

11. B en jam in  E. S immons 
647 E. Jackson Street 
Savannah, Georgia

12. J ames Y oung
636 Wheaton Street 
Savannah, Georgia

13. Ola B lake
214 Eeynolds Street 
Savannah, Georgia

Plaintiffs,
v.

1. H ousing and H ome F inance A gency

Serve:
R aymond M. F oley, Administrator 
Normandy Building 
1626 K  Street, N. W.
Washington 25, D. C.

2. R aymond M. F oley, Administrator 
H ousing and H ome F inance A gency 
Normandy Building
1626 K Street, N. W.
Washington 25, D. C.

3. P ublic H ousing A dministration,
body corporate,

Serve:
J ohn  T . E gan, Commissioner 
Longfellow Building 
1201 Connecticut Avenue, N. W. 
Washington 25, D. C.

4. J ohn  T. E gan, Commissioner 
P ublic H ousing A dministration 
Longfellow Building
1201 Connecticut Avenue, N. W. 
Washington 25, D. C.

Defendants



6

1. The jurisdiction of this court is involved pursuant 
to Title 28, United States Code, Section 1331, this being a 
suit which arises under the Constitution and laws of the 
United States, that is, the Fifth Amendment to the Con­
stitution of the United States and Title 42, United States 
Code, Sections 1401-1433, as amended (Housing Act of 
1937 as amended by the Housing Act of 1949), and Title 8, 
United States Code, Sections 41 and 42, wherein the mat­
ter in controversy as to each of the plaintiffs exceeds Three 
Thousand Dollars ($3,000) exclusive of interests and costs.

2. This is a proceeding for a temporary and permanent 
injunction enjoining the Housing and Home Finance 
Agency, the Administrator of the Housing and Home 
Finance Agency, the Public Housing Administration and 
the Commissioner of the Public Housing Administration 
from giving federal financial assistance and/or other federal 
assistance to the Housing Authority of Savannah, Georgia, 
for the construction and/or operation of a public low-rent 
housing project, pursuant to the provisions of the Housing- 
Act of 1937 as amended by the Housing Act of 1949, from 
which the plaintiffs, although otherwise qualified for admis­
sion, will be excluded and denied consideration for admis­
sion and/or admission solely because of their race and color, 
in violation of the Constitution and laws of the United 
States.

3. This is a proceeding for a declaratory judgment 
pursuant to Title 28, United States Code, Section 2201, for 
the purpose of determining a question in actual controversy1 
between the parties, i.e., whether the defendants and each 
of them can give federal financial assistance and/or other 
federal assistance to the Housing Authority of Savannah, 
Georgia, for the construction and/or operation of a public 
low-rent housing project pursuant to the provisions of the 
Housing Act of 1937, as amended by the Housing Act of

Complaint



7

1949, from which the plaintiffs will he excluded from con­
sideration for admission and/or denied admission, although 
otherwise meeting the qualifications for such consideration 
and admission established by law, solely because of their 
race and color, without violating any rights secured to 
the plaintiffs and each of them individually by the Consti­
tution and laws of the United States, particuarly the Fifth 
Amendment to the Constitution of the United States, and 
Title 42, United States Code, Sections 1401-1431, and Title 
8, United States Code, Sections 41 and 42, and without 
violating the public policy of the United States.

4. This is a class action pursuant to Eule 23(a) of the 
Federal Rules of Civil Procedure brought by the plaintiffs 
on behalf of themselves and on behalf of other persons 
similarly situated, that is, Negro citizens of the United 
States and of the State of Georgia who are residents of 
the City of Savannah, Georgia, and who reside on a site 
in the City of Savannah, Georgia, commonly known as the 
“ Old Fort Area” , which has been condemned by or on 
behalf of the Housing Authority of Savannah, Georgia, a 
public agency, for the purpose of constructing thereon a 
low-rent public housing project to be known as the Fred 
Wessels Homes (designated by defendants as GA-2-4) pur­
suant to the provisions of the Housing- Act of 1937, as 
amended by the Housing Act of 1949, and who will be dis­
placed from said site by reason of the construction of said 
project and who will, in accordance with the announced 
policy, program, and plan of the Housing Authority of 
Savannah, Georgia, which has been approved by these 
defendants consistent with their policy and practice of 
furnishing financial assistance to local public agencies for 
the provision of racially segregated low-rent housing 
projects, be denied consideration for admission and/or 
admission to said project, although they meet all of the

Complaint



8

requirements established by law for such consideration 
and admission to said housing project solely because of 
their race and color. Said persons constitute a class too 
numerous to be broug'ht individually before the court but 
there are common questions of law and fact involved herein, 
common grievances arising out of common wrongs, and 
common relief sought for the entire class as well as special 
relief for the plaintiffs. The interests of said class are 
fairly and adequately represented by the plaintiffs herein.

5. Each of the plaintiffs is an adult Negro citizen in the 
United States and of the State of Georgia. Each of the 
plaintiffs resides in the City of Savannah, Georgia, on a site 
commonly known as the “ Old Fort Area” . Each of the 
plaintiffs will be displaced from such site by reason of the 
fact that the said site has been condemned by or on behalf 
of the Housing Authority of Savannah, Georgia, a public 
agency, for the purpose of constructing thereon a low-rent 
housing project pursuant to the provisions of the Housing 
Act of 1937, as amended by the Housing Act of 1949. Each 
of the plaintiffs meets the requirements established by law 
for consideration and admission to the said low-rent public 
housing project. Each of the plaintiffs is entitled by Title 
42, United States Code, Section 1410(g) to a preference for 
consideration and admission to any public low-rent housing 
project built in the City of Savannah, Georgia, pursuant to 
the provisions of the Housing Act of 1937 as amended by 
the blousing Act of 1949, by reason of the fact that his or 
her family will be displaced from a site on which a low- 
rent public housing project will be built.

6. The defendant, Housing and Home Finance Agency 
is an agency of the United States Government established 
pursuant to Reorganization Plan No. 3, effective July 27, 
1947 (Title 5, United States Code, Section 133 (y-16), 
which consists of three constituent agencies, one of which

Complaint



9

is the defendant Public Housing Administration. The 
Housing and Home Finance Agency is headed by an Admin­
istrator, defendant Raymond M. Foley, who is responsible 
for the ‘ ‘ general supervision and coordination of the func­
tions of the constituent agencies of the Housing and Home 
Finance Agency”  (Reorganization Plan No. 3, 1947, Sec­
tion 5(b)).

7. Defendant Public Housing Administration, a con- 
stitutent agency of the Housing and Home Finance Agency, 
under the supervision of defendant Administrator Ray­
mond M. Foley, pursuant to Reorganization Plan No. 3, 
effective July 27, 1947 (Title 5, Section 133 (y-16), is a 
corporate agency and instrumentality of the United States 
Government. The Public Housing Administration is headed 
by a Commissioner, defendant John T. Egan. The de­
fendant Public Housing Administration administers the 
Housing Act of 1937, as amended by the Housing Act of 
1949 (Title 42, United States Code, Section 1401-1433).

8. The Housing Act of 1937, as amended by the Housing 
Act of 1949, provides for federal financial assistance in the 
form of grants, loans, and annual contributions to local 
public housing agencies for the construction and/or opera­
tion of public low-rent housing projects built pursuant to 
the provisions and in accordance with the purposes of the 
Housing Act of 1937, as amended by the Housing Act of 
1949.

9. Pursuant to the provisions of the Housing Act of 
1937, as amended by the Housing Act of 1949, the defendant 
Public Housing Administration has entered into a con­
tract with the Housing Authority of Savannah, Georgia, 
pursuant to the provisions of which the Public Housing 
Administration and the Commissioner of the Public Hous­
ing Administration, with the approval of the other de-

Complaint



10

fendants, have agreed to give federal financial assistance 
to the Housing Authority of Savannah, Georgia, for the 
construction and/or operation of a public low-rent housing 
project to be constructed and maintained by the Housing- 
Authority of Savannah, Georgia, pursuant to the provisions 
of the Housing Act of 1937, as amended by the Housing Act 
of 1949. Said public low-rent housing project will be known 
as the Fred Wessels Homes and has been designated by 
defendant Public Housing Administration and the de­
fendant Commissioner of the Public Housing Adminis­
tration as GA—2-4. Said project will be constructed on a 
site in the City of Savannah, Georgia, commonly known as 
the “ Old Fort Area” , on which the plaintiffs reside and 
from which they will be displaced by reason of such con­
struction. The Housing Authority of Savannah, Georgia, 
has condemned the site and has acquired title thereto and 
has proceeded to demolish the buildings thereon for the 
purpose of constructing thereon said public low-cost hous­
ing project.

10. The Housing Authority of Savannah, Georgia, has, 
as a prerequisite to the securing of the agreement for fed­
eral financial assistance from the defendant Public Housing 
Administration and the defendant Commissioner of the 
Public Housing Administration, submitted to said de­
fendants a plan and program for the approval of said 
defendants. Said plan and program describes the site 
on which the project would be built in terms of its present 
racial characteristics and specifies that occupancy of the 
said project to be built thereon would be limited to white 
families. 11

11. Said plan and program, specifying that the occu­
pancy of the said project would be limited to white families, 
has been approved by the defendant Public Housing Ad-

Complaint



11

ministration and tlie defendant Commissioner of the Public 
Housing Administration. Said plan and program was ap­
proved by the defendant Public Housing Administration 
and the defendant John T. Egan with the knowledge, con­
sent, and approval of the other defendants. Pursuant to 
said approval, the defendant Public Housing Administra­
tion and the defendant Commissioner of the Public Housing 
Administration entered into said contract for the provision 
of federal financial assistance to the Housing Authority of 
the City of Savannah, Georgia, for the construction and/or 
operation of the said project.

12. The Housing Authority of the City of Savannah, 
Georgia, has specifically announced that, in accordance with 
its policy, occupancy of said low-rent public housing proj­
ect will be limited to white occupancy. Thus, the plaintiffs, 
who are Negroes, will not be considered for admission 
and/or admitted thereto solely because of their race or 
color. The defendant Public Housing Administration, and 
the other defendants have specific knowledge of this an­
nounced policy and have approved said policy and have 
approved the plan and program specifically indicating 
this policy and have agreed to give federal financial assis­
tance to construct and/or operate the project -where said 
policy, plan, and program will be put into effect in violation 
of the right conferred upon the plaintiffs and each of them 
to a preference for consideration and admission to any 
public low-rent housing project in the City of Savannah, 
Georgia, built pursuant to the Housing Act of 1937 as 
amended by the Housing Act of 1949, as persons displaced 
from the site, and in violation of the rights secured to the 
plaintiffs and each of them individually by the Fifth Amend­
ment to the Constitution of the United States and in viola­
tion of the duty imposed upon the defendants by the 
Housing Act of 1937, as amended by the Housing Act of

Complaint



12

1949, and in violation of rights secured to the plaintiffs 
and each of them individually by Title 8, United States 
Code, Sections 41 and 42, and in violation of the public 
policy of the United States.

13. The plaintiffs herein will he denied consideration 
for and/or housing*, for which they are otherwise qualified, 
by the Housing Authority of Savannah, Georgia, with the 
aid, support, and financial assistance of the defendants 
herein solely because of their race and color, unless such 
injury and violation of rights is enjoined by this court.

14. The plaintiffs, and each of them, will suffer irrepar­
able injury, for which there is no adequate remedy at law, 
by the violation of these rights by the defendants herein 
unless injunctive relief is granted by this court.

15. Each of the defendants is under a duty to discharge 
his or its duties in conformity with the laws, Constitution, 
and public policy of the United States.

W hebefobe, plaintiffs respectfully pray this court that 
upon the filing of this complaint, as may appear proper 
and convenient to the court, the court advance this cause 
on the docket and order a speedy hearing of this action 
according to the law and that this court, upon said hearing,

1. Adjudge, decree and declare the rights and other 
legal relations of the parties to the subject matter here in 
controversy in order that said declaration shall have the 
force and effect of a final judgment ;

2. Enter a final judgment or decree declaring (a) that 
the defendants and each of them cannot give federal finan­
cial assistance or other federal assistance to the Housing 
Authority of Savannah, Georgia, for the construction

Complaint



13

and/or operation of a public low-rent housing project pur­
suant to the provisions of the Housing Act of 1937, as 
amended by the Housing Act of 1949, from which the plain­
tiffs and other qualified Negroes similarly situated will be 
excluded and denied consideration for admission and/or 
admission solely because of their race and color in violation 
of the Constitution, laws, and public policy of the United 
States; (b) that the plaintiffs and all other Negroes simi­
larly situated cannot be denied consideration for admission 
and/or admission to the Fred Wessels Homes or any other 
federally-aided housing project solely because of their 
race and color; (c) that the plaintiffs and all other Negroes 
similarly situated must be considered for admission and/or 
admitted to the Fred Wessels Homes or any other feder­
ally-aided housing project; (d) that the preference for 
admission to the Fred Wessels Homes or any other fed­
erally-aided low-rent housing project in the City of Savan­
nah, Georgia, conferred on plaintiffs and all other Negroes 
similarly situated by Section 1410(g) of Title 42, United 
States Code, may not be qualified or limited by race or 
color.

