Huntt v. Government of Virgin Islands

• Decision Date: 07 April 1967
• Docket Number: No. 15871.,15871.
• Citation: 382 F.2d 38
• Parties: Leslie F. HUNTT v. The GOVERNMENT OF the VIRGIN ISLANDS, Appellant.
• Court: U.S. Court of Appeals — Third Circuit

382 F.2d 38 (1967)

Leslie F. HUNTT v. The GOVERNMENT OF the VIRGIN ISLANDS, Appellant.

No. 15871.

United States Court of Appeals Third Circuit.

Argued September 26, 1966.

Decided April 7, 1967.

Rehearing Denied May 24, 1967.

COPYRIGHT MATERIAL OMITTED

Francisco Corneiro, Atty. Gen. of the Virgin Islands, Charlotte Amalie, St. Thomas, V. I., for appellant.

John D. Marsh, Christiansted, St. Croix, V. I. (Young, Isherwood & Marsh, Christiansted, St. Croix, V. I., on the brief), for appellee.

Before KALODNER, HASTIE and SMITH, Circuit Judges.

OPINION OF THE COURT

KALODNER, Circuit Judge.

In this action by the plaintiff against the Government of the Virgin Islands ("Government") for specific performance of an alleged contract to issue its revenue bonds on behalf of the plaintiff for the construction of a hotel project on the Island of St. Croix in promotion of its economy, the court below granted specific performance of the contract. This appeal followed.

The issues presented are, in broad outline, whether the court below erred (1) in transcending permissible limits of judicial action in its Judgment decreeing Government's performance of the contract, assuming arguendo, existence of a contract, and (2) in ruling that a contract had been entered into by Government with the plaintiff.

This is the second time this case has been here. In 1964, we reversed the District Court's entry of judgment on the pleadings, which sought specific performance or in the alternative damages, in favor of the defendant, 3 Cir., 339 F.2d 309, 311, on our view that "a full record is necessary for the determination of the issues", and, "Assuming arguendo that it may be determined ultimately that the bonds could not be issued because prohibited by law, it does not necessarily follow that the plaintiff may not be entitled to the damages claimed by him in the alternative or some part of them."

In the proceedings following remand, the plaintiff, by amendment to his complaint, withdrew his claim for damages and sought only to compel specific performance of the obligations of the alleged contract, i. e., to require Government to issue its revenue bonds to finance the earlier stated hotel project.

Since the instant controversy has its genesis in the Revised Organic Act of the Virgin Islands, as amended in 1958, a resolution adopted by the legislature of the Virgin Islands and subsequent legislation, their consideration is essential before we proceed to resolution of the issues presented by this appeal.

The Revised Organic Act of the Virgin Islands, as amended in 1958, in Section 8(b), 48 U.S.C.A. § 1574(b), authorized the Legislature of the Virgin Islands to "cause to be issued on behalf of said government of the Virgin Islands bonds or other obligations (1) for a specific public improvement or specific public undertaking authorized by an act of the legislature, and (2) for the establishment, construction, operation, maintenance, reconstruction, improvement, or enlargement of other projects, authorized by an act of the legislature, which will, in the legislature's judgment, promote the public interest by economic development of the Virgin Islands". It further provided that "Such bonds or obligations shall be payable solely from the revenues directly derived from and attributable to such specified public improvement, public undertaking, or other project. * * *"¹

Ostensibly pursuant to the authority granted by the 1958 amendment of the Revised Organic Act, the legislature of the Virgin Islands promulgated Resolution No. 147 on January 19, 1960. This Resolution recited that:

* * * * * *

"Whereas Leslie F. Huntt and Associates are exploring the possibility of establishing a hotel, apartments, stores, offices, garages, and commercial space in the Virgin Islands * * * and

"Whereas the Legislature of the Virgin Islands considers that such facilities if established would promote the public interest by assisting in the economic development of the Virgin Islands; Now, Therefore

"Be it Resolved by the Legislature of the Virgin Islands, that the issuance of revenue bonds or other obligations pursuant to § 8(b) of the Revised Organic Act of the Virgin Islands is hereby authorized for the purpose of establishing the facilities described above, providing specific plans therefor are approved by the Legislature, and providing that the development created thereby shall promote the public interest by economic development of the Virgin Islands."

The Resolution concluded with the statement that:

"On approval of said plans, the Legislature will take steps as are necessary to implement § 8(b) of the Revised Organic Act of the Virgin Islands to provide funds by the issuance of revenue bonds or other obligations for the establishment of said facilities."

