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Summary of Opinion — United States v. Jordan et al., No. 10988 (6th Cir. Feb. 6, 1951)

Factual and Procedural Background

In June 1944 the United States instituted condemnation proceedings seeking the temporary use of approximately 7,800 acres in Lauderdale County, Tennessee, for expansion and use of an air-to-ground gunnery range associated with the Dyersburg Army Air Base. An order of possession was entered on June 15, 1944. Some landowners executed negotiated leases and releases with the Government; other tracts were the subject of condemnation stipulations which fixed rental values and included releases of claims. The Government used the property for gunnery training during 1944–1946 and subsequently surrendered possession in 1945 and 1946.

On November 25, 1947, owners of about twenty tracts (the appellees) filed suit under the Tucker Act (then codified at 28 U.S.C.A. § 1346) to recover damages to standing timber allegedly rendered valueless because steel‑jacketed machine‑gun bullets were lodged in trees. The district court, following a bench trial, found that the releases and stipulations were executed through mutual mistake of fact, vacated the judgments entered on those stipulations, set aside the releases, and awarded separate sums for standing timber (at $12.50 and $8.00 per 1,000 board feet depending on size) plus interest from the date of the taking. The United States appealed.

Legal Issues Presented

  1. Whether the district court had jurisdiction to vacate and set aside prior judgments and releases entered in the condemnation proceedings on the ground of mutual mistake or other equitable considerations, despite those judgments appearing final and the term of court having expired.
  2. Whether the Government is liable, beyond rental paid, for damage to standing timber caused by normal use of the premises as an air-to-ground gunnery range or whether such damage was necessarily included in the rent.
  3. Whether awards for the taking/damage to timber properly include interest from the date of taking when the additional compensation was not fixed by contract.
  4. Whether subsequent purchasers (assignees) of the land could prosecute claims assigned by prior owners in light of the anti‑assignment statute (31 U.S.C.A. § 203).
  5. Whether specific awards should be reduced because some timber had been sold after Government surrender of possession (claims regarding Tracts 17, 17a, 5, 16 and 23).

Arguments of the Parties

Appellant (United States) — Contentions

  • The district court lacked jurisdiction to vacate the earlier condemnation judgments because the present suit constitutes a collateral attack on those judgments (citing Rooker and Union Land Bank v. Byerly) and because the term of court in which those judgments were entered had expired (citing Bronson v. Schulten and E.C. Shevlin Co. v. United States).
  • The damage to timber was a normal and foreseeable consequence of use of the property as a gunnery range; accordingly, the Government should not be liable beyond the rental amounts paid.
  • Interest should not be allowed on awarded sums where compensation was fixed by contract (citing Albrecht v. United States).
  • Assignments of claims to subsequent purchasers are barred by the anti‑assignment statute, 31 U.S.C.A. § 203 (citing United States v. Gillis).
  • Certain awards erroneously included timber elements that had been sold by the landowner after Government abandonment (Tracts 17, 17a, 5, 16 and 23), so the awards should be reduced accordingly.

