Case ID: us-ct-cl_64/html/0607-01.html
Source: Caselaw Access Project
Author: {"author": "Campbell, Chief Justice,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

ADAM SCHUMANN v. THE UNITED STATES
    [No. D-363.
    Decided February 20, 1928]
    
      On the Proofs
    
    
      Eminent domain; act of June 15, 19J7; authority to taJce; district supervisor of Emergency Fleet Corporation. — A district supervisor of the Emergency Fleet Corporation did not have authority, under the act of June 15, 1917, or orders issued thereunder, to act for the corporation in the requisitioning of property. Notice on plaintiff by that officer that it would he necessary “ to take over as a war measure ” the premises occupied by him and requesting him to vacate, did not constitute a taking for which he was entitled to just compensation.
    
      The Reporter’s statement of the case:
    
      Mr. William E. Leahy for the plaintiff. Mr. Lucian H. Vandoren was on the brief.
    
      Mr. W. F. Noms, with whom was Mr. Assistant Attorney General Herman J. Galloway, for the defendant. Mr. Howard W. Ameli was on the brief.
    The court made special findings of fact, as follows:
    I. Plaintiff is a resident of the Borough of Brooklyn, city of New York, State of New York, and a citizen of the -United States, and has at all t.imes borne true allegiance to the Government of tbe United States, and has not in any way voluntarily aided, abetted, or given encouragement to rebellion against the said Government. He is the sole owner of the claim sued upon and has never assigned the same.
    II. On June 28, 1918, plaintiff was engaged in the business of selling natural ice at wholesale and retail in the Borough of Brooklyn, N. Y., under the firm name and style of Greater New York Ice Co. He had been ,in this business continuously since 1891 and at Twenty-fourth Street since 1906.
    III. In the conduct of said naturaf-ice business plaintiff found it necessary to maintain—
    
      (a) On the Hudson River at New Baltimore, Greene County, N. Y., ice houses for the storage of the natural ice as it was harvested.
    (5) Also storage facilities, stables, machinery, pier space, etc., in Brooklyn, at the foot of Twenty-fourth Street, at which point the ice harvested and stored at New Baltimore would be delivered for sale and delivery to his customers.
    IY. The properties at New Baltimore and Twenty-fourth Street, Brooklyn, constituted parts of the one general business of selling natural ice, the storage facilities at New Baltimore being maintained for the purpose of storing ice when harvested in the winter months for later sale and delivery through his Twenty-fourth Street property, in Brooklyn. Without his property-at New Baltimore it would have been more expensive to have conducted his business, and without his Brooklyn property it would have been more expensive to make deliveries of the natural ice harvested at New Baltimore.
    Y. The space occupied by plaintiff on the pier at the foot of Twenty-fourth Street, Brooklyn, was held by him under lease dated the 1st day of October, 1915, for the term of three years and six months commencing on the 1st day of November, 1915, at a yearly rental of $420, and another lease, which was dated the 1st day. of May, 1916, for the term of three years commencing on the date of said lease, at a yearly rental of $1,080.
    
      VI. The real estate situated at New Baltimore was held by plaintiff under lease dated June 29, 1896, made by James K. Bronk and Caroline Bronk, his wife, to Charles Van Hoesen and John F. Lalor, which said lease by assignment had come to plaintiff in January, 1912. This lease was for a term of 20 years from June 30, 1896, with a right to a renewal thereof for a further term of 20 years.
    VII. Plaintiff, subsequent to the leasing of property at the foot of Twenty-fourth Street, erected and maintained thereon certain buildings, to wit, an ice-weighing office, a bookkeeping office, a garage, stable, and wagon shed, and installed other facilities. On June 28, 1918, plaintiff was operating a business on said pier equipped to furnish ice to fishing boats, peddlers, and independent dealers, and that enabled him to carry on a large reta.il and wholesale trade outside of the pier. He handled between forty and fifty thousand tons of natural ice per year, on an average, with an average profit thereon of $1 per ton.
    VIII. The property at the foot of Twenty-fourth Street was located at a point to which vessels could make deliveries of ice from New Baltimore.
    IX. During the period from June 28, 1918, to the date of the vacating of the pier at the foot of Twenty-fourth Street by the plaintiff, and for a period of time thereafter, there were no other properties readily available to him which he could buy or lease for receiving deliveries of ice from New Baltimore.
    X. The Todd Shipyards Corporation acquired title to the pier at the foot of Twenty-fourth Street, Brooklyn, in 1915 or 1916. At that time, and subsequent, there were several tenants on the pier, including plaintiff, who were occupying the property under leases. It owned a shipyard known as the Tebo Yacht Basin plant adjacent to the property of the Twenty-fourth Street pier. The company operating the Tebo Yacht Basin plant was a subsidiary of the Todd Shipyards Corporation.
    XT. In 191T the Todd Shipyards Corporation entered into a contract with the Navy Department for the construction of 10 mine sweepers, and also entered into a contract with
    
