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UNITED STATES v. CERTAIN LANDS

January 31, 1949

UNITED STATES
v.
CERTAIN LANDS IN BUTLER COUNTY, PA., et al.



The opinion of the court was delivered by: GIBSON

The United States has filed a Motion for Judgment of Just Compensation, which requests this Court to decree that the sum specified in the sublease and agreement, $ 2,512,297.39, is the just compensation for the taking of the hospital. It is the Commonwealth's position, in opposing this motion, that the sum specified in the sublease and agreement is not just compensation because the execution of this sublease by the agencies of the Commonwealth was ultra vires; and the letter of December 28, 1945, from the Division Engineer of the War Department, constituted a surrender of the sublease which prevents the United States from asserting the agreement.

 It is the opinion of the Court that the meaning of 'sale' should not be extended to include agreements fixing the compensation in condemnation proceedings which are necessarily involuntary on the part of the owner. The parties either agree upon the amount of just compensation or accept the award made by the Court.

 The hospital consisted of twelve buildings at the time the sublease was executed. I was a reasonable arrangement providing necessary protection for the Federal Government with adequate consideration to the State, for the parties to agree upon the just compensation for these twelve buildings before the United States converted them into an operating plant at a cost of $ 4,000,000, when a correct appraisal would be extremely difficult.

 In addition, the defense of ultra vires does not necessarily mean that the agreement is unenforceable. In equity and good conscience the Commonwealth cannot maintain this defense at this time.

 The United States filed its condemnation proceedings before the expiration of the term of the sublease. The letter from the Division Engineer of the War Department did not constitute a surrender of the sublease. It was notice that the tenant would vacate at the end of the term. It had the same effect as the tenant's failing to renew the sublease on December 1, 1945. It was possible, however, that the Commonwealth, upon receipt of this letter, could have acted in such a manner that the United States would now be estopped to assert the agreement. The investigation conducted by the Secretary of Welfare of the Commonwealth did not amount to such a change of position.

 The motion of the petitioner should be granted.

 The Court, after hearing and consideration, makes the following Findings of Fact and Conclusions of Law:

 Findings of Fact.

 1. The General State Authority, a public corporation and government instrumentality of the Commonwealth of Pennsylvania, erected in the year 1940 in Butler County, Pennsylvania, a certain establishment known as the Western Pennsylvania Tubercular Sanitorium (hereinafter referred to as the 'Hospital').

 2. This was a W.P.A. project and the United States of America contributed funds to the extent of $ 386,756.87 toward the construction and furnishing of this hospital.

 3. The General State Authority leased the hospital to the Department of Property and Supplies of the Commonwealth of Pennsylvania for a term beginning November 1, 1939 and ending June 1, 1968.

 4. On October 23, 1942, the Authority as owner, the Department as subleasor, and the United States of America as sublessee, executed a sublease and agreement by which the hospital was leased to the United States for the period of October 23, 1942 to June 30, 1943.

 5. This sublease provided that by mutual agreement it could be renewed from year to year, but not beyond May 1, 1968, provided the United States gave written notice to the Department at least six months before the ...


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