B-15721, MARCH 31, 1941, 20 COMP. GEN. 581

B-15721: Mar 31, 1941

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LEASES - RENT - PROPERTY HELD BY LIBRARY OF CONGRESS TRUST FUND BOARD AS TRUSTEE WHERE THE LEGAL TITLE TO CERTAIN REAL PROPERTY IS HELD BY THE LIBRARY OF CONGRESS TRUST FUND BOARD AS TRUSTEE FOR THE PURPOSES OF A TRUST AND THE UNITED STATES GENERALLY HAS NO RIGHT TO THE BENEFICIAL USE OF THE PROPERTY EXCEPT UPON PAYMENT OF PROPER COMPENSATION THEREFOR. THE GENERAL RULE THAT PAYMENT OF RENT BY ONE GOVERNMENT DEPARTMENT OR AGENCY FOR PREMISES UNDER THE CONTROL OF ANOTHER SUCH DEPARTMENT OR AGENCY IS UNAUTHORIZED BEING INAPPLICABLE TO THIS SITUATION. 1941: I HAVE YOUR LETTER OF MARCH 20. NEGOTIATIONS HAVE BEEN MADE WITH THE LIBRARY OF CONGRESS TRUST FUND BOARD. THAT THE LESSEE WILL OPERATE AND MAINTAIN THE BUILDINGS AND MAKE ALL REPAIRS.

B-15721, MARCH 31, 1941, 20 COMP. GEN. 581

LEASES - RENT - PROPERTY HELD BY LIBRARY OF CONGRESS TRUST FUND BOARD AS TRUSTEE WHERE THE LEGAL TITLE TO CERTAIN REAL PROPERTY IS HELD BY THE LIBRARY OF CONGRESS TRUST FUND BOARD AS TRUSTEE FOR THE PURPOSES OF A TRUST AND THE UNITED STATES GENERALLY HAS NO RIGHT TO THE BENEFICIAL USE OF THE PROPERTY EXCEPT UPON PAYMENT OF PROPER COMPENSATION THEREFOR, THE GOVERNMENT PROPERLY MAY PAY RENT FOR THE PROPERTY UNDER A LEASE ENTERED INTO WITH THE BOARD, THE GENERAL RULE THAT PAYMENT OF RENT BY ONE GOVERNMENT DEPARTMENT OR AGENCY FOR PREMISES UNDER THE CONTROL OF ANOTHER SUCH DEPARTMENT OR AGENCY IS UNAUTHORIZED BEING INAPPLICABLE TO THIS SITUATION.

COMPTROLLER GENERAL WARREN TO THE FEDERAL WORKS ADMINISTRATOR, MARCH 31, 1941:

I HAVE YOUR LETTER OF MARCH 20, 1941, AS FOLLOWS:

THE PUBLIC BUILDINGS ADMINISTRATION OF THIS AGENCY DESIRES TO TAKE A LEASE OF THE PREMISES LOCATED AT 1600 EYE STREET NW., WASHINGTON, D.C., FOR USE AS OFFICE QUARTERS FOR THE EXECUTIVE OFFICE OF THE PRESIDENT, DIVISION OF DEFENSE HOUSING COORDINATION. NEGOTIATIONS HAVE BEEN MADE WITH THE LIBRARY OF CONGRESS TRUST FUND BOARD, THE OWNER, AND IT HAS AGREED TO LEASE THE PREMISES FOR A TERM BEGINNING MARCH 1, 1941, AND ENDING FEBRUARY 28, 1942, SUBJECT TO AVAILABLE APPROPRIATIONS FOR PAYMENT OF THE RENT FOR THE PERIOD FOLLOWING JUNE 30, 1941, IN CONSIDERATION OF A RENTAL OF $10,000.08 PER ANNUM. THE PROPOSED LEASE WOULD PROVIDE FOR RENEWALS FROM YEAR TO YEAR AT THE LESSEE'S OPTION FOR A PERIOD NOT TO EXTEND BEYOND THE 30TH DAY OF JUNE, 1944; CANCELLATION BY THE LESSEE UPON THIRTY DAYS' WRITTEN NOTICE TO THE LESSOR; CANCELLATION BY THE LESSOR UPON NINETY DAYS' WRITTEN NOTICE TO THE LESSEE, IN THE EVENT OF SALE OF THE PROPERTY; AND THAT THE LESSEE WILL OPERATE AND MAINTAIN THE BUILDINGS AND MAKE ALL REPAIRS, ALTERATIONS, AND IMPROVEMENTS INCIDENT TO OCCUPANCY.

