Brief for the United States in Opposition — Kimball Laundry Co. v. United States

Supreme Court brief1949

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Opinions below — rk MS ae » faayl tag

Jurisdiction up SOR A ero i aoe 5

(Questions presented ao Tage te Sie RCRA Spin Sect “2

Statement? : RRS : nA ie Go eee ae

Argument ae oe ee

Conclusion Peay GOP 19

CITATIONS .

aa Cy ases . . ; e a . é . . % me

A Ibrecht v0 nited 8 States, 329.U. S. 599 cee Ataeeiey et An ae

Bothwell v. United:States, 254 U. S. Mr i ee

4 eee Joslin Conv. Prov idence, 262 U: S. 668 *: kas

; Metropolitan Laundry Co., Appeal of, 2 B.T.A. 1062 fre 12

“Mitchell v. United States, 267 ae S. 341° * 3h 38 44

* Monongahela Navigat’ n t o. v. United States, 148 LU. S. :

312 Piha / a ae ae

Omnia v. United States, 261 U.S. 502 ed meee

* Pioneer ene 4. Coov. Commissioner, 5 B.T.AL 8: 2] Mee

Seaboard Air Line Ry. v. United States, hie U, $. 299 = 16

, Unbed States v. General Motors Corp., 323 ©. a 3T3 “Bay ee

YP nite d States v, Petty: Motor © ‘ompany, 327 U, 8..372 Al,.12

l mated 5 States ex rel. T.V.A,.vo Powelson, ¢ 319 U. S. 266,

: ot 1], 13, i4

2 Statutes: ; i ah

aoa Act of October 16, 1941, 55 Stat. 742, @. 445, as amended

eee op by Title VI of, the Seeond-War Powers Act of March

ay, "27, 1942, 56 Stat? 176,181, ©. 199, sees, 601-602, 50°,

U.S.C. App. (1940 ed.) Supp. V, see. 721 ~/ “ol4

Declaration of’-Taking “Aet, 46 act 1421, 40 USC. ;

sec. 2588 ...,.: aS ee

ee Second Way P owers Act of Mare h 27, 1942, 56 Stat. 177,

ink Title IT, see. 201, 05 U.S.C. (1940 ed.) Supp. -V, sea -

eit ery is ter iS bah phe fee a, 28

% ‘

Bnthe Supreme Gourt af the Bnited States.

| ; OCTOBER ea , 1948. e | |

oe rere ee a

‘

Phe aie No. 6. ; ¢

: ‘

» Kimpaus, Latunpry Company, 4 CorPoRaTIoN, |

PETITIONER |

‘ e - A «

Unxirep States oF AMERICA

— een eee ne ae ern

ON-PETITION FOR A’ WRIT) OF CERTIORARI TO THE

UNITED STATES CIRCUIT COURT OF APPEALS FOR,

THE EIGHTH CIRCUIT

BRIEF FOR THE UNITED STATES IN OPPOSITION

nn te

eee. ‘ a

OPINIONS BELOW

— The District Court did not write anopinion. ‘Phe

opinion of the Circuit Court of Appeals, (R. 3-14,

vol. LV) is reported in 166 F.2d 856.

JURISDICTION

The. judgment of the Cireuit Court of Appeals

was entered Mareli 11, 1948 (R15, vol. LV). The

petition for a writ of certiorari Was tiled May 28,

148. The jurisdietion of this Court is invoked

(1)

oc sasesiestetiniiansaalaapadai cian,

ame nded by the, Aet of February 13,-1925

Sonsticus PRESENTED

Whither the courts below erred in holding

* that the measure of compensation for the taking by

“the United States of the temporary use and oecu-

i Pee ,

pancy ofa laundry plantis the market value of

damage and depreciation im the value of the build-

ing, machinery and-equipment oecasioned hy the

taking and im rejecting, petitioner’s claim either

(1) for the fullnarket value of the laundry, ¢. es, Of

2 all the physical assets and-the business, ine nding

the value of its trade routes*and customers or (2)

an element of rental or use value of. theJaund: ry.

Ww hether,in a procee ding hy the C nited Sti ites

tow eae min the use and occupancy of property for

a'specitied period, extendible for additional y arly

periods at the election of the United States, the

courts helow properly computed interest on’ the

sum awarded for the initial period and each addi-

tional yelirly period from the beginning of each

period to the date of payment and on the award for

‘damages occasioned by the taking from the date

of the verdiet until paid.

‘ y

STATEMENT

In order to provide laundry ‘and dry cleaning

iservices. for members of its armed forees, the

unde ry Section 240 (a) of the Judicial ¢ ‘ode, as

the use ‘and occupancy taken plus any destruetion,

- for the value of its trade routes and customers as

é nited St: ites tiled ; t petition’ on Novetnber BIL

19H. under ; authority of Title TL of the Second

Ww ar Powers: Act sot Maireh 2%, 194: oo Stat. LT7.>

221, ao me. (1940 ed. ) Supp. V. see. Vi lajsto

ee ke the cighh: te use and occupy certain prop:

erty in Omaha, Nebraska. The property, known 2s

the Kimball Laundry, and owsied and operated by

the Kimball Laundry Company, consisted of real

estate, together with all imprevements thereon and »

all personal property used in connection witli the

laundry (R. 1-5). ‘The estate sought in the peti--

tionwas the riglit to use and occupy the property

for a. period ending June 30, 1943, and for addi- .

tional yearly periods for the duration of the na-

tonal eme reone Vv at the election-of the Secret; Un,

. War ch. . Phe district court. wy} “antec the

t Se States innine diate POSSeSSION of the prop-

erty, and, with A. Li. Jac ‘ohberger (secretary and

operations INanager of the Kimball Laundry

-, Compahy) as superintendent, the plant was oper-

ated Jas a nilitary laundry (R.°5-8, 265- 267).

