McNaught v. United States ( 1954 )

Jones, Chief Judge,

delivered the opinion of the court:

Plaintiff seeks to recover damages to the soil and to the tiling caused by defendant’s use of 170 acres of land in Cook County, Illinois, as an outlying flying field under a lease of such property to the Government.

Plaintiff and her husband, now deceased, owned 452 acres of land in Illinois which they used as a dairy and livestock farm. Under date of April 3,1942,170 acres of the property were leased to the Navy for the initial period March 1,1942, to June 30, 1943. Under an optional renewal provision the premises were used until the spring of 1946. The annual rental was $2,550, payable at the rate of $212.50 per month.

Pertinent provisions of the lease are set out in our finding 2.

The terrain was undulating and rolling with some small hills, depressions and valleys. There were no buildings on this particular tract, but there was a tile drainage system. The defendant agreed not to “spread or cause to be spread any gravel * * * nor lay or cause to be laid any concrete * * * over the demised premises or any part thereof, nor do or cause anything to be done * * * which might or could be detrimental to the soil thereof for farming purposes.” The usual restoration provisions were contained in the lease. In addition the lease contained the following stipulation:

All top soil removed at any time during the term of this leasing shall be replaced by the Government after grading operations have been completed, so that said premises may at all times maintain their present state of fertility.

The defendant graded the surface to level it off for use as a flying field. Heavy road-building machinery, such as bulldozers and carryalls, was utilized, the topsoil and part of the subsurface soil were pushed aside, the subsurface soil and subsoil, including clay, were excavated from the high knolls and deposited in the depression areas. A mixture of topsoil and subsurface soil which had been pushed aside was respread over the graded areas.

The grading operations thus caused considerable disturbance to and rearrangement of the soil. On 22% acres all of the subsurface soil and portions of the subsoil and clay were removed and then spread over with a blend of top and subsurface soil, and fills in the depressed areas were made of a blend of topsoil and subsurface material excavated from the knolls. On much of the remaining portion of the tract there was a mixing of the topsoil with other materials in the process of respreading.

The plaintiff claims that the productive value of the farm was permanently reduced, and that she is entitled to this reduction in value, plus the damages to the tile drainage system, plus rents for 11 months.

At the threshold we are met with the defense that the liquidated damage provision in the “Whereas” portion of the contract should be held to cover all damages. However, if this were correct there would be no point in the other specific obligations of the contract. The entire contract must be construed together. Plaintiff testified that this particular provision was merely to cover the cost of the alfalfa seed, phosphate and lime used on the 170 acres and the plowing done thereon prior to the execution of the lease, all of which were necessarily lost by the entry on the premises. It was stated that it was “fair and just compensation [to be] paid in advance for damages which will necessarily result to the described property and crops planted thereon, by the entry upon and improvements made thereon by the Government.”

The specific obligation embodied in the later provisions of the contract were much broader. When the contract is read as a whole this appears to be a reasonable interpretation. The most favorable construction of the provision to the defendant would be that it is unclear in the light of the later provisions, thus making an explanation in order. The defendant did not attempt to controvert the testimony of the plaintiff. At any rate the positive obligation to replace the topsoil “so that said premises may at all times maintain their present state of fertility” was an affirmative undertaking the defendant voluntarily assumed.

The record definitely shows that this obligation was not met, that the fertility of the soil was reduced, that the topsoil was replaced mixed with other materials, including clay, and that the value of the tract was materially reduced from what it would have been had the changes not been made, or if the topsoil had been replaced in unmixed condition.

The defendant further claims that it was impossible to restore the topsoil without mixing it with other materials in the process. The record while conflicting shows that it could have been done with only slight mixing. It would have been more troublesome and somewhat more expensive. The defendant used heavy machinery that did the job, but that caused more mixing of other materials with the topsoil than would have otherwise occurred.

As usual the experts, while agreeing that damage was done, differed widely as to the amount, ranging from a low estimate of $2,000 to a high of $22,100 as the reduction in the value of the farm.

The defendant’s main expert said the full productivity could be restored by the use of fertilizer and other treatment in three to five years. This is contrary not only to the major evidence in the record, but contrary to practically all the official reports made by those who have made a ■ lifetime study of the subject of soils. Most of these agree that it takes at least 50 years for nature to build a topsoil and that only nature can build it, although fertilizer and other ingredients applied scientifically from time to time will of course increase the yield.

