Brief for the US — Kimball Laundry Co. v. United States

Supreme Court brief1949

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IEW Sls olin 5 Re he By ee os erg canes le

irisdietion. —__. a a oe prevest ¢ckacenete 1

uestions preainted : ce pul Saen own whan Salado 2

atute involved — . j St ae bicae heen Oe

SONU gs ee eee bia dn Sono ba greed-< ou 2 is

mmlary of argunient.. Bile we ath tiie ween enetacedes” &

rgument:- : : ; :

I. ‘The petitioner has reveived full and agequate com-

/ pensation for the ‘teniporary use ‘of the property,

under - estabtished:, rules seri asied applied by ‘the

INN SOIR sor ei cts cat cw ck oceans cee 27

II. The petitioner, having heen fully iinncmien for tht

temporary taking of its propéty, is not entitled to

* . a further award for lass of good will or-trade routes.

The Govgrnwent did not take petitioner’s good will

ae its trade routes, and the courts below did not err ,

ree holding that. evidence of the value of the trade *°

ase inadmissible..¢_.--_ 2 ..---.-.- a

- 0 A. Busines® losses aré not compensable under the ie :

oat Filth: Asse awe Scns 0 ese -up sos “43

B~ Petitioner's business has not been taken <ooue : 45

C. This cases presents no exception to the rule

«that iness losses are not ‘compensable aa» 4

-D. Ghe evidence relating to petitioner’ s good will =

a value (“trade routes’’). reflects the ty poy e-

"~~ speevlative nature of such value. 2s. __ 2. oe

, fre gvithout merit. , ,-. bo cmantoeeswedd sag - 68.

A. The trial court did net err jn ralir ‘that the : =

- - Gov ernment’ & witnesses .w ere ling that to

: NUIT nc nw ce thon 8 eK er ee

B. The -tnal court did not err in excluding re-

. iruttal testimony_.--_-. pe peace aro i

. C. The trial court aw arded thie proper amount of,

interest .- Esa chew Beast ww laiaakee «Coe

ynclusion— ee eg ee een i wi ces 77:

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cond War-P, rag Act of Mere h’97, 1942, 56 Stat. 177, \

Title Jf, see. 50 U.S. C. 61940 edo, Supp. V, sec. |

Jia... wieceves a

Bonbright, Valuation of Prope rty (1937), pp- 727 734, roun 52, 53¢

Nichols, Eminent Romain (24 edi 17), p. W7S_ 66

cel, Valuation under Eminent Domain (1936):

Geen. 154, .166,,161, 178... . 2...) Bees ests. BE

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Oc ‘TOBER Tr RM, ‘1918.

) No. 63

'-Kimpatt Lavxpry Company, “4 ]CORPORATION- *

on aE ONER eee

need We eta a

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Uxrivep STATES OF ADERIC.

ON WRIT OF CERTIORARI YO THE UNNED STATES COURT

OF APPEALS FOR THE FIGHTH CIRCU IT oe.

ts". Lil . . ? a .

“BRIEF FOR THE UNITED STATES ;

Ree Weiss aia ta ae eee is

OPINION BELOW 7

The opinion of the C ourt. of Appes us ¢R. 3-14,

vol. IV) is reported in 166 °F. 2d 856. The .dis-

trict:court did not write an opinion. - |

JURISDICTION 7 |

_ The judgment of the Court of Appeals’ was

_ entered on March 11, 1948 (R. 15, vol. IV). The

“Petition for.a writ of certiorari was. filed on

May 28, ‘1948, ‘and: was “gr: mted en Octal er | ae

1948, a —— of thisy C ourt rests on -

28.U: 1 ~, ‘: imei tens oe ao raed

a <. iter | eee

‘ap?’ ;

\ . ' + ‘ 10 r - er i

oe ee Shenae ay 7

. a ae.

* 229-2 235; D..Ex: Py a, 238-242),! the

"gi unt “asf laundry. werk doné eae ‘Hr. year from. %

LOB? - through 1941, measured (ascchahen. to type). ;

hy the shamiber of Bie es, patmds oF bundles*han

ed: (D; Rx. 24, -R. 279-282), the total nunber

oof are being served: on November 21: TH: 2.

a D... ee 23-2: 7), _and the prices being

Pea for. wna and div-cleaning — se rvices ”

. under G..P-: A. ceilings in November 1942 (1). Exs,

28, 29, ‘R. 205-297). Ss = ee

= Wetdenas was also admitted on behalf of the.

Kimball : ‘Laundry Company that the original cost S

of the land ‘was $5000 (R.°385-386), that the fee

value of the land in. Nov ember 1942 was $30,001 by :

(R. 314; 389). that the original Coste the building = |

in L925. was “$499,094: 9.99, the cost of an addition

to the building iy 1935 was~ £39356. 56 and the

es cost as of November 21, 1942, was

S2SO,348, no ‘allowance being’ made for deprecia-.

tion (D. Ex. 19, R: 261-264). Evidence -was also.

oo .

“alinitted to the effect t that the cost of putting ‘the

Was 868628.08 ‘in November 1942, al T$

‘in Mareh IaH, leaving.a difference ‘e in-value before

Tarik ling back in the same conditionsas it was in

HH? was $35,000, (R.. 304-306,-see D. Exs. 1 42?

.. 408, 412-415; 419), +¥at the vale of power -

equipment and machinery, 4neluding. the biflers, '

$30,260.53

‘ nad nifer-t he taking of f $52,064. a ). Ex. Poe R. ‘

Thos represents gross income, ( ‘ompare: Def fend: ant’s E X-f .

“hibit 7 CR. 221) fer the years 1936-1943.

eS ee ne | aS

270-373 ie xee also D). HiXs. y. 44. R. 40 1. 415-

419, 420), - that the Value® insti led of all: other

oe thinery> and —— as of, November Dy

, normual dep rechation, the latter due to the hey _

/ S42, awas. $273.8 39 and as of N November’ 1945

ps $120,699.79, lesZing’ a differe nee he value he-

fore and sia = taking of $15 I 131. (D. ‘Ex,

‘StS: I4T-251, BIBI; 258-260). inh :

On | helialf of. ve Yur did. States two witnesses

testified as to the fair annual rental or ‘Suse,

yalue”’ of the property taken, including damages -

inet urred during | the, Government’s use of ‘the

_ property. Cornelius G, Wi ber, an engineer and

appr aiser exper enced in'v alaing industrial plants

< (Re 722- 723), testified that the f ‘air annual rental

value was 70,000 or a total of $257,000 for the

- period from Nove tuber, 2 1942, to June 30, 1946

(R. 729-159 ; Govt. Ex, 22; R. 135-737). ' He ar-

vived at, his estimate of virlue hy allowing the

following sums: #27.300 per year asa reasonable

yettimm onthe value of the entire plant . e.; 6%

$455,000, ‘whieh was-in his opinion the fair.

a reasonable value ‘of the, plant) CR. 728-730.) ,

$9,0Q0 4. “5 ‘year fort axes and insurance, » $27,-

77. 79 per Vear- for depreciation on the building

and Machinery, ine lading both normal ‘and ab-

use. of ‘the (propel ity by the Gavernment, . $6;000

3 As is the ease with reference to many of the exhibits; De-

-. fendant’s Exhibit 21, ¢: msisting of 23. pages, is not, printed -

- in full in the record td R. 142- aus

owe

am * —

9 2

a oe “\

om |

ete eee 12

for contingene ies and: uncertainities reg garding ex-

piration. of, thé ‘tern, making: a vound total ‘

$70,000 per year or $252,000 for 3.6 yeas ‘9

730-733). . These -figures were adjusted later In’

the light of certain information obtained subse-

quent to the making of the appraisal-and Weber

gave as’ his final estimate of value for the terms iy!

taken, including restoration and repair costs; the .-

sum of $257,000 (R. 733-735; Govt.-Ex. 22, R..

735-737).: On cross-examination, Weber stated

that the reproduction cost new of: the eritire plant

ayithout allowing for.depreciation due fo wear and +

tear or functional obsolescence, would be $642,-

925.28 (R. 744-746; see also Govt. Ex. .23,-R:.

751-752). 2 a: hey )

‘Lewis’ ©. Sholes, a_ real estate man ia ap-

praiser with many | Years of ° ‘experience, had

examined and appraised . the property shortly

before it was taken by the United States, had.

observed it during ‘the’ Government’ Ss occupancy

and had examined and age it in the latter

part. of 1945 (R. 760-76 sy TER, 773, 784). He

testified ‘that the fair and sneii rental Aalue

of the property including damages heer rom

the use RY. the Army. was - $65,663 per year

(R. 771) or a total of $253, 066.80 for the 3 years .

7 months’ period including cost .of repairs put

not including the cost of mov ing back y¢ertain

machinery and equipment Which had: not been

used by the Government but had: beer remoyed

‘and stored at For Omaha (R. 772-776 ; “Govt.

» Ex. 24, R. TTi1-178}, Satoles’ estimate of value

was’ made wp as follows: a return on investment

«of 5% of the ‘value ot the land, and . building,

or “$10, 380 per year, and 7% of the value of

machinery and equipme nt, or “19, 813 per. year,

$23,220 per ‘year for normal depreciation on the

“building, mace hinery and équipment, $4,500 ‘per

year for taxes, $750" per year for msurance,

“$2,000 per. year for the owner’ for: management

and #€9,000 “per year for abnormal use’ of the

- property hy. the United States, making a total 7

of $236,356. 80 = (Ik. 769-772). To this figure,

‘Wholes added! $16,680 fox “pestor: ition and repair

costs not. included? in his: “gstimate of .$9,000 per

year. for abnormal lise, ma ‘king a final total of

$253,066.80 - for the taking (R. 772-776, . Govt.

Ex. 24.° R. 777-7178). On°* eross examination,

Sholes stated that in determining the total value

of the property he liad estimated reproduction

cost new . prior. -to. deducting | depreciation at Q

$660, 474.36 (R. 783-784).

Appellant objected ta the aplicalixes of these

witnesses to give their opinions ‘of. value and

to their testimony as to rental value on the

ground, that there was no showing that a laundry

4 Shoes’ value of the entire property after allowing for —

depreciation was as follows: land, $17.600 (R..767), building; .

$190,000 (R. 767-768), power plant, $12,500 (R. 768), other

815504~ 46° -—— 2 . Cae <7

- machinery and equipment, $215,400 eal 768), obec total

value of $438,500 (R. w- :

had aver been rented and that this was nat—

aa proper way to valne a temporary tise: “These

" objections were overruled (R. 728-729," 767-769).

_ Exhibits were introduced and several witnesses ep

testified? 6n behalf of” the Governmenit’ as to

repairs and replacements made bythe -Govern-

ment during its ocewmpancy (Gyt. Exs. 2,3, 4,-

5A, 6, 7, 8, R. 461-478, 498-507), the estimated

fair and reasonable cost of painting and other-

wise repairing and restoring the buiffting, ‘build-

ing equipment, power plant and utility equipment:

‘to first-class condition (R: 478-483, 491-496, - *

507-510, 520, 531, S44, 548, 601-608, 611-620;

Govt. Ex, a7, R., $36—-640 ; : seealso R. 690-692),

and the estimated fair ‘and re: ‘sonable cost of re-

pairing, 1 replacing and moving back ‘into their

original position. all Jaundry and dry-cleaning

machinery and equipment so that the Playt. would

“be ina good. and efficient operating ‘condition ” |

(Govt. Exs. 10, 11, 18, 12A, 21, R. 549-567,- 0 |

571-572, 6 GAT, 649-655). The total’ sum for re- 7

pairing the - “puilding, building equipment and

power fant equipment’ was %* 37, H21.54 (see R. 2

633, 640, 690-692), and the total sunt for -the

repairs to laundry and dry-clearing equipment

was $90.471.27 (see R. 631-6: B2,. 645), making

the cost of all. repairs $57,992.61 (see R. 63:

— 690-692). Appellant’s objections to the evens:

-ment’s testimony and exhibits relating ‘to this »

subject made on various grounds were’ overruled .

ae 04-505, 555-056, 631-032, 634-035 », G46, 648).

RSI aaa tis acs aad

On rebuttal, : Peter W.. Dahlquist testified that

he ‘had: examined the daundry cand dry -cleaning

equipment which Government witnesses had said

could be repaired for the total sum of $20,471.27

and that in his opinion it would cost st. 42°

“to repair 1 it: (R. 809-812, 814; 1D. Exs: , 49, 50,

JR. 822-82: 3). He further stated that dtiniaats

‘of thé cost of parts-was: very close to that te stified

to by the Government’ s witnesses but that there .

Was a big difference e between the amount, allowed

by him for. the labor ‘costs and the amount.

allowed by the Government witnesses (R. 817). -

Certain other evidence offered on rebnttal was

excluded on the ground ‘that it 3v as not. proper

rebuttal (R. 826-830; 833-838, 8416-849).

During thé trial seve ral exhibits, prepared by

‘certified public accountants , from the books -of

the company, which were aftered in evidence by-

the F imball Laundry Company, were ‘exchided.

The excluded exhibits were as. follows: Defend-

ant’s Exhibits 1 and 3, two _compilatieris-showing

* the disposition of the funds of the laundry com-

pany, one from 1924 through. 1942, and the other _

frotw 1938 through (1942 (R. 188-191, 196-197,

200-201); Refendant’s Exhibit 2, a compilation

of the total cost of the company ’s fixed assets,

i.e, real estate, building, mae hinery and equip-

ment ¢R. 192- 200) ; Defendant? s Exhibit 4, show-

ing the net profits of the company before nid

after deducting income tax ahd de ‘preciation

taken on income tax returns and also showing

the amount. of Income tax paid and the amourit

of depreciation take: on income’ tex returns from.

