District of Columbia v. Washington Market Company

The object of this action was to recover the sum of $53,847.23, with interest, alleged to be due from the Washington Market Company, by virtue of the terms of its charter, to the city of Washington, of which the plaintiff in error is the legal successor. The act of congress to incorporate the Washington Market Company (16 St. at Large, 124) took effect May 20, 1870. By the second section it was enacted that the company—

'Is hereby authorized and empowered to locate and construct a     suitable building or buildings upon the following-described      grounds, namely, commencing at the intersection of the center      line of B street north with the west line of Seventh street      west; running thence north along the west side of Seventh      street to the southerly side of Pennsylvania avenue; thence      westerly along the southerly side of Pennsylvania avenue to      the southerly side of Louisiana avenue; thence westerly along      the southerly side of Louisiana avenue to the east side of      Ninth street west; thence along the east line of Ninth street      to the center line of B street; thence along the center line      of B street to the place of beginning,-and to use and occupy      the same by the erection of a suitable building or buildings      for a public market-house, including the necessary stalls and      sheds, and also for stores, public halls, and such other      purposes as may be determined by said company, not      inconsistent with its use as a public market. The buildings     herein designated to be used for the purposes of a market      shall be used for no other purpose inconsistent therewith,      but the same shall remain a public market as hereinbefore      described.'

And provision was made, when the building was ready for occupancy, for letting out parts of the same as stalls and stands for market purposes, the rents for which were to belong to the market company. The buildings were to be constructed according to plans set forth in a schedule made part of the act. The company was required to purchase and pay for all buildings and fixtures then on the premises belonging to individuals, at prices to be fixed, if not agreed on, and to completely finish its structures and improvements within two years and sixty days after obtaining possession of the premises described. The twelfth, thirteenth, and fourteenth sections of the act are as follows:

'Sec. 12. And be it further enacted, that the privileges     conferred by this act shall be enjoyed by said company for      the term of 99 years, unless sooner terminated for a      non-compliance or abuse of the conditons herein imposed upon      said company, which may be done by suit in the name of the      United States, to recover possession of said property. At the     end of said period of 99 years, the said lands, with all the      erections and improvements thereon shall revert to the United      States, unless congress shall by law extend the period of      occupation thereof by said company: provided, that if the      corporation of the city of Washington shall, after a period      of 30 years from the approval of this act, by a vote of the      councils thereof, express a desire to possess itself of the      said market buildings and grounds, congress may authorize the      corporate authorities to take possession of the same upon      payment to the said market-house company of a sum of money      equal to a fair and just valuation of the buildings and      improvements then standing on said grounds, and the mode and      manner of ascertaining such valuation shall be determined by      congress.

'Sec. 13. And be it further enacted, that the real estate     herein described is hereby vested in the said corporation for      and during the said term of 99 years, or until a forfeiture      of its rights and privileges by a breach of the conditions      herein imposed on said company, and said estate shall be      taken and considered as a determinable fee. The real and     personal property of said corporation shall be subject to      assessment and taxation for all district and municipal      purposes, in the same manner and to the same extent that like property in the city of Washington owned and      possessed by individuals is liable to assessment and      taxation.

'Sec. 14. And be it further enacted, that in consideration of     the privileges granted by this act to the Washington Market      Company, the said company shall pay yearly, every year during      the said term of 99 years, unto the city of Washington, the      sum of $25,000; which sum shall be received by said city, and      set apart and expended by and under the direction of the city      government of said city, for the support and relief of the      poor of said city and of the District of Columbia; and said      city may enforce the payment of said sum from time to time as      the same shall become due, either by an action at law or by      the same proceedings now authorized by law for the collection      of taxes by said city.'

The real estate granted by this act was public property of the United States. It had been, and at the time of the passage of the act was, used as a market, and the buildings thereon, erected by individuals for such use, and which the market company were required to purchase, were subsequently destroyed by fire. Thereupon congress passed the following joint resolution, which took effect December 20, 1870, (16 St. at Large, 589:)

'Be it resolved by the senate and house of representatives of     the United States of America in congress assembled, that the      chairman of the committees on public buildings and grounds of      the senate and house of representatives, with the mayor of      Washington, be and hereby are constituted commissioners to      require the Washington Market Company, organized under the      fifteenth section of the act of May 20, 1870, promptly to      furnish temporary market accommodations for the marketmen who      were driven out by the late fire; and also to erect, at the      earliest possible day, the first stories or market portions      of the permanent market buildings provided for in said act;      and that said commissioners be authorized to make such      alterations in the buildings and such arrangements with said      company as shall be best calculated to secure the speedy      erection of buildings creditable to the city, and      sufficiently commodious for all the wants of the public:      provided, however, that the passage of this resolution shall      not be construed to supersede, delay, or in any way affect the pending investigations into the affairs of said company,      nor to relieve the company or any person from consequences of      any acts under investigation.'

