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May 26, 1955

UNITED STATES of America, Plaintiff,
ONE PARCEL OF LAND KNOWN AS LOT 39 IN SQUARE 2535 IN THE DISTRICT OF COLUMBIA, Gelmarc Towers, Inc., a Corporation, et al., and Unknown Owners, Defendants

The opinion of the court was delivered by: LAWS

In an earlier proceeding in this Court, the United States acquired the use and occupancy of Gelmarc Towers, an uncompleted apartment building in the District of Columbia which the owners converted into an office building for Government use. The term ran from April 1 to June 30, 1951, and pursuant to the petition for condemnation was renewed annually for three one-year periods ending on June 30, 1954.

On June 30, 1954, the United States filed this proceeding to continue its term in the property from July 1, 1954, to June 30, 1955, with the right of the United States to conclude and terminate the term at any time after September 1, 1954, at its election, upon sixty days' notice to be filed in the proceeding. The estimated just compensation as rental for this period of one year was deposited with the Court on August 10, 1954.

 On August 31, 1954, the Government filed notice of election to terminate the estate effective as of September 1, 1954. It is agreed, and counsel for the owners was advised on September 2, 1954, that the Government was in fact not prepared to surrender possession on September 1, 1954, since some property had been left on the premises which the, government wished to remove. In addition, the Government wished to make at least a partial restoration of the property, which it proceeded to do. From the amount earlier deposited with the Court as estimated compensation, a distribution was ordered by the Court on October 19, 1954, for the period from July 1 to October 31, 1954.

 On October 30, 1954, the Government filed another notice of termination of its estate, effective as of October 29, 1954, subject to the right of the owners to claim the reasonable cost of restoration of the premises and reasonable rent during the period of restoration. By this notice the United States stated it tendered the keys to the premises to the owners. By telephone conversation on October 28 and 29, counsel for the owners had been informed such notice was being prepared. He advised Government counsel he could not take possession, since maintenance personnel were not immediately available to prevent pipes from freezing and other damage resulting to the building, and there was some question of the extent to which the United States was required to and would make restoration of the property, under a stipulation entered on June 25, 1951, before surrendering possession. Government counsel indicated the matter would have to be taken up with his superiors. There never came a time when the owners were given specific notice that the Government had completed all the restoration work which it elected to do.

 On December 10, 1954, the Government filed a motion for an order of the Court that custody of the property be turned over to the owners and the Government be released from responsibility for custody. An answer in opposition was filed by the owners. The parties were unable to agree on a transfer of possession. The owners sought to impose conditions that any taking by them must be without prejudice to their right to claim rental during the time the Government was in possession and that a condemnation jury should view the premises before the owners began restoration. Until March 24, 1955, the Government would not agree to these conditions. After a condemnation jury had been selected and had a view of the property, by stipulation possession was turned over to the owners by the Government effective on March 28, 1955.

 At pre-trial hearing it was stipulated that the Court would decide all issues of fact as well as law incident to the validity of the notices to surrender the premises and questions relating to the termination of the estate and surrender of possession.

 Determination of issues in a condemnation case rests upon broad principles of equity which go beyond technical requirements of local landlord and tenant law. The right of the United States Government to take private property under its power of eminent domain is subject to the requirement of the Fifth Amendment to the Constitution that private property shall not be taken for public use without just compensation. On the one hand, it contemplates that the monies paid into the common Treasury by the taxpayers shall be jealousy guarded as a public trust against unfounded and unjust claims. On the other, it guarantees that the Government, having regard for the rights and welfare of its citizens and respect for the restraints on its authority, shall deal fairly and equitably with each of them.

 In this case, the Government in its complaint assumed an obligation to give sixty days' notice to be filed in this proceeding before terminating its estate. This was not an unreasonable condition. The property involved is a large new luxury apartment building. It was not completed when the Government went into possession in 1951. It would appear obvious, before the owners on repossession could complete the building and prepare for occupancy, it would be necessary to gather materials on the site and have available a construction, custodial and managerial force to proceed with the work. Sixty days was the length of time which the Government itself apparently considered reasonable for such preparation, and the owners were led to rely upon such notice being given. The Government continued in possession of the property after July 1, 1954, under these conditions.

 The Government maintains this case is not a condemnation under a declaration of taking procedure, so that it was free to abandon the proceeding at any time. Where no declaration of taking has been filed, no judgment entered and no payment or deposit made of an award of just compensation, title has not vested in the United States, and it is free to abandon the taking or reduce the estate at any time, even if it has taken possession, and be liable only for actual use and occupancy with restoration damage. Danforth v. United States, 1939, 308 U.S. 271, 60 S. Ct. 231, 84 L. Ed. 240; Moody v. Wickard, 1943, 78 U.S.App.D.C. 80, 136 F.2d 801, certiorari denied, 320 U.S. 775, 64 S. Ct. 89, 88 L. Ed. 465; Johnson & Wimsatt v. Reichelderfer, 1933, 62 App.D.C. 237, 66 F.2d 217; O'Connor v. United States, 9 Cir., 1946, 155 F.2d 425; Barnidge v. United States, 8 Cir., 1939, 101 F.2d 295; Kanakanui v. United States, 9 Cir., 1917, 244 F. 923; United States v. 4.105 Acres of Land in Pleasanton, D.C.Cal.1946, 68 F.Supp. 279. In this type of proceeding, the Government has opportunity of determining the price of a property so that it may decide whether it exceeds the expected benefit or is more than it is prepared to pay, and the owner may have an opportunity to test the validity of the taking. The Government can then decide whether to accept or refuse at the price fixed.

