Thorpe v. Housing Authority of the City of Durham Brief for Respondent

    IN THE

Cmnri at %  Inttefo
October T erm , 1967

No. 1003

J oyce C. T horpe, Petitioner, 
r.

H ousing A uthority of the  City  of D u rh am .

On Writ of Certiorari to the Supreme Court of North Carolina

BRIEF FOR RESPONDENT

----------

D aniel K . E dwards 
W illiam  Y. M anson 

111 Corcoran Street 
Durham, North Carolina 

Attorneys for Housing 
Authority of the City of 
Durhaml

P ress of B yron S. A d a m s  P rinting, Inc., W ashington, D . C.



INDEX

Questions Presented ....................................................
Statement of Facts .............................. ......................
Summary of Argument.............................................. .
Argument

I, The Eviction Proceedings in the Court Below 
Did Not Violate Constitutional Due Process^Be­
cause an Aedquate Hearing Was Provided 
During the Trial Below and Because the Hous­
ing Authority Was Not Required to Have a 
Reason Other Than the Expiration of the Term 
of the Lease .......................................................
A. An Adequate Hearing was Provided by the 

Trial Below ..................................................
B. The Housing Authority was not Required to 

Show a Reason Other than the End of the 
Term of the Lease ................................ .. • • 12

II. The Lease Entered Into hy the Petitioner and 
the Housing Authority Is Not an Unconstitu­
tional Method of Prescribing and Defining the 
Tenant’s Right of Occupancy........................... 18

III. The Circular, Whatever It May Be, Did Not 
Have Application to Events that Occurred be­
fore the Issuance Date of the Circular............. 24

Conclusion
Appendix

TABLE OF CASES
Barsky v. Board of Regents, 347 US 442 .................... 18
Bell v. Maryland, 378 US 226 .......................................  18
Bourjois v. Chapman, '301 US 183, 189; 57 S. Ot. 691,

81 L, Ed. 1027 (1937) ............................................. 8
Brand v. Chicago Housing Authority, 120 F. 2d 786,

(CCA 7, 1941) .........................................13,14,19,24



11 Index Continued

Page
Cafeteria and Restaurant Workers Union v. McEIroy,

367 US 886 .............................................................  16
Chicago Housing Authority v. Blackman, 4 111. 2d 319,

_ 122 NE 2d i522 (1954) .........................................  13
Chicago Housing Authority v. Ivory, 341 111, App. 282,

93 NE 2d 386 <1950)....................................... 13,14,19
Chicago Housing Authority v. Lindsey Stewart, ------

111. —  (1968) ...................................................13,19
Chin Tow v. United States, 208 US 8 ...........................  12
Columbus Metropolitan Housing Authority v. Simpson,

85 Ohio App. 73, 85 NE 2d 560 (1949)................ 14,19
Detroit Housing Commission v. Lewis, 226 F. 2d 180

6th 'Cir. 1955) .........................................................  13
Erie Railroad Company v. Tompkins, 304 US 6 4 .........  18
Paris v. United States, 192 F. 2d 53 (10th Cir. 1951) . . .  15
FHA v. The Darlington, Inc., 358 US 8 4 .................... 28
Fleming v. Rhodes, 331 US 100 ..................................  28
Goldsmith v. U. S. Board of Tax Appeals, 270 US 117 16 
Hamm v. Rock Hill, 379 US 306, 313: 85 S. Ct. 384

(19641 ....................................................................  27
Holt v. Richmond Redevelopment and Housing Au­

thority, 266 F. Supp. 397 (E.D. Va., 1966)............. 13
Housing Authority v. Johnson, 261 NO 76, 134 SE 2d

121 .........................................................................  17
Housing Authority of the City of Pittsburgh v. Turner,

201 Pa. Super. 62, 191 A. 2d 869 (1963) ............ 14,19
Housing Authority v. Thorpe, 271 NC 468, 157 SE 2d

147 (1967) ......................................................15,17, 20
Joint Anti-Fascist Refugee Committee v. MrGrath,

341 US 123............................................................. 16
Kwong Hai Chew v. Golding, 344 US 590 .................... 17
Lynch v. United States, 292 US 571, 64 S. Ct. -840, 78

L. Ed. 1434 .......................................................18,19,28
Marsh v. Alabama, 326 US 501.....................................  16
Morgan v. United States, 304 US 1 ..............................  17
Municipal Housing Authority for City of Yonkers v. 

Walck, 277 App. Div. 791, 97 NTS 2d 488, (2d
Dept. 1950) ...........................................................15 19

Ng Fung Ho v. White, 259 US 276 ..............................  ’ 17
Randell v. Newark Housing Authority, 384 F. 2d 1951

(CCA 3-1967) ....................................................  8
Shelton v. Tucker, 364 US 479 ..................................... 16



Index Continued m

Sherbert v. Verner, 374 US 398 16
Slochower v. Board of Higher Education, 360 US 051 16
Snowden v. Hughes, 321 US 1 .....................................  12
Thorpe v. Housing Authority, 386 US 670 (1967)----  8
Toreaso v. Watkins, 367 US 488 ..................................  16
Tucker v. Texas, 326 US 517 ......................................... 18
United Public Workers v. Mitchell, 330' US 7 5 ......... . 16
United States v. Blumenthal, 315 F. 2d 351 (3rd Cir.

1963) ....................................................................15,17
United States v. Schooner Peggy, 1 Crunch 103, 110; 2

L, Ed. 49 (1801) ............................    27
Walton v. City of Phoenix, 69 Ariz. 26, 208 P. 2d 309

(1949) ...................................................................14,19
Wells v. Housing Authority, 213 NO 744, 197 SE 693 17
Wieman v. Updegraff, 344 US 183............................... 16
Williams v. Housing Authority of Atlanta, 223 Ga.

407,155 SE 2d 923 (1967)...................................... 15
Willner v. Committee on Character and Fitness, 373 

US 9 6 .....................................................................16,17

United States Housing Act of 1937, as amended (42
USC § 1401) ...........................................5,20,24,25,29

General Statutes of North Carolina §42-26(1) .........  10
General Statutes of North Carolina § 157-1 through

STATUTES AND REGULATIONS
25
26

26, 27
27
27

§ 157-48 17, 20, 25, 29



IH THE

&uprrntr Court of ftjr Imtrii States
October Term, 1967

Ho. 1003

J oyce C. T horpe, Petitioner,

v.

H ousing A uthority op the City op Durham.

On Writ of Certiorari to the Supreme Court of North Carolina

BRIEF FOR RESPONDENT

QUESTIONS PRESENTED

The Petitioner was a tenant under a written lease in 
a housing project owned by the Respondent which was 
constructed with funds borrowed from private sources 
and which is supported, in part, by annual contrihu-



2

tions from the Federal Government pursuant to a 
Contract with the Respondent, Housing Authority of 
the City of Durham. The Housing Authority is a 
corporation, organized under the Housing Authority 
Law of the State of North Carolina, which empowered 
it to enter into an Annual Contributions Contract with 
agencies of the Federal Government. Pursuant to 
the terms of the lease, the Housing Authority gave the 
Petitioner notice it was not renewing the term of her 
lease and instituted an eviction proceeding in the 
Courts of the State after the tenant failed to vacate 
at the end of the term. The Petitioner defended, con­
tending that she was being evicted because she had 
participated in a tenants’ organization and that she 
was entitled, as a matter of law, to an administrative 
hearing before the institution of the eviction proceed­
ings in the State Courts. It was determined, as a 
matter of fact, that the reason for her eviction wTas not 
her participation in the organization of a tenants’ 
group.

1. Hnder these circumstances, does the due process 
clause o f the Fifth and Fourteenth Amendments to 
the Constitution of the United States require that the 
Petitioner be given an administrative hearing prior 
to the institution of an eviction proceeding against her 
in the State Courts?

2. Was the eviction proceeding in the Courts of 
the State of North Carolina violative of the due proc­
ess clauses of the Fifth and Fourteenth Amendments 
to the Constitution of the United States?

3. Was a HUD Circular, promulgated on February 
7, 1967, effective to invalidate the eviction action in 
the Courts of the State of North Carolina, instituted 
in the State Courts on September 17, 1965?



