ARTICLE 966. A defeated bona fide possessor is also entitled to an allowance for the useful improvements made before the answer to the suit.

By useful improvements shall be understood only such as shall have increased the market value of the thing.

The person seeking the revendication, shall choose between the payment of the value thereof at the time of the restitution of the works of which the improvements consist, or the payment of the increased value of the thing at said time due to the said improvements.

With regard to the works done after the suit was answered, the bona fide possessor shall have the rights only which are granted in the last paragraph of this article to a possessor in bad faith.

The possessor in bad faith shall not be entitled to any allowance for the useful improvements referred to in this article.

But he may take with him the materials of which said improvements consist, provided that they can be removed without damage to the thing recovered, and that the owner refuses to pay him the price which such materials would be worth after their separation.

ARTICLE 970. When there shall be due the defeated possessor a balance by reason of expenses and improvements, he may retain the thing until the payment is made, or security to his satisfaction is given.

It is evident, therefore, that the lessors of town lots belonging to the municipality of Gorgona acquired certain definitive rights under Colombian and Panamanian law, and the question arises whether any rights thus acquired were divested or in any way affected by: (1) ordinances or resolutions of municipality of Gorgona, passed subsequent to American occupation; (2) revocable leases or licenses issued by the Isthmian Canal Commission.

Resolutions and ordinances of the municipality of Gorgona

The resolutions and ordinances of the municipality of Gorgona relating to the leasing of municipal property are as follows:

(a) Resolution No. 5 of the municipal council of Gorgona, dated March 20, 1905.

(b) Ordinance No. 2 of the municipality of Gorgona, dated February 27, 1907, amending resolution No. 5, of March 20, 1905. (c) Ordinance No. 8 of the municipality of Gorgona, dated May 17, 1905.

(d) Ordinance No. 1 of the municipal council of Gorgona, dated February 27, 1907, amending ordinance No. 8 of May 17, 1905. The resolution of the municipal council, dated March 20, 1905 (No. 5), together with the amending ordinance of February 27, 1907 (ordinance No. 2), relate to the rental of town lots, whereas ordinance No. 8, dated May 17, 1905, and ordinance No. 1, dated February 27, 1907, and approved February 28, 1907, evidently relate to the leasing of agricultural lands. For the determination of the status of the claimants now

under consideration, it is only necessary to consider the resolutions and ordinances relating to town lots.

The resolution of March 20, 1905, provides a procedure for the rental of town lots. The provision of Article 1 of this resolution declaring null and void "all grants of lots or lands within the radius of the town that date from more than ninety days from the date of the concession and on which the concessioners have not begun to build," simply follows the provisions of Article IV of the decree of Governor Vila of 1886. This ordinance in Article 9 provides, by implication, for leases for a term of one year, and makes no mention of the rights or obligations of tenants in case the lease is terminated. The termination of leases is provided for in ordinance No. 2 of February 28, 1907, amending resolution No. 5. The pertinent portion of this ordinance reads as follows:

ARTICLE 13. The lessee of any lot of land leased under the terms of this resolution shall deliver the same when called upon by the Mayor to do so, in the event the land is required for use by the municipality, the Government of the Canal Zone, or the Isthmian Canal Commission.

This amendment shall not be construed to abridge any rights which present lessees may have to notice respecting revocation of their leases or to any compensation for improvements placed on the land. It is, however, understood that upon expiration of the period of notice to which lessees may be entitled under the laws in force on the Canal Zone-such period dating from the approval of this ordinance—all lessees will hold their land subject to the terms of this amendment.

After careful consideration of the whole situation, the Commission has reached the conclusion that, while it was entirely within the power of the municipal council of Gorgona to provide for the leasing of town lots, it was beyond the power of the municipality to amend either the law of 1894 or the provisions of the Civil Code.

Whatever, therefore, may have been the conditions under which the town lots of Gorgona were leased, the ordinances of the municipality could not deprive tenants of rights secured to them by the act of 1894, and by Articles 739, 966 and 970 of the Civil Code.

That the action of the municipality could not have the effect of undermining or divesting rights guaranteed under the Civil Code is further confirmed, if such confirmation were necessary, by an examination of the general policy of the Government of the United States in the Canal Zone as laid down by the President of the United States in his instructions to the Secretary of War, under date of May 9, 1904, the pertinent portion of which reads as follows:

The inhabitants of the Isthmian Canal Zone are entitled to security in their persons, property and religion, and in all their private rights and relations. They should be so informed by public announcement. The people should be disturbed as little as possible in their customs and avocations that are in harmony with principles of wellordered and decent living.

