Case ID: us-ct-cl_63/html/0562-01.html
Source: Caselaw Access Project
Author: {"author": "Gkaham, Judge,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

MACK COPPER COMPANY v. THE UNITED STATES
    [No. D-134.
    Decided June 6, 1927]
    
      On the Proofs
    
    
      Unvment domami; taJcmg imder expectation of lease; removal of soil; compensation. — Where the Government takes possession of land with the expectation of procuring a lease, and retains possession and uses the land without at any time obtaining the lease, it is liable to the owner for the value of the use and occupation, and where, during the occupancy, it removes and sells to third parties a part of the soil, it is also liable to the owner for just compensation for the soil removed, with interest to the date of payment. '
    
      Sarnie; liaiiUty for waste. — -Under the circumstances recited, and where there has been waste, no covenant can be implied under which relief can be given for the waste committed.
    
      The BefortePs statement of the case:
    
      Messrs. Horace 8. ~Whitman and John W. Clifton for the plaintiff. Mr. E. E. Hendee was on the brief.
    
      Mr. Dam, M. Jackson, with whom was Mr. Assistant Attorney General Herman J. Galloway, for the defendant.
    The court made special findings of fact, as follows:
    I. Plaintiff, the Mack Copper Company, is now, and was at the times hereinafter mentioned, a corporation duly organized under the laws of the State of Delaware, for the purpose, among other things, of holding, purchasing, mortgaging, and conveying real estate and personal property in the State of Delaware and elsewhere.
    Under date of May 21, 1917, the Mack Copper Company complied with the laws of the State of California, providing for foreign corporations doing business in said State, and has been ever since duly authorized to transact business in the State of California, and is now transacting business in the State of California, with its principal office in the city of San Diego, county of San Diego, in said State.
    II. On the 26th day of March, 1912, Joseph S. Mack, representing himself and others, entered into a written agreement with the Sam Ferry Smith Company, a corporation having its principal place of business in the city of San Diego, county of San Diego, State of California, wherein it was agreed by and between said parties that the Sam Ferry Smith Company would sell and convey unto Joseph S. Mack the following-described real estate in the county of San Diego, State of California, bounded and described as follows, to wit—
    “ Lot seventy-eight (78), Lancho Mission of San Diego, according to partition map thereof made in the action of Juan M. Luco et al. vs. Commercial Bank of San Diego et al. and on file in the office of the county clerk of said county, containing five thousand and thirty-nine (5,039) acres, more or less.”
    for the sum of $300,000 gold coin of the United States, payable as follows: $10,000 at the time of the execution of the contract, $90,000 on or before July 26, 1912, and $200,000 on or before March 26, 1914, together with interest on all deferred payments at the rate of six per cent per annum from date of contract, payable quarterly; and that the Sam Ferry Smith Company was to accept the note of Joseph S. Mack for the sum of $200,000, payable on or before March 26, 1914, with interest thereon at the rate of six per cent per annum, payable quarterly, secured by first mortgage upon the premises described in said contract. This agreement to purchase was assigned to Caroline J. Mack in 1913.
    III. Due to the fact that there was a cloud upon the title to said real estate, the Sam Ferry Smith Company was required to quiet title to the same before it could execute a deed of conveyance conveying to the said Joseph S. Mack a good merchantable title. This required time, and it was not until the 27th day of April, 1917, that the Sam Ferry Smith Company executed and delivered a deed for said real estate.
    On the 14th day of November, 1916, Joseph S. Mack and others organized the Mack Copper Company, a corporation, for the purpose of taking over the contract of sale that the said Joseph S. Mack had entered into with the Sam Ferry Smith Company, which contract had been assigned to Caroline J. Mack, and which was accepted by the resolution of the company’s board of directors on January 2 as follows:
    “ Meeting of the board of directors of Mack Copper Company, January second, 1917, at Allentown, Pa., at which a quorum was present.
    “ Upon motion duly made and carried it was
    “ Resolved, That the, contract for the purchase from Caroline J. Mack of all of her right, title, and interest in and to lot 78 of the Ex Mission Rancho, San Diego County, California, be and the same is hereby ratified and confirmed as the act and deed of this company.
    “ Upon motion duly made and carried it was
    “ Resolved, That the officers of the company carry out all of the provisions of the contract with Caroline J. Mack, to completely vest the title of the lands therein described securely in this company, and at once proceed with the development and sale of the land as the subdivision plans drawn call for, not, however, at a less price than will net to the company $250,000 per acre for the first 500 acres, and when this number of acres have been sold a full report shall be made to Caroline J. Mack, and the officers shall do nothing in further disposing of or preparing the land for sale until there is an agreement had by the full board of directors and approved by the stockholders.”
    On the 27th day of April, 1917, the Sam Ferry Smith Company deeded and conveyed the said real estate, containing 5,039 acres of land, more or less, to the Mack Copper Company, and on said date the Mack Copper Company, by its officers, executed a mortgage upon said real estate to the Sam Ferry Smith Company for the sum of $235,990.00, with interest at six per cent per annum, payable quarterly. During the years 1912 and 1913 Joseph S. Mack and his associates had paid to the Sam Ferry Smith Company the sum of $102,694.82 on the purchase price of said real estate, and this amount, together with the mortgage of $235,990.00, made the total consideration for said deed of conveyance the sum of $338,684.82.
    IV. The real estate in question is what is known as mesa lands. It adjoins the corporate limits of the city of San Diego, biit that part where the Army camp was located is approximately nine miles from the center of the city of San Diego. The northern and western part is traversed by Rose Canyon, and San Clemente Canyon traverses the southern and eastern part of said land. All of the land in between Nose Canyon and San Clemente Canyon, and also that part of the land lying south and east of San Clemente Canyon, is what might be termed plateau or table-land, the same being slightly rolling, and at the times hereinafter mentioned all but about 200 acres of it was partly covered with a slight growth of native underbrush. A small stream flows in the San Clemente Canyon during the winter time, but in the summer time it is usually dry. About eighty per cent of the total area of said land is rolling, the remaining twenty per cent being taken up by the two canyons. At places the sides of the canyons are steep, but the soil in the valleys is very rich and fertile and furnishes fine pasturage for stock.
    V. At the time the Mack Copper Company acquired the title to said real estate it was the intention of the officers of said company to subdivide said land and dispose of the subdivisions for industrial sites and home sites. Definite plans were made for subdividing said lands, and plaintiff’s officers were negotiating with various people with a view to carrying out their subdivision plans, when some time before May 15, 1917, the Government placed a small detachment of soldiers and officers on said land with a view to establishing a cantonment thereon.
    VI. As early as May 11, 1917, it became generally known that the Government of the United States was contemplating locating a cantonment in southern California, and the citizens of San Diego began to make every effort possible to have the cantonment located near said city. Citizens’ committees were appointed for the purpose of securing leases for lands on -which the proposed cantonment could be located. At that time Joseph S. Mack was the only officer and representative of plaintiff corporation in the State of California. The officers and directors of the Mack Copper Company were, at that time, Joseph S. Mack, president and director; Augustus F. Mack, vice president, general manager, and director; Caroline J. Mack, secretary, treasurer, and director. Joseph S. Mack owned three shares out of the fifty thousand shares of the capital stock of said corporation.
    
