Case ID: us-ct-cl_57/html/0104-01.html
Source: Caselaw Access Project
Author: {"author": "\n      DowNey, Judge,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

TWIN CITY FOUR WHEEL DRIVE COMPANY v. THE UNITED STATES.
    [No. 34214.
    Decided January 30, 1922.]
    
      On the Proofs.
    
    
      Contract; executed by plaintiff only; fully performed. — The plaintiff rents a building to the Government anil executes a formal lease agreement stipulating the amount of rental and binding the Government to pay the cost of moving plaintiff’s property therefrom and moving it back at the termination of the lease. The Government accepts the agreement with a promise to execute the same, and takes possession of the building, after removing plaintiffs property, and holds it for several months, paying plaintiff less than the agreed rental. The Government never executes the agreement, and before the termination of the lease gives plaintiff 30 days’ notice of its intention to surrender the building, and at the end of 30 days moves out, but does not return plaintiff’s property thereto. Held, that plaintiff is entitled to recover the reasonable rental value of such building, less the amount received, for the period of its occupation by the Government, together with the cost of returning plaintiff’s property thereto.
    
      The Reporter's statement of the case:
    
      Mr. Jesse Van Valhenburg for the plaintiff.
    
      Mr. Alexander H. McCormick, with whom was Mr. Assistant Attorney General Robert H. Lovett, for the defendant.
    The following are the facts of the case as found by the court:
    I. Plaintiff is now, and during all the times hereinafter mentioned was, a corporation duly organized and existing under and by virtue of the laws of the State of South Dakota, duly licensed to transact business within the State of Minnesota, having its principal place of business at St. Paul in said State. It has at all times borne true allegiance to the Government of the United States, and has not in any way voluntarily abetted or given encouragement to rebellion against said Government, or to any enemies thereof.
    II. On and prior to October 1, 1918, plaintiff was, ever since said date has been and now is, owner and in actual possession of that certain building and ground upon which located, lying and being in the county of Iiamsey and State of Minnesota, bounded by University Avenue, Cromwell Avenue, Bayard Avenue, and Palham Street, in said city, comprising lots 1 to 6, inclusive, block 6, Baker’s addition to the city of St. Paul.
    III. On September 24, 1918, long prior to that date, and thereafter during all the times herein mentioned, Major W. It. Weaver, of the United States Army, was officer in command of tlie United States Air Mechanics’ Training School, then located and conducted in the so-called Overland Building, in the city of St. Paul, which said Overland Building was then located within the second block west of plaintiff’s said building.
    At said time Captain Arthur Gosling had charge, for the United States, under said Major W. R. Weaver, of all business affairs pertaining to said school, and more especially the procuring of supplies, the payment therefor, the procuring of buildings and quarters, and the payment therefor, and then had offices located in said Overland Building.
    At said time one L. L. Davis was civilian chief clerk and assistant to said Captain Arthur Gosling, and had an office in said Overland Building.
    At said time one George W. Heinrich, an enlisted man, was likewise attached to the office of Captain Arthur Gosling, and was at times delegated to perform special duties, owing to his unusual business experience.
    IY. In September and October of 1918 an epidemic of influenza broke out and spread throughout said aviation school, about 600 of the students being afflicted. The students were then quartered in the Overland Building and in tents on the premises, from 1,200 to 1,500 being quartered in tents. The housing facilities were entirely inadequate, and the congestion interfered with the proper combating of the disease.
    V. With a view to acquiring more housing space, Major Weaver and Captain Gosling, accompanied by several officers from Washington, began an inspection of buildings which might be suitable for the desired purpose, and they found the plaintiff’s building exceptionally desirable. Thereupon, about September 10, 1918, negotiations were commenced between said plaintiff and said Major W. R. Weaver, through Captain Gosling’s office, for the leasing by plaintiff to the Government of the United States of the building of said plaintiff for sleeping quarters in connection with said aviation school, which negotiations resulted, on or about September 28, 1918, in á verbal agreement for the leasing of said premises by plaintiff to the United States and the preparation by said Captain Gosling’s office of a written lease.
    It was verbally agreed between said plaintiff and said Major Weaver and Captain Gosling that the Government of the United States would pay to plaintiff as rental of said building 25 cents per square foot per year for all space included in said building, which was in said lease designated as 84,000 square feet, but which was in truth and in fact 76,600 square feet; that said Government should at its own expense remove from said building all of plaintiff’s personal property to a place provided therefor by plaintiff, should pay said plaintiff for any damage resulting to plaintiff’s property from such removal, should have the right to cancel said lease upon 30 days’ written notice to plaintiff, and should upon surrender of said building move back into said building plaintiff’s said personal property, and pay to said plaintiff any damage, if any, resulting to said property in so removing the same back into said building.