The térm taken Was extended for additional year ly.

“pertods, the last extension terminating on June 30,

1946 (RR. 12-16, 65-67, 82-85). From time. to time,

the United States filed declarations of taking and

deposited estimated compensation in court for the

‘Various periods taken) (R.° 16-18, 55-56, 67-63,

85-86 ).' The Kimball Laundry Company with-

. On M: iv 11, 1943, the term was extended to June 30. 1044

(R. 12}. On June 19, H 3, the Uni ted St ates deposited & 30, 140

+ as estim: ited compens: a8 for the term ending June 30, 1943

° ©

‘drew. the sums thus-depioxited without prejudice {0

its contentions in the case CR. 92-94, o8-99, T1-72,

SS-90 ).. a ees 19, 14, Six appraisers

appointed in accordance with Nebraska daw to

determine oo compe nsation for the taking, made

their report fixing COIN Pe? nsation in the: sum of

$74,940.00 per year. CR. 36-38). Both the United

States and _tlie Kimball Laundry: Company ape

, pealed from the appraisers’ award cae 19-40), A

__ jury trial totietermine—just-+ ‘or the

faking was not had until March, 1946, and on Mareh

23, 1946, three days after the jury returne d its véer-

diet; possession of the property Ww as returned to the .

‘Kimball Laundry C ompany CR. 183, 95, 97).

In the district court, the Kimball Laundry. C om- ;

pany ‘gsontended that thé United States, while os-

tensibly taking only the right to use and oceupy

the perisiis & had in legal effect, taken all of the

. company’s physical assets and its business as well,-

including its trade routes and customers, and was

"obligated fo ‘pay the full market value of what

was alleged to have bee n ‘taken, estimated to cbe

approximately’ $1, 000,000. (R: 21-51, 45-49, 91-98:

vol. IV, p. 5). The company also ¢ontended that

‘

(R. 16-18). On April 6, 1944, $50,000 as estimated compensa.

fvon was deposited for the term ending June 30, 1944 (R..55-

56). On May 31, 1944, the term was extended to June 30,

1945, and $50,000 as estimated. coripensation to cover that

ternt was deposited on.August 10, 1944°(R. 65, 67-68). On

May 28, 1945, the term was extended to June 30, 1946, and’

-$65;000 as estimated conipensation for that period w as depos-

ited on August 8, 1945 (R. 83, 85- 86).

ifthe re ‘ntal or use value of its laundry was to be

used to me asure CoMipe nsation, the Value of its

frade routes and customers Was admissible as ay

element of value CR. 93-94 ;- vol. IV, p.-3). °The -

Government contended that just COM Pe castti was

to be measiired by ‘the Market rental or use value

of the laundry for the period taken, plus the cost

of restoring the plant ind mac hine ‘ry to the condi-

tion in Whiely the ‘Vvowe re on Nov ember 22, 1942, the

~ date the v nited States, took possession iss the

Vp 5?

trict eourt was in. “accord with the Aiemenions 's

“proper

theory as to the proper basis for determining

compeusation and its rulings and instracions. to

the jury were in substantial conformity with —

theory. (see R. 150- 165, 231-2: 32, at volALV,

Tlie proceedings before the jury may be a)

Jacobberger and, Fred Jacobberger, the officers

and principal stoc kholders of the Kimball -Laun-

dry Company (R. 265, 384, 443-444), testified that

Somarized as follows: ALL. Jacobberger, Harry’

in their opinions the total valuesof the use of the -

laundry for three years and seven months (Novem-*

her 22, 1942, to’ June 30; 1946), cluding danmiages

to the building, maéhinery and equipment, was

570,000 to 580,000. CR. 318, 425,-433). Among

it Yr evidence admitted on behalf of the Laundry

Company ‘was the fee \ value of the land (R.-314,

389), the original and the reproduction cost of the

building (D. Ex. 19, R. 961-264), the cost of putting

eg 3 ee

the buil ling hav k in the same condition as in 1942

(RL 30E-306, seo. D. Kxs. 41, 12. Roto, fPAl5,

ALG) atiel ‘the difference het ween the vale of qua-

chinery and equipment in meagre 142 and in’.

March, 1946 (D. Inxs. AVand 23, R. 247-2 951, 253-' YO4,

958-260, 270-273 see also D. re, 45.and 4, R. 408-

lz, 415-4 19,420). For the PAIP pose of showing the i

capacity of the laundry plant, that it was a going |

ceoncern and tlic volume of business, tlie Laundry

Company w as permitted teshow its yearly, receipts

tars gress income} from 1926 throuvh 1942 2 eae

Ex. 10, R. 229-235: D. Ex.'12, R. 238-242) ; the

amount of laundry ok done-each year from 1932

through 1941, measured (according to type) Dy the

number of pieces, pounds oF bundles handled (D.

Ex. 24, R. 279-284), the total mimber of customers

being served on November 21, 1942" CD. Ex. 11,

AR. 235-237) and: ‘tlie prices being ¢ charged for laun-

dry and dry « Jéaning servi ices under O.P.A. ceilings

in November 1942 (D. Exs. 28 and 29, R. 295-297).