1924 through: 1942 5 (R. 201-204) ; - Defendaitt? s

Exhibit 5, showi® the net profits of the gonipany

from 1933 through 1942 be fore and after. deduct-

ing officers’ salaries, Inceme tax and depreciation

taken on income tax returns, the amount of the

latter items, the surplus on hand Janua: ry 1, 1933,

the dividends paid from: 1933 through 1942 hd

surplus 6n hand December 31, 1942 (R. 20: 5-206) ;

“Defendant’s ‘Exhibit. 6, containing a compara;

tive balance sheet for the years 1923 and 1942

and. showing, among other things, the percent=

age of officers’ salaries to capital stock and sur-

plus, the percentage of dividends to capital, stock

and surplus and the percentage of ‘repairs: to

the accumulated: cost: of equipment from 192

tio: 1942 (R. 207-218, 855-857); Defendant’s Ex- .-

hibit 7, showing the gross income of laundry

from 1924 through 1942 (R. 219-221) ;° Defend~.

ant’s Exhibit 13, showing the _commissions—and |

pablo B= Sa

total salaries and commissions paid the drivers

on the laundry routes (R. 243-244) ; Defendant’s

Exhibit i, ‘identified as ‘ “purporting” to evalu-

‘ate the cuftomers sérved by the laundry during

8 te excluding Defendant’ s Exhibit 7 i, the trial court stated ;

that it would be admitted if there were attached a statement

of net earnings (R. 219-221). No-offer of proof in compli-

~ ancé with this suggestion. was made. Gross income for the

_ years 1936- 1942 was admit ed elsewhere. See sector ..

supra. ! °

- git

ABs Bec de

1942 (R. 468-370) ; ‘Defendant's Exhibits. 15, 16,

and “17, showing the estimated operating: losses:

which it was’ contended would occur during the:

@ first three years of operation after the Govern-

ment surrendered possession of the plant (these:

loss@® represented the cost of rebuilding the t ratle

routes) (Pet. 8) é¢R. 370-383) ; eoiumn 1. of De-

fendant’s Exhibit 21, showing’ the oerigimal cost

installed of: all machinery and equipment (eX- _

cept power machinery and equipment) Ch. 250- es

St S-e) te pare ie

* The trial court. also rejec ‘ted an offer to. prove

_by witness A. L. Jacobberger that the value of —

the ‘Kimball -Laundiy Company”? at the time ;

-of-the taking ‘exclusive of the delivery trucks,

pnelasive of aliv element of good wil, and ex-

clusive of ‘tthe loss of *profits’’? was $987,524. 32

~ (R. 315). The offer showed that this sum in-_

eluded the following . items: $28 AS ( value of

__ hitting), $273,831.39 (value .of niachinery and

- equipment), $62,928.08 (xalue of power equip-

ment), "$30,000 (value of land), and $34,516.85

(value of trade routes as a e apital. asset evalu- ;

ah : ated ‘by number of custome rs): (R. 316)... Fur- |

ther offering to prove ‘that the value. .of the —

property to. the company upow its return by

the Governnient would ° be $426,208.28, it ‘was

stated that the purpose of the offer was to show

that the proper measure’ of ddmages- was . the

“difference. between’ the: foregoing alleged values

$561.316.04 CR 316) eet Ane se, at

the jury (R. 1 50-165) to the effect that the owner

of property taken for public use is entitled to

just compensation, oe, the full and. perfect

equivalent in mong for the property ti ken, that

“he is entitled to be: put invas good a position

%, peeuniarily as. if. his “property: had not) been

taken. After stating tliat in fee takings. the

, Measure of compensation is fair market value

of the. property. taken gnd ean be fairly easily *

determined, the court, pointed out thie difficulty

; of determining market value Tin eamareny ake .

‘ings where: there is no ‘market’? price, and dis-

eussed the vartous items of evidence admitted

of the company before and after: fle: nline or

At. the close ‘of the trial, the court mistrueted

which the jury was toe consider, in aneffort to.

find a. “vardsti¢k’? for measuring the fair and’

Fpenacnidble alue .of the use lat Ane property,

The court _ also instruc ted the “Jury. that they

we re to determine the fair and réasonable value

of the use of the property or annual rental (ex-

plaining that this value is sometimes called the

value of the use. and sometimes rental) and that,

¢ YS A

_ in addition,’ they should determine and ‘award °

. Compensation for destruction, damage, or depreci-

ation of the property.’ The jury was further in-

structed that sinee it had vappeared on cross:

examination of some of the owner's witnesses

who had: given their opinions of the value of

‘ : a ‘. é ? eo,

“the: property thi it: they. hard considered | ceptain

elements wile ‘ly are not: ‘proper,the te stimeny ’

of those. withe SSCS, insofar as the improper ele-:

qents | were concerned, should be disregarded

ca ie 56-157: see also R. 167).

’ Petitioner objected to the iiistructions to disre-

rc tid cortain ‘testimony of its Witnesses and wb-

jected genet rally. bee ause the instructions were hot

“exphie it enough with re gard to the element of dam-

ages and because the use of the-aword ‘ “rental”

by the court in, the-tnstructions Was not proper. +

and. becatise here, as well as throughout the trial, :

the. court failed and refused to recognize as ai.

clement ‘of damage the destruction. of the trade

", routes ‘and customer lists CR. 165-166). Specific

exceptions were taken (R. 166) to “all Instruc-

tions. ziven as requested by’ the Government “(see

R. 163-165, 169-172) and to the failure te give

instructions requested by petitioner (see R. 172-

178). | :

The jury: returned its verdict on March 20,

1946, awarding a total sum of } $27, 776,03 for the

taking of the: property for a term beginning

_ November 22, 1942, and ending June. 3, 1946,

and including compensation for failure to‘return

~ the. property ain the condition it was in on’ No-

-vomber 29.1942. (R.- 95-96). Special findings ‘

s were made: fiyine the amnual compensation pay-

able at $70,000, inaking the total rental for the -

-entire period of 3.6 years the sum of €252,000 and

=" Gag-. . «

Ne SS 20

‘

. fixing the amount payable for f failure to return

the property in the same condifion # as when taken

in the sum of $45,776.03 (CR: 96). A

A Notion in arrest of judgment fled ‘March 27,

1946, was yerruled (R. 97-101; see R, 107)." On

April 9, 194 Treat was entered in-the amount

of the verdict and ‘interest at 6% was awarded

from November 22, 1942, on the amount due “for

the rent or use of the property for “the period

November: 22, 1942, to June 30, 1943, until paid

and on the: amount due for each subsequent yearly

period from the beginning of such period until

paid, viving credit from time to time for the sums -

— deposited as estimated compensatic n when decla- |

rations ‘of taking were. filed (R. 101- 107). ‘Inter-

est was also awarded on the sum. of $45, 716. 03,

the jury’s award for failure to return the prop-.

erty in the same condition as when taken, from °°

Mareh 20, 1946, the date of the verdict, a "a

-paid (R. 105). . e |

On Mare] 23. 1946, the United States surren- -

.*dered possession of the property to the Kimball —~ :

Laundry ‘Company (R. 97). On June 11, 1946,

the United States deposited’ in court $98,124.27,

. the amount remaining due to satisfy the judgment,

(see JR. 158)... Upon applic ation, the Kimball

* The judgment reserved jur fediction | in the trial court for

any additional claim which might arise by reason of an ex-

tension of the time beyond June 30, 1946, or by reason of any

_ additional damage to the premises occurring after the verdict.

and prior to surrender of possession (R./106). However, on.

“wT

| een ee ;

or -

the company’s right to appeal (R: 137-140).

A motion. for new trial filed April 19, 1946°(R.-

_-FO7-126)\. was “defied on \August 16; 1946 (see

R. 140)se.

Upon appeal by petitioner to the United’ States

Court of Appeats for the Eighth Ciratit, the judg-

ment was affirmed, the -court hglding that the ~

United States had not taken the ‘Laundry Com-

pany’s’ business, trade routes ‘or: tustomers, that:

while the Government's occupation of, the plant

< $75,000. of this sum, the order allowing the with- °

drawal stating that it was without prejudice to

“Laundry Cotpany was permitied to withdraw.

undoubtedly: disrupted ‘and ‘damaged ‘the -com- |

pany ’s business such damage is not compensable

under the Fifth Amendment (vol. IV, pp. 8-10). a

Pointtng out that, even if thetaking of the t¢mpo-

"vary occupancy of the laundry. were to be given’

May. 8, 1946, the parties entered into a stipulation fixing the.

sum of $18,089.55 as the amount, to be paid by the Kimball |

‘Laundry Company for’cértain machihery and parts owned —

Dy the United States and desired by the company, and agree-

ing that ‘the sum of $20¢€ covered in full any and all el:fims

of every kind and nature for damage caused to the Premises.

by the United States from and after March 20, 1946, and prior *

to the date of surrender of possession { R. 134). -It was fur-

ther agreed that $200 with interest until’ paid should be

“e added to the judgment. and that $18,089.55 should be credited

tothe judgment as if paid.in cash on March 23, 1946 (R. 185).

Judgment was entered ‘Sh the stipulation on the same diy

(R. 136-137). ne ng Pek pore

. *On September 30, 19: 8, the district court, upon motion

by the Company, permitted the withdrawal of an additional

$20,000 from the sum deposited to satisfy the judgment.

the legal effect of the taking of fee title, ‘Silage

~fo-the company’s business would not be compen-

sable, the court held that what was taken inthe

instant case. was the tempor ary use and eecupancy -

; ‘of the laundry, that just compensation for the

“4 right to use and’ occupy property temporarily is,

_ the value on the market of the use and occupancy, | P

- together with compensation €or any destruction,

damage and depreciation in vahie of the property

occasioned by the tempotary us@find does not,in- |

. elude business - losses (vol. IV; pp. 8-10). The

court ‘also held that interest on the ‘award. had _

been properly computed (vol. I'V, pp: 13-14).

is _ SUMMARY OF ARGUMENT

i. |

-The Government here condemned the tem-

‘porary use of the laundry plant, ‘including land,

buildings and. equipment. It is well settled, as .

the courts below held, that just compensation

for such a takmg is ‘measured ‘by the market

~ rental : value of the temporary ‘occupaney taken.

~In addition, ‘compensation must be paid for the

failure of the Government to return. the prop- :

erty’ in the same ondition. as when it was taken, >

ordinary wear ‘arid tear excepted. The present

case was tried in- “accordasice Ww ith these prin-

ciples which have emerged from long experience _

as fair’ and just guides for the determination of -—

the | governmental obligations * flowing from -an -

eu? Ley

“exercise of the power of eminent ‘Amnith: Peti- -

tioner apparent argues that. its compensation

should be determined either by. the full f ee value --

‘e of the property or by the difference between such ©

value at the time the. property was. taken and

the time of its return to petitioner. ‘But .sinee

the United States, did not take the property ab-

-solutely, petitioner «plainly is not, entitled to re-

coyer: its fee value. Petitioner’s s advocacy of the -°

“‘hefore and after”? measure: of just compensa-

-* tion is: put: forward in the instant case only as..

a means of inclusion in the judgment of an

award for the alleged taking of its “trade

routes”. We shall show in: point II that the

‘courts below pr operly excluded evidence relat- ;

ing to the trade routes. In any’ event, ‘petitioner’s

‘“‘hefore and after” theory” of valuation would

make: compensation depend on fluctuations in’ the

market whieh, very. often, would have’ no rela- .

tion whatever to the value of the use taken.

"Petitioner's real contention is that its trade

routes, i. @., the patronage - of its customers, were ©

'.. taken and the: value thereof should have been-

included in the award. The: evidence which: was

excluded. by, the: trial court .was offered to sup- |

port this elaim. The courts below were correct.

in holding that this eonstituted.-simply an at-

tempt to recover for a business loss which is ‘not oat

allowable. in am proceeding. See eee

- aa ceainaaealll

£m ei

* : : nae aN -o" < 5 . .

A. It is well settled “that busmess injuries,

such as loss of profits av damage to god, will,

are like ‘other consequential losses resulting ‘from

~ the t taking of -private ‘property for public juse,

~ and may not. be | “constdered in determining the

: 7 :

compensation’ payable under the Fifth ‘Amend-

ment.” Just compensation igs the: salue of —

intere ‘st taken.: :

B. It. Is plain that ais Government had- no

interest in and did not take the company’ *s busi-

ness, trade routes or chstomers. + It sitiply ” took

the physical properties. . That thereby petition-.

er’s business may have been disrupted or injured

ddes not mean - that. the business was taketi.

Omnia Co. v: Udited States, 261 U.S. 502: Mit-

—chell v. United. States, 267 Us S. 341. A cof-

‘clusion that petisioner. was wjured through loss,

of patronage . ‘an. he baséd not én anv faetual

evidence presented. by. petitioner but. om sheer’ >

| spec ulation as to conditions at the tinte of re turn

of the prope ity.

C. The fact that in the instant case the. prop-

erty, was:.taken temporarily, rather than per-~

manently ‘does not change .this result. In United

States’ v,. Ge neral Motors Corp., 323 U. 8.3 373,

this Court . while holding “that when a part of

a ‘condemnee’s s. interest is taken, the necessary.

cost of ’ moving, storing, and _Jefurning personal

_ property located in. the building ‘taken- tempo- -

rarily might be.considered, in the. peculiar cir- |

cumstances of: that casg, in determining market

Nee f

bbe Sats, 4.4208: “*

‘it

“¢€

peculiar” to the oWher, suchas the value of ge

; * = a

price | for the tempor ary oecupaney, also held thi

as in’ thy case of: fee takings, proof of. valjre

will or: of injury to ‘the condeinnee’s* businéss,

must be excluded. There? is tie wasrant for the

allow ance of such brsiness’ losses” in a condehma-

‘tion proceeding. The value ofa business ss or its

good twill - is attrilnitable te many varying and

speculative factors, suc ‘ho as skill of management,

the nature amd @xtent of competition. and gen-

‘al business conditions, among othr things:

--Suieh yalue is “highly _spee ative and should have

no pert in the — of the value of what

was actually taken, i. e., the “physic: ul property.

In the instant. case, titipee? was. permitted .

to introduce all relevant, evidence relating - to

value of” its: plant and the fact that i had

profitable’ business located on the property: ah

elaim for loss of trade rputes constituted ‘simply

an attempt to recover. for infury to good | will

-or, business loss and was properly. rejected.”