3. Issue a temporary injunction restraining and en­
joining the defendants and each of them, their agents, 
representatives, and successors in office from giving fed­
eral financial assistance and/or other federal assistance 
to the Housing Authority of Savannah, Georgia, for the 
construction and/or operation of a public low-rent hous­
ing project pursuant to the provisions of the Housing Act 
of 1937, as amended by the Housing Act of 1949, from which 
the plaintiffs and other Negroes similarly situated will be 
excluded and denied consideration for admission and/or 
admission solely because of their race and color.

4. Issue a permanent injunction restraining and en­
joining the defendants and each of them, their agents, rep-

Complaint



14

resentatives, and successors in office from giving federal 
financial assistance and/or other federal assistance to the 
Housing Authority of Savannah, Georgia, for the con­
struction and/or operation of a public low-rent housing 
project pursuant to the provisions of the Housing Act of 
1937, as amended by the Housing Act of 1949, from which 
the plaintiffs and other Negroes similarly situated will be 
excluded and denied consideration for admission and/or 
admission solely because of their race and color.

5. And for such other and further relief as to the Court 
shall seem just and proper.

T hurgood M arshall,
Constance B aker M otley,

20 West 40th Street,
New York 18, New York;

J ulius  T. W illiam s,
7191/2 West Broad Street, 

Savannah, Georgia;
F rank  D. R eeves,

1901 Eleventh Street, N. W., 
Washington 1, D. C.,

Attorneys for Plaintiffs.

Complaint



15

IN THE UNITED STATES DISTRICT COURT

Defendants’ Motion for Summary Judgment

F or the  D istrict of Columbia 

Civil Action No. 3991-52

----------- o-----------
H eyward, et al.,

v.
Plaintiffs,

H ousing and H ome F inance A gency, et al.,
Defendants.

----------------------o----------------------

Now come defendants, by their attorneys, and move the 
Court for summary judgment of dismissal of the complaint 
on the ground that there is no genuine issue as to any 
material fact and that defendants are entitled to a judg­
ment as a matter of law for the following reasons:

1. This Court has no jurisdiction over defendant Hous­
ing and Home Finance Agency, which is an agency in the 
Executive Branch of the Government not subject to suit.

2. The complaint fails' to state a claim upon which 
relief can be granted.

3. There is no case or controversy between plaintiffs 
and defendants with respect to any actual, adverse issue 
involving the parties’ legal rights or obligations.

4. The action is premature in that plaintiffs are not 
threatened with any immediate irreparable injury. The 
injury of which plaintiffs complain is that they will be



16

excluded from occupancy, solely because of their race and 
color, of a low-rent housing project, Project 6A-2-4 (known 
as “ Fred Wessels Homes” ), now under construction by the 
Housing Authority of Savannah, Georgia. This project 
will not be ready for occupancy until approximately March, 
1954. Accordingly, plaintiffs cannot sutler any injury at 
this time.

5. Plaintiffs are not, and will not be, denied any prefer­
ence in occupancy of low-rent housing projects to which 
they may be entitled by virtue of 42 U. S. C. 1410(g). 
Plaintiffs, as persons displaced from the site of Project 
GA-2-4 and as members of low-income families which are 
eligible applicants for occupancy, are being given and will 
be given preference, to the extent provided by law, in occu­
pancy of low-rent housing projects in Savannah owned 
and operated by the Housing Authority of Savannah.

6. Defendants have not taken, and are not threatening 
to take any action which will deprive plaintiffs of their 
asserted right to preference in occupancy of any of the 
low-rent housing projects in Savannah owned and operated 
by the Housing Authority of Savannah, Georgia. Defend­
ants do not impose any restrictions upon the occupancy of 
said projects on the basis of applicants’ race or color. 
Any such restrictions in occupancy on the basis of race or1 
color are imposed solely by the Housing Authority of 
Savannah. Hence, plaintiffs ’ complaint is against the acts 
of the Housing Authority of Savannah, not against any 
acts performed or threatened by defendants.

7. There is no actual controversy between plaintiffs 
and defendants as to plaintiffs’ alleged right to have 
Project GA-2-4 rented on a racially non-segregated basis. 
Defendants have taken and now take no position as to 
whether plaintiffs do or do not have such alleged right.

Defendants’ Motion for Summary Judgment



17

8. Plaintiffs have no legal interest in the expenditure 
of Federal funds for Project GA-2-4 and hence have no 
standing to sue to enjoin such expenditure.

9. The relief sought by plaintiffs, to enjoin defendants 
from giving any Federal financial assistance to the Housing 
Authority of Savannah for the construction of a low-rent 
housing project from which plaintiffs will be excluded 
solely on the basis of their race or color would he futile. 
The granting of such relief would not open Project GA-2-4 
to occupancy by the plaintiffs; on the contrary, it would 
merely prevent the construction of said project and thereby 
deprive other low-income families in addition to plaintiffs 
of an opportunity to obtain such housing without affording 
any benefit to plaintiffs.

10. There is a lack of an indispensable party—the Hous­
ing Authority of Savannah, which prescribes the policies 
of occupancy of this project on the basis of race and color. 
This Housing Authority is a municipal corporation of the 
State of Georgia, is not joined as a defendant in this action, 
and is not subject to suit within the jurisdiction of this 
Court.

H olmes B aliridge,
Assistant Attorney General;

Charles M. I belan,
United States Attorney;

Ross O ’D onoghue,
Assistant United States Attorney;

E dward H. H ickey,
Attorney, Department of Justice;

D onald B. M acGuineas, 
Attorney, Department of Justice,

Attorneys for Defendants.

Defendants’ Motion for Summary Judgment



1 8

IN THE UNITED STATES DISTRICT COURT

F or th e  D istrict or Columbia

Civil Action No. 3991-52

Affidavit of John T. Egan in Support of Defendants’
Motion for Summary Judgment

-----------o----------------------
H eyward, et al.,

Plaintiffs,
v.

H ousing and H ome F inange A gency,
Defendants.

----------------------o----------------------

D istrict oe C olumbia 
City  of W ashington

J ohn  T. E gan, being first duly sworn deposes and states:

1. I am the Commissioner of the Public Housing Ad­
ministration, which is an agency within the executive depart­
ment of the Federal Government and a constitutent agency 
of the Housing and Home Finance Agency, an independent 
agency in the executive branch of the Federal Government.

2. As Commissioner of the Public Housing Administra­
tion I am vested with the function of administering the 
low-rent housing program of the Federal Government pro­
vided by the Housing Act of 1937, as amended by the Hous­
ing Act of 1949 (42 U. S. C. 1401-33).

3. Under the low-rent housing program, low-rent hous­
ing projects to provide dwellings within the financial reach



1 9

of families of low income are constructed, owned and 
operated by a State, county or municipal public bousing 
agency, referred to in this affidavit as a “ local authority.”  
The function of the Public Housing Administration is to 
provide financial assistance to the local authorities in the 
development and administration by them of low-rent hous­
ing projects.

4. Such financial assistance may take the form of (1) 
loans to local authorities pursuant to 42 U. S. C. 1409,
(2) annual contributions to local authorities to assist in 
achieving and maintaining the low-rent character of their 
housing projects pursuant to 42 IT. S. C. 1410, (3) capital 
grants to local authorities to assure the low-rent character 
of their projects pursuant to 42 IT. S. C. 1411.

5. (a) Where a development plan for low-rent housing 
projects is submitted by the local authority to the Public 
Housing Administration for financial assistance which in­
volves the use of slum sites with consequent displacement 
of site occupants, the regulations of the Public Housing 
Administration require the local authority to demonstrate 
to the satisfaction of the Public Housing Administration 
that relocation of site occupants is feasible by showing that 
with respect to displaced families apparently eligible for 
public low-rent housing, such families can be offered dwell­
ings in low-rent housing projects at the time of displace­
ment or that they can reasonably be expected to find 
temporary dwelling accommodations of some kind and 
later be accommodated in low-rent housing projects (Low- 
Rent Housing Manual, Section 213.2, a copy of which is 
attached to this affidavit as Exhibit 1).

(b) The regulations of the Public Housing Adminis­
tration further require that programs for the development 
of low-rent housing must reflect equitable provision for eli-

Affidavit of John T. Egan



20

gible families of all races determined on the approximate 
volume and urgency of their respective needs for such hous­
ing (Low-Rent Housing Manual, Section 102.1, a copy of 
which is attached to this affidavit as Exhibit 2).

(c) The regulations further require that sites for pub­
lic housing projects shall be selected in such manner as to 
make possible the application of the policies on racial equity 
in tenant selection referred to above; that the number of 
dwelling units which are developed for racial minority 
occupancy shall not be less than the number of units de­
stroyed which are in racial minority occupancy; that the 
selection of sites should not result in a material reduction 
in the land area in the locality available to racial minority 
families; that every effort be made to avoid the selection 
of sites which will result in the displacement of minority 
group populations; and that the use of congested slum 
sites occupied predominantly by racial minority groups 
should be made only where the local authority can demon­
strate that relocation of site occupants in accordance with 
regulations of the Public Housing Administration is feasi­
ble (Low-Rent Housing Manual, Section 208.8, a copy of 
which is attached to this affidavit as Exhibit 3).

6. While, as stated above, the Public Housing Adminis­
tration requires the development programs of local au­
thorities to make equitable provision for eligible families 
of all races, the policy of the Public Housing Administra­
tion with respect to whether or not a particular low-rent 
housing project shall be operated by the local authority on 
a racially segregated or non-segregated basis is that the 
determination of that question is entirely one for the local 
authority. The Public Housing Administration has not 
and would not interpose any objection to a determination 
by a local authority to operate such a project on a racially 
non-segregated basis.

Affidavit of John T. Egan



21

7. Low-rent housing projects in the City of Savannah, 
Georgia, for which financial assistance is provided by the 
Public Housing Administration are constructed, owned and 
operated by the Housing Authority of Savannah, a munici­
pal corporation organized under the Housing Authorities 
Law of the State of Georgia (Act Number 411 of the Laws 
of 1937, as amended). At the present time five low-rent 
housing projects have been completed and are being oper­
ated by the Housing Authority of Savannah. These are 
Projects GA-2-1, with 176 dwelling units for Negroes, 
GA-2-2 with 480 dwelling units for Negroes; GA-2-3, with 
314 dwelling units for whites; GA-2-5, with 127 dwelling 
units for Negroes; and GA-2-6, with 86 dwelling units for 
whites.

8. The status of the low-rent housing project specifi­
cally referred to in the complaint in this action, No. GA-2-4 
(known as Fred Wessels Homes) is as follows:

(a) On September 22, 1949, the Housing Authority of 
Savannah filed with the Public Housing Administration an 
application for a program reservation for four projects 
totaling 800 low-rent dwelling units, consisting of Projects 
GA-2-5 and GA-2-6 (referred to above), GA-2-4 to contain 
250 dwelling units for whites, and GA-2-7 to contain 337 
dwelling units for Negroes, together with an application 
for a preliminary loan necessary to inaugurate such a hous­
ing program. On November 8, 1949, and again on October 
1, 1951, the Public Housing Administration issued such 
program reservation for these 800 dwelling units in accord­
ance with the application submitted by the Housing Au­
thority of Savannah.

(b) On September 12, 1950, the Housing Authority of 
Savannah and the Public Housing Administration entered 
into a preliminary loan contract (a copy of which is attached 
to this affidavit as Exhibit 4) under which the Public Hons-

Affidavit of John T. Egan



22

ing Administration agreed to loan to the Housing Authority 
of Savannah not to exceed $210,000 for use in making pre­
liminary surveys and planning for low-rent housing proj­
ects. On March 19,1952, the Housing Authority of Savannah 
and the Public Housing Administration entered into an an­
nual contributions contract under which the Public Housing 
Administration agreed to lend to the Housing Authority 
of Savannah $2,292,000, bearing interest at 2%% per an­
num, to cover the estimated development cost of said 
project and agreed to make annual contributions to the 
Housing Authority of Savannah to provide funds necessary 
to meet the annual payments of interest and amortization 
of principal of the funds borrowed by the Housing Au­
thority of Savannah for the development of that project. 
A copy of Part One of said annual contributions contract 
is attached to this affidavit as Exhibit 5. A copy of Part 
Two of said annual contributions contract is attached to 
this affidavit as Exhibit 6. On July 24, 1952, the Housing 
Authority of Savannah and the Public Housing Administra­
tion entered into Amendatory Agreement No. 1 to said 
annual contributions contract by which the principal amount 
of the Public Housing Administration loan was changed 
from $2,292,000 to $2,792,000. A copy of said Amendatory 
Agreement No. 1 is attached to this affidavit as Exhibit 7.

(c) On May 20, 1952, the Housing Authority of Savan­
nah entered into a contract with the Byck-Worrell Con­
struction Company of Savannah for the construction of 
Project GA-2-4, with a construction period of 460 days 
after the issuance of a notice to proceed. Work under this 
contract has, however, been delayed because of difficulty in 
obtaining the approval of the City Council of Savannah to 
the lay-out of the project. At the present time the only 
work done consists of work in connection with the assem­
bling and clearing of the site. Revised drawings were 
submitted to the contractor on November 6, 1952, for a new

Affidavit of John T. Egan



23

cost estimate. Such estimate has not yet been received; 
and upon its receipt, it must be approved by the Public 
Housing Administration. Assuming such estimate is ap­
proved by December 15, 1952 (the earliest date likely), it 
is estimated that, based on a construction period of 460 
days, Project GA-2-4 will not be completed and available 
for occupancy until the latter part of March, 1954.

