United States v. 83.94 Acres of Land, Newport County, RI

• Decision Date: 17 May 1946
• Docket Number: Misc. No. 117.
• Citation: 65 F. Supp. 843
• Parties: UNITED STATES v. 83.94 ACRES OF LAND, NEWPORT COUNTY, R. I., et al.
• Court: U.S. District Court — District of Rhode Island

65 F. Supp. 843

UNITED STATES v. 83.94 ACRES OF LAND, NEWPORT COUNTY, R. I., et al.

Misc. No. 117.

District Court, D. Rhode Island.

May 17, 1946.

George F. Troy, U. S. Atty., of Providence, R. I., Samuel O. Clark, Jr., Asst. Atty. Gen., and Andrew D. Sharpe and Frank A. Michels, Sp. Assts. to Atty. Gen., for the Government.

Jerome Beaudrias, of Yonkers, N. Y. (I. J. Beaudrias, of Yonkers, N. Y., of counsel), for Bettie H. Smythe.

HARTIGAN, District Judge.

This matter was heard on a petition for distribution of funds deposited in the registry of the court and presents the question for decision whether the United States, in a condemnation proceeding wherein it is the condemnor, is entitled to have a federal estate tax liability (as a lien upon the land condemned) satisfied from the award which the United States deposited in the registry of the court for distribution.

September 30, 1941, the United States of America, pursuant to a request of the Acting Secretary of the Navy, filed a petition for condemnation of certain lands set forth therein and a declaration of taking and the sum of $60,002 estimated by the Acting Secretary of the Navy to be just compensation for all of said lands was deposited in the registry of the court for the use and benefit of all persons entitled thereto and an order and judgment on the declaration of taking was entered vesting title to the said lands in fee simple absolute in the United States. 46 Stat. 1421, 40 U.S.C.A. § 258a.

Schedule A attached to the declaration of taking is as follows:

Schedule "A"

The names and addresses of the persons having title to or other interest in the lands described in the within declaration of taking, and the amounts estimated to be fair compensation for each respective ownership including all improvements thereon, are as follows:

                      ----------------------------------------------------------------------
                      Name and Address             Parcel          Acres      Estimated Fair
                                                   Number                      Compensation
                      -----------------------------------------------------------------------
                      Bettie H. Smythe,               A             80.90        $60,000.00
                      Hileary Holt Farms,             B
                      Raccon Ford, Virginia
                      New York, New Haven
                      and Hartford Railroad           C              3.04              1.00
                      Company
                      Henry I. Chase
                      Newport Rhode Island            For all right, title              1.00
                                                      and interest in and
                                                      to the lands described
                                                      in the attached
                                                      declaration of taking
                               Total                                83.94         $60,002.00
                

March 14, 1942, Bettie H. Smythe filed a petition for payment to her on account of just compensation. She alleges (8) that the abstract of title to the lands described in said declaration of taking indicates that there are various minor liens, easements, or other interests in said land outstanding as encumbrances on the record title to said lands which remain to be released or otherwise disposed of before final judgment may be entered for the payment of the entire sum due her as just compensation for the taking of her said parcels of land and improvements; and that the disposition of said encumbrances will require delay and, therefore, a long period of time will elapse before the full amount of compensation to which she is entitled may be ordered paid. The petition prays for the distribution of $40,000 out of the sum of $60,001 now on deposit in the registry of the court as the amount estimated to be due to her. (The correct amount shown in schedule A is $60,000.)

March 16, 1942, an interlocutory judgment was entered which contained the following:

"It is, therefore, considered by the Court and it is the order, judgment and decree of the Court

"(a) That the defendant, Bettie H. Smythe, is the only person in title and interest entitled to said sum of $60,001. now on deposit in the Registry of this Court as the sum estimated by the petitioner to be just compensation for the taking of the land described in paragraph `Third' of this judgment.

"(b) That under the provisions of an Act of Congress approved February 26, 1931, 46 Stat. 1421, U.S.C.A. Title 40, Sec. 258a said defendant, Bettie H. Smythe, is entitled to receive the sum of $40,000. forthwith on account of the just compensation to be awarded to her in this proceeding in respect to the aforesaid parcel of land with improvements, without prejudice to her right to establish and receive such amount in excess thereof as may be awarded to her as just compensation for said taking.