    The written lease prepared in Captain Gosling’s office was by him presented to the plaintiff for signature, and on or about September 28,1918, the same was duly executed by the plaintiff and delivered to said Captain Gosling and was by said Major Weaver forwarded to Washington for proper signature on behalf of the United States, but was never so signed.
    Said written lease was as follows:
    LEASE.
    Lessor: Twin City Four Wheel Drive Company. Contracting officer: C. G. Edgar, colonel, Signal Corps. Premises: Land located in Ramsey County, City of St. Paul, State of Minnesota (lots 1 to 6, block 6, Baker’s addition, and two-story building situated thereon).
    To be occupied by U. S. Government as barracks and school for aviation mechanics.
    Rental per annum: $21,000.00. Appropriation: Air Service, • military, 1919.
    Date of lease: Sept. 28, 1918.
    Date expires: June 30, 1919. Date effective: Sept. 28, 1918. The authority for this lease is_
    These articles of agreement entered into this 28th day of Sept. 1918, between C. G. Edgar, colonel, Signal Corps, U. S. Army, for and in behalf of the United States of America (hereinafter designated as lessee), of the first part, and the Twin City Four Wheel Drive Company, incorporated (a corporation existing under the laws of the State of South Dakota), of the city of St. Paul, in the county of Bamsey, and State of Minnesota (hereinafter designated as lessor), of the second part, witness:
    That the said parties do hereby mutually covenant and agree to and with each other as follows:
    1. That the said lessor shall, and by these presents does hereby, lease, demise, and let to the lessee the following described premises, to have and to hold the same with their appurtenances, unto the lessee, for the term beginning with September 28, 1918, and ending with June 30, 1919, at the rate of twenty-one thousand dollars ($21,000.00) per annum and under the conditions described below: Bent payable quarterly.
    DESCRIPTION OE PROPERTY.
    That certain tract or parcel of land lying within the bounds of Bamsey County, State of Minnesota, city of St. Paul, being more particularly described as follows:
    Lots one (1), two (2), three (3), four (4), five (5), and ,six (6), block six (6), Baker’s addition to the city of St. Paul, and the two-story brick building containing 84,000 square feet floor space located thereon.
    As a part and further consideration of the above-specified payment of rent, the lessor agrees to the following covenants : '
    (a.) That said lessor has good right to lease said premises in the manner aforesaid, and that it will suffer and permit the lesee (upon the lessee’s keeping all covenants as hereinafter contained) to occupy, possess, and enjoy said premises as aforesaid without hindrance or molestation from it or any person claiming by, from, or under it.
    That upon receiving written notice from the lessee on or before June 30,1919, the lessor will renew this agreement for a term commencing July 1, 1919, and ending June 30, 1920, for the sum of twenty-one thousand dollars ($21,-000.00), pajmble as follows:
    $5,250.00 on October 1, 1919.
    5,250 “ January 1, 1920.
    5,250 “ April 1, 1920.
    5,250 “ July 1, 1920.
    (5) The lessor agrees that at the expiration of this lease and any renewal thereof the lessee may within a reasonable time, remove any and all buildings, structures, and other improvements or parts of buildings structures and other improvements placed or erected on said premises during the term thereof, or any renewal thereof, all expenses connected with such removal to be borne by lessee.
    2. That the said lessor will warrant and defend to the lessee, its officers, and agents the quiet and peaceable possession and occupancy of the aforesaid premises, and in case of any disturbance by suit or otherwise will defend the same free of charge to the Government in or before the proper State or United States courts.
    3. That for and in consideration of the faithful performance of the stipulations of this agreement the said lessee hereby hires said premises as hereinbefore specified, and agrees:
    That it will commit no waste and will not suffer the same to be committed, and Avill not misuse or injure the said premises except in so far as is consistent with the use of this tract for aeronautical purposes.
    That this lease shall not be assigned nor any part or the whole of said premises underlet.
    4. That for and in consideration of the faithful performance of the stipulations of this agreement the lessee shall pay to the lessor or agent the sum or sums stated in article 1 hereof.
    5. That it is expressly agreed and understood that this lease shall be noneffective until an appropriation adequate to its fulfillment is granted by Congress and is available, except in so far as is necessary to provide for the necessities of the sendee as authorized by section 3732 of the Revised Statutes of the United States. However, in order to provide for the necessities of the service as authorized by said section, it is agreed that the premises specified herein, so far as authorized by said section, shall be occupied by the lessee as contemplated by this lease, and that payment of the rental shall be made as soon as is practicable after funds are appropriated and are available.
    6. That no Member of or Delegate to Congress, or Resident Commissioner, nor any person belonging to or employed in the military sendee of the United States, is or shall be admitted to any share or part of this contract, or to any benefit which may arise herefrom, but, under the provisions of section 116 of the act of Congress approved March 4, 1909 (35 Stat. L., 1109), this stipulation, so far as it relates to Members of or Delegates to Congress, or Resident Commissioners, shall not extend, or be construed to extend, to any contract made with an incorporated company for its general benefit.
    
