Opposition Brief — John Hancock Mutual Life Insurance v. United States

INDEX

Page

Opinion below - - -....--------------------+---------+---->> 1

Jurisdiction - -.......------------------------------------ 1

Question presented ----..-..------------------------------- 2

Statement... ........------------------------------------- 2

Argument... -...----------------------------------------- 5

Conclusion... .....-------------------------------------- 7

CITATIONS

Carlock v. United States, 53 F. 2d 926_...-...-.---------- 5

Mayor & C. C. of Balto. v. Gamse, 132 ee ‘5

Silberman v. United States, 131 F. 2d 715_....----------- 5

United States v. General Motors Corp., 323 U. 8. 373. -.-.--- 6

United States v. Petty Motor Co., 327 U. 8. 372_.....----- 5

Miscellaneous:

Orgel, Valuation under Eminent Domain (1936) sec. 124--- 5

(I)

719130—46

Inthe Supreme Court of the United States

OcroBerR TERM, 1946

No. 570

JoHun Hancock Mutvat Lire INSURANCE

CoMPANY, PETITIONER

v.

Unitrep States oF AMERICA

ON PETITION FOR A WRIT OF CERTIORARI TO THE UNITED

STATES CIRCUIT COURT OF APPEALS FOR THE FIRST

CIRCUIT

BRIEF FOR THE UNITED STATES IN OPPOSITION

OPINION BELOW

The district court wrote no opinion. Its charge

to the jury appears in the record at pages 21-24.

The opinion of the Circuit Court of Appeals (R.

42-43) is reported in 155 F. 2d 977.

JURISDICTION

The judgment of the Circuit Court of Appeals

was entered on June 12, 1946 (R. 44), and on

July 5, 1946, a petition for rehearing was denied

(R. 44). The petition for a writ of certiorari

was filed on October 4, 1946. The jurisdiction

(1)

—

2

of this Court is invoked under Section 240 (a)

of the Judicial Code, as amended by the Act of

February 13, 1925.

QUESTION PRESENTED

Whether a tenant occupying a portion of

premises condemned can recover the full rental

value of his premises without deducting the rent

reserved in the lease, in the absence of a showing

that after the condemnation the tenant continued

under an obligation to pay rent to his lessor.

STATEMENT

On April 28, 1942, the United States instituted

proceedings to condemn 60,000 square feet of floor

space in the Massachusetts Mutual Life Insur-

ance Building in Springfield, Massachusetts, for

a term of years beginning April 28, 1942, and

expiring June 30, 1943, to provide office facilities

for the Army Ordnance Department and for

related military purposes (R. 1-8). On the

same day the United States gave notice of inten-

tion to take immediate possession pursuant to

an order of court authorizing it to do so (R.

11-12).

The John Hancock Mutual Life Insurance

Company® occupied rooms 905-908 under a five-

year lease beginning April 1, 1941, and expiring

March 31, 1946, at a total rental of $6,060 to be

paid at a monthly rate of $92.50 for the first

1 Hereinafter referred to as John Hancock.

—

3

year, $97.50 for the second year, and $105 for

the last three years (R. 14, 2431). It also

occupied rooms 422-423 of the building under a

lease for a three-year term beginning November

1, 1941, and expiring October 31, 1944, at a total

rental of $1,260 to be paid at the rate of $35

per month (R. 17-18, 32-38). A settlement hav-

ing been made with the owner of the building

by means of a lease of the building to the United

States, a jury trial was had on June 4, 1945, to

determine the compensation due the tenants (R.

18, 20). John Hancock introduced evidence that

rooms 905-908 which contained 688 square feet

had a fair rental value of $1.80 per square foot

per year and that rooms 422-423 which éontained

257 square feet had a fair rental value of $1.65

per square foot per year (R. 20-21). The Gov-

ernment’s testimony as to fair annual rental

value was $1.76 per square foot for rooms 905-

908, and $1.63 per square foot for rooms 422-423,

the same as the rent being paid under the leases

(R. 20-21, 23). The trial court in charging the

jury as to the measure of the tenant’s compensa-

tion gave the following instructions (R. 23-24):

* * * If the rent John Hancock was

paying on the day it moved is in your judg-

ment a fair market rental of those

premises, then John Hancock can recover

nothing in this action, because counsel has

argued to you and witnesses have said

that in computing the fair market value

——

4

as of that date, they have taken into con-

sideration the removal expenses and other

things that go with it.’

