January 3, 1940

An affidavit by George MacKay is identical to the one furnished by D. MacLennan.

Assuming the correctness of all these allegations in the affidavits which, incidentally, are uncorroborated, it is difficult to see wherein they constitute a basis for a modification of the prior decision of the Department. They do tend to show that in certain particulars the special agent was in error, but it is apparent that these particulars have little or no bearing on the case. This application for exchange was made and is being considered under section 8 (b) of the Taylor Grazing Act of June 28, 1934, supra, as amended, and that section provides that exchanges of this type may be consummated "when public interests will be benefited thereby." In considering the possible benefit to the public interest, individual cases of hardship or dissatisfaction alone cannot be allowed to sway the Department in reaching a decision. To hold otherwise would prevent the consummation of most exchanges not made mandatory by statute. Only in cases where such hardship is likely to be so widespread that a large section of the public will be adversely affected would the Department be warranted in taking cognizance thereof.

It is difficult to see how any of the statements in the motion or the supporting affidavits can be interpreted as indicating that the exchange is not in the public interest. The consummation of the exchange will result in the consolidation of the landholdings of the applicant company and the Federal Government. The presently existing "checkerboard" pattern of ownership will be largely eliminated and thus the company and the Government will be able to administer their lands in a better manner. It is recognized that there will be hardships in certain instances resulting from the loss by certain livestock operators and ranchers of the use of lands that are now in Federal ownership and that they have long been accustomed to using, but these factors are outweighed by the public interests benefited.

Without going into a detailed discussion of the various allegations of the motion and the affidavits, it may be stated that they have little or no bearing on the case. For example, the fact that George MacKay and Mary MacKay Stewart may or may not run their cattle together or have any partnership agreement, does not affect the case. The same is true of the question of whether or not the Martin Bros. lease the MacLennan lands or are in favor of or opposed to the exchange. In fact, it may be stated of all of the allegations of the affidavits that, although they may show that the special agent was misinformed as to certain particulars, they were in nowise important for they had no bearing on the question of the sufficiency or insufficiency of the benefit of the exchange to the public interest.

Insofar as the request for a hearing is concerned, it may be stated that neither the statute nor the regulations contain any provision for a hearing on exchanges proposed under section 8 (b). No doubt the Department could order such a hearing if it were considered necessary to a proper disposition of such a proposal but in a case like this little would be gained by such hearing other than to accumulate a record consisting of unqualified approbation of the exchange by the ranchers in the vicinity of the offered lands and equally vehement condemnation of the exchange by the ranchers in the vicinity of the selected lands. Such a record would be of no real assistance to the Department in determining the degree of benefit to the public interest, and hence of no real assistance in disposing of an application. For this reason the Department has provided for investigations by special agents who, by the nature of their employment, are relieved of bias and are capable of that degree of detachment that will enable them to submit reports that will be of real assistance to the Department in disposing of such matters.

Since the filing of the motion for rehearing, the Department has been informally advised of a proposal by the attorney for the moving parties that the exchange be rejected insofar as protests have been filed and approved as to the remainder. It is apparent that this suggestion cannot be made a basis for final disposal of the case. As has been pointed out above, the test of an exchange under section 8 (b) is whether its consummation will be in the public interest and not whether it is objected to by some individual or group of individuals. If it were to be otherwise, and a protest by someone who has been accustomed to using the land selected by the exchange applicant could serve to block the exchange to the extent that he was interested in the selected lands, it would mean that the requirement of the statute that exchanges should be considered in the light of public interest would be set aside, and instead consideration of private interests would become paramount.

The Department considers itself bound to administer the public lands in the interests of all of the people as a whole, and in such manner as will result in the greatest public benefit. In the present case the selected lands are poorly situated from the standpoint of effective control and administration and the exchange, if consummated, will eliminate this difficulty. It is recognized that the neighboring farmers and ranchers have used the selected lands, many of them for years, and are, in varying degrees, dependent thereon for the maintenance of their livestock operations. But this prior use of the lands was only at sufferance of the Federal Government and in no manner served to vest a continued right to such use. Thus when it becomes apparent that the interests of the public at large can best be served by disposing

January 20, 1940

of these lands in exchange for other lands, the Department feels that it is its duty to do so. In this respect, the Government is in a similar position to that of a private party who may have extensive landholdings and who has permitted adjoining land owners to use his lands free for such time as he has had no other use for them. In such case his right to sell or otherwise dispose of his lands could not be qualified or limited by the fact that there had been such suffered use. This is essentially the situation in the present case where the selected lands have long been used by the protestants or their predecessors in interest and such use is being set up as an argument against the exchange. That it cannot prevail is obvious for, as stated above, the interests of private parties must give way when opposed to dominant public benefits.

There is nothing in the present case to show that the proposed exchange will be otherwise than beneficial to public interests, and no reason appears for the ordering of a hearing or for the modification of the former decision. The former decision is accordingly adhered to and the motion is

Denied.

R. C. CONLY

Opinion, January 20, 1940

DAMAGE CLAIMS-BAILEE.

Private property, in the possession of claimant as bailee, was damaged through the negligence of a Government employee. Since the bailee was responsible to the bailor-owner, who waives in favor of bailee all right of claim against any third party by reason of any collision involving the bailed property, the bailee's interest in the property entitles him to reimbursement under the act of June 28, 1937.