D. The ev iden®e rélating te -petitioner’s geod

will value (**trade routes’’) reflects the typica ally

“spec lative nature of such value. -

ae eas : ik . “PS a

~~,

Other allege “i evrors specified: as grounds for

reversal are without merit. ud,

A. Whe, qualitie: ition of witnesses to EXpress an

-opinion of valle is 2 matter’ within the ise re

tion of the trial court and ‘its decision is cone

tlusive — uiless there. has been “an abuse of

26°

‘«

discretion. No abuse of dinebitiin can be shown

here.

mony’ is a matter within the discretion of the

trial’ court, and its decision will not ke reversed

in the absence & a clear abuse of #discretion.

There was no abuse of dis cretion here.

) Cé When property is taken prior to. pay ment

therefor, interest is allowed as part of -just

compensation from the.date of the taking until

payment. Here, the preperty was taken for a

specified term with the option to renew the

term for additional yearly periods. The option

ras exercised from time-to time thus extending _

the taking

. “the . term from year to year. Sine

_ yas * dne~ of . yearly periods and, sMmee the jury

aw arded compereation on a-yearlx basis, interest

was properly compuited’ on. the sui allowed’ for -

inning pt the period

£ T

Compensation ‘for

each period: from the: b

until paid. The Declaration

not require a different. result.

the failure to return property taken temporarily -

in the same ,condition as when ‘taken, ordinary

weaf- and. tear excepted, is not due until the

DB. Admiation or exclusion ‘of rebuttal a

king’ Act does:

‘property is returned: Interest (on the sum,

~ awarded for that purpose does not begin to run

until: the. date of return. Since interest is not

allowable when «just compensation is fixed by

agreement of the parties, petitioner's claim to

interest -with. regard ; ‘to certain supplies: was.-

properly disallowed, ee

¥%

oe) .e ee

‘ARGUMENT .

oi | I eo /

/ oe eae

OTHE PETITIONER HAS RECEIVED FULL AND ‘ADEQUATE

; / : ; ‘

COMPENSATION FOR THE TEMPORA RY USE OF THE

PROPERTY, UNDER ESTABLISHED RULES PROPERLY

APPLIED BY THE BISTRICT COURT *

By every: objective test, petitioner has re-

ceived fair and adequate compensation ‘Tt has

obtained, after the three years. nd seven months

of use of its plant by the United States, a sum

almost. half the total market. value of. the fee

title (according to” petitioner’s “own: estimates) —

“plus the return of the-entire property. The

‘award was based onthe market rental value of

the plant. (including equipment), plus an allow-

ance to restore the property to its original condi-

tion, and was thus. — ‘in aecord with |

established authority.” It has long been held that

the measure of compensation for the taking of

a -temporary interest in property such as was

taken here is market rental ae - United: States

.. Petty Motor ‘Co., 327 Up.8. 372, 377-378;

ee States v..General ane. oe p:, 323 U. S:

373,.382, 383; Phelps v. United States, 274 U. S.

- 341, 342-3428; Kansas City Southern Ry. Co: v.

Commissioner of Internal Re venue, 52 F. 2d

372, 379-380, 381 (C.-C. A.8), certiorari denied,

284 -U. S. 6765 Tn. re Condemnation of Lands

for Military C amp, 950 Fed. 314 (E. Dp. Ark.) ;

~ Johnson v. United States, 2 C. Cis. 391, 415-416,

Le)

’

on!

419 Johnson v. United States, 4. C. Cis. 248, 251;

Pope v. United States, 26 C. Cls. 1, Bs. Such a

measure has been applied almost unive srsally by

the district courts in the many. reeent cases

arising «during the war where. the Government

condemned only the temporary use of property

which, would not be needed theréafter. United

States v.. 14.4756. Acres° of Land in Christiana

Hundred, 71 F. Supp. 1005 (1D. Del.) ; United. °

States Vv. 5,901.77 Acres of Land in Marin County,

65 F..Supp.. 454 (N. D. Cal.); United States v.

7.41 Acres of Land in Camden, 63°F. Supp.. 43,

(D. N.VU.); United States v. 40.558 Acres of

Land, in New Castle County, 62 ¥. Supp. 98

(D, Del.); Uiniled States v. Certain Parcels of

Land in Baltimor e, 95 F. Supp. 257, 264 (D. Md.) ;

United Staves Vv. 16.747 Acres of Land in Dela:

ware, 50. ¥. Supp. 389, 391 (D. Del.) ; United

States v. Entire Fifth Floer in Butterick Bldq.,

54 F. Supp. 258, 261 (S. D. N.Y.) ; United States —

‘Ve STAY Acres of Land tn Flushing & Arde

: Bulova, 5d F. Supp. 147% 148 (BE. D. N. AS

ee The sii cases foiand 1 in which the. courts: have a

from the standard of market rental valué are cases 4

upon by petitioner (Br. 123-124). United States v. 9. D4

Acres of Land in. City of Charleston, AF Supp. 478 (E. D.

3. he stands alone against the great weight ‘of autherity and

its reasoniég has been specifically rejec ted in subsequent eée-”

as cisions, FE. g. Viited Ntates Vv. a prin Parcels of Land in

paltimore, 55 F.Supp. 257. 264 (D. Mad.). In United States

v. Bauman, 56 F. = 10g" o Ore’), alsorelied upon hy

petitioner (Pet. 59: Br. 124). he Cnited States filed a peti-

tion in 194 dis sottieue at terta ye three years wi ith the right

to éancel at the end of any year. ‘The court merely held that

og . a o ip

“Thevalue of a tempora ry interest is Re variously.

spoken of as ‘‘the market. rental value 6f ‘the -

temporary occupancy taken,’ United States vy.

“General Motors Corp, 823 Us 8.373, 382-2383,

“the fair market value of the use,” Unite d Statés—

: 14.4756 Acres of Land in Christiana. Hundred,

“ F. Supp. 1005, 1008 (D. Del.)..or more fre-

quently the couvenient designation/ of. “fair

annual rental!” is cused. United States v. Certain

Parcels of Land “in Baltimore, 55 .F. Supp. 257,

264 (D. Md.) ; United States. v. 16.747 Acres

of’ Land . in Delaware, 50 F. Supp. 389 (D.

Del). Th’ temporary takings, as well as in fee

takings, there is sonietimes "no ‘market ” for-the

property taken. Cf iU nited, States. v. Pe tty Motor -

Co, 327 U. S. 372, -378, But’ “where Tor any

reason, property has no market, eae must be

chad tovother data to ascertain its value * * °*,77

Umited States v. Miller, 317 U.S. 369, 374. As

the court said in United States v. 16.747. Acres ‘of

Land in Delaware, 50 F. Supp. : 389, 391 | (D. Del.),

Certainly an. expert appraiser can determine

the United States could not amend its petition and file a

declaration of taking to acquire aterm for one year with a

right to renew for additional yearly periods for the dura-

- tion of the national emergeney without inelhiding compen-

_Sation in its deposit, for the value of the right of renewal.

In 1/000 Acres of “Land in irae County, Tero: United

States, 152-F, 2d 566 Sf of A. 5), certiorari! denied, 328

UL S.8385 {see Br. 123), me court recognized abd fallowed

the veneral rule.in valuing the fee owner’s interest. but he-.

cause of the peculiar nature of‘an oil andyas lease, held that

a different measure myst be applied to determine compensa-

tion for the lessee’s interest.

$15504—48 5

* = #99

" :

> . ; 30

, ~ ; . :

a fair annual rental, ‘determined as though

the government had rented the. property for a

year with an option to renew. from year to year

.’ Thus, as will be. shown, infra, pp.

32-34, expert witnesses in the present case gave

’, their opinions as to the value of the use ‘of the

property or the fair ‘annual rental: and ‘other

data’? was admitted as bearing on the value af «

the temporary interest taken. :

In addition to the market rental value of the

property “during the period of the teniporary

taking, the award in such cases must include an

allowance to enable the return of the property in

as good condition as when the United. States took.

possession, ordinary wear and. tear excepted.’

This principle, whieh was followed by the

courts below, iS well established. <In re Condemna- °

tion of Lands for M ihtary Cam p, 250 Fed. 314.

(E. .D, Ark.); United: States v. Certain Parcels

of Land in Baltimore, 55 F. Supp. 257, 263

(DD. Md.); United States v. 14.4750 Acres of.

Land in Christiana H undred, $l F. Supp.

1005 (D. Del.) ; United Statés v. 5,901.77 Aeres

of Land em, Marin County, 65 F, Supp. 454 (N.

D. Cal.); United States v. 60,000 Square. Feet

‘of Land (Oakland Hotel), 53.F. Supp: 707, 770-

771 (N. D. Cal.) ; United States v. 16.7 747 Acres of

Land in Delaware, 50 F. Supp. 389 (1S. Del. ).- Ae

by r reason of the use made of the premises by the

*Conrpensation fr ordinary, wear and tear is inc luded 4 a)

‘fixing market rental value.

cag es

EL ae See

Cnite d States. they are damaged beyond ordinary

wear and tear, the owner is entitled to. Compensa~

~ tion for the damage so caused. Compensation for

this type of daniage’ is generally determined by :

reference .to the difference between’ the market - s.

value of the property in its condition before and

‘after the taking. See, e& g.. United Siates. v.

1,901.27 Acres of Land in Marin County, 65 FE.

Supp. 454° ¢N. 1). Cal.) ; United States v. 60,000

Square Feet of Land (Oakland Hotel), 58 F.

Supp. 767, 770-771 AN. D. Cal.). When, as here,

the damage results “simply from heavy -usage and

:from the change in location of machinery, the

diffe rence in market value caused, by the Govern-

ment? s use of the property is generally shown by

the cost of restoring the préperty to its former.

condition. - KE. g. In re Condemnation of Lands’

for Military Camp, 250 Fed. 314 «E. D. Ark.).”

MAS will be tioted from the cases cited above, there is a

divergence of opinion among the lower federal courts as to

the time when compensation for damage resting from the

use of the property is to be determined. One view is that, if

the ewner so desires: it should be determined at the time of

the trial even thotigh the : amount of the damage may be specu-

lative At that time. United States v. G0.000 Square Feet of

Land (Oakland. Hotel), supra. Another 4% that the trial

court should yetain jurisdiction. to debeosdin such compen-

sation when the property is returned. United Nfates v. Cer-

tain Parce Is of Lave i an Baltimore, SUpPra; Tn ft ¢ ‘onde ming tion

"of Lauds for Mel lta: Y A ane p, su pre. Anda third view is that

this compensation cannot be determined and awarded in thie

condemnation arecegsos but must be recovered ina separate

suit brought for that purpose after the property rs returned.

Vaste d Ntates V. 14.47: WP Aceves of Lund in Chri istiand Llun-

# at ae aes

2 ae ei

te - 32 eee oe.

In the “present case “evidence War admitted

“showing both the market rental value of the prop-

— ertys for the period taken and the amount. of dam-

age 1 resulting to’ the property from the. Se madé

of it by the Government. Expert witnisses for

x both sides testified to the total sum which, in their.

opinions, the owner was entitled, to recover and

explained. how - they arrived at the sums testified

to. An examination of the testimony shows that

‘the methods used by the Government Ss Wwithessés

. and by those of petitioner in” arriving at their

. total estimates were: similar. Both allowed’ vari-

ous amounts for the — value of the property

CR. 320, 424-425, 456, 28-737, 768-778).”: The

dred, supra, and cases cited therein. It is immaterial for

- present purposes w hich view is correct since the trial occurred

af a time when it was known that possession would be sur-

rendered within a very short time. The issue ‘as to the

amount of compensatiort for damage to the property result -

_ing from the Government's use up-to the time of the trial

was-submitted to the jury. without question by both parties

and. compensation for damage occurring after the trial and

before possession was actually surrendered, w as included in”

a supplemental “judgment upon stipulation: by the parties

(R. 134-137). The amount of both ja udgments has been de-

posited in court (R. 138). :

" Petitioner's witnesses referred to this sum sts the amount

which it was “entitled to forthe use and ocetipancy *.* *

based on my knowledge and talking with real estate mien who

are in the ‘busitess of investing money: for the use of that kind

-that are rented * * # (RS: 320), thie amount “the use of: :

* the plant per year was worth * *- '* over and above the

* amount of the damage to the building and machinery. and: *

equipment’ * (RR. 424-425) and “the fair value for the tempo-

rary use” (R. 456). ‘The-Government’s Withiesseg referrer

——— : & f *

cp OT EE ES ENS

= k

“ite ms included ‘byt hoth in camputing the fair.

— J value Were taxes, INSUrANce, parberarl dépre-

elation and a net return on investment, i. ena giet

return on the value of the phvsic a] assets (RO.

320-327, 324-325, 332-3 334, 391-393, 456-4: 58, 7T2R-*

737. 769-770, 777-778). Other evideice admitted

on behalf of petitioner as be wing on ‘the v ane <

f the. use. ofthe ; property was ‘the origiual cost

ve the: land and building, the \ ‘alue of the land un a

“November 1942, the reproduction cost of the

building int ‘November 1942, and -the value of the

machinery and other equipment in, Nevember

1942 CR. 258-264,. 270-273, 314, 385-386, 389)...

In addition, witnesses for both parties dered -

‘avious sums. for damages to the property vesult-

ing from its use by the Government (R. 319-320,

343, BH, 45, 424, 456). “The latter sums were some-

times re tered to by the petitioner’ s witnésses as .

the. amount necessary to repair and replace: parts

- of the, building, power plant, machinery and

equipment (R. 345, 424, 456). At ‘other times,

petitioner's testimony and exhibits referred to.

these sims as representing the” ‘cost ~of- ~putting as

the building baek in the condition i . 1 which it.

Was in 1942 (see R. 304-306), and lia ‘Bienes

_. between the value 6f all rhachinery and equipme nt.