(d) Up to the present the Public Housing Administra­
tion has advanced to the Housing Authority of Savannah 
under the annual contributions contract the sum of $939,567.

9. (a) As appears from the preceding paragraphs of 
this affidavit, the low-rent housing program of the Housing 
Authority of Savannah, including projects completed and 
planned, consists of the following:

Affidavit of John T. Egan

Dwelling Units Dwelling Units
Project No. for Whites for Negroes

GrA-2-1 176
GA-2-2 480
GA-2-3 314
GA-2-4 250
GA-2-5 127
GA-2-6 86
GA-2-7 337

Totals 650 1,120
Percentage of 

Total 36.7% 63.3%

(b) The percentage distribution of low-rent housing 
required to achieve racial equity, based on the volume of 
substandard housing as estimated by the Director of the 
Atlanta Field Office of the Public Housing Administration 
on the basis of a 1950 census of housing prepared by the



2 4

Bureau of Census, Department of Commerce, is white 
33.7%, Negro 66.3%. I am informed by the Director of the 
Atlanta Field Office of the Pulbic Housing Administration 
that the Housing Authority of Savannah contemplates sub­
mitting an application for another low-rent housing project 
(in addition to the seven projects listed above) to consist 
of 800 dwelling units for Negro occupancy.

10. I am informed by the Housing Authority of Savan­
nah that the occupants of the site of Project GA-2-4 were 
78% Negroes and 22% whites. The seven low-rent housing 
projects in Savannah listed above (and in addition the 
eighth project contemplated by the Housing Authority of 
Savannah, in the event it is constructed) are, or when con­
structed will be, available for occupancy by low-income 
families displaced from the site of the Project GA-2-4 who 
are otherwise eligible for occupancy of such projects, in 
the relative preferences prescribed by 42 U. S. C. 1410(g).

11. In view of the policy of the Public Housing Admin­
istration set forth in paragraph 6 of this affidavit to leave 
to the determination of the Housing Authority of Savannah 
the question as to whether Project GA-2-4 shall be operated 
by that Authority on a racially segregated or non-segre- 
gated basis, it is my opinion that no real dispute exists 
between the plaintiffs and the defendants in this action as 
to whether or not the plaintiffs have any legal right to have 
said project operated on a non-segregated basis.

12. In my opinion, the issuance of any order by this 
Court prohibiting the Public Housing Administration from 
rendering financial assistance to the Housing Authority 
of Savannah in the construction and operation of Project 
GA-2-4 will not provide any additional low-rent housing 
accommodations to plaintiffs. The only effect of such an 
order would be to prevent construction of Project GA-2-4

Affidavit of John T. Egan



2 5

and thereby reduce the number of low-rent dwelling units 
available in Savannah for other low-income persons eligi­
ble for occupancy of such projects.

Affidavit of John T. Egan

J ohn T. E gan
Commissioner of Public Housing- 

Administration

City  of W ashington  )
D istrict of C olumbia \ ' '

Subscribed and sworn to before me this day
of

Notary Public



26

HHFA
PHA

5-15-51 LOW-BENT HOUSING MANUAL 213.2

Relocation of Site Occupants

1. Introduction

a. If a Local Authority proposes to use a slum site, iu 
order that displacement of site occupants will not result 
in undue hardship to such occupants, the Local Authority 
shall:

(1) As a condition to preliminary approval of the site 
demonstrate to the satisfaction of the PHA (in 
accordance with paragraph 2 below) that relocation 
of site occupants is feasible;

(2) As a condition to approval of the Development 
Program establish a plan satisfactory to the PHA 
for relocating site occupants; and

(3) In the Annual Contributions Contract agree to 
carry out the relocation plans set forth in the 
Development Program.

Proposals for use of slum sites involving the displace­
ment of minority groups will be subject to careful scrutiny 
by the PHA, because such groups are often seriously re­
stricted as to the neighborhoods in which they can find other 
dwellings.

b. Suggested procedures for setting up and staffing a 
Housing Advisory Office and for effecting the removal of 
site occupants will be contained in a Low-Bent Housing 
Bulletin.

Exhibit 1

N o te : This Section supersedes Section 213.2, dated 10-
13-50. The entire release has been revised.



2 7

2. Demonstration of Feasibility

a. To demonstrate the feasibility of relocation the 
Local Authority must show:

(1) A reasonably sound estimate of the number of 
families to be displaced from the site, including 
appropriate data as to income and race;

(2) The approximate time of displacement, particu­
larly when demolition and rebuilding is to be car­
ried out in stages;

(3) With respect to families apparently eligible for 
public low-rent housing, that such families can 
be offered dwellings in low-rent housing projects 
at the time of displacement or that they can 
reasonably be expected to find temporary dwelling 
accommodations of some kind and later be accom­
modated in low-rent housing projects;

(4) With respect to families not eligible for public 
low-rent housing, that they can reasonably be ex­
pected to find dwelling accommodations no worse 
than those on the site and at rents within their 
financial means.

b. The demonstration of feasibility must recognize any 
restrictions in the supply of bousing for minority group 
families.

c. The demonstration must recognize the demands of 
any other relocation which will take place in the community, 
particularly any slum clearance assisted under Title I of 
the Housing Act of 1949.

d. The demonstration shall be made in the form of 
Item 223 of the Development Program and must be sub­
mitted before the PHA will give tentative approval of the 
site (see Manual Section 208.1).

Exhibit 1



28

Exhibit 1

3. Relocation Plan
a. The Local Authority shall prepare a relocation plan 

with respect to assisting* the occupants of the site to find 
other quarters. Such plan shall include the proposals which 
the Local Authority considers necessary for the provision 
for personnel to handle relocation, an office at the site or 
elsewhere at which families may obtain information, survey 
of site occupants to determine individual family rehousing 
needs and problems, notification to families of the avail­
ability of advice and assistance in finding other quarters, 
arrangements for obtaining information on vacancies, in­
spection of any vacanies to which families not eligible for 
public low-rent housing are to be referred, arrangements 
for obtaining the cooperation of other community agencies, 
arrangements for coordinating the relocation activities 
of the Local Authority with those of any other local agency 
which is engaged in a relocation program (see paragraph 5 
below), and any other actions deemed necessary by the 
Local Authority. As part of the relocation plan the Local 
Authority shall include in the Development Program an 
estimate of the cost of the services described in this para­
graph.

b. If the Local Authority believes it will be necessary 
to extend any direct financial assistance to site occupants 
(see paragraph 4, below), there shall also be included an 
estimate of the number of cases for which such assistance 
will be necessary and an estimate of the aggregate cost of 
such assistance.

c. The relocation plan shall be prepared in the form 
of Item 224 of the Development Program and shall be sub­
mitted with the final Development Program.



29

4. Direct Finamcial Assistance to Site Occupants
a. The Local Authority may furnish direct financial 

assistance to site occupants who are to be displaced if after 
exhausting all other reasonable means it appears that, in 
the determination of the Local Authority, legal eviction 
will otherwise be necessary to secure the removal of certain 
site occupants and the attendant expense in attorney’s fee 
and court costs incident to eviction proceedings, together 
with other costs incident to delay in the project while 
waiting to secure eviction, will in the aggregate equal or 
exceed the aggregate of the proposed financial assistance. 
Such financial assistance to any site occupant shall not, 
without approval of PHA, exceed a reasonable amount for 
moving expenses plus a reasonable amount for the first 
month’s rent in appropriate quarters.

b. If, after approval of the Development Program, the 
Local Authority finds it necessary to furnish any other type 
of financial assistance in specific cases beyond that author­
ized by paragraph 4a, above, or to expend for all cases 
more than the total sum provided for direct assistance in 
the relocation plan, it should address a letter to the PHA 
Field Office Director stating the type of assistance to be 
given, the approximate number of cases which will re­
ceive such assistance, the cost thereof, full justification as 
to the necessity (in terms of savings in attorneys fees, 
court costs and other costs incident to delay), and, if 
required, a revised Development Cost Budget. The PHA 
Field Office Director will notify the Local Authority by 
letter of approval or disapproval of the request.

c. No expenditures for rehabilitation, improvement, or 
decoration of privately owned property can in any event 
be approved as a part of the development cost.

Exhibit 1



30

5. Coordination With Other Agencies Engaged
in Relocation
a. If slum clearance under an urban redevelopment 

program or any other program, such as a highway project, 
is being undertaken by other agencies in the community; 
the Local Authority should pay very careful attention to 
coordinating its relocation activities with those of such 
other agencies. This will help to avoid duplication of 
effort in conducting surveys and obtaining vacancy listings, 
will result in less hardship to families by avoiding duplicate 
referrals to the same dwelling, and will promote better 
understanding of and sympathy for the program among the 
families being displaced as well as the community at large.

b. The local agencies involved should together consider 
this problem and decide that either:

(1) Each agency should do its own relocation work, 
depending on close liaison between the personnel 
of each agency to achieve the necessary coordina­
tion, or

(2) All relocation work should be done by one of the 
agencies involved, or

(3) A centralized relocation agency should be created 
for this purpose.

If another agency is to do the work for the Local 
Authority, the Local Authority should retain sufficient 
control to insure coordination with site acquisition and con­
struction and compliance with Local Authority relocation 
policy. The Local Authority must, in any event, maintain 
complete responsibility for determining eligibility and pref­
erence rights of families to be admitted to public housing.

c. If the work is to be done for the Local Authority 
by another agency, the Local Authority may reimburse

Exhibit 1



31

such agency for reasonable costs attributable to the reloca­
tion performed for the Local Authority. A firm maximum 
cost should be agreed to in advance to insure that the De­
velopment Cost Budget is not exceeded. If the Local 
Authority does relocation work for another agency it must 
obtain adequate reimbursement to insure that costs of such 
relocation are not charged to PHA-aided projects.

6. Record of Families Displaced

a. The Local Authority shall make and preserve a 
record of the families displaced by the development of the 
project. This information should be obtained at the time 
of the survey of site occupants referred to in paragraph 3, 
above.

b. This record is established for use in determining 
which families, among eligible applicants for admission to 
any Federally aided low-rent housing, are entitled to 
receive preference in tenant selection as displaced site 
occupants. The permanent record of site occupants shall 
contain the following information:

(1) Name of the head of the family;
(2) Site address of the family;
(3) Veteran or service status;
(4) Information on service-connected disability or 

death;
(5) Date the family moved from the site.

c. The address of the place to which the family moved 
should also be recorded and made a part of the permanent 
record when made possible by the site occupant.

d. Site occupants shall be informed that, if they apply 
for admission to a Federally aided low-rent project and if

Exhibit 1



32

they are found to be eligible, they will be entitled as site 
occupants to receive preferential consideration as units 
become available for occupancy. In connection with this, 
site occupants should be encouraged to keep the Local 
Authority advised of their whereabouts. Specific informa­
tion concerning the preference rating of eligible site occu­
pants will be covered in another Section.

7. Contract Provisions

a. The Annual Contributions Contract will provide that 
the Local Authority (1) shall undertake all steps necessary 
to carry out the relocation plan described in the Develop­
ment Program, and (2) may pay as part of the development 
cost the expense thereof except that no costs of direct 
financial assistance to site occupants shall be included in 
Development Cost other than those approved by the PHA. 
The contract will not obligate the Local Authority to find 
new quarters for every family, nor will the contract estab­
lish any third-party rights on the part of site occupants.

b. The contract will also require that the Local Author­
ity shall make and preserve the record of the families dis­
placed, referred to in paragraph 6, above.

Exhibit 1



33

HHFA
PHA

2-21-51 102.1

Exhibit 2

LOW-RENT HOUSING MANUAL 

Racial Policy
The following general statement of racial policy shall 

he applicable to all low-rent housing projects developed 
and operated under the United States Housing Act of 1937, 
as amended:

1. Programs for the development of low-rent housing, 
in order to be eligible for PHA assistance, must re­
flect equitable provision for eligible families of all 
races determined on the approximate volume and 
urgency of their respective needs for such housing.

2. While the selection of tenants and the assigning of 
dwelling units are primarily matters for local deter­
mination, urgency of need and the preferences pre­
scribed in the Housing Act of 1949 are the basic 
statutory standards for the selection of tenants.



34

HHFA
PHA

3-27-52 208.8

Exhibit 3

LOW-RENT HOUSING MANUAL

Site Selection Policies in Relation to Problems of Minorities

1. Purpose. This Section sets forth PHA policies gov­
erning the selection of sites in relation to problems of 
minorities.

2. Policies. The following policies should be followed 
in the selection of sites for public housing projects:

a. Sites for public housing projects shall be selected in 
such manner as to make possible the application of 
the policies on racial equity in tenant selection out­
lined in Section 102.1, Racial Policy.

b. The number of dwelling units in local program which 
are developed for racial minority occupancy shall 
not be less than the number of units destroyed which 
are in racial minority ocupancy.

c. The selection of sites for public housing should not 
result in a material reduction of the land area in the 
locality which is available to racial minority families.

d. Every effort should be made to avoid the selection of 
sites which will result in the displacement of minority 
group populations.

e. Use of congested slum sites which are occupied pre­
dominantly by racial minority groups should be made 
only where it is possible to comply with the provi­
sions of Section 213.2, Relocation of Site Occupants.



