Twin Cities Properties, Inc. v. United States

87 Ct. Cl. 531, 1938 U.S. Ct. Cl. LEXIS 140, 1938 WL 4015
CourtUnited States Court of Claims
DecidedNovember 14, 1938
DocketNo. 43088
StatusPublished
Cited by3 cases

This text of 87 Ct. Cl. 531 (Twin Cities Properties, Inc. v. United States) is published on Counsel Stack Legal Research, covering United States Court of Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Twin Cities Properties, Inc. v. United States, 87 Ct. Cl. 531, 1938 U.S. Ct. Cl. LEXIS 140, 1938 WL 4015 (cc 1938).

Opinion

Williams, Judge,

delivered the opinion of the court:

The plaintiff seeks to recover the sum of $24,166.39, alleged to be due from the defendant for unpaid rent for the period March 1, 1935, to June 30, 1935, under a lease of a parcel post station at Minneapolis, Minnesota.

Suit is based on a lease made between the Federal Building Realty Corporation and the Postmaster General bearing date of December 8, 1923. The lease by its terms superseded and cancelled an earlier lease dated October 5, 1922, between the same parties for the same premises. The two leases contained identical provisions with the exception that a provision in the earlier lease of October 5, 1922, reading “It is agreed and understood by the parties hereto that this lease may be terminated whenever the post office for the use of which this lease is made can be moved into a Government building upon ninety days’ notice to the lessor of the intention of the Department so to terminate,” was omitted from the lease of December 8, 1923.

The lease of December 8, 1923, contained the following-provision : “It is understood and agreed that this lease supersedes and cancels the lease for the same quarters dated October 24, 1922, for the same period at the same rental.” The Federal Building Realty Corporation paid the defendant no additional consideration in connection with the execution of the lease of December 8, 1923.

The plaintiff’s right to recover depends entirely upon the validity of the lease of December 8, 1923. The defendant contends that this lease was a nullity and wholly invalid, and that the first lease was the only valid subsisting con[541]*541tract between the parties from July 5, 1922, to March 6, 1935, when the defendant surrendered possession of the premises.

The facts disclose that in response to an advertisement of the United States Post Office Department for proposals for the construction and lease of a parcel post station in Minneapolis, Minnesota, Johnson, Drake & Piper, Inc., on December 29,1921, submitted to the Post Office Department its proposal to erect for, and lease to, the defendant such parcel post station for a term of 20 years from June 15, 1922, or subsequent date as might be designated, “subject to the provisions of the lease contract used by the Post Office Department, excluding, however, the cancellation clause, or clauses, therein.” The cancellation clause of lease contracts of the Post Office Department excluded by Johnson, Drake & Piper, Inc., in its proposal, is the one which reads:

It is agreed and understood by the parties hereto that this lease may be terminated whenever the post office for the use of which this lease is made can be moved into a Government building upon ninety days’ notice to the lessor of the intention of the Department so to terminate.

Under the act of March 3,1885, the inclusion of this provision was mandatory in all leases for premises for use as a post office.

After the submission of its proposal certain officers of Johnson, Drake & Piper, Inc., conferred with officials of the Post Office Department, including Dr. Hubert Work, First Assistant Postmaster General, with particular reference as to whether or not a noncancellable lease could be given by the Post Office Department. The officers of Johnson, Drake & Piper, Inc., stated in these conferences that the corporation was unwilling to proceed with the erection of a parcel post station unless it would eventually receive a noncan-cellable lease. Officials of the Post Office Department, including Dr. Work, stated that as soon as the present law was amended to permit the giving of a noncancellable lease such noncancellable lease would be given to Johnson, Drake & Piper, Inc., and further informed such officers that amend-atory legislation had been contemplated for some time and [542]*542that the Postmaster General bad contacted certain Congressional leaders who had assured him that the prohibitory clause would be eliminated. The officers were further advised by Dr. Work that since it might take several months to secure the proposed change in the laAv, Johnson, Drake & Piper, Inc., might have to temporarily take a cancellable lease in order to secure payment of the rent, but that as soon as the law was changed, a noncancellable lease would be given.

Acting upon this understanding Johnson, Drake & Piper, Inc., Began the construction of the parcel post station, but early in 1922, before the building was completed, and before a formal lease had been entered into, Johnson, Drake & Piper, Inc., organized the Federal Building Realty Corporation for the purpose of taking title to the property and arrangements were completed with the defendant whereby the Federal Building Realty Corporation would become the lessor of the premises. In October 1922 the Federal Building Realty Corporation received from the Post Office Department a lease to the parcel post station. The lease covered a 20-year period beginning July 5, 1922, and carried an annual rental of $11,900. It was filed in the land records of Hennepin County, Minnesota, October 30, 1922. This lease contained the provision that “the lease may be terminated whenever the post office for the use of which this lease is made can be moved into a Government building upon ninety days’ notice to the lessor of the intention of the department so to terminate.” The act of March 3, 1885 (23 Stat. 385, 386), was repealed by Congress on June 19, 1922 (42 Stat. 652, 656), so that at the time the original lease was executed the Postmaster General had full authority to make a noncancellable lease, but apparently that fact was overlooked by the parties to the lease and the cancellable provision of the act of March 3,1885, was inserted although it had been agreed between the Post Office Department and Johnson, Drake & Piper, Inc., that a noncancellable lease would be given as soon as the law had been amended permitting that to be done.

Early in 1923, following the execution of this lease, an officer of the Federal Building Realty Corporation in Min[543]*543neapolis telephoned Postmaster General Work seeking1 to ascertain when the noncancellable lease would be executed. Dr. Work advised him that it would come through, but that it would take several months, and assured him there was no question, but that the Federal Building Realty Corporation would receive the kind of lease it had been promised. Following this telephone conversation there were no further communications or negotiations of any kind between the parties in respect to the lease until December 28, 1923, when the Post Office Department transmitted to the postmaster at Minneapolis the second lease, dated December 8, 1923, with instructions that it be delivered by him to the Federal Building Realty Corporation, as lessor, and with the further directions that the copy marked “original” should be recorded at the expense of the lessor, and that the copy marked “duplicate” should be retained by the lessor. The lease was duly received by the Federal Building Realty Corporation from the postmaster on December 31,1923, and in accordance with the directions of the defendant the “original” was recorded on January 3,1924, in the land records of Hennepin County, Minnesota, and was returned by the lessor to the postmaster on January '21, 1924, the lessor retaining for its files the “duplicate.”

On September 15, 1926, the plaintiff, Twin Cities Properties, Inc., purchased from the Federal Building Realty Corporation the real estate subject to the lease of December 8, 1923.

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Related

Eastern Building Corp. v. United States
96 Ct. Cl. 399 (Court of Claims, 1942)
Twin Cities Properties, Inc. v. United States
90 Ct. Cl. 119 (Court of Claims, 1939)

Cite This Page — Counsel Stack

Bluebook (online)
87 Ct. Cl. 531, 1938 U.S. Ct. Cl. LEXIS 140, 1938 WL 4015, Counsel Stack Legal Research, https://law.counselstack.com/opinion/twin-cities-properties-inc-v-united-states-cc-1938.