United States v. Petty Motor Co., 2820-2826.

• Decision Date: 05 March 1945
• Docket Number: No. 2820-2826.,2820-2826.
• Parties: UNITED STATES v. PETTY MOTOR CO., and six other cases.
• Court: U.S. Court of Appeals — Tenth Circuit

147 F.2d 912 (1945)

UNITED STATES v. PETTY MOTOR CO., and six other cases.

Nos. 2820-2826.

Circuit Court of Appeals, Tenth Circuit.

March 5, 1945.

Wilma C. Martin of Washington, D. C. (Norman M. Littell, Asst. Atty. Gen., Dan B. Shields, U. S. Atty., of Salt Lake City, Utah, and Vernon L. Wilkinson, Atty., Department of Justice, of Washington, D. C., on the brief), for appellant.

Shirley P. Jones, of Salt Lake City, Utah (Benjamin L. Rich and Gordon R. Strong, both of Salt Lake City, Utah, on the brief), for appellees William G. Grimsdell and others.

Before PHILLIPS and MURRAH, Circuit Judges, and RICE, District Judge.

RICE, District Judge.

On November 9, 1942, the government, acting by authority of the Second World War Powers Act of March 27, 1942, 56 Stat. 176, 177, 50 U.S.C.A. § 632, instituted a proceedings in rem to condemn and take possession of a leasehold interest in a certain building located in Salt Lake City, Utah, and known there as the old Terminal Building. The leasehold interest taken gave the United States immediate possession and the right to occupy same as lessee until June 30, 1945, with the right to surrender possession on June 30, 1943, or June 30, 1944, by giving sixty days' notice. The building was owned by W. B. Richards, but was occupied by various tenants, and all of the tenants were made parties to the condemnation proceedings.

On November 10, 1942, the government was granted immediate possession, and the tenants were ordered to vacate between November 17th and December 1st.

Of the appellees here, five of them, towit, The Galigher Company, Grocer Printing Company, Chicago Flexible Shaft Company, Brockbank Apparel Company, and Gray-Cannon Lumber Company, had no written leases but were in possession and occupied the premises under oral contracts on a month to month basis. They were long-time tenants — that is, they had occupied the same premises under the same arrangements with the owner over a long period of time. The arrangement was mutually satisfactory to the tenants and to the owner, and each of the tenants was a satisfactory tenant to the owner. As to each of the oral contracts or leases it is admitted that the owner had the right to terminate said leases under the law of Utah upon giving the required notice. The facts, however, are that the owner gave no such notice. So regardless of what could have been done, each tenant under the oral lease had every reason to think he could remain indefinitely as a tenant, and the record justifies the conclusion that each would have continued for an indefinite period had not the government begun condemnation proceedings.

The Independent Pneumatic Tool Company occupied its space under a five-year written lease. A new lease for a period of five years, beginning December 1, 1942, had been signed by both the owner and the tenant. This lease contained a provision that the term and all rights under the lease would terminate if possession of the premises was taken by a federal, state, or other public authority for public use.

The Petty Motor Company had a written lease on the basement of the building for a term of one year beginning August 1, 1942, with the right to renew for another year.

Before the trial of the cause the government completed negotiations for a lease of the entire building from the owner for a term ending June 30, 1943, with the right of renewal each year for a period of ten years thereafter. The fact that this lease had been procured from the owner by the government developed during the trial. Whereupon, the tenants moved to dismiss as to the owner. The government concurred in this motion, and the court dismissed the proceedings as to the owner. The record discloses that the negotiated lease made no mention of the rights, if any, of the tenants. Admittedly, the negotiated lease and the sum paid to the owner for it made no provision and included no sum as compensation for the interest of the tenants that was taken.

The government took the position below, and adheres to it here, that the amount of the recovery was limited to the value of the occupancy as a unit, to be paid in one lump sum to the owner of the building. That thereafter it, the government, was not interested in the respective claims of the tenants and that their claims and rights, if any, were against the award which would be distributed as their interest might appear.

The trial court disagreed with the government's theory. Upon the trial the court permitted evidence on behalf of each tenant of the costs of moving out of the building, remodeling the new premises, reinstalling their equipment, and the increased rents they were required to pay. Witnesses for the tenants acquainted with rental values, after hearing the testimony concerning costs of moving, etc., and being told that they might consider such costs solely for the purpose of determining value, were then permitted to testify as to the value of the tenants' "right of...