3

STATEMENT OF FACTS

It was stipulated by the parties to this action that 
the Petitioner occupied a dwelling apartment owned 
by the Housing Authority of the City of Durham 
pursuant to and under and by virtue of a lease which 
she entered into with the Housing Authority. (A. 5). 
It was also established for the purposes of this case 
by stipulation that the Petitioner received the notice 
of termination; that she alleged that the reason she 
was being evicted was her participation in the organi­
zation of the Parents’ Club; that the trial Judge could 
hear and determine the cause by finding facts based 
on the stipulations and any Affidavits entered into 
the record; that the Executive Director of the Housing 
Authority, if  present and duly sworn, would testify 
that whatever reason there may have been, if  any, 
for giving notice to Petitioner of the termination of 
her lease it was not for the reason that she was elected 
President of any group organized in McDougald Ter­
race, and not for any other reason set forth in her 
Affidavit,, and was not because of her efforts to organize 
the tenants; and, further, that the Executive Director 
did so testify in the hearing before the Justice of the 
Peace when the case was initially heard. (A. 6 & 7). 
Petitioner alleged in her Affidavit that “ On the 1st 
day of September, 1965, the Housing Authority of the 
City of Durham and C. S. Oldham met with Detective 
Prank McRae, of the Police Department of the City 
of Durham, who supplied them with certain informa­
tion allegedly uncovered during the investigation of 
her conduct.”  (A. 9).

The trial in the Superior Court of North Carolina, 
though on appeal from the Judgment of the Justice 
of the Peace, was de novo, and in the absence of



4

stipulation would require the introduction of evidence 
by the Housing Authority to make out its case. Pro­
ceeding according to the stipulation, the Court found 
for the Housing Authority, making specific findings 
of fact with respect to the Petitioner’s allegation as 
to the reason for the termination of her lease. (A. 21).

During the trial, the Petitioner offered no evidence 
that was excluded by the Court and made no effort 
to cross-examine any witness of the Housing Authority 
or any official of the Housing Authority. In the 
Petitioner’s Exceptions and Assignments of Error on 
appeal to the Supreme Court of North Carolina, there 
was no mention of any refusal by the trial Court to 
admit any evidence offered by the Petitioner nor any 
complaint about any refusal of the trial Court to permit 
any cross-examination. (A. 25).

This Court remanded the case to the Supreme Court 
of North Carolina to determine what effect, i f  any, 
the HUD Circular of February 7, 1967, had upon the 
proceedings. The Supreme Court of North Carolina, 
after hearing, held that the HUD directive, whatever 
its prospective effect might be, did not invalidate the 
notice of August 11, 1965, terminating Petitioner’s 
lease nor the eviction proceedings instituted in the 
State Courts on September 17, 1965.

SUMMARY OF ARGUMENT

The Petitioner, finding nothing in the relevant leg­
islation enacted by the Congress of the United States 
or by the State Legislature of North Carolina that 
bestows upon her a right to occupy a dwelling unit 
in the housing project owned by the Respondent, other 
than the right acquired by virtue of executing the 
lease, has resorted to this Court, contending that it



5

should supply such legislative omission by interpre­
tation of the provisions of the Constitution of the 
United States. W e respectfully submit that it is the 
wisest course to leave the issues stirred here with the 
legislative branch which has the fiscal resources to 
implement its decisions as well as the responsibility 
to limit the scope of its decisions to its financial re­
sources. The Constitution may permit the Congress 
to provide housing for all indigent persons, but it 
does not require that it be done. W e submit further 
that the Constitution does not prohibit the Congress 
from providing housing for some indigents without 
providing it for all.

By its appropriations the Congress has, in fact, 
sought to provide housing for some, but not all, of 
the indigents in the country. It has not sought to 
establish which of these indigents shall receive the 
housing, leaving that matter to the discretion of local 
agencies with the exception of certain priorities that 
it established for certain categories of persons. These 
categories do not affect this Petitioner.

A  decision by this Court that all equally eligible 
indigents have a Constitutional right of occupancy 
of dwelling units in low-rent, housing projects would 
nullify the purpose and effect of the United States 
Housing Act of 1937, as amended, since that Act and 
the appropriations supporting it cannot implement 
that result.

The program of the Congress to inject into the 
housing market a substantial number of low-rent 
housing units should not be struck down because it 
is not all-inclusive nor because the technique em­
ployed is not the building and operation of housing



6

units by the Federal Government but by financial sup­
port to State and local agencies conducting local 
programs.

A First Amendment issue does not present itself 
on this record. The record in this case does not show 
that Petitioner was evicted because of the exercise 
of any such Constitutional right. The opinion of the 
North Carolina Supreme Court on rehearing makes 
clear that it does not support the theory that a tenant 
may be evicted for the exercise of such a right.

The trial Court found on competent evidence that 
the Housing Authority did not notify the tenant that 
her lease would not be automatically renewed for 
another term because she exercised a First Amend­
ment right as she asserted. Neither the trial Court 
nor the State Supreme Court refused the tenant right 
to present evidence nor to have the Court make findings 
upon that issue. In a judicial eviction proceeding, 
the North Carolina Statute does require the landlord 
to affirmatively show only that the tenant is holding 
over after the expiration of the term of his lease or 
that he has violated some provision of the lease. As­
suming, arguendo, that a tenant could defeat an evic­
tion by showing the Housing Authority was motivated 
by a design to prevent the exercise of a Constitutional 
right, this Statute is not unconstitutional as it applies 
to the Housing Authority as a landlord, since it does 
not prevent the tenant from asserting or showing that 
the notice, whereby the Housing Authority prevented 
the automatic renewal of the term of the tenant’s lease, 
was invalid and ineffectual for that reason. The Con­
stitution does not place this burden of proof upon this 
landlord.



7

This eviction, being through judicial process, afforded 
the tenant a full judicial hearing in the trial Court 
which would seem to be more impartial and constitu­
tionally acceptable than a hearing by the Housing 
Authority itself. The Petitioner had, therefore, full 
opportunity to establish any lawful defense she wished. 
During the trial of this action, the tenant did not 
seek to inquire into any reasons the Housing Authority 
may have had for failing to renew her lease other 
than her assertion that it acted because of her organi­
zational activities among the tenants. !She did raise 
that issue, and the trial Court passed upon it—not by 
ruling it irrelevant, but by finding against her on 
the evidence. The procedures available to the tenant 
in this case adequately protected her from any repri­
sals for the exercise of any Constitutional rights.

The tenant has no Constitutional right to remain in 
occupancy without a lease or after the expiration of 
the term of the lease. The fact that the lease, by its 
terms and provisions, was for thirty days’ duration 
(instead of being for the lifetime of the tenant) did 
not constitute a violation of the Constitution nor the 
Federal or State Statutes pertaining to the Housing 
Authority’s operation.

The relationship between the Petitioner and the 
Housing Authority being contractual—that is, by virtue 
of a lease—and the relationship between the Housing 
Authority and HUD being contractual by virtue of 
a written Annual Contributions Contract, the Con­
stitution does not require the State Courts to give the 
HUD Circular of February 7,1967, a retroactive effect 
to amend these Contracts as of the date notice of termi­
nation was given.



8

ARGUMENT

I.
THE EVICTION PROCEEDINGS IN THE COURT BELOW DID NOT 

VIOLATE CONSTITUTIONAL DUE PROCESS BECAUSE AN 
ADEQUATE HEARING WAS PROVIDED DURING THE TRIAL 
BELOW AND BECAUSE THE HOUSING AUTHORITY WAS 
NOT REQUIRED TO HAVE A REASON OTHER THAN THE 
EXPIRATION OF THE TERM OF THE LEASE.

A . An Adequate Hearing Was Provided by the Trial Below

Justice White, in his dissenting opinion in Thorpe 
v. Housing Authority, 386 US 670 (1967), stated: 
“ Petitioner was afforded a full due process hearing in 
the lower court and had the opportunity to explore 
fully why she was evicted.”  Justice Douglas, in his 
concurring opinion, stated: “ Moreover, is there a con­
stitutional requirement for an administrative hearing 
where, as here, the tenant can have a full judicial 
hearing when the Authority attempts to evict him 
through judicial process? Petitioner has had a hear­
ing in the State 'Courts.”  In her Brief, the Petitioner 
states: “ Certainly, proceedings in open court, held be­
fore the governmental action at issue became effective, 
might satisfy the requirements of due process. ’ ’ (Peti­
tioner’s Brief, p. 43). Justice Brandeis, delivering 
the opinion of the Court in Bourjois v. Chapman, 301 
US 183,189, 57 iS. Ct. 691, 81 L. Ed. 1027 (1937), made 
the same point.1 To like effect is Randell v. Newark

1He said: “ And neither Constitution (Constitution of the State 
of Maine and the Constitution of the United States) requires 
that there must be a hearing of the applicant before the Board 
may exercise a judgment under the circumstances and of the 
character here involved. The requirements, of due process of law 
amply safeguarded by Section 2 of the Statute, which provides: 
‘ Prom the refusal of said department to issue a certificate of 
registration for any cosmetic preparation, appeal shall lie to the 
Superior Court in the County of Kennebec or any other county 
in the State from which the same was offered for registration’.”



9

Housing Authority, 384 F. 2d 1951 (OCA 3-1967), 
where the Court said: “ . . . the problem of eviction of 
tenants is governed by the New Jersey judicial rules
relating to proceedings between landlord and tenant-----
Under these statutes, in order for a housing authority 
to enforce an eviction, they must have recourse to the 
state courts. . . . Viewing thus the entire statutory 
pattern, it does seem clear that the most probable in­
terpretation of the statutes guarantees due process via 
the necessary role the state courts play in any eviction.”