      Various members of the citizens’ committee who were securing leases on land approached the said Joseph S. Mack and asked him to lease plaintiff company’s land for a period of five years at and for the consideration of $1.00. Members of this committee informed Mr. Mack that the United States would take the property regardless of whether a lease was executed. Joseph S. Mack refused to enter into any lease agreement and informed the committee that he had no authority to lease the company’s land. Without any authority from Joseph S. Mack, or any of the officers of the Mack Copper Company, the Government placed additional troops on the land of the company, and the Government was in full possession of a part thereof before May 26, 1917. On May 26, 1917, Joseph S. Mack was again approached by the citizens’ committee and requested to lease the Mack Copper Company’s lands to the United States for five years at and for a consideration of $1.00. Mr. Mack again stated that he had no authority to execute a lease on the land. Great pressure was brought to bear on him, and on May 28, 1917, Joseph S. Mack signed a paper antedated May 26, 1917, purporting to lease 2,800 acres of the land of the Mack Copper Company to one F. J. Belcher, jr., trustee.
    This lease was executed by Joseph S. Mack, president of the Mack Copper Company, without the knowledge or consent of the officers or board of directors of said company.
    A copy of said lease, marked “ Exhibit A,” is attached to the petition, and is made a part hereof by reference.
    VII. Under date of May 21,1917, certain gentlemen, representing the city of San Diego and the various civic organizations in San Diego, sent the following telegram to General W. L. Sibert, U. S. A.:
    SaN Diego, CalieoRNIa, May 21,1917.
    
