A-37896, OCTOBER 23, 1931, 11 COMP. GEN. 146

A-37896: Oct 23, 1931

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LEASES - BREACH - TERMINATION WHERE A CONTRACT OF LEASE OF A GOVERNMENT-OWNED FLEET OF TOWBOATS AND BARGES AND UNLOADING FACILITIES IS TERMINATED BY THE GOVERNMENT ON ACCOUNT OF THE LESSEE'S BREACH. THE FLEET OF LEASED VESSELS IS TAKEN BACK BY THE GOVERNMENT. THE UNLOADING FACILITIES WHICH THE GOVERNMENT HAD ERECTED ON THE LESSEE'S LAND WERE NOT REMOVED OR SUCH LAND LEASED FROM THE OWNER. THERE IS NO OBLIGATION TO PAY THE LESSEE ANY RENTALS. ALLEGED TO HAVE ACCRUED AFTER THE TERMINATION OF SAID CONTRACT. THE CLAIM IS FOR RENTALS ALLEGED TO BE DUE FROM MARCH 23. FOR EXPENSES ALLEGED TO HAVE BEEN INCURRED IN MAINTAINING TWO WATCHMEN (DAY AND NIGHT) ON SUCH PREMISES. 000 WITH WHICH TO HAVE CONSTRUCTED 19 BARGES AND 3 OR 4 TOWBOATS.

A-37896, OCTOBER 23, 1931, 11 COMP. GEN. 146

LEASES - BREACH - TERMINATION WHERE A CONTRACT OF LEASE OF A GOVERNMENT-OWNED FLEET OF TOWBOATS AND BARGES AND UNLOADING FACILITIES IS TERMINATED BY THE GOVERNMENT ON ACCOUNT OF THE LESSEE'S BREACH, IN THAT HE FAILED TO OPERATE SUCH FLEET AS A COMMON CARRIER, AS AGREED, AND THE FLEET OF LEASED VESSELS IS TAKEN BACK BY THE GOVERNMENT, BUT THE UNLOADING FACILITIES WHICH THE GOVERNMENT HAD ERECTED ON THE LESSEE'S LAND WERE NOT REMOVED OR SUCH LAND LEASED FROM THE OWNER, AS PERMITTED BUT NOT REQUIRED BY THE CONTRACT AS AMENDED BY SUPPLEMENT AGREEMENT, THE SAME APPARENTLY HAVING BEEN ABANDONED TO THE OWNER OF THE LAND UPON WHICH THEY STAND, THERE IS NO OBLIGATION TO PAY THE LESSEE ANY RENTALS, EXPENSES, OR INTEREST, ALLEGED TO HAVE ACCRUED AFTER THE TERMINATION OF SAID CONTRACT, IN CONNECTION WITH THE CARE OF SAID UNLOADING FACILITIES.

DECISION BY COMPTROLLER GENERAL MCCARL, OCTOBER 23, 1931:

THERE HAS BEEN PRESENTED TO THIS OFFICE FOR CONSIDERATION AND SETTLEMENT THE CLAIM OF EDWARD F. GOLTRA FOR THE SUM OF $78,798.57, ALLEGED TO BE DUE ON ACCOUNT OF CIRCUMSTANCES GROWING OUT OF HIS WAR DEPARTMENT CONTRACT DATED MAY 28, 1919, FOR THE LEASE, WITH THE OPTION TO PURCHASE, OF A FLEET OF GOVERNMENT-OWNED BARGES AND TOWBOATS FOR OPERATION AS A COMMON CARRIER ON THE MISSISSIPPI RIVER AND ITS TRIBUTARIES, AND SUPPLEMENTAL CONTRACT OF MAY 26, 1921, FOR THE ERECTION BY THE GOVERNMENT OF CERTAIN UNLOADING FACILITIES ON CLAIMANT'S LAND.