      7. That the lessor hereby stipulates that no part of the money received, as rental will be given to the occupant of the above-described premises, or to the person for whose benefit or use they were hired, or to anyone for him, nor will any rebate be given on said i'ental for the benefit of any such person.
    8. That the lessee reserves the right to quit, relinquish, and give up the said premises at any time within the period for which this lease is made or may be renewed, by givng to the said lessor or agent thirty days’ notice in writing.
    9. That, at the option of the lessee, this lease, with all its covenants and agreements, may be renewed yearly as often as the needs of the public service may require, so as to give the lessee continuous possession of the premises, not extending, however, beyond June 30, 1920, but no renewal shall be made to include more than one fiscal year, as specified in article 1.
    10. It is further understood and agreed that the covenants and agreements contained herein shall be binding upon the parties hereto, their successors and assigns.
    11. It is further understood and agreed that the lessee shall bear the actual expense incurred in the lessor’s vacating the premises and the lessor shall be reimbursed in a like amount for the reinstallation of fixtures.
    In witness whereof the parties aforesaid have hereunto placed their hands the date first hereinbefore written. The officer of the United States whose name is signed below certifies that the rate stated in this lease is not in excess of the commercial retail value of the premises named and that said rate is the amount to be actually paid to the lessor for his own use, and that there are no public buildings, quarters, or grounds available for use as specified in this lease, and that the rate stipulated in this lease is a fair rental value of reasonably good premises suitable for the purposes stated herein in the locality where situated.
    Witnesses:
    -as to-,
    
      Colonel, Signal Corps, U. S. Army. _as to Twin City Four Wheel Drive Co.
    (Signed) G. W. HeiNricii.
    (Signed) L. L. Davis.
    As to by — E. H. Steiger,
    
      President.
    
    (Signed) by — R. S. HtjtchiNsoN,
    
      Secretary.
    
    (Signed) E. H. Steiger,
    (Signed) J. L. Ware,
    
      Executive Committee.
    
    
      I hereby certify that I have satisfied myself of the authority of the person signing the lessor’s name to this lease to bind the lessor, and I have waived the filing of the evidence of such authority, as permitted so to do by the Army regulations.
    
      Colonel, Signal Corps, U. S. Army.
    
    I do solemnly swear (affirm) that the foregoing is an exact copy of a contract made by me personally with the lessor named above, that I made the same fairly, without any benefit or advantage to myself, or allowing any such benefit or advantage corruptly to the said lessor, or to any other person; and that the papers accompanying include all. those relating to the said contract, as required by the statute in such case made and provided.
    Colonel, Signal Corps, United States Army.
    
    Subscribed and sworn (affirmed) to before me this_
    day of-, 1916.
    Attested a true copy.
    Twin City Fouk Wheel Deive Co.,
    By (signed) E. S. Hutchinson, Secy.
    