    Gen. W. L. Sibert, U. S. A.,
    
      Hotel Alexandria, Los Angeles, California:
    
    San Diego offers to give Government five-year lease, rent free, on approximately eight thousand acres of land located on Linda Vista Mesa as shown on topographic map in possession of your board. This property to be used by War Department for Army training purposes. Also agrees to provide site for artillery range. To cause city water to be piped to the cantonment and be prepared to deliver from one to one and a half million gallons per day on two weeks’ notice. To deliver gas and electrical energy to cantonment buildings with necessary wiring, electrical current, delivered within three days and gas within ten days. To cause spur track from main line of Santa Fe to be built to cantonment within two weeks from receipt of -notice by railroad company and to provide necessary sidetracks. Construct and maintain necessary highways to cantonment. To use best efforts to secure use of adjoining lands for field maneuvers. Should Government determine upon this locality as site for permanent division cantonment, peace strength, our best efforts shall be expended to acquire and donate necessary land.
    City of San Diego, by L. J. Wilde, mayor; George Cromwell, city eng.; San Diego Chamber of Commerce, by W. S. Dorland, president; Army post committee, by F. J. Belcher, jr., chairman; San Diego Consolidated Gas & Elec. Co., by H. H. Jones, general manager; Cabrille Commercial Club, by O. E. Darnell, president; Merchants Association, by Alfred D. LaMotte, president; Manufacturers Association of San Diego, by F. M. White, president.
    Under date of May 24, 1917, General Liggett sent the following telegram to F. J. Belcher, jr., chairman of the Army post committee at San Diego:
    SaN FeaNcisoo, Cal., May 1917.
    
    F. J. Belcher, Jr.
    
      San Diego, Oal.:
    
    Bef erence telegram May first signed by you and other residents San Diego your proposition give Government five years lease, rent free, approximately eight thousand acres of land on Linda Vista Mesa, is accepted period. Map mailed to you tonight showing location cantonment period. Bequest you proceed at once carry out your further agreement providing piping for city water to cantonment and delivery gas and electrical energy and to secure construction of spur track from main line Santa Fe. Also to construct and maintain necessary highways to cantonment period. I shall furthermore recommend to War Department locate permanently cantonment approximately division on this site contingent upon donation to Federal Government necessary land for training purposes.
    Liggett.
    