Appellees (Landowners) — Contentions

  • The releases and stipulations should be set aside because they were executed on a mutual mistake of fact: at the time of execution the parties were unaware that steel‑jacketed bullets had so lodged in standing timber as to render it valueless.
  • Under express or implied covenants in the negotiated leases (and under principles applicable in condemnation), they were entitled to recover damages for destruction of growing timber in addition to rental value; alternatively, such damage constituted a taking requiring Fifth Amendment compensation.
  • Where the additional compensation for timber damage was not fixed by contract, interest is a proper element of just compensation from the date of the taking.
  • Assignments from prior owners to subsequent purchasers were proper and not within the mischief of the anti‑assignment statute because leases ran to “successors and assigns” and the assignments were incidental to sales.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court in This Case
Rooker v. Fidelity Trust Co., 263 U.S. 413 Authority for the general rule that a collateral attack on a final judgment is not permitted. Cited by the Government to argue that the present proceeding was a collateral attack; the court acknowledged the general rule but held equitable relief may be available in appropriate circumstances.
Union Land Bank v. Byerly, 310 U.S. 1 Similar principle regarding collateral attacks upon judgments. Same use as Rooker; court recognized the general rule but noted equitable exceptions.
Bronson v. Schulten, 104 U.S. 410 Authority that expiration of the term of court raises an obstacle to relief from judgments. Government relied on it; the court nonetheless held that equitable considerations may permit relief despite expiration of term.
E.C. Shevlin Co. v. United States, 146 F.2d 613 (9th Cir.) Rule regarding relief from judgments and effect of term expiration (cited regarding both jurisdictional points and equitable exceptions). Cited by the Government; the panel acknowledged it but treated it as part of the background to the equitable analysis allowing vacation of the earlier judgments.
Julian v. Central Trust Co., 193 U.S. 93 Equitable considerations may require relief from an apparent final judgment. Used to support the proposition that a final judgment is not absolutely immune from equitable attack when justice requires it.
Simon v. Southern Ry. Co., 236 U.S. 115 Same principle — equitable relief in special circumstances. Support for court's holding that equitable jurisdiction existed to set aside the prior judgments.
Ballard Ballard Co. v. Munson S.S. Line, 25 F.2d 252 (6th Cir.) Example of equitable relief against judgments in exceptional circumstances. Included among authorities showing equitable relief is possible despite finality.
Hazel‑Atlas Glass Co. v. Hartford Empire Co., 322 U.S. 238 Relief may be granted against a judgment that is manifestly unconscionable. Cited as a long‑recognized exception permitting equitable relief against enforcement of unconscionable judgments.
Taylor v. Nashville Chattanooga Railroad Co., 86 Tenn. 228, 6 S.W. 393 State case recognizing equitable relief against unconscionable judgments. Cited as local authority illustrative of equitable exceptions.
Pickford v. Talbott, 225 U.S. 651 Supports equitable intervention in exceptional cases. Used to show historical recognition of equitable relief against judgments under appropriate circumstances.
Thompson, Trustee v. Camp, Adm'x, 163 F.2d 396 (6th Cir.) Authority supporting relief from judgments where mutual mistake existed. Courts relied on it in concluding that the stipulations and releases could be set aside for mutual mistake.
Callen v. Penn. R.R. Co., 332 U.S. 625 Support for setting aside judgments based on mistake or inequitable circumstances. Cited to support the district court's setting aside of stipulations and releases for mutual mistake.
Metropolitan Life Ins. Co. v. Humphrey, 167 Tenn. 421, 70 S.W.2d 361 State precedent cited regarding equitable relief for mistake or unconscionability. Used as additional authority supporting the vacation of releases/judgments based on mistake.
United States v. Bostwick, 94 U.S. 53 Implied covenant of a lessee to avoid injuring the inheritance and to return property in as good condition, ordinary wear excepted. Applied to support the existence of an implied obligation in the condemnation context that the Government should not injure the inheritance (growing timber).
Campbell v. W.M. Ritter Lumber Co., 140 Ky. 312, 131 S.W. 20 State authority recognizing implied lessee obligations regarding protection of the inheritance. Used to support the proposition that even absent express covenants, an implied obligation exists to avoid injury to the inheritance.
United States v. General Motors Corp., 323 U.S. 373 Government obligation to make payment where property is taken or destroyed in such manner as to require compensation under the Fifth Amendment. Applied to conclude that the Government had an obligation to pay for the destroyed standing timber in addition to rental.
Kimball Laundry Co. v. United States, 338 U.S. 1 Principles concerning just compensation for government takings and consequential losses. Used with General Motors to support the conclusion that damage to timber required compensation under the Fifth Amendment.
Seaboard Air Line Ry. Co. v. United States, 261 U.S. 299 Where compensation is not fixed by contract, interest may be recoverable as part of just compensation. Applied to sustain allowance of interest on the timber awards from the date of taking because timber compensation was not contractually fixed.
Jacobs v. United States, 290 U.S. 13 Authority on interest as an element of compensation where not fixed by contract. Used to support awarding interest on the timber compensation.
United States v. Klamath Indians, 304 U.S. 119 Interest can be part of compensation for a taking when not fixed by contract. Cited in the same context to justify interest on the awards from the date of taking.
United States v. Gillis, 95 U.S. 407 General statement about the anti‑assignment statute barring certain assignments of claims against the Government. Government relied on it to argue assignments to purchasers were barred; the court discussed exceptions and declined to bar the assigned claims here.
Goodman v. Niblack, 102 U.S. 556 Recognizes exceptions to the literal wording of anti‑assignment statutes. Cited to support the conclusion that the assignments in this case fell within recognized exceptions and did not violate 31 U.S.C.A. § 203.
Erwin v. United States, 97 U.S. 392 Another early authority recognizing exceptions to the anti‑assignment rule. Used in the chain of authorities showing exceptions to the anti‑assignment statute.
Seaboard Air Line Ry. v. United States, 256 U.S. 655 (Earlier Seaboard citation) Authority showing exceptions to anti‑assignment prohibitions in certain circumstances. Cited in the discussion of exceptions to the anti‑assignment statute.
Western Pacific R.R. Co. v. United States, 268 U.S. 271 Authority regarding assignment exceptions to claims against the Government. Included among precedents showing the anti‑assignment statute does not bar all assignments; court relied on such authorities in validating assignments here.
Old Colony Ins. Co. v. United States, 168 F.2d 931 (6th Cir.) Circuit authority addressing exceptions to anti‑assignment restrictions. Used to support the district court's conclusion that assignments were not barred here.
United States v. South Carolina State Highway Dept., 171 F.2d 893 (4th Cir.) Another circuit case recognizing exceptions to anti‑assignment prohibitions. Included in the collection of authorities showing recognized exceptions permitting assignment.
Albrecht v. United States, 329 U.S. 599 When compensation is fixed by contract containing no interest provision, interest does not run against the Government. Cited by the Government to oppose interest here; the court distinguished Albrecht because timber compensation in this case was not fixed by contract.

