Case ID: us-ct-cl_75/html/0569-01.html
Source: Caselaw Access Project
Author: {"author": "LittletoN, Judge,\n     GREEN, Judge,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

WILLIAM WRIGLEY, JR., COMPANY v. THE UNITED STATES
    [No. 17336 Congressional.
    Decided June 6, 1932]
    
      
      Mr. George A. King for the plaintiff. Messrs. Clarence W. DeKnight and Louis W. McKernan, and Metcalfe <& Branch were on the briefs.
    
      Mr. Wilbur H. Friedman, with whom was Mr. Assistant Attorney General- Charles B. Rugg, for the defendant.
    
      Madam Loyola M. Coyne, and Messrs. E. B. Holland and Ban M. Jachson were on the briefs.
   Whaley, Judge,

delivered the opinion:

This is one (Senate bill 1524) of a number of cases referred to this court under Senate congressional reference, Resolution No. 107, 67th Congress, 1st session.

The plaintiff is a West Virginia corporation engaged in the business of manufacturing chewing gum and was, in the year 1918, a tenant of the Bush Terminal Buildings Company under four leases, all of which expired August 1, 1921. The leases covered 60,748 square feet of space in Buildings No. 5 and No. 6 of the Bush Terminal property in Brooklyn, New York. On June 18, 1918, the Navy Department, acting under authority of the act of March 4, 1917, ch. 180, 39 Stat. 1168, 1192, 1193, and the act of June 15, 1917, ch. 29, 40 Stat. 182, served notice upon the Bush Terminal Buildings Company, a copy of which was also served upon the plaintiff as the tenant of the Bush Terminal Buildings Company, that the Government required the use of certain of its buildings including those in which the plaintiff was a tenant and demanded possession to be delivered on or before December 1, 1918. The notice also carried the provision that the Government would take over all or any portion named in the commandeer order at any time possession could be given before the first of December. Immediately upon receipt of the notice the plaintiff proceeded to secure another location for its manufacturing plant and succeeded in obtaining certain premises which are referred to in the record as the Metropolitan Avenue plant. (Finding XIY.) The purchase of these premises was consummated on August 12, 1918. About a month thereafter, or on September 13, 1918, plaintiff was notified that the commandeer order served by the Navy Department for possession of these buildings had been canceled as of September 9, 1918. On or about September 16, 1918, plaintiff commenced moving its machinery and other equipment from the Bush Terminal buildings to the Metropolitan Avenue plant, and on or about January 25, 1919, the removal was completed.

Coincident with the requisition order the Navy Department had set up a board of appraisers to determine the rental value of the premises to the owner, and the compensation which should be paid to tenants for losses sustained. On June 21, 1918, two days after plaintiff received the requisition order, plaintiff was required to furnish the above board with a detail list of personal property possessed by plaintiff and of machinery installed inside its lease, and the plaintiff at once supplied this information, and later, on July 9, 1918, the commandant of the third district in acknowledging receipt of this confirmation, said:

“ The filing of the questionnaire by you does not in any way act as a stay, or release you from the obligation to vacate the premises on or before December 1, 1918.
“ It is the intention of the board to make a personal visit to each plant affected by this commandeer, for the purpose of verifying such statements as have been filed, and this, you appreciate, will take some time, as there are some sixty-odd firms affected by the commandeer.
“When and as soon as you have made definite arrangements to vacate the space now occupied by you, kindly notify the board as to the date upon which you expect to remove from the premises now occupied.”

Again on September 8, 1918, accredited representatives of the Government personnally visited the plaintiff and requested that the vacation of its lease be expedited. A representative of the Government personally visited the leased quarters of the plaintiff to verify and check over plaintiff’s return of property and machinery located therein, and for 2 months and 20 days the requisition order was as completely effective as to the plaintiff as though it had been consummated by court procedure in times of peace.

The plaintiff is now suing to recover just compensation for the taking of its leasehold interest in the Bush Terminal Buildings, and contends it is entitled to recover for the following items:

(1) The value of the unelapsed period of the leases.

(2) The value of certain fixtures which were incapable of being detached and removed to the new plant.

(3) The cost of removal; the damages incident to the change of location, including the charges for removing and reinstalling equipment; salaries of officers and employees for time spent in moving, and overhead expenses for one day when the plant Vas idle.

(4) The difference between the rate paid for fire insurance at the Bush Terminal Buildings and that paid at the new plant during the unexpired term of the leases.

