Source: http://pa.findacase.com/research/wfrmDocViewer.aspx/xq/fac.19670323_0040258.C03.htm/qx
Timestamp: 2019-04-21 20:45:33+00:00

Document:
Staley, Chief Judge, Freedman and Coffin,*fn* Circuit Judges.
This appeal raises the important question of the power of the Legislature of the Virgin Islands to authorize the private sale to a designated grantee of a specific plot of land owned by the Government of the Virgin Islands.
In 1961 a plot of land, consisting of 1,010 square feet, at Domini Gade No. 8T, St. Thomas, was escheated to the Government of the Virgin Islands pursuant to a judgment entered by the district court. A few months later the Legislature passed and the Governor approved Act No. 876, which authorized the Governor to transfer the plot to the Department of Property and Procurement "for sale at a reasonable price to Mr. Steadman Hodge, to be used solely for construction of a home thereon." The Governor transferred the property to the Department for sale to Mr. Hodge and the Commissioner of Property and Procurement by deed granted and conveyed it to Mr. Hodge on June 8, 1962 for the sum of $200. The deed recited that the Commissioner had determined that $200 was the reasonable price for the property.
The case then proceeded to trial and the court below entered judgment declaring the conveyance to be void. Smith v. Government of the Virgin Islands, 240 F. Supp. 809, 5 V.I. 124 (D.V.I.1965). From this judgment the defendants have taken this appeal.
Act No. 876 singled out Hodge from all other citizens and discriminated against them by granting to him an exclusive privilege to acquire the parcel of land. This arbitrary action violated the specific prohibition of § 1471 against the passage of a special law "granting to any * * * individual any special or exclusive privilege * * * whatever."
Act No. 876 also violates the prohibition in § 1471 against the enactment of a special law "where a general law can be made applicable." Such a general law already existed when Act No. 876 was enacted. This was the escheat law (15 V.I. Code § 126) which prescribes in detail the procedure for the sale of property which has been escheated to the Government of the Virgin Islands. It requires public sale by the marshal after notice prescribed by the court, ultimate judicial confirmation of the sale and conveyance of the property to the purchaser by the marshal. It provides for the vacation of a sale if the bids received are disproportionate to the value of the property and if it appears to the court that on a resale a higher price can be obtained which would exceed the successful bid by at least ten per cent, exclusive of the expenses of a new sale.
While legislative action presumptively is proper,*fn11 Act No. 876 clearly is without any reasonable foundation and therefore is arbitrary and invalid on its face. It is a special law for the sale of a specific parcel of real estate to a designated individual, adopted at a time when, under 15 V.I. Code § 126, a general law existed for the sale of government property.
Appellants contend, however, that § 1471 is inapplicable to the Virgin Islands because it deals with the legislatures of territories "now or hereafter to be organized." While the Virgin Islands constitute an "unincorporated" territory, it does not follow from this that they are also an "unorganized" territory. The question whether a territory is "incorporated" into the United States did not exist when § 1471 was adopted. It originated later in the problems which arose from the territorial acquisitions by the United States after the Treaty of Paris in 1899 following the Spanish-American War. The distinction originated with Mr. Justice White in one of the Insular Cases,*fn12 which dealt with the difficult problem of the extent to which the guarantees of the Constitution of the United States applied in the newly acquired territories. See generally, Coudert, The Evolution of the Doctrine of Territorial Incorporation, 26 Colum.L.Rev. 823 (1926).

References: v. 
 § 1471
 § 1471
 § 126
 § 126
 § 1471
 § 1471