35

PHA-1926 
Rev. 2-24-50

PRELIMINARY LOAN CONTRACT

This Agreement entered into this 12th day of Septem­
ber, 1950, by and between Housing Authority of Savannah 
(herein called the “ Local Authority” ) and the Public Hous­
ing Administration (herein called “ PH A” ), witnesseth:

In consideration of the mutual covenants hereinafter 
set forth, the parties hereto do agree as follows:

1. The Local Authority certifies that it is a body cor­
porate and politic, duly created and organized pursuant to 
and in accordance with the provisions of The “ Housing 
Authorities Law”  of the State of Georgia and laws amenda­
tory thereof and supplemental thereto, and that it is author­
ized to purchase and acquire land, to clear buildings there­
from, to develop, construct, maintain and operate low-rent 
housing and slum-clearance projects for the purpose of 
providing decent, safe and sanitary dwellings for families 
of low income, to borrow money for such purposes, and to 
issue its bonds or other evidences of indebtedness, and in 
connection with the foregoing to take all such other action 
as is provided for herein.

2. The Local Authority proposes to develop low-rent 
housing projects with financial assistance from the PHA 
pursuant to the United States Housing Act of 1937, as 
amended (herein called the “ Act” ). In connection there­
with, the Local Authority proposes to undertake prelimin­
ary surveys and planning necessary for the preparation and 
submission of Development Programs for each of such pro­
jects serving as the basis for applications to the PHA for 
Annual Contributions Contracts.

Exhibit 4



36

3. The PHA has issued to the Local Authority its 
Program Reservation No. Ga-2-A for a total of 800 units of 
low-rent housing, which Program Reservation is not a legal 
obligation or commitment on the part of the PHA, and 
which the PHA intends to cancel unless Development Pro­
grams satisfactory to the PHA for 500 of such units are 
submitted by the Local Authority on or before November 
30, 1950, or unless satisfactory Development Program for 
300 additional units are submitted on or before November 
30, 1951.

4. The Local Authority, pursuant to the provisions of 
the Act, has applied to the PHA for a preliminary loan to 
meet the cost of preliminary surveys and planning of the 
low-rent housing projects to be developed pursuant to such 
Program Reservation and located in the City of Savannah, 
Georgia. The Council of the Mayor and Aldermen of the 
City of Savannah, Georgia (the governing body of the City 
of Savannah, Georgia) has by its resolution duly adopted 
on the 14 day of July, 1950, approved the application of the 
Local Authority for such preliminary loan.

5. The Local Authority has demonstrated to the satis­
faction of the PHA that there is a need for the low-rent 
housing covered by said Program Reservation which need 
is not being met by private enterprise.

6. Subject to the provisions hereinafter set forth, the 
PHA hereby agrees to loan to the Local Authority, for use 
in preliminary surveys and planning for low-rent housing 
projects to be developed pursuant to the aforesaid Pro­
gram Resei’vation a sum not in excess of $210,000. Of such 
amount, the sum of $30,000 will be advanced immediately 
after the execution of this agreement for use only for eli­
gible costs of such preliminary surveys and planning. As a 
condition to such immediate advance, the Local Authority

Exhibit 4



37

hereby certifies that, in respect to such proposed projects, 
it has complied with the provisions relating to the payment 
of prevailing salaries and wages contained in Section 16(2) 
of the Act.

7. The PHA shall not be obligated to make any further 
advances hereunder in the event of any one of the following 
conditions:

(a) if the Local Authority and the Council of the Mayor 
and Aldermen of the City of Savannah, Georgia 
(the governing body of the City of Savannah, 
Georgia) have not, at the time of the request for 
such further advances, entered into a Cooperation 
Agreement satisfactory to the PHA providing for 
the local cooperation required by the PHA pur­
suant to the A ct; or

(b) if the requisition of the Local Authority therefor 
is not accompanied by a signed Certificate of Pur­
poses in form and detail satisfactory to the PHA, 
showing the use of such funds already expended 
and the proposed use of any balance of funds re­
maining and of the additional funds requested, and 
demonstrating the need at the time for the addi­
tional funds, and by such other documents and data 
as may be requested by the PH A; or

(c) if the Local Authority has not furnished a cer­
tificate prior to each advance that it has complied 
with the provisions relating to the payment of pre­
vailing salaries and wages contained in Section 
16(2) of the Act; or

(d) if the Local Authority has not complied with all the 
provisions in this Contract; or

Exhibit 4



Exhibit 4

(e) if any legal question affecting this Contract, or 
affecting the power of the Local Authority to enter 
into an Annual Contributions Contract has not 
been disposed of to the satisfaction of PHA.

8. Every advance shall he evidenced by a preliminary 
loan note in principal amount equal to the amount of such 
advance. Principal and interest shall he payable on demand 
and shall in any event become due and payable, without 
demand, forty years from the date of this Contract. The 
note shall be in such form and secured in such manner as 
shall be satisfactory to the PHA, and shall bear interest 
from the date of the advance at the rate of two and one- 
half per centum (2% % ) per year.

9. The cost of the aforesaid preliminary surveys and 
planning shall be deemed to be a part of the total develop­
ment cost of low-rent housing projects which are developed 
pursuant to the aforesaid Program Eeservation and for 
which Annual Contributions Contracts are entered into by 
the PHA and the Local Authority. After the date on which 
the first advance on any Annual Contributions Contract is 
received by the Local Authority, no disbursements shall be 
made from the Preliminary Loan Fund in payment for 
services rendered or material furnished after such date in 
respect to the project or projects covered by such Annual 
Contributions Contract. The Local Authority shall apply 
to the payment of the principal of and interest on said pre­
liminary loan notes the following funds in the following 
manner:

(a) Moneys becoming available for the development 
of the first project or projects for which a single 
Annual Contributions Contract is entered into 
shall be applied to the payment of said preliminary 
loan notes in amounts equal to (i) the full cost of



39

all preliminary housing surveys made by the Local 
Authority, and (ii) all costs of planning such first 
project or projects which have been paid from the 
Preliminary Loan Fund;

(b) Moneys becoming available for the development of 
subsequent projects for which Annual Contribu­
tions Contracts are entered into shall be applied 
to the payment of said preliminary loan notes in 
amounts equal to all costs of planning such later 
project or projects which have been paid from the 
Preliminary Loan Fund;

(c) All moneys remaining in the hands of the Local 
Authority out of the funds advanced by the PHA 
hereunder at the time when all the projects to be 
developed pursuant to the aforesaid Program Res­
ervation have been covered by Annual Contribu­
tions Contracts shall be immediately paid over to 
the PHA in whole or partial payment of the pre­
liminary loan notes then held by the PHA; and

(d) Moneys becoming available from any other sources 
for the development of any projects for which pre­
liminary surveys and plans are made with the aid 
of loan funds provided under this Contract shall 
be applied to the payment of any unpaid balance 
of said preliminary loan notes.

10. The Local Authority shall enter into a Preliminary 
Loan Depositary Agreement, which shall be in a form ap­
proved by the PHA, and with a bank (which shall be and 
continue to be a member of the Federal Deposit Insurance 
Corporation) selected as the depositary by the Local 
Authority. The entire proceeds of every advance made pur­
suant to this Contract shall be deposited in the Preliminary 
Loan Fund at the time such advance is made, unless the

Exhibit 4



40

PHA shall consent in writing to the deposit of such pro­
ceeds in some other account. If the PHA finds that one 
or more of the following conditions has or have occurred: 
(a) the depositary is no longer a member of the Federal 
Deposit Insurance Corporation; (b) the depositary has de­
faulted in the performance of any of its obligations under 
the Preliminary Loan Depositary Agreement; (c) the PHA 
for any reason deems the funds deposited by the Local 
Authority with the depositary to be unsafe or insecure, then 
the PHA may require the Local Authority to withdraw all 
its funds immediately from such depositary and to enter 
into a Preliminary Loan Depositary Agreement, and to 
deposit such funds, with a new depositary (which shall he 
a member of the Federal Deposit Insurance Corporation). 
The PHA may exercise its powers under the provisions of 
the Preliminary Loan Depositary Agreement to suspend 
withdrawals by the Local Authority, and may itself make 
withdrawals from the Preliminary Loan Fund, if the Local 
Authority shall default in the performance or observance 
of any of the agreements on the part of the Local Authority 
contained in this Preliminary Loan Contract ; but after sus­
pending withdrawals by the Local Authority or itself with­
drawing such funds, the PHA shall use the funds, as far as 
possible, to pay any obligations theretofore validly incurred 
by the Local Authority under the provisions of this Con­
tract. In the event that the PHA cancels or reduces the 
Program Eeservation for any cause without there being 
a default by the Local Authority under this Contract, the 
PHA may exercise its powers under the provisions of the 
Preliminary Loan Depositary Agreement to suspend with­
drawals by the Local Authority; and in that event the PHA 
at the end of sixty (60) days after sending the notice sus­
pending withdrawals (copy of which notice shall at the same 
time be sent to the Local Authority), may itself withdraw 
the funds then remaining and apply the same to the payment

Exhibit 4



41

of the Preliminary Loan Note. In said notice suspending 
withdrawals, the PHA shall authorize the depositary, dur­
ing such sixty day period, to continue to honor any check or 
order drawn by the Local Authority upon the Preliminary 
Loan Fund, if such check or order shall contain a certificate 
executed by a person authorized on behalf of the Local 
Authority to sign checks or orders upon such Preliminary 
Loan Fund, reading as follows:

“ This is to certify that (1) I am the duly ap­
pointed, qualified and acting officer of the Housing 
Authority of Savannah authorized to sign the check 
[order] to which this certificate relates and to execute 
this certificate; (2) the said check [order] is drawn 
to pay an obligation validly incurred by the Hous­
ing Authority of Savannah under the terms of the 
Preliminary Loan Contract dated the 12 day of Sep­
tember, 1950 between the Public Housing Adminis­
tration and the Housing Authority of Savannah; and
(3) -said obligation was incurred in good faith prior 
to the date of the written notice by the Public Hous­
ing Administration to the Preliminary Loan De­
positary bank suspending withdrawals by the Hous­
ing Authority of Savannah from the Preliminary 
Loan Fund.”  11

11. The Local Authority shall expeditiously and economi­
cally complete the preliminary surveys and planning, sub­
mit Development Programs, and take such other actions as 
are prequisite to the execution of Annual Contributions 
Contracts for the projects to be developed pursuant to the 
aforesaid Program Reservation. Promptly after receipt 
of the initial advance of funds under this Contract, the 
Local Authority shall obtain from financially sound insur­
ance companies, and thereafter maintain in force, the fol­
lowing insurance: (a) fidelity bonds covering all persons

Exhibit 4



4 2

who will handle or disburse any of the funds made available 
under this Contract; (b) workmen’s compensation; (c) 
automobile insurance (including comprehensive fire and 
theft, liability for bodily injury and property damage);
(d) public liability; and (e) fire and extended coverage in­
surance on furniture and fixtures. The Local Authority 
shall promptly furnish the PHA with certified copies of 
such policies and bonds.

12. The Local Authority will not undertake preliminary 
housing surveys covering housing and economic conditions 
except after mutual agreement between the Local Authority 
and the PHA as to the type, extent, methods, and proposed 
costs of such surveys.

13. The Local Authority shall by contract, in a form 
prescribed or approved by the PHA, provide qualified archi­
tectural and engineering services necessary for each low- 
rent housing project to be developed pursuant to the afore­
said Program Reservation, including preparation of ma­
terials necessary for Development Programs. Such con­
tracts shall further provide that, in the event of the execu­
tion of an Annual Contributions Contract covering any 
such project, the architects and engineers shall furnish 
the architectural and engineering services necessary for 
the completion of the project. Such contracts shall fur­
ther provide that the Local Authority may at any time 
abandon the construction of the project or any substantial 
part thereof, or may, for cause, abandon all or any sub­
stantial part of the architect’s services, and that in either 
such event, the contract shall be modified or terminated, 
and payment for the services of the architect theretofore 
rendered shall be made in a manner to be set forth in such 
contract. The PHA shall furnish schedules of reasonable 
maximum fees, wdiich fees shall not be exceeded without 
PHA concurrence. Architects shall be required by the

Exhibit 4



4 3

Local Authority to he responsible for compliance of plans 
and specifications with applicable local laws and regula­
tions.

14. The Local Authority shall by contract, in a form 
prescribed or approved by the PHA, provide qualified 
services for obtaining land surveys, title information, and 
appraisals necessary for each low-rent housing project 
to be developed pursuant to the aforesaid Program Reser­
vation. Specific parcel-by-parcel appraisals shall not be 
made prior to the tentative approval by the PHA of a 
project site and the General Scheme of the project. All 
appraisals shall be held strictly confidential, and in no case 
shall persons who have made such appraisals be employed 
to negotiate options. The Local Authority may by con­
tract, in a form prescribed or approved by the PHA, pro­
vide qualified services for the negotiation of options before 
execution of an Annual Contributions Contract. No part 
of any funds made available to the Local Authority under 
this Preliminary Loan Contract shall be used either to 
acquire land or to make any payments (other than nominal 
payments of one dollar per option) as consideration for 
options, nor shall irrevocable commitments to acquire land 
be made before the execution of an Annual Contributions 
Contract.