(iteluding power équipment ahd laundry and as

_ clea ning equipment) before the taking and-

to it eis as. “fair annual rental.” “éstimated fair-

rental” or “use value™ (R. 729-730. 735-736, 771).

+, Chee te : = at 3

a - :

value at the time of ‘i trial ¢see R. 260, 272-

273)... The amount tulowed. by the Government’ a

Withesses for damages resulting from the use of,

the pre perty was inchidéd 1, their estimates of

fear, annual rental is depreciation due to ab

“normal OF. OXCOSSIVG use of the property CR. 730-

_ 182, 1). Tatthis was added a rip stm conn

puted at the time “or the “trier. fone the getual cost

TOG mems oy.

of restoration .and repair not. ineluded in the ab-

normal depree lation allow: see (see Re T35-TAT,

(77-778). Other testimony Was ‘also introduced

by the Government as to the: cost of repairs and

“restoration -_ (see R.° 557-567, 631-633, 647-655,

590-6 92). ; 3 :

After instructing, the jury general as to the

meaning of just ‘compensation, | i. e., that it meant

. that the owner should recover the full and perfeet

equivalent in-money. of the property taken. and.

that the owner wasto be put in as good a position

pecuniarily as if his property had: ndt been taken,

and that the measure of just compensation is the

fair market value of the property: at the time of : 7

_ the taking, the trial court pointed ont: that while. ”

the -standard of fair market value works very

nicely in Gases of fee takings, itis much more dif-

ficult to apply. it in cases of temporary takings be-

ezgise, as a general rule, “as in the lustant Ise,

‘there is no mirket for the. prope rity for a tempo-

rary Tse CR. 150-153; See also, R. 154, 162, 164).

7) 5 ‘

3) Phas fe »

As thie count stated, e There -is’ ne evidence Gf any

laundry having been seld on the market. ‘That

“being so, vou have to begin te jook around te tind

another ‘“vardstiek ” .CR. - 153). Continuing, the

court commented on soine of the eVidence adniitted

‘for the plirpose of showing the fair rental value

. § taken and the principles applicable in arriving:

hot only at that value but also in arriving 2t the

amount of depree lation MR. 14- 161),- pointing

out tdiat it depreciation. for ordinary wear and

tear was ineluded in fixing the rental-for the use

of the property it should not ‘again be included

e oi in the damages awarded to repair or restere the

’ _ property (R. 158). The court further instructed,

the jury to bring: in a gerieral verdict fixing a

lump sum covering both the value of the use of

the property and the damages to the property and

to make spec ‘inl findings (1) ‘as to ‘the amount

alowed as “annual rental or the amount that you >

‘ S a oF ~~. - ee , . “4 = **

+ determine for the use 6f the property per annum

alee q

. cand (2) its to the compensation payable for | fail-

7) .* ure-to return the property in the condition: it was

e ~ g on November 22, 142y 3 | Puan

q Thus, it appears that eve Die Was admitted

g : and the jury Was instructed ine avcordanee with

.prine iples generatly. applicable Yer takings of this

‘trial court's charge was not a model of coneisériess

4) one a atk Le ne VD

oz value of the Use of the prope rty for the pe ‘riod vA

kind. Altheugh the court below obséPyed that the ‘

4g eS

‘er accuracy, it is submitted that, as that-comrt said

(R. 11, vol. IV): i

Taking“ the charge “asca whole +

a adequately apprised thé jury of the

applicable law and the considerations upon

whieh a verdict could jawfully be’ based,

and did not nullify the pertinent evidence

admitted. . Moreover, after listening for.

two weeks to contheting:> estimates and

opinions as to fair rental value and as to

- damages to‘and. deterioration of the plant

and ‘machinery. attributable, to the Gov-

ernment’s use, the jury vould hardly have

had any illusions as: to the issues of fact

. Which were presented by the’ evidence. So

far as the record shows, no attempt, was

made by the Government, during the trial,

to minimize the usefulness or capacity of

the laundry: or to show that. it was not

completely equipped and in \profitable Op-

.eration when taken over by, the Govern-

ment. It insisted; however, that the Com-

pany was not entitled to have! ‘loss of trade

routes and customers, expenses of litiga-

tion, and other consequential damages,

considered in deteriiining just COMpeENsa-

tion for the tse and ocenpancy of the’

laundry. Pee

.* *

ad oe

. But we belie ‘ve that : a fair distillation of. peti-

tioner’s thirty-two points relied upon for reversal

(Br. 34-108) is its contention that itis entitled

to the inclusion in the. award of the value’ of

* 5 .

37 i | ” .) ”

its trade routes, i. e., the patronage. of its CUS.

tomers. While it) makes cand > coyld make no. -

contention that the! Government has taken its.

“eMSTOMers, Pe titioner does eohtend that they have

been: lost te it and that that loss should tie com

pensated, ‘We. deal direetty with that contention

in Point: PL of our Argument, infra, pp. 41-46.~ °

But hecanse peice _ in the course of making

that argument, appears to re ject the rental valug

of; the use of its facilities as the applicable: meas |

tire. of oe (Br.. 30-31, Pt. ‘XV; Br.

V16-117, par. 13; Br. 123-128), We have endeav-

ered to show chat petitioner, has ‘hee sa fully com-

_ pensated under that Settled rute of compensation,

a rule whie ‘h has grown out of and survived the

test of experiéne e in cases’ of thiis sort.

On this: phase of the ease, petitione Pr states ‘tat

its Inunidry plant) was ‘totalky Aken” on No-

¥e miber 91, 1942 (Br. 2: ef. Br. 125), and that

the plant was dec ‘lared he and abandoned

on March 22, 1946 (Br. 2, 5-6, 125), The argu-

ment apparently «1 made is fe the measure of ©

compensation: 1S either the full ‘fee’ v: ahie of the.

property or the “difference between the fee value

return -ta oe laundry COMMpany (R.- 2T-3l, 91-93,

vol. LV; p." Br. 27, Pt. VILL: Br. 31-02, Pt.

XVI; Br. Az —

at the time of the taking. and at the tinie of its.

; In making these conte ntions, petitione re n-

; deavors to rely upon the Act of October 16, 1941,

55. Stat. 742, as amended by T ithe VE of the Nee-

ond War Powers ‘Act of Marchi 27, 1942, 5G Stat.

es 176; 181, secs, 601-602, as ame nded; | YOULS. ( App.

(1940 ed.) Supp. V,: sees 721-722 (Br. 3, 32-33,

124; App. pp. .8-13).. That Act authorized the

President to requisition personalty for military.

or naval purposes (i. e., equipment, supplies or

munitions and machinery,.tools or material neces-

sary, to manufacture, service or operate, such

: equipment, supplies or munitions ). It provided

the means for determining the just compensation

to be paid forthe property requisitioned and fur=

ther provided for: the return of the property io

‘the former owner if he desired it. upon payment -

of its fair value as of the date of the return. That

statute has no application here, and could hardly

\. justify the: ‘petitioner’s s contentions even if it had.

The authority ‘to acquire “real ‘property together

with personal property loeated therean or used"

therew ith is found in. Title If of the Second War

Powers Act of March 2 27, 1942, 56 Stat. 177, see.

201, 50 U.S.C. (1940 ed. ) Supp. -V, see. 171a.

It was under the Second. War Powers Act that

the present proceeding . was: instituted at thé re-

quest of the Secret ary of War (R.-1). -By that

~ Act, Congress exp! essly autharized the taking of

-temporary- occupancy rather than the: fee title.

—

Since: the adtninistr: tive déte rmination’ fo lo so

“was Hot arbitrary or capric ious it is binding

petitioner. United States v. Carmack, 329.-U.

* 230. Obviously ue justification. ean be iven bee

“egnpelling the United States tospay the fee v atue

cof the. prope ry whep it hax only taken that .

limited interest and, thereafter, returned the

prope rty to the owner—property which, ace cording»

to petitioner's own estiinates, was worth $400,000

-on the date of return (R. 315-316).

It is rather prea aidoxieal that petitioner makes /

the alternative contention - -that the me: asure of

compensation is the difference Imtween the valife

of the property at the time of taking and at the

time of its return. Under. such a formula: he

owner -Wwhase: property Is taken tempor arily might

property were veturned in much the same condi-

we rece ive ne compensation. for its use. Thus, if the

tion as when it was taken and the market re ae

stable one, lre could ‘ebne veivably ‘be entitied only to”

depreciation. Tnsofar-as the ‘before and after

formula depends upon maiket fluc tuations rather |

than. depreciation’ of the, property it: wall: make

the award for temporary Vv use depend upon what

may often be a ‘wholly irrelev ‘ant factor. Indeed,

in the insti ant case ‘the “before and after” theory,

“advocated by petitioner, if applied with’ proper

chy Set

revard to the items which are ‘compensable, would *

result in a lesser award than the.verdict.. Peti-

40) .

tioner- contends that its lass ik SHOT CBr.

12): But this computation tmlindes an award of

340,516.8 ) for loss of trade routes, an itym Whic “7

is. not compe nsable- (see pois, Il. nts [’: 41).

If this item is exe ‘uded the total awiertl DY peti-

tioner’s theory, and based von its own figures,

would be $252,050.19 as opposed | to the verdict of

$297, 776.03 or $45,725. 84 less: than the amount

awarded. It is ‘thus apparent that petitioner

here’ advocates the before and ‘after theory only

asa device to’ include thie alle wed joss: of tr ade

routes in the award.

ets 4

Petitioner also-asserts from time to time tha

‘the trial court allowed it to recover onky ‘‘inter-

est?” on the appraised value of: the property. (Br,

2, 14,17, 277 30, 121-123; see also R: 7, vol. IV):

As pointed out above (pp. 32= 33), one of theitems

considered by ‘witnesses for both the owner ‘and: :

‘the Government: in computing compensation for

the use of the property or fair annual rental

was’ a fair return om the value of the property -

* For purposes of ike iMustration, we have t tken thie fig

ures set out in.the petitioner's brief (jy, LZ). In factethe offer

of prdof of “before and after value” alleged 9 total loss of

$561,316.04 (R. 316) rather than $502,567, O4 stated in the

brief. This difference of $31,251.00 is due to the fact that the

comput: ations in the brief aré based on various bits of evi-

dence, many of them exchuded rebuttal testimony, from which

petitioner arrives at a value on date of veturn of S395057.25,

rather than the $426,208.28. stated in the offer of proof. Tak

tng the figures of the offer of proof but excluding loss. of

trade routes, petitioner's loss would be S76, O76, st Tess than

the amount ‘awarded, .

eae Brae a. Ms Beet ai ak te ee

eae POR, 332+ SEB, 17, 730. 7335, SRG This. thee court

sh its ch ayn referns et O “gnterest’” on thevcyalue

of the }? rope rty tis oie woe the virstick tort

4 on side red yo arriving. aut aun aquuial renitel (R.-

159): This’ ae 4, ardstiek’” was not’ only ; used by

' petiti@mer *s Witnesses, but petitioner did not ob

“? jeet to the use of the tern, in the: instructions. -

De = — Rather it objecte al to the se. of the: term “rental”

Ps in the ‘charge (see R.. 16: 5-166). @ Here ‘ageir

under: ‘the CIKE jumstanees of the trial of this ease,

| there could have been no misunderst: uiding hy

‘ -the jury: ; 7 ;

: | 2 it oe rid -

-; THE PETITIONER, HAVING. BEEN FULLY COMPENSATED °

FOR THE TEMPORARY TRING (OF EPS PROTERTS.,

IS NOE ENTITLED TOA PURTHER AWARD FOR Loss

OF GOOD WILL OR TRADE ROUTES, © THE GOVERN -

ar MENT DID NOT TAKE PE TITIONER'S GOOD WILL On

ie TPS TRADE ROUTES, AND THE COURTS BELOW DID

. ; NOT ERR IN HOLDING, THAT. EVIDENCE OF VALUE:

i OF THE TRADE ROUTES WAS IN ADMISSIBLE

Petitioner's contention is that the courts below

‘ erred in not permitting. it to reéover. for the

2. ) “alleged -destraction of its trade routes (Br. .25-

1 (C26). Pet rtiener asserts that it was “driven from .

Aa business” (Br. 2,25) and that its trade routes w ere.

; tot ally destroye dd? (Br. 9, 2 >). Petitioner S pro-

: ' ; tests, here: and below, that this is nota claim for

2 Joss of profits, damage. to good. will or injury to,

o its business (Br.-9-10, 134) ‘amount to nothing

x y -

“* ¥ HAR At Qe

mars than a quibble as to the eee ee

‘Terns, $ ;

At the tiatl petitioner Sout te have AES

Jacobliger testify to the value af **the Kimball soreen

Laundry: Company.” before nu) after the, tak.. |

‘ing CR; 315-316). As the offer of proof gan un

the testimony thus sought to be introdneed® Was.

the “hefore and after’ ‘value: i the Tand, Tul -

ine, machinery, cquipment anid the trade routes,

the latter being ‘evaluated by numbers of eus:.. bi

= tomers of different kinds’? at) $340,516, 58 (R.- pee

O16). Thasimuc h-as the “be fore and after’? values

of all items ine Juded in the offer of “proof, with’

\ the exception of the trade> rites, were admitted

ou behalf of petitioner elsewhere an the course

of the trial CR. 260, 264, 275, 306, 830), + if appers

that in computing the ‘total ‘iiterenes hetween 27

the value of the laundry company before nid

after: the’. taking, Mr. Jacibbe peer allowed for.

thé complete destruction of thetvalue of the trade

routes (see supra, pp. 10-11, W7-18, and Br, 18).