The trial-court refused to allow the company to”

show the value of the “Kimball Laundry Com-

pany”’ (t.e., the fee value of all the physical assets

and the trade routes) ) before and after the-taking

“CR. °315-316) or to’ show the value of the trade

-routesas a separate item (D. Ex. 14k; 368-370), *

Two Withesses. on lehalf of the United States

testified th: at the fair re ‘tal or “use value’” of the

property for three vears, seven months, ine Juding

damages to the building, machinery and equipme nt,

— . ; Yi

Was 3 $255,060, SO and $257,000¢ respeetiv Ny CR. 775

Tb; Caer ‘ i x. 24. ie. Ti7t-Tis;: R. 33-4: Tp oy ‘t

‘E . 23 936 7s}. Other evidence. tt hela of

ey Cine rntie wit die ‘luded estimates of the cost of

Yepuring thet wuilding, machiie ‘ry and equipment .

so thatthe plant would he ing good and: efficie nt

operating ‘condition CR. ATS483, F9T-A96, DUT-510,

520, 531,° 544, 548-567) 571-5720 601-608. wll G20,

631-645, 690-692), ee

At: the elose of: the trial, the district eourt- in-

~attucted the jury gene willy as tothe meaning of jure

compensation, ie., that it mneant that the own

should recover the full and pe fect equivnlent m

money of the property taken and, that jhe owner,

was to he put in as good-a position pec “iiarily as

if his. property’ had not been taken, and ‘that the

measure of just compensation is the fair market

value ofgthe ] ovoperty at the time of the t: iking. The

court then pointed out that while the standard af

fair market value works very nicely in cases of

fee ti: kings, itis much more difficult to apply it ‘in

eases of temporary takings hecause, as a veneral

rule, as in the instant case, there is no market for

the property for a temporary use (R. 150-153;

see also R, ‘154, 162, 164). As the. court. stated,

“The ‘re is no evidence of any laundry, having been

sold on the’ market. That being so; you have to be-

gin to‘look around to find another yardstic as “(R.

153). ¢ ‘ontinuing, the court comme ‘nted on various

items of evidence. adniitted fgr the purpose of

. 7

showing the fair rental value or valtie of the use |

of “the | property for the period taken and the prin. |

ciples applicable in arriving not only at that: Vahie

but also in arriving at the amount of de preciation © | me

CR. 154-161). . The court furthe ‘r-instructed -the. | oe

jury that sinee it had appe ared. on. eross-examina-~

tion that someé of the owner's witnesses had cone. 2

sidered certain elements which were not proper, the .

testimony of those Witnesses, insofar. as the im- |

proper elements were: concerned, should be dis-

regarded (R. 156-157, see also R. 167). Finally, the |

court instruc ted the jury to bring i Ina ge neral ve ,, ESCHER

dict fixing a lump sum covering both the value of

‘the use of the property and the damages tothe « . '

property and to make special findings (1) as to the |

amount allowed as “annual rental or ‘the amount

that you- determine for the use of the property pe ae

“annum”’ and. (2) as ‘to the compensation payable sy

for failure te return the property in the cordition |

it Was on: November 22, 1942 (R161). Appellant_

made various objections to the in&tructions, par-

ticularly beéause_of its refusal td permit ¢ onsequen-

tial damages to he recovered and to recognize as an

-elament of.damage the destruction of the trade

routes and customer lists -(R. 165-166).

The Jury returned its verdict on Mare h 20, 1946,

awarding a totai sum of $297,776.03 for the taking

of the property. for a term beginning Nove mber 22,

1942 and ending June 30, 1946, ine lading compen

sation for failure to return the property in the

' ~~

9 ; ’

condition it Was in on Noveinbe r 29, 1942 (R. 95. _-

96). Spegial findings were made fiximy fhe annual |

compe sation pave able at STO00, making the total

rental for the entire period of 3.6 vears the sun:

of $252,000 and tixing the ainouut payable for fail-

ure to return the pepe ‘rty in the same condition

as when take ‘nin the sum of § £45,776.03. ER. 96). On-

April 9, 1946, the. court entered judgment on the

‘ve rdict, allowing interest at 650 (1) on the amount

a adjudged due for the use 6f the laundry boi the

period November 22, 1942,.to June 30, 19435, from

—the beginning. of the period until paid and (3)-on

‘the amount due for each vear thereafter from the

_beginning-of.that.year wntil paid, giving credit to

‘the United States for the sums deyosited as esti-

‘mated compensation (R. 101-107). Interest was’

also allowed on the sum of $45,776.03, the Awe ard for a

failnre to return the prope rty in the same « condition

as when taken, from March 20, sab bs until paid

(CR. 105). 7 |

As stated above, the U ‘nited States returned the

laundry to the company on Marelr 23, 1946, and on:

June 11, 1946, it paid into court $98, 124.27, the.-

amour nt: remaining due to. satisfy the judgment

(see ee 95 = %, 138)? The company Was ae

; ? This sum ine luded compe nsation és the use or aed of the. *

prope rty to June 30, 1946, no deduction being made for the fact’

that the laundry was returned some three months prior to that

date. By-stipulation it was agreed that $200 would céver' all

damages io the property cecurring between March 20, "1946, .

_ ‘date of the verdict,-and the date of surrender of possession,

. 134-136). Judgment was entered on the Soe fixing

s io. Eom

. : a ‘ : : ‘ \

me "£6 withdraw #70000 ‘of the latter stim witho a.

prejudice {6 its right of appeal ( R. ‘BIH.

‘: Upon appeal to the United States Circuit Court —

: “tO Appeals for the Might} Cireuit, the jadgment

was affirmed, the court Jiolding that the United

~ States had not taken the ‘Laundry Company's

business, trade routes.or customers, that while the

Government’s occupation of the plant undoubtedly

disrupted ahd damaged the ‘conrpany’s, business .

such damage is not compensable under the Fifth.