      the United States Shipping Board 'Emergency Fleet Corporation for the engining and fitting up of 20 wooden hulls of that corporation at the Tebo Yacht Basin.
    The Emergency Fleet Corporation, under the terms of the contract, delivered engines and equipment for particular wooden hulls and such material and equipment was placed on the Twenty-fourth Street pier, which was owned by said Todd Shipyards Corporation.
    XII. Some of the tenants besides plaintiff were in the ice business and their customers came on the pioperty with wagons for the purpose of securing ice.
    The representatives of the Todd Shipyards Corporation learned that parts of the engines were missing from time to time, and that the material for these engines was being scattered all over said pier.
    The Todd Shipyards Corporation was concerned with the loss of said material and also desired more space. It conferred with the tenants and also with Mr. Hudson, district supervisor of the Emergency Fleet Corporation, with the view of getting said tenants off the property and securing the space occupied by them.
    XIII. On June 26, 1918, a letter was sent by the Todd Shipyards Corporation to the supervisor of installation of the Emergency Fleet Corporation, stating that it had served notice on two of the tenants to vacate on a month’s notice, but that the Standard Building Supply Co. and A. Schumann (Greater New York Ice Co.) had leases “that do not expire until January 1, 1919, and May 1, 1919, respectively,” and had made no effort to get them to give up their leases, but on account of the nature of the shipyard’s work it asked some suggestions from the supervisor along that line, as it desired all the privacy possible at that plant. Hudson then wrote the following letter:
    ÜNited States Shipping BoaRd
    EMERGENCY FLEET CORPORATION,
    Second District,
    
      115 Broadway, New York City, Jv/ne 88, 1918. Mr. A. Schumann,
    
      Foot Twenty-fourth Street, Brooklyn, N. Y.
    
    Dear Sir: We are sending to Todd Shipyards Corporation the machinery equipment for some 20 hulls. Their work for the Emergency Fleet Corporation covers the installation of this equipment in the hulls.
    This is urgent war work and there is insufficient storage capacity. It will be necessary, therefore, to take over as a war measure the building you are now occupying on the Twenty-fourth Street dock. You will therefore please arrange to vacate the premises at the earliest possible date. You can take up, through this office or directly with the Todd Company, reimbursement for the expense to which you are put.
    Kindly acknowledge receipt of this letter and state when you will vacate so that we can arrange to send additional war material.
    Yery truly yours,
    (Sgd.) W. G. HtjdsoN,
    
      District Supervisor.
    