MARGOLD, Solicitor:

Mr. R. C. Conly, of Daingerfield, Tex., has filed a claim in the amount of $28.20 against the United States for compensation for damage to his Ford sedan as the result of a collision with a National Park Service truck operated by Henry Sadberry, an enrollee in the Civilian Conservation Corps. The question whether the claim should be paid under section 16 of the act of June 28, 1937 (50 Stat. 321), has been submitted to me for opinion.

The collision occurred on May 5, 1939, in Daingerfield State Park, Tex., when the enrollee driver backed the Government truck into the private car. The various statements submitted indicate that the property damage was caused by the negligence of the Government employee, who backed his truck without ascertaining, whether the way was clear...

The record discloses that the private car was in the possession of the claimant as bailee when the accident occurred. The bailor-owner, Ted Spencer, submits a notarized waiver agreement, in which he states that R. C. Conly assumed full responsibility for the collection of any claim which might arise against a third party by reason of any collision involving the bailed property, and in which he waives in favor of Conly all rights pertaining to any such claim.

Dobie's "Handbook on the Law of Bailments and Carriers" (1914), section 39, states that a "bailee borrower may maintain, by virtue of his interest, an appropriate action against a third party for the wrongful disturbance of his possessions," citing various cases in different jurisdictions wherein the law has been so applied. Masterson v. International & G. N. Ry., 55 S. W. 577 (not officially reported), and Panhandle & S. F. Ry. v. Jackson, 8 S. W. (2d) 256 (not officially reported), both decided by the Court of Civil Appeals of Texas, are cases in point in which the court held that the bailee had the right and authority to institute and maintain suit to recover for the damage to the property involved. The court pointed out in these cases that the bailee was responsible to the owner for the property and that he was therefore a rightful claimant.

In view of Mr. Conly's interest as bailee in the property in the instant case, it is my opinion that the claim is properly payable to him, it having been concluded that the negligence on the part of the Government employee permits payment. The claim is supported by a notarized repair bill made out in the name of the claimant and paid in full by him.

Approved:

W. C. MENDENHALL,

Acting Under Secretary.

ARCHIE LINGO

Decided February 20, 1940

ALASKA-OIL AND GAS LEASES-SECTION 17 OF MINERAL LEASING ACT.

Section 17 of the Mineral Leasing Act, as amended, does not apply to Alaska leases insofar as it prohibits waiver, suspension, or reduction of rental payments on oil and gas leases.

RENTAL PAYMENTS-WAIVER ON ALASKA MINERAL LEASES-SECTION 22 OF MINERAL LEASING ACT.

Rentals on Alaska leases may be waived, in the discretion of the Secretary, under the proviso clause of section 22 of the Mineral Leasing Act of 1920.

CHAPMAN, Assistant Secretary:

By decision of February 8, 1939, the Commissioner of the General Land Office directed that Archie Lingo be notified that he would be

February 20, 1940

allowed 60 days from notice to pay the first year's annual rental of 25 cents an acre in connection with his oil and gas lease application filed August 12, 1937, for unsurveyed secs. 3, 4, 9, and 10, T. 43 S., R. 58 W., Seward meridian, Alaska, and that for failure to comply his application would be finally rejected.

The applicant filed an appeal and an application for waiver of rentals.

The grounds of appeal are that until the execution of a lease and the approval of a bond no rentals can be due; and that under section 22 of the act of February 25, 1920 (41 Stat. 437), as amended by the act of April 30, 1926 (44 Stat. 373), it becomes the duty of the Secretary of the Interior, for the purpose of encouraging the production of petroleum in Alaska, to waive the payment of any rentals for a period not exceeding the first 5 years of any oil and gas lease in that Territory. The Supplemental Regulations Affecting Oil and Gas Leases in Alaska, approved July 3, 1937 (Circular No. 1431, 56 I. D. 472), provide that the first year's rental payable on such leases shall be "payable prior to the execution of the lease. This regulation is fully within the authority of the Secretary, under section 32 of the Mineral Leasing Act of February 25, 1920 (41 Stat. 437), "to prescribe necessary and proper rules and regulations and to do any and all things necessary to carry out and accomplish the purposes of this act." It is true that the rental for the first year is required to be paid before the term has commenced and before the lease is granted. But obviously it is not unreasonable to exact the payment in advance as a token of good faith (Cf. Hardeman v. Witbeck, 286 U. S. 444 (1932)). The first ground of the appeal is therefore without substance.

The second ground is also without merit. The proviso clause of section 22 of the act of February 25, 1920 (41 Stat. 437), cited by the appellant, specifically provides that waiver of rental payments by the Secretary is "in his discretion." The statute imposes no mandatory duty upon the Secretary to make such waiver.

The applicant, however, has filed an application for waiver of rental payments in which he alleges various factual grounds to induce the Secretary to waive the rental payments. Consideration can be given to the facts alleged only if the Secretary may legally waive such rental payments.

Section 22 of the 1920 Mineral Leasing Act provides:

That leases in Alaska under this act * shall be upon such rental and royalties as shall be fixed by the Secretary of the Interior and specified in the lease, and be subject to readjustment at the end of each twenty-year period of the lease: Provided further, That for the purpose of encouraging the production of petroleum products in Alaska the Secretary may, in his discretion, waive the payment of any rental or royalty not exceeding the first five years of any lease. [Emphasis supplied.]