A-6534, JANUARY 21, 1925, 4 COMP. GEN. 622

A-6534: Jan 21, 1925

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THE LEASEHOLD ESTATE IS MERGED IN THE FEE. THE FORMER OWNER OR LESSOR IS NOT ENTITLED TO ANY RENT FALLING DUE UNDER THE TERMS OF THE LEASE ON A DATE SUBSEQUENT TO THE TRANSFER OF TITLE. YOUR REQUEST FOR DECISION AS TO THE AMOUNT YOU ARE LEGALLY AUTHORIZED TO PAY TO THE DAYTON AIR SERVICE INCORPORATED COMMITTEE. IT DOES NOT APPEAR THAT ANY CONTRACT FOR THE PURCHASE OF THE PREMISES OR FOR THE CONVEYANCE THEREOF TO THE UNITED STATES WAS EVER ENTERED INTO BY THE PARTIES. THE MATERIAL FACTS ARE UNDERSTOOD TO BE THAT THE GOVERNMENT HAD BEEN USING THE LAND FOR SEVERAL YEARS UNDER PRIOR LEASES. THAT THESE LANDS FORMED A PART OF WHAT IS KNOWN IN THE LAWS OF THE STATE OF OHIO AS THE MIAMI CONSERVATION DISTRICT.

A-6534, JANUARY 21, 1925, 4 COMP. GEN. 622

LEASES, RENT - MERGING OF ESTATES UPON TRANSFER OF THE TITLE TO A TRACT OF LAND TO THE UNITED STATES, DURING THE OCCUPANCY THEREOF BY THE UNITED STATES AS LESSEE, THE LEASEHOLD ESTATE IS MERGED IN THE FEE, AND THE FORMER OWNER OR LESSOR IS NOT ENTITLED TO ANY RENT FALLING DUE UNDER THE TERMS OF THE LEASE ON A DATE SUBSEQUENT TO THE TRANSFER OF TITLE, THE RENT NOT BEING APPORTIONABLE AND FOLLOWING THE REVERSION OF THE LAND.

COMPTROLLER GENERAL MCCARL TO LIEUT. W. H. SUTHERLAND, UNITED STATES ARMY, JANUARY 21, 1925:

THERE HAS BEEN RECEIVED BY INDORSEMENT DATED NOVEMBER 25, 1924, OFFICE OF CHIEF OF FINANCE, YOUR REQUEST FOR DECISION AS TO THE AMOUNT YOU ARE LEGALLY AUTHORIZED TO PAY TO THE DAYTON AIR SERVICE INCORPORATED COMMITTEE, ON VOUCHER SUBMITTED, STATED IN THE SUM OF $875, COVERING RENTAL OF LAND FOR THE PERIOD JULY 1 TO AUGUST 12, 1924.

ON JULY 1, 1924, CLAIMANT AND THE UNITED STATES EXECUTED A LEASE TO CERTAIN TRACTS OF LAND NEAR DAYTON, OHIO, FOR USE BY THE GOVERNMENT AS AN AVIATION FIELD. CLAUSE 9 OF SAID LEASE READS AS FOLLOWS:

THE GOVERNMENT SHALL PAY THE LESSOR FOR THE PREMISES RENT AT THE FOLLOWING RATE: SEVEN THOUSAND FIVE HUNDRED ($7,500) DOLLARS PER YEAR. PAYMENT SHALL BE MADE AT THE END OF EACH QUARTER.

THE LEASE CONTAINS NO PROVISION RELATIVE TO PURCHASE OF THE LAND COVERED BY THE LEASE, AND IT DOES NOT APPEAR THAT ANY CONTRACT FOR THE PURCHASE OF THE PREMISES OR FOR THE CONVEYANCE THEREOF TO THE UNITED STATES WAS EVER ENTERED INTO BY THE PARTIES. THE MATERIAL FACTS ARE UNDERSTOOD TO BE THAT THE GOVERNMENT HAD BEEN USING THE LAND FOR SEVERAL YEARS UNDER PRIOR LEASES, TOGETHER WITH OTHER CONTIGUOUS LANDS, FOR AN AVIATION FIELD KNOWN AS WILBUR WRIGHT FIELD; THAT THESE LANDS FORMED A PART OF WHAT IS KNOWN IN THE LAWS OF THE STATE OF OHIO AS THE MIAMI CONSERVATION DISTRICT; THAT THE NUMEROUS OWNERS OF DIFFERENT TRACTS OF LAND COVERED BY THE LEASE INCORPORATED IN THE NAME OF THE DAYTON AIR SERVICE INCORPORATED COMMITTEE; AND THAT THIS CORPORATION SECURED TITLE TO SEVERAL THOUSAND ACRES OF LAND AND ON AUGUST 9, 1924, EXECUTED A GENERAL WARRANTY DEED TO THE UNITED STATES CONVEYING THE TITLE TO SAID LANDS FOR A RECITED CONSIDERATION OF $1, WHICH DEED WAS ACCEPTED AND FILED FOR RECORD BY THE UNITED STATES ON AUGUST 12, 1924. IT THUS APPEARS THAT CONVEYANCE OF THE LAND TO THE UNITED STATES WAS IN REALITY IN THE NATURE OF A GIFT FOR THE PURPOSES MENTIONED. AMONG THE COVENANTS OF WARRANTY IN THE DEED ARE THE FOLLOWING:

* * * AND ALL THE ESTATE, TITLE, AND INTEREST OF THE SAID GRANTOR, EITHER IN LAW OR EQUITY, OF, IN, AND TO THE SAID PREMISES; TOGETHER WITH ALL THE PRIVILEGES AND APPURTENANCES TO THE SAME BELONGING, AND ALL THE RENTS, ISSUES AND PROFITS THEREOF.

TO HAVE AND TO HOLD THE SAME TO THE UNITED STATES OF AMERICA, ITS SUCCESSORS AND ASSIGNS FOREVER, AS AND FOR AN AVIATION FIELD AND FOR SUCH OTHER SERVICE OF THE UNITED STATES OF AMERICA AS MAY NOW OR HEREAFTER APPEAR TO IT DESIRABLE, BUT UPON ABANDONMENT OR DISCONTINUANCE OF THE USE OF THE WITHIN DESCRIBED PREMISED BY THE UNITED STATES OF AMERICA, TITLE TO SAID LANDS SHALL IPSO FACTO REVERT TO THE GRANTOR.

IT IS CLEAR ACCORDING TO THE PLAIN AND EXPLICIT TERMS OF THE LEASE, THAT THE RENT DID NOT ACCRUE UNDER THE TERMS THEREOF, OR BECOME DUE AND PAYABLE, UNTIL THE END OF THE FIRST QUARTER WHICH WOULD HAVE BEEN SEPTEMBER 30, 1924, AND PRIOR TO THAT DATE, ON AUGUST 12, 1924, THE LANDS WERE CONVEYED BY GENERAL WARRANTY DEED TO THE LESSEE THUS MERGING THE TWO ESTATES IN THE LESSEE.

IN DISCUSSING THE QUESTION OF OWNERSHIP OF RENTS AFTER THE MERGING OF THE WHOLE ESTATE IN THE LESSEE, THE COURT OF CLAIMS IN CUMMING ET AL. V. UNITED STATES, DECIDED DECEMBER 6, 1922, 57 CT.CLS. 551, 556, SAID:

BECAUSE THE TRANSACTION WAS NOT CLOSED UNTIL THE LATTER PART OF DECEMBER, THE PLAINTIFFS CONTEND THAT THEY SHOULD BE ALLOWED RENT UP TO THE DATE IN DECEMBER WHEN THE DEFENDANT MADE ITS PAYMENT. ANOTHER PRINCIPLE INTERVENES, HOWEVER, WHICH PREVENTS THIS. THE DECEMBER INSTALLMENT OF RENT COULD NOT ACCRUE UNDER THE TERMS OF THE LEASE BEFORE THE END OF THE MONTH, AND PRIOR TO THAT TIME THE TENANT HOLDING UNDER THE LEASE HAD SUCCEEDED TO THE FEE, BY CONVEYANCES OF TITLE BY THE LANDLORDS. RENT FOLLOWS THE REVERSION, AND BEFORE THE RENT BECAME DUE THE REVERSION HAD PASSED TO THE UNITED STATES. IN THESE CIRCUMSTANCES, AS WAS SAID BY CHIEF JUSTICE RICHARDSON IN YORK V. JONES, 2 N.H. 454, 456,"THERE IS NO DOUBT THAT THE RENT PASSED AS INCIDENT TO THE REVERSION AND BECAME EXTINGUISHED," OR, AS SAID IN ANOTHER CASE, "THE TERM FOR YEARS WAS DROWNED OR MERGED IN THE FEE SIMPLE ESTATE AND BECAME EXTINCT," LIEBSCHUTZ V. MOORE, 70 IND. 142, 147. THERE COULD NOT BE A RIGHT OF ACTION UNTIL THE INSTALLMENT OF RENT ACCRUED ACCORDING TO THE LEASE, AND WHEN THAT TIME ARRIVED THE PLAINTIFFS HAD CEASED TO BE OWNERS. THE COURT CAN NOT APPORTION THE RENT RESERVED.

