B-136726, JUL. 21, 1958

B-136726: Jul 21, 1958

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TO THE SECRETARY OF THE ARMY: REFERENCE IS MADE TO LETTER DATED JUNE 30. IT APPEARS THAT IN CONNECTION WITH THE CONSTRUCTION OF THE FORT RANDALL DAM AND RESERVOIR PROJECT CERTAIN LANDS OWNED BY THE CROW CREEK TRIBE OF SIOUX INDIANS WERE ACQUIRED BY THE UNITED STATES ON JANUARY 21. WERE THE HEADQUARTERS SITE FOR THE CROW CREEK AGENCY AND THAT LICENSED INDIAN TRADERS OWNED IMPROVEMENTS AT THIS HEADQUARTERS SITE WHICH THEY OR PRIOR PERMITTEES HAD ERECTED PURSUANT TO PERMITS ISSUED BY THE BUREAU OF INDIAN AFFAIRS. THESE PERMITS WERE TERMINABLE UPON NOTICE BY THE SECRETARY OF THE INTERIOR AND. OR TENANCY AT WILL. IT IS STATED IN YOUR DEPARTMENT'S LETTER THAT BECAUSE OF THEIR LIMITED RIGHTS IN THE PREMISES THE PERMITTEES COULD NOT BE COMPENSATED FOR THEIR IMPROVEMENTS AS PART OF THE REALTY IN ACCORDANCE WITH OUR DECISION OF AUGUST 4.

B-136726, JUL. 21, 1958

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO LETTER DATED JUNE 30, 1958, SIGNED BY MR. EDWARD A. BACON FOR THE ASSISTANT SECRETARY OF THE ARMY (CIVIL MILITARY AFFAIRS), CONCERNING THE PAYMENT OF CLAIMS UNDER THE ACT OF AUGUST 6, 1956 (PUBLIC LAW 987), 70 STAT. 1051, AND PRESENTING TWO QUESTIONS IN CONNECTION THEREWITH FOR OUR CONSIDERATION.

IT APPEARS THAT IN CONNECTION WITH THE CONSTRUCTION OF THE FORT RANDALL DAM AND RESERVOIR PROJECT CERTAIN LANDS OWNED BY THE CROW CREEK TRIBE OF SIOUX INDIANS WERE ACQUIRED BY THE UNITED STATES ON JANUARY 21, 1955. FURTHER APPEARS THAT THESE LANDS, IN PART, WERE THE HEADQUARTERS SITE FOR THE CROW CREEK AGENCY AND THAT LICENSED INDIAN TRADERS OWNED IMPROVEMENTS AT THIS HEADQUARTERS SITE WHICH THEY OR PRIOR PERMITTEES HAD ERECTED PURSUANT TO PERMITS ISSUED BY THE BUREAU OF INDIAN AFFAIRS, DEPARTMENT OF THE INTERIOR. THESE PERMITS WERE TERMINABLE UPON NOTICE BY THE SECRETARY OF THE INTERIOR AND, THUS, PERMITTEES OCCUPIED THE LANDS ON A MONTH-TO- MONTH, OR TENANCY AT WILL, BASIS. IT IS STATED IN YOUR DEPARTMENT'S LETTER THAT BECAUSE OF THEIR LIMITED RIGHTS IN THE PREMISES THE PERMITTEES COULD NOT BE COMPENSATED FOR THEIR IMPROVEMENTS AS PART OF THE REALTY IN ACCORDANCE WITH OUR DECISION OF AUGUST 4, 1950, B-95443. THE DEPARTMENT FURTHER ADVISES THAT INCIDENT TO THE FORT RANDALL PROJECT THE CROW CREEK AGENCY HEADQUARTERS WERE RELOCATED IN PART TO PIERRE, SOUTH DAKOTA, AND, IN PART, TO A SITE OUTSIDE THE PROJECT BOUNDARIES NEAR FORT THOMPSON. APPEARS THAT AS A NECESSARY INCIDENT TO COMPLETION OF THE RELOCATION, UTILITY SERVICES TO THE IMPROVEMENTS OWNED BY THE PERMITTEES WERE DISCONTINUED.