Amendment (vol. IV, pp. 8-10). Pointing out

that, eyen if the taking of the temporary oceu-

pancy of @ié laundry were fo be given the legal .

effect of the taking Of fee title, damage to the com-’

~ pany’s business would not be compensable, the.

- court held that what was taken-in the instant case

Was the temporary use and oceupancy of the Tain-

dry, that just compensation - for the right to use

_ and eceupy property tempo ‘arily is the value on the

‘market of the use and eceupancy, together ~witl

compensation for any destruction, damage and de-

temporary use and does not include business losses

r (vol. IV, pp. 8-10). Hie court beiow also held that

_ interest on the award had been properly: computed

(vol. TV, pp. 13-14). °°. “seer ; |

ae ; ; ‘ 3 : ‘ ; :

lie competisation, for he damage agreed upon. and alse °pro-

viding fora eredit to the United States of $18,089.55 for cer-

tain personal property owne® by it which the Laundry Com-

pany had agreed to purchase at that price (R. 136-137).

preciation in value of the property oceasioned by the _

ARGUMENT ,

1. It has hee n’settie 1d hy this € ourt that _tnjuries

to a business; dike other COMSEGUE ‘ntial Tosses re-,

sulting from the taking of private property for

public use, are not compet nsable under the Fifth

Amendment. United States v Petty Motor Coni-

pany, 827 U.S. N72, BTT-3IS; United States xv.

Creneral Motors € on 1 B23 US. 373, FFI-3BR0, ¢ |

United States. CL rel. T.V A, V. Pear ee S.

266, 281-282; Mitchell vy. United States, 267 U.S.

341, 345: Joslin Co. vi Providence, 262 U. ‘S. 668,

675-676; Bothwell v. United States, 254 U.S. 281.

‘The rule is the same whether the interest taken in

the property is the feé title ora temporary use and

ocenpancy: United States v.. Petty Motor Com-

pany. supra; United States y. General Motors

Qorp. ; supra, As this Court held in the General

Midors case atop. 383, ‘* proof. of value peculiar to .

the re sponde nt, of the value of good- 4% or of ike

jury to the business of the respondent. , * * in

this case the case of the ti iking ofa epohaiie use

and occupanc yJ, as in the vase of the condemnation.

ofa fee, must be excluded from the reckoning.’

These decisions clearly support the judgment

below. In order, to eseape their effect, petitioner

seennngly argues \that its bustmess. was destroyed

and that' the alleged \dest ruction constituted a tak-_

ing of the business. 'T hus, it seeks to present a novel

question Which should be decided by this Court by

axserting that for the fret time mentioned in any:

Soe \

ike eee ae

reported ase, the Government, while purportedly

taking only a teniporary use of building and aia-.

-chinery according to its petition in condemmation,

~**for all practical comMOn-sense Purposes aetually

took a going business institution” (Pe t. 33,.par. 6),

Accordingly, petitioner attempts to distingnish the

Petty Motor and General Motors cases, supra, on

the. theory that its claim for the value of its’f rade :

routes and customers ‘is not properly classified as

joss of Lrotits, damage to good willy injury to the

business of like consequential losses which’ were

held not to be compensable in those cases (Pet. 34-

Sdepars. 1-2; sees also’ Pet. 34) pairs 7 and Pet, 28-

29)" On the other hand, atses which in terms hold

‘that “destruction” of a business is not a “taking”

and consequently not compensable are sought to be

‘i distinguished. by refere nee te various irre evant fae-

tors. THus, : as to Bothwell v. United States, Ht.

Ss. 931, 243, where this court held that nothing could

De rec overed for “destruction of Tusiness** because

‘there was no.actual taking” ‘of the business, peti-

tioner suggests, Without any suppert in the opihion,

that the condemnee in that,case lad the opportunity

too earry on the business ¢ ‘Isewhere. And. as to

“Whether petitisie’s ner is, in faet, one for Toss of good

will or séme other type of business Joss.is immaterial. “How- .

ever, it may be noted that while petitioner deniés that it seeks

té Feeover for loss of good ‘will (Pet. 34, par. 7; Pet: 35, par. 2;

Pet. 39, par. 1+, the very cases orf which it reljed in the tri: il

-court as justifying the method used by one of its witnesses in

walning the trade routes (R. 368-370) show that the value

‘placed upon the trade routes represents good will. See Appeal:

of Metropolitan Laundry Co., 2 B.T.A. 1062 (19257; Pioneer a

Laundry Co. v. Commissioner, 5 BY. A. 821. (1926/.

Witehell \. Lnaited States, 207 U. Ss. “4H. where

this Court again. held that: the destruction of a

business dees not constitute a taking. speciticaly

“Stating as a fact that the former owners we reun-

sable to’ reestablish their. disihess “else Where Cp.

AS) ). pet Htioners assume that the decision was based is.

solelv-upon a lack of statutory authority toe take”

a business (Peto38, par. 11). \Petitioner’s asser-

tien that Joslin Co. v. Providener, 262 U.S. 668—

whereit was he 1d that injury te at business i is not an:

clement of constitutional just compensation “in,

volves a rule founded upon asfatute™ (Pet. 37-38)

is equally without basis. | ‘i .

at nited States er rel. TEVA. Vv. Powelson, 319

U S. 260, is apparently distinguished on the ground

‘that a ‘tgoing’’ business was not destroyed by the’

taking in-that ease and that iit had heen, ¢ samnpen-

‘sation would have been awarded for the bus ies

(Pet. 36-37, pars. 7-8). Accordingly, petitioner

-relies tpon the Powelson ease, supra, and pen

* Monongahela Navigat'y Co. vv. United’ States, 148

U.S. 312-( Pet. 35-37, pars. 4-8). Neither of those:

cases supports petitioner’s contention... In. the

Monongahela case, Supra, a franchise was held to.

che such ‘tan integral parf’’ of a lock and dam that

it Was taken when the property was taken. See

Ounia Vv. United States, 261.0. S.5902, 513.) The.