    VI. On or' about October 1, 1918, the Government of the United States took possession of the building of said plaintiff under direction of said Major W. E. Weaver, and pursuant to the terms of said purported lease, and remained in possession of the same to January 31,1919.
    VII. Thirty days prior to said January 31, 1919, said plaintiff received written notice from said Captain Gosling that the Government would, on or before January 31, 1919, surrender possession of said building to said plaintiff, which it did.
    The plaintiff was not notified until after the termination of the Government’s occupancy that the written lease would not be executed.
    VIII. A reasonable rental value for said premises at the time the United States took possession thereof and during its occupancy was 25 cents per square foot per year, or $6,550 for the period of occupancy in addition to any expense to the plaintiff of removing therefrom and returning thereto its personal property.
    
      IX. The personal property belonging to plaintiff in said building, consisting oí approximately 150 truck loads, on October 1, 1918, was by said Captain Gosling’s office carried on trucks belonging to the Government of the United States from said building to a building leased by said plaintiff for said purpose from South Side Wagon & Auto Company. In so removing the same said property was allowed to stand upon said trucks in rain while being so taken to the building designated therefor, and was roughly handled in such removal, and was deposited in a pile or heap in the building to which removed, and was damaged thereby to the amount of $1,621.60.
    X. Upon surrender of said building by the Government said plaintiff requested Captain Gosling to procure the return of plaintiff’s property to said building, but he directed that the plaintiff should itself return its property, stating that the expense thereof would be reimbursed to it, and plaintiff thereupon removed said property back into its building at an expense to it of $1,281.19, which was not reimbursed.
    XI. A portion of plaintiff’s building, including 1,300 square feet of space on the ground floor, and twice that amount in the basement, had been rented to Portage ILubber Company upon a lease having 23 months to run. It had been rented at $250 per month, or 76 cents per square foot per year, and has since the surrender of the building by the Government been rented at the rate of $180.55 per month, or a total loss of $2,060.67.
    XII. A claim was duly presented by plaintiff to the War Department’s' claim board and a hearing thereon had on June 21, 1919, at St.. Paul, Minnesota, and thereafter an award was made by said board allowing said plaintiff the sum of $4,914.70 in full of its said claim, including all items thereof and no more. 'Said plaintiff received notice of the making of said award August 21, 1919, and thereafter on or about September 19, 1919, in writing notified said War Department’s claim board of its refusal to accept said award, but of its willingness to accept three-fourths of the amount thereof to apply on any amount to be allowed by the Court • of Claims of the United States upon its said claim, which was paid and received in the amount of $3,686.01.
   DowNey, Judge,

delivered the opinion oí the court:

During the year 1918, as a war activity, the United States was maintaining in St. Paul, Minnesota, a training school for air-service mechanics. It was located in the Overland Building, and the students were quartered therein and in tents on the premises. In September of that year there were twelve or fifteen hundred students quartered in tents, and about this time an epidemic of influenza broke out and spread among the students to such an extent that about six hundred were afflicted. Housing accommodations were entirely inadequate under favorable circumstances and with such an epidemic raging, the congestion and the character of the accommodations were such that it could not be properly handled and suppressed.

Under these circumstances Major Weaver, who was in command of the school, and Captain Gosling, who was supply officer and charged with the duty of procuring supplies and quarters, accompanied by several officers from Washington, who were presumably there for that purpose, began an inspection of buildings which might be procured or taken over for use as quarters, and having inspected a large manufacturing building belonging to the plaintiff company they found it “ exceptionally desirable.”

Negotiations were entered into between the plaintiff’s officers on the one hand and Major Weaver and Captain Gosling on the other, resulting in a proposition being submitted by the plaintiff, which, as to proposed rental charges, was thereafter considerably reduced, and a verbal agreement was thereupon reached between them for the renting of the building. This agreement, in brief, involved the payment of rental at the rate of 25 cents per square foot per year for the entire building, the reimbursing to the plaintiff of any expense incurred in moving its property out of the building and in returning it thereto at the expiration of the tenancy, with provisions as to the extension and the termination of the tenancy, with other formal matter not here material.