During the trial of this matter in the Superior Court, 
the defendant did not quarrel with the nature nor with 
the scope of the judicial inquiry, but contended only 
that due process required that the Housing Authority 
give the tenant notice of its reasons and a hearing 
thereon before it instituted eviction proceedings—in 
fact, before giving her notice of termination. This was 
the theme of Petitioner’s “ Motion to Quash”  in the Su­
perior Court (A. p. 10). When the trial Court found 
as a f  act that, prior to giving her notice of the termina­
tion of the lease, the Petitioner was not given a hearing 
by the Housing Authority and that the Housing Au­
thority gave no reason to the defendant for giving her 
notice the lease was being terminated at the end of the 
term, it found further that the Petitioner “ had no hear­
ing other than that before the Justice of the Peace in 
this eviction action and in this Court”  (A. p. 22). The 
Petitioner did not object or except to this, and, in her 
Assignments of Error on Appeal from the Superior 
Court to the Supreme Court of North Carolina, did not 
object to the scope of the judicial inquiry. There was 
no request that the trial Court enlarge its inquiry into 
matters not acted upon by the Court in its findings of 
fact nor any request for examination of any witnesses



10

that was denied. As the Court said in Bandell v. 
Newark Housing Authority, supra: “ A  party cannot 
refuse to make any use of a system of ‘ administrative’ 
and ‘ judicial’ relief clearly open to him and thus 
create a record on which a Federal Court can decide 
that the party has been denied due process, or that 
due process safeguards are lacking.”

The Petitioner’s present position—that it would have 
been futile for Petitioner to have attempted to explore 
the pre-eviction notice situation further during the trial 
because under the eviction statute of North Carolina 
the Court could not make such an exploration possible 
—is not valid. In its findings the trial Court itself 
found that she was having a hearing on this matter 
in the course of the trial (A. p. 22). It is true, as 
Petitioner asserts (Petitioner’s Brief, p. 43), that this 
action was brought under North Carolina General 
Statutes, Section 42-26(1), which is an action based on 
a tenant’s holding over after the expiration of the 
term of his lease, but that would not restrict the in­
quiry. On that issue, the Housing Authority had to 
show the lease and the language thereof that provided 
for a term of a period of thirty days, and was auto­
matically renewable unless a fifteen-day notice was 
given. It would then have to show that a lawful notice 
was given in order that the term of the lease not be 
automatically renewed. The nature of the notice, its 
language, its timing, and its motivation could be in­
quired into.

There was some language in the original opinion of 
the North Carolina Supreme Court in this case that 
could be construed as saying the motivation was not 
material, although we do not agree this construction



11

would be proper. However, on rehearing, the North 
Carolina Supreme Court certainly clarified that point 
by carefully considering the contention of the Peti­
tioner that she had been evicted because of her organ­
izational activities among the tenants and the finding 
of the trial Court that she had not been evicted for 
that reason—this being her sole contention about mo­
tives. The Court did not consider what other and 
additional inquiry or efforts at discovery the Petitioner 
could have made before or during the trial since on 
the record there was no issue of that sort before the 
Court (A. pp. 38, 39, 40). We do not contend that, in 
the case of Housing Authority leases if  the purpose of 
the notice of termination of the lease is to proscribe the 
exercise of a constitutional right by the tenant the 
notice would be effective; the notice would be invalid, 
and the term of the lease and its automatic renewal 
would not thereby be affected.

The Petitioner now contends, however, that “ Because 
of the Court’s apparent new view that the reason for 
eviction had become relevant, it should have, instead of 
reaffirming, remanded the case to the trial court to 
require the Authority to come forward with a reason 
for its action and to give Petitioner an opportunity 
to present her evidence and to have the cause tried on 
the true issues.”  (Petitioner’s Brief, pp. 45, 46.) 
This assumes that constitutional due process requires 
that whenever a Housing Authority presents its evic­
tion case in Court, it must not only introduce the lease 
and evidence showing that the term of the lease had 
expired by reason of proper notice being given as pro­
vided in the lease, but, also, to show a judicially ac­
ceptable reason for its relying on the termination pro­
cedures stated in the lease.



12

B. The Housing Authority Was Not Required To Show a 
Reason Other Than the End of the Term of the Lease

When we agree that there are reasons for which the 
Housing Authority could not terminate the Petitioner’s 
lease, we are talking about reasons such as those al­
leged by the Petitioner in the trial Court—to-wit, an in­
fringement upon the exercise of some constitutional 
right. For the most part, tenants would certainly be 
aware of any deprivation of such constitutional rights 
and would be able to allege that they were being re­
stricted in the exercise thereof. It is not reasonably 
necessary to require the Housing Authority to state 
some other reason for the sole purpose of negating a 
possible infringement upon the exercise of the con­
stitutional right. Moreover, for the Authority to estab­
lish that it had no reason other than its desire to term­
inate the lease would be just as effective for this 
purpose. It is not unreasonable to require the tenant 
to assert what constitutional right is being violated. 
(Snowden v. Hughes, 321 US 1; Chin Yow v. United 
States, 208 US 8.)

Upon a rehearing, the Housing Authority, of course, 
could not show that it had given the tenant a hearing 
of its own prior to giving notice of termination, nor 
could it show that it had stated to the tenant what its 
reason, if  any, was. I f  these were the relevant issues, 
a rehearing by the trial Court, as Justice Douglas 
points out, would serve no purpose. Also, the trial 
Court and the North Carolina Supreme Court had al­
ready passed on the evidence relating to Petitioner’s 
claim of denial of her exercise of First Amendment 
rights, and on the evidence had found against her. 
There was competent evidence upon which the trial 
Court could make this finding of fact; and it, therefore,



13

should he sustained. Only if the trial Court had re­
fused to make findings of fact on this point because 
it deemed it irrelevant would a rehearing be required, 
since that position would have brought this case within 
the rule followed in Holt v. Richmond Redevelopment 
and Housing Authority, 266 F. Supp. 397 (E.D. Ya., 
1966) and in Detroit Housing Commission v. Lewis, 
226 F. 2d 180 (6th Cir. 1955).

Oases decided throughout the land have recognized 
and acted upon this theory. In Illinois, for example, 
it is recognized that a Housing Authority cannot evict 
a tenant because of an unconstitutional condition placed 
upon occupancy as was the case in Chicago Housing 
Authority v. Blackman, 4 111. 2d 319, 122 HE 2d o22 
(1951), where the Housing Authority notified the 
tenant that it was terminating the lease because of 
the tenant’s failure and refusal to subscribe to a loyalty 
oath. On the other hand, where no unconstitutional 
condition was found, there was no prohibition against 
the Housing Authority’s evicting a tenant holding a 
month-to-montk tenancy under lease after giving due 
notice of termination without assigning any reason 
other than that the lease had terminated under its 
terms. Chicago Housing Authority v. Ivory, 341 111. 
App. 282, 93 HE 2d 386 (1950) ; Brand v. Chicago 
Housing Authority, 120 E. 2d 786 (CCA 7,1941). This 
rule in Illinois was recently applied by the Illinois Su­
preme Court in Chicago Housing Authority v. Lindsey
S tew a r t , (------  111. ------  (1968)) decided in March,
1968. In that case, Justice Klingbiel, speaking for the 
Court, said: “ It is urged that due process of law pre­
cludes an ‘ arbitrary’ termination of tenancies such as 
this. W e cannot accept such a contention. It was a 
condition of granting to defendant these benefits, at



14

public expense, that the occupancy he on a month-to- 
month basis, and such are the terms upon which the 
defendant took possession. There is nothing arbitrary 
about requiring a public-housing tenant to vacate at the 
expiration of his lease, nor does it deny due process of 
law, or any other constitutional right that reasons for 
doing so are not specified. (Housing Authority of the 
City of Pittsburgh v. Turner, 201 Pa. Super. 62, 191 A. 
2d 869.) As the Federal Court of Appeals observed in 
a similar case: ‘Any property right acquired by the 
plaintiffs was circumscribed by the terms and condi­
tions upon which it was founded. True, as tenants, they 
acquired the right of possession, but this right was lim­
ited by the terms of the lease, by which such right was 
obtained. By express provision thereof, either party 
was entitled to cancellation on fif teen days notice to the 
other. It is our opinion that this provision with refer­
ence to the termination of the tenancy is valid and bind­
ing upon plaintiffs in the same manner as though the 
lessor had been a private person rather than a Govern­
mental Agency.’ Brand v. Chicago Housing Authority 
(7th Cir. 1941) 120 F. 2d 786.”