THE CLAIM IS FOR RENTALS ALLEGED TO BE DUE FROM MARCH 23, 1923, TO SEPTEMBER 4, 1924, AND FROM JULY 1, 1926, TO AUGUST 31, 1930, (1) FOR OCCUPANCY AND USE BY THE GOVERNMENT OF A TRACT OF LAND OWNED BY THE CLAIMANT IN ST. LOUIS, MO., AT THE FOOT OF MALT STREET AND FRONTING ON THE MISSISSIPPI RIVER, UPON WHICH THE GOVERNMENT ERECTED THE UNLOADING FACILITIES PURSUANT TO SAID SUPPLEMENTAL CONTRACT OF MAY 26, 1921; AND (2) FOR USE BY THE GOVERNMENT OF THE LESSEE'S WHARFAGE IMPROVEMENTS ON SAID TRACT OF LAND; ALSO, FOR EXPENSES ALLEGED TO HAVE BEEN INCURRED IN MAINTAINING TWO WATCHMEN (DAY AND NIGHT) ON SUCH PREMISES; AND, ALSO, FOR INTEREST ON THE AMOUNT OF THE CLAIM. THE CLAIM CONSISTS OF FOUR SEPARATE ITEMS, AS FOLLOWS:

TABLE RENTALS ON LAND, AT $2,280 PER ANNUM ------------------------ $12,799.63 RENTALS ON IMPROVEMENTS, AT $6,491 PER ANNUM -------------- - 36,439.24 EXPENSES FOR 2 WATCHMEN (DAY AND NIGHT), AT $250 PER MONTH -- 16,841.25 INTEREST ON CLAIM (TO AUGUST 31, 1930), AT 6 PERCENT PER ANNUM 12,718.45

---------- TOTAL AMOUNT OF CLAIM -------- ------------------------------ 78,798.57

THE FACTS WITH REFERENCE TO THE MATTERS INVOLVED IN THE CLAIM AND THE TRANSACTIONS ARISING IN CONNECTION WITH THE CONTRACTS AS SET FORTH IN A MEMORANDUM OF THE JUDGE ADVOCATE GENERAL TO THE ASSISTANT SECRETARY OF WAR, DATED JUNE 8, 1931, AND IN THE COURT DECISIONS THEREIN MENTIONED AS HAVING ARISEN IN CONNECTION WITH THE CONTRACTOR'S DEFAULT UNDER SAID CONTRACT AND ITS SUPPLEMENT, APPEAR TO BE AS FOLLOWS:

IN 1918, ON ACCOUNT OF THE EMERGENCY CREATED BY THE LATE WAR, THE NECESSITY AROSE OF HAVING TOWBOATS AND BARGES ON THE UPPER MISSISSIPPI RIVER EMPLOYED IN CARRYING COAL AND IRON ORE AND OTHER HEAVY MATERIALS TO ST. LOUIS FOR USE IN THE MANUFACTURE OF IRON NEEDED IN THE PRODUCTION OF MUNITIONS OF WAR, AND FOR SUCH PURPOSE THE UNITED STATES SHIPPING BOARD EMERGENCY FLEET CORPORATION ALLOTTED TO THE CHIEF OF ENGINEERS OF THE UNITED STATES ARMY THE SUM OF $3,860,000 WITH WHICH TO HAVE CONSTRUCTED 19 BARGES AND 3 OR 4 TOWBOATS. WHEN THE ARMISTICE WAS SIGNED, THESE BARGES HAD BEEN CONSTRUCTED OR WERE NEARING COMPLETION AND THE TOWBOATS HAD BEEN CONTRACTED FOR, AND THE GOVERNMENT THEN, DESIRING TO MAKE SOME DISPOSITION AND USE OF THE FLEET, ENTERED INTO A WRITTEN CONTRACT ON MAY 28, 1919, BY THE TERMS OF WHICH THE UNITED STATES CHARTERED AND LEASED TO CLAIMANT THE 19 BARGES NEARING COMPLETION AND 3 OR 4 TOWBOATS NOT YET CONSTRUCTED, FOR A TERM OF FIVE YEARS FROM THE DATE THE FIRST TOWBOAT OR BARGE SHOULD BE DELIVERED TO THE LESSEE.