    XIV. The principal duties of Hudson, the district supervisor, were to expedite the construction of ships and cooperate with the shipbuilders. He was not given authority to commandeer, requisition, or take personal or real property. There was no resolution by the board of directors of the United States Shipping Board Emergency Fleet Corporation nor was there any order from its general manager directing the requisition of plaintiff’s property on said East Twenty-fourth Street pier. As authorized by the act of June 15, 191?, the President, on July 11, 191?, issued his Executive order delegating certain authority, as follows:
    “ I do hereby direct that, the United States Shipping Board Emergency Fleet Corporation shall have and exercise all power and authority vested in me in said section of said act in so far as applicable to and in furtherance of the construction of vessels, the purchase or requisitioning of vessels in process of construction, whether oh the ways or already launched, or of contract^ for the construction of such vessels and the completion thereof, and all power and authority applicable to and in furtherance of the production, purchase, and requisitioning of materials for ship construction.”
    On the 2?th day of July, 191?, the trustees of the United States Shipping Board Emergency Fleet Corporation conferred upon the general manager of the corporation the authority and powers vested in the corporation by virtue of the statute and Executive order aforesaid, and on, to wit, December 13,191?, the United States Shipping Board Emergency Fleet Corporation directed that the power vested in the general manager by the resolution of July 27, 1917, “be, and it is hereby, vested in the President of this corporation.”
    XY. On or about July 1, 1918, one representative of the Todd Shipyard^ Corporation, had a conference with plaintiff, at which plaintiff stated that if the Todd Shipyards Corporation would permit him to stay there until his ice-business season was over that summer he would vacate — and plaintiff did vacate — in October or November, 1918. Bonnett told plaintiff that the Todd Shipyards Corporation desired the space and also wanted to keep people from coming in and taking parts of the engines, and it would be necessary to install a pass system in order to keep unauthorized persons off the. dock. A pass system, acquiesced in by plaintiff, was installed and the passes were signed by the Tebo Yacht Basin, a subsidiary of the Todd Shipyards Corporation. Plaintiff paid no rent to the Todd Co. after November 1, 1918.
    By reason of the installation of said pass system on pier and the dock regulations as hereinbefore set forth, it became increasingly difficult for plaintiff to carry on his business from said Twenty-fourth Street pier.
    XYI. Plaintiff, immediately upon the said letter, had his superintendent interview District Supervisor Hudson. Shortly thereafter the Todd Shipyards Corporation began to occupy a great part of said pier by storing thereon machinery, materials, and equipment for the construction of certain hulls; fenced off the entrance to said dock and pier; and posted watchmen thereon, who admitted only such persons as held passes issued by said Todd Corporation; took over the regulation and control of said pier and the access of fishing boats and vessels to same as well as the entry thereto of independent wagons and plaintiff’s wagons used in the distribution of ice to customers; required plaintiff to permit another ice company, to wit, the Knickerbocker Ice Co., to receive deliveries at plaintiff’s dock and to allow the boats of the said Knickerbocker Ice Co. to discharge and land ice at this dock.
    XVII. The buildings Ids ice business at the Twenty-fourth Street site were of the reasonable value of $5,000 in tbe summer of 1918, exclusive of a stable which had cost $2,500 to erect and which was torn down and sold for $200. Because of the interruptions in the delivery of natural ice from the New Baltimore supply, plaintiff had to purchase ice from others at retail prices for delivery to customers with whom he was under contract. He had 7,000 tons of ice at New Baltimore that could not be delivered on the pier, and he purchased about 7,000 tons from others. If he could have delivered his own ice instead of the ice purchased as stated, he would have made an additional profit of $10,500. The inability ,to make greater deliveries from New Baltimore, caused by the restrictions and lessening of pier space, prevented sales to retailers and peddlers who in the past had been used to getting ice from plaintiff.
    Plaintiff purchased the New Baltimore property, including leasehold, for $30,000, which was a reasonable price therefor. He made improvements during his ownership at the reasonable cost of $25,000. After leaving the Twenty-fourth Street pier site, where his ice from New Baltimore had been delivered, he sold the latter property for $5,000. It had a capacity of approximately 35,000 tons of ice. There were stored at that place 3,500 tons of ice not used when plaintiff left the Twenty-fourth Street site. Its reasonable value in the summer of 1918 was $5,000.
    XVIII. Plaintiff heretofore, to wit, on the 30th of June, 1923, filed a claim with the United States Shipping Board Emergency Fleet Corporation for just compensation for the taking over by the United States of plaintiff’s Twenty-fourth Street property and damages resulting therefrom, which claim was, by resolution of the United States Shipping Board passed on the 16th of April, 1924, disallowed in toto.
    
    The court decided that plaintiff was not entitled to recover.
   Campbell, Chief Justice,

delivered the .opinion of the court:

This suit seeks to recover compensation for the requisition or taking of certain property by the United States and for damages incident to such taking. The facts show that for a number of years prior to June 28, 1918, the plaintiff was in possession, as lessée, of certain real estate or space on the pier at the foot of Twenty-fourth Street in the Borough of Brooklyn, N. Y., and of other real estate at New Baltimore on the Hudson River ,in Greene County, N. Y. The plaintiff’s business was that of selling natural ice at wholesale and retail in New York and had been conducted for many years. The ice was harvested and stored in ice houses maintained at New Baltimore and thence transported to the property in Brooklyn, where were maintained storage facilities and conveniences for its sale and delivery to customers. The properties and facilities at New Baltimore and at Brooklyn constituted parts of the one general business. The requisition or taking by the Government is claimed to have been under and by virtue of the act of June 15, 1917, 40 Stat. 182, and the Executive order of July 11, 1917, delegating to the United States Shipping Board Emergency Fleet Corporation the powers granted to the President by the act. To sustain the claim of a requisition by this agency, the plaintiff shows that the Todd Shipyards Corporation acquired title to the pier at the foot of Twenty-fourth Street in 1915 or 1916. At the time, and subsequent, there were several tenants on the pier. This corporation owned a shipyard known as the Tebo Yacht Basin plant, adjacent to the property of the Twenty-fourth Street pier, that was operated by a subsidiary of the Todd Shipyards Corporation. This fast-named corporation ,in 1917 entered into a contract with the Navy Department for the construction of 10 mine sweepers and also into a conti'act with the United States Shipping Board Emergency Fleet Corporation for certain work on 20 wooden hulls of that corporation at the Tebo Yacht Basin. Under the terms of this contract the Emergency Fleet Corporation delivered engines and equipment for the wooden hulls, and such material and equipment were placed on the Twenty-fourth Street pier, owned by the Todd Shipyards Corporation. Representatives of the Todd Corporation having learned that parts of these engines were missing from time to time and that the materials were being scattered, and also finding the need of more space, conferred with the various tenants and with the district supervisor of the Emergency Fleet Corporation with the view of getting these tenants to move and thus secure the desired space for itself. On June 26, 1918, the Todd Shipyards Corporation, by its president, wrote to the supervisor of installation of the Emergency Fleet Corporation, located ,in New York City, stating that the Todd Corporation had served notice on the several tenants to vacate upon a month’s notice, but that Schumann (plaintiff) and another had leases that did not exp,ire for some months; that no effort had been made to get these tenants to give up their leases, and adding that on account of the nature of the work being done, the company “ desired all the privacy possible at its plant.” Following th,is letter was one under date of June 28, 1918, addressed to plaintiff by W. Gr. Hudson, district supervisor for the United States Shipping Board Emergency Fleet Corporation, second district, which informed plaintiff that there was being sent to the Todd Shipyards Corporation machinery and equipment for some 20 hulls and that their work for the Emergency Fleet Corporation covered its installation. The letter added: “ This is urgent war work and there is insufficient storage capacity. It will be necessary, therefore, to take over as a war measure the building you are now occupying on the Twenty-fourth Street dock. You wifi therefore please arrange to vacate the premises at the earliest possible date. You can take up through this office or directly with' the Todd Co. reimbursement for the expense to which you are put.” This letter furnishes the basis of the claim that plaintiff’s property was requisitioned. A few days after the letter was written a representative of the Todd Co. conferred with plaintiff, during which the plaintiff stated that ,if the Todd Co. would permit him to stay until the close of the ice-business season he would vacate and he did accordingly vacate in October or November, 1918. The plaintiff’s leases were on property acquired by the Todd Shipyards Corporation after the leases were made; Their terms expired in May, 1919.