      It is noted that in the telegram from General Liggett to F. J. Belcher, jr., reference is made to the telegram of May 1st, but it is evident that that date is an error and it had reference to the telegram of May 21, 1917.
    At the time that the telegram under date of May 21st was sent to Gen. W. L. Sibert, U. S. offering to give the Government a five-year lease, rent free, on approximately 8,000 acres of land plaintiff in this case had not executed a lease to F. J. Belcher, jr., chairman of the Army post committee at San Diego, or to any other person, firm, or corporation. None of the senders of said telegram of May 21st owned any interest in and to the Mack Copper Company real estate, nor did they represent anyone owning any of said real estate.
    It does not appear in the evidence whether the 8,000 acres of land located on Linda Yista Mesa and mentioned in the telegram to General W. L. Sibert, U. S. A., under date of May 21st, included plaintiff’s land or any part thereof. The topographic map referred to in said telegram is not in evidence in this case.
    VIII. In June, 1917, the citizens’ committee of San Diego approached Mr. Joseph S. Mack and asked him to sign another lease for additional lands of the Mack Copper Company, and on June 27th the said Joseph S. Mack executed another paper purporting to be a lease for 1,200 additional acres of the Mack Copper Company’s lands to F. J. Belcher, jr., trustee, for the sum of $1.00. This paper was not attested by the signature of the secretary or treasurer of the Mack Copper Company, and was made without the knowledge or consent of the board of directors or the officers of the Mack Copper Company. This lease was also antedated and shows on its face that it was executed under date of May 26, 1917, when in truth and in fact it was not executed until a later date.
    IX. The first knowledge that any of the officers or directors of the Mack Copper Company had that Joseph S. Mack had executed a lease covering any part of the Mack Copper Company’s lands was in August, 1917, when Augustus F. Mack, the vice president and general manager of the company, returned from Mexico to the city of San Diego. As soon as A. F. Mack was informed that Joseph S. Mack had executed a lease for said lands he informed the Army officers stationed on the land that Joseph S. Mack had no authority to execute said lease. At that time the cantonment was partially completed.
    X. F. J. Belcher, jr., did not assign the leases, executed by Joseph S. Mack to him as trustee, to the Government of the United States, but some time in the latter part of October or the first part of November, 1918, the said F. J. Belcher, jr., entered into a lease contract with the United States, represented by Wm. G. Gambrill, colonel, department quartermaster, Western Department, Quartermaster Corps, U. S. Army, wherein and by the terms of which the said F. J. Belcher, jr., directly attempted to lease to the United States a large acreage of lands upon the Linda Yista Mesa, including four thousand acres of the Mack Copper Company’s lands, for the term of five years from June 1, 1911', to May 31, 1922, for the sum of $1.00. This paper was not signed by Colonel Gambrill until about November 1, 1918, but it was antedated June 1, 1917.
    XI. The United States occupied 4,000 acres of plaintiff’s land continuously until November 6, 1921, and during that time it established on said 4,000 acres and other lands not belonging to plaintiff a general camp and cantonment, known as Camp Kearney, using a large area for a parade ground for the Infantry, Cavalry, and Artillery. The parade ground occupied approximately 600 acres. Two concrete roadways were built, running diagonally through the lands, and at places were sunk about 18" below the surface. In all about 127 buildings and several thousand tent houses were erected for the accommodation of officers and men, which buildings were placed on concrete foundations. Two septic tanks were installed, one on the side of San Clemente Canyon, which carried the sewage from the general cantonment, and one in Bose Canyon, which carried the sewage and drainage from the remount station. Walks and' streets were laid out and outlined with cobblestones and rocks, and many of the streets were graveled. An area of approximately 120 acres was used by the Government in constructing trenches, cross trenches, tunnels, and dugouts for instruction to the troops. In this connection barbed-wire entanglements were constructed.
    XII. At times the Government kept as many as 9,000 horses, and on the average about 7,000 horses were kept in the remount area, which consisted of about 200 acres. These horses were chiefly at large corrals. The manure was collected by scrapers, and all of the top soil to a depth of eighteen inches or more was removed down to hardpan. The hardpan was injurious to the horses’ feet, so new top soil, stripped from other parts of plaintiff’s land, was hauled in and deposited thereon, and this new soil in turn scraped up, sold, and hauled away. All of the manure and top soil scraped with it were sold by the United States. On an average about twenty-five carloads were sold daily, fifty per cent of which was top soil and fifty per cent manure. The United States received on an average $1.50 per ton for the top soil and manure sold, and approximately 200,000 cubic yards of soil and manure were sold, each cubic yard weighing one ton, and the proceeds thereof, $300,000, went to the United States.
    It will require an expenditure of about $200.00 per acre to recondition the land used as a remount area.
    XIII. The parade ground covered approximately 600 acres. The undergrowth was cut off by the Government and the land leveled by taking the top soil from the higher places and placing it in the lower places. Eock and other materials were hauled from adjacent lands and placed upon the parade grounds in order to give it an even, hard surface. The surface was watered and rolled, oiled, and packed to such an extent that the parade ground became and remains very hard. Where the buildings were erected concrete foundations were set in the ground. Walks and streets were laid out and outlined with cobblestones or rocks brought on the property. The roadways, streets, and paths throughout were made and filled with rock or gravel obtained from a quarry on plaintiff’s lands. Thousands of tons of rocks and cobbles were placed on the ground and rolled in by the Government in leveling the ground and for marking the various company streets. The Government sold the buildings and all property that could be salvaged, the final removal of the same being shortly after June 1, 1922. The purchasers took the pipe fittings from the buildings down to the outlets of the sewer pipes in the ground and left the outlets. In many instances they blasted out the fittings and left the sewers partially wrecked. It will require an expenditure, of approximately $500.00 per acre to recondition the soil and put it in the same condition that it was in when the Government took possession.
    XIY. The smaller septic tank on the bank of Bose Canyon •carried the drainage from the remount and hospital areas through plaintiff’s land, not covered by the lease. Both of the septic tanks were either too small or were improperly constructed, as a result of which the raw sewage overflowed from the tanks, and putrid streams with offensive odors flowed down the canyons. From time to time the United States cleaned out the tanks and dumped the sludge therefrom on plaintiff’s lands. Approximately 20,000 tons of this sludge taken from the septic tanks were piled on and now remain on plaintiff’s lands. One pile of sludge is approximately 300 feet long by 30 to 35 feet in width. It will require an expenditure of approximately $10.00 per ton to remove this sludge from the land.
    XV. The Government troops dug numerous trenches, cross trenches, tunnels, and dugouts and placed barbed-wire entanglements on approximately 120 acres of land. This same area w'as also used for artillery practice and is filled with shell pits and holes produced by exploding mines and shells used by the Army in its maneuvers. It will require an expenditure of approximately $300.00 an acre to restore this area to the condition which it was in when the Government took possession.
    XVI. Without the consent of and over the protest of paintiff the Government opened a quarry on plaintiff’s land and took therefrom approximately 60,000 cubic yards of rock and gravel. The value of the rock and gravel at the time it was removed was 25 cents a yard.
    