Pe titione r also offered to prove, this same value of the

th ale routes by an exhibit prepared by Harty :

Judd, : a certified public accountant, who, it was said, rg

~ would testify that he arrived at the conclusions

wet valare shown on the exhibit in. aceordaane e with

the, standard method. used by, laundries in evalu-

\ ating custome rr nid Yi ade Poites and approved,

Ne . Fralies supplied. ee . . > :

ie ee i . 6,

by iis Boatd of Pax. Ap ‘als, CD. Es zs; 34, R 368—

370). It is contended that the. tri! court erred:

a excluding: this and other revidence he aring on!

the value of the trade routes and ia refusing

te instruct the. jury to consider their vialire (see,

e, £5 Br..23-26, 113, 120-123,127)2.},’

ye Busine ss losses are nal compu usthle. under

thie Fifth. Amendment tt is. well settled -in’ thie

federal cgurts that Business injuries,. suc ‘hh. its lds,

of profits and diiuage 5 rood will, like other

consequential JOSse8 yesnlting from the taking -

oof) private property for public use, are not

compensabbe. ‘under the Fifth. Amendment.

oF nited Sfates Vv: Pelty Motor se a27:U. 8”

(372, 377-378 -- Wieled States v.. General Motors

¥ arte Corp., 323° U “8. 373. 39-30, ne United Slates

gg eth FOV. AL v. Powelson, 319 U. S. 266,

ie 281 IS? Milehell v. Uurted. States, 267 U.S. odd,

: a 345: Joslin oe: ¥. Providence, 262° x S. G68, 676;

| 0. * Bothwell v. United States, 254 US. 231; United

; ie States v. Beckbold Co., 429° FB, 2d. 173, di6

by. (C0 @. AL 8); Batple vo Hagen, 93 BF; 2d 68, 70-74

eae (App. 1D. Co); Stephenson Brick Co. v. United

i ’ » “Statés, 110 F. 2d 360 (C. C. A.D) 2 In re Post

: = | Ofiice Siten Borough of The Bionz, 210 Fed. 832

: CC. CG. A. 3): United. States v. Meyers, A90 Fed.

688 (D, Conn.): Lehigh Valley Coal Co. v..

Chicago, 26 Fed. 415, 417 (N. Dy sdll) As this |

Court suid in the Powelson: case, supra, at ite :

SS SS eo. ew

there was no obligation on the part-of the United

281-282: “There are numerous business losses

which’ result’ from condemnation of properties:

but which are’ not vompensable under the Fifth

Amendment. *° * * It is a well settled rule

‘that while it is. the owne r’s loss, not the taker’s

vain. which is the measure of compensation for:

the property taken

fered by the «

are compensable under ‘the

Fifth Amendment. In- absence: of a. statutory

mandate * *. *

for w hat, it takes, not for opportunities which the

owner may lose.” Accordingly, i in the Mitchell

the sovereign’ must pay only

pase, supra, the owner Was denied compensation

for the destruction of his-business which resutted

‘rom the taking of his land even though the busi-

ness could not. be re- established elsewhere. | And

in the Bothwell case; supra, the court held that

_ States to pay. the loss due to a férced sale of

cattle at prices below their fair market value or

not all losses suf-_

. for destruction ‘of. the business restting from

" the taking. : .

This Court has ‘recogiiized, as Was pointed out

in United States v. Petty Motor Co., 327 U.S.

372, 377, that by the denial of recovery for busi-

ness and. other: consequential losses the owner

often receives less than the | value of the property

to him or for. his. particular: purposes, but as was

also pointed out in that case, the just ‘compensa-

‘

BIEN EDEN fc ,

PNG Pa ser AP

ees

ae ae

ta et

SERIA I

es SEKAI

IS haere

eens 4

ira

pier F

ee Pere ae PtH

CA ESE ARS TAA

igh fe

Soe AE

ERVIN

SRO

bass

thon cuarantecd by theeWorstitution is Rovertne:

less Himited to “the vi ilue of the inte rest taken.’

This settled rule supplies a sti indard of objectiv-

ity essential je governmental: administration ino

this field. ane

. B. Petttioner’s. bUstiess has not been taken-

“Odntr: ry to: petitioner's contentions, the fact that

the value of petitioner’s trade routes (business:

relationships) may have been. injured, or. ever —

destroyed, ' does not mean. that they hi ive been

“taken! de 80 as to give Vise to a right to’ compen-

sation therefor. Mullen Be nevolent Corp. \.

— United States, 290 U. S. 89-94; Omnia Co. Vv.

United States, 261 0. S. 502. “Destruction of,

or injury to, property is frequently accomplished

without a Basak in the constitutional sense.’

Omnia Co. v. United. States; supra, at page 9508.

In the’ aan ‘ase, the claimant was the owner

of: a contract toe acquire. Steel plate at a price’

under the market. - ‘Phe United, States requisi-

‘tioned the steel, thus destroying the value of the

contract, but it was held that the contract had

not been {aken and that the owner was not entitled

to. be compensated for jgs loss. This Court said -

(p. 510) that oe * © * © for consequential loss.

or injury -yesulting from lawful governmental

action, the law affords no remedy. The. char-

acter of the power exercised is net material.

i under any power, a contract or

815504 48 4

other: property. is taken for, publie use, the Gov-

ernnigagits is liable; but if injured or destroyed

| -. :

hy Jawful action, withont a taking, the Govern-

ment is not liable” Again, at page 513, the

Court said: ‘The Governme nt took. over during’

the war railroads steel mills, ship yards, ‘tele-

phone and:te legraph lines, the capacity output: of

‘factories and other producing activities. If ap-

~pellant’s contenti@n’ is sound the Government

thereby teok and beeame Hable to pay for an

appalling number of existing contracts for future -

- service or delivery, the performance of. which”

its action made impossible. This is madmissible.

Frustration and appropriation. are essentially

different-things.”? Similarly, in Mitchell v. United

States, 267 U.S. 341, 345, it was held that the

| destruction of (a business: caused by taking’ the

land on whieh it: Was carried on Was hot a “tak-

ing”’ of the business.

Cases like Brooks-Seanlon Corp. v. United

. States, 265 U.S. 106, and Mouongahela Nawga-.

tion Cor. ve U wited States, 148 U. S..312, relied.

upon by petitioner (see Br. 109-1173; do not

establish a contrary rule. In the Broa s-Scanlon

vase, supra, the United Sti ites took -a contract for

the construction of: a ship. As the Coutt said

—(p.2120), it “put itself in the shoes of claimant

and teek from claimant and appropriated to the

use ,of the United States all the rights and ad-

vantages that an assignee of the e@ntract would

ae |

tivasten. Mee.

PP Fee We

SRE TOR a | Rr wR

oe * ae ae

have had.” Conseqacutly, it was.held (pp. T2o- ~

424) that the mee vstpre af compensation was “the

cum whieh,’ considering all the ciretimstanees ee

nicertainties of the war and the rest- “probe

ably could jiave heen obtaine for an assignme nt.

od the contract and claimant? s Tights the rennder

2 *.*™ Thethe Monongahelis CHSe, supra, ‘the

U nited States took a jock and dani eonst he te “ft a

the invitation of the United States ane under a

fr: anchise froin the State of Pennsivivania. Ag .

this Court hi as SIce pointed out, it was there held

that the frane chise was “an integral. part’? of the

property: so that it was. taken when the eee

was taken and its value was required to. be ir

clided iy ‘the compensation: pine See Omaia

Cavs mi nited Slates, 201 U. S. 502, 513." Here,

the United’ States did not rie petitioner ‘sta: ade

routes. It took the laundry company property.

lit to-go into the laundry business in Omi aha, lout

merely ‘to perform: a, necessary function ii the

~ cern Seana EE .

’

Moreover, asthas been porte “bout in muibsequent cases, the

peace ron re sted prin warily oh estop ype. Onna Cay. lyats :

Nfates, x prs sat pp. 14: a nited Ntates or rh TV.

| Powelson, Bitha. s: 266: vs, footnote L2. The fhe

reached in the, Mononge oy Jo case appenrs highly questionable,

und in any eve mat Should not be extended fo the instant situ-

ation. “ hi che 1s ceariv listings shable. id nited Ntates f- Vs

Byeooklyn Linion Gas Co, 16s F.2d gai (C. €. A. DY), rehed

pon by the petitioner (Br. 100, 1167, follows the view that

there was a taking of a public utility's frane hise and hence

the taking © { pre 2prenin Peggy): ich com pensation piust be paid.

anid. like Monongqahela_is, readily dint! thtishable.

is .

. t

—————

mae >

s ie he

prosecution of the war, that of providin latridrs

ind dry-cleaning se rvices for the me nibe rs Of the

Bite forces. Tt dict hot put. itself in the =the

i t the Kimball Laundry Comipany, ner hid it at

tempt to take advantage of that: COMPany Ss 1 nde

| routes by serving ‘its customers. AS the court

below said ( R. 8, vol. LV ys ;

oe The Government took exact!*

what it purported to take, namely, the tertt®

porary use. and eccupaney of the Come -

pany’s laundry.” The Government did aot.

take or intend to take, and obviously could -

not use, the. Company's business, trade

routes, or customers. “No doubt ‘the Goy-

ernment’ S oce upation of the plant dis-

rupted and damaged the Company's busi- |

ness, although it could hardly have de-

stroved the demand for lanndry service in -

the- city of Omaha or disabled the Com-

pany from ever re-establishing its busi-.

“hess. ee OF :

This statement ‘of the court below. may, in- |

deéd, reflect an overly generous appraisal of the

petitioner’s evidence. Petitioner offered to prove

that .the taking in 1942 disabled it from serving

its customers (R. 437-438). Also, it offered.eom-

putations by an accountant prepared in 1943 rép-°

_ resenting operating. loss for the three years *feom-

mencing from date plant was taken to ‘re-establish

condition existing November 21, 1942" ete 370-

382). -But as the court below pointed out, the

’ 49

Governinent * eceupation did not diss ible the Come

pany from, re-esti ablishing its busiuess awhen the

property was returned ia 1946. A cannot he as:

~ sumed that the de mane. fer laundny service in

Omaha avas any less in 1946 than it was i bode.

Any extra expense, whieh might he incurred in

see uring the renurn cf petitione ys old cnstomie rs

Ot. MELROSE 3 Ha

orcof securing new customers would de pe md on

- many factors such as the popul: ition of Omaha,

gener al business conditions, the price situation,

the ability of the pe srsonnel of the Company and

many ‘Similar factors which might indeed -yesult -

in a better business situation ina short time after

return. Thus, a conclusion that petitioner has

heen injured by loss of patronage of its custome 1S

could rot be based upon any factual evidence

proffered by petitioner but purely on spec ‘ulation

as to various factors relating to its Inisiness: pros-

~ a in 1946. |

. This case prese nis noe ‘eree ption ‘to the rule

is business losses ag vat compe sable —W hile

petitioner appare ‘ntly ‘contended in its petition for,

certiorarl hy el. 22) that becatise it was the fee.

owner of a laundry’ which was a going business

and because the ‘Gove yriment took only a tempo-

2 i ee use, the ‘foregoing we ‘-esti ablished principles:

m do ‘not apply and that «a novel question Is prer

sainie _principles apply whether the Goyernmeni

takes a temporary) use or 7 alisohuty fee ‘tithe

; = : ; al oer

ee on, cae ree | eae Se

ar, 111). and that the que Stioth pResented is

whether the Governtuent TRY caveid payment af

competisation for tits trac’ foutes wit aking

femporary are rather than the feo CB ST6-117,

ge6 also Lt. 11). Whaters P. the -pree ehse nature

of the question sought to be prresenit ted, pou tite he ‘*

contentions were answered ity v sited Stoles \.

General Motors € Or p, ye | U, Ss. roe fy that

case, “this C ourt said (p. B82) . eee — . =

* * Here the ise of a wareliouse

lorva short time was taken. The property

- -tinieht have been the Genes al Motors’ fac.

tory. Or several plants. Or a modest

sstore or home. Whatever of prope ry thes

citizen “has the’ Goverment may ‘take, \

When. it takes the property, that-is, the fee,

— the lease, whatever he may wi, ‘terminat-

Ing altogether Iris interest, under the estab:

lished ‘law it must pay him for what. is

taken, not more; and he must stand ‘what-

ever indirect or remote injuries are prop-

erly comprehended within the meaning of

“consequential damage’ as that. concep.

tiom has been defined in Such cases. Even

so the’ consequences often aire hi Fh. For * |

these whatever remedy may exist les with ,

(' ONZTESS. . ar ea ye

Continuing (py. 382), this: Court said that it was -

‘altogether atiother matter when the Government

does not. take the citizens entire interest. but by

the forin of its ‘proceeding chops it-into bits” aun

held that in the CASE, uf ten porary takings Cert:

° °

°.

: 5 ss —— s .« - “. ¢ : ;

HeCESSALY costs mew red dys the certichetreies », Sen

rt eS the cost a Pere; il of pe peered property; its

starivge and return, should bye considvred iy ale rer

mining the hiaeker price for the a A. aualt

ae it was further held. 3S). |

that ‘ Preaf oof -such costs is os ath

value ts to be dts tinguished from. proof of value

pecull ur Ter. the. respondent, or the value ‘of ecoa: .

will or ot TRY te thre business of the 2 ly responde nt

J which, i this ease, asin the case cat tie conde “friniat-

thet. ola tee. rust be exclude “al froin the reckoning. c

“Thats, althoush. the result of the Gene rq! Motors

ease Wis toa How compe hsation for items Previously

rewarded as ven compensable, the holding wits am

exeocdinely Harrew one (United States \. Petty

Molor Co., 327 U. S.: 3722, and the Court expressly

preserved: the- rile prohibiting compensation for

consequent i: iL damage, and in partic ‘ular in respect

| of business losses. anid a; nage to good: will. ‘ eti-

toner Zeeks to extend: the result of the Ge neral

Motors ease to inelide the. Ve ry things. whic hh the

Court Spee itieally stated cofild hot be inchided. ‘The

HeCESSALY expETISES neurred tes a restilt of having

to remove ‘personal property from “the premises

and _ sidbsequently return it represent an -actual”

ont iy of money due te the. temporary taking of

the building im which tt was located, — Ever °se,

“the Court did net allow these expenses as such,

but only as reflected in the rental jules cleo.