In other jurisdictions the same distinction has pre­
vailed. This is easily seen by contrasting the cases 
cited by Petitioner in her Brief, Page 20 thereof, with 
such eases as Walton v. City of Phoenix, 69 Ariz. 26, 208 
P. 2d 309 (1949) ; Chicago Housing Authority v. Ivory, 
supra; Brand v. Chicago Housing Authority, supra; 
Housing Authority of the City of Pittsburgh v. Turner, 
201 Pa. Super. 62, 191 A. 2d 869 (1963); Columbus 
Metropolitan Housing Authority v. Simpson, 85 Ohio 
App. 73, 85 NE 2d 560 (1949), which are all in accord 
with the decision of the North Carolina Supreme Court 
in this ease and are, on the facts presented, directly in



15

point. To like effect are United States v. Blumenthal, 
315 F. 2d 351 (3rd Cdr. 1963) ; Municipal Housing Au­
thority for City of Yonkers v. Walck, 277 App. Div. 
791, 97 NYS 2d 488 (2d Dept. 1950) ; Faris v. United 
States, 192 F. 2d 53 (10th Cir. 1951) ; and Williams v. 
Housing Authority of Altanta, 223 (la. 407, 155 SE 2d 
923 (1967).

The only case cited hy the Petitioner directly sup­
porting her position here is Vinson v. Greenburgh 
Housing Authority,, decided by New York Supreme 
Court’s Appellate Division, Second Department, on 
March 11,1968, where two of the five Judges dissented.

The proposal for a rehearing, then, could he based 
only on the theory that other reasons were relevant 
and that the burden was upon the Housing Authority 
to show them.2 Reasons other than tenant’s exercise 
of the constitutional right would he relevant only if 
the Court held that the tenant had a constitutional right 
of occupancy, apart from the lease, that could he ended 
only hy judicially approved reasons.

This, therefore, is clearly not a due process argument, 
absent such a right. It is indeed pertinent to determine 
“ the precise nature of the interest that has been ad­

2 In Holt., the Court cites Housing Authority v. Thorpe, 271 NO 
468 (1967), and said: “ There, however, the Court found as a 
matter of fact that whatever may have been plaintiff’s reason for 
terminating the lease, it was neither because the defendant had 
engaged in efforts to organize the tenants nor because she had been 
elected President of a tenants’ group. It is that factual distinc­
tion which makes that decision inapplicable to the case at Bar.”  
It is that factual distinction which makes the cases cited by the 
Petitioner relating to the imposition of unconstitutional conditions 
inapplicable ato this ease at Bar. See pages 19 and 20 of Peti­
tioner’s Brief.



16

versely affected.”  (Joint Anti-Fascist Refugee Com­
mittee v. McGrath, 341 US 123; see Petitioner’s Brief, 
p. 37.) “ Due process”  does not create the “ interest” ; 
due process requirements arise only after a legal in­
terest is found to exist. (In  Willner v. Committee on 
Character and Fitness, 373 US 96, it was admittance 
to the Bar; in Goldsmith v. U. S. Board of Tax Ap­
p e a ls 270 US 117, it was the privilege of practicing 
before the Board of Tax Appeals—rights which should 
be available to all qualified persons.)

In declining to renew the Petitioner’s lease, the 
Housing Authority was not acting as a legislative body 
nor as a judicial body nor as a regulatory board or 
commission, but, rather, as a proprietor managing the 
operation of a housing project. ( Cafeteria and Res­
taurant Workers Union v. McFlroy, 367 US 886.) 
With respect to this proprietary function, the Housing 
Authority, under the State law, had no greater powers 
than those of any other landlord; in fact, the Peti­
tioner is contending that it had much less authority 
than any other landlord. (See Marsh v. Alabama, 
326 US 501.)3 The scope and nature of the Housing 
Authority is private in nature and is Government 
connected only by virtue of the fact that its housing 
facilities are in part financed by the Federal Govern­
ment, and this makes its position unlike that of the

8 As we have pointed out before, the doctrine prohibiting the 
imposition of unconstitutional conditions by an agency of the 
Government, even if applicable to the Housing Authority, does not 
present an issue in this case. Therefore, Sherbert v. Yerner, 374 
US 398; Toreaso v. Watkins, 367 US 488; Shelton v. Tucker, 364 
US 479; United Public Workers v. Mitchell, 330 US 75; Slochower 
v. Board of Higher Education, 350 US 551; and Wieman v. Upde- 
graff, 344 US 183, and other cases in this category cited by Peti­
tioner are not applicable.



17

Board in Willner v. Committee on Character and 
Fitness, supra, where it was held that requirements 
of procedural due process must be met before a State 
can exclude a person from practicing law.4

Although the Housing Authority Law of the State 
of North Carolina (Gr. S. 157-1 through 157-48) grants 
the Housing Authority varied powers in connection 
with planning, investigating and advising with mu­
nicipalities in operating its housing project and in its 
dealings with the Petitioner, it was not acting either 
as an agent of the State or of the municipality or of 
the Federal Government. It was acting pursuant to 
its statutory power to ‘ ‘ prepare, carry out and operate 
housing projects”  (G. S. 157-9). Wells v. Housing 
Authority, 213 NC 744,197 SE 693; Housing Authority 
v. Johnson, 261 NO 76, 134 SE 2d 121; Housing Au­
thority v. Thorpe, 271 NC 468, 157 SE 2d 147 (1967).5

4 In Morgan v. United States, 304 US 1, there was no constitu­
tional issue decided, but the Court there did refer to the quasi 
judicial functions of administrative agencies—in that ease, the 
Secretary of Agriculture in fixing maximum rates at Kansas City 
Stockyard. To like effect are the deportation eases, holding that 
there must be an effective review of administrative action by reg­
ular judicial branch of the Government— Ng Fung IIo v. White, 
259 US 276, holding that persons about to be deported were en­
titled to a judicial determination of their claims that they are 
citizens o f the United States and Ewong Hcd Chew v. Golding, 344 
US 590.

5 In United States v. Blumenthal, 315 P. 2d 351 (3rd Cir. 1963), 
the defendant, a month-to-month lessee of business property owned 
by the Federal Government in the Virgin Islands, who was dis­
possessed, argued that the Government acted arbitrarily in failing 
to specify in the notice to quit the reason for his decision. In 
deciding against the defendant, the Court said: 1 ‘ The fact that the 
plaintiff gave no reason for its notice to quit and sought to evict 
the defendant while renting other similar business properties to 
other tenants on a similar month-to-month basis is said to amount



18

If, then, we look to the decisions of the North Carolina 
Supreme Court for authoritative construction of North 
Carolina Statutes, as we must (Erie Railroad Com­
pany v. Tompkins, 304 US 64; Tucker v. Texas, 326 
US 517; Bell v. Maryland, 378 US 226; Barsky v. 
Board of Regents, 347 US 442), the State statute does 
not help the Petitioner’s argument here. The landlord 
is treated as an ordinary landlord with no govern­
mental powers, and the tenant is treated as an ordi­
nary tenant with the usual rights of tenants, with the 
possible additional right not to be penalized for exer­
cising a constitutional right. (Lynch v. United States, 
292 US 571, 54 8. Ct. 840, 78 L. Ed. 1434!.)

In view of this, it is not oppressive, not arbitrary, 
not unjust—and not unconstitutional—in this confron­
tation between Petitioner and Respondent to apply 
rules generally applicable to others.

i i .

THE LEASE ENTERED INTO BY THE PETITIONER AND THE 
HOUSING AUTHORITY IS NOT AN UNCONSTITUTIONAL 
METHOD OF PRESCRIBING AND DEFINING THE TENANT'S 
RIGHT OF OCCUPANCY.

W e come now to consider whether the month-to- 
month written lease, executed by the plaintiff, violates 
the Constitution when it provides that: “ The man­
agement may terminate this lease by giving to the 
tenant notice in writing of such termination fifteen 
(15) days prior to the last day of the term.”  (A. 
p. 12). At the trial it was stipulated that the Peti­

to discrimination against the defendant which was so arbitrary as 
to deny due process of law. But the plaintiff, which is here acting 
in its proprietary rather than its governmental capacity, has the 
same absolute right as any other landlord to terminate a month-to- 
month lease by giving appropriate notice and to recover possession 
of the demised property without being required to give any reason 
for its action.”



19

tioner occupied the dwelling unit “ pursuant to this 
lease and under and by virtue of this lease.”  (A. 
p. 5). We take it that this means what it says, is 
palpably true, and excludes any argument that the 
Petitioner’s occupancy was by some right other than 
the lease. This lease is a valid contract. Lynch v. 
United States, supra; Walton v. City of Phoenix, 
supra; Chicago Housing Authority v. Ivory, supra; 
Brand v. Chicago Housing Authority, supra; Housing 
Authority of the City of Pittsburgh v. Turner, supra; 
Columbus Metropolitan Housing Authority v. Simp­
son, supra; Chicago Housing Authority v. Lindsey 
Stewart, supra; and Municipal Housing Authority for 
City of Yonkers v. Walck, supra.