THE DECISIONS ON THIS QUESTION THROUGHOUT THE STATES APPEAR TO BE UNIFORM IN HOLDING THAT THE RENT FOLLOWS THE REVERSION OF THE LAND IN THE ABSENCE OF AN AGREEMENT TO THE CONTRARY, AND SUCH IS THE HOLDING OF THE APPELLATE COURTS IN OHIO, WHEREIN THE LAND INVOLVED UNDER THIS LEASE IN QUESTION IS SITUATED.

IN WALD ET AL. V. BIEN, 14 N.P.N.S. (OHIO) 145, 150, DECIDED APRIL 9, 1913, WHEREIN ARE CITED NUMEROUS AUTHORITIES FROM VARIOUS STATES, THE COURT SAID:

THE LAW CERTAINLY IS, IN THE ABSENCE OF AGREEMENT TO THE CONTRARY, RENTS BELONG TO WHOEVER IS THE OWNER OF THE REVERSION AT THE TIME THEY ACCRUE, WITHOUT REFERENCE AS TO WHETHER THEY ARE PAYABLE IN ADVANCE OR NOT. THE RULE IS THUS STATED, I. TIFFANY ON LANDLORD AND TENANT SECTION 76:

"RENT IS NOT, AT COMMON LAW, REGARDED AS ACCRUING FROM DAY TO DAY AS INTEREST DOES, BUT IT IS ONLY UPON THE DAY FIXED FOR PAYMENT THAT ANY PART OF IT BECOMES DUE. THE RESULT OF THIS PRINCIPLE IS THAT, ORDINARILY THE PERSON WHO IS ON THAT DAY THE OWNER OF THE REVERSION IS ENTITLED TO THE ENTIRE INSTALLMENT OF RENT DUE ON THAT DAY, THOUGH HE MAY HAVE BEEN THE OWNER OF THE REVERSION OR RENT BUT A PART OF THE TIME WHICH HAS ELAPSED SINCE THE LAST RENT DAY. CONVERSELY, ONE WHO HAS BEEN OWNER OF THE REVERSION OR THE RENT DURING A PART OF SUCH PERIOD CAN CLAIM NO PORTION OF THE INSTALLMENT UNLESS HE IS SUCH OWNER AT THE TIME AT WHICH THE INSTALLMENT IS PAYABLE BY THE TERMS OF THE LEASE. THE GENERAL RULE IN THIS REGARD IS ORDINARILY EXPRESSED BY SAYING THAT RENT CAN NOT BE APPORTIONED AS TO TIME.'

IN HUGHES V. FORSYTHE, 26 C.C.N.S. 13, DECIDED MARCH TERM 1916, THE OHIO COURT OF APPEALS HELD:

IT IS A GENERAL PRINCIPLE OF LAW THAT RENTS ARE NOT APPORTIONABLE AS TO TIME EXCEPT BY VIRTUE OF CONTRACT TO THAT EFFECT, AND THAT RENTS ARE PROPERTY OF THE OWNER OF THE REVERSION IN THE LANDS FOR WHICH RENT IS DUE.

IN VIEW OF THESE DECISIONS, WHICH CONCLUSIVELY ESTABLISH AND CONFIRM THAT, IN THE ABSENCE OF CONTRARY PROVISION IN THE CONTRACT OR LEASE, THE RENTS FOLLOW THE REVERSION OF THE LANDS FOR WHICH RENT IS CLAIMED AND CAN NOT BE APPORTIONED AS TO TIME, AND IT APPEARING THAT THE RENT WAS NOT DUE OR PAYABLE TO CLAIMANT UNDER THE LEASE IN QUESTION UNTIL SEPTEMBER 30, 1924, AT WHICH TIME THE UNITED STATES WAS THE OWNER OF THE REVERSION IN THE LAND, IT MUST BE HELD THAT THE RIGHT TO THE RENTS, RESERVED IN THE LEASE, PASSED TO THE UNITED STATES UNDER THE DEED OF AUGUST 9, 1924, WHICH BY SPECIFIC COVENANT GRANTED "ALL RENTS, ISSUES, AND PROFITS THEREOF" TO THE UNITED STATES, AND THUS EXTINGUISHED THE RIGHT OF CLAIMANT TO DEMAND OR COLLECT ANY RENTS WHICH WERE NOT DUE AND PAYABLE AT THE TIME OF THE EXECUTION AND DELIVERY OF THE DEED.

ACCORDINGLY, YOU ARE ADVISED THAT PAYMENT OF ANY SUM UNDER SAID LEASE DATED JULY 1, 1924, BETWEEN THE DAYTON AIR SERVICE INCORPORATED COMMITTEE AND THE GOVERNMENT IS NOT AUTHORIZED.