      XVII. During tbe occupancy by the Government there was constructed 3y2 miles of railroad on the lands of the plaintiff, with an average single track fill or embankment of four feet. This embankment still remains on plaintiff’s property and consists of stone, gravel, and other hard materials. The rails and railroad supplies were sold by the Government and the bare embankment remains. The cost of removing the embankment and restoring this ground to the condition it was in when the Government took possession would be approximately $17,500.
    XVIII. The only means of ingress and egress to and from the 1,039 acres of plaintiff’s land, not covered by the lease, was over the 4,000 acres occupied by the Government. The Government refused the plaintiff the right to go across the 4,000 acres that it was occupying, although plaintiff repeatedly requested so to do. At times the Government pastured its horses on this 1,039 acres.
    XIX. In the year 1913 Joseph S. Mack and Augustus F, Mack, who held the contract of purchase from the Sam Ferry Smith Company, developed a water supply on the lands in question. A surface well was dug in Nose Canyon and a pump operated by a windmill. An abundant supply of water was produced during the year 1913. During the dry part of that year, 1,000 head of cattle and 3,000 head of sheep were grazed and watered on the land. The rental value of .the land during the year 1913 for pasturage purposes was approximately $10,000. At the time the Government took possession of the land the windmill and pump were still standing on the property. There was also a well in San Clemente Canyon, but it was never used.
    XX. Under an arrangement with the War Department plaintiff company was permitted to drill for oil on an 80-acre tract of land lying in San Clemente Canyon, and on April 3,1920, plaintiff started with a well, and at a depth of about 375 feet struck an enormous flow of water. The water was cased off and the well proceeded to a depth of about 1,500 feet and abandoned. Subsequent to the return of the property to plaintiff and during the year 1924 the plaintiff perforated the casing about 375 feet below the surface by the explosion of a shot of dynamite, whereupon the water rose in the pipe to within approximately 130 feet of the surface. Pumps were installed, and since that time this one well has produced a sufficient amount of water to properly irrigate 200 acres of land, and there has been no perceptible decrease in the water supply by reason of such irrigation.
    XXI. At the time the Government took possession of the 4,000 acres of plaintiff’s land, said land was of the value of approximately $200.00 per acre. The 1,039 acres of plaintiff’s land that were not covered by the lease, but which land was used by the Government, were of the value of $175.00 per acre.
    XXII. At the time the Government took possession of the 4,000 acres of plaintiff’s land the rental value of the same for grazing purposes, in the condition in which the land was, and without water, was from 25 cents to 50 cents per acre per annum. The rental value of the said 4,000 acres for grazing purposes, with the supply of water that had been developed on said land at the time the Government took possession of the same, was $4.00 per acre per annum. Part of the 4,000 acres, or approximately 200 acres, had been leveled and the underbrush removed and was suitable for farming purposes. At the time the Government took possession of the same, without water, the fair rental value of said land for farming purposes was $15.00 per acre. With water the fair rental value of said land for farming purposes was $45.00 per acre.
    The fair rental value of the 1,039 acres of land, not covered by the lease, but which were used by the Government, was $5,000.00 per annum.
    Since 1924 there has been an abundant supply of water to irrigate at least 500 acres of land.
    The Government cleaned the underbrush off of about 1,000 acres of the land. It requires an expenditure of about $15.00 per acre to clear the underbrush off and level said land go as to make it suitable for farming.
    The court decided that plaintiff was entitled to recover for the value of the use and occupation of its property by the defendant the sum of $79,500, and for the value of soil removed and sold $150,000, a total of $229,500, with interest on $150,000 thereof at six per cent per annum from June 1, 1922, to date of payment.
   Gkaham, Judge,