—_ a

* In this connection, it. maybe ere ‘that there i is ‘nothing i in

the Second War Powers Act any more than in the statute in-

volved in the Mitcheil case to authorize the taking of a busi,

: mess... ; E ° . ‘

' o

distinction betwee lie the Monongahela Case, whe ‘re

the Prane ‘hise. was held to have been takgn. ‘and ..

cases di ke Mitchell v. United States, 267 USS. 341,

supra, Whe re the HISiNess Was “destroyed” but rot

1 wie “Bowelson

“supra, at pp. 231-2 itis netitioner attempts Rees

to establisiva case warranting review hy tlits Court

made ‘i

at ike "age Ine le med CASE,

by climinating entirely the -gene ral principles.

‘found: i the! prior decisions of this Court and by

. limiting eg ich ease either to its partieul facts orto).

the” xpewial, tepminology used by thes€ ourt to. des

se ribe the loss. for Which recovery -was denied.

Hotveve Tr, both courts below have ruled that peti-.

‘ stioner’ s business was’ fot taken and that its claini

is one for damiages to its business whie aT this Court.

em:

_ appeals presents: TSWeW question which. showtd he

Pesvers Act of Marten 27,

81-62," 50. Us. ¢. St1940- edt Supp: V,, sees. i2- rae, which ,

hivis held on humerous: Oc asions to dye NOLCOM-

pensable (R. 4; vol LV, p. 8; A);

{ ‘ousequently, the decision -of the cirenit court ‘el 2

See su ph pe

settled by this Court, nor is the decision ist ¢ conflict

with hay appdicable Ugeision. 6f ‘this Court. No &

qiest ion of recovery: for damiige to or destruc tion : a0,

sof a bnisiness Was presented or passed upon imany . x

cof. the other: ‘cass re clied die by be Vittme r-( Pet. is

~39-40)." . _ ay te Seren sete ike oe eget

spe : $ : ye ae bh .

Moreaver, - “as, this Court ee in &ex aioe: frases * * *:

“pointed put”. re Mononyahela* case. rested, primarily upon the

ao doe trine of estoppe t,

3D.

U'nitéd State®er rél, TV. A..¥. Pow elson:

S. 266,282, footnote > ei

oe Pe ‘titioner refers “(p..32) to the. Act of October 16, 14h:

555 Stat 742.7. 445 DAS amended by Title VI of the Sec md War

O42, 56. Stat. 176; IRI, .¢. 7199) secs.

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2. Petitioner's contention (Pet. 4-4) that in-

terest on tae award: Was improperly computed is

Without merit and presents mo question for review

by this Court.) Phe tise and oeenupaney conderimed

Was fora specified term Cheginntng November 22,

1942, and ending, Hine 30, TE extendible dor

ade litional vearly. periods during the eme reney at

‘the clectionof the Secretary of War (CR. 2). At the.

c aul of the initial period the term was exte nde d for

one vear and again in T9444 and 1945 was extended

for.additional yearly periods (R. 12,65, 82). Deela-

rations of taking were filed and estimated compen-

sation Was ‘deposited in court for each period. (R.

the laundry was returmed to petitioner (R. 95, 97).

The trial court allowed™aiterest on the sum found

x by the jury to be due for the initial term and each

additional yearly period from the beginning of

such period until the date of payment (R. 101-107).

Interest was allowed on the’ sum awarded for

damage, destruction and depreciation in the value

of the property y occasioned by the taking from the

date of the verdiet until payment (R.'105).

W hen property is — al ior to payment there-

—

authorized the President to reisnieitlon military oF naval exjuip-

merit. supplies ar munitions and machinery,.tools or materials

heces@ury to mannfactire, service or operate such equipment,

supplies or munitions. + That statute bas no bearing om this case,

Which ds a proc & brought at the, request of the Secretary

of War utider Title Il of the Second War Powers Act, supra,

AO Stat. 177 see. 201, 50 U.S.C. (1940 ed) Supp. V, ‘sec. 17 1a,

to eetidenmmn the tempors ey: use of real Jproperty tf gether with

person: al property located thereon or used therewith

16,95, 56,89). A few days after the jury's verdict

Cc?

for. duterest is allowed on the sum determined to |

‘he the valee of the property as part of just com-_

pensation from the date of taking to the date of

pavinene. Seaboard , Vir Line Ry vile nited States,

261 U: S. 2OY, HOD: ‘Albreclit vot nited States, 329

U.S. 599, Go2.° The provision in the Declaration

of Taking Act, 46 Stat. 1421, YO UIS.C. see. 258a,-

for interest on the sum finally awarded as the value

of the property is merely a .tutory embodiment

of this rule (Albrecht vi Ua. L States, supra, at

p. 009) which was. properly applied i in the instant

case. . : : ‘ ; ~

AAs the court below said CR. 15 -14, vol. IV),

‘From a realistic viewpoint, What the Gover nment |

Pe on November 22, 142, was the right to use

and oecupy the laundry: to June 30, [943° and ‘each

time it extended the term it tdok the additional —

yearly périod. The court Was correct in holding

that petitioner’s right to compensation for. use

‘and. occitpaney for each period taken accrued suc-

cessively as’ the térms were taken and that its

right to compensation for injuries to and deteriora-_

tion of its property attributable to Goverment

use accrued at the end of thie total term and did—

hot, as petitioner conten@s, accrue on the total

award on November 22, 1942,

. In its que stions resented, petitione > See

* teferved to numerous rulings. of the. trial court *

which are alleged. to. be. erroneous (Pet. 22- 45,

7 Here, as she! ‘low (see R. 6 vol. PV) njost, of the stig-

gested er rors are hot laa in the brief. Tusofar:

as they re ‘late to the standard for asce Ftaining just -

compensition they are ‘controlled’ by the ruling

that business losses are not compensable (Ques:

tions TIE, IV, Ve VIL IN, NER XIU NV, XVI,

XV Il, Pet. P31), Other suge restedl errors, such

as the qualification of witnesses (Questions VIT-

VIII, Pet. 24) and the exclusion of rebuttal testi-_

mony (Question XI, Pet.°26) are matters - resting

within the: discretion of the trial court and dy not

present questions for review. by this Court.

It Is urged that. the trial court’s conduct of the

case was such that, it destroy ed all testimony -and

evidence. intboducedt. by defendant ‘from a com-

mon sense Viewpoint’? and - ‘alls for an exercise

Of this Court’s power of supervision (Pet. 41- 42),

-As in other questions suggested, petitioner’s pri-

mary complaint is again exclusion of allegedly

proper evidgnée of value, ie., evidence relating to

ifsa leged business losses (see Pet. 42, par: 4: see

alsoR. 165- 106). I urthe rinore, 2s the court below *

stated (vol. IV, pe EE}:s. “Taking thé charge as-

. a whole, however, we think it adequately apprised

the jury of the applicable: law ‘and the considera-.

tions Upon. whie ha verdict gould lawfully be based,

_and-did not mullity thie pertinent evidence adtiiitted..

Moreover, after listening for two weeks to con-

flieting estimates and opintons-as to fair rental

value and as tp-damages to.and deétérioration -of

wen

i 5

a .

the plant and machine ‘ry attributable to the Govern-

‘ment’s use, the, jury could hardly have had auuy

Hbtstens: as ty thie isstes— t+—tiret- whie tt a ,

presente id by the evidence. So far as the record

shows, no attempt was made by the Government,

dirring the trial, to minimize the. Use fulness or

capacity of the laundry ar to show that it was not

completely equipped and an profitable operation

when taken over by the Gov ernment, It insisted, -

however, -that the Company was not entitled. to

have loss of trade reutes and customers, expenses aa

of litigation, and other ¢ onsequy ntial damages, con-

- sidered in determining just compe nsation for the

‘use and occupancy of the laundry.” The ‘jury's

verdict of almost $300,000) for the cuse_of the

property TOtgm@b Vears - and Tor damages to and

‘epreciation Mth property issabout half the fee

value of the. physical property as claimed hy peti-

tioner (i.¢.. approximately &600,000, see RL 214,

- 316, 260, 264, 273, 423-424) “and ‘represents about

- one-third the: alleged) fee value of the qghysical

property and the business, (see R. 21-31). While,

vas the court below pointed out. (vol. TV, p. 14)°

it Was mue ‘h less than the amount claimed } by peti-

tioner, it: was. well Within. the evidence e and: ex-

tee «ded by about $40,000 the highe ‘st estimate made

“by any Goverment witness (see I. 133-737).

One < ee, -2 os o 7 -

ee oe eee et ee

.——

‘49

.. CONCLUSION Pr

- The “deci tsion of the court bade is dorrect, and .

“* presents ne conflict or que stion Whi Ti, should) be

. decided hy this Conrt. .

. | Prine S. Per. MAN,

: Soli¢ itor (er ne rad.

j oe. A, Devirr V ANECH,

° Assistant Attorney Gon ral,

Roger Po-Marevis,

= fg 2% x Attorni ys, De partment of Fustice.

~A Jt L Y 1948 - +

. NY ° ' . ‘

a -

“*.

“ ~~ S GOVESNMENT PRINTING GrPIce teen > otree 1g

"Ma 4

. » = . ” ‘

\ “se

» . :

. c

tom

; ; %

é -

; : “ ~ :

; 2; , e@

: In November; 1942, ‘the United ‘tates con,

“demned the right, ‘on a terporar y basis, to use >. -

gd occupy the laundty? plant of the petitioner

in. order . to provide laundry and dry-cleaning

- service® to members ‘of the atmied forces.. The

- property was taken for .a teim: ending. in’ Jaine,

1943, together with a right ‘ta_extend for annual. -

: periods which, was exercised, the property finally «

being returned on March 23, 1946. :

After an extended trial, judgment was awarded

the petitioner in. the amount of approximately

oe = $300, 000,. a sim about half of the fee value of

“the petitioner’ Ss: physical properties. according te

its own estimates... ‘Petitioner was ac cordingly

__ awarded for a. three years, séven ‘months: use by

- the Government, half of the market’ value: of the |

pre emises, and. obtained the return of the entire,

plant and prop erty. __Although "its facilities _—

the date of restor ‘ation were, according to it,

_ worth $400,000, the petitioner, now ¢laims to. be .

~ entitled téan additional. award of approximately:

‘ _— 000, and ‘the questions presented are:

1. Whether. the courts below were correct in

‘holding that just compensation should be the_

: value _of_ of _the_use_of-the-property (computed on

a fair. annual rental. value): plus damages for

- failure of the Government to return the property

jin the ‘same Condition. as when it was taken,

wneany wear and ve excepted. a a a

‘@

| QUESTIONS PRESENTED : : A ee

2. Whether the court below vrf@d in digallow- —

ing: compensation for the alleged destruction of

value of trade routes, i. ¢., the: patrovage of. cus-

tomers sery ed by the laundry.

