Case ID: us-ct-cl_57/html/0529-01.html
Source: Caselaw Access Project
Author: {"author": "\n      Hay, Judge,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

JOHN W. PARISH, TRUSTEE (JOHN H. BEXTEN, SUBSTITUTED), v. THE UNITED STATES.
    [No. 34450.
    Decided November 6, 1922.]
    
      On the Proofs.
    
    
      Eminent domain; talcing; national emergency. — Where the Government takes over part of the plant in a private factory for public use, either under the act of March 4, 1917, 39 Stat. 1193, or under eminent domain, during a national emergency, the Government is liable for the reasonable value oí the part taken over as of the time of the taking, and is not liable for the incidental damage to the remainder of the plant.
    
      
      The Reporter's statement of the case:
    
      ■Messrs. Homer S. Ovmmings and Raymond E. Hackett for the plaintiff. Mr. Charles D. Lockwood was on the hriefs.
    
      Mr. T. K. Schnwck, with whom was Mr. Assistant Attorney General Robert H. Lovett, for the defendant.
    The following are the facts of the case as found by the court:
    I. The Brass and Metals Manufacturing Company is a corporation of Kansas City, Missouri, organized under the laws of the State of Delaware in the year 1915, and had an authorized capital stock of $300,000, and was organized for the purpose of engaging in the manufacture of small-arms ammunition.
    The corporation acquired by assignment a contract with the Royal Italian Government, and also acquired certain machinery for the manufacture of small-arms ammunition, for which it paid the sum of $86,000. It also acquired the short shell manufacturing business of one Sherman.
    II. The corporation leased the factory building and site of the Stafford Motor Car Company and installed therein the machinery purchased by it and such machinery of the Sherman plant as was suitable. It constructed a testing range and made necessary additions to the buildings, and by the summer of 1916 the company had a plant which had the capacity of 150,000 cartridges per day. It was ascertained, however, that the company could not comply with its contract with the Italian Government with the equipment and facilities which it then had. And on November 8, 1916, the company entered into an amended and supplemental agreement with the Italian Government, a copy of which agreement, marked “ Exhibit 15,” is attached to the petition and made a part of this finding by reference.
    III. The company on November 15, 1916, induced Mr. C. K. Lassiter and others to take an interest in its management; and at that time the sum of $225,000 was put into the treasury of the company; and this enabled the company to make the contract referred to in Finding II; and with this money the company purchased new machinery and made new improvements in its plant; this new machinery being installed in the plant in December, 1916, and in January and February, 1917. After these dates the company began the production and delivery of cartridges under the amended contract, and on April 1, 1917, had delivered 7,500,000 cartridges, at which time, the company being in default under the contract, the Italian' Government gave notice that it would cancel the contract, and the plant of the company was shut down. The failure of the company to make the deliveries called for was owing to the failure to obtain a sufficient quantity of brass, and to the poor quality of brass which it did obtain. The contract was actually canceled on August 16, 1917.
    IY. The plant of the Brass Manufacturing Company remained closed and inoperative until requisitioned. During that time the plant was kept intact and as an entity; the machinery was all tooled up and ready for immediate operation.
    Y. The United States on December 28, 1917, requisitioned and took over from the plaintiff, John W. Parish, trustee, all of the small-arms cartridge-making machinery, munition-making machinery, and other'special machinery, together with the tools and equipment which were located in the plant of the company and which were owned by John W. Parish, as trustee; and thereafter such machinery was from time to time shipped and distributed by the United States to various plants in the United States.
    VI. A deed of trust was executed on June 12,1917, by the company for the benefit of its creditors in the amount of $330,000. On November 30, 1917, the plant and assets of the company were put up for sale at public auction under' the terms of the said deed of trust. At that sale a bona fide offer of $270,000 was made for the property but was not accepted. On December 1, 1917, and for a short time thereafter, a negotiation was bad by the representatives of the company with responsible parties, who offered the sum of $400,000 for the property, which would have been accepted* but before the offer could be closed the United States took over the property.
    VII. The fair and reasonable market value of the property taken by the United States from the plaintiff on December 28, 1917, was the sum of $255,662.26.
    In the purchase of the special carti'idge-making machinery and the machine tools and equipment, and in tooling up the machinery and making the plant ready' and available for operation, and in putting the plant in the condition it was when taken, the company had expended the sum of $473,-722.60. The fair and reasonable value of the entire plant and its facilities of the plaintiff at the time of the taking was the sum of $500,000. The Government did not take over the plant, but took over certain machinery in the plant, which is set out in plaintiff’s Exhibit 2 and is hereby made a part of this finding by reference.
    VIII. After the property was taken as aforesaid, a board of appraisers, duly constituted and charged with the duty of determining just compensation to the plaintiff for all property taken over by the United States, was appointed by the President of the United States. The plaintiff presented his claim to said board, and on February 25, 1919, said board made its award, finding and awarding to the plaintiff as just compensation for the taking of said property the sum of $158,525.59. Thereafter the plaintiff duly notified the defendant that the amount of compensation, as determined by said board, was not satisfactory to him and rejected said award, and thereafter the plaintiff, on March 15, 1919, accepted 75 per cent of said amount so determined by said board, to wit, the sum of $126,277.40.
    IX. Since the bringing of this suit the plaintiff, John W. Parish, has died, and John H. Bexten has been substituted in his place as trustee.
   Hay, Judge,

