#### SAMUEL H. McKNIGHT v. THE UNITED STATES

[No. F-78.

Decided December 5, 1927]

*On the Proofs*

*Lease; possession after notice of surrender.*— Where in accordance with the terms of a lease the Government gives the lessor notice of surrender of the premises, but continues thereafter to occupy the same, the notice so given is of no value, and the lessor is entitled for the entire period of occupancy to rent at the rate named in the lease.

*Same; finding by officer m charge as to repairs.*— Where a lease obligates the Government to keep the premises in good repair “ to the satisfaction of the Government officer in charge,” and after occupancy has terminated a properly constituted board, assembled by the said officer and of which he is a member, finds the amount necessary to restore the premises to good condition, the lessor is entitled to recover the same.

*The Reporter’s*statement of the case:

*Mr. Robert N. Anderson*for the plaintiff. *Humphreys & ■ Day*were on the briefs.

*Mr. Heber H.*Rice, with whom was *Mr. Assistant Attorney General Herman J.*Galloway, for the defendant.

The court made special findings of fact, as follows:

I. The plaintiff, Samuel H. McKnight, at all times hereinafter mentioned, was, and is, a citizen of the United States, residing in Jersey City, in the State of New Jersey.

II. On April 8, 1916, the Wash-In-Ton Laundry was organized as a corporation under the laws of the State of New Jersey, with its principal place of business at 1114-1122 Willow Avenue, in the city of Hoboken, in the said State.

III. The Quartermaster Corps of the War Department of the United States purchased from the Wash-In-Ton Laundry on February 18, 1918, for the sum of $149,061.30 the laundry plant, machinery, and equipment of the latter1 located at 1114 to 1122 Willow Avenue, in the said city of Hoboken. On the same date the Wash-In-Ton Laundry leased to the United States the building located at 1114 to 1122 Willow Avenue, Hoboken, N. J., together with the *292real estate upon wbicb the said building was located, for the sum of $416.66 per month for the period from February 23 to June 30, 1918. A lease similar in all respects to the lease of February 18, 1918 (save as to minor changes in paragraph 6 thereof, which are not'material to the issues in this case), and at the same rental of $416.66 per month, was executed by the parties on September 5, 1918, and covered the period from *July*1, 1918, to June 30, 1919. This latter lease was renewed to June 30, 1920, upon the same terms.

IY. The United States, acting through Major C. F. von dem Bussche, Quartermaster Corps, United States Army, who acted under authority from the Secretary of War, entered into a lease with the said Wash-In-Ton Laundry at a monthly rental of $833.33 payable as stated therein, for the year beginning July 1, 1920, and ending June 30, 1921, of the said building located at 1114 to 1122 Willow Avenue, Hoboken, N. J., together with the real estate upon which the said building was located, with option to renew said lease with all convenants and agreements yearly, not extending, however, beyond June 30, 1922. The said lease contained, among other provisions, the following:

“That the said lessee shall keep the premises in good repair to the satisfaction of the Government officer in charge, and all buildings and other improvements fixed to or erected or placed in or upon the said premises by the lessee shall be and remain the exclusive property of the lessee, provided, however, that the same, unless sold or otherwise disposed of, shall be removed by the lessee within 90 days after' the said premises are vacated under this lease.

“ That for and in consideration of the faithful performance of the stipulations of this agreement, the lessee shall pay to the said lessor or agent the sum or sums stated in article 1 hereof. Payment shall be made at the end of each calendar month, or as soon thereafter as is practicable, at the office of the contracting officer or by a disbursing officer designated, in the funds furnished for the purpose by the Government. Should the premises be relinquished before the close of the monthly period, the rental for the last period shall be only the pro rata part of the monthly rental, depending upon the time of occupancy.

“ 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 giving to the said lessor or agent 90 days’ notice in writing.

*293“ 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, 1922, but no renewal shall be made to include more than one fiscal year.”

On July 14, 1920, one Horace Brittain, of Middletown, N. T., filed a suit in the Chancery Court of the State of New Jersey to foreclose a second mortgage of $15,700 which had been placed upon the said 'premises prior to February 1, 1918. Upon the sale in January, 1921, of the said premises under the aforesaid proceeding, the plaintiff purchased the same. By deed dated the 25th of January, 1921, one Thomas Madigan, sheriff of Hudson County, N. J., conveyed the aforesaid premises to the plaintiff, Samuel H. McKnight.

V. By instrument in writing dated January 26, 1921, the Wash-In-Ton Laundry, for value received, assigned and transferred to the plaintiff, his heirs and assigns, all of its right, title, and interest in and to the said lease, and to any and all renewals thereof, together with all rental which should accrue and become due and payable thereunder, on and after the 25th day of January, 1921, all of which more fully appears from a copy of the said assignment, attached to plaintiff’s petition as Exhibit B, and made a part hereof by reference; and the United States paid to the Wash-In-Ton Laundry, at the rate of $833.33 per month, the rent under the aforesaid lease for the period July 1, 1920, to January 25, 1921, inclusive, and thereafter paid the rent to the plaintiff.