On the other hand the plaintiff’s experts testify that the damage was permanent, that the productivity of the soil could never be restored. This is the other extreme.

Experts sometimes baffle us. In the expression of opinion they are not only given the privilege of a wide range, they usually exercise it. Somewhere in this maze we must undertake to find the true level.

The intrinsic value of the soil cannot be discounted. It is the priceless ingredient in the alchemy of life. Man came from the soil and in the end goes back to the soil. It is as essential as the air we breathe. Life cannot be sustained without it. As far back as we have any record of the human race the cultivation of the soil has been the primary occupation of man. It is proved by experience, it is established by the facts of history, that not only the wealth of a nation, but the character and quality of its people go up and down with the productivity of its soil. No institutions can be permanent when linked to a barren land.

Practically all the new wealth of the world comes from the ground, either from the minerals found in the earth, or from crops that grow in the soil or from livestock that feeds upon the products of the soil. The products may be increased in value by the genius of industry, but the raw materials are essential.

Nature does rebuild and even create soil. It is done over a period of years in nature’s laboratory by a hidden process which no man knows.

From a consideration of all the evidence we find that the damage to plaintiff from the failure of the defendant to properly replace the topsoil is $7,500, and that this amount represents the difference in the market value of the property as returned and as it should have been returned pursuant to the terms of the lease.

As set out in findings 19,20, and 21 we find that the amount of money actually expended by plaintiff in restoring the damage done to the tile draining system in the southeast corner of what is described in the record as the “upper 90” and the “lower 80” was $5,420.25 which was directly attributable to the grading operations with the heavy bulldozers and road-grading machinery. This amount was actually expended by plaintiff in repairing the damage. We do not allow anything for the additional amount, $3,388.24, expended by plaintiff in restoring the part of the system that was located on the northern part of the “upper 90” because that part of the system was not functioning properly at the time the lease period began.

The plaintiff claims $2,337.50 additional rental under the lease contract. The prolusion under which the claim is made is set out in the footnote.¹ It will be noted that the provision is for rental payments for the balance of the calendar year in which the lease is terminated and two months of the next year, “which * * * shall be considered liquidated damages for loss of use of the land during the regular crop-planting season” and other damages by reason of the cancellation. There is a further provision that upon 30 days’ written notice the lease may be cancelled on March 1 of any year without payment of the liquidated damages so provided. The lease was cancelled by agreement just before March 1, 1946. The plaintiff claims rental payments for the remainder of 1946 and two months of 1947.

When the provision is read and construed as a whole it becomes manifest that the specific provision was to pay for loss of the land during the crop year and that if the lease were cancelled not later than March 1 of any year there would be no additional payments. The lease was cancelled before March 1 and the land was actually planted to crops that year. True, the yield was not as great as it probably would have been had the lease never been executed, but this is covered by the recovery for the reduced value of the farm. The whole purpose of the section has thus been served.

The lease provided for 30 days’ notice and plaintiff could have insisted on that notice, but in that event defendant would have had the use of the land for another year had it so desired. Evidently plaintiff preferred to agree to the cancellation and by so doing waived the 30 days’ notice. Smith v. United States, 96 C. Cls. 326, 340; Kalbritan v. Padover, 161 N. E. 898.

The plaintiff is entitled to recover the sum of $12,920.25.

It is so ordered.

MaddeN, Judge; Whitaker, Judge; and LittletoN, Judge, concur.

FINDINGS OE FACT

The court makes findings of fact based upon the evidence, the report of Commissioner C. Murray Bernhardt, and the briefs and argument of counsel, as follows:

1. Plaintiff is a citizen of the United States and a resident of Illinois.

2. Plaintiff is the executrix of the estate of her late husband, Norris McNaught, who died October 15, 1942. She is the residuary legatee under his will and is the sole owner of the property involved in this proceeding.