The laws of the land, with which the inhabitants are familiar, and which were in

force on February 26, 1904, will continue in force in the Canal Zone, and in other places on the Isthmus over which the United States has jurisdiction, until altered or annulled by the said Commission, but there are certain great principles of government which have been made the basis of an existence as a nation which we deem essential to the rule of law and maintenance of order, and which shall have force in said zone. The principles referred to may be generally stated as follows:

That no person shall be deprived of life, liberty, or property without due process of law; that private property shall not be taken for public use without just compensation, that in all criminal prosecutions the accused shall enjoy the right of a speedy and public trial, to be informed of the nature and cause of the accusation, to be confronted with the witnesses against him, to have compulsory process for obtaining witnesses in his favor, and to have the assistance of counsel for his defense; that excessive bail shall not be required nor excessive fines imposed, nor cruel or unusual punishment inflicted; that no person shall be put twice in jeopardy for the same offense, or be compelled in any criminal case to be a witness against himself; that the right to be secure against unreasonable searches and seizures shall not be violated; that neither slavery nor involuntary servitude shall exist except as a punishment for crime; that no bill of attainder or ex post facto law shall be passed; that no law shall be passed abridging the freedom of speech or of the press, or of the rights of the people to peaceably assemble and petition the government for a redress of grievances; that no law shall be made respecting the establishment of religion or prohibiting the free exercise thereof.

Leases or licenses issued by the Isthmian Canal Commission

It now remains to examine the effect of the acceptance of Isthmian Canal Commission leases or licenses on the status of those claimants who occupied town lots either under the renewable permits issued under the decree of March 16, 1886, or under leases from the municipality of Gorgona granted prior to the executive order of the President of the United States, dated March 13, 1907, which order abolished the municipalities of the Canal Zone.

Tenants of municipal lands belonging to this category acquired certain definite rights to compensation in case of eviction, under Law No. 50 of November 6, 1894, and under Articles 739, 966 and 970 of the Civil Code. These rights were not divested by the acceptance of the Isthmian Canal Commission licenses, and the claims of such persons, therefore, come within the jurisdiction of this Commission.

THE COMMISSION HAS, THEREFORE, REACHED THE CONCLUSION:

First. That nothing contained in the resolution No. 5 of the municipality of Gorgona, dated March 20, 1905, or in ordinance No. 2, dated February 28, 1907, can deprive those persons who occupy town lots either under the decree of March 16, 1886, or under a lease from the municipality of Gorgona, of the protection granted by Law No. 50 of 1894, or of Articles 739, 966 and 970 of the Civil Code, and it is immate

rial in this connection whether such leases were acquired from the municipality of Gorgona prior to American occupation or subsequent thereto.

Second. Those persons, who, prior to March 13, 1907, possessed either renewable permits under the decree of March 16, 1886, or leases from the municipality of Gorgona are entitled to the protection of Article 5 of the law of 1894 and of the provisions of Articles 739, 966 and 970 of the Civil Code, specifically referred to in that law, and the subsequent acceptance of Isthmian Canal Commission leases or licenses does not divest them of the rights thus acquired.

Third. The plea of counsel for the United States in this case does not raise the question as to the status of claimants who, at the time of the acceptance of Isthmian Canal Commission leases or licenses, did not possess either a permit issued under the decree of 1886 or a lease issued by the municipality of Gorgona.

In view of the conclusions herein formulated, the Commission orders that the plea of counsel for the United States to the jurisdiction of the Commission be overruled.

In the appraisal of the lands in the Canal Zone taken over by the Government of the United States, an interesting question of interpretation presented itself to the Commission. Article 6 of the treaty of February 26, 1904, provides: "The appraisal of said private lands and private property and the assessment of damages to them shall be based upon their value before the date of this convention."

It was evident that the purpose of this clause was to prevent the burdening of the United States Government with speculative values on the lands which it might require for the construction of the Canal. The Commission undertook a careful investigation of land values prior to 1904 and found that owing to the unstable conditions that prevailed under Colombian rule, there was no market for real estate, and that there were comparatively few transfers recorded. Many of those recorded represented the foreclosures of mortgages rather than the direct results of bargain and sale. The fact, furthermore, that nearly ten years had elapsed since the ratification of the treaty greatly increased the difficulty of determining the value of lands prior to the ratification of the treaty. After prolonged discussion of the question, the Commission on the 25th of March, 1913, adopted the following rule:

In determining the value of lands taken by the United States, the

Commission must be governed by the terms of Article VI, which provides:

The appraisal of said private lands and private property and the assessment of damages to them shall be based upon their value before the date of this convention.

In the application of the treaty, the Commission will follow the principles of the Commission of 1908, which are stated in their report to have been the following:

To hear all evidence presented bearing upon the fair value of the property to be expropriated by the United States, and upon damages thereto: to consider especially, as elements of such valuation, the extent and character of the property affected, its location, for what it is adapted or could be adapted within a reasonable time; as well as to take into account other pertinent considerations, and, in determining the basis upon which damages are to be assessed, to eliminate from consideration the effect which the building of the Canal may have had upon the value of such estates.

The application of this rule proved entirely feasible, as well as satisfactory, and convinced the inhabitants of the Canal Zone that the United States had no desire to deal harshly with them in the adjustment of their rightful claims.

LEO S. ROWE.