A-11250, FEBRUARY 15, 1927, 6 COMP. GEN. 533

A-11250: Feb 15, 1927

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LEASES - RESTORATION OF PREMISES UNDER A LEASE PROVIDING THAT THE GOVERNMENT SHALL HAVE THE RIGHT. PAYMENT FOR RESTORING PARTITIONS REMOVED AT THE REQUEST OF THE GOVERNMENT IS NOT AUTHORIZED WHERE IT APPEARS THAT THE REQUIRED NOTICE WAS NOT GIVEN IN TIME BY THE LESSOR. WHEREBY WAS DISALLOWED THE CLAIM OF THE WASHINGTON BUILDING CORPORATION FOR $313 AS REIMBURSEMENT OF THE COST OF REPLACING PARTITIONS BETWEEN ROOMS ON THE FOURTH FLOOR OF THE INVESTMENT BUILDING. PARAGRAPH 8 OF THE LEASE PROVIDES THAT THE GOVERNMENT SHALL HAVE THE RIGHT. THE SECOND PARAGRAPH OF THE CHAIRMAN'S LETTER READS AS FOLLOWS: IT IS UNDERSTOOD. THAT THE EXPENSE IN CONNECTION WITH THIS CHANGE WILL BE BORNE BY THE BOARD.

A-11250, FEBRUARY 15, 1927, 6 COMP. GEN. 533

LEASES - RESTORATION OF PREMISES UNDER A LEASE PROVIDING THAT THE GOVERNMENT SHALL HAVE THE RIGHT, DURING THE EXISTENCE OF THE LEASE, TO MAKE ALTERATIONS AND, IF REQUIRED BY THE LESSOR UPON WRITTEN NOTICE 90 DAYS BEFORE TERMINATION OF THE LEASE, SHALL RESTORE THE PREMISES TO THE SAME CONDITION AS THAT EXISTING AT THE TIME OF ENTERING UPON THE SAME, PAYMENT FOR RESTORING PARTITIONS REMOVED AT THE REQUEST OF THE GOVERNMENT IS NOT AUTHORIZED WHERE IT APPEARS THAT THE REQUIRED NOTICE WAS NOT GIVEN IN TIME BY THE LESSOR.

DECISION BY COMPTROLLER GENERAL MCCARL, FEBRUARY 15, 1927:

REVIEW HAS BEEN REQUESTED OF SETTLEMENT NO. 0160048, DATED OCTOBER 28, 1926, WHEREBY WAS DISALLOWED THE CLAIM OF THE WASHINGTON BUILDING CORPORATION FOR $313 AS REIMBURSEMENT OF THE COST OF REPLACING PARTITIONS BETWEEN ROOMS ON THE FOURTH FLOOR OF THE INVESTMENT BUILDING, WASHINGTON, D.C., FORMERLY OCCUPIED BY THE UNITED STATES BOARD OF TAX APPEALS UNDER LEASE DATED JULY 16, 1924, COVERING THE FISCAL YEAR 1925, WITH A PROVISION FOR RENEWAL FOR THE FISCAL YEAR 1926, AT THE OPTION OF THE GOVERNMENT.

PARAGRAPH 8 OF THE LEASE PROVIDES THAT THE GOVERNMENT SHALL HAVE THE RIGHT, DURING THE EXISTENCE OF THE LEASE, TO MAKE ALTERATIONS AND, IF REQUIRED BY THE LESSOR, SHALL, BEFORE THE EXPIRATION OF THE LEASE OR RENEWAL THEREOF, RESTORE THE PREMISES TO THE SAME CONDITION AS THAT EXISTING AT THE TIME OF ENTERING UPON THE SAME UNDER THE LEASE, REASONABLE AND ORDINARY WEAR AND TEAR, ETC., EXCEPTED, WITH THE PROVISO THAT IF THE LESSOR REQUIRES SUCH RESTORATION, THE LESSOR SHALL GIVE WRITTEN NOTICE THEREOF TO THE GOVERNMENT 90 DAYS BEFORE THE TERMINATION OF THE LEASE.

ON FEBRUARY 17, 1925, THE CHAIRMAN OF THE BOARD OF TAX APPEALS ADDRESSED A LETTER TO THE AGENT OF THE LESSOR REQUESTING PERMISSION TO REMOVE THE WALL THAT SEPARATED ROOMS 438 AND 434 IN THE INVESTMENT BUILDING. THE SECOND PARAGRAPH OF THE CHAIRMAN'S LETTER READS AS FOLLOWS:

IT IS UNDERSTOOD, OF COURSE, THAT THE EXPENSE IN CONNECTION WITH THIS CHANGE WILL BE BORNE BY THE BOARD, AND THAT AT THE TERMINATION OF OUR CONTRACT OR LEASE THE WALL WILL BE RESTORED AT THE EXPENSE OF THE GOVERNMENT IF REQUIRED.