SUBSEQUENT TO OUR DECISION OF AUGUST 4, 1950, THE CONGRESS ENACTED PUBLIC LAW 987, SECTION 1 OF WHICH PROVIDES AS FOLLOWS:

"* * * THAT THE SECRETARY OF THE ARMY IS AUTHORIZED AND DIRECTED TO PAY TO ANY BONA FIDE LESSEE OR PERMITTEE OWNING IMPROVEMENTS SITUATED ON A RAILROAD RIGHT-OF-WAY OR ON INDIAN TRIBAL LAND THE FAIR VALUE, AS DETERMINED BY THE SECRETARY, OR BY A COURT OF COMPETENT JURISDICTION, OF ANY SUCH IMPROVEMENTS WHICH WILL BE RENDERED INOPERATIVE OR BE OTHERWISE ADVERSELY AFFECTED BY THE CONSTRUCTION OF THE GAVINS POINT, FORT RANDALL, AND OAHE DAMS AND RESERVOIR PROJECTS ON THE MISSOURI RIVER.'

THE LETTER CONTINUES IN PERTINENT PART AS FOLLOWS:

"A PERMIT WAS ISSUED TO THE CHAMBERLAIN WHOLESALE GROCERY COMPANY ON JANUARY 1, 1951. IT PROVIDED THAT IMPROVEMENTS MIGHT BE ERECTED BY THE PERMITTEE AND THE SAME WOULD NOT BECOME A PART OF THE REALTY BUT REMAIN THE PROPERTY OF THE PERMITTEE. CHAMBERLAIN WHOLESALE GROCERY COMPANY RENTED THE IMPROVEMENTS TO VARIOUS LICENSED INDIAN TRADERS. MRS. NELL LEE, THE LAST OCCUPANT, TOOK POSSESSION ON OCTOBER 1, 1951 AND OCCUPIED THE SAME UNTIL JANUARY 23, 1956. ON JANUARY 23, 1956, FIRE DESTROYED THE IMPROVEMENTS EXCEPT FOR A DETACHED GARAGE. THE EXACT CAUSE OF THE FIRE IS UNKNOWN BUT IT IS SUSPECTED THAT IT WAS DUE TO DEFECTIVE ELECTRIC WIRING. THE IMPROVEMENTS WERE INSURED FOR $1,500 BY THE NORTH RIVER INSURANCE COMPANY OF NEW YORK, NEW YORK, UNDER ITS POLICY NO. 264555. THE CHAMBERLAIN WHOLESALE GROCERY COMPANY RECEIVED PAYMENT OF $1,500 UNDER THIS POLICY BECAUSE OF THE FIRE. THE IMPROVEMENTS WERE NOT RECONSTRUCTED NOR HAS THE CORPORATION CONSTRUCTED OR OBTAINED REPLACEMENT FACILITIES OUTSIDE THE PROJECT BOUNDARIES. NO NOTICE OF TERMINATION OF THE PERMIT HAS BEEN ISSUED BY THE GOVERNMENT NOR HAD THE GOVERNMENT TAKEN POSSESSION OR CONTROL OF THE IMPROVEMENTS PRIOR TO THE FIRE.