3. Whethti there, was a reversible error com>

=i in other rulings” of. the trial court.

nN . ;

5 es eS : STATUTE INVOLVED

‘The pertinent provisiens of the Second War

_ Powers Act -( Act? of. August. 18, 1890, 26 Stat.

316, as.amended by the Act ts of July 4, pe 40

Stat. 241, April 11, 1918, 40. Stat. 518," 50

171, and by. ‘Title IL of the Seeond War oem

Act of March,27, 1942 , 56 Stat. 176, 177, See. 201,

00 U.S. cf (10 od o Supp. V, =TmR) are as -

“follows: eae gin

The Seiretary of War *|.*.% may

acquire _by- -purehasé, donation, or other

~*" means of, transfer, or may cause proceed-_

-_ ings to be instituted. in any court having

jurisdiction of .such proceedings, to ae-

- quire by condemnation, any real property,:

;. temporary use _thereof,-or other interest

-. therein, together with any personal: prop-

erty located thereon — or. used therewith,

- that. shall be deemed necessary, for mili;

- tary, naval, or other war purposes, * * *.

Upon or atter the filing of the condemna- |

tien petition, immediate possession may be

takén and the property may be occupied,

used, and improved for. the purposes* of

7 this Act, — any other law.

.° ' Pia ee ; | 7 : -

; STATEMENT :

- Tn order to provide. laundry iu nd dity-cle “Aning

“services for me mibers, ef yits aryued forces, ‘the

United States filéd a petition on: November 21,

1942, under: authority .of Title IT of She ‘Second

War Powers Act of. March 2%, 1942, 56- Stat.

177, sec:'201, 50 U.S. C. (1940 ed.) Supp. V;

itfa, to condemn the right to use. and. occupy

ce rtain property in Omaha, Ne braska. The. prop- «

erty, known as the Rimball Laundry, ,and owned

and ‘operated by the Kimball Laundry C ompany,

consisted‘of real estate, together with all improve- x

ments thereon and all personal. pre ised in in +

‘ \eonnection with the Jaundry exe ept” > delivery’

"equipment (R. 1-5).° “The estate sought m the’ .

petition -was the. right to use and. occupy the

property for a period ending. Jie 30, 1943, and

~ for additional yearly periods for: the. duration »

Seeretary of War (Ro 2). The distiict court

.. granted the United Stites immediate possess sion

al “the property and, with A.. L. Jacobbervet

is (secretary and operations manager of -thé Kim-

~~ ball Laundry Company) as, superintende nt, the -—

‘. plants was operated asa military laundry: (R.

5-8, 265-267). The. term taken was extended. for

additional yearly: periods, the Yast extension te A ;

minating on June 30, 1946, (R. 12-16, 65-61,/ 2- .

85). From Aime to time, the United Sta f fied

declarations of taking, and. deposited ‘pStimated

*s Oye

' compensation in court for the various ——

\ taken (R. 16-18, 55-56, 67-68, 85-86). The >.

«Kimball Laundry ‘Company, withdrew ‘the sums.

; A, “, 1 thus deposited Without prejudic e to ‘its. conten-

~,% °° tions in the, ease (Re 52% sk, A8~59, 7-72, 88-90).

- On ‘August. 23, 1943, the Kimball Laundry Com-

pany filed arf answer to the’ condemnation peti-

‘tion allégitig ‘that its’ gome bustneSs, although not

_* — deseribed of referred to imthe petition, had been

ee taken by the Unite ‘States, that the taking was:

me __not-that of a temporary use, but rather. of ‘title

fa ‘to all of. its bySiness’ assets, sO'that the proper

". measure of Aompensation was ,not rental : but

“was oY a value of its laundry’ and dry-clean-,

mE _- ing estaBlishment as a going cern in the sum

Pree 2 $1,000, 900: less “credits wy ah States

_— a=

. . férgSupplies already nid for and certain, pers”.

ialty not taken, leaving a net sum of $949,-

axe | gi 40 for the \ value of the phy sical property and

the business alleged toshave been taken (R. 21-31).

4? In‘ accordance.with Nebr aska Jaw, six ‘appraisers

i’ io. a May 11, 1948, the term was‘extended to June 30, 1944

: — (R: 12). On June 19, 1943, the United States deposited

fet | $30,140 as estimated compensation for the term ending June |

~ 30, 1943 (R, 16-18). On April 6, 1944, $50,000 as estimated —

compensation was deposited for the term ending JSate: 30,

1944 GR. 55-56). On May 31, 1944, the term was extended

- to June 30, 1945, and $50,000 as estimatéd compensation to’

-cover that term was deposited on August 10, 1944 (R. 65,

67-68). On May 28, 1945, the tern, was extended to ‘June 30,

1946, and $65, 000 as estimated compensation for that period.

eae deposited on Anant 8, 1945 (R. 83, oe."

= correct the award of the appraisers and énter —

judement hh a matter of law in the sun of.

$949,979. 40, for the. fair and reasonable value -

aes, Soot pears 20

a a 4 oe

(appointed to. ‘detéTiniine just, comapeinaition foe:

the taki)” made - their report. on November 19,

= 4945, awarding the Kimball Laundry: Company i

> the sum of $74,940 per vear for the ‘estate t taken’ %

‘and: stating: that they bad made no allowance

for damage for loss of patrons: R. 31-38). Both:

'- the Vnited States and ‘the ‘Laundry. Company

appealed frbm the appraisers’ aw ard CR, 39-40)

aa and the ompany filed, what. it: ‘alled ;a “‘peti-

tion in error’? in which it ated the- court. to

ofits. entire property. plus costs: and intet rests

-(R. 44-52).