ON FEBRUARY 18, 1925, THE AGENT OF THE LESSOR REPLIED TO THE REQUEST FOR REMOVAL OF THE PARTITION AS FOLLOWS:

IN REPLY TO YOUR LETTER OF FEBRUARY 17TH, IN WHICH YOU REQUEST THE PARTITION BETWEEN ROOMS 438 AND 434 REMOVED, HAVE TO SAY THAT THE ORDER HAS BEEN GIVEN FOR THE REMOVAL OF THIS PARTITION WITH THE UNDERSTANDING THAT YOU PAY FOR THE COST OF THE REMOVAL AND ALSO THE REPLACEMENT OF SAME AT THE END OF YOUR LEASE, IF THE BUILDING OWNERS REQUIRE IT.

THERE IS NO WAY AT THIS TIME TO DETERMINE EITHER THE COST OF REMOVAL OR THE COST OF REPLACEMENT, BUT WE ASSUME THAT YOU WILL APPROVE THE COST AS SUBMITTED, ASSURING YOU THAT THE BUILDING SINKS NO PROFIT, BUT WILL HAVE IT DONE AT ACTUAL COST. IF THIS ARRANGEMENT IS SATISFACTORY, KINDLY NOTIFY US.

ON MAY 26, 1925, THE BOARD NOTIFIED THE AGENT THAT IT WOULD NOT EXERCISE ITS OPTION TO RENEW THE LEASE FOR THE FISCAL YEAR 1926. ON MAY 28, 1925, THE AGENT ACKNOWLEDGED RECEIPT OF THE BOARD'S LETTER OF MAY 26 AND REQUESTED THE BOARD TO RESTORE THE PARTITIONS WHICH WERE REMOVED FOR IT AND FOR WHICH IT HAD AGREED TO PAY.

THE RULE IS WELL ESTABLISHED THAT A CONTRACT REQUIRING NOTICE CAN NOT BE ENFORCED UNLESS THE NOTICE PROVIDED FOR HAS BEEN GIVEN. SEE WESTERN UNION TELEGRAPH CO. V. YOPST AND THE DECISIONS THEREIN CITED; 3 L.R.A. 224; 118 IND. 248; 20 N.E. 222.

IT HAS BEEN SUGGESTED THAT THE PARAGRAPH QUOTED FROM THE LETTER OF FEBRUARY 18, 1925, CONSTITUTES CONSTRUCTIVE NOTICE. BUT SAID LETTER CAN NOT BE SO CONSTRUED. THE LETTER OF FEBRUARY 17, 1925, REQUESTING THE REMOVAL, AGREED THAT THE EXPENSE OF RESTORATION WOULD BE BORNE BY THE GOVERNMENT "IF REQUIRED.' THE LETTER OF FEBRUARY 18, 1925, STATED THAT THE REMOVAL WOULD BE MADE WITH THE UNDERSTANDING THAT THE GOVERNMENT WOULD PAY FOR THE COST OF REMOVAL AND ALSO OF REPLACEMENT "IF THE BUILDING OWNERS REQUIRE IT.' IT IS CLEAR, THEREFORE, THAT THE ARRANGEMENT AS EVIDENCED BY THESE LETTERS WAS NOT INTENDED TO, AND DID NOT, CHANGE THE TERMS OF THE LEASE, BUT WAS MADE IN THE LIGHT OF AND SUBJECT TO THE PROVISIONS OF THE LEASE, LEAVING THE QUESTION AS TO WHETHER THESE PARTITIONS WERE TO BE REPLACED AT GOVERNMENT EXPENSES FOR DETERMINATION AS PROVIDED FOR IN THE LEASE. THE LEASE TERMINATED JUNE 30, 1925. NOTICE THAT THE REPLACEMENT OF THE PARTITIONS WOULD BE REQUIRED WAS NOT GIVEN UNTIL MAY 28, 1925. THEREFORE, THERE WAS NOT SUCH NOTICE AS WAS REQUIRED UNDER THE PLAIN TERMS OF THE LEASE IN ORDER TO OBLIGATE THE GOVERNMENT TO REPLACE THE PARTITIONS. ACCORDINGLY, IT MUST BE HELD THAT NO LEGAL OBLIGATION RESTS ON THE GOVERNMENT TO REIMBURSE THE OWNERS FOR THE COST OF RESTORING THE PARTITIONS.

UPON REVIEW, THE SETTLEMENT DISALLOWING THE CLAIM MUST BE AND IS SUSTAINED.