On February 21, 1871, the municipal government of the city of Washington was superseded by the act of congress of that date, providing a government for the District of Columbia as its successor, and the legislative assembly of the District of Columbia, on August 23, 1871, passed the following resolution:

'Be it resolved by the legislative assembly of the District     of Columbia, that the governor be authorized and required to      act as one of the commissioners of the Washington Market      Company, under the resolution of congress approved December      20, 1870; and that he be requested to procure such      alterations in the plan of the buildings to be erected by      said company as shall transfer the proposed hall from the      Ninth-street wing to the main building on Pennsylvania      avenue, and also to secure a reduction from $25,000 to      $20,000 of the annual rental required to be paid by said      company, and which is now assessed by the company upon the      stall-holders.'

The act of congress making appropriations to supply deficiencies, etc., approved March 3, 1873, (17 St. at Large, 540,) contains the following paragraph:

'For the purchase by the United States of the interest of the     District of Columbia in the present city-hall building in      Washington, now used solely for government purposes, such sum      as may be determined by three impartial appraisers, to be      selected by the secretary of the interior, not exceeding      $75,000, the same to be applied by said district only for the      erection of a suitable building for the district offices; and      the governor and board of public works are authorized, if      they deem it advisable for that purpose, to make arrangements      to secure sufficient land fronting on Pennsylvania and      Louisiana avenues, between Seventh and Ninth streets:      provided, that the government of the United States shall not      be liable for any expenditures for said land, or for the purchase money therefor, or for the      buildings to be erected thereon; and no land, or the use      thereof, is hereby granted for the purpose of erecting any      building thereon for such building.'

On June 26, 1873, the legislative assembly of the District of Columbia passed an act appropriating the sum of $90,000 for the erection of a suitable building for the district offices, under the direction of the governor and board of public works, which included the sum of $75,000, receivable for its interest in the city-hall building, under the provisions of the above paragraph from the deficiency appropriation act.

In view of that expenditure the governor and board of public works had made an arrangement for a site for the intended structure with the Washington Market Company, which is contained in the following memorandum of agreement between them:

'In pursuance of the act of congress of March 3, 1873,     authorizing the governor and board of public works, if they      deem it advisable, for the purpose of erecting thereon a      suitable building for district offices, to make arrangements      to secure sufficient land fronting on Pennsylvania and      Louisiana avenues, between Seventh and Ninth streets, it is      hereby agreed that—

'(1) The Washington Market Company shall, by good and     sufficient quitclaim deed, release and convey to the District      of Columbia all the title and interest of said company      acquired under act of congress of May 20, 1870, incorporating      said company, in and to so much of the land within said      district, described in section 2 of said act, and fronting      Pennsylvania and Louisiana avenues, as is contained within      the following limits: Beginning at the southwest corner of      Seventh street and Pennsylvania avenue; thence westerly along      the southerly side of Pennsylvania avenue to its intersection      with the southerly side of Louisiana avenue; thence westerly      along the southerly side of Louisiana avenue to the east side      of Ninth street; thence along the east line of Ninth street      86 feet; thence easterly on a line parallel with the      aforesaid southerly line of Louisiana avenue to a point 86      feet south of said intersection of the southerly line of      Pennsylvania and Louisiana avenues; and thence on a line      parallel with the aforesaid southerly side of Pennsylvania avenue to the westerly line of Seventh street, at a point 86      feet from the corner began at; thence northerly along the      west line of Seventh street 86 feet to the corner began at.

'The Washington Market Company shall also, in said deed,     convey to said district the right to use in common with said      market company, as a passageway and court-yard, all the land      between the lot conveyed in said deed and a line drawn      westerly from Seventh to Ninth street, 10 feet north of the      north walls of the present Seventh and Ninth street buildings      of said market company.