THE LESSEE COVENANTED TO OPERATE THE WHOLE FLEET AS A COMMON CARRIER ON THE MISSISSIPPI RIVER AND ITS TRIBUTARIES FOR THE PERIOD OF THE LEASE AND OF ANY RENEWALS THEREOF, TRANSPORTING IRON ORE, COAL, AND OTHER COMMODITIES AT RATES NOT IN EXCESS OF THE PREVAILING RAIL TARIFFS, AND AT NOT LESS THAN THE PREVAILING RAIL TARIFFS WITHOUT THE CONSENT OF THE SECRETARY OF WAR. THE LESSEE WAS TO PAY ALL OPERATING EXPENSES OF THE FLEET, AND TO MAINTAIN DURING THE LEASE PERIOD EACH TOWBOAT AND BARGE OF THE FLEET IN GOOD OPERATING CONDITION TO THE SATISFACTION OF THE LESSOR. THE SALVAGE EARNED BY ANY OF THE FLEET WAS TO BE FOR THE BENEFIT OF THE UNITED STATES, AFTER DEDUCTING EXPENSES. THE NET EARNINGS ABOVE OPERATING EXPENSES AND MAINTENANCE FOR EACH TON OF CARGO WERE TO BE TURNED OVER BY THE LESSEE TO THE SECRETARY OF WAR EVERY NINETY DAYS, FOR DEPOSIT TO HIS CREDIT IN THE TREASURY, UNTIL THE NET EARNINGS EQUALLED THE FULL AMOUNT OF THE COST OF THE SEVERAL VESSELS, PLUS INTEREST ON THE COST AT 4 PERCENT PER ANNUM; AND THEN FOR DEPOSIT IN ST. LOUIS BANKS, TO BE HELD FOR THE FULFILLMENT OF THE TERMS OF THE LEASE. THE LESSEE WAS TO KEEP ACCURATE DETAILED ACCOUNTS OF ALL TONNAGE MOVED AND ALL MONEYS RECEIVED AND HIS OPERATING EXPENSES, SUBJECT TO THE INSPECTION OF THE LESSOR OR HIS REPRESENTATIVES, AND THE OVERHEAD EXPENSES WERE TO BE SUBJECT TO THE APPROVAL OF THE LESSOR, AND ANY ITEMS OBJECTED TO WERE TO BE REFERRED TO THE SECRETARY OF WAR, WHOSE DECISION WAS TO BE FINAL. THE LEASE PROVIDED, ALSO, THAT WITHIN THREE MONTHS PRIOR TO THE EXPIRATION THEREOF OR OF ANY PERIOD OF RENEWAL, OR SOONER IF SO DESIRED BY THE LESSEE, A BOARD WAS TO APPRAISE THE VALUE OF THE FLEET; AND THE LESSEE WAS GIVEN THE OPTION OF PURCHASING THE FLEET BY THE FUND FROM THE NET EARNINGS AND BY 15 PROMISSORY NOTES RUNNING FOR 15 YEARS, THE TITLE OF THE PROPERTY TO REMAIN IN THE UNITED STATES UNTIL THE PAYMENT OF THE WHOLE OF THE PURCHASE PRICE OF THE PROPERTY.

SECTION 8 OF THE CONTRACT RESERVED TO THE UNITED STATES THE RIGHT TO TERMINATE THE CONTRACT AND TAKE BACK THE GOVERNMENT'S LEASED PROPERTY, WHENEVER, IN THE JUDGMENT OF THE LESSOR, THE LESSEE FAILED TO COMPLY WITH THE TERMS THEREOF.

