United States v. San Gerónimo Development Co.

• Decision Date: 04 March 1946
• Docket Number: 4075.,No. 4074,4074
• Parties: UNITED STATES v. SAN GERONIMO DEVELOPMENT CO., Inc., et al. SAN GERONIMO DEVELOPMENT CO., Inc., v. UNITED STATES.
• Court: U.S. Court of Appeals — First Circuit

154 F.2d 78 (1946)

UNITED STATES v. SAN GERONIMO DEVELOPMENT CO., Inc., et al. SAN GERONIMO DEVELOPMENT CO., Inc., v. UNITED STATES.

Nos. 4074, 4075.

Circuit Court of Appeals, First Circuit.

March 4, 1946.

COPYRIGHT MATERIAL OMITTED

Roger P. Marquis, J. Edward Williams, and Vernon L. Wilkinson, Department of Justice, all of Washington, D. C., Philip F. Herrick, U. S. Atty., District of Puerto Rico, of San Juan, P. R., for United States.

Ryder Patten, of San Juan, P. R., for appellee San Geronimo Development Co., Inc.

Gabriel de la Haba, of San Juan, P. R., for appellees de la Haba and Mera.

H. S. McConnell, of San Juan, P. R., for appellee Pedro A. Pizá.

Before MAGRUDER, MAHONEY and WOODBURY, Circuit Judges.

MAGRUDER, Circuit Judge.

These are cross-appeals, in which the petition filed by the United States in the court below is somewhat of an unfamiliar hybrid, and the substantive question upon which the decision turns is a special and non-recurring one as to which there are no precedents to indicate the answer.

In No. 4074, the United States claims that during the war emergency the Navy Department is entitled to the free use and occupation of a certain tract of land in Puerto Rico under a right reserved in a lease for 999 years executed by the Navy Department to one Virgil Baker in 1921, pursuant to authority of § 5 of the Naval Service Appropriation Act approved July 12, 1921, 42 Stat. 139, 140. On the other hand, appellees assert that this reserved right of free user was in effect extinguished or released by a presidential proclamation of August 26, 1929, 46 Stat. 3004, transferring to the People of Puerto Rico all right, title, and interest of the United States in a part of the Military Reservation of San Juan known as the San Geronimo tract, or the San Geronimo Naval Reservation, in which said Baker tract was included; such transfer having been made under authority of § 7 of the Organic Act for Puerto Rico, 39 Stat. 954, 48 U.S.C.A. §§ 747, 748. The District Court was persuaded to the latter view, and proceeded to adjudge to the various parties in interest the amounts of just compensation due them upon condemnation of the temporary use of the Baker tract.

In No. 4075, one of the parties in interest, San Geronimo Development Co., Inc., claiming that the amount awarded to it was inadequate, filed a cross-appeal from the final judgment below.

We are of opinion that the United States should prevail in its appeal in No. 4074. Hence, the question presented in No. 4075 becomes academic, and San Geronimo Development Co., Inc., must necessarily fail in its cross-appeal.

In 1919 the San Geronimo tract, part of the Military Reservation of San Juan owned by the United States, was formally transferred to the Navy Department and became known as the San Geronimo Naval Reservation. In that year the Navy Department leased to Lieutenant Commander Virgil Baker, Retired, an unused portion of the reservation for a term of five years, with permission to Baker to erect and occupy a concrete dwelling thereon. Baker at that time was in charge of the naval radio station at San Juan. There followed a series of negotiations between Baker and the Navy Department in which Baker sought to obtain ownership of the tract leased to him. These negotiations are reported at length in the opinion of this court in Baker v. United States, 1 Cir., 1928, 27 F.2d 863, certiorari denied 1929, 278 U.S. 656, 49 S.Ct. 185, 73 L.Ed. 565. As a result there was included in the Naval Service Appropriation Act of July 12, 1921, at the request of the Secretary of the Navy, the following provision: "Sec. 5. That as consideration for a suitable site and requisite rights, privileges, and easements for a receiving and distant-control radio station in Porto Rico the Secretary of the Navy be, and he hereby is, authorized to exchange or lease for such period as he may deem proper any land under naval control in Porto Rico not otherwise required for naval purposes: Provided, That in time of war or national emergency, if necessary, the Navy Department shall have without cost free and unlimited use of any land so exchanged or leased." 42 Stat. 122, 139, 140.

The foregoing provision was enacted to give the Secretary of the Navy power to lease or permanently transfer to Baker the tract of land involved in the present appeals. See the legislative history set forth in Baker v. United States, supra, 27 F.2d 863, at pages 866-868. Pursuant to this statutory authority, an agreement of lease was entered into on July 15, 1921, between the United States, represented by the Acting Secretary of the Navy, and Lieutenant Commander Baker.