(5) Interest on investment, interest on mortgage, insurance, depreciation, and taxes in connection with the new plant for the period from July 29, 1918, to January 25, 1919.

It is true that the Navy Department did not enter into physical possession at any time of the space leased by the plaintiff but, due to the commandeer order, the plaintiff was forced out of its leaseholds and compelled to seek other premises. It was in compliance with the commandeer order that the plaintiff acted in good faith to deliver the premises. Ever since the decision of the Supreme Court in Duckett & Co. v. United State, 266 U. S. 149, and Phelps v. United States, 274 U. S. 341, it has been settled law that the use of property can be taken as well as title to the property, and for the use just compensation must be paid, and also that when just compensation is allowed, in order to make the owner whole, interest must be included from the date of taking to the date of payment, not as interest but as just compensation. These cases further leave no doubt that this court has jurisdiction, under congressional reference, to render judgment on this class of claims.

The naval appropriation bill of March 4, 1917, 89 Stat. 1168, 1192, 1193, and the urgent deficiency bill of June 15, 1917, 40 Stat. 182, under which the commandeer order was issued, gave to the President extraordinary powers in the matter of requisition and taking of private property. The right to requisition and take over any factory or part thereof, without taking possession of the entire building, was a part of the power conferred. It was emergency legislation and an order issued thereunder was mandatory. It was to be obeyed. The one restrictive provision was that, in the event of the exercise of the authority given, the President was to fix the amount of just compensation, which, if unsatisfactory, could be accepted to the extent of 75 per cent and the desired balance sued for in this court. The President was not bound by legal formalities or procedure, but the exercise by him of the authority granted was as effective in character as if formal condemnation or procedure had been pursued, and the mandatory provisions of the legislation left no option upon the part of anyone receiving a requisition order except to consider himself divested of all present ownership, discretion, or title to the property or materials desired, inconsistent with the President’s exercise of the power and authority conferred by the acts.

The extraordinary power to be exerted under the acts was not burdened with court procedure. There can be no question in this case that all the formalities requisite (if they can be called that) were complied with by the Government, so far as issuance of the order and service of notice is concerned. The subject matter of the requisition, that is, the contracts of lease (the Navy Department was to pay rent), was one that could be and was requisitioned. The case of Brooks-Scanlon Corp. v. United States, 265 U. S. 106, 120, conclusively decided that contracts and contract rights were under the statute fit subjects of expropriation. See also Duckett v. United States, 58 C. Cls. 234, 250; 266 U. S. 149, 151. Under the statutes physical possession was not necessary to validate such an expropriation. In fact, in many cases, there was never any physical possession. The nature of the case did not always require it, nor was it contemplated. The requisition itself with its attendant notice, transferred the contract and the contract rights, and it was obligatory.

The very purpose of the statutes was expedition. The effect of requisitions thereunder was immediate, in no way deferred by refusal or delay upon the owner’s part to comply with them.

It is undeniable, from the facts found, that the Navy Department was anxious to gain occupancy of the premises as soon as possible. The course taken both by plaintiff and defendant plainly shows that there was no question as to the effectiveness of the order. The defendant required obedience, and the plaintiff proceeded to obey. The plaintiff could not have sublet the premises, even with the landlord’s consent. Its lease had been taken from it, it was no longer lessee, and it had nothing it could assign.

It was physically impossible for the Government immediately to occupy the premises. The course pursued was eminently practical. That the Government should simultaneously with service of notice enter upon the premises and physically oust this tenant, is hardly to be imagined. The very terms of the order precluded such a course. The order effectively expropriated plaintiff’s leases. In all the circumstances of the case it can not be said that the Government omitted any act which could have been a more complete exercise of its power and authority under the statutes which authorized the procedure.

The Government could not recall what it had done. That was consummated. It could only go through the form of canceling the requisition order, and refrain from further exercising the right of the requisitioned tenancy. This course was adopted. That the defendant had theretofore actually exercised the right of tenancy in requiring plaintiff to vacate seems certain.

The plaintiff is entitled to recover just compensation for the value of its leases from January 25, 1919, the date it surrendered the premises, to the end of the term of its leases, namely, August 1, 1921. Taking into consideration the character and location of the space in question and the facilities afforded the tenant, the general condition in and about the port of New York regarding space for manufacturing purposes, and the rates at which like space was then held and being rented by the Bush Terminal Buildings Company, the just compensation to be paid the plaintiff for the unexpired term of the leases is $40,979.14, together with interest from January 25, 1919.