The first question that arises is whether there was a requisition or taking by the United States, or any authorized agency, of plaintiff’s property. The act of June 15, 1917, authorized the President “(d) To requisition and take over for use or operation by the United States any plant or any part thereof without taking possession of the entire plant, whether the United States has or has not any contract or agreement with the owner or occupier of such plant.” This provision is enlarged by the act of November 4,1918, 40 Stat. 1022, but while the taking complained of antedates this statute, the latter may serve to indicate the intent of the statute under consideration. The later act authorizes the acquisition of plants, as wel) as the title to or use of land or an interest therein. There were other acts under which property could be requisitioned and expropriated by the Government, but the present case is confined to the act mentioned because it is only under that act that the action of the United States Shipping Board Emergency Fleet Corporation can be made the basis of this suit. It was the authority and power vested by this act that the President exercised through the organization just mentioned. It may be stated at this point that many of the items of the claim can not be allowed even if there was a taking. The Government did not take, nor was it authorized to take, plaintiff’s ice facilities at New Baltimore or its business anywhere. No recovery can be had as for a takjng of the business. “ If the business was destroyed the destruction was an unintended incident of the taking of land.” Mitchell's case, 267 U. S. 341, 345. Consequential damages are not recoverable. Bothwell case, 254 U. S. 231; Mitchell case, supra; Gulf Refining Co. case, 58 C. Cls. 559. But was there “ a requisition or taking over for use or operation by the United States of any plant ” or any part thereof or a taking of any property of plaintiff? All that appears in evidence is that a district supervisor of the Emergency Fleet Corporation wrote the letter to plaintiff above quoted. It is thoroughly established that “ in order that the Government shall be liable it must appear that the officer who has physically taken possession of the property was duly authorized so to do, either directly by Congress or by the official upon whom Congress conferred the power.” United States v. North American Go., 253 U. S. 330, 333. In other words, it must be shown in this case that the President or his selected agency, the United' States Shipping Board Emergency Fleet Corporation, or its duly constituted agent acting for it, requisitioned and took over plaintiff’s property. The Mr. Hudson, who wrote the letter, was not vested with authority to act for the Fleet Corporation in the matter of requisitioning property such as that corporation, under its delegated powers, might requisition. It had conferred its power in that regard upon its general manager or president, but not upon its district supervisors. The latter had defined and limited duties, principally the expediting of the construction of ships and cooperating with shipbuilders to accomplish this end. Hudson wrote to plaintiff because the Todd Co. wanted the space. He told Todd that he had no authority to remove the tenants and also that plaintiff was free to disregard the letter. And while his action in writing the letter is not to be commended in view of the limitation, known to himself, upon his authority, it is yet to be said that his action was voluntary and was not that of the United States or of the Emergency Fleet Corporation as the agent of the United States. The plaintiff did not act as though his property was being taken. He dealt with the Todd Corporation and agreed to give up his lease at the end of the summer ice season. He did give it up and paid no rent afterwards. His lease would have expired in any event before the next summer. In no sense could the Todd Shipyards Corporation be regarded as an agency of the Government. It had contracts to do work. The United States and no one for the Government took over or expropriated plaintiff’s property. The petition should be dismissed. And it is so ordered.

Moss, Judge; Geaham, Judge; and Booth, Judge, concur.