Court's Reasoning and Analysis

The court proceeded through several discrete lines of legal analysis, tying each to the record findings and cited authorities:

  1. Jurisdiction to Vacate Prior Judgments and Releases:

    Analysis:

    While the Government correctly invoked the general rule that a final judgment is not subject to collateral attack and that relief is ordinarily not available after the term, the court recognized longstanding equitable exceptions. Citing Supreme Court and circuit authority, the court concluded that where equitable considerations justify relief (for example, where a judgment is manifestly unconscionable or was procured pursuant to a mutual mistake of fact), the district court has jurisdiction to vacate such judgments even after the term. The panel therefore accepted the district court's jurisdiction to set aside the prior stipulations and releases upon the showing made here.

  2. Mutual Mistake, Lack of Consideration, and Setting Aside Releases:

    Analysis:

    The district court found, on evidence, that the releases and stipulations were executed through mutual mistake of fact because the landowners (not in possession) were unaware that steel‑jacketed bullets had made the standing timber valueless. The panel found these factual findings not clearly erroneous. The court relied on the circumstances — extremely low rentals in some negotiated leases, token consideration stated in releases ("One Dollar and other valuable considerations" rarely paid), and the landowners' desire simply to regain possession — to conclude the parties lacked knowledge of material damage at the time, justifying rescission of the releases and stipulations.

  3. Liability for Damage to Standing Timber and Existence of Contractual or Implied Covenants:

    Analysis:

    The court examined the lease forms and the stipulations. Some negotiated leases contained express covenants (return premises in as good condition, procedures for timber destruction exceeding one acre, or reservation that rental did not include compensation for damages). Where no express covenant existed (as in condemnation stipulations), the court found an implied obligation of a lessee not to injure the inheritance and to return the property in as good condition except for ordinary wear and tear, citing United States v. Bostwick and state authority. The Government's own leasing agent's testimony (that negotiations were based on straight land rental plus growing crop value and that exceptions were attempted where timber damage was probable) and the very low rental rates supported the conclusion that timber damage was not treated as included in the rent.

  4. Factual Finding of Damaging Conduct and Constitutional Liability:

    Analysis:

    The district court found as a fact, supported by testimony, that millions of steel‑jacketed .50 caliber bullets were fired and lodged in standing trees across the range, rendering timber unmerchantable because of the hazard to sawmill equipment and employees. The panel accepted this factual finding as not clearly erroneous. Applying takings jurisprudence (United States v. General Motors Corp.; Kimball Laundry), the court held that damage to or destruction of standing timber by Government operations imposed an obligation to pay just compensation under the Fifth Amendment in addition to rental value.

