Mouat v. United States, 49896.

• Decision Date: 02 March 1954
• Docket Number: No. 49896.,49896.
• Citation: 119 F. Supp. 499,127 Ct. Cl. 590
• Parties: MOUAT v. UNITED STATES.
• Court: U.S. Claims Court

119 F. Supp. 499

127 Ct. Cl. 590

MOUAT v. UNITED STATES.

No. 49896.

United States Court of Claims.

March 2, 1954.

H. Lowndes Maury, Butte, Mont., and Ralph E. Becker, Washington, D. C., Alfred G. Shone, Butte, Mont., on the briefs, for plaintiff.

Thomas L. McKevitt, Washington, D. C., Perry W. Morton, Asst. Atty. Gen., for defendant.

Before JONES, Chief Judge, and LITTLETON, WHITAKER, and MADDEN, Judges.

JONES, Chief Judge.

The plaintiff for himself and other interested parties, and as administrator of the estate of his deceased wife, instituted this suit for the value of certain improvements which it is alleged were taken by the Government and converted to its own use. For simplicity the various parties at interest will be referred to as the plaintiff.

The plaintiff owned three patented tracts and several unpatented lode and placer claims located in Custer National Forest Reserve in Stillwater County, Montana.

On December 20, 1941, the plaintiff, as lessor, entered into a 10-year lease contract with the Metals Reserve Company, a government corporation created by the Reconstruction Finance Corporation.

This case concerns improvements on two of these unpatented claims.

By the terms of the lease it was agreed that plaintiff would be paid a royalty of at least $10,000 per year on chromite ore and other minerals or metals mined from the leased premises, with a proviso that if operations were suspended for any of several reasons the payment would likewise be suspended for such period, and that on 90 days' notice and the payment of $1,000 the defendant could terminate the lease.

The lease also contained the following provision:

"Upon the expiration of this lease or the termination of this lease for any reason by either party, lessee shall have six (6) months additional time to remove from the leased premises its personal property and its tools, equipment, machinery, tracks and tramways, but shall leave intact all mine workings and timbering, ties and all excavations, foundations, wooden mine structures, wooden tramway towers and wooden buildings erected upon the demised premises and ore on dumps upon which royalties have not been paid.

* * * * *

"17. Time is of the essence of this agreement * * *.

"18. It is mutually agreed that this lease is a Montana contract, and shall be interpreted and construed under and by the laws of the State of Montana.

* * * * *

"20. Lessee agrees with the lessors that unless there is an understanding to the contrary in writing, anything remaining on the premises herein demised and leased upon the termination hereof, for a period of more than six months after such termination, shall conclusively be deemed to have been abandoned by the lessee in favor of the lessors.

* * * * *

"22. Promptly upon receipt of lessee's written request, lessors will execute and deliver to lessee a quit claim deed to all of lessors' right, title, and interest in and to property not to exceed 200 acres, to be designated by lessee for use by lessee for millsites, townsites, stock piling and tailings disposal."

There is no evidence in writing of any variation in these terms. However, in conferences preceding the execution of the lease it was understood that the structures erected by the lessee for use as a townsite and millsite would be built on land to be conveyed by the lessors by quitclaim deed and that the term "wooden buildings" in paragraph 15 would not apply to buildings on the townsite, but would apply to buildings at the millsite, and that the wooden buildings to be left on the premises included tool houses, machine houses and other structures necessary to mining operations.

There was objection on the part of plaintiff to this evidence as an effort to vary the terms of the written lease and on the ground that all previous negotiations were merged in the written instrument. If the provisions of the lease contract are clear it is the generally accepted rule that prior negotiations and conversations may not serve to vary the terms of an unambiguous document that is finally agreed upon.

There is no evidence that the lessors were ever requested to execute or deliver any quitclaim deed to any part of the leased premises and none was executed. The townsite and millsite structures, loading platforms, machine shops, and other improvements were constructed on the leased premises.

On February 16, 1942, the Defense Plant Corporation, a wholly owned subsidiary of the Reconstruction Finance Corporation, acting for itself and the Metals Reserve Company, obtained from the Forest Service, Department of Agriculture, a special use permit for the purpose of carrying on mining operations within the forest reserve. The permit covered the leased lands here involved and some additional areas. The conditions of the permit are set out in finding 5.

During the year 1942 the Defense Plant Corporation constructed within the Lake Placer claims of plaintiff seventy-three 3- and 4-room dwellings, some additional duplexes, bunkhouses, a mess hall, a store building, a first-aid house, a postoffice building and a garage.

The townsite extended beyond the leased premises onto adjacent property.

The Metals Reserve Company paid the plaintiff the minimum royalty for 1942 and the royalty payment for 1943 exceeded the minimum stipulated. Production of ore on the leased premises ceased on October 1, 1943. On June 30, 1945, by act of Congress, the Metals Reserve Company was dissolved and its functions, assets, and liabilities were transferred to the Reconstruction Finance Corporation which was made subject to all existing liabilities.

By the payment of the required sum of $1,000 and written notice to the lessors on November 19, 1945, the Reconstruction Finance Corporation terminated the lease, effective February 28, 1946. The Reconstruction Finance Corporation, however, did not surrender possession of the leased premises but continued to hold over all of said lands until the close of business on August 31, 1946, at which time the War Assets Administration assumed the actual control and custody of the premises and held them until possession was restored to the lessors by the United States District Court for the District of Montana, pursuant to judgment entered June 11, 1949.

The Defense Plant Corporation had on April 16, 1945, declared to the Surplus Property Administration that the improvements at the mine and townsite located on the leased premises and those at the millsite situated on lands which had been acquired by condemnation proceedings were surplus property.

During the 6-month period from February 28 to August 31, 1946, certain of the properties as listed in finding 10 were removed from the townsite area on the Lake Placer claims.

After August 31, 1946, the War Assets Administration removed from the Lake Placer leased premises twenty-one 3-room houses which had a market value at that time of $400 each, or a total value of $8,400.

The plaintiff claims compensation under the Fifth Amendment for the properties removed by the Reconstruction Finance Corporation during the 6-month period prior to August 31, 1946, and also for the properties removed by the War Assets Administration from the Lake Placer leased premises after August 31, 1946.

Since we regard the provisions of the lease contract as clear, we find the plaintiff is entitled to the value of the properties removed from the leased premises in violation of the terms of the lease agreement.

But here a complicating feature comes into the picture.

On September 17, 1946, the...