"A PERMIT WAS ISSUED TO ARTHUR H. BURKHOLDER ON JANUARY 8, 1948. IT ALSO PROVIDED THAT IMPROVEMENTS MIGHT BE ERECTED AND THE SAME WOULD NOT BECOME A PART OF THE REALTY BUT WOULD REMAIN THE PROPERTY OF THE PERMITTEE. MR. BURKHOLDER FIRST OCCUPIED THE PREMISES ON APRIL 1, 1945, PRESUMABLY AS A SUB-LETTEE OF A PRIOR PERMITTEE. HE CONTINUED IN POSSESSION UNTIL DECEMBER 1955 WHEN HE PURCHASED ANOTHER BUILDING AND MOVED IT TO THE NEW CROW CREEK AGENCY SITE OUTSIDE OF THE PROJECT BOUNDARIES. MRS. NELL LEE, FORMER SUB-LETTEE OF THE CHAMBERLAIN WHOLESALE GROCERY COMPANY, RENTED THE SUBJECT IMPROVEMENTS FROM MR. BURKHOLDER ON FEBRUARY 28, 1957. SHE REMAINED IN POSSESSION UNTIL MARCH 23, 1957, WHEN SHE RELOCATED TO HER OWN NEWLY CONSTRUCTED IMPROVEMENTS SITUATED ON THE CROW CREEK RESERVATION OUTSIDE THE PROJECT BOUNDARIES. THE BURKHOLDER IMPROVEMENTS AT THE OLD SITE WERE COMPLETELY DESTROYED BY FIRE ON JUNE 11, 1957. THE CAUSE OF THE FIRE IS UNKNOWN BUT IT IS BELIEVED TO HAVE BEEN CAUSED BY LIGHTNING. THE DESTROYED IMPROVEMENTS WERE INSURED FOR $4,250. THE ST. PAUL MERCURY INSURANCE COMPANY, ST. PAUL, MINNESOTA, PAID MR. BURKHOLDER $2,125 UNDER ITS POLICY NO. 140RA0441 AND THE SECURITY INSURANCE COMPANY OF NEW HAVEN, CONNECTICUT, PAID $2,125 ON ITS POLICY NO. 14273. NO NOTICE OF TERMINATION OF THE PERMIT HAS BEEN ISSUED BY THE GOVERNMENT NOR HAD THE GOVERNMENT TAKEN POSSESSION OR CONTROL OF THE IMPROVEMENTS PRIOR TO THE FIRE.'

IN CONNECTION WITH THE FOREGOING THE FOLLOWING QUESTIONS ARE PRESENTED FOR DECISION:

"A. WHETHER PAYMENT UNDER THE REFERENCED PUBLIC LAW TO CHAMBERLAIN WHOLESALE GROCERY COMPANY, A CORPORATION, IS BARRED BY THE FACT THAT THE IMPROVEMENTS OWNED BY THE CORPORATION WERE DESTROYED BY FIRE PRIOR TO APPROVAL OF THE PUBLIC LAW ALTHOUGH THE IMPROVEMENTS WERE IN EXISTENCE ON THE DATE THE INDIAN TRIBAL LANDS IN QUESTION WERE ACQUIRED FOR THE FORT RANDALL DAM AND RESERVOIR PROJECT.

"B. WHETHER PAYMENT UNDER THE REFERENCED PUBLIC LAW TO ARTHUR H. BURKHOLDER, AN INDIVIDUAL, IS BARRED BY THE FACT THAT THE IMPROVEMENTS OWNED BY HIM, ALTHOUGH IN EXISTENCE ON THE DATE THE INDIAN TRIBAL LANDS IN QUESTION WERE ACQUIRED FOR THE FORT RANDALL DAM AND RESERVOIR PROJECT, WERE DESTROYED BY FIRE SUBSEQUENT TO APPROVAL OF THE PUBLIC LAW BUT PRIOR TO DETERMINATION OF THE FAIR VALUE THEREOF BY THE SECRETARY OF THE ARMY.'