3. Plaintiff and her late husband acquired approximately 452 acres of farm property in Cook County, Illinois, as joint tenants by three purchases made in 1940 and 1941, of which they leased approximately 170 unimproved acres to defendant by lease dated April 3,1942, for use by the Navy as an outlying flying field for naval aircraft. Prior to the execution of the lease the plaintiff, in preparing the property for planting crops for that year, had gone to some expense in phosphating, liming, and plowing the soil, and in purchasing alfalfa seed. The lease, which was prepared by defendant, was for an initial period from March 1, 1942, to and including June 30, 1943, and provided in part:

WHEREAS, the property described herein is necessary for the prosecution of the war effort and is particularly adapted for the purpose of outlying flying field and

WHEREAS, the Lessor desires to enter into a lease with the Government for the purpose hereinbefore stated, provided fair and just compensation be paid in advance for damages which will necessarily result to the described property and crops planted thereon, by the entry upon and improvements made thereon by the Government, and further the Government and Lessor have agreed, and do hereby agree that

-TWO THOUSAND AND NO/100 ($2,000.00)-dollars represent liquidated damages for the damages stated, * * *

$ $ $ $ $

This lease may, at the option of the Government, be renewed from year to year at a rental of two thousand five hundred fifty and no/100 dollars ($2,550.00) and otherwise upon the terms and conditions herein specified, provided notice be given in writing to the Lessor at least thirty (30) days before this lease or any renewal thereof would otherwise expire ;

The Government shall pay the Lessor for the premises rent at the following rate: Two hundred twelve and 50/100 dollars ($212.50) per month. Payment shall be made at the end of each quarter annum.

Upon termination of this lease or any renewal thereof, the Government agrees to pay rental for the balance of the calendar year in which this lease is terminated and two months of the succeeding calendar year at a rate proportionate to the rate provided in this lease which amount shall be considered liquidated damages for loss of use of the land during the regular crop planting season and any and all other damages suffered by the lessor by reason of cancellation of this lease by the Government, it being understood and agreed that this lease or any renewal thereof may be cancelled on the first day of March of any year, upon thirty (30) days written notice to the lessor, without payment of the liquidated damages above provided in this paragraph.

The Government shall have the right, during the existence of this lease, to make alterations and attach fixtures on or upon the premises hereby leased, consistent with and for the purpose of this leasing, except that Lessee shall not at any time during the term of this lease, or any renewal thereof, spread or cause to be spread any gravel or similar substance or material, nor lay or cause to be laid any concrete or similar substance or material, over the demised premises or any part thereof, nor do or cause anything to be done on or upon said premises, or any part thereof, which might or could be detrimental or injurious to the soil thereof for farming purposes; all fixtures so placed in or upon the said premises shall be and remain the property of the Government and may be removed therefrom by the Government prior to the termination of this lease and the Government shall, before the expiration of this lease or any renewal thereof, restore the premises to the same condition as that existing at the time of entering upon the same under this lease, reasonable and ordinary wear and tear and damages by the elements, or by circumstances over which the Government has no control, excepted.

All top soil removed at any time during the term of this leasing shall be replaced by the Government after grading operations have been completed, so that said premises may at all times maintain their present state of fertility.

4. By exercise of the renewal option in the lease defendant occupied the leased premises until the spring of 1946.

DAMAGE TO SOIL

5. The leased premises consisted of two adjoining parcels in the shape of the letter “L”. The vertical parcel contained approximately 95 acres but is referred to as the “upper 90”. The horizontal parcel contained approximately 77.77 acres and is referred to as the “lower 80”. The terrain was undulating and rolling, with several small hills, depressions and valleys. There was frequently no natural surface outlet between or through the hills. There were no structures on the property at the commencement of the lease.

6. As used in this report, topsoil is the strata of soil lying on the surface of the ground. Subsurface soil is the strata directly underlying the topsoil, and subsoil is the strata directly underlying the subsurface soil. Beneath the subsoil lies the glacial till. The soil of the leased premises was of three predominant types. Depending on the soil type involved, the thicknesses of the topsoil, subsurface soil and subsoil on the leased premises prior to Navy occupancy in 1942 were, respectively, 6 to 12 inches, 6 to 12 inches, and 8 to 15 inches.

7. After taking possession of the premises in 1942 defendant graded the surface to level it off for use as a flying field. The grading was accomplished with road-building machinery, such as bulldozers and carryalls. In the grading the topsoil and part of the subsurface soil were pushed aside and the subsurface and subsoil excavated from the high knolls and deposited in the depressional areas. After these fills were made, the mixture of topsoil and subsurface soil which had been pushed aside was respread over the graded areas. The field was then tiled in certain areas with surface tiles and seeded.

8. The grading operation by defendant created areas of heavy, moderate and light disturbance to the soil.

9. There were 22% acres of heavy soil disturbance where all of the subsurface soil and portions of the subsoil were removed, and then spread over with a blend of topsoil and subsurface soil; or where, over the original profiles of the depressed areas, fills were made of subsoil and subsurface soil excavated from the knolls and then spread over with a blend of topsoil and subsurface soil.