  5. Interest on Awards:

    Analysis:

    The court distinguished cases denying interest where compensation is fixed by contract (Albrecht). Because the rental was fixed but the additional timber compensation was not fixed by contract, the panel held that interest from the date of the taking was properly included in the awards, citing Seaboard Air Line Ry., Jacobs, and United States v. Klamath Indians.

  6. Validity of Assignments to Subsequent Purchasers:

    Analysis:

    The Government argued assignments were barred by the anti‑assignment statute (31 U.S.C.A. § 203), but the court reviewed numerous authorities recognizing exceptions to the statute's literal wording. Because the leases ran to "successors and assigns" and the assignments to the purchasers were incidental to sales and furthered vendors' obligations under conveyances, the court concluded the assignments were permissible and that the statute's purposes were not violated.

  7. Sales After Surrender and Possible Credits:

    Analysis:

    The Government pointed to sales of timber after surrender (e.g., tracts 17, 17a, 5, 16, 23). The court noted the record showed government timber-cruiser recheck figures post‑sale and that some sales were not closed transactions in view of buyers' later discovery of hidden defects. The record did not clearly establish any credit to the Government based on such sales or any kick‑backs; the court declined to modify awards on that basis and observed the matter had not been specifically presented to the district judge for resolution.

Holding and Implications

Holding: The judgment of the district court was affirmed.

Direct consequences of the decision for the parties:

  • The district court's vacatur of the prior stipulations and releases was upheld on the ground they were procured by mutual mistake of fact and were manifestly unconscionable in the circumstances; those releases/judgments were properly set aside.
  • The appellees (landowners) were entitled to separate recoveries for damage to standing timber (awards computed at the district court's rates of $12.50 and $8.00 per 1,000 board feet as appropriate), and those awards carried interest from the date of the taking because the timber compensation was not contractually fixed.
  • Assignments from prior owners to subsequent purchasers were held valid and not barred by 31 U.S.C.A. § 203 under the facts presented.
  • Questions about sales of timber after surrender were not resolved in a manner that required modification of the awards; the record did not demonstrate an entitlement to credit for such sales sufficient to change the awards on appeal.

Broader implications: The opinion applies established equitable and takings principles to the facts of this case; it affirms that equitable relief (including vacatur of prior judgments) may be available post‑term where mutual mistake or unconscionability is shown, and that the Government may be required to pay just compensation (including interest) for destruction of growing timber. The court did not announce a novel rule of law but applied existing precedents to the circumstances before it.

This summary is drawn exclusively from the provided opinion of the United States Court of Appeals, Sixth Circuit, dated February 6, 1951, in United States v. Jordan et al., No. 10988.

UNITED STATES v. JORDAN et al.

MILLER, Circuit Judge.

The Unitel States appeals from a judgment which allowed the appellees separate recoveries for damages to timber located on tracts of land owned by them and used by the Army in connection with the operation of an air to ground gunnery range near Dyersburg, Tennessee.

On June 15, 1944, the United States instituted proceedings to condemn the temporary use of approximately 7,800 acres of land in Lauderdale County, Tennessee, for use in connection with the expansion of the Dyersburg Army Air Base, Air to Ground Gunnery Range. On the same day, the court entered an order of possession. Thereafter, the Army procured voluntary leases from some of the landowners involved and their tracts were dismissed from the proceedings. Following use of the property as an air to ground gunnery range, the Government in 1945 and 1946 surrendered possession to the landowners. In the condemnation suit the Government secured from the landowner at the time an agreement stipulating the fair rental value of the leasehold estate, and by which the landowner agreed to accept said sum in full and complete satisfaction for the land for said period, and in consideration of the sum so paid, released the United States for any and all claims for damages. Judgments were entered upon the stipulations and releases so executed. Following distribution of the funds in court to the landowners entitled thereto, an order closing the case was entered on March 12, 1947. In the negotiated leases, releases were also taken from the landowners upon surrender of possession, under which the landowner, for a consideration of "One Dollar and other valuable considerations" released the United States from all claims, excepting unpaid rent, arising out of the lease and occupation of the land.