The plaintiff claims, in addition, the cost of moving its stock, the dismantling and removing of its equipment from the old to the new plant, and the cost of reinstalling the same; in other words, the cost of moving, together with the salaries and wages of certain employees for the time spent in moving, the idleness of its plant for one day, and the value of fixtures which could not be removed. These are set out in detail in Finding XX. The plaintiff was not the owner of the fee, but a tenant holding under leases which contained no right of renewal. At the termination of the leases it would have had to move to a new location. The cost, labor, and expense of dismantling, removing, and reassembling the appliances, the loss of fixtures, idleness of plant and overhead, would all have been incurred at that time. The removal at an earlier date imposed no additional burden. Mayor v. Gamse & Bro., 132 Md. 290.

Just compensation is fixed for the fair value of the property requisitioned at the time of the taking. It does not include consequential damages resulting from forced removal of property not taken by the Government. The plaintiff’s right to occupy and use certain footage, or space, in the buildings was taken over, nothing more. The liability of the Government is for the value of this right given by the leases to the end of the period mentioned in them. The business was not taken over. The expenses incurred by the plaintiff in moving from the terminal to the new site were those which it would have sustained at the termination of its leases, consequential in their nature, and for which there is no recovery.

In Bothwell v. United States, 254 U. S. 231, the lands of a cattle ranch were condemned and as a consequence a sale of the cattle was forced, but it was held that the Government was not responsible in damages for the loss due to the enforced sale of the cattle or the destruction of business.

In Southern Products Co. v. United States, 61 C. Cls. 801, the plaintiff was ordered to remove a large quantity of cotton from the Bush Terminal Buildings, which had been taken over by the War Department under requisition, and the plaintiff sued to recover the removal costs and damages sustained by reason of the cotton being injured by exposure to the weather. No recovery was allowed on the ground no property was taken and the expense was incident to its removal. See also Gershon Bros. Co. v. United States, 284 Fed. 849, and United States v. Meyers, 190 Fed. 688.

There is no claim made by the plaintiff that its business was taken. On the contrary, it is seeking to recover a loss it claims to have sustained by reason of the change from one location to another. Whatever injury to business this may have been, for such an injury the Government is not liable.

In Mitchell v. United States, 267 U. S. 341, it it held “ No recovery therefor can be had now as for a taking of the business. There is no finding as a fact that the Government took the business, or that what it did was intended as a taking. If the business was destroyed, the destruction was an unintended incident of the taking of land. There can be no recovery under the Tucker Act if the intention to take is lacking.”

There was no attempt to take the business of plaintiff, and any injury caused thereto was incidental to taking over the use of the premises on which the business was conducted, without intention to injure or destroy the business itself.

These are all inconveniences and expenses incident to the surrender of the possession and are not elements to be considered in determining the compensation to which the owner is entitled. The title to all property is held subject to the implied condition that it must be surrendered whenever the public interest requires. De Laval Co. v. United States, 284 U. S. 61, 73; Nitro Powder Co. v. United States, 71 C. Cls. 369, 374.

The plaintiff has brought to our attention several cases which have held consequential damages recoverable. All these cases involve State statutes permitting municipalities and railroads to condemn but no case has been cited which involved the exercise by the United States of its power of Eminent domain in which consequential damages have been allowed, and the statutes under which this property of the plaintiff was taken are silent as to such damages. Just compensation alone is provided and the cases cited, sufra, fix the basis of what shall be included in those two words.

The items mentioned in Finding XX are disallowed. The plaintiff is entitled to recover just compensation for the value of its leases from January 25, 1919, to August 1, 1921, which is found to be $40,979.14, with interest from the former date.

It is so ordered.

Williams, Judge, and Booth, Chief Justice, concur.

LittletoN, Judge,

dissenting:

Plaintiff sues to recover $160,284.81 as losses and damages sustained, including an amount of $41,400.89 as the value of its leases on certain space in the Bush Terminal buildings from the date of plaintiff’s removal from said premises, January 19, 1919, until the expiration of said leases, August 1, 1921. It also sues for interest upon each item of damage from the date on which it was incurred.