VI. Thereafter an official communication, a copy of which is attached to plaintiff’s petition as Exhibit C, and made a part hereof by reference, was addressed to the plaintiff under date of April 26, 1921, by John T. Harris, assistant quartermaster supply officer at Brooklyn, N Y., inclosing two copies of “Notice of renewal,” notifying the plaintiff that in accordance with article 9 of the aforesaid lease the defendant thereby exercised the privilege of renewal contained in the said lease, and that it thereby renewed the same for the Government fiscal year 1922, namely, July 1, 1921, to June 30. 1922.

*294VII. By instrument dated April 18, 1921, a copy of which is attached to plaintiff’s petition as Exhibit D, and made a part hereof by reference, the plaintiff and the United States, acting through Maj. John T. Harris, Quartermaster Corps, entered into a formal renewal of the lease for an additional period of one year beginning July 1,1921, and expiring June 30, 1922, upon the same terms as the preceding lease.

VIII. Thereafter, on December 27, 1921, Eobert B. Fields, assistant quartermaster supply officer, Brooklyn, N. Y., addressed a letter to the plaintiff, a copy of which is attached to plaintiff’s petition as Exhibit E, and made a part hereof by reference, advising that in accordance with article 8 of the lease dated July 1, 1920, notice was thereby given that the United States Government would relinquish and give up said premises on March 31, 1922, and inclosing a “ Notice of cancellation.” The receipt of said notice was duly acknowledged by plaintiff in writing under date of December 28, 1921.

IX. Thereafter, on January 16, 1922, the said Eobert B. Field, captain, Quartermaster Corps, desiring to terminate the lease upon shorter notice, addressed a letter to the plaintiff, a copy of which is attached to plaintiff’s petition as Exhibit G and made a part hereof by reference, inclosing a “ Notice of cancellation,” effective January 31, 1922, a copy of which is attached to plaintiff’s petition as Exhibit H and made a part hereof by reference, and requesting that the plaintiff return the previous copy of the “ Notice of cancellation ” referred to in Finding VIII. Plaintiff, however, did not acknowledge receipt of said notice or letter and did not return the original “Notice of cancellation” as requested.

X. Defendant continued to occupy the premises until May 15,1922, when possession thereof was delivered to plaintiff.

XI. By letter dated May 15, 1922, a copy of which is attached to plaintiff’s petition as Exhibit J and made a part hereof by reference, and signed by the said Eobert B. Field, assistant to the quartermaster supply officer, plaintiff was notified that the Government would relinquish and give up the said premises on that date. In the aforesaid letter the United States requested the plaintiff to submit his bill for *295rental from May 1 to 15, 1922, and. sign a proposed release. The plaintiff refused to execute said release, but took possession of the premises on said date after the United States had vacated the same, and on May 18, 1922, addressed a letter to defendant upon the subject, as follows:

Jersey City, N. J., *May 18,19M.*

QUARTERMASTER SUPPLY OlTTCER,

*First Avenue <& 59th Street, Broohlyn, N. Y.*

(Attention of Capt. Robert B. Field.)

Dear Sir : This is to advise you that on May 15th, 1922, at about six o’clock in the evening, pursuant to a telephone call received by me earlier in the afternoon, I attended at the premises 1114-1122 Willow Avenue, Hoboken, New Jersey, where a representative of your office informed me that he had been instructed to turn over said premises to me immediately. At that time he requested me to sign certain releases for said property, which I refused to sign. I also told him that I did not recognize any legal right in the Government to surrender the property to me at that time and in that manner. He then informed me that he had been instructed to leave the building anyway, and after he had gone I took possession of said building for the purpose of preserving and protecting it against fire and other hazards.

I wish it to be understood that my possession of said building is under protest on my part and is not to be considered as a waiver of any of my rights.

Yours very truly,

S. H. McKNIght,

*Owner of premises, lllJp-1182 Willow Avenue,*

*Hobohen, New- J ersey.*

XII. The defendant paid to the plaintiff rent for the aforesaid premises at the rate of $833.33 per month for the period beginning January 26, 1921, and ending April 30, 1922. The rent in full up to January 26, 1921, was paid to said Wash-In-Ton Laundry. Defendant also tendered the plaintiff the amount of the rental from May 1 to 15,1922, but said tender was refused by plaintiff.

XIII. On May 16, 1922, the plaintiff filed with the office of the Quartermaster General, Real Estate Claims Board, Washington, D. C., his claim for rent for the months of May and June, 1922, in the sum of $1,666.66 and his claim on account of the alleged failure of the said defendant to keep the aforesaid premises in good repair in the sum of $7,522.50, or *296a total claim of $9,189.16. Thereafter a board of officers was appointed by the War Department to investigate and report on the aforesaid claims and to make recommendations concerning settlement of same; on August 21,1922, Capt. Daniel J. Dunn, president of the board, addressed a letter to the plaintiff, a copy of which is attached to plaintiff’s petition as Exhibit K and is made a part hereof by reference.