On November 25, 1947, the appellees, being the owners of some twenty tracts so held and used by the Government, under both negotiated leases and through condemnation proceedings, filed this action in the district court under the Tucker Act, [28 U.S. Code, § 41(20) at that time] to recover damages to the timber thereon resulting from the fact that steel jacketed bullets were lodged in the standing timber to such an extent that it was rendered valueless. Following a trial before the court without a jury, the District Judge made findings of fact and conclusions of law upholding the claims of the appellees. He set aside the releases and stipulations between the parties on the ground that they were executed through mutual mistake of fact, because at the time they were agreed to the parties were ignorant of the fact that the standing timber had been rendered valueless by machine gun bullets. He vacated the judgments entered on the stipulations on the ground that they were manifestly unconscionable. He ruled that the claimants were entitled, in addition to the rental value and crop damage paid, to recover just compensation for the taking of their growing timber under the Fifth Amendment of the Constitution of the United States. Separate awards in favor of the respective claimants, computed on the basis of $12.50 per 1,000 board feet for the standing timber 12 inches and up, and the sum of $8.00 per 1,000 board feet for the standing timber 8 inches to 12 inches, were included in the judgment, which also allowed interest on each award from the date of the filing of the condemnation proceeding and the entry of the order of possession on June 15, 1944.

1948 Revised Judicial Code, 28 U.S.C.A. § 1346.

The Government contends that the District Judge had no jurisdiction to vacate the judgments entered in the condemnation proceeding, because (1) the present proceeding is a collateral attack on such judgments, Rooker v. Fidelity Trust Co., 263 U.S. 413, 415-416, 44 S.Ct. 149, 68 L. Ed. 362; Union Land Bank v. Byerly, 310 U.S. 1, 7-8, 60 S.Ct. 773, 84 L.Ed. 1041, and (2) because the term of court in which they were entered had expired. Bronson v. Schulten, 104 U.S. 410, 415, 26 L.Ed. 797; E.C. Shevlin Co. v. United States, 9 Cir., 146 F.2d 613, 616. Such is the general rule, as shown by the cases cited. However, an apparent final judgment is not necessarily immune from attack, even after term, where equitable considerations require appropriate equitable relief. Julian v. Central Trust Co., 193 U.S. 93, 24 S.Ct. 399, 48 L. Ed. 629; Simon v. Southern Ry. Co., 236 U.S. 115, 35 S.Ct. 255, 59 L.Ed. 492; Ballard Ballard Co. v. Munson S.S. Line, 6 Cir., 25 F.2d 252. And it has long been a recognized exception to the general rule that under certain circumstances, such as where it was manifestly unconscionable for a successful adversary to enforce a judgment in his favor, relief will be granted by a court of equity against such a judgment, regardless of the expiration of the term of its entry. Hazel-Atlas Glass Co. v. Hartford Empire Co., 322 U.S. 238, 64 S.Ct. 1281, 88 L.Ed. 1596; Taylor v. Nashville Chattanooga Railroad Co., 86 Tenn. 228, 6 S.W. 393. See also Pickford v. Talbott, 225 U.S. 651, 657-658, 32 S.Ct. 687, 56 L. Ed. 1240; E.C. Shevlin Co. v. United States, supra, 146 F.2d at page 615. We conclude that jurisdiction in the district court existed in the present case to vacate and set aside the judgments in the condemnation suit upon a showing of such equitable considerations as would justify such relief.