The majority opinion correctly, holds that the United States can not be held! responsible under the acts of March 4 and June 15, 1917, for plaintiff’s damage or loss incident to the lawful exercise by the Government of its right to requisition, or commandeer private property. I am of opinion, however, that plaintiff is not entitled to judgment for any amount as just compensation for the reason that there was no taking of its property.

On June 18, 1918, the defendant placed with the Bush Terminal Buildings Company order N-3255 for delivery to the Navy Department, pursuant to the acts of March 4 and June 15, 1917, of certain described premises in Brooklyn, New York, known as Bush Terminal Model Loft Buildings, Nos. 3, 4, 5, and 6. The plaintiff occupied certain space in buildings 5 and 6 under a lease from the Bush Terminal Buildings Company and a copy of the order was delivered to the plaintiff. Paragraph 3 of the order provided that “It is further understood and agreed that the Navy Department will accept occupancy of all or any part of this space on or before December 1st, 1918, it being the intention of the Navy Department to permit tenants now occupying the space above mentioned to vacate same before December 1st, 1918, or at such earlier date as they may secure other suitable quarters, and that the obligation of the Navy Department for rental of said space, as it may be from time to time vacated, will begin on the date that the space is actually vacated, all space to be vacated before December 1st, 1918.” This order was withdrawn and canceled on September 9, 1918, and the proceedings to take possession of the premises were completely abandoned. At the time of abandonment by the United States of proceedings to take over the premises in question the plaintiff had not vacated the space occupied by it under leases in buildings 5 and 6, nor had it been disturbed in its possession, occupation, and use thereof. It did not vacate the space which it occupied until January 19, 1919, four months after the commandeering proceedings had been withdrawn and abandoned.

The United States did not at any time subsequent to September 9, 1918, issue a requisition order covering the buildings of the Bush Terminal or the space therein occupied by the plaintiff under its four leases expiring August 1, 1921. Nor did the United States at any time enter into actual possession of any of the Bush Terminal buildings, or use or occupy any of the space therein occupied by plaintiff. It is well settled that proceedings to take property for public use, whatever their nature, may be abandoned before consummation, and, if the owner of the property has never been disturbed in his use or possession, he can not, in the absence of some statutory provision, recover damages or losses sustained by him on the ground that he would not have been put to such expense if the proceeding to take the property had not been commenced. A person whose property has been taken in the manner authorized by the acts of March 4 and June 15, 1917, is entitled to sue for just compensation under section 145, Judicial Code, for the property taken, but such acts do not authorize the recovery of damages. Although plaintiff may have sustained some damage in making preparation to comply with the requisition order before it was revoked, the court is without authority to render judgment against the United States therefor. Eminent domain proceedings are from their inception until the taking is completed wholly within the control of the Government and may be withdrawn and abandoned in whole or in part at any time during pendency thereof and before the right to just compensation has become vested. Garrison v. City of New York, 21 Wall. 196; Kanakanui v. United States, 244 Fed. 923; Owen et al. v. United States, 8 Fed. (2d) 992. I think this rule applies to a proceeding to take property by the process of requisition. Marion & Rye Valley Ry. Co. v. United States, 60 C. Cls. 230, 249, 250. Where pursuant to an act of Congress private property is taken for public use by officers of the United States, the owner’s claim is one arising out of implied contract. Phelps v. United States, 274 U. S. 341, 343. The requisition in this case fixed a future date for delivery. It contemplated negotiations with reference to the taking over of the property and the fixing of compensation. Before the arrival of the date on which use and possession were to be delivered the requisition order was withdrawn and canceled. It seems to me therefore, in these circumstances, that there was no implied contract to pay and that the right of the plaintiff to sue for just.compensation had not accrued.

The disadvantages arising from the institution of eminent domain proceedings may be considerable, but they can not be recognized as the subject of an action against the sovereign because of the action of officers authorized to prosecute such proceedings. In the nature of things, Government officials must exercise discretion on the question whether the public shall be finally committed, and, if they conclude to withdraw proceedings to take private property for public use, the court must hold such consequences as are here complained of to be damnum absque injuria.

In Liggett & Myers Tobacco Co. v. United States, 274 U. S. 215, in Duckett & Co., Inc., v. United States, 266 U. S. 149, and in Phelps v. United States, 274 U. S. 341, the United States issued requisition orders for delivery of certain articles and certain properties under which the articles and the properties called for were subsequently delivered. In the Duckett and Phelps eases, as a result of conferences, the properties requisitioned were vacated by the lessees and use and possession were taken by the United States. There was at no time a withdrawal or cancellation of the commandeering proceeding. Those cases are not, therefore, authority for the plaintiff’s claim for judgment in this case.