XIY. The plaintiff replied to the said letter of August 21, 1922, by his letter dated August 29, 1922, a copy of which is attached to the petition as Exhibit L and made a part hereof by reference.

XV. On August 30, 1922, said board of officers recommended to the War Department that certain allowances be made to plaintiff in settlement of his claim in the sum of $6,733.

XVI. On October 7, 1922, the Real Estate Claims Board, Office of the Quartermaster General, reviewed the recommendation of said board of officers and disapproved same. The action of the Real Estate Board was sustained by the War Department.

The War Department has repeatedly refused, and continues tó refuse, to make any allowance in plaintiff’s favor upon his claim.

The court decided that plaintiff was entitled to recover $6,733.66.

Booth, Judge,

delivered the opinion of the court:

The defendant leased from the plaintiff, a New Jersey corporation, the premises described in the findings. The transaction was the restilt of a desire upon the part of the defendant to own and operate its own laundry during the war period. The plaintiff owned both the laundry equipment and the premises wherein it was located. The defendant purchased the equipment and continued to operate the laundry upon the same premises under the lease involved. Payments of rental were regularly made under the leases and the difficulty out of which this case arises is confined to the last two months of the term of the lease and the clause respecting repairs and maintenance of the premises in good *297condition. The final lease, exact in terms with prior leases except as to increased rental, expressly imposed upon the defendant ,the obligation of keeping the premises in good repair “to the satisfaction of the Government officer in charge.”

The findings show, and it an undisputed fact, that the defendant, through a properly constituted board, found that to place the premises in good repair would require an expenditure of $5,067. We say this board was properly constituted. Capt. Eobert B. Field was at the time the assistant depot quartermaster at Governors Island and in charge of all the Government leases and buildings within the New York depot area, and he it was who assembled the board, he himself, as the officer in charge, being a member of the board. For some reason not of record the War Department refused to allow the recommendations of the board. It is difficult to perceive a defense to this item of the claim. The defendant does not contest the extent of damage and 'the proof clearly sustains the unusual and emergency character of the use to which the premises were put. The terms of the leas'e are plain and free from ambiguity. The officer in charge has acted, and we think the right of recovery is too plain to warrant extended discussion.

On December 27, 1921, the defendant, through the officer in charge, Captain Field, notified the plaintiff that the premises would be surrendered to him on March 31, 1922. The lease required a 90-day notice of determination to quit— a right reserved by the defendant and which might be exercised at any time during the period of the lease. The plaintiff received, acknowledged, and acquiesced in this notice. Subsequently, on January 16, 1922, Captain Field forwarded to the plaintiff another notice undertaking to relinquish the premises and terminate the lease on January 31, 1922. This notice, while received by the plaintiff, was not acknowledged or acquiesced in by him. Notwithstanding both notices, the defendant did not act in accord with either; on the contrary, possession of the premises was retained by the defendant until May 15, 1922. The defendant paid the monthly rental stipulated in the lease except for the months of May and June, 1922. Pro rata rental was tendered the plaintiff for *298one-half the month of May and payment refused for the entire month of June, 1922. If the plaintiff’s contention is sustainable under, this' item, the amount involved is $1,666.66. Defendant contests judgment for this amount upon the .theory that the 90 days’ notice — i. e., the first notice given— terminated the léase on March 31, 1922, and thereafter the landlord simply suffered the tenant to hold over. We confess some inability to follow the argument. The lease expressly provides a mode and manner for its termination, the lessee gives' the required notices in the proper, manner and then disregards its contractual obligations to observe what it has done. Therefore the lessor, helpless in the premises, is to be penalized for observing his obligations under the lease. If the defendant intended to vacate the premises' and take advantage of a unilateral provision of the contract beneficial to it, the way was open and the course prescribed. Defendant observed the formal part of the lease and disregarded the obligation to vacate, but continued in possession until it found a convenient time to get out. The record unmistakably indicates that the plaintiff was faced with a situation which may or may not have arisen subsequent to the giving of the notice, which rendered compliance therewith imposible, and continued possession under the lease obtained. It is rather a strange doctrine that a lessee may terminate a lease by a written notice and then hold over under a different tenure and defeat the payment of rental for the contract period. This lease was incapable of termination except as therein provided, “ 90 days’ notice of intention to terminate.” If the date of termination ai'rived during a monthly period, pro rata rental accrued for the portion of time the premises were occupied, otherwise not. A notice without action in accord therewith, as said by this court in *Spofford*v. *United States,*32 C. Cls. 452, 459, “ would be valueless.” See also *King-Durkee Co.,*126 Minn. 452; *O'Brien*v. *Clement,*160 N. Y. S. 975.

Plaintiff is entitled to recover. It is so ordered.

Moss, *Judge;*Graham, *Judge;*and Campbell, *Ghief Justice,*concur.