Subsequently, the Legislature passed Act No. 577 (approved June 3, 1960). This Act referred to Resolution No. 147 as having authorized the issuance of revenue bonds pursuant to Section 8(b) of the Revised Organic Act, as amended, for the purpose of establishing a hotel, etc. in the Virgin Islands by Leslie Huntt and Associates, and stated that: "* * * it is the judgment of the Legislature that such facilities will promote the public interest by economic development of the Virgin Islands." The Act provided that issuance of bonds, in accordance with Section 8(b), in the amount of $3,000,000, for the purpose of establishing, constructing, operating and maintaining a hotel, etc. by Leslie Huntt and Associates "is hereby authorized and approved," and that "The Commissioner of Finance upon approval of the Governor of the Virgin Islands is directed and authorized to take such steps as are necessary to issue the bonds herein authorized * * * upon application by Leslie Huntt and Associates or such corporation as may be designated by Leslie Huntt and Associates."

Thereafter, the Legislature passed Act No. 743 (approved June 12, 1961), which provided that "notwithstanding" several Acts, including Act No. 577 "all authorizations for the issuance of bonds or other obligations heretofore or hereafter approved by the Legislature pursuant to section 8(b) of the Revised Organic Act of the Virgin Islands shall be effectuated in accordance with rules and regulations prescribed by the Commissioner of Finance and approved by the Governor" (emphasis supplied). Act 743 further provided that: "Subject to the provisions of the said section such rules and regulations shall provide for the issuance of appropriate certificates of tax exemption to the beneficiaries issuing the bonds or other obligations, and for the designation in the case of private beneficiaries of trustees to protect the interests of the Government of the Virgin Islands."

Subsequently, by Act No. 850 (approved March 16, 1962), the Legislature specifically repealed the foregoing Acts and all other Acts "relating to or authorizing the issuance of bonds or other obligations heretofore approved by the Legislature pursuant to Section 8(b) of the Revised Organic Act of the Virgin Islands * * *."

The District Court found, as "facts", that Resolution No. 147 evidenced the Legislature's "intention to authorize to Leslie F. Huntt and Associates the issuance of government bonds or other obligations for the construction of a hotel project in the Virgin Islands"; that plaintiff, relying on this Resolution, employed an architect and caused plans to be prepared and submitted to the Legislature for approval; that as a result of plaintiff's efforts having met the approval of the Legislature, Act No. 577 "came into being"; that Act No. 743 was enacted to clarify and implement the issuance of the bonds referred to in Act No. 577; that plaintiff requested the Governor to promulgate rules and regulations pursuant to Act No. 743; that in September, 1961, at the Governor's suggestion, plaintiff submitted a proposed draft of rules and regulations; that plaintiff expended $29,807.37 in travelling expenses and an additional $12,000 in other expenses in attempting to bring about his business venture; that he consumed approximately 644 days in working on the project and that his time was worth $175.00 per day; that on March 7, 1962, the Legislature repealed Act No. 577; and that this repealing Act, No. 850, was approved by the Governor on March 16, 1962.

Consistent with the contentions of the plaintiff, the District Court stated the following conclusions of law: that "Resolution No. 147 constituted an offer on the part of the Virgin Islands Legislature whereby it agreed to take such steps to initiate the issuance of bonds upon plaintiff providing specific plans which would have to be approved by the Legislature"; that "* * * plaintiff accepted the offer referred to above when such plans were submitted to the Legislature"; that "The Legislature and the Governor by enacting Act No. 577, which accepted plaintiff's plans, entered into a legally binding contract on behalf of the Government of the Virgin Islands with the plaintiff"; that "* * * plaintiff has done all that was required of him under the terms of the contract"; that "* * * defendant has breached its contract in failing to promulgate the rules and regulations as set forth in Act No. 743, by its attempt to repudiate the contract referred to above by enacting Act No. 850, and by its failure to issue the bonds"; that "Act No. 850 which attempted to repeal the enabling provisions of Act No. 577 is unconstitutional in that it is contrary to Section 3 of the `Revised Organic Act of the Virgin Islands' * * which provides that `no law impairing the obligation of contract shall be enacted'. Trustees of Dartmouth College v. Woodward, 4 Wh. 518 4 L.Ed. 629 (1819)"; that "An award of damages * * * would be inadequate"; and that "To compel specific performance would do more complete and perfect justice, because of the special features of the contract which the parties entered into." Accordingly, the District Court entered the judgment...