# Swiss Federal Railways v. United States

> United States Court of Claims · June 2, 1953 · 112 F. Supp. 357

URL: https://www.frixlaw.com/law-library/cases/8590603

## Case

- **Full name:** SWISS FEDERAL RAILWAYS AND CONFEDERATION OF SWITZERLAND v. United States
- **Court:** United States Court of Claims
- **Decided:** June 2, 1953
- **Citations:** 112 F. Supp. 357; 125 Ct. Cl. 444; 1953 U.S. Ct. Cl. LEXIS 174
- **Precedential status:** Published
- **Opinion:** Dissent by Maddentjudge
- **Judges:** Howell, Jones, Littleton, Madden, Tjudge, Whitaeek
- **Cited by:** 2 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/8590603

## Opinion text

MaddeN, tJudge,
dissenting.
The decision of the court requires the Government to pay the plaintiff approximately four times as much for the railway tires as anyone else would have paid for them. That seems to me to be an injustice to the Government and to the taxpayers who supply the Government’s funds.
The plaintiff, having procured the tires, was unable to get them to Switzerland where it had expected to use them, because of the blockade by the British of shipments to Europe. It was unable to sell the tires, as tires, because no one had any use for them, on account of their unusual dimensions. The consequence was that they were, at the time, good for nothing except scrap. There was a ready market for scrap.
If the plaintiff could have held the tires until the blockade was lifted, they would then have had value as tires. That potential future value has been called “retention value.” United States v. Commodities Trading Corporation, 339 U. S. 121 . The Supreme Court in the Commodities case held that retention value was not a proper measure of just compensation. In spite of the court’s disclaimer, I see no other basis than retention value for the court’s award in the instant case.
It does, of course, always seem uneconomical and wasteful to convert to scrap things which have been manufactured at great effort and expense. But if, because of obsolescence, or a blockade, or some other circumstance, the things are of no use in their manufactured state, it is uneconomical and wasteful to preserve them merely as artifacts. If the Government’s right of eminent domain is to serve its intended *455 purpose, it must take things when it needs them. It is fiction to suppose, for the purposes of measuring just compensation, that it took them at some other time, at which time the market should have recovered, the blockade should have been lifted, or some other event adding to their value should have occurred.
FINDINGS 0E FACT
The court, having considered the evidence, the report of Commissioner George II. Foster, and the briefs and argument of counsel, makes findings of fact as follows:
1. Plaintiff, Swiss Federal Railways, is a branch of the Federal Government of Switzerland, not separately incorporated, but operated by a Board of Management and a Board of Directors whose members are named by the executive branch of the Swiss Government. The Swiss Federal Railways may sue or be sued in that name in the courts of Switzerland, may accept the conveyance of real property and the sale or transfer of personal property in that name, and may borrow money in that name.
The intervening plaintiff, the Confederation of Switzerland, is the Federal Government of Switzerland.
All of the transactions hereinafter described were carried on in the name of Swiss Federal Railways, also known as Schweizerische Bundesbahnen. When used herein, the term “plaintiff” shall be deemed to refer to the Swiss Federal Railways.
2. Switzerland accords to citizens of the United States the right to prosecute claims against its Government in its courts.
3. Under date of June 20,1940, plaintiff ordered 420 rough machined rolled railway tires, in five different sizes, from the Baldwin Locomotive Works, Philadelphia, Pennsylvania. Manufacture of these items was completed, and they were shipped to New York for exportation to plaintiff on or about November 22, 1940. The purchase price at the rate of $6.39 per hundredweight was paid to the Baldwin Locomotive Works by Swiss Bank Corporation.
*456 4. Plaintiff was unable to secure a navicert from the British Government permitting the shipment of these tires through the British blockade, and 190 of them were placed in storage at Yerona, Pennsylvania, and 230 at Burnham, Pennsylvania. Storage charges at these points were paid by Swiss Bank Corporation for plaintiff’s account. No application for an export license for this material under the Act of July 2, 1940, was ever filed, in view of the inability to secure a navicert.