BY SUPPLEMENTAL AGREEMENT OF MAY 26, 1921, PROVISION WAS MADE FOR CERTAIN UNLOADING FACILITIES AT ST. LOUIS, MO., FOR THE USE OF SAID FLEET OF LEASED BARGES AND TOWBOATS. UNDER THIS SUPPLEMENTAL AGREEMENT THE LESSEE, AT HIS OWN EXPENSE, WAS TO PROVIDE THE NECESSARY TRACT OF LAND AND RUNWAY ON WHICH THE UNLOADING FACILITIES WERE TO BE ERECTED, TO STAND AND TO BE OPERATED; THE LESSOR, THE UNITED STATES, WAS TO ERECT ON SAID TRACT OF LAND AN UNLOADING APPARATUS OR FACILITIES OF A KIND AND CHARACTER AGREED TO BY THE LESSOR AND LESSEE AS SUFFICIENT AND ADEQUATE TO HANDLE THE CARGOES TO BE TRANSPORTED BY SAID BARGES AND TOWBOATS; THE LESSEE WAS TO MAINTAIN AND OPERATE, AT HIS EXPENSE, SUCH UNLOADING FACILITIES IN CONNECTION WITH THE BARGES AND TOWBOATS AS A COMMON CARRIER, SUBJECT TO SUCH CHARGES FOR SERVICES OF LOADING AND UNLOADING AS SHOULD BE APPROVED BY THE SECRETARY OF WAR; THE LESSEE WAS TO INSURE SUCH FACILITIES FOR THE BENEFIT OF THE UNITED STATES IN SUCH AN AMOUNT AND WITH INSURANCE COMPANIES AS SHOULD BE APPROVED BY THE LESSOR. THIS SUPPLEMENT TO THE LEASE PROVIDED, ALSO, THAT THE TERMS OF THE ORIGINAL LEASE AS TO NET EARNINGS (PAR. 3), APPRAISEMENT, OPTION, AND CONDITIONS OF PURCHASE (PAR. 5), METHOD OF PAYMENT IN EVENT OF PURCHASE (PAR. 6), AND INSPECTION (PAR. 8), SHOULD GOVERN SO FAR AS PRACTICABLE AND PERTINENT TO THE SAID UNLOADING FACILITIES; THAT IN CASE THE SAID LESSEE DID NOT TAKE OVER AND PAY FOR THE UNLOADING FACILITIES, ACCORDING TO THE SAID TERMS OF THE SUPPLEMENTAL AGREEMENT, THE LESSOR MIGHT TAKE SAID FACILITIES IN THE SAME MANNER AS IS PROVIDED IN THE ORIGINAL LEASE AS TO THE BARGES AND TOWBOATS; OR, IN CASE THE LESSOR DID NOT DESIRE TO REMOVE THE UNLOADING FACILITIES, THE LESSOR SHOULD HAVE THE RIGHT TO LEASE THE LAND AND RUNWAYS ON WHICH THE UNLOADING FACILITIES STOOD FOR FIVE YEARS, WITH THE PRIVILEGE OF RENEWALS, THE TERMS OF ANY SUCH LEASE--- IF NOT MUTUALLY AGREED TO BY THE LESSOR AND LESSEE--- TO BE FIXED BY A BOARD OF THREE PERSONS, ONE MEMBER TO BE SELECTED BY THE LESSOR, ONE MEMBER BY THE LESSEE, AND ONE MEMBER BY AGREEMENT BETWEEN THE TWO AFORESAID MEMBERS.

THE SAID TOWBOATS AND BARGES APPEAR TO HAVE BEEN COMPLETED AND TURNED OVER TO THE LESSEE (CLAIMANT) UNDER SAID CONTRACT ON OR ABOUT JULY 15, 1922, AND HE RECEIVED THE UNLOADING APPARATUS ON OR ABOUT SEPTEMBER 16, 1922. HOWEVER, IT APPEARS THAT AFTER THE LESSEE GOT THE VESSELS, THE GOVERNMENT CLAIMED THEY WERE NOT PUT IN USE AND OPERATED, AS CONTEMPLATED BY SUCH CONTRACT, BUT WERE TIED UP TO THE WHARVES AT THE PORT OF ST. LOUIS, MO., AND WERE NEVER USED BY THE LESSEE EXCEPTING FOR THE TRANSPORTATION OF TWO COMPARATIVELY SMALL CARGOES. CONSEQUENTLY, PURSUANT TO THE RIGHT RESERVED IN PARAGRAPH 8 OF THE CONTRACT AND ITS SUPPLEMENT, THE SECRETARY OF WAR DETERMINED THAT THE TERMS AND PROVISIONS OF THE CONTRACT HAD NOT BEEN COMPLIED WITH BY THE LESSEE IN THAT HE HAD FAILED TO OPERATE AS A COMMON CARRIER ON THE MISSISSIPPI RIVER AND ITS TRIBUTARIES THE SAID GOVERNMENT FLEET OF TOWBOATS AND BARGES, AS AGREED, AND THAT SAID CONTRACT AND ITS SUPPLEMENT SHOULD BE TERMINATED. WRITTEN NOTICE OF THE TERMINATION OF SAID CONTRACT, DATED MARCH 3, 1923, WAS GIVEN TO THE LESSEE ON MARCH 4, 1923, IN WHICH THE SECRETARY OF WAR DEMANDED THAT THE LESSEE IMMEDIATELY DELIVER TO THE GOVERNMENT'S REPRESENTATIVE THE POSSESSION OF SAID FLEET OF TOWBOATS AND BARGES, AND ANY UNLOADING FACILITIES ERECTED PURSUANT TO THE SUPPLEMENTAL CONTRACT AND PAID FOR BY THE UNITED STATES. BY LETTER OF MARCH 8, 1923, TO THE SECRETARY OF WAR, THE LESSEE REFUSED TO DELIVER SAID LEASED PROPERTY TO THE LESSOR, AND THEREUPON, PURSUANT TO INSTRUCTIONS FROM THE SECRETARY OF WAR, ON OR ABOUT MARCH 25, 1923, THE CHIEF OF INLAND AND COASTWISE WATERWAYS SERVICE TOOK POSSESSION OF A NUMBER OF THE SAID BARGES AND TOWBOATS.