‘A pretrial hearing. was had at the oanidak of

the Kimball Laundry Company. on May 17,1945

(R? ‘BD; see ‘DB 90), ‘and, af thie beginning: of

_the trial. before a jury, tlie district. court ruled

on-various motions pending before it (R. 188).

The - Government’ 's motion” to” strike. the. answer

? and the petition in Hor was granted, the eourt co

stating that the Government’s osjection that the

- answer contained allegations of * evidence and :

“eoncdusions of Jaw rather. than facts was: well,

‘taken and furthermore that ne. - not think

pleadings were’ necessary (ht. 76-8 2,183). . Dur- ;

ing the course of the trial (on March 18, 1946)

the' Kimball Laundry Company filed a sec¢ond

. | “petition on ee > in which. it alleged, among

tf eraee, A. a i ie

| ee aes See

. .

then. things, that. it had. built up highly vu aly

able trade foutes Over the vears by’. definite

contractual” relationships, for. aliundiy and dry-..

cle: ming SETVICES, Higt> those contracts: were de-

market value of the property ‘as a going concer

- stroved by the taking, that sd 1e fair, reasonable

Was ‘over $1, 000,000, that the. United: States had

-no right or author ity. to ‘take a temporary: use,

of the prope ty unless "tt paid the, fuil damages .

which. were salleged to pe overs Sl 000,000 * CR.

91-93). It was further alleged that if the. court

“determined that the value of a temporary use

_would be just compensation, then all elements of

value inhering in the property, including the

value of the trade: routes, which was afleged: to

have been -destroyed, should be given considers-

_. tion and- fully. inchrdéd -(R. 93-95): “A motion

~— of «the Government to strike - this petition wa

granted (R. 95; 863). | !

The .trial hefore the jury lasted. two weeks,

beginning March’ ‘4, 1946, and ending: March- 19,

. 1946 CR. 183, 863). The -testimouy | may ‘be

summarized ‘as- oe RE EOS a Aegan earn mic

Three officers’ of. the Kimball Laundiy Com-

‘pany, who were the principal . stockholders (R.

265, 384, 443-444),” gave their.opinions as to the

: ~ainount of coprpensation ‘to, which the company

was ‘gititled. by reason of the taking of its prop-

2 ‘ent. ALL, Jacabberger, secretary and operations

‘manager. (R. 265), testified that. the totals value

ioe ae

‘of the use. of the. property for three years anid ;

. seven months | (November 22 22, 1942, to June 30,

te 1946), including damages to’ the property ineurr ed

during the Government's occupancy, \was »$570,-" -

000 (R. olsg).: Harry Jacobbergér,. president of.

the company, estimated: that value to be $580,000

(Ru 4382+433; ef. R. 423-424)," ‘and Fred Jacob:

berger, former vice president in charge of salés

promotion, expressed the opinion that such value

.Was> $570,000 . (R. 454).. All three witnesses

arrived : at. ‘their figures by allowitig’ $220, 799.09

~ for. physical damage to the. buildings, machines wT,

and ‘equipment | (R. 319-320, 343, 424, 456). The

remaining $350,000 to $360,000 represented the.

Ww itnesses” opinions as to value of the use of the.

property for three years. and : seven. montlts at a

rate of approximately $107,000 a year éR: 320, 345-

346), The method by w hieh the use value for the -

period of Government operation was compute “d by

a the three witnesses varied.” For example, A. Ia

Jacobberger’s estimate: was composed of approx-

“ imately. $2: 5,200 illowed for taxes and insurance at

, ‘$7,000 per. year (R. 320-321, 343), some £66,000

+ for depreciation (R. 324-325, 332-334, 351-353),.

miscellaneoys expenses (storage of customers’

clothing and the trucks, which were ‘not. . taken,

réconditioning the trucks and litigation expenses)

in the sum of $16,400 ¢R. 326-327, 356), an allow-

- aneé of $75,000 for expenses. during the period

-. which would elapse between the time of surrender .

e*-

im Ra RAiny rs ae aie ges

4 Pi b= : . -

vig paktey Y 9.

of poseceeioin by the Government and the tite the »

laundry éguid be ptit hack into, operation CR-330--

331, 360-361), and an allowance of approximately ..

— $130,000 for, a net, return to the owners for the -

‘use of the property, based on capital investment

in land, birilditig, inachinery- and equipment (R. |

*.° 332-333). Harry JaMbberger, in explaining what »

. ‘his estimate of $100,000. per year for the use of:

- the property ineluded,e stated “nothing but the: |

rental of a business” and.that it was.*‘the valug —

that; plant had to us as a going eoncern”’ as

426-427 7).¢ Fred _Jacobberger . testified that -

arriving: ‘at the sum of $1C 0,000 per year hé tog

allowed: $26,000 per -year to be set aside for depre-

ciation, $7,000 per year for insurance and taxes,

and a\ reta 1, of $65,000 per year om investment,

“- representing 10% of $650,000, his value for tlie

éntire physical plant (R. 456-458). Alt three of

these Witnesses. stated on cross examination that,

the fee simple value of the. entire physical * ‘prop-

--erties of the laundry. compapy on the, datg of the -

~ taking was between $200,000 and $650, 000 (R. 330,

424, 457). -

| For the purpose of showi ing the capacity of he

plant, ‘that it was a gonig concern and, the volumie «

of business, the laundry company ‘was permitted

to introduce exhibits showing the véarly receipts |

from various types of laundry.and dry -cleaning .

‘ services rendered from 1936 wn 1942 (D.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.