«@ «

eee hee 8 m ae to ais

able. Moreover. while the ascertainment

“saben: of such expenditires hay involv sutb-

le te re

their

stantial diffieulty, thes. may ovdinarily Ie

niined with some degvee of accuracy? and

a > “ ° x : os

reasonableness verified, * Cood will. on the:

other hand, represents an imtangible asset . the,

valne of whicli depends upon many varving and

specitative factors. Inasmuch as the value of

good will” Tas never, so faras is known, been

aw arded as part of just compensation for the

taking of property under thie power of eminent

domain, no criterion for measuring its value is

found in the eminent domain cases. Hyowever,¢

turning “to other’ fields. where good | will. must

sometimes be valued, we obtain some indiedtion

of the elusive and complex problem -presented _

and can see liow remote such value is frém the ,

valug of what was taken; i. e., the physical prop-

erty, and jiow dependent it is upon speculative” -

eleme ats whieh should Have no part \in deter-

mining | just compensation for ° ‘the. physical

property.

The value of .the good an of a business in-

cladés the full vahie of the cilerprise i extess of

‘the value placed on the tangible property... IT Bon--

bright, Valuation of Property (1937), pp. 727-

O34, 756. ‘Although, as Bonbright poitits out (pp.

Ne will be shown, dafya, poo, the value of petitioner's

trade routes is the same as the value of * ‘good will” witch

in turn is synonymous with the value of the business as dis-

tinguished ‘from the value of the physical property: :

nea

Bo Mr SOIT te Oo

wate Ge

TENE RE aI Se, EN BR Ly Ser yt Orme MRR ERT eA S

<> re f

ay & : , $8.

F2T-728,, “geod will may propevly he given a

restricted meaning; 1. ¢., that. it is “the proba-

bility that old ‘customers will return to the on

" stand,” it. I generally thought of as **the whole Le

_ complex of intangifies- —the. attitude ail eCONOTHE

condition of old and new custome rs, ihe-re lations, .

legal ‘and nonlegal: to employees and sources: of

- supply, the quality. of management, the ability of

‘the organization to produce and market efficiently,

the existence. and character of competition, gen-

eral business conditidius and prospeéets,: sometimes,

. franchises, patent rights, ete.—which will enable ee

the ‘going concern to yield high earnugs. *. All

of these spec sulative elements enter into the value

of the good will of the Kimball Laundry Company

as-an enterprise at the date of he, taking of the

physical plant: 3

— But the enterprise Was not ‘taken. The Com-

pany kept its name; its books.and its lists of eus- eg

toniers. As the couct below said (R. 8, vol. TV),

‘the taking: ‘could hardly have ‘destroyed: the de- -

mand for laundry service .in the City of Omaha

r disabled the company from ever re-establish-

Ing’ its business. The time it would take to re-

build its. patronage aiid the extent to whieh protits . ane

would be towered during that time would depend ia

upon, the dernand for. laundry service in, Omaha,

the economic conditions,” the kind and amount of .

competition, the skill of the managers and ‘per-

sonnel, ete, Clearly, none of thése-influences on -

‘tak ins by the Governmend. See supra, p. 49.

thes alue: of-thes onte rprise, wheties favey able or

unfavorable ,coutd be attributed to the te ein porary

' Petitioner has been paid for the use of its prop:

erty during. the temporary oceupanes and, they

property has heen returned, together with pays’

ment of the amount necessary to restore thie prop:

erty to the same condition it was in when the Gov-

ernment acquired it, The amount. allowed—

market rental value—iieludés an objective allow-

agce for the income-making potentialities of the

property in the form ef a fair return on-the value |

of the property. Anything additional would be

unjustified, There isno more reason to Compen-

sate. petitioner for any specific business dosses

which may be suffered while it're-est: tblishes its

enterprise - than there is to compensate the fee

owner whose entire property interest-is taken and

Who must, acquire new premises .and re-establish

‘his business elsewhere or who must start up a new

busitiess. if; as in Mitchell v. U7 nited States, 267

Bite? 541, 843, the same business cannot he ye-

establishéd elsewhere. In fact, the allowance of

the Kimball Lanndry Company's claim in this case

Would be demonstrably unjust. On the basis of the

company's. own estimates of value, ibaweuld have

been entitled te recover only #400,000 to st)! 90,000"

CR: 423- 124, 457) if the Govérmment had taken a

fee simp le estate and would have recovere «| noth

“Ing for any business losses. “Since the “Govern.

ES NE Ae WP a Be ee

ae, es : ie

~~ eet ae

—

anent took oily ry temporary usecof thie’ property

the jury awitrded the . company approximately

$300,000, of which $252 |

1 ees perty during the (iov-

DOO represents compensa’

tion for the nse of

ernme Hts veeM PRNCEY CR, 95-96). This suum, conn

puted at the rite of $70,000.00 per vear, (RL 96)

ismoe than the net income of the laundry for

ws year in the past 19 aia with the exe ption

#1930 (see Def. Ex. 4, col. 2. Ry 204); “In fact’

it is almost twice: the company *s average net in:

come for the laste 5 complete years of: operation’

_prigie to the faking (1937-1941). The’ property,

has been returned to the company, together with

payment for damages caused by the Government's |.

cause, While petitioner may not agree with the

mount awarded by the jury: for the latter item,

Bd re presents the sui which the py found would

place.it in the same position so far as the physical:

prope ty is concerned as when the Government

took possession. Yet, petitioner claims an addi-

tional em of £540, 516.85. A(R, 316; Br. 12) for.

allege “| dest ruetion of the value of its trade routes,

which when add ed'to the $2: 22, 000 awarded for the

use of, the propebty amounts to $592,516 aid is the

Appreximate eqnivple nt of the fee value of. its

property when it still, has the property (w hich ac-

peording fo: petitioner's own figures: (R. ‘3I6) nae

worth ove 4F4C00,000 when, “returned ), to ‘do with as

it Wishes, either to se ‘ll it or to. go hack into the

laundry, business. Re’

._ #

Apparently on the theory that taking part of:

the oWners-estate is similis into ts aking part of the

traet of land, petitioner also, reties upon the se.

_ ealled “severance damage ciises ( Br. 117-121).

The ride laid down in that line of eases Was. re

-c@ntly- summarized as follows in Uuited States y,

Miller, 317 U. S. 369, 376: a 8} only a portion ofa

"single tract is taken, the ow ner’s compensation for

that taking includes any ele ‘ment of value arising’

out of the relation of the part taken to the entire

tract. “Such: damage iss often, “though somewhat

loosely, spoken of as severance damage.’ Tlie

‘severance damage” theory cannot be used as a

‘device , to recover business losses. ty As we have’

és shown isu ph ‘a, pp. 45-46, the i ‘act that a. taking of the

owner “SY property “results in a destruction of his |

Business does not give rise to A.right to compensa-

tion for the business. This rule is applicable not

only where all of the property is taken but also

where part has been taken. Thus, in Ralph vy.

Hazen, 93 FB. 2a 68, 70271 (App. D.-€2), where

part of a tract om which was located. a garage

was taken, it was held that damages to the garage

-biisiness could not be included in determining the

compensation tebe paid. Similarly, in Sfiephen- ,

Son Brick Covx. United States, 10-F, 2d 360 (C.

C. AL 5Y, it was Jield that when part of a tract

of land nsed for a brick manufacturing plant Was

taken, the fact-that the plant was making money

could “be considered, but the business was net to

. r ; rs

» 1 .

~~. . .

be valued iis such, her Was any ‘loss ad profits te PT cae

he compensated: for.” See also, Bueljer v. Cited

Pes

States, Wo BL 2d 391, BOM), (e. © AY I iz ae,

henge d, cs} ‘8. ae yas €. Coated Stutes ¥.-7 7936.6

Aeres of Land, 69 F. Supp. 828, 3320502. hy

Petitioner's reliance: { LI. 11 i-| 18) on és hale ted

Stales ¥. Chicago, Bod QR. Con pany, ee DaeTE|

IgE -(C. C24. 8), certiorari denied, 208 US. 689,

is misplaced.’ Whatever the merits of that de

cision, it is clear-that the court af appeals suc:

vestion i that case that cases like @thyow +.

U nited States, 166 U.S. 269, have been overmiled +

1 Petitioner relies (Bro UIT. 119. 221) upon, Conited States

¥. < 05 ‘Meres of “Land. Kte.. 42 FO Supp: 905. (Haw...

“Vhat Kune Is HOW pe nding on an appeal taken by the-€rovert

nent on the ground that‘it represents an improper allowance 38

of business Joss in the guise of severance damage. Mor COVEN,

ceyen.if the district court san: alysis of the facts in that case ts

accepted, it deés not support petitioner” selaim. ‘The court:

there held that the taking of certain physical property dian

ished the actual market value of other plivsieal propert\ not 3

tuken. As thus analy zed, the case presented the ordinary

problen of severance damage. This has. ne ap plication: to.

the instant case where petitioner's claim is thatthe ten:porary

taking of the physical property impaired the value 6f its

tradevoutes. The value of the trade routes represents agmere

expectaney offa continuing business relationship rather than’

‘abyaproperty right in the custome rs: Any injury tothe trade

rotites would be atypical busiiess.loss which, it is well settled, :

is hot Aap rr «usable. This distinction bet ween diminution im, -:-

the, valuecof pls sical property. on the one ham, ane impair

Tent of business eXpeetatrons onthe other has been preciseis

the Tite of distinetion between Chiat whieh is compensable and

thet M fined, Is rot, Cf. Bur tv Te lhl te di Ntate ssupracat PP.

DOH -39GL a . .

wen

° ot" .

e 7 : . os be ce

os * ~ ee >

PRO fe. 2d", 5 i4- I. 7 D, and that’ the: words OF

dnziiaged” sane now been added to the word

“taken” in the Fifth. Amendment (82 F.2d at.”

139 cannot ‘stand in the ight of this Court Ss res!

ee he sions, See, e. g., Wnated States v. Willow

Rive r Co. S24 U. 8.499, 502, 510, ‘The opinion

i the. General Motors: cG ase, in Lany event, itself

panei suffic ‘lent answer ‘to petitioner’ s areu-

‘ mnent: It was there said (323.0. S. at 879-380) :

~The sovei reign, ordinarily takes the fee.

— The. rule in’suclea ease is that compensa-

‘tion for”. that ‘interest does “not inelade

‘future loss of profits, the expense of imev->

‘+ ing removable fixtures and personal prop-

~ erty from the premises, the loss. of goed-

will which inheres in‘the lecation. of the.

land, or. other ‘like consequential, losses”

~ whie hi would ensue the sale of the proper ty\

‘to. someone other than the sover CAEN.

CS eee See Even where, state . constitutions

.~ redheniae

use, assmany do, it has generally.beei held

_that that whieh is taken of damaged is the ;

a | we ~ group of tights, which the so-called, owner

_ exercises in his dominion ‘of, the: physical

thing, and that damiage to those rights of

ownership does not inelude losses to his ~_-

“business er other éonse quential daniage.

Ww bile’ it-is¢ leaPpas. pointed out aboves pp. “41-43,

that in, attempting to recover’ for. the alle ed de.

struction of itsttrade 1 routes, ‘petitioner seeks to Re

Peer os

_ command that -comperisation be made for ~

a property “taken or damaged?’ for. publié —* |

}

reeover a business si Its binek (pp. § WO, 122)

confuses the’ Issue by i that at seeks to

recover for good, will, Juss "profit and loss of

further busine SS ous Tt did TL oe trial court “(see

" R: 31 5). Its theory seems to hb that: the value -

of trade routes does eit represcit “good will prof:

its or other business valne and that it is admis-

sible as part cof -the composite value of the plant

as a going concern (Br. 111, 114). }

“However, the very cases relied upon by peti-

tioner as justifying the method used by its wit-.

ness Judd in valuing the “rade routes (R:‘ 368-

370) show that. the value which it was sought

to have the jury consider was the value of ‘good

- will.’ Dr both Appeal of. Metropolitan Laundry |

Co, 2B. 'T. A. 1062, and Pioneer Laundry Co, -”

v.- Commisstoner, 5 B. T. AL 821, it: was he ld.

that the value of good will acquired by the core

pore ite taxpayer when it purchased another Jaun-_

dry should have been included in. the computa-

tion of its statutary invested capital for income

and profits-tax purposes. As pial in the opin-

ions,, good. will consisted of the ralue ‘of the

. drivers’ routes’ and igsiea as igh:

Petitioner. emphasizes throughout, that its laun-

“dry” was a “going” business andl attempts to dis-.

\ tinguish certain of the ¢ ‘ASCS folding that damages

“tq a business are not compensable on the ground

‘tliat they: did not invelve ‘a “going”? business

* (Pet. 35-31; ;see Br, 113-114). ° Petitioner's éaim,,

6 br

which ‘is: f for ae recovery of the value of its

good will or the business, is to be distinguished |

a from * gOhig concern’ value Whie li nude roce rtsain

cireunist nées may be ti aken, int} consider ation in.