THE CLAIMANT THEREUPON IMMEDIATELY ENTERED SUIT AGAINST THE SECRETARY OF WAR AND OTHERS IN THE DISTRICT COURT OF THE UNITED STATES FOR THE EASTERN DISTRICT OF MISSOURI, IN WHICH AT THE MARCH TERM, 1924, THE COURT ISSUED AN ORDER GRANTING A TEMPORARY AND MANDATORY INJUNCTION AGAINST THE DEFENDANTS RESTRAINING THEM FROM INTERFERING WITH THE PLAINTIFF'SPOSSESSION OF THE SAID FLEET OF TOWBOATS AND BARGES, AND OTHER FACILITIES AND APPLIANCES OF TRANSPORTATION AS DESCRIBED IN THE BILL OF COMPLAINT, AND DIRECTING THAT POSSESSION OF ALL OF SUCH PROPERTY THERETOFORE SEIZED BY THE DEFENDANTS BE RESTORED TO THE PLAINTIFF, AT THE PORT OF ST. LOUIS, SUBJECT TO AN ACCOUNTING TO BE HAD FOR ANY DAMAGE RESULTING FROM THE USE AND POSSESSION THEREOF SINCE THE TAKING. UPON APPEAL, THE UNITED STATES CIRCUIT COURT OF APPEALS, EIGHTH CIRCUIT, ON JULY 23, 1925, REVERSED THE DECREE OF THE DISTRICT COURT IN RESTORING SAID PROPERTY TO THE LESSEE AND ENJOINING THE DEFENDANTS, AND HELD THAT THE MOTION TO DISMISS AND TO QUASH THE TEMPORARY RESTRAINING ORDER SHOULD HAVE BEEN GRANTED. WEEKS V. GOLTRA, 7 FED.REP./2D) 838. THE UNITED STATES SUPREME COURT GRANTED CERTIORARI AND ON JUNE 7, 1926, AFFIRMED THE RULING OF THE CIRCUIT COURT OF APPEALS. GOLTRA V. WEEKS, 271 U.S. 536. FOLLOWING SUCH DECISION, THE LESSEE ON SEPTEMBER 26, 1927, FILED IN THE DISTRICT COURT OF THE UNITED STATES FOR THE EASTERN DISTRICT OF MISSOURI AN AMENDED AND SUPPLEMENTAL BILL OF COMPLAINT, AND THIS WAS MET BY A MOTION TO DISMISS, WHICH WAS SUSTAINED BY SAID DISTRICT COURT, AND AN INJUNCTION REFUSED, ON THE GROUNDS THAT (1) THE LEASE HAVING TERMINATED BY LIMITATION OF TIME, THERE WAS NO SUBSTANTIAL RELIEF WHICH A COURT OF EQUITY COULD GRANT, AND (2) THAT THE SUPREME COURT OF THE UNITED STATES HAD DETERMINED THE MERITS OF THE CONTROVERSY ADVERSELY TO THE APPELLANT. UPON APPEAL FROM SAID ORDER OF DISMISSAL, THE UNITED STATES CIRCUIT COURT OF APPEALS, EIGHTH CIRCUIT, ON NOVEMBER 2, 1928, AFFIRMED THE DECREE OF THE DISTRICT COURT IN SUSTAINING THE MOTION TO DISMISS THE AMENDED COMPLAINT AND IN REFUSING AN INJUNCTION. GOLTRA V. DAVIS, 29 FED.REP./2) 257. IN ITS OPINION THE SAID CIRCUIT COURT OF APPEALS STATED:

(3) THE LEASE PROVIDED FOR TERMINATION THEREOF AT THE DISCRETION OF THE SECRETARY OF WAR. THAT HE MAY EXERCISE THIS DISCRETION, UPON HIS OWN JUDGMENT, IF DONE IN GOOD FAITH, WITHOUT REVIEW BY THE COURTS, IS SUSTAINED BY ABUNDANT AUTHORITY. THE SUPREME COURT HAS HELD THAT HE DID SO TERMINATE THE LEASE IN GOOD FAITH. HAVING SO HELD IN PLAIN AND UNMISTAKABLE LANGUAGE, THE ACTION OF THE LOWER COURT IN DISMISSING THE AMENDED AND SUPPLEMENTAL BILL OF COMPLAINT WAS CORRECT, AND WILL HAVE TO BE SUSTAINED.