THE QUESTION FOR YOUR DECISION IS WHETHER THE SAID LIBRARY OF CONGRESS TRUST FUND BOARD IS A FEDERAL GOVERNMENTAL AGENCY WITHIN THE PRINCIPLES OF DECISIONS HOLDING THAT PAYMENT OF RENTAL BY ONE GOVERNMENT DEPARTMENT OR AGENCY FOR PREMISES UNDER THE CONTROL OF ANOTHER SUCH DEPARTMENT OR AGENCY IS UNAUTHORIZED (21 COMP. DEC. 528; 22 COMP. DEC. 684; 16 COMP. GEN. 887).

THE LIBRARY OF CONGRESS TRUST FUND BOARD WAS CREATED BY THE ACT OF MARCH 3, 1925, 43 STAT. 1107, AS AMENDED (1U.S.C., TITLE 2, SECS. 154 163), WITH PERPETUAL SUCCESSION WITH "ALL THE USUAL POWERS OF A TRUSTEE," INCLUDING THE POWER TO "INVEST, REINVEST, AND RETAIN INVESTMENTS," AND, SPECIFICALLY, THE AUTHORITY TO "ACCEPT, RECEIVE, HOLD, AND ADMINISTER SUCH GIFTS, BEQUESTS, OR DEVISES OF PROPERTY FOR THE BENEFIT OF, OR IN CONNECTION WITH, THE LIBRARY, ITS COLLECTIONS, OR ITS SERVICE, AS MAY BE APPROVED BY THE BOARD AND BY THE JOINT COMMITTEE ON THE LIBRARY.'

THE PROPERTY IN QUESTION WAS CONVEYED TO THE LIBRARY OF CONGRESS TRUST FUND BOARD BY DEED OF ANNIE MAY HEGEMAN DATED DECEMBER 20, 1938, UNDER A PROPOSED AGREEMENT OF THE SAME DATE IN WHICH THE DONOR PROVIDED "THAT WHEN THE PROPERTY IS SOLD, ONE-HALF OF THE NET PROCEEDS OF SUCH SALE WILL BE ADDED TO THE PERMANENT INVESTED FUNDS HELD BY YOUR BOARD AS TRUSTEES FOR THE LIBRARY OF CONGRESS," TOGETHER WITH HER DESIRE "THAT THE INCOME OF SAID TRUST FUND SHALL BE APPLIED BY THE LIBRARIAN OF THE LIBRARY OF CONGRESS, FROM TIME TO TIME AS HE DEEMS ADVISABLE, TOWARDS THE MAINTENANCE OF A CONSULTANTSHIP IN CONNECTION WITH THE COLLECTIONS AND SERVICES OF THE LIBRARY.' THE AGREEMENT FURTHER PROVIDES THAT " IF ANY INCOME IS DERIVED FROM THE PROPERTY BEFORE SUCH SALE IS MADE BY YOUR BOARD, I AUTHORIZE YOUR BOARD TO RECEIVE AND APPLY SUCH INCOME AS TRUSTEES FOR THE LIBRARY OF CONGRESS FOR SUCH PURPOSES AND IN SUCH MANNER AS YOUR BOARD IN ITS ABSOLUTE DISCRETION MAY DEEM ADVISABLE.' ON DECEMBER 22, 1938, THE TRUST FUND BOARD, AT A MEETING DULY CALLED (A QUORUM BEING PRESENT), VOTED " THAT THE LIBRARY OF CONGRESS TRUST FUND BOARD ACCEPTS THE MAGNANIMOUS GIFT FROM MISS HEGEMAN WITH ALL OF THE DIRECTIONS ATTACHED THERETO AS EXPRESSED IN HER LETTER.'