10. There were 22% acres of moderate soil disturbance where part of the subsurface soil was removed and then spread over with a blend of topsoil and subsurface soil.

11. There were 40 acres of light soil disturbance where the topsoil had been replaced and worked over.

12. It is impossible to remove the topsoil on an area as large and irregular as this area was and, upon completion of grading, replace the topsoil without some mixing, but by the use of heavy machinery and giving first attention to getting the ground ready for use as a flying field more mixing was caused than would otherwise have been necessary.

13. (a) The soil disturbance to the leased premises reduced their ability to grow corn, oats, and alfalfa, but this disturbance was not permanent.

(b) In 1941 the “upper 90” produced, under management by plaintiff and her husband, 80 bushels of oats per acre and 80 to 90 bushels of corn per acre. During the five years preceding and including 1941, the “lower 80”, under different management, produced a yield of corn and oats averaging between 60 and 70 bushels.

(c) In 1946, the first year plaintiff planted the leased premises to crops after defendant vacated, the corn crop was poor and only about 10% could be harvested, the remainder being placed in silo. The oat crop was too poor for harvesting and was left in the field. Late planting may have affected the oat crop.

(d) In 1947,1948, and 1949, the oat crop averaged no more than 30 bushels per acre. The corn crop was spotty and poor, with some good rows and some bad, and the yield approximated one-half of a good yield. The corn was put in silo and none was sold. The poor quality of the corn crop may have been partially due to late planting, planting too close together, and cultivating too deeply. 1949 was the last year corn was planted.

It is estimated that over a period of approximately ten years, the area of heavy soil disturbance would have no income-producing value, the area of moderate soil disturbance would suffer a 50 percent reduction in income-producing value, and the area of light soil disturbance would suffer a ten percent reduction in income-producing value. This estimate is not the sole criterion employed in determining the reduction in value of the leased premises due to soil disturbance as found in finding 18, infra. Other factors were persuasive.

(e) In 1950 only alfalfa and oats were grown. The oat crop averaged 30 bushels per acre and was fed to stock. After 1050 only alfalfa was planted and grown on the leased premises.

(f) Alfalfa was planted and grown from 1946 through 1952. It grew well in the areas of light soil disturbance and no soil disturbance, but poorly elsewhere. The over-all quality of the 1952 alfalfa crop was poor. Alfalfa will not grow well where subsurface soil is removed and topsoil is next to subsoil.

14. (a) Average yields which reasonably could be expected from a farm in the area of the leased premises are 55 to 60 bushels of corn per acre, 40 to 50 bushels of oats per acre, and 2% tons of alfalfa per acre.

(b) During the 11 years ending in 1945 the average prices in Illinois for corn, oats and alfalfa, respectively, were 78 cents per bushel, 44 cents per bushel, and $11.41 per ton. During the years 1946 and 1947 these prices averaged, respectively, $1.68, $1.15, and $20.

15. Plaintiff made reasonable efforts to rejuvenate the soil. She converted the entire field to alfalfa in gradual stages from 1946 to 1952 for that purpose. She has kept it well supplied with fertilizers, phosphate, and lime.

16. The altered soil map of the leased premises caused by the grading operation has justified and required a change in the cropping of the field to incorporate a larger proportionate amount of grass-rooted crops and a reduction in the amount devoted to corn.

17. The leased premises were an integral part of the entire 452-acre farm which plaintiff and her husband acquired in 1940 and 1941 and converted into a dairy and livestock operation. The products from the crops grown on the 170 acres were intended to be utilized in feeding the cows and other livestock. Loss of fertility in the 170-acre field resulted in a less efficient over-all farming operation, and necessitated the purchase of feed on the open market. No evidence was presented that would fix the value of this special use, and plaintiff did not allege it in the pleadings.

18. The estimates made by soil and farm appraisal experts who testified as to the reduction in the value of the leased premises due to the soil disturbance alone ranged from $2,000 to $22,100. From a consideration of all the evidence it is reasonable to conclude that the damage to plaintiff resulting from the soil disturbance and the consequent reduced ability of the property to grow crops amounted to $7,500. The difference in the market value of the property in the condition in which it was returned and in the condition in which it should have been returned pursuant to the terms of the lease was $7,500.