 The Court is of opinion these cases are not applicable to the present case. Other than the fact the initial pleading in this case was denominated a complaint rather than a declaration of taking, the proceeding in all respects partook of the nature of a declaration of taking. The statutory authority cited, the same as that cited in the earlier case vesting title in the United States, included that of former 40 U.S.C.A. §§ 361-386, recodified as D.C.Code 1951, §§ 16-619 to 16-644, which contemplates a declaration of taking procedure in § 16-628. In accordance with that section, there is a statement of statutory authority, an identification of the property, a statement of the estate taken, a technical description of the property, and a statement of estimated just compensation. The sum estimated as just compensation for the entire yearly period was deposited in the registry of the Court. Without objection, the Government permitted an award by the Court to the owners for the first four months of tenancy in an order which described the estate as having been acquired. In the two notices of termination and surrender, the United States recognized and denominated its interest as an estate.

 The considerations governing the procedure in the cases cited are also not applicable here. Title had vested in the earlier proceeding by which the United States was in possession of the property for more than three years when this action was filed. Judgment had been entered in such proceeding which served as a fair indication of the amount of rental that might be expected to be awarded as just compensation. The United States itself had defined the terms whereby it could terminate the estate, thereby protecting itself against having to take an estate beyond the term it might be of benefit to the Government, by providing for termination at any time after September 1, 1954, two months after the estate began, upon sixty days' notice. The Court is of opinion the United States could not abandon the estate except pursuant to the terms of the taking. United States v. Hayes, 9 Cir., 1949, 172 F.2d 677; United States v. Sunset Cemetery Co., 7 Cir., 1942, 132 F.2d 163; United States v. Certain Parcels of Land in City of Baltimore, Md., D.C.Md.1945, 61 F.Supp. 164.

 In addition to this, it appears the Government never chose to surrender possession by motion to dismiss filed in this case, as would be required. It proceeded at all times, including when posting the two notices, as if it were relying upon the complaint filed in this action, which in effect led the owners to rely on its terms.

 The owners were entitled to be apprised with a reasonable degree of certainty of the intentions of the condemnor before they could be expected to know what preparations to make, as well as when, to take over the property. Many changes had been made in preparing the property for Government use in 1951. Extensive changes would have to be made, either by the owners or by the Government, in restoring the building. The Government at its election could make full, partial, or no restoration, being liable for the reasonable cost of whatever restoration had not been completed, less reasonable and ordinary wear and tear from normal use, and reasonable rental for the period while restoration was completed. Spreckels v. United States, 1927, 63 Ct.Cl. 64; United States v. 37.15 Acres of Land, More or Less, in Mariposa County, Cal., D.C.Cal.1948, 77 F.Supp. 798; United States v. 14.4756 Acres of Land in Christiana Hundred, New Castle County, D.C.Del.1947, 71 F.Supp. 1005. The owners could not hold the Government liable for rental upon their refusal to take the premises because it was not completely restored, Riverside Military Academy v. United States, 1952, 122 Ct.Cl. 756, or for the period while negotiations were in progress, Spreckels v. United States, supra, or for any failure to remove its property after the premises were vacated, Colton v. United States, 1930, 71 Ct.Cl. 138, or for any failure to give formal notice when the parties knew what was required and acted on that basis, Smith v. United States, 1942, 96 Ct.Cl. 326. The owners did, however, have a right to be fairly informed of what election the Government had made so that they might know what materials and work force were necessary. So long as the Government had not resolved, and revealed to the owners, what restoration it would make, the owners could not reasonably know what was expected of them

 The Government maintains there is no liability for rental beyond October 31, 1954, because it acted at all times as would a reasonable man in attempting to prevent costs to the Government beyond that absolutely necessary by terminating the estate forthwith in accordance with the request of the Administrator of the General Services Administration, dated August 28, 1954, that the pending proceedings be terminated 'at the earliest possible date subsequent to September 1.' This phrase may not be interpreted as necessarily meaning immediately, but must be construed as requesting termination as soon as possible according to the best interests of the Government. The order would necessarily involve considerations of removal of Government property from the premises, the extent to which restoration should be made by the Government, possibilities of compromise, and similar factors. Until responsible Government agencies had decided upon a course of action in the light of these considerations, the earliest ...

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