THE SUBJECT PROPERTY HAS A REPUTED VALUATION OF $372,620.00 ( DISTRICT OF COLUMBIA ASSESSORS OFFICE, FEBRUARY 1941) AND UNDER THE ACT OF JUNE 30, 1932, 47 STAT. 412, AS AMENDED ( U.S.C., SUP. V, TITLE 40, SEC. 278A), A PER ANNUM RENTAL OF $55,893.00 WOULD BE PERMISSIBLE. THE LIBRARY OF CONGRESS TRUST FUND BOARD FIXED THE SELLING PRICE OF THE PROPERTY AT $375,000.00 AND CONSIDERED 4 PERCENT OF THIS AMOUNT, OR $15,000.00, AS A MINIMUM PER ANNUAL RENTAL BUT SUBSEQUENTLY CONSENTED TO REDUCE THIS AMOUNT BY ACCEPTING THE PUBLIC BUILDINGS ADMINISTRATION'S OFFER OF $10,000.00.

IN THE EVENT IT IS HELD THAT PAYMENT OF THE PROPOSED RENTAL TO THE LIBRARY OF CONGRESS TRUST FUND BOARD WOULD BE UNAUTHORIZED, THEN, IN ACCORDANCE WITH THE PRIOR RULINGS OF YOUR OFFICE, THE ONLY CONSIDERATION THE PUBLIC BUILDINGS ADMINISTRATION WOULD BE AUTHORIZED TO PAY TO THE TRUST FUND BOARD FOR THE USE OF THE PROPERTY WOULD BE IN THE AMOUNT THAT THE FUNDS, IF ANY, AVAILABLE TO THE BOARD FOR THE MAINTENANCE AND OPERATION OF THE PROPERTY ARE DEPLETED INCIDENT TO OCCUPANCY AND USE BY THE TENANT AGENCY. IT IS DOUBTED THAT THE TRUST FUND BOARD WOULD BE WILLING TO CONSIDER ANY AGREEMENT WHEREBY NO INCOME WOULD BE REALIZED FOR THE REASON THAT THERE IS ALWAYS THE POSSIBILITY THAT THE PROPERTY COULD BE LEASED TO A NONGOVERNMENTAL ENTITY FOR A SUBSTANTIAL COMPENSATION. MOREOVER, IT APPEARS THAT THE TRUST FUND BOARD CANNOT, WITHOUT A SPECIFIC BREACH OF ITS ACCEPTED OBLIGATIONS, IMPOVERISH THE CORPUS OF THE TRUST, NOR PERMIT IT TO BE USED FOR THE GENERAL PURPOSES OF THE GOVERNMENT, EVEN FOR SUCH SPECIAL GOVERNMENTAL NEEDS AS MAY ARISE OUT OF EMERGENCY CONDITIONS, EXCEPT ON THE BASIS OF REASONABLE COMPENSATION TO BE APPLIED TO THE PURPOSES OF THE TRUST. THEREFORE, IT IS BELIEVED THAT UNLESS THE PROPOSED LEASE CAN BE EXECUTED AND COMPLIED WITH, THE PUBLIC BUILDINGS ADMINISTRATION WILL BE UNABLE TO OBTAIN THE USE OF THIS PROPERTY, WHICH APPARENTLY WOULD BE OF MORE VALUE FOR THE PURPOSES TO WHICH IT IS DESIGNED TO BE PUT THAN ANY OTHER PROPERTY AVAILABLE FOR A COMPARABLE RENTAL. IS FURTHER BELIEVED THAT THE EXECUTION OF SUCH A LEASE WOULD ACCORDINGLY RESULT IN AN ACTUAL SAVING OF MONEY TO THE GOVERNMENT.

IN VIEW OF THE GOVERNMENT'S URGENT NEED FOR OFFICE SPACE, IT IS REQUESTED THAT YOUR REPLY TO THE INQUIRY PRESENTED BE MADE AS SOON AS POSSIBLE.

THERE ARE TRANSMITTED HEREWITH THE FOLLOWING PAPERS: PHOTOSTATIC COPY OF THE DEED OF CONVEYANCE TO THE LIBRARY OF CONGRESS TRUST FUND BOARD; PHOTOSTATIC COPY OF THE MINUTES OF THE MEETING OF THE TRUST FUND BOARD HELD ON DECEMBER 22, 1938, IN WHICH IS INCORPORATED THE LETTER OF ANNIE MAY HEGEMAN DATED DECEMBER 20, 1938; AND AN EXCERPT FROM A LETTER TO MR. C. J. GUTHRIDGE, CHIEF, PLANNING AND SPACE CONTROL, PUBLIC BUILDINGS ADMINISTRATION, FROM MR. ARCHIBALD MACLEISH, THE LIBRARIAN OF CONGRESS ( SECRETARY OF LIBRARY OF CONGRESS TRUST FUND BOARD).