When the Government issued the requisition order in this case on June 18, Í918, it was only considering the taking of the Bush Terminal buildings, but it did not take. By so considering no new relation between the Government and the plaintiff’s property came into being, for at all times the property of the plaintiff and of every other owner is exposed to the right of the public to take it for public use. By issuing the requisition order and considering the matter, the taking of such property became more probable than before, but it remained only a possibility. Plaintiff’s exclusive possession was not interrupted; its use was made less profitable only by its apprehension lest a possibility might ripen into a certainty.

I am of the opinion that the United States is not liable, as for a taking, for loss suffered through the revocation of the commandeering process where the owner had retained possession of the property and the Government had neither accepted, used, nor injured it. Garrison v. City of New York, supra; Bauman v. Ross, 167 U. S. 548, 598-9; Omnia Commercial Co., Inc., v. United States, 261 U. S. 502, 508-9.

In these circumstances I think the facts in the case should be found by the court and reported to the Senate pursuant to Senate Resolution 170, 67th Congress, 1st session, November 9,1921, referring to this court Senate bill 1524, May 3, 1921, for the payment of the claim of plaintiff for “ just compensation and in full settlement and satisfaction of .its damages and loss incurred and suffered by it in complying with U. S. Navy commandeering order N-3255, dated June 18, 1918.” Inasmuch as the bill referred to this court by the Senate Eesolution provided for the payment of damages and loss, as well as just compensation, it may be doubted whether under section 151 of the Judicial Code this court can separate the subject matter of the resolution and allow judgment for just compensation and deny recovery for loss and damage, the latter 'item not being within our general jurisdiction under section 145.

GREEN, Judge,

also dissenting:

I concur with that part of the majority opinion which holds there was in fact a taking of the use of the property from the time that the plaintiff was served with notice that the Government required the use of the premises which it occupied and that possession be delivered on or before December 1,1918. The Government thus took over the control of the premises and plaintiff submitted to its action. Thereafter the situation of the plaintiff was practically the same as a tenant at will who must surrender the possession of the leased premises at any time when demanded.

The language of the bill which has been referred to this court by the action of the Senate raises a strong doubt in my mind as to whether it does not apply to some matters which can not be considered by the Court of Claims. The bill provides for the payment to the plaintiff of $113,554.49 “ as just compensation and in full settlement and satisfaction of its damages and loss incurred and suffered by it in complying with United States Navy Commandeer Order Numbered N-3255, dated June 18, 1918.”

It will be observed that the bill proposes to make this payment not only for “ just compensation,” but for damages and loss incurred and suffered by plaintiff. The majority opinion holds that the plaintiff is entitled to recover just compensation for the value of its lease from the date it surrendered the premises to the end of the term, but properly refused to allow the plaintiff for damages and loss incurred and suffered by it as a result of the order referred to in the Senate bill. This loss and damage as the majority opinion shows, is quite distinct from just compensation and is a subject matter for which this court, as the majority opinion correctly holds, can not award compensation and as to which it can only make a report to the Senate pursuant to the resolution referring the bill. This situation seems to me to prevent a judgment from being rendered and requires a report to be made to the Senate. I prefer, however, to rest my dissent on other grounds. I think that cases such as we have before us are governed by the rule that the party who claims to have sustained damages inflicted by another should use reasonable effort to mitigate the amount thereof. In the case at bar, the commandeering order was revoked before plaintiff began to move out of the premises commandeered, although not until after plaintiff had bought other premises into which it intended to and did move its business. The plaintiff could have retained the premises until the end of its lease and rented the buildings which it had acquired, or it could have moved into the newly acquired quarters and leased the premises which the Government had originally commandeered with the consent of the lessor. The premises which it originally leased are shown to have a high rental value, and I think we are justified in assuming that the premises which it bought had a rental value, although both had been changed or fitted up to meet the requirements of plaintiff’s business. The burden, as I think, was upon plaintiff to show the amount of rental that could be obtained, or that it was unable by reasonable effort to lease either of the two premises in such a manner as to materially reduce the damages which it sustained. There is no evidence on this point and no way of ascertaining what would be just compensation to the plaintiff under the circumstances. I am, therefore, of the opinion that the only action that this court can take in the premises is to make a report pursuant to the Senate resolution.