The term of the lease—that it was for a term of 
one month, automatically renewable unless notice of 
termination was given—was an integral part of the 
lease. I f  the lease was invalid, then the Petitioner 
had no right to occupancy of the premises, not even 
squatter’s rights, since she had not there held ad­
versely to the Housing Authority for the necessary 
period of time. Her income eligibility to be accepted 
as a tenant in the project did not give her a right of 
occupancy, since all those who are so eligible are not 
and cannot be accepted due to their number as con­
trasted to the available dwelling units and, also, be­
cause there is nothing in the program by State or 
Federal Statute or Federal Eegulation that requires 
the Housing Authority to construct or operate such 
dwelling units to house all those who are eligible. The 
statutory provisions prohibiting the continued occu­
pancy by a tenant if  the tenant’s income eligibility 
ceases cannot be construed as meaning the tenant has 
a right to occupancy so long as that eligibility con­
tinues. On the other hand, the statutes creating the 
program contemplated that occupancy of the dwelling



20

units be regulated by using the legal devises and 
concepts normally involved in and arising from the 
landlord-tenant relationship. The system produced 
by both the United States Housing Act of 1937, as 
amended, and the hiorth Carolina ‘ ‘ Housing Authority 
Law”  requires that this be done. The State statute 
said, in several places, that the Housing Authority 
may “ rent or lease the dwelling accommodations”  (NC 
Cl. S. 157-29; Housing Authority v. Thorpe, 271 NC 
468, 157 S.E. 2d 147 (1967).) Language consistent 
with these concepts is also contained in the Federal 
statutes. Neither statute undertook to set out a form 
for such lease nor prescribed the length of any term 
nor the method by which the tenancy should be ended.

The Annual Contributions Contract between the 
Housing Authority and the Federal Agency, in the 
form which we believe to be generally applicable in 
the nation, provides that a local authority shall not 
permit any family to occupy a dwelling unit in any 
project except pursuant to a written lease, which lease 
shall contain all relevant provisions necessary to meet 
the requirements of the Housing Act of 1937, as 
amended, and the Annual Contributions Contract. The 
local Housing Authority Management Handbook, pub­
lished by the Public Housing Administration (now 
Department of Housing and Urban Development), 
states that: “ Whenever a family is admitted to oc­
cupancy in a low-rent project, there is established a 
landlord-tenant relationship with contractual obliga­
tions to be fulfilled by both parties.” 6 It further

6 Part IV, Section 1, Paragraph 6a. The whole sub-paragraph 
reads as follows: ‘ ‘ Whenever a family is admitted to occupancy 
in a low-rent project there is established a landlord-tenant rela­
tionship with contractual obligations to be fulfilled by both parties.



21

provides (Part IV, Section 1, Paragraph 6 d (l ) )  : “ It 
is recommended that each local authority’s lease he 
drawn on a month-to-month basis whenever possible. 
This should permit any necessary evictions to be ac­
complished with a minimum of delay and expense upon 
the giving of a statutory notice to quit without stating 
reasons for such notice.”

The HUD Circular of February 7, 1967 (App. IV, 
p. 26a, Petitioner’s Brief) does not substantially change 
this position. From a consideration of what that Cir­
cular does not say, it is difficult to reach a logical 
conclusion as to what it does say. It does not, for 
example, purport to change the terms of the lease 
provisions used by Housing Authorities, nor does it 
purport to take away from the Housing Authority its 
legal ability to evict by complying with the terms 
of the lease and the pertinent provisions of the State 
law relating to evictions. It does not deal with what 
reasons are acceptable to HUD nor does it deal with 
the reason that the term of the lease had expired as 
an acceptable reason. It did not purport to change 
the provisions of the Handbook above quoted. What
These obligations include many of those in standard landlord- 
tenant leases, such as the provision by the landlord of designated 
housing space and utilities and the payment of rent by the tenant. 
But in low-rent public housing there are also the following special 
obligations of a tenant to be reflected in the lease: (1) Furnish 
the Local Authority, upon request, with information necessary to 
determine eligibility for continued occupancy, the appropriate 
rent and dwelling size required. (2) Pay an increased rent when 
appropriate for its redetermined income or family composition.
(3) Transfer to a unit of appropriate size (at such time as the 
Local Authority may designate) when a change in family compo- A, 
sition warrants a different size dwelling. (4) Vacate if the family 
becomes overincome or becomes subject to removal through vio­
lation of any obligation of tenancy.”



22

HUD believes to be desirable or essential administra­
tive practice by the Local Authority can be, and ap­
parently is, entirely different from any legal require­
ments pertaining to a judicial eviction proceeding.

This Circular certainly does not answer the question 
as to what reasons must be shown, if  any, by the 
Housing Authority in an action in Court or an eviction 
before the Housing Authority can prevail. It does 
not require the Housing Authority to produce such 
reasons in Court and deals only with a public rela­
tions matter. Whether the phrase “ from this date”  
used in the Circular was intended to refer both to 
the activity of informing the tenant and to maintain­
ing the records, it obviously appears in the only para­
graph containing directive language.

The Petitioner (and perhaps HUD) seeks to es­
tablish this document as a legal instrument, imposing 
judicially enforceable duties upon local Housing Au­
thorities; but cast in this role, it is fatally defective 
for vagueness. Even the Petitioner’s Brief finds great 
difficulty in interpretation, saying, in substance only, 
that it amounts to a directive by HUD to the Courts 
to apply constitutional “ due process”  concepts to events 
occurring before the institution of an eviction pro­
ceeding in Court. By expressing a belief that a rea­
son should be stated to the tenant without saying what 
sort of reason would be required, it does not alter the 
in-court requirements of proof in eviction proceedings, 
and does not create an identifiable right enforceable by 
the tenant. As the Petitioner’s Brief points out, “ The 
Circular does not prohibit the use of month-to-month 
leases under which the Authority may obtain a judg­
ment of eviction on the sole basis of proper notice of



23

termination and without any allegation or proof of 
cause.”  (Petitioner’s Brief, p. 60.)7

Moreover, the Circular clearly does not say that a 
Housing Authority cannot terminate at the end of 
any term without cause as is provided in the lease. 
Here, the tenant was well aware that the reason for 
the eviction proceeding was that she was holding over 
after the end of the term of her lease.

Circulars of this sort do not change the situation. 
HUD might as well have issued a Circular requiring 
officials of the Housing Authority to he kind and con­
siderate of tenants when making demand upon the 
tenants for the payment of rent. In such event, it is 
doubtful that the tenant could assert, as a justification 
for his nonpayment of rent, that an official of the 
Housing Authority was not kind and considerate.

The use of the lease devise, a normal landlord and 
tenant instrument, is a means of preventing the segre­
gation of the tenants in public housing projects from 
the society in which they live. The Federal Govern­
ment, in establishing this program, has not provided 
institutions in which all indigents may be inmates, 
but has granted financial assistance to local housing 
authorities organized under State law for the pur­
pose of injecting into the housing rental market a 
substantial number of decent low-rent dwelling units.

7 It is interesting: to note, moreover, that Petitioner’s Brief 
refers to HUD’s Housing Authority Management Handbook as 
being “ nonmandatory”  and points to the language contained 
therein— “ it is recommended”  that leases be drawn on a month- 
to-month basis—while on the other hand arguing that the Circular 
of February 7, 1967, is mandatory even though it uses such lan­
guage as “ we believe.”



24

This gives the Housing Authority no governmental 
authority with respect to its tenants and no authority 
greater than that possessed by any other landlord. The 
interpretation and the enforcement of the lease is a 
matter for the Courts. There is no Federal admin­
istrative, statutory, or Constitutional requirement that 
the term of such lease be for the duration of the life­
time of the tenant or for the duration of his eligibility, 
there being no guarantee that all members of the eligi­
ble class shall have low-rent housing within a housing 
authority project. As the Court said, in Brand v. 
Chicago Housing Authority, supra: “ The fact that 
the government selected plaintiff as the object of such 
beneficence does not preclude it from determining at 
a later time that the purpose of the act will be better 
served by the selection of some other family of the 
same or lower income class. To hold, as plaintiff 
would have us do, that the mere selection of a tenant 
carries with it a continuing right of tenure irrespec­
tive of the terms and conditions upon which the tenancy 
was founded, would not only contravene the purpose 
and policy of the act, but would come near to destroy­
ing it.”

i n .

THE CIRCULAR, WHATEVER IT MAY BE, DID NOT HAVE 
APPLICATION TO EVENTS THAT OCCURRED BEFORE THE 
ISSUANCE DATE OF THE CIRCULAR.