The terms agreed upon were incorporated in a written lease prepared by Captain Gosling, or in his office under his direction, and by him presented to the plaintiff’s proper officers for signature and signed by them, after proper authority granted by the directors, and this lease was sent on to Washington for signature on behalf of the United States, the plaintiff being given to understand that it would be returned signed within a short time, probably within a week.

The officers of 'the training school thereupon took possession of the building under the lease. Officers from Washington had participated in the inspection and approval of the building, and there is apparent from the record no expectation upon the part of the officers of the school other than that the lease would be signed when it reached Washington. The plaintiff’s property then in the building, after but a day’s notice, was loaded rather indiscriminately and without care into trucks and hauled and dumped into a building which plaintiff had succeeded in hastily renting for that purpose, some damage thereto resulting.

The armistice soon followed, and about the last of December the United States, by Captain Gosling, notified the plaintiff that possession of the building would be surrendered on or before January 31, 1919, and it was surrendered on or before that date. It was not, so far as appears from the record, until after the termination of the tenancy by reason of the 80-day notice and the surrender of the building to the plaintiff that plaintiff was notified that the lease signed by it and under which it had surrendered possession of its building, had not been and would not be signed by the United States.

It does not appear from the record why this lease was sent to Washington for signature when it is conclusively shown that it was one of the duties of Captain Gosling, as supply officer, to procure quarters and when in this matter he acted, in addition to his own authority, under the direction of the commanding officer and in an emergency. However, the reason for the procedure, probably a good one, is not material. The circumstances are of some interest as bearing on the good faith of the supply officer as the Government’s authorized rental agent and of the plaintiff in surrendering the possession of its building under a lease which it had every reason to assume would be properly executed by the United States, in connection with which it is to be noted that a three-months’ tenancy expired without any notice within that time to the plaintiff that the lease would not be executed, although possession under the lease must have been well known in the Washington office during all that time, and also, that the tenancy was in fact terminated by just such a notice as was provided for in the lease.

The plaintiff sues for the amount of rent provided for in the lease (less an amount already paid) which it also proves was the fair rental value of the property, expense of returning its property to the building, a work it- was directed to undertake for itself on assurance that it would be reimbursed, damages to its property in moving and some loss occasioned by the termination of a profitable existent tenancy in a part of its building at the time it was taken over by the United States. The last of these items is not strenuously urged and there is apparent no basis upon which it can be predicated. Neither does it seem to us possible upon any theory to permit a recovery for the alleged damages done to plaintiff’s property in connection with its removal.

There remains the question of the recovery of the rental either at the rate provided in the lease as agreed upon between the parties or at its fair value as shown and found and the expense to which plaintiff was put in returning its property to its building at the expiration of the tenancy. And it may here be noted that the findings of fact fix the rental value of the property at the same amount provided in the lease, in addition to the cost to the plaintiff of removing and returning its property, also provided for therein. It is not necessary, therefore, to discuss in detail any one of the two or three different theories under which the plaintiff might and we believe is entitled to recover, or to discriminate with nicety between the different theories and their applicability.

The plaintiff relies upon the Dent Act, 40 Stat. 1272. The defendant’s position is that the lease not having been “ reduced to writing and signed by the contracting parties with their names at the end thereof,” as required by section 3744, ^Revised Statutes, “ the question involved in this case is the rental value of the property.” We might leave the case where the defendant has thus put it, for the result is apparent. But it is our understanding that the purpose of the Dent Act in the main was to provide relief from the infirmities under which parties dealing with the Government found themselves by reason of the fact that their contracts had not been formally executed as required by the statute cited. And the conditions of such relief recited in the first section of the act seem to be broad enough to cover this case.

But, aside from this feature of the case, this contract was fully performed and, as said, so iierformed before any notice to the plaintiff that it would not be executed as required by law. It has frequently been held that the invalidity of a contract is immaterial after it has been performed.

And if it could be successfully contended that relief is not to be found in the Dent Act or upon the contract because it was fully performed, there would remain the right, as upon an implied contract, to recover the fair rental value of the property. It would seem that no further discussion was necessary.

Upon any one of these theories the plaintiff is entitled to judgment in the sum of $4,145.18.

Graham, Judge; Hat, Judge; Booth, Judge, and Campbell, Chief Justice, concur.