B-101717, MAY 21, 1951, 30 COMP. GEN. 467

B-101717: May 21, 1951

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

CLAIMS - CONFLICTING - GENERAL ACCOUNTING OFFICER PROCEDURE WHERE THERE ARE CONFLICTING CLAIMS FOR RENT FOR LAND LEASED TO THE GOVERNMENT AND THE RECORD IS SUCH AS TO RENDER IT IMPOSSIBLE TO DETERMINE WHICH PARTY IS ENTITLED TO RECEIVE THE RENT FROM THE PREMISES. 1951: REFERENCE IS MADE TO YOUR LETTER OF FEBRUARY 23. OF WHICH THE LEASED PREMISES WERE A PART. IT APPEARS THAT ON OR ABOUT THE SAME DATE THE SIPLES EXECUTED WHAT IS DESCRIBED AS A LEASE DATED MAY 4. IT WAS PROVIDED THAT MR. IT WAS PROVIDED THAT IN THE EVENT THE GOVERNMENT SHOULD ABANDON THE PROPERTY ANY TIME PRIOR TO JUNE 30. - WHICH WAS NEVER RECORDED. THE LATTER DEED RECITES THAT IT IS SUBJECT TO THE GOVERNMENT'S UNRECORDED LEASE.

B-101717, MAY 21, 1951, 30 COMP. GEN. 467

CLAIMS - CONFLICTING - GENERAL ACCOUNTING OFFICER PROCEDURE WHERE THERE ARE CONFLICTING CLAIMS FOR RENT FOR LAND LEASED TO THE GOVERNMENT AND THE RECORD IS SUCH AS TO RENDER IT IMPOSSIBLE TO DETERMINE WHICH PARTY IS ENTITLED TO RECEIVE THE RENT FROM THE PREMISES, PAYMENT MAY NOT BE MADE TO ANY OF THE PARTIES CONCERNED UNLESS THEY CAN AGREE UPON A PROPER SETTLEMENT OR COMPOSE THEIR DIFFERENCES IN SOME WAY.

COMPTROLLER GENERAL WARREN TO H. NUNN, DEPARTMENT OF COMMERCE, MAY 21, 1951:

REFERENCE IS MADE TO YOUR LETTER OF FEBRUARY 23, 1951, TRANSMITTED HERE BY THE CHIEF, ACCOUNTING DIVISION, CIVIL AERONAUTICS ADMINISTRATION, SUBMITTING A VOUCHER AND RELATED PAPER STATED IN FAVOR OF H. S. NORMAN IN THE AMOUNT OF $75 COVERING PAYMENT OF RENT FOR THE CALENDAR YEAR ENDING JUNE 30, 1951, FOR THE RADIO RANGE SITE AT ARCATA, CALIFORNIA, LEASED TO THE GOVERNMENT UNDER LEASE C6CA-3892 (FORMERLY NOY/R/-35201), DATED JANUARY 8, 1944, AND REQUESTING A DECISION AS TO WHETHER YOU PROPERLY MAY CERTIFY THE VOUCHER FOR PAYMENT.

THE MATTER PRESENTED CONCERNS CONFLICTING CLAIMS FOR RENT FOR THE PERIOD COVERED BY THE VOUCHER AS WELL AS PRIOR PERIODS, IT APPEARING THAT NO RENT HAS BEEN PAID FOR THE LEASED PREMISES SINCE JUNE 30, 1947. UNDER THE LEASE JULIUS F. FISHER LET THE PREMISES DESCRIBED THEREIN TO THE GOVERNMENT FOR THE TERM BEGINNING JANUARY 8, 1944, AND ENDING JUNE 30, 1944, AT A RENTAL OF $37.50 FOR THE ORIGINAL TERM PAYABLE IN ARREARS AND WITH RENEWAL OPTION IN FAVOR OF THE GOVERNMENT NOT TO EXTEND THE OCCUPANCY BEYOND JUNE 30, 1954, AT AN ANNUAL RENTAL OF $75, ALSO PAYABLE IN ARREARS. IT APPEARS THAT THE DEPARTMENT OF THE NAVY TRANSFERRED THE LEASE TO THE CIVIL AERONAUTICS ADMINISTRATION EFFECTIVE JULY 1, 1950.