"(c) That the Clerk of this Court is hereby ordered and directed to pay forthwith said sum of $40,000. from and out of the money deposited in this cause in the Registry of this Court on September 30, 1941, by James Forrestal, Acting Secretary of the Navy, acting for and in the capacity of the Secretary of the Navy of the United States, to the use of the persons in title and interest entitled thereto, said payment to be made for and in behalf of said defendant, Bettie H. Smythe, and distributed in the following manner but without prejudice to the right of said Bettie H. Smythe to establish and receive such amount in excess thereof as may be awarded to her as just compensation for said taking: to Aquidneck National Bank of Newport, the sum of $18,815.07; to Burdick, Corcoran & Peckham, as attorneys for the heirs or devisees or assignees of Robert S. Chase, the sum of $1,625.00; and to J. Russell Haire as attorney for the petitioner, Bettie H. Smythe, the sum of $19,559.93: constituting in all the sum of $40,000; all checks for said three distributive sums to be made payable as aforesaid and delivered to said J. Russell Haire as attorney for the petitioner."

(Said check for $1,625 was subsequently returned and credited to the account of Bettie H. Smythe in the registry of the court by an order entered April 2, 1945.)

November 2, 1944, the United States filed a motion to amend its petition for condemnation by adding to paragraph 4 the following sentence: "That Bettie H. Smythe, the apparent and presumptive owner of the lands described herein, executed and delivered an option to your petitioner to convey said lands to the United States at the prices stated therein, which said option was duly exercised and accepted by the United States." November 6th an order allowing said amendment was entered.

November 22, 1944, the government filed a motion for entry of judgment alleging that Bettie H. Smythe for a consideration paid by the United States executed an option (modified by an attached rider not material here) dated August 25, 1941, in which she agreed to sell and convey to the government for the consideration of $60,000 the land in question and that said option was accepted by the government on September 12, 1941. May 7, 1945, this motion was discontinued.

The option contains the following provisions:

"The undersigned hereby grants to the government the right of immediate occupancy and use of the land for any purpose whatsoever from and after the acceptance by the government of this option, which acceptance shall be within thirty (30) days after the date hereof, until such time as said land is conveyed to the government by the undersigned, the title approved by the Attorney General of the United States as required by law and the agreed purchase price paid by the government to the undersigned.

"The undersigned further agrees that she will execute and deliver a warranty deed conveying the fee simple title to the above described land to the United States of America and shall cause to be executed and delivered all abstracts or certificates of title, plats, maps, official certifications, affidavits, evidences of title, deeds of conveyance, etc. necessary in the opinion of the Attorney General, to convey to the United States of America a valid and satisfactory title to said land clear of all mineral rights, easements, restrictions, leases, judgments, taxes and assessments, existing or inchoate, liens, or encumbrances of any sort, at the date of the transfer of the title to the United States.

"Upon final approval of the title to the property by the Attorney General, the agreed purchase price above mentioned will be paid by the government to the undersigned.

"It is further agreed that in the event the government determines to acquire the title to said lands under the power of eminent domain by condemnation proceedings, then the compensation to be claimed by the undersigned for said land and the award to be made to the undersigned therefore in said condemnation proceedings shall be the amount of the purchase price herein agreed upon, and it is specifically agreed that this agreement shall be filed in said condemnation proceedings as a stipulation fixing the compensation between said parties for said land."

March 8, 1945, the government filed a petition for disbursement of the funds in the registry of the court and an order was entered giving notice of said petition to said Bettie H. Smythe, Joseph D. Nunan, Jr., Commissioner of Internal Revenue, Treasury Department, Washington, D. C., and to the Collector of Internal Revenue for the Fourteenth District of the State of New York, of a hearing on said petition to be held on April 2, 1945.

April 19, 1945, the parties entered into a stipulation which states in part:

"Whereas the undersigned defendants are owners of or have an interest in the lands condemned, described in the Declaration of Taking as Parcels Nos. A. and B., or however described and identified, and under the provisions of the Declaration of Taking Act (46 Stat. 1421) the title to the above-described land in fee simple absolute was vested in the United States of America and the right of just compensation for the same...