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May 26, 1964
sufficient to impute a knowledge that appellant's right to a lease was superior to Toles is another question. Appellant, of course, contends that it should be, either because of imputed notice, a presumption of fact, or of constructive notice, a presumption of law. See the discussion regarding the types of notice and general effect of them in Charles v. Roxana Petroleum Corporation, 282 Fed. 983, 987 (8th Cir. 1922), cert. denied, 261 U.S. 614. We agree with appellant to the extent that land office records may in some circumstances be held to give constructive or imputed notice of certain facts to which a party will be held bound regardless of his actual notice. Generally, these will be facts which may be easily ascertained from those records available to the public reflecting the status of an application or claim, such as the serial register book and the plats, and which will show a chain of title or information apparent on the face of the instrument through which the claimant is making his claim. See the Krueger case, supra; Gabbs Exploration Co., 67 I.D. 160 (1960), aff'd Gabbs Exploration Co. v. Udall, 315 F. 2d 37 (D.C. Cir. 1963), cert. denied, 375 U.S. 822; also see James C. Forsling, 56 I.D. 281 (1938).
With respect to the hypothetical situations mentioned by appellant, it would be appropriate to hold a purchaser bound by what he could easily have ascertained from the land office records in those instances as any action by the land office against a lease or any protest by another party would be recorded on the serial register book and would evidence a cloud upon the title of the lease clearly apparent to anyone checking the land office records. It would be expected that a prospective purchaser of an oil and gas lease would check the land office records to ascertain that the lease had in fact issued and in doing so would easily see such a notation. Thus, it would be appropriate to hold a purchaser bound by what he could and should have ascertained from those records. Cf. Gabbs Exploration Co., supra.
However, in the circumstances of the present case with respect to the question of notice, the negligence of the purchaser is not so clearly evident. Here the serial register and the plat at the time the assignment was filed showed the lease in apparently good standing without any adverse action against it. Therefore, although the plat would show appellant's offer pending, the records would also show that it was filed after the lessee's offer. The lease instrument itself would show no defects. It would show that the lease issued for less acreage than applied for. In order for the purchaser to gain any notice that this made the lease defective, he would have to ascertain the land
It may be noted that a 1960 amendment of section 27 of the Mineral Leasing Act, supra, specifically provides that the commencement and conclusion of every proceeding (to cancel or forfeit a lease) "shall be promptly noted on the appropriate public records of the Bureau of Land Management." 30 U.S.C. § 184 (h) (3) (Supp. IV, 1963).
status of adjoining lands from other records, including a master plat which would show the status of adjoining lands at the time the offer was filed, as the current plat would not reflect that. He would also have to inspect the appellant's offer and analyze it to see if it was defective in any way.
Any constructive or imputed notice here would go far beyond that in the Krueger case where the situation implied bad faith. Here the purchaser did request a title opinion from his attorneys who informed him of appellant's pending offer but indicated that it was apparently filed after the lessee's and that it would "probably be all right." The court in Charles v. Roxana Petroleum Corp., supra, at page 984, stated that "action of parties in seeking legal opinion of reputable lawyers on the question of title is strong evidence of good faith." Since there was a reservation in the lawyer's opinion, the purchaser, himself, checked the records and found that the lessee's offer was filed before appellant's and, therefore, he states he ordered the completion of the transaction. Perhaps an extremely cautious person might have taken steps which appellant suggests in its appeal or might have made a much more thorough check of the records, carefully analyzing all possibilities, and might have decided not to take the assignment. However, the test for imputing notice of a superior right, as appellant's cited cases note also, is generally whether the facts are sufficient to put an ordinarily prudent man upon inquiry, an inquiry which, if followed with reasonable diligence, would lead to the discovery of defects in the title or of equitable rights of others affecting the property. As stated in Charles v. Roxana Petroleum Corp., supra, at page 996, the test is "not what an extremely cautious person might do, but what a prudent one should do."
If appellant's contentions were entirely accepted here as to the application of imputed or constructive notice, there could never be a situation involving a lease which is voidable where a transferee could be considered a bona fide purchaser under the Mineral Leasing Act so long as there are other offers for the land noted on the land office records or, indeed, even if there were no adverse party other than the Government, where the defect in the lease could have been ascertained if an extensive search of the records was made and all knowledge of regulations and rulings was applied. We do not believe that a prospective assignee of an oil and gas lease which is shown on the serial register pages and the plats as issued and in apparent good standing is bound to presume that there was some irregularity in the issuance of the lease and that a searching examination of all the land office records must be made and an exhaustive legal opinion of all possible attacks be received in order to ascertain whether the land office employees may have made some mistake. Cf. United States v. Detroit
May 26, 1964
Lumber Co., supra, at page 332. Mistakes in issuing leases to the first qualified applicant do occur, but they are the exception rather than the rule. The normal assumption for anyone to make who looks at land office records reflecting the status after a lease has issued is that it was issued to the first qualified applicant and that the land office did or will reject any conflicting offers which were filed subsequent to the offer for which the lease issued.
While the appellant would hold the assignee to a strict accountability for what an analysis of the land office records would have revealed, it apparently made no such examination itself. At least it permitted Toles' prior conflicting offer to remain on the record for over a half year without protesting it for the defects it contends Lowe should have uncovered. So far as the records show, the only obstacle to Toles' offer was a junior offer. The issuance of a lease to Toles is at least prima facie evidence that all preliminary requirements were satisfied and that the lease was properly issued. Solicitor's opinion, M-36539 (November 19, 1958).