THE RECORD SHOWS THAT BY DEED MAY 8, 1945 (RECORDED JULY 17, 1945), MR. FISHER CONVEYED A PARCEL, OF WHICH THE LEASED PREMISES WERE A PART, TO F. K. SIPLE AND MARJORIE SIPLE, HIS WIFE. IT APPEARS THAT ON OR ABOUT THE SAME DATE THE SIPLES EXECUTED WHAT IS DESCRIBED AS A LEASE DATED MAY 4, 1945, HEREINAFTER REFERRED TO AS THE "INSTRUMENT," WHEREIN THEY LET THE PREMISES AS DESCRIBED IN THE GOVERNMENT'S LEASE TO MR. FISHER FOR A TERM BEGINNING EFFECTIVE AS OF THE DATE OF THE INSTRUMENT TO JUNE 30, 1954, WITH THE RIGHT TO SUBLEASE TO THE UNITED STATES. ALSO, IT WAS PROVIDED THAT MR. FISHER SHOULD RETAIN ALL BENEFITS RECEIVED BY HIM FROM THE LETTING AND SUBLETTING TO THE UNITED STATES OR THE OPTION TO PURCHASE THEREIN CONTAINED; THAT THE SIPLES SHOULD BE SUBJECT TO ALL THE BURDENS AND LIABILITIES IN THE GOVERNMENT'S LEASE ATTACHING TO THE LESSOR AND RUNNING IN FAVOR OF THE GOVERNMENT'S LEASE ATTACHING TO THE LESSOR AND RUNNING IN FAVOR OF THE GOVERNMENT; AND THAT IN THE EVENT THE GOVERNMENT OR ANY SUBLESSOR SHOULD EXERCISE THE OPTION TO PURCHASE THE SIPLES WOULD THEN EXECUTE SUCH A DEED AS MR. FISHER SHOULD DEMAND, PROVIDED THAT ALL EXPENSES INCIDENTAL TO THE TRANSFER OF TITLE SHOULD BE PAID BY MR. FISHER. FURTHER, IT WAS PROVIDED THAT IN THE EVENT THE GOVERNMENT SHOULD ABANDON THE PROPERTY ANY TIME PRIOR TO JUNE 30, 1954, THE INSTRUMENT WOULD TERMINATE AND POSSESSION WOULD REVERT TO THE SIPLES; THAT IN THE EVENT OF THE GOVERNMENT'S FAILURE TO EXERCISE THE PURCHASE OPTION AND IN THE EVENT OF THE EXPIRATION OF THE GOVERNMENT'S LEASE THROUGH LAPSE OF TIME THE INSTRUMENT--- WHICH WAS NEVER RECORDED--- SHOULD TERMINATE AND POSSESSION SHOULD REVERT TO THE SIPLES; AND THAT THE INSTRUMENT SHOULD BE BINDING ON THE HEIRS, ADMINISTRATORS, EXECUTORS, AND ASSIGNS OF ALL PARTIES.

BY DEED DATED AUGUST 3, 1946, (RECORDED NOVEMBER 27, 1946), THE SIPLES CONVEYED THE PARCEL INVOLVED TO H. S. NORMAN, THE PAYEE ON THE VOUCHER SUBMITTED. THE LATTER DEED RECITES THAT IT IS SUBJECT TO THE GOVERNMENT'S UNRECORDED LEASE. IN ADDITION THE RECORD SHOWS THAT UP TO AND INCLUDING JUNE 30, 1947, MR. FISHER CONTINUED TO REPRESENT HIMSELF AS OWNER; THAT HE WAS SO RECOGNIZED BY THE DEPARTMENT OF THE NAVY AND THAT AN ATTEMPT TO RESOLVE THE CONFLICTING CLAIMS OF MR. NORMAN AND MR. FISHER BY AGREEMENT PROVIDING THAT ALL RENTALS AFTER JULY 1, 1948, WOULD ACCRUE TO MR. NORMAN FAILED OF ACCOMPLISHMENT WHEN MR. FISHER REFUSED TO EXECUTE SUCH AGREEMENT ON THE GROUND THAT ALL RENTALS ACCRUING UNDER THE LEASE BELONGED TO HIM.

SECTIONS 1107, 1214, AND 1215 OF THE CIVIL CODE OF CALIFORNIA PROVIDE AS FOLLOWS:

SEC. 1107. GRANT, HOW FAR CONCLUSIVE ON PURCHASERS. EVERY GRANT OF AN ESTATE IN REAL PROPERTY IS CONCLUSIVE AGAINST THE GRANTOR, ALSO AGAINST EVERYONE SUBSEQUENTLY CLAIMING UNDER HIM, EXCEPT A PURCHASER OR ENCUMBRANCER WHO IN GOOD FAITH AND FOR A VALUABLE CONSIDERATION ACQUIRES A TITLE OR LIEN BY AN INSTRUMENT THAT IS FIRST DULY RECORDED.

SEC. 1214. UNRECORDED CONVEYANCE VOID AS TO SUBSEQUENT PURCHASER OR MORTGAGEE. EVERY CONVEYANCE OF REAL PROPERTY, OTHER THAN A LEASE FOR A TERM NOT EXCEEDING ONE YEAR, IS VOID AS AGAINST ANY SUBSEQUENT PURCHASER OR MORTGAGEE OF THE SAME PROPERTY, OR ANY PART THEREOF, INGOOD FAITH AND FOR A VALUABLE CONSIDERATION, WHOSE CONVEYANCE IS FIRST DULY RECORDED, AND AS AGAINST ANY JUDGMENT AFFECTING THE TITLE, UNLESS SUCH CONVEYANCE SHALL HAVE BEEN DULY RECORDED PRIOR TO THE RECORD OF NOTICE OF ACTION.