15. No part of any funds made available to the Local 
Authority under this Preliminary Loan Contract shall be 
used for any purposes except for making preliminary sur­
veys and planning for low-rent housing projects to be 
developed pursuant to the aforesaid Program Reservation. 
No part of such funds shall be used to make payments for 
any materials or services purchased or contracted for by 
the Local Authority prior to the date of the Preliminary 
Loan Contract without the prior approval of the PHA as 
to the eligibility and amount of such payments. No part

Exhibit 4



4 4

of any funds made available under this Preliminary Loan 
Contract subsequent to the initial advance shall be used 
for the payment of any items not covered by a Certificate 
of Purposes as provided in Section 7(b) hereof.

16. The preliminary surveys and planning carried out 
by the Local Authority pursuant to this Preliminary Loan 
Contract shall be limited to low-rent housing projects, (a) 
which will comply with the cost limitations of Section 15(5) 
of the Act, (b) in connection with which the equivalent 
elimination provisions of Section 10(a) of the Act will be 
complied with, and (c) which will comply with all other 
applicable provisions of the Act.

17. The Local Authority, in connection with any low- 
rent housing project to be developed pursuant to the afore­
said Program Eeservation, agrees as follows:

(a) The Local Authority will itself pay, and in all 
contracts entered into by it shall require that there 
shall be paid, to all architects, technical engineers, 
draftsmen, and technicians employed in prelimi­
nary surveys and planning or in the development 
of such projects, and to all maintenance laborers 
and mechanics employed in the administration of 
such projects, not less than the salaries or wages 
prevailing in the locality of such project, as such 
prevailing salaries or wages are determined or 
adopted (subsequent to determination under ap­
plicable State or local law) by the PHA;

(b) The Local Authority will itself pay, and in all 
contracts entered into by it shall require that 
there shall be paid, to all laborers and mechanics 
employed in preliminary surveys and planning or 
in the development of such projects, not less than 
the wages prevailing in the locality of such project,

Exhibit 4



4 5

as predetermined either (i) by the Secretary of 
Labor pursuant to the Davis-Bacon Act (49 Stat. 
1011), or (ii) under applicable State laws, which­
ever wages are the higher;

(c) The Local Authority will require that architects, 
technical engineers, draftsmen, technicians, labor­
ers and mechanics, employed in the preliminary 
surveys and planning and in the development of 
such projects shall not be permitted to work 
thereon more than eight hours per day nor more 
than forty hours per week, unless such employees 
be paid at least time and a half for hours of work 
in excess of the limits prescribed above. The said 
limits shall not apply to executive, supervisory, 
or administrative employees, as such. If there is 
a State or local law applicable to any or all of the 
foregoing classes of employees prescribing hours 
of work not in excess of the hours above pre­
scribed, the Local Authority will require compli­
ance with the State or local laws applicable to such 
class or classes, instead of compliance with the 
above requirements;

(d) In cases of underpayment of wages by any con­
tractor or subcontractor to persons employed on 
work covered by this Preliminary Loan Contract, 
the Local Authority shall withhold from the con­
tractor out of payments due, an amount sufficient 
to pay to such persons the difference between the 
wages required to he paid under the contract and 
the wages actually paid such employees for the 
total number of hours worked; provided, that the 
Local Authority shall not be considered in default 
under this sub-section (d) if it has in good faith 
made payments to the contractor in reliance upon 
the affidavit or certificate of the contractor as to

Exhibit 4



46

the payment of such wages to such employees. The 
amounts withheld shall he disbursed by the Local 
Authority for and on account of the contractor to 
the respective employees to whom they are due;

(e) The Local Authority will comply in all respects 
with the provisions of the so-called Kick-Back 
Statute (PL-324, Seventy-Third Congress, ap­
proved June 13, 1934), and the Regulations issued 
from time to time pursuant thereto; and will in­
corporate or require to be incorporated in every 
construction contract in connection with the proj­
ects the applicable provisions of said Statute and 
said Regulations;

(f) The Local Authority will not discriminate against 
any employee or applicant for employment be­
cause of race, creed, color, or national origin; and 
will incorporate or require to be incorporated the 
foregoing provision in every contract made by it 
in connection with the preliminary surveys and 
planning, the development, and the administra­
tion of such projects, except in contracts or sub­
contracts for standard commercial supplies or for 
raw material;

(g) The Local Authority will require that only such 
unmanufactured articles, materials and supplies 
as have been mined or produced in the United 
States of America, and that only such manufac-

■ tured articles, materials and supplies as have been 
manufactured in the United States of America 
substantially all from articles, materials or sup­
plies mined, produced or manufactured, as the 
case may be, in the United States of America,

Exhibit 4



4 7

shall be used in the development of the projects; 
provided, however, that if the use of domestic 
articles, materials or supplies is impracticable, or 
if the cost thereof is determined by the PH A to be 
unreasonable, the Local Authority may, if it so 
desires, request the PHA to waive the foregoing 
restrictions so as to permit the purchase of foreign 
articles, materials or supplies.

18. The Local Authority shall at all times during the 
life of this Contract maintain complete and accurate books 
of account and records documenting all expenditures of 
moneys advanced hereunder, and shall submit such periodic 
reports and statements as may be required by the PHA. 
Such books of account records, reports and statements shall 
be in such form as may be prescribed or approved by the 
PHA. At any time during normal business hours, and as 
often as the PHA shall deem advisable, the PHA shall, 
through any agent or representative designated by it, have 
full and free access to all the books of account and records 
of the Local Authority, including the right to make excerpts 
or transcripts from such books of account and records.

19. Any right or remedy which the PHA may have 
under this Preliminary Loan Contract may be waived in 
writing by the PHA, either with or without the execution of 
a new or supplemental agreement, if, in the judgment of 
the PHA, this Preliminary Loan Contract as modified or 
amended by any such waiver will still conform with the 
terms of the Act.

20. No Member of or Delegate to the Congress of the 
United States of America shall be admitted to any share or 
part of this Contract or to any benefit to arise therefrom.

21. No member of the Local Authority shall participate 
in any decision relating to the projects affecting his per-

Exhibit 4



48

sonal interests or the interests of any corporation, partner­
ship, or association in which he is directly or indirectly in­
terested; nor shall any member, officer, agent, servant, or 
employee of the Local Authority have any interest, direct 
or indirect, in any contract for property, materials, or 
services to be acquired by the Local Authority; nor shall 
the Local Authority enter into any contract for property, 
materials, or services with any former member of the 
Local Authority within one year after he shall have ceased 
to be a member except as may be required by law.

22. No member or officer of the Local Authority shall 
be individually liable on any obligation assumed by the 
Local Authority hereunder.

23. Nothing contained in this Preliminary Loan Con­
tract shall be construed as creating or justifying any claim 
against the PHA by any third party pursuant to any act or 
omission of the Local Authority, except as specifically 
provided in paragraph 10 of this Contract.

24. Neither the execution of this Preliminary Loan 
Contract, nor any acts in pursuance thereof shall be con­
strued as constituting any legal obligation by the PHA to 
enter into any Annual Contributions Contract in connec­
tion with the low-rent housing projects to which this 
Preliminary Loan Contract applies, it being expressly 
understood that the PHA will, in its sole discretion, deter­
mine whether or not such annual Contributions Contract 
or Contracts shall be entered into.

25. If any provision of this Contract is held invalid, 
the remainder of this Contract shall not be affected thereby, 
if, in the judgment of the PHA, such remainder of this 
Contract would then continue to conform to the terms of 
the Act.

Exhibit 4



4 9

26. The PH A certifies that the President of the United 
States of America has approved the undertaking by the 
PHA of the loan for which provision is made herein and 
has approved the making of this Contract.

27. The Local Authority certifies that all conditions 
precedent to the valid execution and delivery of this Pre­
liminary Loan Contract on its part have been complied 
with and that all things necessary to constitute this Con­
tract its valid, binding and legal agreement on the terms 
and conditions and for the purposes herein set forth, have 
been done and performed and have happened, and that the 
execution and delivery of this Contract on its part have 
been and are in all respects authorized in accordance with 
law. The PHA similarly certifies with reference to its 
execution and delivery of this Contract.

I n witness whereof, the Local Authority and the PHA 
have caused this Preliminary Loan Contract to be duly 
executed and their respective seals to be hereunto affixed 
and attested, all as of the date first above written.

H ousing A uthority of S avannah 
(Name of Local Authority)

By / s /  H erbert L. K ayton 
(S eal) Affixed Chairman
A tte st :

/ s /  W . H. S tillwell
Secretary

P ublic H ousing A dministration 
By / s /  M. B. Satterfield 

( S e a t ,)  Affixed Director, Atlanta Field Office

A ttest :

/ s /  Fsm  A. D onham
Attesting Officer

Exhibit 4



5 0

Exhibit 5

Form PHA-2171 
Eev. December 1, 1951

ANNUAL CONTRIBUTIONS CONTRACT 

P art O ne

THIS AGREEMENT entered into as of the 19th day 
of March, 1952 (herein called the “ Date of This Contract” )) 
by and between the Public Housing Administration (Here­
in called the “ PH A” ), which is administering, in accord­
ance with Reorganization Plan No. 3 of 1947, effective July 
27,1947, the functions of the United States Housing Author­
ity, created in pursuance of the provisions of the United 
States Housing Act of 1937, which act, as amended to the 
Date of This Contract, is herein called the “ Act” , and the 
H ousing A uthority of S avannah  (Herein called the “ Local 
Authority” ), which is a body corporate and politic organ­
ized and existing under the laws of the State of Georgia 
(Herein called the ‘ ‘ State” ) and a ‘ ‘ public housing agency”  
as defined in the Act, W itnesseth :

In consideration of the mutual covenants hereinafter set 
forth, the parties hereto do agree, as follows:

Sec. 1. Project, Cooperation Agreement, and Maximum 
Limitations

(A) The Local Authority is undertaking the development 
and operation of low-rent housing as defined in the Act, as 
follows:



51

Exhibit 5

Approximate Maximum Cost of 
Construction and 

Equipment per Room
Project Number of Estimated Total 
No. Dwelling Units Development Cost

OA-2-4
&A-2-5
&A-2-6

250
127
86

$2,845,143.00
1,142,373.00

862,514.00

$1,750.00
1.750.00
1.750.00

Total 463 $4,850,030.00

(B) With respect to such low-rent housing and in com­
pliance with Sec. 10(a), Sec. 10(h) and Sec. 15(7)(b) of the 
Act the Local Authority has entered into, and the PHA has 
approved, an agreement or agreements with the governing 
body or bodies of the locality or localities in which such 
housing is or will he situated, as follows:

Public Body Date of Agreement

City of Savannah, Georgia May 6, 1950

Such agreement or agreements collectively are herein called 
the “ Cooperation Agreement” .

(C) The President of the United States approved the 
making of this Contract and the undertaking by the PHA, 
as herein provided, of the loan and annual contributions in 
the amount, at the rates, and on the PHA List or Lists as 
follows:

PHA Loan $2,292,000.00
PHA loan interest rate per annum 2%% (herein 

called the “ PHA Loan Interest Rate” ).
Maximum contribution percentage 4%% (herein 

called the “ Maximum Contribution Percentage” ).



5 2

PHA List No. 243, dated July 23, 1951, for Project 
No. G1A-2-4; and PHA List No. 205, dated March 
15, 1951, for Projects Nos. GA-2-5, 2-6.

(H) Each propect identified in this Sec. 1 is herein 
called a “ Project”  and, if more than one Project is so 
identified, are herein cellectively called the “ Projects” .

Sec. 2. Development Program
Each Project is more fully described in a statement 

(herein called a “ Development Program” ) which has been 
adopted by the Local Authority and approved by the PHA 
to serve as the basis of the development of such Project. 
Each Project including such changes therein (whether in 
the number of dwellings to be provided thereby or other­
wise) as may be made from time to time with the approval 
of the PHA shall be developed and operated by the Local 
Authority in compliance with all provisions of this Con­
tract and all applicable provisions of the Act.

Sec. 3. Development Cost of Project
The Local Authority estimates that the total Develop­

ment Cost of each Project will not exceed the estimated 
total Development Cost therefor as specified in Sec. 1, 
which estimate is approved by the PHA. The respective 
estimates of total Development Cost as specified in Sec. 1, 
or the latest revisions thereof pursuant to the provisions 
of Part Two hereof, are herein called the “ Maximum De­
velopment Cost”  of the respective Projects or of all the 
Projects in the aggregate as the context indicates. The 
Local Authority, however, shall complete the development 
of the Projects at the lowest possible cost, and in no event 
at a cost in excess of the aggregate Maximum Development 
Cost therefor.

Exhibit 5



Exhibit 5

Sec. 4. Cost Limits
(A) The cost for construction and equipment of each 

Project (excluding land, demolition, and Nondwelling Fa­
cilities) shall not exceed per room the amount specified for 
such Project in Sec. 1 under the heading “ Maximum Cost 
of Construction and Equipment per Room”  and where such 
amount exceeds $1750 for any Project the Public Housing 
Commissioner has found that in the geographical area of 
such Project (1) it is not feasible under the cost limitation 
for construction and equipment (excluding land, demoli­
tion, and Nondwelling Facilities) of not to exceed $1750 
per room as set forth in Section 15(5) of the Act to con­
struct such Project without sacrifice of sound standards of 
construction, design, and livability, and (2) there is an 
acute need for the housing which will be provided by such 
Project. Therefore, and in pursuance of the authorization 
in said Section 15(5) of the Act, the Public Housing Com­
missioner has prescribed such higher cost limitation for 
the construction and equipment (excluding land, demoli­
tion and Nondwelling Facilities) per room for such Project.