The Government also contends that since the leasehold interests were acquired for use as an air to ground gunnery range, the normal use of the property for such purpose would cause damage to the standing timber thereon, for which it should not be liable beyond the rental paid for the property. The District Judge found that under the express or implied covenants in the negotiated leases, and in the stipulations in the suit for condemnation, the appellees were entitled to recover damages to their standing timber in addition to the rental value paid, or were entitled under the facts in this case, in addition to the rental value paid, to recover just compensation for the taking of their growing timber under the Fifth Amendment to the Constitution of the United States. We are of the opinion that the evidence sustains these findings and conclusions. In the negotiated leases three different lease forms were used. By the provisions of one form, the Government agreed to return the premises in as good condition as that existing at the time of entering upon the same, reasonable and ordinary wear and tear excepted. Another form provided that at such times as the Government destroyed timber from an area in excess of one acre the parties would have a survey and timber cruise made for the purpose of determining the value of the timber destroyed and the Government would reimburse the lessor in the amount of the value of such timber destroyed. A third form provided that the rental payment agreed upon "does not include compensation for damages, if any, resulting from the use of the premises for the purposes leased; and that upon the termination of the lease, damages, if any, will be determined and payment therefor accomplished by supplemental agreement." Even in the absence of an express covenant, as was the situation in the condemnation suit, there is an implied obligation on the part of the lessee to treat the property leased in such manner that no injury be done to the inheritance, and to return the property to the lessor in as good condition as is received, ordinary wear and tear excepted. United States v. Bostwick, 94 U.S. 53, 65-66, 24 L.Ed. 65; Campbell v. W.M. Ritter Lumber Co., 140 Ky. 312, 315, 131 S.W. 20. The Government agent, J.C. Tainter, who negotiated the leases, testified that the negotiations were based on a straight land rental plus the growing crop value, and that when releases were being subsequently procured, if there was a probability of timber damage to the tract, they endeavored to put in the body of the release an exception and reservation of a claim for damages along those lines. The extremely low rental which was paid, in some instances as low as fifty cents an acre, strongly supports the ruling that timber damage was not included in the rental figure.

In our opinion, the finding of the District Judge that the releases and stipulations were executed through mutual mistake of fact is not clearly erroneous and is accordingly accepted. The evidence showed that the landowners had contacted their Congressman about getting back on the land, and the main purpose of the releases was to put the landowner back in possession and to stop the payment of rent. The Government contended, and still contends, that any damage to timber was localized in the target areas. The landowners were not in possession, and, except for a possible permit to go upon their property at certain designated times when firing was not going on, had no opportunity to ascertain if any damage had been done to the timber. They testified that such widespread damage to the timber was unknown to them. In the tracts subject to condemnation the stipulations fixed "the fair rental value of the leasehold estate" and the landowner stated his willingness "to accept said sum in full and complete satisfaction for said rent for said period." No additional consideration was given for the added release. In the negotiated releases the purported consideration was "One Dollar and other valuable considerations," which apparently was rarely, if ever, actually paid. This lack of consideration, considered particularly in the light of the substantial damage actually suffered and later ascertained, is very convincing evidence that the parties did not have at the time information about any material damage to the standing timber. The releases and stipulations, together with the judgments entered on the stipulations, were properly set aside as being based on a mutual mistake of fact. Thompson, Trustee v. Camp, Adm'x, 6 Cir., 163 F.2d 396; Callen v. Penn. R.R. Co., 332 U.S. 625, 68 S.Ct. 296, 92 L.Ed. 242. See: Metropolitan Life Ins. Co. v. Humphrey, 167 Tenn. 421, 70 S.W.2d 361.

The District Judge found as a fact that millions of steel jacketed, 50 caliber, machine gun bullets were fired at targets located roughly in the northwestern and southern sections of the range and scattered throughout each of these tracts, with the result that steel jacketed bullets were lodged in the standing timber to such extent that all of it was rendered valueless and unmerchantable. This finding is supported by the evidence, is not clearly erroneous, and must be accepted on this review. As shown by the testimony of Barton Tully, R.E. Miller, W.H. Bailey and Alvin Wunderlich, the existence of steel jacketed machine gun bullets in standing timber in any particular area, even though in small and scattered amounts, presents a very material hazard to any sawmill operator interested in the purchase of such timber. A concealed steel jacketed bullet will, in many instances, materially damage or ruin expensive sawmill equipment, and in some instances cause severe personal injuries to the employees engaged in the sawmill operations. Following such damage, the sawmill may have to close down, but with continuing payrolls, pending repairs. The reasonable probability of such hidden danger may be sufficient to render timber unmerchantable. The bullets, in the present case, were not restricted to the immediate area of the targets, but were lodged in trees throughout the entire range. Such damage to or destruction of the standing timber imposed an obligation upon the Government under the Fifth Amendment to the Constitution of the United States to make payment to the lessor for the value thereof, in addition to its obligation for the rental value of the property so leased. United States v. General Motors Corp., 323 U.S. 373, 383-384, 65 S.Ct. 357, 89 L.Ed. 311; Kimball Laundry Co. v. United States, 338 U.S. 1, 7, 69 S.Ct. 1434, 93 L.Ed. 1765. The Government concedes that the amounts of $8.00 and $12.50 per 1,000 board feet, as found by the District Judge, are within the range of the testimony.