delivered the opinion of the court:

This is a suit brought by John W. Parish, trustee, but since the suit was brought the said Parish has died and John H. Bexten has been substituted in his place as trustee.

• The suit is brought for the purpose of obtaining just compensation for the taking of private property.

An award in the amount of $158,525.59 was made by the board of appraisers appointed by the President of the United States, under the statute in such cases made and provided. The award was not satisfactory to the plaintiff, and he accepted 75 per cent thereof, as was permitted by the statute, said 75 per cent being the sum of $126,277.40, and suit is brought in this court for the purpose of having it determined whether he has been awarded just compensation by said board; and if he has not, to have this court determine what sum in addition to what he has received will be just compensation for the value of the property taken.

The findings of fact fully set out the circumstances of the case, and the .court, after a careful consideration of the facts found, has determined that the sum of $255,662.26 is just compensation for the property taken.

The plaintiff, however, contends that the amount of just compensation to which he is entitled should be determined upon the basis of the value of the plant as an entity and not upon the basis of the value of the property actually taken.

It appears from the facts found that the property of the plaintiff was taken while war was being waged between this country and Germany and was taken by virtue of the act of Congress approved March 4, 1917, 39 Stat. 1193, where it is provided:

“ Fourth. To requisition and take over for use or operation by the Government any factory, or any part thereof without taking possession of the entire factory, whether the United States has or has not any contract or agreement with the owner or occupier of such factory.”

The statute further provides that when property is so taken the Government shall make just compensation therefor.

In taking the property of the plaintiff the President was exercising powers conferred upon him by the statute; and if in exercising these powers he injured the property of the plaintiff can it be said that the Government is to be held accountable? In other words, is the just compensation pro- , vided for in the statute to extend beyond the property actually taken? The facts are that the plant was not taken as an entity; only certain parts of it were taken, which was expressly provided for in the statute. Did Congress intend that the Government should pay for the parts not taken, or that the courts in determining just compensation should take into consideration any injury which might be done the plant by the taking of parts of it ? Congress had the power in time of war to impose conditions and to take over industries and to regulate how these things should be done. The Government, in exercising its rights under the statute, can not be required to pay for a whole plant when it only takes a part of it.

If the plaintiff claims under the fifth amendment the facts will not sustain his case. The facts show that the Government took parts of the plant, and as to the parts taken an implied contract arises, and the Government is bound to make just compensation therefor. But there was no taking of the plant as an entity, and to recover for a taking under the fifth amendment it must be upon an implied contract. It is not possible to imply a contract in a case when the property itself was not taken. In this case what was done was done in the exercise of a right which the Government had, and the consequences were only incidental, and no liability was incurred. Natron Soda Co. v. United States, 54 C. Cls. 169; 257 U. S. 138; Miller v. United States, 11 Wall. 268; Hamilton v. Dillin, 21 Wall. 73; Munn v. Illinois, 94 U. S. 113; C. B. & Q. Ry. v. Drainage Commissioners, 200 U. S. 561.

The court, in arriving at the just compensation to which the plaintiff is entitled, has taken into consideration the value of the property taken at the time it was taken, and that value was the value of the machinery set up and ready for operation, and the expense of placing the machinery in con-di'tion for proper work must be taken into account in determining just compensation.

The court is of opinion that the plaintiff is entitled to a judgment for $129,384.86. And it is so ordered.

Grahasi, Judge; Downey, Judge; and Campbell, Chief Justice, concur.