(B) The term “ Nondwelling Facilities”  as used in this 
Contract includes nondwelling structures, spaces, and equip­
ment, and site development, improvements and facilities 
located outside building walls (including streets, sidewalks, 
and sanitary, utility, and other facilities, but excluding 
separate heating plant structures, equipment, and distribu­
tion lines).

Sec. 5. Need for Project and Rental Gap
The Local Authority has demonstrated to the satisfac­

tion of the PHA (1) that there is a need for such low-rent 
housing which is not being met by private enterprise, and 
(2) that a gap of at least twenty per centum has been left 
between the upper rental limits for admission to such low- 
rent housing and the lowest rents at which private enter­



54

prise, unaided by public subsidy, is providing (through 
new construction and available existing structures) a sub­
stantial supply of decent, safe, and sanitary housing 
toward meeting the need of an adequate volume thereof.

Sec. 6. Justification for Project and Financial Assist­
ance by PH A

The development and operation of each Project in ac­
cordance with this Contract will provide decent, safe, and 
sanitary dwellings within the financial reach of families 
who are in the lowest income group and who cannot afford 
to pay enough to cause private enterprise in their locality 
or metropolitan area to build an adequate supply of decent, 
safe, and sanitary dwellings for their use (which families 
are herein called “ Families of Low Income” ), and the pro­
visions of this Contract are adequate to assure that each 
such Project will be developed and operated in compliance 
with all the requirements of the Act. The loan herein pro­
vided is necessary to assist the development of each Project, 
and the annual contributions payable by the PHA in the 
amounts, for the period, and in the manner herein pro­
vided are necessary to achieve, maintain, and assure the 
low-rent character of each such Project.

Sec. 7. Tax Exemption of Project

Under the Constitution and Statutes of the State each 
Project is exempt from all real and personal property 
taxes which may be levied or imposed by the State, city, 
county, or other political subdivisions.

Sec. 8. Loan by PHA

Subject to and in accordance with all the provisions of 
Part Two hereof, and in order to assist the development of 
each Project, the PHA shall lend to the Local Authority

Exhibit 5



5 5

an amount not to exceed the PHA Loan specified in Sec. 1. 
Such amount, or the latest revision thereof pursuant to 
the provisions of Part Two hereof, is herein called the 
“ Maximum Loan Commitment” : Provided, That in no
event shall the loan by the PHA exceed ninety per centum 
of the Maximum Development Cost of all the Projects. 
Such loan shall bear interest at the PHA Loan Interest 
Rate.

Sec. 9. Annual Contributions by PEA

Subject to and in accordance with all the provisions of 
Part Two hereof, and in order to assist in achieving and 
maintaining the low-rent character of each Project, the 
PHA shall make annual contributions to the Local Au­
thority in the amount and for the period specified in Part 
Two.

Sec. 10. Bonds and Additional Projects
The Local Authority shall authorize, issue, and sell to 

others than the PHA, obligations of the type described in 
Sec. 411 (herein called the “ Bonds” ), all as prescribed in 
Part Two of this Contract, with respect to the Projects 
and to any other low-rent housing project or projects 
undertaken by the Local Authority with financial assist­
ance of the PHA which, pursuant to mutual agreement of 
the Local Authority and the PHA, may be incorporated 
under the terms of this Contract.

Sec. 11. Regulations as to Citizenship of Tenants

The Local Authority has adopted a resolution contain­
ing regulations prohibiting as a tenant of any Project by 
rental or occupancy any person other than a citizen of the 
United States, except that such prohibition does not apply 
in the case of the family of any Serviceman or the family

Exhibit 5



5 6

of any Veteran who has been discharged (other than dis­
honorably) from, or the family of any Serviceman who died 
in, the armed forces of the United States within four years 
prior to the date of application for admission to such 
Project. Said resolution shall not be altered, modified, 
amended, or rescinded except to the extent and when sub­
sequent changes in applicable Federal statutes modify or 
relax the requirement for such regulations.

Sec. 12. National Emergency
(A) The Local Authority shall, (1) during any period 

of national emergency in connection with national defense' 
as declared by the President of the United States or any 
period during which a state of war between the United 
States and any foreign power exists, and (2) upon either a 
determination by the President of the United States that 
there is an acute shortage of housing in the locality of any 
Project which impedes the national defense and that the 
necessary housing would not otherwise be provided when 
needed for persons engaged in national defense activities, 
or a determination by the President of the United States 
that there is an acute need for housing in the locality of 
any Project to assure the availability of dwellings for per­
sons engaged in national defense activities, to the maxi­
mum extent authorized or permitted under applicable Fed­
eral and State laws then in effect, operate such Project to 
provide housing for persons engaged in national defense 
activities.

(B) If, by reason of any such emergency or state of 
war, the construction of any Project is either prohibited 
or stopped prior to the delivery of Bonds and it appears 
that such prohibition or stoppage of construction will con­
tinue for an extended period, the Local Authority shall 
refrain from the award of any further Construction or 
Equipment Contracts, shall take in respect to Construction 
or Equipment Contracts already let whatever action is 
reasonably necessary to conserve monies and assets (in­

Exhibit 5



57

eluding termination or settlement of any outstanding Con­
struction or Equipment Contracts), and shall take all other 
reasonable actions necessary to minimize overhead ex­
penses and losses. Any monies in the General Fund for the 
development of such Project in excess of the amounts 
needed therefor under the aforesaid limitations shall, upon 
request of the PHA, be applied to the payment of any 
Advance Notes or Temporary Notes issued in connection 
with such Project, and the PHA shall not be obligated to 
make any further advances with respect to work under Con­
struction or Equipment Contracts until such prohibition or 
stoppage is ended. Nothing in this subsection (B) shall be 
construed as prohibiting the Local Authority from pro­
ceeding with site acquisition and the completion of plans, 
drawings, specifications, and related documents.

Sec. 13. Incorporation of Part Two in this Contract

For convenience, various provisions of this annual con­
tributions contract are embodied in a separate document 
designated “ Terms and Conditions”  being Form No. PHA 
2172, Rev. Sept. 1, 1951, which (as modified by Sec. 14) 
constitutes Part Two of this Contract. The provisions, 
terms, covenants, and conditions embodied in Part Two 
are binding upon the parties hereto, with the same effect as 
if set forth in full in this Part One of this Contract. The 
term “ Contract”  as used herein shall mean this annual 
contributions contract, consisting of this Part One thereof 
and the Terms and Conditions constituting Part Two 
thereof.

Sec. 14. Additional Provisions and Modifications

The following additional provisions, and modifications 
of either Part One or Part Two, as hereinafter set forth 
constitute the only modifications to this contract:

(A) The Terms and Conditions constituting Part Two 
hereof are hereby modified in the following respect:

Exhibit 5



Exhibit 5

Sec. 206, subsection (C), is modified to read as follows:
“ (C) ‘ Serviceman’ as used in this Contract shall 

mean a person in the active military or naval service 
of the United States who has served therein at any 
time (i) on or after September 16, 1940, and prior to 
July 26, 1947, (ii) on or after April 6, 1917, and 
prior to November 11, 1918, or (iii) on or after 
June 27, 1950, and prior to such date thereafter as 
shall be determined by the President. ‘Veterans’ as 
used in this Contract shall mean a person who has 
served in the active military or naval service of the 
United States at any time (i) on or after September 
16, 1940, and prior to July 26, 1947, (ii) on or after 
April 6, 1917, and prior to November 11, 1918;, or 
(iii) on or after June 27, 1950, and prior to such 
date thereafter as shall be determined by the Presi­
dent, and who shall have been discharged or released 
therefrom under conditions other than dishonor­
able.”

(B) The Annual Contributions Contract entered into 
as of April 17, 1951, between the Local Authority and the 
PHA (which Contract, together with any supplements 
thereto or amendments or waivers of any provisions thereof 
are herein collectively called the “ Original Contract” ) is 
hereby amended and consolidated into this Contract which 
shall henceforth govern the development and operation of 
each Project. All actions and proceedings properly had, 
taken, or performed pursuant to the Original Contract shall 
be deemed to have been had, taken, and performed and shall 
be continued under this Contract.

See. 15. Performance of Conditions Precedent to Vali­
dity of this Contract

The Local Authority certifies that all conditions prece­
dent to the valid execution and delivery of this Contract on



5 9

its part have been complied with, that all things necessary 
to constitute this Contract its valid, binding, and legal 
agreement on the terms and conditions and for the pur­
poses herein set forth have been done and have occurred, 
and that the execution and delivery of this Contract on 
its part have been and are in all respects duly authorized 
in accordance with law. The PHA similarly certifies with 
reference to its own execution and delivery of this Contract.

I n witness whereof, The Local Authority and the PHA 
have caused this Contract to be executed in their respective 
names and have caused their respective seals to be hereunto 
affixed and attested as of the Date of This Contract first 
above written.

H ousing A uthority  of Savannah  
By / s /  H erbert L. T aylor 

Chairman
(S eal) Affixed 
A ttest :

/ s /  W . H. S tillw ell
Secretary

P ublic H ousing A dministration 
By / s /  M. B. Satterfield 

Director, Atlanta Field Office
(S eal) Affixed 
A tte st :

/ s /  R alph  C. Chester
Attesting Officer

Exhibit 5



Exhibit 6

Form No. PHA-2172

(See opposite fPST* )



61



62

AMENDATORY AGREEMENT NO. 1
TO

ANNUAL CONTRIBUTIONS CONTRACT
This Amendatory Agreement entered into as of the 

24th day of July, 1952, by and between the Public Housing 
Administration (herein called the “ PH A” ) and the H ous­
ing A uthority  of Savannah  (herein called the “ Local 
Authority ” ), W itnesseth  :

In consideration of the mutual covenants hereinafter 
and in the Annual Contributions Contract set forth the par­
ties do agree as follows:

The Annual Contributions Contract entered into as of 
the 19th day of March, 1952, between the parties shall be 
and the same hereby is amended by deleting from Part One 
thereof the amount of the PHA loan which is specified as 
‘ ‘ $2,292,000.00 ’ ’ and by inserting in lieu thereof the amount 
of “ $2,792,000.00” .

In witness whereof the parties hereto have caused this 
amendatory agreement to be executed in their respective 
names and their respective seals to be hereunto impressed 
or affixed and attested as of the date and year first above 
written.

H ousing A uthority  of S avannah  
By /S /  H erbert L. K ayton 

( seal) Affixed Chairman
Attest:

/ S /  W . H. S tillw ell
Secretary

P ublic H ousing A dministration 
/ s /  A. R. H anson

( seal) Affixed Director, Atlanta Field Office

Attest:
/S /  R alph  C. C hester

Attesting Officer

Exhibit 7



63

Transcript of Hearing

M otion F oe S umm aey  J udgment

“ Mr. MacGuineas: * * * In the first place, we suggest 
that the action is premature * * * ”  (p. 5).

“ The Court: Is there any announcement as to the
nature of the project?’ ’ (p. 5).

“ Mr. MacGuineas: Yes * * * ”  (p. 5).
*  #  #

“ Mr. MacGuineas: * * * That local authority in Savan­
nah has stated that [sic] proposes to have this project 
when completed occupied exclusively by white people”  
(pp. 5-6).

‘ ‘ The Court: I do not see that this action is premature. 
This is in the nature of an action for declaratory judg­
ment”  (p. 6).

#  *  *

“ Mr. MacGuineas: As to that, since the other party to 
the contract is not before the Court, to wit, the Savannah 
Authority, wn submit there is a lack of indispensable party”  
(p. 11).

*  *  *

“ The Court: I am not going to hold the state agency 
as an indispensable party”  (p. 11).









m

if*,- ii? . -C ■





IN THE

United States Court of Appeals
FOR THE FIFTH CIRCUIT

No.  1 6 0 4 0

PRINCE HEYWARD, ET AL.,
Appellants,

versus

PUBLIC HOUSING ADMINISTRATION, ET AL.,
Appellees.

Appeal from  the United States District Court fo r  the 
Southern District o f  Georgia.

(November 30, 1956.)

Before HUTCHESON, Chief Judge and BORAH and 
BROWN, Circuit Judges.

BORAH, Circuit Judge: This is an appeal from two
orders entered by the district court dismissing an action 
brought by Prince Heyward and seventeen other Negro 
citizens of the United States, residents of Savannah, 
Georgia, in their own behalf and in behalf of other 
Negroes similarly situated, against two groups of defend-



ants, (1) the Public Housing Administration,1 and its 
Atlanta Field Office Director, Arthur Hanson, and (2) 
the Housing Authority of Savannah, Georgia,2 and its 
officers,® praying for a declaratory judgment, injunctive 
relief, and an award of $5,000 damages to each plaintiff 
against each defendant. The jurisdiction of the court be­
low was invoked pursuant to 28 U.S.C. 1331,4 on the 
ground that the action arises under the Constitution and 
laws of the United States and more than $3,000 is in con­
troversy, and 28 U.S.C. 1343(3),5 on the ground that the 
plaintiffs seek redress for deprivation of their civil rights.

