Syquia v. United States, 50130.

• Decision Date: 05 October 1954
• Docket Number: No. 50130.,50130.
• Citation: 124 F. Supp. 638
• Parties: Pedro SYQUIA, Gonzalo Syquia and Leopoldo Syquia v. The UNITED STATES.
• Court: U.S. Claims Court

124 F. Supp. 638

Pedro SYQUIA, Gonzalo Syquia and Leopoldo Syquia v. The UNITED STATES.

No. 50130.

United States Court of Claims.

October 5, 1954.

John P. Lipscomb, Jr., Washington, D. C., for plaintiffs. Allison J. Gibbs, Manila, Philippine Islands, Frederic P. Lee and Alfred M. Osgood, Washington, D. C., were on the briefs.

Walter Kiechel, Jr., Washington, D. C., with whom was Warren E. Burger, Asst. Atty. Gen., for defendant.

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

LITTLETON, Judge.

Plaintiffs, citizens and residents of the Philippine Islands, owned three apartment buildings in the City of Manila, Philippine Islands. These buildings were leased to defendant in 1945 for "the duration of the war and six months thereafter," unless sooner terminated by defendant. This suit is brought to recover the difference between the rental specified in the leases, which was paid to plaintiffs by defendant, and the alleged reasonable rental value of the buildings, during the period between the alleged term of the leases with defendant and the release of the properties by defendant, in 1948. Plaintiffs' petition is in the alternative, the allegations being that the leases terminated: (1) six months after August 14, 1945, the end of hostitities; (2) six months after September 1, 1945, the formal surrender of Japan; or (3) six months after May 11, 1946. The amounts claimed on the basis of the various alternatives are, respectively: (1) $200,750; (2) $189,800; or (3) $178,850.

The sole issue presently presented at this stage of the case is the meaning of the term "the duration of the war" as used in the lease agreements. Plaintiffs contend that this phrase means the duration of actual hostilities. Defendant asserts that it means a period terminated by formal peace treaty or similar political act, and that the properties were, therefore, returned to plaintiffs long before the termination of the "war" by treaty.

After plaintiffs had completed the presentation of their evidence, defendant moved to dismiss plaintiffs' petition pursuant to Rule 49(b) now Rule 49(c), Rules of Court of Claims, 28 U.S.C.A. on the ground that upon the facts and the law plaintiffs had shown no right to recover.

The evidence shows that plaintiffs owned three apartment buildings in the City of Manila. February 25, 1945, two days after organized resistance by Japanese troops in Manila had ceased, plaintiffs, who had previously evacuated from their apartments to an area free from combat as the battle for Manila progressed, secured permission from the military authorities to visit the apartment buildings, prior to the date they were rented to defendant. Plaintiffs found that the buildings had been extensively damaged, that looting had occurred, and that U. S. soldiers were occupying the apartments.

In response to an inquiry by plaintiffs, the Army Provost Marshal advised them that it was not possible to post guards on private property, but he suggested that if the apartment buildings were leased to the Army, the Army would post guards to prevent looting and damage. Plaintiffs decided to lease the properties to the Army to protect them from looting, and thereafter offered to lease the buildings to defendant.

On February 27 or 28, 1945, plaintiffs and an agent of defendant inspected one of the buildings, and on March 7, 1945, executed a lease for this building "for the period of the war and six months thereafter," with defendant to pay "as rental the fair present rental value of the property as determined by competent authority." On March 23, 1945, plaintiffs and an agent of defendant inspected the other two buildings and executed leases therefor with these same provisions.

On July 8, 1945, for two of the buildings, and on August 7, 1945, for the third building, plaintiffs and defendant executed leases superseding the earlier ones. These leases, containing specified rentals, were made retroactive to the date of the earlier leases, and extended therefrom "for the duration of the war and six months thereafter," unless sooner terminated by defendant.

These leases were on printed forms supplied by the defendant, the printed portions of which included the phrase "for the duration of the war and six months thereafter." At the time the leases were entered into and executed, neither plaintiffs not defendant's contracting officer or any other agent of defendant discussed the phrase above quoted. Plaintiffs now contend, and testified, that it was their understanding that the phrase referred to actual hostilities and they contend that the evidence taken before the Commissioner tends to establish the truth of that contention. For the reasons hereinafter stated we agree with the position taken by plaintiffs.