SEC. 1215. CONVEYANCE DEFINED. THE TERM "CONVEYANCE," AS USED IN SECTIONS TWELVE HUNDRED AND THIRTEEN AND TWELVE HUNDRED AND FOURTEEN, EMBRACES EVERY INSTRUMENT IN WRITING BY WHICH ANY ESTATE OR INTEREST IN REAL PROPERTY IS CREATED, ALIENED, MORTGAGED, OR ENCUMBERED, OR BY WHICH THE TITLE TO ANY REAL PROPERTY MAY BE AFFECTED, EXCEPT WILLS.

IT HAS BEEN HELD THAT A PURCHASER OF LAND IN CALIFORNIA, TO TAKE PRECEDENCE OVER A PREVIOUSLY UNRECORDED CONVEYANCE TO ANOTHER, MUST PROVE THAT HE TOOK TITLE WITHOUT ACTUAL OR CONSTRUCTIVE NOTICE OF SUCH CONVEYANCE AND PAID VALUABLE CONSIDERATION FOR SUCH LAND. UNITED STATES V. CERTAIN PARCELS OF LAND, ETC., 85 F.1SUPP. 986. ALSO, IT HAS BEEN HELD THAT ONE WHO PURCHASES REAL ESTATE IS BOUND TO KNOW WHO IS IN POSSESSION THEREOF AND IS CHARGEABLE WITH THE OCCUPANT'S TITLE; AND IF HE HAD NOTICE, ACTUAL OR CONSTRUCTIVE, AT ANY TIME BEFORE THE PAYMENT OF MONEY HE IS NOT A BONA FIDE PURCHASER; AND THAT THE BURDEN IS UPON SUCH PURCHASER TO SHOW THAT HE HAD NO SUCH NOTICE. BEATTIE V. CREWDSON, 57 P. 463 ( CAL.), AND CASES THERE CITED. ALSO, IT HAS BEEN HELD THAT WHERE A LESSEE WAS IN NOTORIOUS AND EXCLUSIVE POSSESSION OF LAND AT THE TIME OF ITS PURCHASE THE PURCHASER WAS PUT UPON INQUIRY, AND NOT HAVING DILIGENTLY PURSUED IT THE UNRECORDED LEASE WAS VALID AGAINST HIM. DREYFUS V. HIRT, 23 P. 193 ( CAL.).

THE SO-CALLED LEASE FROM MR. SIPLE TO MR. FISHER IS AN ANOMALOUS INSTRUMENT APPARENTLY INTENDED EITHER AS AN ASSIGNMENT OF RENT IN PART PAYMENT OF THE PURCHASE PRICE UNDER THE DEED UNDER WHICH THE SIPLES ACQUIRED TITLE, OR AS AN ESTATE FOR YEARS WITH POWER OF SALE. WHATEVER THE NATURE OF THE INSTRUMENT, IT APPARENTLY WAS EXECUTED FOR THE PURPOSE OF ALLOWING MR. FISHER TO RECEIVE THE RENT UNDER THE GOVERNMENT'S LEASE TOGETHER WITH THE PURCHASE PRICE OF THE PROPERTY IN THE EVENT THE GOVERNMENT SHOULD EXERCISE THE PURCHASE OPTION CONTAINED IN ITS LEASE.

WHILE MR. NORMAN ALLEGES HE PURCHASED THE ENTIRE PARCEL WITHOUT ACTUAL KNOWLEDGE OF THE LEASE BETWEEN THE SIPLES AND MR. FISHER, THE CONVEYANCE TO HIM UNDER WHICH HE NOW ASSERTS HIS CLAIM FOR RENT WAS EXPRESSLY SUBJECT TO THE GOVERNMENT'S UNRECORDED LEASE FROM MR. FISHER WHO WAS IN EXCLUSIVE POSSESSION OF THE LAND AT THE TIME OF SUCH CONVEYANCE AS SUBLESSOR UNDER HIS "LEASE" FROM THE SIPLES. WHILE A COURT UNDER SUCH CIRCUMSTANCES MIGHT HOLD THAT THE FACTS OF RECORD ARE NOT SUFFICIENT TO IMPUTE CONSTRUCTIVE NOTICE TO MR. NORMAN OF MR. FISHER'S LEASE, THERE IS AT LEAST TOO MUCH DOUBT IN THE MATTER FOR THIS OFFICE TO AUTHORIZE PAYMENT ON THE VOUCHER ON THE PRESENT RECORD. 17 COMP. GEN. 217; 19 ID. 196. IN THE CIRCUMSTANCES, UNLESS THE INTERESTED PARTIES CAN AGREE UPON A PROPER SETTLEMENT OR COMPOSE THEIR DIFFERENCES IN SOME WAY, CERTIFICATION OF VOUCHERS FOR RENTAL ACCRUING UNDER THE LEASE, INCLUDING THE VOUCHER SUBMITTED, IS NOT AUTHORIZED.