The situation here is not comparable to that obtaining under State recording acts. In those cases not only are the statutory requirements for filing made clear but there are also specific statutory provisions specifying the effects of recordation and establishing the rights of firstrecorded bona fide transferees or claimants. Also, the nature of the interests of the persons being protected is generally vested or otherwise different from that of an offeror under the Mineral Leasing Act, whose only right is that of a preference claimant.
The bona fide purchaser provisions have been considered in their context in the Mineral Leasing Act. As previously mentioned, by the broad terms of the provisions they preclude action by this Department to cancel leases issued in violation of another's statutory preference right where they have been assigned to a bona fide purchaser. Also, Congress intended by them to give great protection to the rights of bona fide purchasers. To apply an extremely strict rule of constructive or imputed notice in this case, where there has been no statutory or regulatory provision making such provision, does not appear to be warranted in the present circumstances. In the absence of any further facts which would suggest bad faith on the part of the assignee, we conclude that the Bureau's finding that Lowe was a bona fide purchaser for value is correct and that, consequently, appellant's offer was properly rejected.
Therefore, pursuant to the authority delegated to the Solicitor by the Secretary of the Interior (210 DM 2.2A (4) (a); 24 F.R. 1348), the decision appealed from is affirmed.
ERNEST F. HOM,
APPEAL OF R & M CONTRACTORS, INC.
Decided May 28, 1964
Contracts: Delays of Contractor
Where the date for completion of a contract falls on a Sunday or a legal holiday, the next succeeding working day is considered to be the required completion date, provided that the contract is completed on that date. If, however, the contract is not completed until a subsequent date, the Sunday or holiday on which the completion date falls, and succeeding Sundays and holidays, are included in the computation of the period of delay in completion, unless specifically excepted by the terms of the contract.
BOARD OF CONTRACT APPEALS
The Government has moved for partial reconsideration of the Board's decision of April 21, 1964, but only in so far as it has the effect of excluding a Sunday from the computation of the unexcused portion of the delay in completion of the contract. The contracting officer's decision stated that the date for completion, as a result of Change Order No. 2, fell on a Sunday, November 26, 1961, hence "November 27, 1961 was considered the new contract completion date."
However, the contract was not completed on November 27, 1961, but on December 13, 1961, and the contractor was charged with 17 days of delay, including the Sunday (November 26, 1961) which had previously been excluded in arriving at the required completion date.
After allowing an extension of nine days for excusable delays, the Board's decision stated that the remaining, or unexcused period of delay, amounted to seven days. This computation did not include the Sunday in question.
The computation of the unexcused portion should have included Sunday, November 26, 1961, since the contract was not completed on the next succeeding working day.1
Accordingly, the motion for reconsideration is granted as to the period of unexcused delay, and our decision of April 21, 1964, is hereby modified by establishing the unexcused period of delay as being eight days, instead of seven days.
PAUL H. GANTT, Chairman.
THOMAS M. DURSTON, Member.
19 Comp. Gen. 336 (1930).
U.S. GOVERNMENT PRINTING OFFICE11964
CLAIM OF PORT BLAKELY MILL COMPANY
Bonneville Power Administration-Torts: Trespass
Decided May 1, 1964*
Electric transmission line easement which gives the grantee the right to maintain and keep parcel of land "at all times free and clear of trees and brush" includes right to spray small natural growth conifers which have not reached such height as to threaten physical or electrical contact with the conductor or which have not reached such density as to block maintenance access along the right-of-way.
Bonneville Power Administration-Torts: Trespass
The owner of an electric transmission line easement may fully use the right granted by the easement, including rights necessarily implied or incidental thereto.
Bonneville Power Administration-Torts: Trespass
The owner of electric transmission line easement is not limited in maintenance of the easement to those methods known or generally practiced at the time of acquisition but may use methods of maintenance reasonably necessary under existing conditions.
Conveyances: Interest Conveyed
In construing the scope of an easement acquired for electric transmission line the interpretation placed upon the instrument by the parties for many years is entitled to great weight.
On May 17, 1963, the Port Blakely Mill Company submitted a written claim against the Bonneville Power Administration in the amount of $2,500. This claim arises out of spraying activities performed by employees of the Administration in the maintenance of the Government's Longview-Chehalis Line No. 1. Claimant alleges damages for both present and future losses to Christmas trees which were growing upon the right-of-way. Claimant estimates a ten-year loss of productivity from long-range effects of the chemicals used in spraying. The Federal Tort Claims Act, 28 U.S.C. §§ 2671-2680 (1958), as amended, 28 U.S.C. §§ 2672, 2679 and 2680 (n) (Supp. IV 1959-62), and the authority delegated to me by the Solicitor of the Department of the Interior (§ 1(a) Solicitor's Reg. 5, Amendment 1, March 9, 1959, 24 F.R. 1877), authorize me to settle claims not over $2,500 against the United States for property damage caused by a negligent or wrongful act or omission of an employee of the United States Department of the Interior while acting within the scope of his employment under circumstances where the United States, if a private person, would be liable under local law.1
*Not in chronological order.
1 The claim is in excess of that which may be considered under section 12(a) of the Bonneville Project Act, 59 Stat. 547-548 (1945), 16 U.S.C. § 832k (a) (1958).
71 I.D. No. 6