2 Heyward, et al. v. Public Housing Adm., et al.

The gravamen of the complaint which was filed on May 
20, 1954, is that defendants, as public officers, are jointly 
enforcing a policy of racial segregation in public low-rent 
housing projects in Savannah, in violation of the rights 
secured to plaintiffs by the Fifth and Fourteenth Amend­
ments to the Federal Constitution, and the United States
Housing Act of 1937, as amended,6 the National Defense
i A corporate agency and instrumentality of the United States 
established pursuant to Reorganization Plan No. 3, effective July 
7, 1947. (5 U.S.C.A. 133y-16.)
2’ A corporate body organized under the laws of the State of 
Georgia which administers the low-rent housing program of the 
City of Savannah. 99 Georgia Code Ann. 1101 et seq.
3 W. Horace Stillwell, Herbert L. Kayton, Wm. H. Stephens, 
James A. Byington, J. R. Burney and Joseph F. Griffin, Jr.
4 28 USC. 1331 provides: “The district courts shall have
original jurisdiction of all civil actions wherein the matter m 
controversy exceeds the sum or value of $3,000 exclusive of in­
terest and costs, and arises under the Constitution, laws or
treaties of the United States. , „ .
5 28 U.S.C. 1343 provides: “The district courts shall have
original jurisdiction of any civil action authorized by law to he 
commenced by any person: * * * (3) To redress the deprivation, 
under color of any State law, statute, ordinance, regulation, 
custom or usage, of any right, privilege or immunity secured by 
the Constitution of the United States or by an Act of Congress 
providing for equal rights of citizens or of all persons within the 
jurisdiction of the United States.
e 42 U.S.C. 1401 et seq.



Housing Acts,7 and the Civil Rights Statute.8 Within the 
delay for answering, Savannah Housing Authority, here­
inafter called SHA, and its officers filed a motion to dis­
miss the complaint and with reservation of their rights 
under the motion they also filed an answer, a motion for 
a more definite statement, and a motion to strike certain 
portions of the complaint. The record reflects that no 
answer was filed by either Public Housing Administration, 
hereinafter called PHA, or Hanson. Approximately one 
year after the complaint was filed and on May 5, 1955, 
plaintiffs served upon PHA, Hanson, SHA and Stillwell, a 
request for admission of facts to which SHA and Stillwell 
timely replied, but no response thereto was ever filed 
by either PHA or Hanson. However, on June 14, 1955, 
PHA and Hanson filed a motion for summary judgment 
and, in support thereof, an affidavit of Charles E. Slusser, 
Commissioner of PHA. Thereafter, and prior to the hear­
ing on the defendants’ respective motions for summary 
judgment and to dismiss, plaintiffs propounded inter­
rogatories to Stillwell, Secretary-Director of SHA, which 
were duly answered by him. On September 29, 1955, 
which was one day prior to the date fixed for the hearing 
on defendants’ previously filed motions, plaintiffs filed a 
written notice which recited that they would in accordance 
with the attached motion move on October 10, 1955, for a 
summary judgment against SHA and its officers. At the 
hearing on defendants’ motion which was had on the fol­
lowing day, plaintiffs’ counsel asked the court to consider 
also at that time their proposed motion for summary 
judgment, and this request was denied. Thereafter, and 
upon consideration of the arguments and briefs and with­
out entertaining a hearing on plaintiffs’ motion for sum-

Heyward, et al. v .  Public Housing A d m .,  et al. 3

t 42 U.S.C. 1501 et seq.
s 42 U.S.C. 1983.



4 Heyward, et al. v. Public Housing Adm., et al.

mary judgment, the court on October 15, 1955, issued an 
order granting the motion of PH A and Hanson for sum­
mary judgment, and on October 21, 1955, granted the mo­
tion of the remaining defendants to dismiss. This appeal 
followed.

In considering the propriety of the district court’s ac­
tion, it would now appear in order to set forth the theory 
o f plaintiffs’ complaint and the essential allegations made 
in support of their claim for relief. The complaint in 
substance alleges: that PHA and SHA, pursuant to the 
provisions of the Housing Act of 1937, as amended, have 
constructed and agreed to construct, operate and maintain 
several public housing projects in the City of Savannah, 
some of which are and will be located on the site of the 
residences or former residences of the plaintiffs; that 
pursuant to the provisions of the National Defense Hous­
ing Acts, PHA holds title to certain other public housing 
projects in Savannah which are operated by SHA as agent 
for PHA; and that the entire public housing program in 
Savannah has been jointly planned, constructed, operated, 
and maintained by PHA and SHA pursuant to the pro­
visions of the aforementioned housing acts and the laws 
of the State of Georgia. In this connection plaintiffs al­
lege that in administering the entire public housing pro­
gram PHA and SHA have determined upon and presently 
enforce an administrative policy of racial segregation re­
sulting in the designation of certain projects for occupancy 
by qualified white families and in the designation of 
other projects for occupancy by qualified Negro families; 
that it is the practice and policy of each of the defend­
ants to require applicants for public housing to state a



H eyw ardet al. v. Public Housing Adm., et al. 5

preference for admission to a particular project and “that 
this information is put on the application blank prepared 
for the purpose of taking applications for public housing 
and that such information is in fact and effect a device 
for discriminating against the Plaintiffs and the members 
of the class which they represent, solely because of their 
race or color;” and that pursuant to the racial segregation 
policy, plaintiffs and others similarly situated, solely be­
cause they are Negroes, are denied the rights and prefer­
ence to occupy housing projects, including those operated 
by SHA as agent for PHA, which have been limited to 
white occupancy by the defendants. It is also alleged 
that each of the plaintiffs has been or will be displaced 
from the site of his or her residence and adjacent areas 
which have been condemned by or on behalf of SHA for 
the purpose of constructing thereon, certain low-rent 
housing projects, one of which is known as Fred Wessels 
Homes; that each of the plaintiffs meets all of the require­
ments established by law for consideration for admis­
sion and for admission to the project built on or to be 
built on the site of his or her former residence, and to 
certain other public housing projects in Savannah all of 
•which have been limited by defendants to occupancy by 
white families. The complaint further alleges that white 
families which have not been displaced from the site of 
any low-rent housing project or slum-clearance project 
initiated after January 1, 1947, and whose housing needs 
are not or were not as urgent as those of the plaintiffs 
have been admitted to Fred Wessels Homes and to other 
projects limited to white occupancy, whereas each of the 
plaintiffs desires to live in Fred Wessels Homes, and each 
has been denied admission to Fred Wessels Homes, solely



6 Heyward, et al. v. Public Housing Adm., et al.

because of race and color, despite the fact that at the time 
said project was ready for occupancy, each of the plain­
tiffs had a preference for admission by virtue of the fact 
that each was or is among those having the greatest 
urgency of need among low-income families eligible for 
public housing in Savannah. Finally, it is alleged that 
each of the defendants is under a duty to discharge his or 
its duties in conformity with the Constitution, laws and 
public policy of the United States, and that plaintiffs 
have no adequate remedy at law to protect their “civil 
and constitutional right not to be discriminated against 
by the State and Federal Governments, solely because of 
race, in leasing an interest in real property.” The relief 
prayed is that the court declare the rights and other legal 
relations of the parties as to the subject-matter in con­
troversy,9 and that the court enjoin defendants and their
9 The prayer of the complaint contains the following:

“2. Enter a final judgment and decree declaring that the 
Defendants and each of them:

“ (a) may not refuse to accept the applications of the Plain­
tiffs for admission to public housing projects limited 
to occupancy by white families;

“ (b) must give the Plaintiffs’ applications for public hous­
ing the same consideration as is given to the applica­
tions of white families for public housing;

“ (c) must not discriminate against the Plaintiffs, solely be­
cause1 of race or color, in certifying applicants for 
public low-rent housing; >

“ (d) must not discriminate against the Plaintiffs and other 
Negroes similarly situated with respect to their ad­
mission to any unit in any public housing project, 
solely because of race and color;

“ (e) must extend the statutory preferences for admission 
to any available unit in any public housing project 
in the City of Savannah, Georgia, without considering 
the race or color of the Plaintiffs and all other Negroes 
similarly situated;

“ (f) may not lawfully pursue a policy of racial segregation 
in public housing by constructing, operating and main­
taining separate public housing projects for eligible 
Negro and white families or by segregating familier 
on the basis of race within a project;



Heyward, et al. v. Public Housing Adm., et al. 7

agents: (1) from refusing to accept plaintiffs’ applications 
for certain public housing projects; (2) from refusing to 
certify plaintiffs as eligible for certain housing projects; 
(3) from refusing to admit plaintiffs to any public housing 
unit for which they are eligible, solely because plaintiffs 
are Negroes; (4) from pursuing a policy of racial segre­
gation in public housing; (5) from refusing to extend the 
statutory preferences for the admission of plaintiffs to 
certain projects; (6) from classifying plaintiffs and others 
similarly situated on the basis of race for any purpose with

“ (g) may not lawfully classify applicants for public hous­
ing on the basis of race for any purpose with respect 
to their applications for, or admissions to, or resi­
dence in any public housing project;

“ (h) may not require Plaintiffs to state a preference for 
admission to a particular project upon applying for 
public housing,

“ (i) may not lawfully determine upon and enforce an ad­
ministrative policy of racial segregation in public 
housing projects which results in the exclusion of 
Plaintiffs and others similarly situated from housing 
units for which they are otherwise eligible and for 
which they have a preference for admission, solely 
because of race and color, especially where such 
projects are constructed, operated or maintained with 
federal financial and/or other federal assistance; and 
declaring,

“ (j) that Defendant Public Housing Administration, its 
agents, employees, representatives and successors may 
not give federal financial assistance and other federal 
assistance to the Defendant Housing Authority of 
Savannah, Georgia for the construction, operation and 
maintenance of any public housing preject from which 
the Plaintiffs and other Negroes similarly situated will 
be excluded and denied consideration for admission 
and denied admission solely because of race and color; 
and

“ (k) declaring that enforcement of racial segregation in 
public housing violates rights secured to the Plain­
tiffs, and other Negroes similarly situated, by the 
due process clause of the Fifth Amendment to the 
Federal Constitution, the equal protection and due 
process clauses of the Fourteenth Amendment to the 
Federal Constitution and Title 8, United States Code, 
Section 42 and Title 42, United States Code, Section 
1410(g) and 1415(8) (c) and 1501 et seq.”



8 Heyward, et al. v. Public Housing Adm., et al.

respect to their applications for or admissions to, or resi­
dence in, any public housing project; (7) from requiring 
plaintiffs to state a preference for admission to a par­
ticular project upon making application for admission 
to any public housing project; and, (8) from segregating 
plaintiffs within any project to which they are admitted. 
Additional injunctive relief is prayed to enjoin PHA from 
giving federal financial and other federal assistance to 
SHA for the construction, operation, or maintenance of 
any project which excludes plaintiffs and other Negroes 
similarly situated, solely because of race or color. Final­
ly, plaintiffs pray that each of them be awarded damages 
in the amount of $5,000 against each and all of the de­
fendants, and that the Court grant such other and addi­
tional relief as may appear to be equitable and just.

The district court granted the motion of defendants 
PHA and Hanson for summary judgment and dismissed 
the complaint as to them on the following grounds: (1) 
that the Court lacks jurisdiction under 28 U.S.C. 1331 be­
cause the complaint fails to show that the matter in con­
troversy as to each plaintiff exceeds $3,000; (2) that the 
Court lacks jurisdiction under 28 U.S.C. 1343(3) because 
defendants were not acting under color of any state law; 
(3) that the Court lacks venue of the action under 28 
U.S.C. 1391 in that PHA is not a corporation doing busi­
ness in the Southern Judicial District of Georgia within 
the meaning of the venue statute; (4) that the plaintiffs 
lack sufficient legal interest in the expenditure of federal 
funds by PHA to give them standing to challenge the 
validity of such expenditure; (5) that PHA, by placing in 
its contracts with SHA a requirement that the latter shall 
extend the preference in occupancy required by 42 U.S.C.



Heyward, et al. v. Public Housing Adm., et al. 9

1410(g) has fulfilled its obligations under that statutory 
provision; (6) that in view of the fact that PHA has left 
to the determination of SHA the policy as to whether low- 
rent housing projects shall be occupied by any particular 
race, there is no justifiable controversy between plain­
tiffs and PHA and Hanson; and (7) that in view of the 
fact that Hanson has no official function or duty with re­
spect to dispensing or withholding of federal funds to 
SHA plaintiffs failed to make out a claim against him.

The district court also dismissed the complaint as to 
SHA and its officers on the ground that since it appears 
from the complaint that plaintiffs are afforded equal 
though separate housing facilities, their civil and constitu­
tional rights have in no wise been violated.

Considering first the order dismissing the complaint 
as to PHA and Hanson, we are in no doubt that the trial 
court erred in ruling that the complaint fails to show 
that the matter in controversy as to each plaintiff exceeds 
the jurisdictional amount and that the court lacked venue 
of the action. In the first place we take it to be funda­
mental that a motion for Summary judgment applies to the 
merits of a claim, or to matter in bar, but not to matter 
in abatement.10 Motions suggesting improper venue or 
lack of jurisdiction for failure to show jurisdictional 
amount present clearly matters in abatement only which 
must be raised not by a motion for summary judgment, 
but by motions under Rule 12(b), Federal Rules of Civil 
Procedure. In this connection it is important to note that 
under the terms of Rule 12(b), such defenses are not in-
10 See Moore’s Federal Practice. 2 Ed., Vol. 6, p. 2025.