This lease, after lengthy recitals, provided as follows:

"Lease

The Secretary of the Navy, representing the United States of America and the Navy Department, and having been duly authorized by the Congress under the provisions of Section 5 of the Naval Appropriation Act approved by the President of the United States on July 12, 1921, does hereby Lease to the said Lieutenant Commander Virgil Baker, U. S. Navy (retired) and his heirs and assigns, for a period of nine-hundred and ninety-nine (999) years from the date hereof, for such use and improvement as they may deem proper, the following described site of land with right of way thereto, which site of land is not otherwise required for Naval purposes and is located in the San Geronimo naval reservation in the Island of Porto Rico: Then follows a description by metes and bounds.

The Lease of the above-described site of land in the San Geronimo Naval Reservation is made in consideration of the transfer, by the said Lieutenant Commander Virgil Baker, U.S.Navy (Retired), and his wife, Stella May Baker, to the United States of America, represented by the Secretary of the Navy, of a Tract of Land and Easements for a distant-control radio station in Porto Rico, as described in the Deed number Twenty-eight executed on the seventh day of June, nineteen hundred and twenty, at San Juan, Porto Rico, before the Notary Don Eduardo Acuna Aybar, and in further consideration of the payment this date to the United States of America of the sum of one dollar ($1.00) by the said Lieutenant-Commander Virgil Baker, U. S. Navy (retired); and in recognition of services rendered by him in the war against the German Empire and in other wars; and in recognition of valuable services rendered by him in May, nineteen hundred and twenty, while not on active duty, which services aided materially in saving the U. S. Army Transport Northern Pacific, then stranded in a dangerous position on a reef off the Island of Porto Rico.

In accordance with the desire of the party of the first part this Lease is granted in lieu of the complete Transfer of Title provided for in previous agreements hereinbefore mentioned, and is accepted by the party of the second part in complete and entire satisfaction of all such previous agreements. It is also mutually understood and agreed that this Lease is not revocable except by mutual agreement of both parties, but that the Navy Department shall retain title to said site of land and, in accordance with the Provisions of the Act of Congress authorizing the Grant of this Lease, it is mutually understood and agreed that the Navy Department shall have in time of war or national emergency, if necessary, free and unlimited use, without cost, of the site of land herein leased. * * *"

In Baker v. United States, supra, the United States brought suit to cancel the Baker lease for fraud, but this court upheld the lease and directed that the complaint be dismissed.

On August 26, 1929, the President of the United States, under authority of § 7 of the Organic Act for Puerto Rico, issued a proclamation reading in part as follows:

"A PROCLAMATION.

"WHEREAS, by Act of Congress approved March 2, 1917 (39 Stat. 951), entitled `An Act to provide a civil government for Porto Rico and for other purposes' it is provided, `That the President may from time to time, in his discretion, convey to the People of Porto Rico such lands, buildings, or interests in lands or other property now owned by the United States and within the territorial limits of Porto Rico, as in his opinion are no longer needed for purposes of the United States';

"AND WHEREAS, the President, by an Executive Order of June 30, 1903, reserved for military purposes certain lands designated as the Military Reservation of San Juan, and said Military Reservation included the tract known as San Geronimo hereinafter described.

"AND WHEREAS, the said tract, known as San Geronimo, and hereinafter more particularly described (excepting approximately five acres thereof), is no longer needed for the purposes of the United States but is required for public use by the People of Porto Rico,

"NOW, THEREFORE, in pursuance of the authority vested in me by the Act of March 2, 1917, aforesaid, all the right, title, and interest of the United States in and to the following described tract of land is hereby transferred and conveyed to the People of Porto Rico, viz:

"Here follows a description of the tract transferred¹."

The case turns upon whether the reserved right of free user of the Baker tract survived to the Navy Department after the transfer effected by this presidential proclamation. We shall examine at a later point the terms of the proclamation and their legal effect.

Since 1921, by derivation from Baker, the tract has been subdivided into parcels held by various sublessees or assignees. In 1930 Baker assigned all his remaining interest to the San Geronimo Development Co., Inc., a corporation the stock of which was wholly owned by Baker and his wife.

Upon the outbreak of war in December, 1941, the Navy Department desired to use and occupy the Baker tract pursuant to the right reserved in the 1921 lease. The parties who had succeeded to Baker's interest in the tract were willing for the Navy Department to make wartime use of the premises, but...