HAVING HERETOFORE HELD THAT, UNDER THE DECISION OF THE SUPREME COURT OF THE UNITED STATES, THE CONTRACT BETWEEN THE PARTIES HAS BEEN TERMINATED AND CANCELED, ALL RIGHTS THEREIN WHICH THE APPELLANT MAY HAVE HAD ARE CONSEQUENTLY TERMINATED AND ENDED, * * *

CERTIORARI WAS APPLIED FOR BUT DENIED. GOLTRA V. DAVIS, 279 U.S. 843. THEREUPON AND NOTWITHSTANDING THAT THE SUPREME COURT OF THE UNITED STATES HAS HELD THAT THE CONTRACT IN QUESTION WAS LAWFULLY TERMINATED BY THE GOVERNMENT ON MARCH 4, 1923, ON ACCOUNT OF THE LESSEE'S DEFAULT THEREUNDER, AND REGARDING WHICH THE UNITED STATES CIRCUIT COURT OF APPEALS, EIGHTH CIRCUIT, HAD HELD THAT ALL RIGHTS THEREIN WHICH THE LESSEE MAY HAVE HAD WERE TERMINATED AND ENDED, THE CLAIMANT (LESSEE) ON MARCH 23, 1929, ENTERED SUIT IN THE SUPREME COURT OF THE DISTRICT OF COLUMBIA AGAINST THE INLAND WATERWAYS CORPORATION FOR $10,211,061.28 DAMAGES FOR ALLEGED BREACH OF THE CONTRACT BY THE UNITED STATES ON THE THEORY THAT THE DEFENDANT HAD SUCCEEDED TO THE LIABILITIES OF THE GOVERNMENT IN THE MATTER. THE AMENDED DECLARATION IN THIS SUIT WAS IN PART AS FOLLOWS: THE PLAINTIFF FURTHER SAYS THAT BY REASON OF ALL THE FOREGOING HE HAS BEEN DEPRIVED OF THE USE AND OCCUPANCY OF THE LAND AND RUNWAY UPON WHICH THE FOREGOING UNLOADING FACILITIES HAVE BEEN ERECTED, AND HAS RECEIVED NO RENT ON ACCOUNT THEREOF, AND THE PLAINTIFF SAYS THAT A FAIR RENTAL VALUE OF SAID LAND FOR THE PERIOD OF TIME THE SAME HAS BEEN OCCUPIED BY THE DEFENDANT AND ITS PREDECESSORS IS THE SUM OF $4,875.00, AND THAT THE PLAINTIFF HAS BEEN OBLIGED TO EXPEND ON ACCOUNT OF THE CARE AND MAINTENANCE OF SAID BRIDGE UP TO MARCH 13, 1929, THE SUM OF $11,083.30. THE PLAINTIFF FURTHER SAYS THAT HE WILL BE PUT TO A LARGE EXPENSE IN REMOVING FROM HIS AFORESAID LAND THE AFORESAID UNLOADING FACILITIES, PARTICULARLY THE CONCRETE RUNWAY ERECTED THEREON, TO WIT, THE SUM OF $2,500.00

THESE ITEMS WERE INCLUDED IN THE ITEMIZED LIST OF DAMAGES TOTALING $10,211,061.28, APPENDED TO THE DECLARATION AS FOLLOWS:

TABLE RENTAL VALUE OF PROPERTY OCCUPIED BY UNLOADING FACILITIES FROM NOVEMBER, 1922, TO MARCH, 1929 ------------------------ $ 4,875.00 TO ESTIMATED COST OF REMOVING BRIDGE RUNWAY ----------------- 2,500.00 TO CARE AND MAINTENANCE OF BRIDGE AND WATCHMEN TO MARCH 1, 1929 ------------- ---------------------------------- 11,083.30