DAMAGE TO TILING

19. As found on the leased premises, tiling on a farm property is an artificial drainage system consisting of a disjointed series of cylindrical lengths of terra cotta pipe from 4" to 12" in diameter, each length butted against the next which, embedded at or below the frost line in those areas of the property lacking adequate natural drainage and arranged in a descending order, serve to carry off excess surface water accumulations.

20. The then existing tiling system in the leased premises was partially repaired by plaintiff prior to March 1, 1942, but the drainage at the north end of the “upper 90” was not functioning properly at that time.

21. The heavy bulldozers and other road-grading machinery used in the grading operation by defendant destroyed the usefulness of much, of the tiling system serving the southeast corners of the “upper 90” and the “lower 80”, either by breaking or dislodging the tile at many points, or hy burying sections of tile under a layer of impervious clay which impeded proper drainage. As a result, plaintiff expended $5,420.25 to replace the damaged areas of the tiling system, which sum included $500 (owed and paid for by plaintiff as her responsibility) for part of the work done on a neighboring property whose tiling system was impaired as a result of defendant’s grading operation on plaintiff’s property. Damage to the tiling system directly attributable to the grading operation was $5,420.25.

22. Necessary repairs made by plaintiff to the tiling system in the north end of the “upper 90” were not the direct result of defendant’s grading operation but resulted primarily from conditions antedating the lease.

LEASE TERMINATION

23. On February 25, 1946, defendant sent to plaintiff the consent papers necessary for the cancellation of the lease as of February 28, 1946. On February 28, 1946, plaintiff executed and delivered to defendant this document, which read as follows:

I, Gertrude McNaught, of Chicago, Illinois, hereby consent to the cancellation of the lease dated March 1, 1942, between myself, as lessor, and the United States of America, as lessee, as of February 28, 1946, covering premises in Cook County, Illinois, described as:

The SW fractional % of section 19, township 41, north range 10, east of third principal meridian; The north l/2 of NW fractional % and the west 15 chains of the north 20 chains of the NE% of section 30, township 41 north, range 10 east of third principal meridian;

Consisting of 170 acres more or less.

The Government will cause to be removed a crushed stone driveway leading from the road to the large shack and three (3) crushed stone circles placed on the property by the lessee. The Government will further cause to be removed all wooden markers which have been placed on the property by the lessee.

WITNESS my band this 28th day of February 1946.

(s) Gertrude McNaught Gertrude McNaught

In presence of:

(s) Melville B. Peterson.

(s) Marie Johnson.

24. Under date of July 8,1946, defendant sent plaintiff a release to be executed in quadruplicate which provided that plaintiff would release defendant

from all manner of actions, claims or demands which against the United States of America, its officers, agents and employees, the undersigned [i. e., plaintiff] ever had, now has, or ever will have upon, or by reason of any matter, cause or thing whatsoever arising out of said lease or the occupancy by the United States of America of said premises or the use of any personal property thereon.

Plaintiff did not execute or return the release to defendant.

25. Defendant did not deliver to plaintiff a formal 30-day written notice that it would terminate the lease on March 1, 1946.

26. On February 25,1946, defendant entered into a “letter agreement” with a Herman Volkening for the latter to remove from the leased premises “all crushed stone-in three (3) two hundred (200) feet diameter landing circles and entry roadway”, and “all field boundary markers, line shack and directional marker.” With the exception of the removal of the crushed stone, Volkening completed the contract prior to March 1,1946. He removed the crushed stone, which had frozen in the ground, by April 8,1946. He had the premises cleared off in time to permit plaintiff to plant her crops and not to interfere with plaintiff’s spring work.

CONCLUSION OF LAW

Upon the foregoing findings of fact, which are made a part of the judgment herein, the court concludes that as a matter of law the plaintiff is entitled to recover, and it is therefore adjudged and ordered that she recover of and from the United States twelve thousand nine hundred twenty dollars and twenty-five cents ($12,920.25).

1 Upon termination of this lease or any renewal thereof, the Government agrees to pay rental for the balance of the calendar year in which this lease is terminated and two months of the succeeding calendar year at a rate proportionate to the rate provided in this lease which amount shall be considered liquidated damages for loss of use of the land during the regular crop planting season and any and all other damages suffered by the lessor by reason of cancellation of this lease by the Government, it being understood and agreed that this lease or any renewal thereof may be cancelled on the first day of March of any year, upon thirty (30) days written notice to the lessor, without payment of the liquidated damages above provided in this paragraph.