THE SAID ACT OF MARCH 3, 1925, 43 STAT. 1107, CREATING THE LIBRARY OF CONGRESS TRUST FUND BOARD, CONTAINS, INTER ALIA, THE FOLLOWING PROVISIONS:

THAT A BOARD IS HEREBY CREATED AND ESTABLISHED, TO BE KNOWN AS THE LIBRARY OF CONGRESS TRUST FUND BOARD (HEREINAFTER REFERRED TO AS THE BOARD), WHICH SHALL CONSIST OF THE SECRETARY OF THE TREASURY, THE CHAIRMAN OF THE JOINT COMMITTEE ON THE LIBRARY, THE LIBRARIAN OF CONGRESS, AND TWO PERSONS APPOINTED BY THE PRESIDENT FOR A TERM OF FIVE YEARS, EACH (THE FIRST APPOINTMENTS BEING FOR THREE AND FIVE YEARS, RESPECTIVELY). THREE MEMBERS OF THE BOARD SHALL CONSTITUTE A QUORUM FOR THE TRANSACTION OF BUSINESS, AND THE BOARD SHALL HAVE AN OFFICIAL SEAL, WHICH SHALL BE JUDICIALLY NOTICED. THE BOARD MAY ADOPT RULES AND REGULATIONS IN REGARD TO ITS PROCEDURE AND THE CONDUCT OF ITS BUSINESS.

NO COMPENSATION SHALL BE PAID TO THE MEMBERS OF THE BOARD FOR THEIR SERVICES AS SUCH MEMBERS, BUT THEY SHALL BE REIMBURSED FOR THE EXPENSES NECESSARILY INCURRED BY THEM, OUT OF THE INCOME FROM THE FUND OR FUNDS IN CONNECTION WITH WHICH SUCH EXPENSES ARE INCURRED. * * *

THE BOARD IS HEREBY AUTHORIZED TO ACCEPT, RECEIVE, HOLD, AND ADMINISTER SUCH GIFTS OR BEQUESTS OF PERSONAL PROPERTY FOR THE BENEFIT OF, OR IN CONNECTION WITH, THE LIBRARY, ITS COLLECTIONS, OR ITS SERVICE, AS MAY BE APPROVED BY THE BOARD AND BY THE JOINT COMMITTEE ON THE LIBRARY.

SEC. 3. THE BOARD SHALL HAVE PERPETUAL SUCCESSION, WITH ALL THE USUAL POWERS AND OBLIGATIONS OF A TRUSTEE, EXCEPT AS HEREIN LIMITED, IN RESPECT OF ALL PROPERTY, MONEYS, OR SECURITIES WHICH SHALL BE CONVEYED, TRANSFERRED, ASSIGNED, BEQUEATHED, DELIVERED, OR PAID OVER TO IT FOR THE PURPOSES ABOVE SPECIFIED. THE BOARD MAY BE SUED IN THE SUPREME COURT OF THE DISTRICT OF COLUMBIA, WHICH IS HEREBY GIVEN JURISDICTION OF SUCH SUITS, FOR THE PURPOSE OF ENFORCING THE PROVISIONS OF ANY TRUST ACCEPTED BY IT.

THE THIRD PARAGRAPH OF THE ACT, SUPRA, WAS AMENDED BY THE ACT OF APRIL 13, 1936, 49 STAT. 1205, TO READ AS FOLLOWS:

SEC. 2. THE BOARD IS HEREBY AUTHORIZED TO ACCEPT, RECEIVE, HOLD, AND ADMINISTER SUCH GIFTS, BEQUESTS, OR DEVISES OF PROPERTY FOR THE BENEFIT OF, OR IN CONNECTION WITH, THE LIBRARY, ITS COLLECTIONS, OR ITS SERVICE, AS MAY BE APPROVED BY THE BOARD AND BY THE JOINT COMMITTEE ON THE LIBRARY.

