B-126729, MAR. 2, 1956

B-126729, MAR. 2, 1956

TO THE ATTORNEY GENERAL:

REFERENCE IS MADE TO LETTER OF SEPTEMBER 13, 1955, WITH ENCLOSURE, FILE WEB-GHV 77-73-555, FROM THE ASSISTANT ATTORNEY GENERAL, CIVIL DIVISION, RELATIVE TO THE REPORTED INDEBTEDNESS OF THE NATIONAL WAREHOUSE COMPANY OF FORT WORTH ARISING UNDER LEASE CONTRACT NO. DA-41 243-ENG-871. YOU REQUEST CERTAIN INFORMATION REGARDING THE CONTENTIONS OF THE DEBTOR'S ATTORNEY WHICH WERE SET FORTH IN LETTER OF JULY 14, 1955, TO THE UNITED STATES ATTORNEY AT FORT WORTH, TEXAS, TOGETHER WITH OUR COMMENTS AND RECOMMENDATION CONCERNING THE COMPROMISE OFFER.

IN RESPONSE TO A REQUEST FOR THE SPECIFIC INFORMATION DESIRED BY YOUR DEPARTMENT, THERE HAS NOW BEEN RECEIVED FROM THE DEPARTMENT OF THE ARMY ADVICE TO THE EFFECT THAT THE BUILDINGS RETURNED BY THE LESSEE PRIOR TO EXPIRATION OF THE LEASE WERE NOT USED OR OCCUPIED BY THE GOVERNMENT DURING THAT PERIOD. ALSO, THE ADMINISTRATIVE OFFICE STATES THAT AN EXAMINATION OF THE PERTINENT FILES FAILS TO DISCLOSE ANY INFORMATION TO SUPPORT THE DEBTOR'S CONTENTION THAT THE GOVERNMENT BENEFITED BY THE REPAIRS ALLEGED TO HAVE BEEN MADE TO THE RETURNED BUILDINGS AT A COST OF $3,600 TO THE LESSEE.

WITH RESPECT TO THE COMPROMISE OFFER, IT IS NOTED THAT THE SETTLEMENT OFFERED COVERS THE FAIR RENTAL DUE, PLUS INTEREST, ON THE FIVE BUILDINGS OCCUPIED FROM JUNE 9 TO JUNE 24, 1951, BEYOND THE TERMINATION DATE OF THE LEASE. THE BALANCE CLAIMED REPRESENTS RENTAL FROM JANUARY 9 TO JUNE 8, 1951, ON THE FOUR BUILDINGS RETURNED TO THE GOVERNMENT ON OR BEFORE THE PRIOR DATE. THE RECORD SHOWS THAT PRIOR TO RECEIPT OF NOTICE OF APPROVAL OF THE FORMAL LEASE THE CONTRACTING PARTIES AGREED TO ELIMINATE FROM THE AGREEMENT THE FOUR BUILDINGS IN QUESTION. THUS THE CONTRACTOR WAS LED TO BELIEVE THAT THE LEASE WAS SUBJECT TO PARTIAL CANCELLATION AND THEREUPON RELINQUISHED OCCUPANCY. THE COMPANY WAS NOT ADVISED OTHERWISE UNTIL AFTER THE LEASE EXPIRED. THERE IS NO QUESTION THAT UNDER THE TERMS OF THE CONTRACT THE ENTIRE LEASE COULD HAVE BEEN CANCELLED AS OF JANUARY 9, 1951, AND THE REMAINING BUILDINGS AGAIN LEASED FROM THAT DATE UNDER A NEW CONTRACT. UNDER THOSE CIRCUMSTANCES IT WOULD APPEAR DOUBTFUL THAT THE GOVERNMENT WOULD PREVAIL IN AN ACTION TO ENFORCE PAYMENT OF THAT PART OF THE RENTAL DEMANDED.

IN VIEW THEREOF, AND SINCE THE DEBTOR COMPANY HAS BEEN DISSOLVED, WE CONCUR WITH THE CONCLUSIONS OF THE UNITED STATES ATTORNEY AT FORT WORTH, TEXAS, AS SET FORTH IN HIS LETTER OF JULY 22, 1955, TO YOU, AND THEREFORE RECOMMEND THAT THE COMPROMISE OFFER BE ACCEPTED.