10 Heyward, et al. v. Public Housing Adm., et al.

tegrated with the motion for summary judgment.11 But 
apart from the fact that these questions were improperly 
raised and disposed of under Rule 56, Federal Rules of 
Civil Procedure, and the further fact that the district 
judge improperly considered the merits of a cause in 
Which he was of the declared opinion that jurisdiction was 
wanting, we think it plain that the allegations of the com­
plaint adequately establish that the requisite jurisdiction­
al amount is here present. The applicable rule with re­
spect to the amount in controversy is relatively simple and 
is this: When a complaint contains a formal allegation
that the amount in controversy exceeds $3,000 and is not 
traversed, such allegation is deemed sufficient to confer 
jurisdiction on the federal court, unless it appears to a 
legal certainty that the other allegations of the complaint 
so qualify or detract from it that it cannot fairly be said 
that jurisdiction appears on the face of the complaint. See 
Kvos, Inc. v. Associated Press, 299 U.S. 269. Here, the 
allegation of jurisdictional amount was not traversed. To 
the contrary, on the face of their motion for summary 
judgment these defendants asserted that “there is no 
genuine issue as to any material fact” , and the supporting 
affidavit does not challenge or contradict the amount 
alleged to be in controversy. And we cannot on this 
record say to a legal certainty that the matter in dispute 
does not involve the requisite jurisdictional amount. As
u Rule 12(b) provides in part, as follows: . . the follow­
ing defenses may at the option of the pleader be made by motion: 
(1) lack of jurisdiction over the subject matter, (2) lack of 
jurisdiction over the person, (3) improper venue . . . (6) failure 
to state a claim upon which relief can be granted . . . If, on a 
motion asserting the defense numbered (6) to dismiss for failure 
of the pleading'to state a claim upon which relief can be granted, 
matters outside the pleadings are presented to and not excluded 
by the court, the motion shall be treated as one for summary 
judgment and disposed of as provided in Rule 56. . . . ”



Heyward, et al. v. Public Housing Adm., et al. 11

to venue of the action we deem it sufficient to say that 
there appears in the record no formal objection to venue, 
and PHA by filing the motion for summary judgment 
and thus putting at issue the merits of the case effectively 
waived whatever objection to venue as it may have 
had.

Coming now to the plaintiffs’ claim for relief under the 
Civil Rights Statute, we find ourselves in accord with 
the trial court’s ruling that neither PHA nor Hanson is 
acting under color of any State law within the require­
ments of 28 U.S.C. 1343(3). Plaintiffs’ case against PHA 
is bottomed on the proposition that the regulation and 
control exercised by the federal agency is so extensive 
and the relationship between the federal agency and SHA 
so intimate that the actions of the one must be deemed 
to be the acts of the other and pursuant to State law or 
custom. It clearly appears, however, from the plead­
ings, the affidavit of Commissioner Slusser and the several 
exhibits attached thereto, as well as from the state and 
federal statutes themselves that PHA and Hanson acted 
pursuant to the federal statutes and have not acted or 
purported to act under any State law, regulation, custom 
or usage.

We are also in agreement with the findings of the dis­
trict judge which fully support his conclusion that plain­
tiffs had failed to make out a claim against Hanson upon 
which relief could be granted. The evidence clearly 
showed that Hanson has no official function or duty with 
respect to dispensing or withholding of federal funds to 
SHA. The affidavit of the Commissioner of PHA shows 
that Hanson was not responsible for final approval of any



12 Heyward, et al. v. Public Housing Adm., et al.

local development program, and “ in no instance and under 
no circumstances does the Field Office Director or any 
other Field Office Official disburse to, or withhold from, 
any local authority Federal funds pursuant to [contracts] 
between the Public Housing Administration and the local 
authority.”

There remains for consideration the question of whether 
PHA was entitled to summary judgment on plaintiffs’ 
claim arising under the Constitution and laws of the 
United States. The court below answered this question 
in the affirmative but did not mention the statutes in­
volved. Insofar as the complaint challenges acts of PHA 
in connection with Lanham Act, national defense housing 
projects, we think the action was properly dismissed for 
the reason that it is a suit against a federal agency which 
is not subject to be sued. 42 U.S.C. 1404(a). Further­
more, the evidence shows that PHA does not make any 
financial contributions with respect to such defense hous­
ing projects and decisions as to occupancy of these 
projects are solely the responsibility of SHA to which 
they have been conveyed.

But with reference to PHA functions in connection with 
the low-rent housing projects, we think the trial judge 
erred in concluding that PHA was entitled to summary 
judgment. This court has consistently adhered to the 
view that a summary judgment should only be given 
when it is quite clear what the truth is. American In­
surance Co. v. Gentile Bros. Co., 5 Cir., 109 F. 2d 732. One 
who moves for summary judgment has the burden of 
demonstrating clearly that there is no genuine issue of



Heyward, et al. v. Public Housing Adm., et al. 13

fact, and any doubt as to the existence of such an issue 
is resolved against him. In the case at bar we cannot 
say that PHA sustained its burden of proving that there 
existed no genuine issue of fact. Here, as in Heyward, et 
al. v. Public Housing Administration, et al., D.C. Cir., 214 
F. 2d 222, plaintiffs are seeking an adjudication whether, 
without violating rights secured to them under the Fifth 
Amendment and the federal housing acts cited above, PHA 
could give federal financial and other assistance to SHA 
in connection with projects from which plaintiffs are de­
nied consideration for admission and admission solely be­
cause of their race and color. While it is true that PHA 
has not been charged by Congress with the duty of pre­
venting discrimination in the leasing of housing project 
units, what these plaintiffs are saying in effect is that 
the federal agency is charged with that duty under the 
Fifth Amendment, and that that duty should be forced 
upon PHA by the courts through the medium of injunc­
tive process. The record shows that the involvement of 
PHA in the low-rent housing program in Savannah con­
sists of a contractual guarantee to various banks and 
lending institutions that money advanced by them for the 
construction of the projects by the local agency will be 
repaid, incidental to which is the prescribing of conditions 
upon which the PHA will undertake to render such as­
sistance. These conditions consist of certain requirements 
which undoubtedly touch the projects at a great many 
points. They have to do with architectural and develop­
mental plans, the amount and terms of financial aid and 
continuing obligations to render financial assistance. With 
reference to occupancy policies, it is plain that the chal­
lenged policy, though initiated by SHA, has been ap-



14 Heyward, et al. v. Public Housing Adm., et al.

proved by PHA, by way of contractual arrangements be­
tween the state and federal agencies.

The statutory preference under which plaintiffs claim 
the right to occupy the low-rent housing projects pro­
vides, in 42 U.S.C. 1410(g), that the following preferences 
shall be extended in the selection of tenants:

. F-irsfr!'%©*'fami 1 ies which are to be dis­
placed by any low-rent housing project on by any 
public slum-clearance or redevelopment project 
initiated after January 1, 1947, or which were so 
displaced within three years prior to making ap­
plication to such public housing agency for ad­
mission to any low-rent housing . . . ”

and, in 42 U.S.C. 1415(8)(c),

in the selection of tenants (i) the public hous­
ing agency shall not discriminate against families * > 
otherwise eligible for admissipn to such housing/1 * 
because their incomes are derived in whole or in 
part from public assistance and (ii) in initially 
selecting families for admission to dwellings of 
given sizes and at specified rents the public hous­
ing agency shall (subject to the preferences in 
section 1410(g) of this title) give preference to 
families having the most urgent housing needs, 
and thereafter, in selecting families for admis­
sion to such dwellings,! shall give due considera­
tion to the urgency of the families’ housing 
needs . . . ”

As we have noted above, the ^omplaint sets forth al­
legations which, if proven, would show a failure on the 
part of PHA to comply with the above statutory tenant



Heyviard, et al. v. Public Housing Adm., et al. 15

selection policy, and this would constitute a violation of 
plaintiffs’ rights to due process under the Fifth Amend­
ment.u The view thus expressed is in accord with thec
Supreme Court decision in Bolling v. Sharpe, 347 U. S. 
497, wherein it was said: “In view of our decision that
the Constitution prohibits the States from maintaining 
racially segregated public schools, it would be unthink­
able that the same Constitution would impose a lesser duty 
on the Federal Government.” With reference to the 
aforementioned statutory occupancy policy, Commissioner 
Slusser in his affidavit states that the “policy of Public 
Housing Administration with respect to occupancy of any 
low-rent housing project is that, subject only to the pro­
visions of the Housing Act of 1937, as amended, and 
regulations promulgated by Public Housing Administra­
tion thereunder, decisions as to occupancy are the ad­
ministrative responsibility of the Housing Authority of 
Savannah.” The regulations to which Slusser refers are 
to be found in PHA’s Housing Manual, dated February 
21, 1951, at Section 102.1, and they are as follows:

“The following general statement of racial 
policy shall be applicable to all low-rent housing 
projects developed and operated under the United 
States Housing Act of 1937, as amended.

“ 1. Programs for the development of low-rent 
housing, in order to be eligible for PHA assis­
tance, must reflect equitable provision for eligible 
families of all races determined on the approxi­
mate volume of their respective needs for such 
housing.

“2. While the selection of tenants and the as­
signing of dwelling units are primarily matters



16 Heyward, et al. v. Public Housing Adm., et al.

for local determination, urgency of need and the 
preference prescribed in the Housing Act of 1949 
are the basic statutory standards for the selec­
tion of tenants.” (Emphasis supplied.)

Thus, at the time this action was filed the regulations of 
PHA required that any local program for the develop­
ment of low-rent housing reflect equitable provision for 
eligible families of all races, but did not require that 
housing be made available on a nonsegregated or nondis- 
criminatory basis. Plaintiffs’ argument is that under these 
regulations the local authority would have no right to ad­
mit Negro applicants to vacant units, no matter what 
their priority is under the statutory preference provision, 
if to do so would deviate from the application of the 
“equity” formula which is written into each of the con­
tracts between the federal and local agencies. Further­
more, there is nothing in the affidavit, exhibits, or plead­
ings filed in this cause which indicates that PHA will or 
will not continue to require SHA to abide by the above 
regulation.

The answer of SHA and its officers, on the other hand, 
categorically denies that plaintiffs were qualified for or 
had been denied any statutory preference for admission 
to public housing projects, or that plaintiffs were re­
quired to state a preference for admission to a particular 
project. And the averment is made that the low-rent 
housing projects are constructed, operated and maintained 
solely by SHA and not by PHA or jointly with PHA; 
that separation of white and colored families in projects 
is not based solely upon the fact that the colored tenants 
are Negroes, but largely to preserve the peace and good 
order of the community; and that the rights of the white



Heyward, et al. v. Public Housing Adm., et al. 17

tenants which, are guaranteed by the Fifth and Fourteenth 
Amendments to the Constitution and the laws of the United 
States would be violated if integration of whites and 
Negroes were to be forced. This being the state of the 
record we think it plain that no convincing showing has 
been made that plaintiffs could not prevail under any 
circumstances, nor do the facts show a right to judgment 
with such clarity as to leave no room for controversy. 
Cf. Barron and Holtzoff, Federal Practice and Procedure, 
Vol. 3, p. 75.

Moreover, as was stated by the Supreme Court in 
Kennedy v. Silas Mason Co., 334 U. S. 249, 257, summary 
procedures “present a treacherous record for deciding is­
sues of far-flung import.” Cf. Pacific American Fisheries 
v. Mullaney, 9 Cir., 191 F. 2d 137. Here, we have an ex­
tremely important question, undoubtedly affecting a large 
percentage of the low-cost housing development programs, 
and ultimately affecting the living standards of a great 
number of persons, white and colored, who are in urgent 
need of decent, safe and sanitary dwellings. No conclu­
sion in such a case should prudently be rested on a in­
definite factual situation and especially should no decla­
ratory judgment or injunction issue, if there should be 
occasion to do so, on anything but clear-cut judicially de­
termined facts.

Turning now to the order which dismissed the com­
plaint as to SHA and its officers for failure to state a 
claim upon which relief could be granted, appellants, in­
sist that the district court’s holding was plain error and 
may not stand. We agree with appellants. Viewing the 
complaint in the light most favorable to appellants and 
with every intendment regarded in their favor, we think



that the complaint sets forth a claim under the Civil 
Rights Statute, and that claim is: that appellants were not 
permitted to make application for any project limited to 
white occupancy, that they are denied the right to lease 
housing facilities provided by public funds under condi­
tions set forth in the statute and equal to those imposed 
upon white families, and that such action on the part 
of SHA and its officers constituted a deprivation under 
color of State law, custom, or usage of the rights guaran­
teed them by the Fourteenth Amendment to the Con­
stitution and the federal housing acts. Accordingly, we 
think it plain that the complaint should not have been dis­
missed on motion without a hearing on the merits, where, 
as here, it does not appear to a certainty that plaintiffs 
would be entitled to no relief under any state of facts 
which could be proved in support of their claim.

The order granting summary judgment to PHA and 
Hanson is accordingly affirmed in part and reversed in 
part, and the order dismissing the action against SHA and 
its officers is reversed, and the case is hereby remanded 
to the district court for further proceedings not incon­
sistent with this opinion.

AFFIRMED IN PART, REVERSED IN PART
AND REMANDED.

18 Heyward, et al. v. Public Housing Adm., et al.

A True Copy: 
Teste:

Clerk of the United States Court of 
Appeals for the Fifth Circuit.