IT APPEARS FROM THE ENCLOSURES TRANSMITTED WITH YOUR LETTER THAT THE SUBJECT PREMISES WERE CONVEYED TO THE LIBRARY OF CONGRESS TRUST FUND BOARD BY DEED EXECUTED BY THE GRANTOR ON DECEMBER 20, 1938, AND THAT THE GRANTOR TRANSMITTED SAID DEED TO THE BOARD BY LETTER OF THE SAME DATE, SETTING FORTH THE CONDITIONS UNDER WHICH THE CONVEYANCE WAS MADE, IN PERTINENT PART, AS FOLLOWS:

AS A MEMORIAL TO MY FATHER, HENRY KIRKE PORTER, IT IS MY PLEASURE TO TENDER TO THE LIBRARY OF CONGRESS TRUST FUND BOARD THE CONVEYANCE OF THE PARCELS OF LAND OWNED BY ME AT THE CORNER OF SIXTEENTH AND " I" STREETS IN THE CITY OF WASHINGTON, DISTRICT OF COLUMBIA, AS A GIFT, UPON AN AGREEMENT THAT WHEN THE PROPERTY IS SOLD ONE-HALF OF THE NET PROCEEDS OF SUCH SALE WILL BE ADDED TO THE PERMANENT INVESTED FUNDS HELD BY YOUR BOARD AS TRUSTEES FOR THE LIBRARY OF CONGRESS. IT IS MY DESIRE, THOUGH THIS IS NOT TO BE REGARDED AS A CONDITION OR PERMANENT LIMITATION, THAT THE INCOME OF SAID TRUST FUND SHALL BE APPLIED BY THE LIBRARIAN OF THE LIBRARY OF CONGRESS, FROM TIME TO TIME AS HE DEEMS ADVISABLE, TOWARDS THE MAINTENANCE OF A CONSULTANTSHIP IN CONNECTION WITH THE COLLECTIONS AND SERVICES OF THE LIBRARY. IF IN THE FUTURE IT SHOULD BE ASCERTAINED THAT THE ABOVE- MENTIONED PURPOSES IS NOT OF REAL VALUE TO THE LIBRARY OF CONGRESS, THE INCOME THEREAFTER SHALL BE APPLIED TO ANY OTHER PROPER PURPOSE OF THE LIBRARY. IN ACCORDANCE WITH THE PROVISIONS OF THE ACT OF CONGRESS ENTITLED " AN ACT TO CREATE A LIBRARY OF CONGRESS TRUST FUND BOARD AND FOR OTHER PURPOSES" APPROVED MARCH 3, 1925, AS AMENDED, I MAKE THIS GIFT WITH THE PROVISION THAT THE BOARD SHALL DEPOSIT THE PRINCIPAL SUM IN CASH WITH THE TREASURER OF THE UNITED STATES AS A PERMANENT LOAN TO THE UNITED STATES TREASURER AND THE TREASURER SHALL THEREAFTER CREDIT SUCH DEPOSIT WITH INTEREST AT THE RATE OF FOUR (4) PERCENT PER ANNUM, PAYABLE SEMIANNUALLY, SUCH INTEREST, AS INCOME, BEING SUBJECT TO DISBURSEMENTS BY THE LIBRARIAN OF CONGRESS FOR THE PURPOSES SPECIFIED. I REQUEST THAT THE FUND BE DESIGNATED ON YOUR RECORDS AS " THE HENRY KIRKE PORTER MEMORIAL FUND.' I AUTHORIZE THE LIBRARY OF CONGRESS TRUST FUND BOARD TO SELL SAID PROPERTY AT SUCH TIME OR TIMES AND UPON SUCH TERMS OR CONDITIONS AS IT MAY IN ITS ABSOLUTE DISCRETION DEEM ADVISABLE.

WHEN A SALE OF THE PROPERTY IS MADE BY YOUR BOARD, I DIRECT YOUR BOARD TO PAY OVER TO THE SMITHSONIAN INSTITUTION, OF WASHINGTON, D.C., THE REMAINING ONE-HALF OF THE NET PROCEEDS OF SUCH SALE, TO BE APPLIED BY THE SMITHSONIAN INSTITUTION FOR SUCH PURPOSES AS I HAVE DESIGNATED TO IT IN A FORMAL OFFER CONTAINED IN MY LETTER TO THE INSTITUTION BEARING THE DATE OF THIS LETTER.

