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Transfer Occurring With Granting of Deed To Real Estate

The court has held that an assignment of a claim against the U.S. to a grantee along with a deed to real property is voluntary.  This makes the assignment unenforceable under the federal anti-assignment statutes.  On the other hand, courts have also held that such grantees may enforce similar claims against the U.S.  The federal anti-assignment statutes are not applicable to an assignment arising out of an operation of law, as distinguished from one that is a result of the voluntary acts of the parties.

In UNITED STATES v. DOW, 357 U.S. 17, 20 (U.S. 1958), a condemnation proceeding was brought by the government in the district court for acquiring a pipeline easement over certain land.  The district court awarded the government possession of the land and a pipeline was constructed.  Two years later, the land was conveyed to the landowner by a general warranty deed, specifically excepting the pipe line easement as being subject to the condemnation proceedings.  After a year, the government filed a declaration of a taking covering the pipeline land.  An estimated compensation was deposited and judgment on the declaration of the taking was entered.  Compensation was provided to the landowner for the imposition of the easement but was later dismissed as a party because the former owner’s assignment to him of the claim against the government for damages was prohibited by the Assignment of Claims Act.  The decision was reversed on appeal and on further review; the court held that the taking did not occur when the government filed its declaration of taking, but rather when it entered into possession of the land.  The reason for reversal was that the former owner’s transfer of the claim against the government was a voluntary assignment and not exempt from the prohibition of the Assignment of Claims Act. Further, the government’s taking occurred when it entered possession of the land, not when it filed its declaration of taking after the landowner had obtained the land, and the landowner took the land with full notice of the government’s condemnation proceedings.

While deciding the case, the court held that the Assignment of Claims Act prohibited voluntary assignment of a compensation claim against the Government for the taking of property and that the assignments of claims which the Act would otherwise nullify are nevertheless valid if they are freely made and executed in the presence of at least two attesting witnesses, after the allowance of such a claim, the ascertainment of the amount due, and the issuing of a warrant for the payment thereof.

Inside Transfer Occurring With Granting of Deed To Real Estate