Toward the end of the year 1945, after hostilities had ceased, officers billeted in the buildings were notified by defendant to vacate them. Plaintiffs then expected that the buildings when so vacated would be returned to them. However, defendant made further repairs to the buildings and thereafter used them to house officers' families, a use for which the buildings had not been originally leased.

Sometime early in 1946, plaintiffs requested that the buildings be returned to them, insisting that the leases had, by their terms, expired six months after V-J Day. This request, made in March 1946, was denied by defendant. Plaintiffs then made efforts to secure increased rentals from defendant, but without success.

In a letter dated May 11, 1946, after the plaintiffs' request that the apartment buildings be returned to them had been turned down, plaintiffs sought a "renegotiation" of the leases, based "on the announced intention of the Army to continue to occupy them for the officers' families." Plaintiffs were informed that a contract could not be altered to the detriment of the Government, but that vacation of the properties prior to February 1, 1947 was contemplated.

On June 28, 1946, plaintiffs requested cancellation of the leases and that the apartments be returned to them. On July 31, 1946, defendant then advised plaintiffs that it planned indefinite use of the buildings, and that they could not be released at that time. Further efforts on plaintiffs' part to end the leases or secure higher rentals from defendant, or to have the buildings returned to them by the Army, were also unsuccessful.

On February 17, 1947, plaintiffs served formal notice upon the then Commanding General in the Philippines, the then Chief of the Real Estate Division in the Engineer's Office, and the 64 occupants of the apartment buildings, to cancel the leases, to increase the rental, and either to execute new leases or release the apartments within thirty days thereafter. This failing, an action of unlawful detainer was instituted by plaintiffs against these parties in the Municipal Court of Manila. That court found that the war between the United States and her allies and Germany and Japan had not terminated, that the terms of the leases had not expired, and that the United States, the real party in interest, could not be sued in the courts of the Philippines without its consent. On appeal, the Court of First Instance of Manila affirmed the decision on the jurisdictional ground, as did the Supreme Court of the Philippines, to which a further appeal was taken by plaintiffs.

On January 12, 1948, plaintiffs were notified that the buildings would be vacated as soon as it was practicable to do so, and formal notices of cancellation were served on plaintiffs, stating that the three buildings would be released on or about February 29, March 31, and May 31, 1948, respectively. The buildings were vacated on or before the specified dates, and the accrued rentals were thereafter paid to and received by plaintiffs, who accepted them under protest.

Defendant contends, in support of its motion to dismiss, that the term "duration of the war" as used in the leases in question meant a period terminated by peace treaty or similar political act, and that to construe the phrase otherwise there must be some manifestation, absent here, that the parties contracted with the intent to give the phrase a different meaning.

Most of the cases relied on by defendant to support this contention have to do with the construction of Federal statutes containing a grant of power to the Government as a Sovereign or to some agency thereof, for the "duration of the war" and six month. In interpreting those statutes the courts have held that the powers so granted continue until six months after the signing of the formal peace treaty or some other equivalent political act. These decisions, however, have been held not applicable¹ to cases involving the interpretation of contracts and leases containing similar or identical phrases defining the period for which they were to remain in effect.

When a lease of real estate or a contract contains a provision that the tenancy or performance is to continue "for the duration of the war," "until the conclusion of the war," "until the end of the war," and even "until the final treaty of peace has been signed," the majority of courts have held that in the absence of evidence that a different meaning was assigned to the phrase by both parties, such phrases are to be interpreted as they are commonly understood by laymen, and that such commonly understood meaning is "until actual hostilities have ceased." The practical effect of these decisions has been that in cases involving leases containing such phrase the courts have held that there is a presumption that the parties intended the leases to last only until the cessation of actual hostilities and for whatever additional definite period is provided for in the leases.

In most of the cases which have come to our attention the court has not found the presumption to be successfully rebutted even where one party's evidence tending to establish a contrary intention remained unrefuted. La...