374CLAIMS OF MIYO TZUIIdI AND SADAKO IZUMIlNos 14G3S4630 and 4736 Dec - PDF document

1 374CLAIMS OF MIYO TZUIIdI AND SADAKO IZU
374CLAIMS OF MIYO TZUIIdI AND SADAKO IZUMIlNos. 14G3S-4630 and 4736. Decirletl October ?, lgfblFINDINGS OF' I'AC'IThese two claims, in the total amount of 97,084, werereceived by the Attorney General in June 1949. Theclaims are identical in character, claimants being sistersand each claiming one-half of the total loss alleged.Claima.nts, perso'ns of Japanese ancestry dIYO IZUII{I AND SADAKO TZVM'I-4630 and 4736. Decicletl October 7, ]:}EE]FINDINGS Or' FACNims, in the total arnount of g7,084, wereAttorney General in June 1g4g. Theical in character, claimants being sistersing one-half of the total loss alleged.ns of Japanese ancestry actually residentr,tes on and since December 7, 1941, wereTulare, California, on May LB, L942,rrders pursuant to Executive Order No.me of their eva,cuation, claimants werebwo parcels of realty, one o,f which wasby of Corcoran, California, and the otherrlare, California. Claimants allege as a:e between the rent received from saidbhe period of their exelusion and the fairre premises. It having been determinednce does not constitute a loss within theAct, the claims were summarily dis-provision that the dismissals should be, event claimants requested a hearing.g made such request, the dismissals were:ing on the claims duly had.rf the record discloses the basis for theh respect to the Tulare property to ber their evacuation, claimants were forcedises for a l0-year term at $85 per month,rental value assertedly was gl3b perrts neithe

2 r allege nor show that the rent-rmal exp
r allege nor show that the rent-rmal expenditures which would not haveLt for their evacuation or exclusion anded a net loss in consequence thereof.375Moreover, the record warrants the inference, and it isaccordingly found, that claimants, in actual fact, netteda profit on the transaction.With respect to the Corcoran property, the record re-veals that the premises-*owned and operated for rentalincome-were originally rented to a Japanese tenant whowas forced to vacate because of his evacuation and theclaimants thereupon placed the property in the hands ofa real estate broker for renting. The record furbher re-veals that the p,remises thereafter remained vacant untilJanuary I, 1945, claimants paying the taxes and contin-uing their customary insurance coverage during the periodof such vacancy. Finally, the record reveals that fromJanuary l, L945, to July 31,1947, on which date the prop-erty was sold, the premises were rented for an amountalleged by claimants to have been less tha,n the fair rentalvalue and that claimants expended the sum of $94 inbroker's fees as an incident of such renting. On the basisof the foregoing, claimants seek recovery of the fair rentalvalue of the p'remises for the period the property wasvacant and, further, the difference between the rent re-ceived and the alleged fair rental value, together withreimbursement of the expenditure for broker's fees, fonthe period it was rented. Claimants have offered no evi-dence showing that the pay

3 ment of the broker's fees-made after the
ment of the broker's fees-made after the lifting of the general Exclusion Orders-was caused by their evacuation or exclusion or that saidpayment resulted in a net loss on the renting. Moreover,the record warrants the inference, and it is accordinglyfound, that claimants netted a profit on the transactiondespite such payment.At the hearing, held subsequent to the bar date, claim-ants requested leave to amend their claim with respect tothe Corcoran property so as to include as items of loss,by way of alternative claim, the sums expended for ta:and insurance during the period the premises were vacant. ]ASONS FOR DECISIONlaims for the difference between there two premises and their alleged fair'r reimbursement of broker's fees can-since they are for loss of anticipated:e barred by Section 2 (b) (b) of the/sui, ante, p. 112. Likewise barred byf the Statute, because it is for loss ofis the claim for loss of rental incomeproperty during the period the iatter. Claimants'request to amend so,aslf loss the tax and insurance payments'operty during the period of vacancyrnted. Kigoji Murai, ante, p. 4b; Roy3.dment being allowable, there is pre-ation the question as to whether pay-insurance on unrented realty are re-bhe question must be answered in themr to be clear. Section 1 of the Stat-vides that to establish a right to re-must show property damage or lossand natural consequence of his evacu-that the instant claimants fail to sat-rt is apparent from the fact that the