5. On May 20,1943, the defendant, acting through the War Production Board and pursuant to the act of October 10, 1940 ( 54 Stat. 1090 ), as amended, duly requisitioned and took possession of the 190 of such tires which were in storage at Verona, Pennsylvania. The weight of said 190 tires was 142,120 pounds.
6. On July 27,1943, the Chairman of the War Production Board made an award of compensation for such tires. This award was in the amount of $1,003.14, (about 70 cents per hundredweight), the scrap value of such tires at the date of taking, and stated that “The person or persons entitled to compensation cannot now be determined.” A copy of such award was sent to plaintiff the same day.
7. By letter dated October 29,1943, plaintiff filed a proof of claim with the War Production Board. Under date of January 28, 1944, the War Production Board directed the Metals Reserve Company to make payment of the amount of its award to plaintiff.
8. Plaintiff was unwilling to accept said award as full payment for the requisitioned tires, and on or about February 20,1945, the Metals Reserve Company paid to plaintiff’s attorney-in-fact the sum of $501.57, being 50 percent of the award made by the War Production Board.
9. The War Production Board was ready to pay all or 50 percent of said award to plaintiff at all times after July 27, 1943, and the delay in making payment from that date to February 20,1945, was entirely the responsibility of plaintiff.
10. Early in 1942 at plaintiff’s request, the Baldwin Locomotive Works began efforts to effect a sale of these tires for plaintiff’s account. Complete descriptions of the tires were furnished to Baldwin’s sales agents in England, Brazil, Ar *457 gentina, Chile, Colombia, Mexico, Cuba and Puerto Rico, as well as to tbe War Production Board and the Engineer Procurement District of the War Department. As a result of these efforts, 200 of the tires were sold to the Paulista Railroad of Brazil on October 6,1942, at $6.39 per hundredweight, and 12 tires were sold to the Havana Terminal Railroad Company of Cuba on October 15, 1942, at the same price. These concerns purchased only the quantities they needed at the time, and were unwilling or unable to purchase any part of the balance- No other sales could be effected, since the tires had been manufactured to dimensions required to fit plaintiff’s rolling stock, and these sizes were not adaptable for use by the railroads in other countries where attempts were made to sell them.
11. At the time of their requisition, the tires were in good condition. In other words, if a purchaser could have been found who desired tires of that size, these tires were in satisfactory physical condition for use as tires. However, there was no available market for their sale as tires and the only market for them on the date of the requisition was for use as scrap.
12. If a purchaser could have been found for the tires on the date of requisition, they could have been sold on the domestic market for $5.70 per hundredweight, f. o. b. Pittsburgh, and on the export market for $6.46 per hundredweight, f. o. b. Pittsburgh. These prices were the established prices of the Office of Price Administration, and they equaled for the quantity here involved, $8,100.84 and $9,180.95, respectively. The purchase price of the 190 tires was $9,081.47. As scrap, the tires had a value of $1,003.14, or about $15.81 per gross ton f. o. b. Verona. The storage charges for the 190 railway tires were at the rate of $9.75 per quarter.
13. Considering the nature of the tires, their special construction, the inability to use or dispose of them for an indefinite period, the wartime conditions, restrictions and regulations, the storage charges, costs of inspection, insurance and other costs, and in the light of other facts and circumstances in the case, we find the actual value of the requisitioned tires at the time and place of taking was $4,000.
*458 CONCLUSION OF LAW
Upon the foregoing findings of fact, which are made a part of the judgment herein, the court concludes that as a matter of law the plaintiff, Swiss Federal Railways, is entitled to recover, and it is therefore adjudged and ordered that it recover of and from the United States three thousand four hundred ninety-eight dollars and forty-three cents ($8,498.43), plus interest on four thousand dollars ($4,000) from May 20, 1943, to July 27,1943, at the rate of four (4) percent per annum; together with interest at the same rate on three thousand four hundred ninety-eight dollars and forty-three cents ($3,498.43) from July 27,1943, to the date of payment, all interest being allowed not as interest but as a part of just compensation.
And it is further adjudged and ordered that as to the intervening plaintiff, the Confederation of Switzerland, the petition be and it is dismissed.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/8590603. Public record. Not legal advice.