delivered the opinion of the court:

We have adopted the findings of the commissioner in this case as they were not excepted to by either party and on the argument were admitted to be satisfactory to both.

The plaintiff, on and for sometime prior to May 15, 1917, had been and was the owner in fee simple of a tract of 5,089 acres of land near the city of San Diego, California. On or before that date the defendant took possession of this land, placed thereon a detachment of officers and soldiers with a view to establishing a cantonment, and for five years thereafter, until about June 1, 1922, occupied and used the said 4,000 acres as a cantonment or training camp, and erected thereon buildings, roads, sewers, railroad embankment, using a large area as parade grounds, and otherwise using it as more fully described in the findings. At times it also used the remaining 1,039 acres of the said 5,039-acre tract for pasturing horses.

It is to be assumed that said possession of the property was taken and the troops were encamped thereon prior to May 15,1917, under and by proper authority. This property was owned by the plaintiff, possession of it was taken by the defendant with the knowledge that it was not the owner thereof and under no claim of right to its possession and use, for at this time no definite steps had been taken to secure for it a lease of the property, and it did not have a lease. It is, however, reasonable to assume that it took possession in the expectation of later securing a lease for which compensation would be made to the owner. The plaintiff company after possession was taken took no steps to dispossess the defendant and apparently acquiesced in and consented to the act of taking and occupation. It was a peaceable appropriation of the land for a legitimate purpose and use and acquiesced in by the plaintiff.

After the property had been taken possession of certain citizens of San Diego, on the 28th of May, procured what purported to be two leases, covering 4,000 acres, from the plaintiff, with one of their number, Belcher by name, as trustee. This lease was signed by Joseph S. Mack, president of the plaintiff company, who did so under great pressure and with the statement that he had no authority to sign it, and in fact he did not have. Thereafter the said Belcher, as trustee, on November 1, 1918, executed a lease to the defendant by which he attempted to lease (Finding X) the tract of land heretofore mentioned, with other tracts, for a period of five years. The lease was dated back to May 26, 1917, as was the acknowledgment thereto.

We are of opinion that the Government never had, so far as the record shows, any valid lease of the plaintiff’s property for any period of time. It will therefore be seen that, having taken possession of the property under the expectation of procuring a lease, for which some compensation would be made to the plaintiff, and having never obtained the lease and at the same time retaining possession of and using the property, it became liable to compensate the plaintiff for the value of said use and occupation. The findings have fixed the reasonable value of the said use and occupation at $79,500.

The defendant during the occupancy of the plaintiff’s property scraped up the soil over about 200 acres, which it sold to third parties and for which it received the sum of $150,000. This was a taking and appropriation of plaintiff’s property for which it is entitled to recover compensation in the sum of $150,000 with interest.

There are other claims connected with the use and occupation of the property in the nature of waste for which the defendant is not liable, as it did not hold the property under a lease and there could arise no implied covenants under which relief could be given.

Judgment should be entered for the plaintiff in the sum of $229,500, with interest on $150,000 thereof at 6% from June 1, 1922, to date of payment, and it is so ordered.

Moss, Judge; Hat, Judge; Booth, Judge; and Campbell, OMef Justice, concur.