WHILE PUBLIC LAW 987 SPEAKS OF PROPERTY "WHICH WILL BE RENDERED INOPERATIVE OR BE OTHERWISE ADVERSELY AFFECTED" AND MIGHT BE INTERPRETED AS PRECLUDING PAYMENTS FOR IMPROVEMENTS DESTROYED BY FIRE PRIOR TO THE DATE OF ITS APPROVAL, THE LEGISLATIVE HISTORY INDICATES CERTAIN OF THE DAMS THEN ALREADY HAD BEEN SUBSTANTIALLY COMPLETED OR WERE WELL UNDER WAY AND THE INTENTION OF THE CONGRESS APPARENTLY WAS TO PERMIT THE PAYMENTS TO THE INVOLVED LESSEES OR PERMITTEES FOR THE FAIR VALUE OF THE IMPROVEMENTS WHICH WERE RENDERED INOPERATIVE OR ADVERSELY AFFECTED BY THE CONSTRUCTION OF THE DAMS WHETHER OR NOT THE DAMAGES OCCURRED PRIOR OR SUBSEQUENT TO THE DATE OF THE APPROVAL OF THE ACT. CONSIDERING SUCH INTENTION, THE SECRETARY OF THE ARMY IS AUTHORIZED THEREBY TO PAY ANY BONA FIDE LESSEE OR PERMITTEE THE FAIR VALUE OF ANY IMPROVEMENTS WHICH WERE RENDERED INOPERATIVE OR OTHERWISE ADVERSELY AFFECTED BY THE CONSTRUCTION OF (AS FAR AS PERTINENT HERE) THE FORT RANDALL DAM AND RESERVOIR PROJECT REGARDLESS OF WHETHER THE DAMAGE OCCURRED PRIOR OR SUBSEQUENT TO PASSAGE OF THE ACT. ASSUMING THAT THE CLAIMANTS ARE BONA FIDE LESSEES OR PERMITTEES, WHETHER PAYMENT UNDER PUBLIC LAW 987 MAY BE MADE IN THE TWO CASES INVOLVED HERE DEPENDS ON WHETHER THE IMPROVEMENTS OWNED BY THE PERMITTEES OR LESSEES WERE RENDERED INOPERATIVE OR OTHERWISE ADVERSELY AFFECTED BY THE CONSTRUCTION OF THE FORT RANDALL PROJECT OR BY THE FIRES. THE FACT THAT THE IMPROVEMENTS WERE DESTROYED BY FIRE PRIOR TO THE APPROVAL OF PUBLIC LAW 987 OR THAT SUCH IMPROVEMENTS WERE DESTROYED BY FIRE PRIOR TO THE DETERMINATION OF THE FAIR MARKET VALUE THEREOF BY THE SECRETARY OF THE ARMY WOULD APPEAR IMMATERIAL AS FAR AS PAYMENT UNDER THE PUBLIC LAW IS CONCERNED, PROVIDED, OF COURSE, THAT YOU ARE ABLE TO DETERMINE FROM AVAILABLE EVIDENCE WHAT THE FAIR VALUE OF THE PROPERTY WAS AT THE TIME IT WAS RENDERED INOPERATIVE OR OTHERWISE ADVERSELY AFFECTED BY CONSTRUCTION OF THE FORT RANDALL PROJECT.

WHILE THE LETTER SAYS IT HAS BEEN ADMINISTRATIVELY DETERMINED THAT, BUT FOR THE FIRES, BOTH THE CHAMBERLAIN WHOLESALE GROCERY COMPANY AND ARTHUR H. BURKHOLDER ARE ENTITLED TO PAYMENT UNDER THE REFERRED TO PUBLIC LAW, IT IS NOT CLEAR FROM THE FACTS THEREIN WHETHER IT HAS ACTUALLY BEEN ADMINISTRATIVELY DETERMINED THAT THE IMPROVEMENTS IN QUESTION WERE RENDERED INOPERATIVE OR OTHERWISE ADVERSELY AFFECTED BY CONSTRUCTION OF THE FORT RANDALL PROJECT OR BY THE FIRES. IF YOU DETERMINE THAT PRIOR TO THE DATES OF THE TWO FIRES THE IMPROVEMENTS INVOLVED HERE WERE RENDERED INOPERATIVE OR OTHERWISE ADVERSELY AFFECTED BY CONSTRUCTION OF THE FORT RANDALL PROJECT PAYMENT MAY BE MADE UNDER PUBLIC LAW 987. IF, HOWEVER, YOU DETERMINE THAT THE CONSTRUCTION OF THE FORT RANDALL PROJECT HAD NOT, PRIOR TO THE DATES OF THE FIRES, RENDERED INOPERATIVE OR OTHERWISE ..END :