At the close of the charge, counsel for John

Hancock made the following objection (R. 24):

I object to that part of the charge that

instructs the jury that the respondent may

recover only in the event that the jury

find the rental value in excess of the lease

value, and I request the Judge to charge

that the respondent is entitled to recover

the rental value of the premises for the

period taken.

The trial court overruled the objection and de-

nied the requested instruction, stating (R. 24)

that “The request for instructions comes too late,

as having come after the charge.’? The jury

returned its verdict on June 4, 1945, assessing

damages in the sum of ‘‘None’’ (R. 18). Judg-

ment was entered on the verdict on October 15,

1945 (R. 19).

The Circuit Court of Appeals for the First Cir-

cuit affirmed, holding that the burden rested upon

petitioner to prove that after condemnation it

was under a continuing obligation to pay rent

?In addition to opinion testimony as to fair rental value,

which, as the court pointed out, included a consideration of

moving costs, there was testimony on behalf of John Han-

cock that it had cost $35 to move out of the premises and

would cost $35 to move back in (R. 23). The court had pre-

viously instructed the jury that they should consider the

moving costs in fixing the value of the leasehold interest.

7 nd

_—

5

and that such proof had not been made (R. 43-

44).

ARGUMENT

A leasehold is valuable only if the market rental

value of the space involved exceeds the rent pay-

able under the lease. Hence compensation pay-

able upon condemnation of leased premises is

measured by such excess, if any.* Since the jury

has found that there was no such excess, i. e., that

the rent payable in the lease equaled the amount

the space would rent for on the market, petitioner

has not been deprived of anything of value for

which it is entitled to be compensated. Its argu-

ment relates, therefore, not to the substantive

issue of compensation but merely to the procedure

by which the award is paid to the lessor.

In the usual condemnation proceeding where

both the landlord and tenant are joined as parties,

the award for the entire property is paid into

court, the tenant’s share therein, if any, is de-

ducted and the remainder is paid to the landlord.

When a settlement is made with the landlord,

the tenant’s rights are not increased. United

States v. Petty Motor Co., 327 U. S. 372, 376.

If, however, the landlord, rather than partici-

pating in the condemnation proceedings, con-

® See United States v. Petty Motor Co., 327 U.S. 372; Car-

lock v. United States, 53 F. 2d 926, 927-928 (App. D. C.) ;

Mayor & C. C. of Balto. v. Gamse, 132 Md. 290, 297-298;

Silberman v. United States, 131 F. 2d 715, 718 (C. C. A. 1);

Orgel, Valuation under Eminent Domain (1936), sec. 124.

6

tinues to receive the rent reserved in the lease,

the entire award is paid to the tenant. Such

was the situation in United States v. General

Motors Corp., 323 U. 8. 373.

Petitioner’s contention, therefore, rests upon

the assumption that the landlord has not par-

ticipated in these proceedings and that petitioner

is bound to continue to pay the rent reserved in

the lease. On the contrary, the owner, the Massa-

chusetts Mutual Life Insurance Company, was

made a party to this proceeding (R. 3, 7) and,

while it does not appear from the record, peti-

tioner does not deny the fact that a settlement by

means of a voluntary lease has been made with

the owner (Br. 13). Petitioner made no attempt

to show that it had paid rent to the owner or that

any demand had been made therefor. The mere

existence of petitioner’s lease does not, as it con-

tends (Br. 12), indicate that the landlord was not

compensated in the condemnation proceeding and

was insisting, instead, upon payment of the lease

rental. Obviously, the owner could not demand rent

of petitioner while receiving rent for the same prem-

ises from the United States.

The only justification for an award to peti-

tioner against the Government rests on the theory

that petitioner is obligated to pay that amount

to the lessor. But the lessor is receiving rent

from the United States, hence the amount of the

7

award should be credited to the Government.

The procedure advocated by petitioner would not,

therefore, accomplish any useful purpose.

CONCLUSION

The decision of the court below is correct and

there is neither a conflict of decisions nor any

question of general importance. It is respect-

fully submitted that the petition should be denied.

J. Howarp MoGratu,

Solicitor General.

Davip L. BaZELon,

Assistant Attorney General.

Rocer P. Marquis,

Wioa C. Martin,

Attorneys.

OcTOBER 1946.

U, S. GOVERNMENT PRINTING OFFICE: 1946