IT IS THUS CLEARLY SHOWN THAT ITEMS FOR USE AND OCCUPATION OF THE LAND AND FOR EXPENSES OF MAINTAINING WATCHMEN FOR THE PROPERTY SUBSEQUENT TO THE TERMINATION OF THE CONTRACT, ITEMS NOW CLAIMED--- IN INCREASED AMOUNTS --- BEFORE THIS OFFICE, WERE SPECIFICALLY INCLUDED IN THE SUIT AGAINST THE INLAND WATERWAYS CORPORATION. IN THAT SUIT THE LOWER COURT SUSTAINED A DEMURRER TO THE DECLARATION AND THE COURT OF APPEALS OF THE DISTRICT OF COLUMBIA ON APRIL 6, 1931, AFFIRMED THE JUDGMENT OF THE LOWER COURT. GOLTRA V. INLAND WATERWAYS CORPORATION, 49 FED.REP./2D) 497. IN ITS OPINION THE COURT OF APPEALS STATED IN PART:

MOREOVER WE ARE OF THE OPINION THAT THE AMENDED DECLARATION DOES NOT SET OUT A VALID CLAIM AGAINST THE UNITED STATES OR ANY OF ITS OFFICERS OR AGENCIES. * * *

AND AGAIN:

IN OUR OPINION THEREFORE THE ALLEGATIONS OF THE AMENDED DECLARATION ARE NOT SUFFICIENT TO SHOW THAT ANY LIABILITY OF THE UNITED STATES OR THE SECRETARY OF WAR EVER AROSE IN FAVOR OF GOLTRA BECAUSE OF THE FACTS THEREIN STATED, AND, SUCH BEING THE CASE, NO LIABILITY OF THIS CHARACTER WAS IMPOSED BY LAW UPON THE DEFENDANT CORPORATION.

ON THIS WHOLE RECORD IT WOULD SEEM TO BE INDISPUTABLY ESTABLISHED BY JUDICIAL DETERMINATION THAT THE CLAIMANT HAS NO VALID CLAIM AGAINST THE UNITED STATES FOR USE AND OCCUPATION OF THE LAND, OR FOR EXPENSES IN CONNECTION THEREWITH, BY VIRTUE OF ANY BREACH OF THE CONTRACT, OR ITS AMENDMENT, BY THE GOVERNMENT OR ITS OFFICERS OR AGENCIES AND SUCH JUDICIAL DETERMINATION PRECLUDES THIS OFFICE FROM CONSIDERING THE MERITS OF SO MUCH OF THE PRESENT CLAIM AS RELATES TO ANY PERIOD PRIOR TO MARCH, 1929, OR THAT ARISES FROM THE TRANSACTIONS OR FACTS RELATED IN THE DECLARATION ON WHICH THE JUDICIAL DETERMINATION WAS BASED. HENCE, THE ONLY QUESTION FOR DETERMINATION BY THIS OFFICE WOULD APPEAR TO BE AS TO WHETHER--- ASSUMING THAT THERE WAS NO OBLIGATION ON THE UNITED STATES TO PAY FOR ANY USE OR OCCUPATION OF CLAIMANT'S PROPERTY FOR ANY PERIOD PRIOR TO MARCH, 1929--- THERE IS A VALID CLAIM ON ACCOUNT OF ANY SUCH USE AND OCCUPATION SUBSEQUENT TO THAT TIME. IF THE ALLEGED USE AND OCCUPATION SUBSEQUENT TO THE JUDICIAL DETERMINATION WAS NO DIFFERENT FROM THAT WHICH MAINTAINED PRIOR THERETO, THE DECISION OF THE COURT MAY BE ACCEPTED AS SUFFICIENT AUTHORITY FOR DISALLOWANCE OF THE PRESENT CLAIM AND THAT APPEARS TO BE THE SITUATION.