'(2) In consideration of the aforesaid release and conveyance     by the Washington Market Company to the District of Columbia,      the district will assume and fulfill all obligation imposed      upon the company by section 14 of said act of May 20, 1870,      (as modified by act of the legislative assembly of the      district of August 23, 1871,) except as follows:

'The Market Company shall pay annually to the District of     Columbia, during the term, and for the purpose mentioned in      said section 14, the sum of seven thousand five hundred      dollars, payable quarterly, which sum shall during said term      be in the place of all rental for the ground occupied by the      market buildings of said company; and in case in any year the      general district taxes upon said ground and market buildings      shall exceed $5,500, the excess above that amount shall be      deducted from said rental of $7,500, so that the total annual      payments for rental and taxes shall not exceed $13,000; the      district, however, not hereby releasing, but expressly      reserving, and the market company hereby confirming, the      right of the district, given by section 2 of the act of May      20, 1870, of fixing and controlling, for the protection of      the market dealers and of the public, the amount of rentals      of the stalls and stands in said market buildings; and it is      also hereby agreed that the annual rental of stalls and      stands in the other markets in the city of Washington shall      not be fixed by the district authorities at a lower rate per      square foot of area than 70 per cent. of the rate fixed under     said section for stalls and stands in the market buildings of      said company; and the district shall not use the land      released and conveyed as aforesaid for the purpose of a      market.

'This agreement shall take effect April 1, 1873, and the market company shall at once settle its past rental account     to that time at the rate, since August 23, 1871, fixed by the      resolution of the legislative assembly of that date, and      shall immediately pay the balance due the treasurer of the      district.

'Possession of the land conveyed shall be given the district     upon the day of executing this agreement.

'Dated at Washington, March 18, 1873.

'WASHINGTON MARKET COMPANY,

By M. G. EMERY, President.

'H. D. COOKE, Governor,

'ALEX. R. SHEPHERD,

'JAMES A. MAGRUDER,

'S. P. BROWN,

'ADOLF CLUSS,

'Board of Public Works.'

By a deed of the same date the Washington Market Company conveyed and released to the District of Columbia the real estate described in the agreement, which deed was delivered and recorded.

From the bill of exceptions, taken upon the trial of the action in the supreme court of the District of Columbia, it appears that—

'To further maintain the issues upon its part joined, the     defendant offered and gave evidence to the jury tending to      prove that immediately upon the execution of said agreement      of March 18, 1873, said defendant settled with the proper      officers of said District of Columbia its past rental account      on the terms and in the manner fixed in said agreement, and      paid to the treasurer of said district the balance agreed in      said settlement to be due from the defendant to said      district; that defendant had paid its said rental account      from and including March 18, 1873, to April 1, 1873, at the      rate of $20,000 per annum. Defendant further gave in evidence     a letter dated April 1, 1873, signed officially by the      comptroller at that date of said district, and addressed to      said defendant, acknowledging that defendant had settled and      paid to said district all amounts due from defendant on      rental account up to said April 1, 1873. Defendant further     proved that from said last date to the date of this suit it      has paid to the plaintiff, on account of said rent, at the rate of $7,500      annually; that immediately subsequent to the date of said      agreement and execution and delivery of said indenture,      conveying to the plaintiff the property fronting on      Pennsylvania avenue between Seventh and Ninth streets      north-west, in the city of Washington, District of Columbia,      the plaintiff took possession of the ground between said      limits, and made excavations for a foundation for a building      for offices for the District of Columbia, but had not      proceeded more than a few days in excavating before the work      was stopped; that the defendant has not, from the date of      said indenture, been in possession of or exercised any power      or authority over the ground so conveyed, or any part      thereof.'

And there was no evidence inconsistent with this. The amount sought to be recovered by the plaintiff is the annual rental of $25,000, accrued during the period specified in the declaration, giving credit for payments actually made, but without regard to the reduction and settlement claimed by the defendant under the agreement of March 18, 1873. This agreement the plaintiff in error claims to be void. The court below, being of a different opinion, directed a verdict for the defendant, the judgment on which is brought into review by this writ of error.

A. G. Riddell and H. E. Davis, for plaintiff in error.

[Argument of Counsel from pages 251-254 intentionally omitted]

''Wm. Birney and B. F. Butler'', for defendant in error.

MATTHEWS, J.