The relationship between the Respondent, Housing 
Authority, and HUD is contractual. The United 
States Housing Act of 1937, as amended, (42 USC 
§ 1401, et seq.) recognizes that it was dealing in large 
measure with local “ Public Housing Agencies”  which, 
in this case, was this Respondent, duly organized under



25

the provisions of the North Carolina “ Housing Au­
thority Law. ’ ’ This State statute is its charter, giving 
it powers and authorities and duties, including the 
power to “ prepare, carry out and operate housing 
projects”  (G. S. 157-9; A. p. 13a, Petitioner’s Brief) 
and to enter into contracts with the Federal Govern­
ment pursuant to operating housing projects “ as the 
Federal Government may require, including agree­
ments that the Federal Government shall have the 
right to supervise and approve the construction, main­
tenance, and operation of such housing projeet. ”  ( G. S. 
157-23; A. p. 17a, Petitioner’s Brief.)

The United States Housing Act of 1937, as amended, 
provided for the financial support of such Local Public 
Housing Agency as the Housing Authority here by 
entering into an Annual Contributions Contract with 
such Local Agency. The Statute says: “ The Au­
thority shall embody the provisions for such annual 
contributions in a contract. . . .”  (42 USC § 1410(a)). 
Thus, HUD was to regulate matters, not by edict or 
decree, but by the terms of an Agreement, some of 
the provisions of which were established by require­
ments of the Statute. For example, “ Every contract 
for annual contributions shall provide that whenever, 
in any year, the receipts of a Public Housing Agency 
in connection with a low-rent housing project exceed 
its expenditures (including debt service and charges) 
an amount equal to such excess shall be applied or 
set aside for application to purposes which in the 
determination of the Authority will affect a reduction 
in the amount of subsequent annual contributions.”



(42 USC § 1410(c)). It dealt with what the contract 
should contain with respect to tenant selection.8

While HUD was given authority to make “  such rules 
-and regulations as may be necessary to carry out the 
provisions”  of the statute, it could not thereby make a 
rule or regulation that changed the basic concept of the 
statute that the relationship between the parties (HUD 
and the Housing Authority) is by contract. As we have 
seen, the -State statute establishing the Housing Au­
thority required obedience to HUD and its rulings 
only by contract. The contract itself does not refer 
to any manuals or circulars issued or to he issued by 
P H A  or by HUD. (See App., p. la .)

The Housing Act itself deals in considerable detail 
with what the contents of the contract between HUD, 
or the Federal authority, and the Local Housing Au­
thority should be. It states that the contract should 
provide that excess income of the Local Authority, over 
and above its necessary operating expenses, should be 
applied to debt service (42 USC § 1410(c)) ; that in­
come limits of those eligible be approved by the Federal 
authority; that admission policies be promulgated by 
the Local Authority and approved by the Federal au­
thority; that the Local Authority re-examine the in­

842 USC § 1410(g) provides in part: “ Every contract for 
annual contributions for any low-rent housing project shall pro­
vide that— (1) the maximum income limits fixed by the public 
housing agency shall be subject to the prior approval of the 
Administration. . . .  (2) the public housing agency shall adopt
and promulgate regulations establishing admission policies. . . . 
(3) the public housing agency shall determine, and so certify to 
the Administration, that each family in the project was admitted 
in accordance with duly adopted regulations and approved in­
come limits. . . . ”



27

come of tenants at least annually (42 U'SC § 1410(g) ) ; 
that contracts should not he entered into with Local 
Authorities that did not have certain tax exemptions 
(42 US'O § 1410(h) ) ; and that the Local Authority not 
be required to make payments for utilities different 
from private persons and corporations (42 USC 
§1410(i)). Nowhere, however, did it contain a re­
quirement that the contract vest in HUD authority to 
prescribe the terms and conditions of the lease to be 
used by the Local Authority other than the tenant- 
income feature, nor did the statute provide that HUD 
by the contract should be vested with any authority 
over the procedures of the Local Authority in giving 
notice of termination of the term of the lease. The 
Annual Contributions Contract between HUD and the 
Local Authority contained no such requirements.

Even if this HUD Circular is construed to modify the 
Annual Contributions Contract between HUD and the 
Housing Authority and further modify the terms of 
the lease between the Housing Authority and the Peti­
tioner here, it does not follow that such modification 
invalidated the notice by which the Petitioner was in­
formed that her lease would not be renewed for another 
term. These rights are property and contract rights 
vested in the parties which the Petitioner seeks to have 
changed ex post facto by the HUD directive. As Chief 
Justice Marshall said, in United States v. Schooner 
Peggy, 1 Cranch 103, 110, 2 L. Ed. 49 (1801) : “ It is 
true that in mere private cases between individuals, a 
Court will and ought to struggle hard against a con­
struction which will, by a retrospective operation, affect 
the rights of parties.. . . ”  And, in Hamm v. Rock Hill, 
379 US 306, 313, 85 S. Ct. 384 (1964), the Court, in 
giving the reason for the retroactive rule applied in



28

that ease, quotes Chief Justice Hughes, saying: “ Pros­
ecution for crimes is hut an application or enforcement 
of the law, and, if  the prosecution continues, the law 
must continue to vivify it. ’ ’ This case at bar, of course, 
is not a prosecution for a crime.

Recognizing that it has been held that the specific 
prohibition of the Constitution relating to ex post facto 
laws applies to statutes making acts criminal after the 
fact, nevertheless this Court has recognized, as in 
Lynch v. United States, supra, that contractual rights 
may find protection under the prohibitions of the Fifth 
Amendment. As Justice Brandeis said for the Court 
in that case (Lynch v. United States, 292 US 571, 579) : 
“ The Fifth Amendment commands that property be 
not taken without making just compensation. Valid 
contracts are property, whether the obligor be a private 
individual, a municipality, a state, or the United States. 
Rights against the United States arising out of a con­
tract with it are protected by the Fifth Amendment.”

Here, rights have been vested by contract between 
the Petitioner and the Housing Authority, by a con­
tract between the Housing Authority and HUD, and 
by a Judgment of the Courts of the State of North 
Carolina.9

“ It is the policy of the United States to vest in the 
local public housing agencies the maximum amount of

9 We are not, of course, asserting that the Congress could not by 
statute change remedies available to landlords and tenants, even 
after Judgment had been entered in the exercise of its general 
powers to control rents in emergency situations, as was the ease 
in Fleming v. Rhodes, 331 US 100, for the situation here is far 
different than the one that existed in that case or in FH A  v. The 
Darlington, Inc., 358 US 84.



29

responsibility in tlie administration of the low-rent 
housing program. . . . ”  (United States Housing Act 
of 1937, as amended, 42 USO § 1401.) This contem­
plated implementing legislation on the State level. Ac­
cordingly, the ‘ ‘ Housing Authority Law”  of the State 
of North Carolina provided that the very creation of a 
local housing authority given by statute power to enter 
into contracts with the Federal agencies would be a 
matter for the consideration and determination by the 
City Governing Body (G.<S. 157-4). As a preliminary 
to entering into a contract with the Federal agencies, 
the Housing Authority, once created, must enter into 
a Cooperation Agreement with the City in which it is 
located. The State statute has its own provisions gov­
erning rentals and tenant selection. (G.S. 157-29.)

It is not unreasonable to say that at least one of the 
reasons for this policy was to encourage localities to 
participate in the program and thereby increase the 
effectiveness of Federal expenditure in connection 
therewith. The local control feature presumably had 
a good deal to do with legislative acceptance of the 
program at all levels. The concept that the occupants 
of the dwelling units would be treated in the same way 
as tenants in privately owned properties is not an un­
reasonable feature of this concept. In view of this 
policy, HUD has not undertaken by this Circular or 
otherwise to ban the use of a lease in form and content 
as was in effect between the Petitioner and the Housing 
Authority in this case, nor has it undertaken by di­
rective to state that specific reasons for terminating 
the lease had to be established by the Housing Au­
thority before notice of termination be given.

W e respectfully submit, therefore, that it is not un­
constitutional for the State Court to construe the HUD



30

Circular of February 7, 1967, in the manner that it 
did—that is to say, that the Circular, whatever its 
prospective effect would be, did not act retroactively 
to change the contractual relationship between the Peti­
tioner and the Housing Authority as of the time the 
lease was terminated, nor to render the eviction action 
in the State Courts void.

CONCLUSION

We respectfully submit that the Judgment of the 
State Court in this case is not oppressive to the Peti­
tioner, does not deal with the Petitioner in a manner 
different from other citizens, does not violate any Fed­
eral law, and is not prohibited by any provision of the 
Constitution, and, therefore, should be sustained.

It has not been shown to be necessary or socially 
sound for this Court to endeavor to fashion special laws 
for persons of Petitioner’s assumed economic status or 
laws to be effective only when and where housing 
shortages may exist. There is no evidence about such 
matters in the record.

Respectfully submitted,

D aniel K . E dwards 
W illiam  Y. Manson 

111 Corcoran Street 
Durham, North Carolina 

Attorneys for Housing 
Authority of the City of 
Durham.