IT IS NOT SHOWN THAT THERE WAS ANY ACTUAL USE OR PHYSICAL OCCUPATION OR CONTROL OF THE PROPERTY BY THE GOVERNMENT SUBSEQUENT TO MARCH, 1929, ON WHICH THERE COULD BE BASED AN IMPLIED PROMISE TO PAY RENTAL OVER THE PERIOD IN QUESTION OR ANY AUTHORIZED REQUEST FOR THE CLAIMANT TO INCUR EXPENSES IN WATCHING AND MAINTAINING THE PROPERTY SUCH AS WOULD IMPLY A PROMISE OF REIMBURSEMENT. THE CIRCUMSTANCE THAT THE CLAIMANT EMPLOYED WATCHMEN TO GUARD THE PROPERTY SHOWS THAT HE, AND NOT THE GOVERNMENT, WAS IN ACTUAL POSSESSION. THE ALLEGATION OF USE AND OCCUPATION BY THE GOVERNMENT APPEARS TO BE BASED SOLELY ON THE FACT THAT THE UNLOADING FACILITIES REMAINED ON THE CLAIMANT'S LAND AFTER TERMINATION OF THE CONTRACT. BUT THE FACTS ARE THAT THE UNLOADING FACILITIES WERE LAWFULLY PLACED ON CLAIMANT'S LAND PURSUANT TO AN EXPRESS AGREEMENT WITH THE CLAIMANT AND UNDER THE TERMS OF THE CONTRACT PROVIDING THEREFOR THE GOVERNMENT WAS UNDER NO OBLIGATION TO REMOVE SUCH FACILITIES WHEN THE CONTRACT WAS TERMINATED. THE GOVERNMENT RESERVED THE RIGHT TO REMOVE SUCH FACILITIES; ALSO, IT RESERVED THE RIGHT TO LEASE THE LAND FROM THE CLAIMANT, BUT IT DID NOT OBLIGATE ITSELF TO DO EITHER, AND WHEN THE CONTRACT WAS TERMINATED IT DID NOT EXERCISE EITHER ITS RIGHT TO REMOVE SUCH FACILITIES OR ITS RIGHT TO LEASE THE LAND. WHILE THE SECRETARY OF WAR, UPON TERMINATION OF THE CONTRACT, MARCH 3, 1923, DIRECTED THE CLAIMANT TO DELIVER OVER TO THE GOVERNMENT ANY UNLOADING FACILITIES ERECTED ON HIS LAND AND PAID FOR BY THE UNITED STATES, SUPPOSEDLY FOR THE PURPOSE OF REMOVAL, THIS THE CLAIMANT REFUSED TO DO AND SECURED AN INJUNCTION TO PREVENT INTERFERENCE WITH HIS POSSESSION. WHEN THIS INJUNCTION WAS FINALLY DISSOLVED UPON CONSIDERATION OF THE MERITS OF THE CASE BY THE SUPREME COURT OF THE UNITED STATES IN JUNE, 1926, THE GOVERNMENT SUPPOSEDLY THEN HAD THE RIGHT, WITHIN A REASONABLE TIME, TO REMOVE THE UNLOADING FACILITIES IT HAD PLACED ON THE LAND, BUT APPARENTLY, IT WAS THEN DETERMINED THAT THEIR VALUE TO THE GOVERNMENT AFTER BEING REMOVED WOULD NOT JUSTIFY THE EXPENSE OF REMOVAL, AND THEY WERE ABANDONED TO THE CLAIMANT. AS THE GOVERNMENT WAS UNDER NO CONTRACTUAL OBLIGATION TO REMOVE THE FACILITIES, IT WAS CLEARLY WITHIN ITS RIGHTS, AS BETWEEN ITSELF AND CLAIMANT, TO PERMIT THEM TO REMAIN ON THE LAND, WHERE THEY HAD BEEN RIGHTFULLY PLACED IN THE FIRST INSTANCE FOR THE USE OF THE CLAIMANT AND IN CONTEMPLATION OF THEIR SUBSEQUENT SALE TO THE CLAIMANT, AND UNDER THE SETTLED RULES OF THE LAW OF REAL PROPERTY PERTAINING TO FIXTURES WHERE A RESERVED RIGHT TO REMOVE IS NOT EXERCISED WITHIN A REASONABLE TIME, IT IS TO BE SUPPOSED THAT UPON THE EXPIRATION OF A REASONABLE TIME, THE GOVERNMENT LOST ITS RIGHT TO REMOVE THE SAID FACILITIES AND THEY BECAME THE PROPERTY OF THE CLAIMANT. FURTHERMORE, IT DOES NOT APPEAR FROM ANYTHING THAT HAS BEEN SUBMITTED TO THIS OFFICE THAT THE CLAIMANT SUSTAINED ANY ACTUAL DAMAGE AS A RESULT OF THE UNLOADING FACILITIES REMAINING ON HIS LAND. AND IF, AS FOUND BY THE COURT, THERE WAS NO OBLIGATION ON THE UNITED STATES TO PAY FOR ANY USE AND OCCUPATION FROM JUNE, 1926, TO MARCH, 1929, CLEARLY THERE IS NO OBLIGATION TO PAY, AS FOR USE AND OCCUPATION OR OTHERWISE, ON ACCOUNT OF THE FACILITIES REMAINING ON HIS LAND AFTER MARCH, 1929.