B-135387, MAR. 21, 1958

B-135387: Mar 21, 1958

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BUILDING NO. 860 WAS ASSIGNED FOR USE BY THE COMPANY. DEMAND WAS MADE BY THE REAL ESTATE OFFICER. DEMAND WAS ALSO MADE FOR THE EXECUTION OF A LEASE FOR BUILDING NO. 860 AT A RENTAL OF $40 PER MONTH. ALLEGES THAT ITS OCCUPANCY OF BUILDING NO. 860 WAS ACCOMPLISHED AT THE REQUEST OF RESPONSIBLE ARMY PERSONNEL AT FORT LEONARD WOOD. THAT THE EXCHANGE SERVICE PROVIDED AT THAT POST WAS SET UP PRIMARILY TO MEET THE SPECIFIC NEEDS AND WISHES OF ARMY PERSONNEL IN THAT AREA. THAT WHILE IT IS GENERALLY AGREEABLE TO THE PAYMENT OF A REASONABLE RENTAL ON THE PREMISES. THE RENTAL STIPULATED IN THE PURPORTED LEASE WAS "BELATEDLY" MENTIONED TO IT. WAS NOT EVEN SUGGESTED PRIOR TO OCCUPANCY. WAS ARBITRARILY FIXED WITHOUT ITS AGREEMENT OR CONCURRENCE.

B-135387, MAR. 21, 1958

TO THE SECRETARY OF THE ARMY:

IN LETTER DATED FEBRUARY 26, 1958, THE ASSISTANT SECRETARY OF THE ARMY (FM) REQUESTS A DECISION AS TO THE LIABILITY, IF ANY, OF THE UNITED TELEPHONE COMPANY OF MISSOURI FOR RENTAL IN CONNECTION WITH ITS OCCUPANCY OF BUILDINGS NOS. 358 AND 860 AT FORT LEONARD WOOD, MISSOURI, FROM APRIL 1, 1953, TO DATE.

ACCORDING TO THE RECORDS FURNISHED, THE UNITED TELEPHONE COMPANY OF MISSOURI OCCUPIED BUILDING NO. 358 AT FORT LEONARD WOOD FROM APRIL 1, 1953, THROUGH JULY 2, 1956, WITHOUT PAYMENT OF ANY COMPENSATION AND APPARENTLY WITHOUT ANY CLAIM FOR COMPENSATION HAVING BEEN ASSERTED BY THE GOVERNMENT. FOLLOWING A FIRE WHICH OCCURRED AT THE PREMISES DURING JULY 1956, BUILDING NO. 860 WAS ASSIGNED FOR USE BY THE COMPANY, AND DEMAND WAS MADE BY THE REAL ESTATE OFFICER, CORPS OF ENGINEERS, KANSAS CITY, MISSOURI, FOR PAYMENT OF THE ESTIMATED REASONABLE RENTAL VALUE OF $540 PER ANNUM, OR THE TOTAL SUM OF $1,758, FOR THE ENTIRE PERIOD OF OCCUPANCY OF BUILDING NO. 358. DEMAND WAS ALSO MADE FOR THE EXECUTION OF A LEASE FOR BUILDING NO. 860 AT A RENTAL OF $40 PER MONTH, AND A CLAIM FOR $960 FOR TWO YEARS AT THAT RATE HAS BEEN ASSERTED.

THE UNITED TELEPHONE COMPANY OF MISSOURI HAS DISCLAIMED LIABILITY FOR ANY PAYMENT FOR OCCUPANCY OF BUILDING NO. 358, CONTENDING, IN SUBSTANCE, THAT IT OCCUPIED THE BUILDING AT THE REQUEST AND INSTRUCTIONS OF THE OFFICIALS AT FORT LEONARD WOOD, AND CONTINUED TO PROVIDE TELEPHONE OR EXCHANGE SERVICE FOR THE BENEFIT OF ARMY PERSONNEL AT THAT POST THROUGHOUT THE PERIOD OF ITS OCCUPANCY WITHOUT ANY DEMAND UPON IT OR THE PAYMENT OF RENTAL FOR THE SPACE NECESSARILY OCCUPIED FOR SUCH PURPOSE.

WITH RESPECT TO BUILDING NO. 860 THE COMPANY HAS REFUSED TO EXECUTE THE PROFFERED LEASE, AND ALLEGES THAT ITS OCCUPANCY OF BUILDING NO. 860 WAS ACCOMPLISHED AT THE REQUEST OF RESPONSIBLE ARMY PERSONNEL AT FORT LEONARD WOOD, AND THAT THE EXCHANGE SERVICE PROVIDED AT THAT POST WAS SET UP PRIMARILY TO MEET THE SPECIFIC NEEDS AND WISHES OF ARMY PERSONNEL IN THAT AREA; THAT WHILE IT IS GENERALLY AGREEABLE TO THE PAYMENT OF A REASONABLE RENTAL ON THE PREMISES, THE RENTAL STIPULATED IN THE PURPORTED LEASE WAS "BELATEDLY" MENTIONED TO IT, AND, IN FACT, WAS NOT EVEN SUGGESTED PRIOR TO OCCUPANCY, AND WAS ARBITRARILY FIXED WITHOUT ITS AGREEMENT OR CONCURRENCE. IT ALSO STATES THAT IT HAS BEEN UNABLE TO FIND ANY OTHER COMPANY IN ITS FIELD WHICH IS CHARGED RENT FOR OCCUPANCY OF SPACE ON ANY MILITARY POST UNDER SIMILAR CIRCUMSTANCES.