The Government contests the allowance of interest on the awards. Where the compensation to be paid by the Government is fixed by contract between the parties, which contains no provision for the payment of interest, no interest runs against the Government even though the Government's payment be delayed. Albrecht v. United States, 329 U.S. 599, 67 S. Ct. 606, 91 L.Ed 532. In the present case, the rental value was agreed upon, but the additional taking through damage to the standing timber was not settled by contract. The awards under such circumstances properly carried interest from the date of taking as a proper element in determining just compensation. Seaboard Air Line Ry. Co. v. United States, 261 U.S. 299, 43 S.Ct. 354, 67 L.Ed. 664; Jacobs v. United States, 290 U.S. 13, 54 S.Ct. 26, 78 L.Ed. 142; United States v. Klamath Indians, 304 U.S. 119, 123, 58 S.Ct. 799, 82 L.Ed. 1219.

Two of the claimants, E.M. Steelman, Jr. and Robert C. Steelman, purchased their respective tracts of land from former owners and lessors after the termination of the Government's leaseholds, without knowledge that the value of the timber had been destroyed. Upon later discovery of the damage, the former owners executed assignments to the purchasers by which they assigned any and all claims against the Government "arising out of express or implied covenants in the aforesaid lease." The Government contends that the assignments are contrary to the provisions of the anti-assignment statute, 31 U.S.C.A. § 203, and that the assignees are barred from prosecuting their respective claims herein. United States v. Gillis, 95 U.S. 407, 24 L. Ed. 503. There are numerous exceptions to the literal wording of the statute. Goodman v. Niblack, 102 U.S. 556, 559-561, 26 L.Ed. 229; Erwin v. United States, 97 U.S. 392, 397, 24 L.Ed. 1065; Seaboard Air Line Ry. v. United States, 256 U.S. 655, 41 S.Ct. 611, 65 L.Ed. 1149; Western Pacific R.R. Co. v. United States, 268 U.S. 271, 45 S.Ct. 503, 69 L.Ed. 951; Old Colony Ins. Co. v. United States, 6 Cir., 168 F.2d 931, 934; United States v. South Carolina State Highway Dept., 4 Cir., 171 F.2d 893, 899. In the present case, the leases with the former owners ran in favor of the owners, their heirs, "successors and assigns." The claims here asserted arise out of these leases containing the express or implied covenants, as found by the trial judge, entitling the owners and their assigns to recover damages to the standing timber in addition to the rental value paid. The subsequent written assignments were incidental to the prior sale of the land, and in furtherance of the vendor's obligations under their deeds of conveyance. The purposes of the statute were in no way violated. Goodman v. Niblack, supra, 102 U.S. at page 560. We agree with the ruling of the District Judge.

The Government contends that the awards for Tracts 17 and 17a erroneously included timber of 12 inches and over that had been sold by the landowner to W.H. Bailey after the Government surrendered possession. But the record indicates that the figures used in computing the awards were based on the testimony of Ned E. Mason, timber cruiser for the Government, who made a recheck of his figures on August 16, 1946, which was subsequent to the sales to Bailey. Similar contentions are made by the Government with respect to Tracts 5, 16 and 23. Sales of timber from these tracts were not closed transactions in view of the buyer's later discovery of the hidden defects rendering the timber purchased valueless. What, if any, credit the Government would be entitled to by reason of such sales, with the very probable kick-backs involved, is not definitely enough indicated by the record to cause a modification of these awards. We do not find in the record that this question was called to the attention of the District Judge.

The judgment is affirmed.

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UNITED STATES v. JORDAN
(Feb 6, 1951)