APPENDIX



la

APPENDIX

Article V, Part Two, Annual Contributions Contract be­
tween Local Authority and Public Housing Administration.

Sec. 501. Conveyance of Title or Delivery of Possession 
in Event of Substantial Default

Upon the occurrence of a Substantial Default (as here­
inafter in Sec. 506 defined) in respect to the covenants or 
conditions to which the Local Authority is subject here­
under, the Local Authority shall, at the option of the 
PHA, either (a) convey to the PITA title to the Projects 
as then, constituted if, in the determination of the PHA 
(which determination shall be final and conclusive), such 
conveyance of title is necessary to achieve the purposes 
of the Act, or (b) deliver possession to the PHA of the 
Projects as then constituted.

Sec. 502. Delivery of Possession in Event of Substantial 
Breach

Upon the occurrence of a Substantial Breach (as here­
inafter in Sec. 507 defined) in respect to the covenants 
or conditions to which the Local Authority is subject here­
under, the Local Authority shall, upon demand by the PHA, 
deliver possession to the PHA of the Projects as then 
constituted.

Sec. 503. Reconveyance or Redelivery
(A) If the PHA shall acquire title to or possession of 

the Projects pursuant to Sec. 501 or Sec. 502, the PHA 
shall reconvey or redeliver possession of the Projects, as 
constituted at the time of such reconveyance or redelivery, 
to the Local Authority (if it then exists) or to its suc­
cessor (if a successor exists at the time of such reconvey­
ance or such redelivery) as soon as practicable: (1) after 
the PHA shall be satisfied that all defaults and breaches 
with respect to the Projects have been cured and that the



Projects will, in order to fulfill the purposes of the Act, 
thereafter be operated in accordance with the terms of 
this Contract; or (2) after the termination of the obliga­
tion of the PHA to make annual contributions available 
unless there are any obligations or covenants of the Local 
Authority to the PHA which are then in default.

(B) Upon any reconveyance or redelivery of the Proj­
ects to the Local Authority the PHA shall account for 
all monies which it has received or expended in connection 
therewith. If during the period in which the PHA has 
held title to or possession of the Projects, the PHA has 
expended any of its funds in connection with development 
or improvement of the Projects, the Local Authority at 
the time of the reconveyance or redelivery of the Projects 
shall pay to the PHA the amount of any such expenditures 
with interest thereon at the PHA Loan Interest Rate to 
the extent that the PHA has not theretofore been reim­
bursed for such amount or interest: Provided, That if
the obligation of the PHA to make annual contributions 
under this Contract has not terminated, and if any portion 
of the amount which the Local Authority is obligated to 
pay to the PHA upon such reconveyance or redelivery con­
stitutes Development Cost, the PHA shall accept, in lieu 
of payment in cash, an Advance Note or Permanent Note 
for such portion.

(C) No conveyance of title and reconveyance thereof, 
or delivery of possession and redelivery thereof, shall 
exhaust the right to require a conveyance of title or de­
livery of possession of the Projects to the PHA pursuant 
to Sec. 501 or Sec. 502 upon the subsequent occurrence of 
a Substantial Default or a Substantial Breach, as the case 
may be.

Sec. 504. Continuance of Annual Contributions
(A) The PHA hereby determines that Sec. 501 and Sec. 

503 of this Contract include provisions that are in ac­
cordance with subsection (a) of Sec. 22 of the Act.



(B) Whenever the annual contributions, pursuant to 
this Contract, have been pledged by the Local Authority 
as security for the payment of the principal and interest 
on the Bonds or other obligations issued pursuant to this 
Contract, the PHA (notwithstanding any other provisions 
of this Contract) shall continue to make the annual con­
tributions provided in this Contract available for the Proj­
ects so long as any of such Bonds or obligations remain 
outstanding; and, in any event, such annual contributions 
shall in each year be at least equal to an amount which, 
together with such income or other funds as are actually 
available from the Projects for the purpose at the time 
such annual contribution is made, will suffice for the pay­
ment of all installments, falling due within the next suc­
ceeding twelve months, of principal and interest on the 
Bonds or other obligations for which the annual contribu­
tions provided for in this Contract have been pledged as 
security: Provided, That in no case shall such annual
contributions be in excess of the maximum sum specified 
in this Contract, nor for longer than the remainder of 
the maximum period fixed by this Contract.

Sec. 505. Rights and Obligations of PHA During Tenure 
Under Sec. 501 or Sec. 502

(A) During any period in which the PHA holds title 
to or possession of the Projects pursuant to Sec. 501 or 
Sec. 502, it shall (1) exercise diligence in the protection 
of the Projects, (2) complete the development of any 
Project or part thereof which is substantially completed 
at the time of acquisition by the PHA of such title or 
possession, as nearly as practicable in accordance with 
the provisions of this Contract, and (3) operate all com­
pleted Projects or parts thereof (including Projects or 
parts thereof which may be completed by the PHA) 
as nearly as practicable in accordance with the provisions 
of this Contract, including the carrying of insurance as 
described in subsections (A) and (B) of 'Sec. 305. The



4a

PHA, at its option, may complete the development of any 
Project or any part thereof.

(B) During any period in which the PHA holds title 
to or possession of the Projects pursuant to Sec. 501 
or Sec. 502, it may, in the name of and on behalf of the 
Local Authority or in its own name and on its own behalf, 
exercise any or all of the rights and privileges of the Local 
Authority pursuant to this Contract and perform any or 
all of the obligations and responsibilities of the Local 
Authority pursuant to this Contract.

(C) Neither the conveyance of title to or the delivery 
of possession of the Projects by the Local Authority pur­
suant to .Sec. 501 or Sec. 502, nor the acceptance of such 
title or possession by the PHA, shall abrogate or affect 
in any way any indebtedness of the Local Authority to 
the PHA arising under this Contract, and in no event shall 
any such conveyance or delivery or any such acceptance 
be deemed to constitute payment or cancellation of any 
such indebtedness.

Sec. 506. Definition of Substantial Default
For the purposes of this Contract a “ Substantial De­

fault”  is defined to be the occurrence of any of the follow­
ing events:

(1) If any Project shall cease to be exempt from all 
real and personal property taxes levied or imposed by 
the State, city, county, or other political subdivisions, or 
if the Local Authority without the approval of the PHA 
shall make or agree to make any payments in lieu of taxes 
in excess of those provided in the Cooperation Agreement; 
or

(2) If the Local Authority shall default in the observance 
of any of the provisions of Sec. 313, or if any Project shall 
be acquired by any third party in any manner including 
a bona-fide foreclosure under a mortgage or other lien 
held by a third party; or



(3) If the Local Authority shall fail to furnish certifi­
cation as to compliance with the provisions of Sec. 16 (2) 
of the Act relating to the payment of prevailing salaries 
and wages as required by subsection (C) of Sec. 419; or

(4) If the Local Authority shall (a) refuse or neglect 
to issue and sell its Bonds in the amounts and at the time 
required by this Contract, or (b) fail to maintain the low- 
rent character of each Project as required by Sec. 202, 
or (c) fail to prosecute diligently the reconstruction, 
restoration, or repair of any Project as required by Sec. 
214; and such refusal, neglect, or failure is not remedied 
within three months after the FHA has notified the Local 
Authority thereof; or

(5) If the Local Authority is in default in the per­
formance or observance of any of the provisions of this 
Contract or of the Act, which default (except for the pro­
visions of Sec. 504) would have the effect of preventing 
the PHA from paying or making available the annual con­
tributions provided for in this Contract; or

(6) If the Local Authority shall abandon any Project, 
or if the powers of the Local Authority to operate the 
Projects in accordance with the provisions of this Contract 
are curtailed or limited to an extent which will prevent 
accomplishment of the objectives of this Contract.