IF ANY INCOME IS DERIVED FROM THE PROPERTY BEFORE SUCH SALE IS MADE BY YOUR BOARD, I AUTHORIZE YOUR BOARD TO RECEIVE AND APPLY SUCH INCOME AS TRUSTEES FOR THE LIBRARY OF CONGRESS FOR SUCH PURPOSES AND IN SUCH MANNER AS YOUR BOARD IN ITS ABSOLUTE DISCRETION MAY DEEM ADVISABLE.

IT APPEARS FURTHER THAT THE BOARD ACCEPTED CONVEYANCE OF THE PREMISES "WITH ALL OF THE DIRECTIONS ATTACHED THERETO AS EXPRESSED IN HER LETTER.'

IT HAS BEEN HELD CONSISTENTLY THAT PAYMENT OF RENT BY ONE GOVERNMENT DEPARTMENT OR AGENCY FOR PREMISES UNDER THE ADMINISTRATIVE CONTROL OF ANOTHER SUCH DEPARTMENT OR AGENCY IS UNAUTHORIZED. 21 COMP. DEC. 524; 22 ID. 684. ALSO, COMPARE 29 OP. ATTY. GEN. 447; 30 ID. 70.

WHILE THE LIBRARY OF CONGRESS TRUST FUND BOARD IS NOT, AS IS THE SMITHSONIAN INSTITUTION, THE OTHER BENEFICIARY UNDER THE TRUST ACCEPTED BY THE BOARD, A CORPORATION, IT IS AN ENTITY CREATED BY LAW WITH PROVISION FOR PERPETUAL SUCCESSION AND ENDOWED WITH THE USUAL POWERS OF A TRUSTEE INCLUDING THE POWER TO INVEST, REINVEST, AND RETAIN INVESTMENTS WITH SPECIFIC AUTHORITY TO ACCEPT, RECEIVE, HOLD, AND ADMINISTER SUCH GIFTS, BEQUESTS, OR DEVISES OF PROPERTY FOR THE BENEFIT OF, OR IN CONNECTION WITH, THE LIBRARY, ITS COLLECTIONS, OR ITS SERVICE, AS MAY BE APPROVED BY THE BOARD AND BY THE JOINT COMMITTEE ON THE LIBRARY.

WHETHER THE BOARD IS OR IS NOT TO BE REGARDED AS A GOVERNMENTAL AGENCY, IT HOLDS LEGAL TITLE TO THE PROPERTY AS TRUSTEE FOR THE PURPOSES OF THE TRUST UNDER WHICH TITLE WAS ACCEPTED BY THE BOARD, AND THE UNITED STATES GENERALLY HAS NO RIGHT TO THE BENEFICIAL USE OF THE PROPERTY EXCEPT UPON PAYMENT OF PROPER COMPENSATION THEREFOR IN FURTHERANCE OF THE PURPOSES OF THE TRUST. IN THIS RESPECT THE SITUATION IS TO BE DISTINGUISHED FROM THE USUAL CASE WHERE THE GOVERNMENT NOT ONLY HOLDS LEGAL TITLE BUT IS ENTITLED IN ITS OWN RIGHT TO THE BENEFICIAL USE AND OCCUPANCY OF THE PREMISES. COMPARE 16 COMP. GEN. 887. ACCORDINGLY, YOU ARE ADVISED THAT THE GENERAL RULE THAT PAYMENT OF RENT BY ONE GOVERNMENT DEPARTMENT OR AGENCY FOR PREMISES UNDER THE CONTROL OF ANOTHER SUCH DEPARTMENT OR AGENCY IS UNAUTHORIZED, IS NOT APPLICABLE TO THE SITUATION HERE PRESENTED. HENCE, THIS OFFICE WILL NOT OBJECT TO OTHERWISE PROPER PAYMENTS OF RENT FOR THE PREMISES INVOLVED UNDER A LEASE ENTERED INTO WITH THE LIBRARY OF CONGRESS TRUST FUND BOARD.