: valning the prope ty on the baits of re production

cost. ~ Banaer Milling: Co. v. State of. New York,

24h) N. - 33, 148 N. Ez 6b, certiorarl demed,

269 UT, S. 582: Bee - Orgel, Valuation. under Emu

hent cae (19: 1G), See, 191 In the Banner

Milling C omipairy case; supra, the property taken

had heen used fora flour mill, It was lie ld? that |

the plant Was “to be’ valued ‘as a live, going

flour mill? and, therefore, . th it. ins determining

fair market value it was proper “to consider, not

onky the cost, of reproduc ing the physical plant,

“Hut also the cost necessarily of ue ok

pended. in bringing the mill or factory into: effi-

eient working condition, which has been called

so:

the synchronizing. of its. parts. Conse ‘quently,

_arehitect’s’ fees in making and » revising. plaris

and: compensation for enginee rs to carr y-out the

plans or. to arrange ‘the factory so as to produce

appropriate mamifacturing results, were held to

be elements which should he considered in esti-

mi iting the market value.” However, ees ele-

+ ments were’ careftilly distinguished from the

value of gead will whieh, it’ was held, could not:

>. « be taken into - conside ration. \, Similarly, in

Chicago x . Farwell, 286 MM, 415, 121 N. E795

the court he Id tht value based Upen the profits”

fom

eee t 6)

derived from the Gperation of a Soap factory

ould mot de ree veered union ~ the rihine of “eft

creney or “eon? value. 7

All the evidene offered hy petitiones as to the

reproduction or. re pLcanient cost of the dynild-

ane, machinery, dud. equipment was admitted

(CK.-2 N20, atid, IT2-9F3), The trial court aise:

admitted much testimeny as te the location,

erowth and expansion ‘of the plant and its eapae-

ity (see R. 229-232, 265-266, 27-278, BS6-3S88,

——*

390-391), including the amount of laundry wapk.

done eae h vear from: 1932 through 1941) CR. 279+

2:3), the gross rece tyits fromthe various types of

laundry and dry- learning SErVICes rendered from

1936 through +1942 CR. Be9-235, 238 S242). the:

- prices. being charged for such *serviees under

O. PL A. ceilings in November 1429 RK. 295-297 5,

cand, the total number, of customers beg served

on November 21, 1942 (R. 235-237). Thus, while

the trial-court properly exeluded evidence of the

value of the business as such, it permitied peti-*

wonet to show how : tii such business it had and that

The tyne cindtaited” of machinery ‘and equipment on

ne date of taking as shown on appellant's exhibits was based

on the cost of replacing it with like machinery in the same

condition and included installing it ready for Operation (R.

246, 240; 270, 308).

. Ttmay also be noted that in spite of-the Goveriment’s objec-

tion, re} pradivetion cost of the building was admitted without

requiring any deduction for depreciation (R. 262-1 263)

815504--48—- 5 os i

it was successful. Ct. Stepacnson. Brick Co. v.

United States, WO F. 2d a6 (C. CL A, a

Having admitted evidence of vross meonie and

the like, itavas proper for the court to mstruct tee

Jury that) such evigletice was admitted only to

“show that it was a going Goncert (RL 155, see

giso R. 229, 24-258, 236). : Moreover, “Haris

Jacobher ver, one of jr metity roner s Withesses whe ihe

asked on cross-exainin tion) What. elements he had

included in valuyag the use of the property, had

said that he included ‘nothing but the nerital ot-a

business” and that the fioure he had testified to

Was based on ‘the value that plant had’ te as as a-

going concern’’ CR, 426427 . Sinee it appeared

that the witness, as petitioner does here, included

the business yatue to petitioner within his defini

tion of “going Goncern’’ value, the trial court

properly instructed the jury THyaat the Bolng-con-

——————

* In titis.connection, it should be noted that the trial court,

“in exgluding Def. Ex. 7 showing the gross incenje of thecom- |

pany from 4924 throu@h. 1942, stated that the éxhibit would -

be admitted if there were attached. a statement of net earn-

ings (1, e. after deduction of all expense of operation, salaries,

ete.) (R.219-221). No offer of proof inh ‘compli: anee with this

Suggestion Was ever made. - Petitioner's suggestion (R. 220)

at its s proflered. Ex. 4 HLA ans}. would suflice for that ne

Zontained other items w hic h “should not be in they” (R <<

A) ~ Moreover, the gross income fro: 1936 through 1942

Was ‘admitted i in the ferm of. yearly réceipts for the varioug ~

types of work done (Def. Ex. LO) R. 233-234). The totals

appearing if the last column of Def. Ex. 10 ave the same as

the gross income for thase vears as shown on the excluded

exhibit (sée R. 22}). nse Dos oan j

ROM APL ADE GD 1) te

wee

cern vulue sought to be placed on the property

by the Kimball. Laundry Company wits not Compe,

tent (R,.155) and that the element of going ¥/ron-

cern which Harry dacobberger had stated he had.

consideréd | on CPOSS-ENIN IMATION should he dis--

regarded ate 156). |

Finally, as this Court pointed « out af ume

Co. voUnited States, 261 U.S. 502, 510, * + *. .

for consequential loss or injury resulting from

lawful governmental action, the law affords no

remedy.. The ‘character of -the-power exercised Is |

not material.”’ Hence, the fact that whatever

_ business, dispdption- there was resulted from the

Government ’s need of its property for war pur poses

wives the pet itioner no greater r ight to compensation

than those who suffered similar losses: because of

govel simental need for services of indiv idwils or for

raw materials upon which a business depends.’

Petitioner's claim, based’ upon alleged loss of -its

laundry custome? rs Is even more remote, than the

netual contracts for future jservices or delivery

for whose. loss ne compensation was pe rmitte d in

the Omnia case. No proof. is required. that. be-

cause of the exigencies of the recent war persots

suffered many losses through frustre ition of their

Caan

ig ability as individuals or through similar

frustration of the ability of businesses to. serve

their customers. For example, substantial sacri-

fice in income was required of many pefRons who

were drafted into the armed forces. -Many busi-

815504--4%--.—6 eae ue

nesses suffered like losses. In St. Regis Paper

Co. y. United States, 0 Ct. Cls. 271, certiorari

denied, No. 74, this ‘Termy the. Paper Compatiy

was. compelled to shut down as a result of govern: -

mental restrictionszupon the vwse-of pulpowood.

Nevertheless, the Company rather than the Gov-

ernment had to bear fhe loss enused the re ‘by. which

was claimed to be ¥ 316,794.86 out-of-poe ‘Ket 6x. .

pense, $228,175. 14 deterioration and de ‘preciation

charges, and $2,094, 686.83 loss of profits.

“We. submit, therefore, ‘that. the courts below.

were clearly correct in concluding. ‘Mthat business

losses and injury te géod will are not compe ‘sable |

and. that the claim for the alleged value of tr ade

routes is, in fact,- simply a elaim for such losses.

With ‘this exception, petitioner was accorded

every opportunity to show the value of the plant .

and the fact that it’ had a “profitable business.

‘located on the property.

D. The evidence relating to petitioner’ s good

will value (° ‘trade routes”) reflects the typreally

speculative nature of such value. — 9 — - :

The-v alne of $340,516.85 claimed by petitioner

for its'tradé routes appears, to” be ‘coniputed by ~

valuing each customer at an arbitrary figure (for

example, $20 fore ach trade route ¢ customer) said

to bechased on trade pri actiee, (Br. 9),

_ Petitioner contends (Br. 8-10) that it haspaid

its ‘‘retite men” during the six years previous to

the taking a total of $237,654.83 in salaries and-

‘commissions, to est; iblish its teatte Toutes. Italso

claims to have spent furt her sums-—not Specified |

to build up its business (Brook), And. it argues

that aftersit reopens its Laumdby it will be compelled

togheur net” losses -for fhe first three years, pre

sumably by reason of: expenditures ineurred to”

‘regainats trade routes. | Br. 10.) fee

All these consider: ations are highly spree salative.

They are also hight? detrimental to ny rational

: program of land acquisition on the part of th

: Government, Tf asa result of a temporary takis:,

_ the Government is ti be esmpelled to rermburse

“a landowner for ite ms of this kind: meur red in the

narra! Course of oper: ating a business, the budeg-

> etary ‘consequences, will he wor pletely wupredict-

_ able. Be fowe faking a particular piece of property

the Government would be Folreed “to analyze in

detail the ‘past business history of the ‘property

owner——as well as. any expenses that he might con-

wider necessary to ineur at some future date when

the property has heen retuimed | to him. Se

Petitioner's proffered evidence of -2 ray od wall

value in support of ‘its claim to ap peaiely

£340,000, in addition te the anieunt AW: drded i

-should be’ “considered mM conjunet lon. with — ay

guialysis. of a Own figures as tor its: actual net

* income. Thys INeamne figures are het suttic iently

. detailed oF pointed to. pe rut an entire ‘ly re ‘hable

éonelusion : astoa fair capitalization of the \ alue of

petitioner 's business. But, they. do Nise. Serious

doubts ae to thes ralidite of pe ‘titione r’s ood will.

Valne figures, and the iNcensistene y of results serves. -

compensation inadmissible,”

a. . cd

. . o ;

to buttress the established view that geno will value ;

Is ser sspeculitive: as to. make j its ine ‘lust bagi in just

This, defendant's Exhibit 4 (1. 204) shows that

for the last-five years OLY: S9- LOFT) “preceding. the

taking, the average net income of the Kimball

“Laundry Company before deducting depreciation

and Jnaone tax was S30375.50 per year - Lsee

“Colum 2. Lt ahis smi is capitabized at

SIX perce hit. the vane. of the: entire enterprise,

ineluding the plivsteal property aid the busiess es»

ory good will would be $656,256.50, whieh is

sss thie fee viitue of the plysieal plant.

‘is & haianead: peritrorre fr tere fe ode we don

Oby lousty, 1 "the phiystea property has the value.

eltitned hy 4 pet ener, a Het return af only i

nercent on that value “leaves he Koon for any ae .

additional value for good: yal. dfon the other

hand, it is assumed: thi” the company. had the - 7 -

good, will whieh petitioner Claims OS340.516.85 )

The fitcr that value haxed onthe income ine }udes” “the.

value of the Bosinessfor'good sil which are attributable to

Hitinerous speculative @lements so has the skill of saaiawe.

ment, the mature of conripert ron and grener: ‘al IHistness cond)

“tions is the primary renson for excluding évidence of income ’

for the ‘pirpose of: -showing the fee value of property con-

demned: Set Orgel. Valnatian Under Eniment Domain, sees.

Ia. PS. IGT, PTE? Nichols, Eninerit Doniain (td ed. 17),

pe LL: heeonerte Nenaltg € WOE, Fon a4 tu; ttt?

piety: Matt rofd Wty of Rac he xfer J Smith Af, Bridge) ). tf

Ajypp. Div. OSs. OST oth Dept. $+ Sewer ~The Mayor 4! Ay p. ;

Div. fem, IS Lt Wept.): : (handle yt EF. R. Ce. ve Cantley, 84

WIV IS: eatso,. Win. Boston & Providence Rail-

‘ roel, Is Mass. Ay) r re,

“7

then

alte as that claimed by petitioner but would be

the physical property could have he such

ap proxin itely €315.739.65. Thus, it ean bee argued

ri ‘on the basis, of petitions Ms own figures. either

i that the compan Hi: iil ne food will « r that _

. tioner is atte Inpting ie recover for it twiess i. a

by, ameTuding it in its, estimates of the. ae ‘alue-

‘of the physical property: cand: then adding it as

i. separate iteni te arrive at an alle ged value of”

cover S900,000 foro the entire enterprise.

Moreover, in computing the rental value of

the property, pe titioner’s, Witnesses” felt: that a%

re urn of TO percent or 864,000 should he allowed

“on the value whieh they placed on the physical

prope rts alone (RO3382 457). 1F.10 per cent is

cowsilered a proper. return and petitioner "s -estl-

‘mate of the xqluc of the physical property is: -

accepted, the laundry compady: Was not even:

making what wold? be considered ¢ fair return

on its property alone and thre are TO additional

earnings repre senting. wi return oon intangible

assets such as rood. will.’

"The cofrect ness of petitioner's = chiain that i its w itness fol-

-lowed the method-of viluing good will approved i im. 1 ppe al

‘of - M. tropofitan 1 Laundy ‘yl, ae 1. T. A. 10@2 and Pioneer

Fr Lianied ry sé oe. ¥;¢ Ce eeNsione ree B. T. AL s21vis doubtful. In

—_——- - those cyses, the value Was computed by multiplying the

weekly receipts by the gourd will eur attributed fo each dol.

lar of receipts. But petitioners witness, instead of using

weekly receipts as a factor, saibstituted merely the tot: il Nut

ber of-customers (R. ane This prov ‘ess would seem to omit

an essential elgmetits a. e.. the amount of receipts and ‘profits

» for which each ¢ ustomer might ‘be apenas. ry

> . fA

aa *

We are not to be taken as contending that

petitioner's enterprises possessed ne “good will

1 the ordinary Sense, ‘The above. is offered, as

we have saids. simply to indicate the difficulties

and doubts inherent in any attenipt te evaluate

good willin a conde manation case of this characte r,

It has already been pointed out Csupra, p. 61)

that the allowance for rental vatue awarded the

_ petitioner in) this cage includes and -retlects the

fact that the property taken was used by a going

_ concern, Tie gene rous-extent of the award is

isulionind by the fact that a rental of $70,000 a

year was ‘allotted to the petitione ras contrasted

with the previous net annual average income of

Bese 39 referred to above. Petitioner has also “

“received an award t@ store the premises to their

or ‘iginal’ condition, Under the Constitution, no

“more is required. oe

1. vee

_-OFHER” ALLEGED. ERRORS SPECIFIED AS GROUNDS FOR

REVERSAL ARE WITHOUT MERIT

A. The trial court did not err in ruling that the

Governine nt’s witnesses were qualified to testify. =e

Petitioner states *th: it certain of the Government's

witnesses were 1 lot qui ilified to testify ( Br. 26-27;

see alse Br. 16-18). These Witnesses were CR.

‘Crowder, an engmeér in the ‘mee ‘hanieal and elec-

trical section of the United States - -Engineers

Office in Omaha, who had had a great deal of

experience in supervising and preparing estimates

of the cost of constructing lavndries and installing

e - oO Se r.

69° :

and repairing laundry equipment, including the

restgration - -of government-leased: laundries else-

Where (Re GU9-610, GHo8—H61, 715); Cornelius G.

ence, having bee ‘MI associated with the American —

; Appraisal Company for 24 years and having ap-

praised many industrial plants, ingliding. inun-

— dries (R: 722- 23): and Lewis “‘Sholes, a lifetime

resident. of’ Sea wha had been. in the real

estate business for 46 iesidabetbcs in the appraising:

business for: the last 20 or 25 years and who had’

* appraise ‘d six other laundry plants in recent years

CR. 760-761 ). ‘Clearly, these w itnesses, as, the

court beJow “held (R. 12, Vol. IV) were qualified

to estimate the rental vee of the laundry, ‘the

damage to machinery and equipmett and the cost

— of repairing and replacing it. Moreover, whether

an expert avitness. is qualified ‘to, testify is. pri-

marily a question: for the trial judge whose deter-

mination can be upset only for an abuse of. dis- °°

cretion (R..12, Vol. EV). Montana Railway Co.

v. Warre n, 137 ULS. 348,354; Chapman v. United

States, 169 F. 2d 641, 645°(E) CG. A. 10), certiorari

“denied, No. 3*5, this ‘Term: Love v. United States,

141 F.2d 981, 983 (C..C. AL 5). No: abuse of

discretion can be shown here. Under Crowder a

~xnpervision, Denton J. LaTurner and Ross 1..

