United States v. 1,830.62 A. OF LAND IN BOTETOURT COUNTY

• Citation: 51 F. Supp. 158
• Decision Date: 12 August 1943
• Docket Number: No. 60 Civil.,60 Civil.
• Parties: UNITED STATES v. 1,830.62 ACRES OF LAND IN BOTETOURT COUNTY, et al.
• Court: U.S. District Court — Western District of Virginia

51 F. Supp. 158

UNITED STATES v. 1,830.62 ACRES OF LAND IN BOTETOURT COUNTY, et al.

No. 60 Civil.

District Court, W. D. Virginia, at Harrisonburg.

August 12, 1943.

Tom Stockton Fox and Harvey B. Apperson, both of Roanoke, Va., for petitioner, Standard Acc. Ins. Co.

W. P. Hazlegrove, of Roanoke, Va., for receiver of Triton Chemical Co.

PAUL, District Judge.

In January, 1942, the United States instituted this suit in condemnation to acquire certain real estate in Botetourt County, in this district, consisting of a tract of land with the buildings thereon and constituting a plant then owned by the Triton Chemical Company, Inc., a corporation having its residence in the State of Delaware, and operated by this company in the manufacture of explosives or explosive compounds.

After some delay, occasioned by efforts to agree upon a value of the property, the condemnor filed a formal declaration of taking and on June 12, 1942, paid into the registry of the court the sum of $465,000, its estimated value of the property taken. In the meanwhile a petition in bankruptcy was filed against the Triton Chemical Company in the district of Delaware on February 24, 1942, to which the company answered denying its insolvency. It being considered that the solvency of the company would depend upon what amount it ultimately received for the plant which was being condemned, the Delaware court refrained from any attempt to pass upon the issue of solvency at that time, but on September 4, 1942, appointed Caleb R. Layton as bankruptcy receiver for the company pending the final award in the condemnation case. On September 10, 1942, this court appointed Caleb R. Layton and W. P. Hazlegrove as ancillary receivers in this district to represent and protect the company in the condemnation proceeding and, at their request, authorized them to continue negotiations with the government in an effort to agree upon an amount to be paid by the latter for the property taken.

It was apparent from the beginning of the proceedings that there were a number of liens against the property being condemned which would have to be paid out of the award, as provided by the condemnation act, Sect. 4374, Code of Virginia. These consisted of unpaid taxes, Federal and State, liens by deed of trust, and mechanics liens. Pending the negotiations as to the value of the property, it was agreed that a reference should be had to ascertain the liens in order that they might be paid as promptly as possible out of the fund previously deposited by the condemnor, thereby stopping the accrual of interest and expediting the disbursal of the balance of such sum as might finally be awarded. The liens were ascertained and, by an order of June 14, 1943, were ordered paid in an amount aggregating approximately $235,000.

Shortly thereafter the ancillary receivers reported that they had reached an agreement with the condemnor for the payment of $567,500 as full compensation for the property taken and, in order to follow the prescribed procedure of the condemnation statute, Virginia Code, Sect. 4366, commissioners were appointed who met on June 19, 1943, and returned an award in the agreed amount. This sum was $102,500 in excess of the amount previously deposited by the condemnor with its declaration of taking. All liens against the property have been paid and there being no adverse claims of title, it has been the expectation of this court that when the balance of the award shall have been paid the fund in the registry of the court will be paid over to the receiver in bankruptcy of the Delaware court, or to such other officer of that court or other person legally entitled to receive the estate of the condemnee.

It will be seen that the suit is purely one in condemnation, having for its purpose the ascertainment of the value of lands taken and the distribution of the compensation for such lands to such persons as are entitled thereto. The ascertainment of the liens on the property and their payment are an essential step in the last named purpose. The case differs in no way from any other condemnation case, except for the delay due to the negotiation of an agreed award and in the fact that the landowner is now represented by a bankruptcy receiver.

In this situation, the Standard Accident Insurance Company has filed what it terms its answer and intervening petition in which it sets out substantially the following: That on September 18, 1941, before this suit was instituted and while the Triton Chemical Company was operating its plant, it (the Triton Company) entered into a contract with the United States Government to furnish the latter with a large amount of trinitrotoluol and that the government agreed to advance to the Triton Company $260,000 to facilitate performance of the contract. That the government required the Triton Company to execute a bond in the sum of $260,000 guaranteeing the repayment of the sum so advanced. That the government also required the Triton Company to execute another bond in the amount of $43,500 to guarantee its performance of the contract. That on September 18, 1941, the Standard Accident Insurance Company executed both of these bonds as surety for the principal obligor.

The petitioner then states that it is not accurately informed to what extent if any the Triton Company has failed to perform its contract with the government for the delivery of trinitrotoluol but that it believes that it has not fully performed its undertakings in that respect. That neither does the petitioner know to what extent the Triton Company has repaid the $260,000 advanced to it, but believes that a substantial part of such advance remains unpaid. That because of the bankruptcy proceedings against the Triton Company and for other reasons there has arisen serious question as to the solvency of the Triton Company and its ability to meet its obligations under the bonds mentioned and that petitioner is apprehensive that the government may make claims against it and seek to impose liability upon it as surety on said bonds.

The petitioner further asserts that, in addition to condemning the real estate of the Triton Company, the government seized and took possession of certain personal property of the Triton Company of a value of at least $121,975.19 for which the Triton Company has a claim. It asserts that when this amount is taken into account, along with the $465,000 paid into court with the declaration of taking and such additional amounts as may be finally awarded for the real estate, there will be either under control of the court, or in the possession of the government, sufficient funds to discharge any liability which might be asserted against petitioner by reason of its suretyship.

The petitioner prays that the United States be required to disclose in these proceedings the amount, if any, in which the Triton Company is indebted to the government by reason of the contract of September 18, 1941; what balance is due the government on its $260,000; and what amount the government owes the Triton Company for the personal property of the latter taken by the government. It is further prayed that, upon such disclosures being made, the government be required to apply the amount it owes for the personal property, or for any other reason, to the obligations owed by the Triton Company, to the exoneration of the petitioner; or if this be not sufficient for that purpose and if there be an additional award in these proceedings, the government be compelled to apply the amount of such additional award to the same purpose; or that if the obligations of the Triton Company to the government be not paid from the amount owed for the personal property taken or from any additional award in this case, then that so much as is necessary of the $465,000 already paid into court be applied to discharge the liabilities of the Triton Company to the government and to exonerate petitioner as surety on the bonds.

It should be noted that the petition was prepared and filed in the Clerk's office some months ago before any additional award for the real estate had been made and before the liens on the property had been ascertained. This accounts for the fact that the petition refers to the additional award as a future possibility and in other unimportant respects is not in conformity with the facts existing as this is written. The change in the situation does not, however, affect the determination of the questions raised by the...