THE ONLY BASIS IN THE PRESENT RECORD FOR THE GOVERNMENT'S CLAIM IS THE POSITION TAKEN BY THE DISTRICT REAL ESTATE OFFICER, THAT SINCE THE COMPANY ENTERED INTO OCCUPANCY OF THE BUILDING, THERE ARISES A LEGAL PRESUMPTION THAT IT WILL PAY A FAIR AND REASONABLE RENTAL THEREON.

USUALLY, THE USE AND OCCUPANCY OF A STRUCTURE KNOWN TO BE OWNED BY ANOTHER, FOR THE PURPOSES OR BENEFIT OF THE OCCUPANT, RAISES AN IMPLIED OBLIGATION TO PAY THE FAIR AND REASONABLE RENTAL VALUE THEREOF TO THE OWNER. IT MUST BE BORNE IN MIND, HOWEVER, THAT THE RELATION OF LANDLORD AND TENANT CAN BE CREATED ONLY BY CONTRACT, EXPRESS OR IMPLIED. IT CANNOT EXISTS WITHOUT SUCH A CONTRACT, AND THE COURTS HAVE RULED THAT A LANDLORD AND TENANT RELATIONSHIP NEVER WILL BE IMPLIED WHEN THE ACTS AND CONDUCT OF THE PARTIES ARE INCONSISTENT WITH ITS EXISTENCE. SEE WIGGINS FERRY COMPANY V. OHIO AND M. R. CO., 142 U.S. 396; BUTLER V. COWLES, 19 AM.DEC. 612; VAN PELT V. RUSSELL, 203 S.W. 267.

INSOFAR AS THE OCCUPANCY OF BUILDING NO. 358 IS CONCERNED, WE ARE GIVEN NO INFORMATION, OTHER THAN THE TELEPHONE COMPANY'S STATEMENT, AS TO THE CIRCUMSTANCES UNDER WHICH IT CAME ABOUT OR THE NATURE OF ITS USE. BASIS APPEARS FOR FINDING THAT A LANDLORD AND TENANT RELATIONSHIP EXISTED, OR EVEN WAS CONTEMPLATED BY THE PARTIES DURING THE THREE AND A FRACTION YEARS THE PREMISES WERE OCCUPIED BY THE COMPANY WITHOUT THE PAYMENT OF RENTAL OF ANY KIND. THE COMPANY'S STATEMENT INDICATES THAT IT USED THE BUILDING TO PROVIDE EXCHANGE SERVICE AT THE SPECIFIC REQUEST OR INSISTENCE OF RESPONSIBLE ARMY AUTHORITIES FOR THE BENEFIT OF THE GOVERNMENT IN SERVING THE POST PERSONNEL. IN SUCH CASE, IT WOULD SEEM THAT THE SERVICE WAS PERFORMED BY THE COMPANY, AND THE PREMISES FURNISHED BY THE GOVERNMENT, FOR THE MUTUAL BENEFIT OF THE PARTIES, AND SINCE THE MATTER OF MONEY PAYMENT APPARENTLY WAS NOT DISCUSSED DURING THE PERIOD OF OCCUPANCY, IT IS ONLY REASONABLE TO ASSUME THAT NO PAYMENT FOR THE USE OR OCCUPANCY OF THE BUILDING WAS CONTEMPLATED. ACCORDINGLY, THERE EXISTS NO CONTRACTUAL OR OTHER LEGAL BASIS UPON WHICH RENTAL ON THAT STRUCTURE MAY NOW BE DEMANDED OF THE OCCUPANT.

WITH RESPECT TO THE CURRENT OCCUPANCY OF BUILDING NO. 860, THE RECORD LEAVES US UNCERTAIN AS TO WHETHER THE QUESTION OF PAYMENT WAS RAISED AT THE TIME THE OCCUPANCY WAS AUTHORIZED OR WHETHER IT WAS A LATER DEVELOPMENT RESULTING FROM THE ATTITUDE OF THE REAL ESTATE OFFICER. SINCE ARMY SR 105-20-3 APPEARS TO FIX RESPONSIBILITY FOR ALL TELEPHONE SERVICE FACILITIES AT AN ARMY INSTALLATION IN THE POST COMMANDER AND POST SIGNAL OFFICER, SUBJECT TO THE AUTHORITY OF THE ARMY AREA COMMANDER, IT WOULD APPEAR THAT THE TERMS OF ANY LEASE OR LICENSE TO THE TELEPHONE COMPANY SHOULD BE NEGOTIATED BY OR AT LEAST WITH THE APPROVAL OF THOSE AUTHORITIES. IN VIEW OF THE STATEMENT OF THE COMPANY THAT IT CAN FIND NO OTHER COMPANY IN ITS FIELD WHICH IS REQUIRED TO PAY RENT UNDER SIMILAR CIRCUMSTANCES, IT IS RECOMMENDED THAT THE PROPRIETY OR POLICY OF SUCH ARRANGEMENTS BE REVIEWED AT THE APPROPRIATE DEPARTMENTAL OR COMMAND LEVEL, AND THAT APPROPRIATE NEGOTIATIONS BE THEN INSTITUTED WITH THE UNITED TELEPHONE COMPANY OF MISSOURI WITH A VIEW TO ARRIVING AT A SATISFACTORY SETTLEMENT CONCERNING THE TERMS OF THE OCCUPANCY OF BUILDING NO. 860. PENDING SUCH ACTION IT IS RECOMMENDED THAT FURTHER COLLECTION ACTION BY YOUR DEPARTMENT BE SUSPENDED.