4 rpresenf merely normal incidents ofilty
rpresenf merely normal incidents ofilty and have no relation whatsoevertion or exclusion. Thus, the tax pay-fillment of an obligation imposed byr by all owners of realty in the arearesence or absence from the locality.rpears from the record, the insurancererage in the amount customarily car-r extra expenditure for additional p,ro-by their exclusion being involved.:d by the Japanese American Citizensuriae, however, the subject tax and377insurance payments are contended to be reimbursable.The basis of the contention is two-fold. The Leaguemaintains, first, that since the subject payments weremade to protect the property and prevent its loss, theynecessarily represent expenditures for preserving properbywithin the meaning of the Statute. Secondly, the Leaguecontends that disallowance of the items creates an in-equity as between vacant property and property rentedfor less than its fair rental value since in the latter situ-ation the owner assertediy may include his tax and in-surance payments among the items of expense to be set-ofragainst income for the purpose of showing a deficiencyas between income and expense and establishing a com-pensable net loss on the rental transaction.The untena,bility of the League's contention is readilydemo,nstrated. That claimants' tax and insurance pay-ments do not constitute expenditures for preserving prop-erty within the meaning of the Statute is plain from thematters previously indicated. As already seen, SectionI of the

5 Statute makes the existence of a causal
Statute makes the existence of a causal connectionbetween evacuation or exclusion and loss indispensableto statutory recognition. As likewise seen, the subjectpayments fail to meet this requirement because of theabsence of such connection. Unlike such matters, for ex-ample, as storage charges or interest payments on lifeinsurance premium loans-abnormal expenditures spe-cially incurred a.s a direct consequence of evacuation orexclusio,n-claimants' tax and insurance payments werenot caused by their evacuation or exclusion but were nor-mal operating costs. It is true, of course, that if, as aresult of their evacuation, claimants had lacked fundswith which to pay the taxes and, as a consequence, hadlost the property, the loss would probabiy be compensable.The latter situation is distinguishable from that here in-volved, however, since the loss would be directly attribut-able to claimants' evacuation and the causal connectionprescribed by the Statute would therefore exist. So, too,if claimants had been forced by their evacua,tion or exclu- mce for the first time or to obtainl of added risk resulting from their, the statutory requirement' wouldmal expenditure directly traceable,sion would be shown.r,t disallowa.nce of the zubject pay-uity between vacant property ands than its fair rental value, it wouldscuria,e misconceives the nature ofI in the latter situation. It is un-claimants had rented the propertyental value and the question arosed a net loss due to the

6 ir exclusion,e payments could properly b
ir exclusion,e payments could properly be in-ns of expense to be deducted fromr order to determine their net posi-rt mean, however, that claimantsation for any deficiency shown be-nal operating expense. While suchesent out-of-pocket expense, it isetion of savings due to normal ex-riod of diminished income does notuble loss (Torao Nakamura, ante,ante, p. 726) any more than doesLcome itself, which was frequentlymants' exclusion from the placesrlly employed their talents prior toz Takeshi, Sakwai, ante, p. 346.., all other cases involving rental) aware, concern situations in whichrc paid if claimants had zustainedersbandable that the amicus curiaelity with the net loss sustained inrs, in the case of Toshiko Usui, su-n a fee paid to a real estate brokernuch as same must, be considerednd deducted from the gross incomethis might have been regarded as a379compensable conservation cost but for the proscriptionof Slction 2 (b) (5). Again, in the case of George E'Suzuki., ante,p.363, the suggestion was prominent that, ifthe total of the amounts received had been insufficientto pay all expenses and to restore the property to the con-dition in which it would have bear found if it had notbeen leased, the difference might have been made up inthe award. Unlike the instant ca,se, however, that claiminvolved items of physical darnage to the property andexpenses specially incurred on account of claimant's evac-.ruiion and exclusion. Cf'. Ali'ce $Yyefuiro, onte, p' 298'In n

7 o case has it been held that a' mere net
o case has it been held that a' mere net loss on abusiness venture was fpso Jacto conpensable under theAct even though the possibility existed tha't the earningsrnight have been larger if claimant's exclusion had notprJvented his normal participation in the enterprise'Rather, it must appear in some concrete way that prop-erty (which might consist of an entire business as a goingconcern) was actually lo,st or damaged due to his enfoncedabsence. The expense, for example, of employing anagent or manager to take claimant's place might, in somecircumstarrces, constitute a compensable conservation costif and to the extent that payment of this expense resultedin a net loss on the operation of the business or enterpriseas a whole. Cf.. Haruko ltow, ante, p' 51' Such compen-sation, however, on these limited facts, would be for theloss of the money spent to empLoy the agent and not forthe net operating ioss that such exp'enditure produced'The latteielement wouldbe of importance only in render-ing inapplicable the anti-profits proscription of Section2 (b) (5) of the Act.In the instant case the expenses of taxes and insurancewere normal and, unlike the cases in which unusual ex-penses were incurred as a result of claimants' enforced^ubr"rr.", would havo been paid regardless of claimants'evacuation. Since they are not within the beneficial cov-erage of Section L of the Act, irrespective of the applica-bilily or inapplicability of Section 2 (b) (5), the question3SU56-5