Sec. 507. Definition of Substantial Breach
For the purposes of this Contract a “ Substantial Breach”  

is defined to be the occurrence of any of the following 
events:

(1) If the Local Authority in the development of any 
Project has1 violated, or takes any action which threatens 
to violate, (a) any of the provisions of Part One of this 
Contract relating to the limitation on the cost for con­
struction and equipment of such Project, or (b) any of 
the provisions of subsection (F) of Sec. 404; or



(2) If the Local Authority, in violation of subsection 
(H) of Sec. 407, has (a) at any time after the end of 
the Initial Operating Period for any Project incurred any 
Operating Expenditures with respect to such Project ex­
cept pursuant to and in accordance with an approved 
Operating Budget for such Project, or (b) during any 
Fiscal Year or other budget period incurred with respect 
to any Project total Operating Expenditures in excess 
of the amount therefor shown in an approved Operating 
Budget (including revisions thereof) governing such Fiscal 
Year or other budget period; or

(3) If the Local Authority has violated any of the pro­
visions of subsection (C) or (D) of (Sec. 401; or

(4) If there is a breach of any of the provisions relating 
to the payment of prevailing salaries and wages which are 
required by this Contract to be included in contracts of 
the Local Authority in connection with the Projects; and 
such breach is not remedied or appropriate action to remedy 
the same initiated by the Local Authority within thirty 
days after the PHA has notified the Local Authority of 
such breach, or if such remedial action is not thereafter 
diligently prosecuted to conclusion; or

(5) If the Local Authority shall fail to prosecute dili­
gently the development of each Project as required by 
subsection (B) of Sec. 102; and such failure is not remedied 
within three months after the PHA has notified the Local 
Authority of such failure; or

(6) If, through any action, failure to act, or fault of 
the Local Authority, its officers, agents, or employees (in­
cluding the Fiscal Agent), there shall be a default in the 
payment of any installment of the principal of or interest 
on any of the Bonds when the same shall become due 
(whether at the maturity thereof or by call for redemption 
or otherwise); and such default shall continue for a period 
of sixty days; or



7a

(7) If there is a flagrant default or breach by the Local 
Authority in the performance or observance of any term, 
covenant, or condition of this Contract; or

(8) If there is any default or breach by the Local Au­
thority in the performance or observance of any term, 
covenant, or condition of this Contract other than the 
defaults or breaches enumerated in Sec. 506 or in sub­
sections (1) through (7) of this Sec. 507; and if such 
default or breach has not been remedied within thirty 
days (or such longer period as may be set by the PH A) 
after the PHA has notified the Local Authority thereof.

Sec. 508. Other Defaults or Breaches, and Other Remedies
(A) Neither the provision of the special remedies set 

forth in Sec. 501 and Sec. 502 in the event of a Substantial 
Default or a Substantial Breach, as the case may be, nor 
any exercise thereof, shall affect or abrogate any other 
remedy which may be available to the PHA in the event 
of a Substantial Default, Substantial Breach, or any other 
default or breach; and the PHA may, during any period 
in which it holds title to or possession of the Projects 
pursuant to Sec. 501 or Sec. 502, exercise any other remedy 
available to it. Neither the definition of certain defaults 
or breaches as Substantial Defaults or Substantial 
Breaches, nor the provision of special remedies therefor, 
shall be deemed to constitute an agreement that any other 
type of default or breach shall be considered insignificant 
or without remedy.

(B) If the Local Authority shall at any time be in 
default or breach, or taike any action which will result 
in a default or breach, in the performance or observance 
of any of the terms, covenants, and conditions of this 
Contract, then the PHA shall have, to the fullest extent 
permitted by laiw (and the Local Authority hereby confers 
upon the PHA the right to all remedies both at law and 
in equity which it is by law authorized to so confer) the 
right (in addition to any rights or remedies in this Con­



tract specifically provided) to maintain any and all actions 
at law or in equity against the Local Authority to enforce 
the correction of any such default or breach or to enjoin 
any such default or breach.

(C) The remedies of the PHA, whether provided by 
law or by this Contract, shall be cumulative, and the exer­
cise of any one or more of such remedies shall not pre­
clude the exercise, at the same or different times, of any 
other such remedies for the same default or breach or 
for any other default or breach by the Local Authority of 
any covenant or agreement on its part contained in this 
Contract.

(D) No act of the PHA (except the issuance of a waiver 
in writing), nor any omission by the POEEA to act, shall 
constitute or be construed as a waiver of any provision 
of this Contract or of any default or breach of the Local 
Authority. No waiver by the PHA of a specific default 
or breach under this Contract shall constitute a waiver 
of, or an agreement to waive, or a precedent for waiving, 
any similar default or breach subsequently1 occurring here­
under.

Sec. 509. Eight, of PHA to 'Terminate Contract
The PHA may at any time by notice to the Local Au­

thority declare this Contract terminated with respect to 
any Project which at such time has not been Permanently 
Financed if (1) the Local Authority has made any fraudu­
lent or willful misrepresentation of any material fact in 
any document or data submitted to the PHA as a basis 
for this Contract or as an inducement to the PHA to enter 
into this Contract, or (2) a Substantial Default or Sub­
stantial Breach exists in connection with any of the Proj­
ects: Provided, That no such termination shall affect
any obligation of the PHA to make annual contributions 
available pursuant to subsection (B) of Sec. 504.



Sec. 510. Rights of Third Parties
(A) The PHA covenants and agrees with and for the 

beneifit of the holders from time to time of the Bonds and 
of interest claims thereunder, that it will pay the annual 
contributions pledged as security for such Bonds and 
interest pursuant to this Contract. To enforce the per­
formance by the PHA of this covenant such holders, as 
well as the Local Authority, shall have the right to proceed 
against the PHA by action at law or suit in equity.

(B) Nothing in this Contract contained shall be con­
strued as creating or justifying any claim against the 
PHA by any third party other than as provided in sub­
section (A) of this Sec. 510.

Sec. 511. Approvals and Notices
(A) Whenever under this Contract approvals, authori­

zations, determinations, satisfactions, or waivers of the 
PHA are required, such approvals, authorizations, deter­
minations, satisfactions, or waivers shall be effective and 
valid only when given either (1) by general orders or 
regulations duly issued from time to time by the PHA, 
or (2) in specific cases, in writing, signed by a duly au­
thorized officer of the PHA, and delivered to the Local 
Authority.

(B) Any notice or demand given under this Contract 
shall be in writing, and signed by a duly authorized officer 
of the party giving such notice or demand. Such notice 
or demand shall be deemed to have been given at the time 
it shall have been received at the principal office of the party 
to whom it is directed.

Sec. 512. Waiver or Amendment
Any right or remedy which the PHA may have under 

this Contract may be waived in writing by the PHA with­
out the execution of a new or supplemental agreement; or



10a

by mutual agreement of the parties hereto this Contract 
may be amended in writing: Provided, 'That none of the 
provisions of this Contract may be modified or amended so 
as to impair in any way the obligation of the P'HA to pay 
any annual contributions which have been pledged as secu­
rity for any obligations of the Local Authority.

Sec. 513. 'Titles, Tables of Contents, and Index
The titles of the several Articles and Sections of this 

Contract and the table of contents and index to this Con­
tract are inserted for convenience of reference only, and 
shall be disregarded in construing or interpreting any of 
the provisions of this Contract.

Sec. 514. Severability of Provisions
If any provision of this Contract is held invalid, the re­

mainder of this Contract shall not be affected thereby if 
such remainder of this Contract would then continue to 
conform to the terms of the Act.

Sec. 515. Interest of Members, Officers, or Employees of 
Local Authority

(A) Neither the Local Authority nor any of its con­
tractors or their subcontractors shall enter into any con­
tract, subcontract, or arrangement, in connection with any 
Project or any property included or planned to be included 
in any Project, in which any member, officer, or employee 
of the Local Authority during his tenure or for one year 
thereafter has any interest, direct or indirect. If any such 
present or former member, officer, or employee involun­
tarily acquires or had acquired prior to the beginning of 
his tenure any such interest, and if such interest is immedi­
ately disclosed to the Local Authority and such disclosure 
is entered upon the minutes of the Local Authority, the 
Local Authority, with the prior approval of the PHA, may 
waive the prohibition contained in this subsection: Pro­



1 1 a

vided, That any such present member, officer, or employee 
shall not participate in any1 action by the Local Authority 
relating to such contract, subcontract, or arrangement.

(B) The Local Authority shall insert in all contracts 
entered into in connection with any Project or any property 
included or planned to be included in any Project, and shall 
require its contractors to insert in each of its subcontracts, 
the following provision:

“ No member, officer, or employee of the Local Au­
thority during his tenure or for one year thereafter 
shall have any interest, direct or indirect, in this con­
tract or the proceeds thereof.”

(0) The provisions of the foregoing subsections (A) and 
(B) of this Sec. 515 shall not be applicable to the purchase 
or sale of Temporary Notes or the Bonds, or to the General 
Depository Agreement, fiscal agency agreements, the trus­
teeships authorized under this Contract, or utility services 
the rates for which are fixed or controlled by a govern­
mental agency.

Sec. 516. Members of Local Authority Not Individually 
Liable

No member or officer of the Local Authority shall be 
individually liable on any obligation assumed by the Local 
Authority hereunder.

Sec. 517. Interest of Member of or Delegate to Congress
No member of or Delegate to the Congress of the United 

States of America or Resident Commissioner, shall be ad­
mitted to any share or part of this Contract or to any 
benefits which may arise therefrom.

Sec. 618. Termination of Obligations
Upon, payment in full of all indebtedness of the Local 

Authority in connection with the Projects for which annual 
contributions are pledged, and upon the x>ayment of any



12a

other indebtedness of the Local Authority in connection 
with the Projects to the P;HA (except indebtedness arising 
under See. 425), all obligations of the PHA and the Local 
Authority under this Contract shall cease and determine 
except the obligations of the Local Authority pursuant to 
Sec. 425.