Néweom, two engineers connected with rei Deal z

ean Laundry Machine Coinpany CR. 546, 5 i, GOL)

and A. a. Pargytt, acconstruction engineer err

ployed” in the U tlited: | Hitates Engineers Offic ee ace

ati

2 . ’ i 7 ,

523) examined the machinery aud equipment and

jointly prepared exhibits showing the eost of re

pairing, replacing and relocating it. (see RL STL S72,

SS85-DS84, 587-588, 599-601, 6LO-G11, 619,622, G0-

631). Each of these wi nesses, ‘Inechidinge Crowd- .

, testified as to items whieh they had personally

spite’ and Crowder gave the total of all tenis

testified to (see RR. (31:3 4, 647-H48y. Sholes to- |

gether with petitioner’ Ss Withess Goodwin ex-

camined the property in 1942. before. the tuking -

and made an-inventory ahd appraisidl at thint time

and also i in 1945 CR, 246, 251, 771, 782-783). His

inventory and « appraisal: were available to. other

Covernme nit Witnesses whe had not seen the pwop-.

. \erty-at the date of ti king ¢R. 725 .. The former.

master mechanic. of ee hed Sueded Cols

~ pany. accompanied. Weber on his examination of:

the property and deseribed the changes whieh tad

“taken place nN the condition ‘of the: machine ry’ h..

rer,

(25). Itoor plans showing the location of equip-

ment at the: time of taking and. Lsts* of items

moved out: of the building by: the Government we re

inspected by the Witnesses (Gov't. Exo 9, R. 620-

622, 634, 725). "Phus, as the court helow said CR.

12, Vols TV), **The fact that m: my of the Govern

ment’s “experts on value or on damage to equip

ment and machine ry had not seen the laundry in

1942 did tiot disqualify them to testify to their

estimates of its value at that time Ter had |

heard the eéndition of the plant. anid ka see in ry

fully dese wibed, and assumed that it w a el her

’ cae in Bea |

>»

71. aS —. s

wood. or fiest-class : eererencdics the time the fiove

ernment took over. ; ' ‘

Ie inatly. although petitioner States its alijection

to the testimony of Sholes and Weber in thé fron

‘of ain objection te therr qualifieationss, the hist af

the complaint is not their qualitic ations, but their

method. of, valuatién. That ‘complaint is “dealt.

with in Points T amd 1, supra. : |

B. The trial court did not-err int reluding \rs

buttal testimony. Certain evidence offered DS .

petitions v.to rebut the Government ‘site stiniony its

to Ry cost cof restoring the Inrilding and some of

the Tiiyghinery to ats. fornier condition Was &N-

eluded bythe trial court on the ground that it was

pari of the’ Mompany’s main -case “(R.-A827-830,

833-838, - S468 Pe, ef. Br. I sy: The order of.

proof oma trials kirgely in the digeretion of the

trial eourt. Philadelphia & Trenton Railroad Co.

vy. Stimpson, 14 Pet. 448, 462-163: VMeClelian ve."

Hein, 6 Neh, 600,77 N. W. 120. - As, the court.

below stited, ‘ticre ‘ Was uo abuse of that disere-

tion in this case R. 13 ; Vol. IV). Petitrone y's

witnesses hag already testified in the case in. chief

“as to. the cost of igus the building (R. 506,

408, 12-415 », 419). ‘ Rebuttal testimony as td the ;

cost of repairing, the laundry and dry cleaning

equipment was admitted - (R. 809-812, S14; Def.

Exs. 48. 49, 50, R. 822-823).° The only item of

nie ‘Hiinery vepair offered on. rebuttal whieh was

excluded was the cost-of replacing: il boiler valued

by petitioner in 1942 at $8,921. 2%) Re." 1272).° As

‘mae «

7% fo eae é Ja aS

Oe ae . te this item, petitioner’ s atic on ‘its case in

Lae soa “chief was, tlat it was damaged; Yond vse-and :

ig aa oh ‘4 a .--thierefory an’ alléwance for. its fullivalue was inade

ate tt “GR, bea aeeR, 847) 5 Ww reas, the ) foyernmient's

\ " aang Soni for #5, 817.50 me 639 : see 'R: 849).

tet we _ Thus, ‘the rebut I te: stimony rejected by the trial

ie Reus fy Re :Segurt pertained - to. matters which ‘not only. could,

Sak iy . PRES have been, but had been, gone into’ on petitioner’ s

eee eee ; ‘ a 7}: ease in chief, and was, therefore, properly excluded. ae

ee ttle) oh EN United ‘Stabes Vv. Prettyman, 42. F:

a: gel UCB A ES i |

+64 vs a sl 1

Bene Ree CG. The trial, court awarde d the ‘proper ‘amount

Bae ele as ‘inte rest-'The térm taken in ‘this ease wis one

fo a : _egi wing November 22, 1942 2, and ending June

hi Sean | 1943, ith, the: right to renew, the tekm ‘for,

ats

Ps Spe fe ro ne a | addition | yearly Periods for the. “duration ithe -

ee \

emerge encys( Re. -2).° Ag: the’ time. of, t|

“term chad’ | “extended to Jie 30,. 1946. CR.

. yas he 88-85): Conseqquc ntly,. ‘the’ questi of ¢ompen-*

A EL oes “sation. for the Whole term. thus far taketi a

A ae a a 7 _subm tted: 4, the jury, us well as gee amount of;

et es damages: resulting: fron the use. of the property

Te ee A. up. to, the. time of the trial. Although? ‘the: jury:

ens Goofs: e? hy ies instructed. ‘to’ return a genefal verdict: for |

eee ae the total cor@bensation- to. which ‘petitioner’ was:

en ae

trial’ tbe:

‘das Bs - found to’ ‘be entitled, it. was also instructed to’

ane a teu . fatline of the United St: ites to return. the prop-

ve: y° “? pipe

Si. cae te

é . eae

» - .

% eo Ae te

a - <a. special findings” as-.to the sum payable

oe . — and as’ tothe amount . awarded for: .

ee erty ua the same condition it Was ‘on November

. 7 ° = .

sinerpetsinis SS Oi ORME RN Bae aces waste Messrs wee

\ . . & > .- 8 Pee

eR ey ae Sseeayor

sal asl . x

RIN,

ante) ten

Ayes

’

PEN ake AS <6

. .

on the sume, allowgd - for

re ~pensatioty. (see R. 163-10! De

_ upon the* same Reames as tot

Ps s.%

_ 1942 ( 161; see KR. $506),

: Line Rys v.. United Slates, 261 8. 299, 306

(1923) ; see Albreéht v. lL nited. States, 329 U: S.

599, 602 (1947). , "The | only .term:. “taken gp |

was one énding jdune 30,°

‘November Dy 1942,

1943 (including, of course, the. rig to# renew

- for additional ‘yearly - periods). The property

. was not taken beyond Sune 30,

tern, was renewed, ‘the ‘new term? heing . taken

hoard ‘Air *.

1943, until the

When property

; ‘is taken. prior to payment therefor, interest is.

Pecan as part of just smeieattint from the

“date, of taking until payment.

upon” expiration” of tHe preceding term. Sin a: <9

‘the. taking, therefore, was of yearly periods: al

‘simee the: award was ‘made - on. the same basis, °

interest at. A) ‘per ‘cent. was pr operly cumputed

each perith ‘from the.

te ‘it was

beginning of the: period ‘until the

"paid, making allowance, for, the. Sums ‘deposited |

in court from time tp time as estimattd com-

tends (R. 97-98, “ef: Br. 128-129) that ‘because the

term taken. was.to terminate ultimately ‘(under

‘the last renewal) | onl June 30, 1946, there watt

, Pet itioner “Onl . ;

‘established. ‘for. the purpose of this case a con-"

tinugus period” “between, Noverabey" 22, 1942 2. and

a, A, different situation is presented Sint the. award is ar-

rived at by -reference to comparable transactions where the - .

- rental Is payable at the end of thd-year or the rental is pay-

‘able’ monthly” In such cases, ‘oh should. be computed

award. . . . ee

: - Fe : F $5 os iN & 4 = me 2 pe .

of payment as was the -

Ys:

* oe

"es

Tut 30, “1946, ‘thereby. requiring’ interest On thes .

total award _ set forth ins the general verdict, .

‘e., the **u imate ward." Thiss coptention ds

without, yerit. It atnounts to saving that the

entire three year's, and six, months’ teri avas-t taken’

in November 143 and. the’ Goverime nt “at: that -

_time became. ‘obligs ited to pay. the total due “for,

thé entire period. This -is plainly. contiary: to”

fact sifice the obligation” te pay for additional |

periods arose only when the term Was: Auccessively

renewed. And: indeed, separate declarations of

“taking wer e filed for each: periad,; see supra, pp. 4-5.

Moreover, the faliaey of. petitioner’ S contention

eppears if its effect tu other sittia tions-is con-

‘sidered. If, for, example, the. trial had Been

he id shortly after the Governme nit 400k possession

and the jury had found thelf; air wnnual rental ‘“‘de-

ter ntiviid as though the government. had rented the

pr operty for ayear with an option to renew from

; “year to: year” (see U nited l States v. 16.747 Aeres

of pind i in Delaware, 50. ¥F. Supp. 389, ie Del.),

suprarpp. 29-30), and the Gove! rigneut had’ paid the:

vent thus determined “each, fear as it. renewed |

the term, it, surely could ‘not be contended that

when the: Goyer ment surrendered possession it

would then. Have t® pay interest as-if+ the total ,

amount of the rent ultiinately paid had’ been, due

at the'time posse sion was taken. The fact ‘that

the juty trial was not had until shortly: before

t.%

“

. “

the. Governmieiit ‘surrendered possession dean net

change the efate takei from a one-year term «

with an = to renew toa specific term. of

36 years. Sac ieee es ora

The ee is apparently made (Pet. 40; see

ajso Br. 128-129; 131,° ESF 6). that the language’

of - the. ‘Dee laration of Taking Act of February |

26, 1931, "sees 1, 46° Stat? 1421, ‘40 -U.. Se.

258a, | requires interest to be computed In ae- :

seordanee with - petitiofer’s 8 “contention, “How-

“ever, as this: Court held m “Albi'ccht v. DE nited

States, 329 U .- 8. 599, 605 (1947), ‘the provi-

- sion Aftor, payment of interest an that ‘act is

no thore than a statutory “einbodiment of the

oyule | for determining constitutional i: “just comn-

* * Rg?

~ perisation’ ign ects Payee = ie oR

Pefitroner also scaatende., that interest should

‘have be a Y allowed ‘on the sunvawarded for: faijure

of the U hited Sti ates to return the property in-the

same ‘condition. as wher taken. froin November 21,

1942, until paid (BF, 29, 131- B32) md states (Br.

29, “that no -duterest was allowed on. this item,

“Interest, was, in fact, allowed On this item From

Seveh | 20, 1946 {the date of the swerdict,. R. 95),

until paid (R. 105-06). ? Since the sum thus.

awarded arises out of the obligation to-return the

property in as good condition as whe nm taken, reg-

s au aible wear and tea AY exce uae baie sation for

“commie due until “the property is ‘returned, Until

; that time it is not known. howsauch, if any, dam- -

) age. there ‘will be or whether “the United States

will dtselt: restore the premises to their former.

condition befote returning them or whether the

4ier _be “compensated. for the faibure ton:

“return the. premises in their formers conitition:s:

Obviously, payment for damages occurring dur-

a é

ing the Gove TM nt’s occupancy” isnot dite, until

the. property is retum@ied. Z Ac cordingly, «the trial

court was ‘correct ini awarding intexest only from

the date of: the verdict which % was rendered, two

| days be fore possession was surrende ‘ved, ‘

‘Petitioner further. contends that it” is ehtitled |

_to ustrest on the sum of $34,875.50 for" chemicals,

soap and supplies wleged to have been taken’ on

November 21, 1942; but not paid for until July 8,

1943 (Br. 23, 30, 132). The only mention of

these items in the reeord is found in petitioner's

“answer and petition: on appeal (R. 26,.94). The

hs » ee 2 , > : i :

matter of acquiring the items mentioned and pay-

‘ing for. them was handled entirely outside the. con-

Aeration - proceedings ‘and is «no part ‘of the

proceedings. Muoreovet, the sum was p; a as the

resujt of an ae reement between the Ufited States

sant the Kimball Laundry Company. Interest is

not: allow able wheny just: compensation ix fixed

by angreement of the parties. Albrecht y. United

: States, 3: 29 U, 8.599, G02-GO4 (1947). .

Fe Sl Oe

bree .

a Sa ae

a) . -° ; «

7 tf - : ¢

: ie

. war . vat ir :

“ coNCLUBION Po oe

Box the fore sting reasons, 1f is res Mhetfully

: geben’. thyit there is’ yo reve rsjble error in the.

rulings of? the trial court and that’ the judgment

: _. of the Court of “Appeals should be affirme =

3 } Purr BP EREMAN,

£O a ae eae =a , Loaeoe Solicitor General:

eee “Gronce T. Wasnincron, \

. , Assistant Solicitor General.

aS epee es ety a

c ee “Assistant Atto Mey, General,

see eeg ; Roger P.. Mareuis,

eo: 72 > Ways 6. M ARTIN,

: “ef ‘ Attorneys, Department of, Justice

“Dec MBER 194 eB nee

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