Case Name: Southern Railway Company v. Consumers' Fuel Company
Court: Kentucky Court of Appeals
Jurisdiction: Kentucky
Decision Date: 1924-05-27
Citations: 203 Ky. 441
Docket Number: 
Parties: Southern Railway Company v. Consumers’ Fuel Company.
Judges: Whole court sitting.
Reporter: Kentucky Reports
Volume: 203
Pages: 441–446

Head Matter:
Southern Railway Company v. Consumers’ Fuel Company.
(Decided May 27, 1924.)
Appeal from Bell Circuit Court.
1. Eminent Domain — No Emergency Ever Supersedes Provisions of Constitution Requiring Just Compensation, — -No emergency, however great, ever supersedes provisions of Const. U. S. Amend. 5, requiring just compensation, and railroad confiscating coal under Lever Act, section 25 (U. S. Comp. Stats: 1918, U. S. Comp. Stats. Ann. Supp. 1919, section 3115%q), must pay market value, and not less price fixed by order of President, and such statute is unconstitutional to that extent.
2. Constitutional Law — Value of Coal Confiscated by Railroad Must be Determined by Courts, and Not Executive Department. — Value of coal confiscated by railroad under Lever Act, section 25 (U. S. Comp. Stats. 1918, U. S. Comp. Stats. Ann. Supp. 1919, section 3115%q), must be ascertained by judicial proceedings, and cannot be determined by Executive Department.
3. Carriers — Court Held to Properly Admit Evidence as to Market for Confiscated Coal for Export Purposes. — In action against railroad which confiscated coal under Lever Act, section 25 (U. S. Comp. Stats. 1918, U. S. Comp. Stats. Ann. Supp. 1919, section 3115%q), intended for export, court properly admitted evidence as to market for coal for export‘purposes at place from which coal was shipped.
4. Trial — -Correction, of Instruction and Verdict. — When verdict was reported, and it was discovered mistake had been made in instruction with reference to date from which plaintiff, was entitled to interest on judgment, court properly changed instruction, and had ' jury change verdict.
5. Carriers — Railroad Confiscating Coal Liable for Interest from Date of Demand. — -Exporter of coal was entitled to recover interest from railroad confiscating coal, but refusing to pay market value, in view of Lever Act, section 25 (U S. Comp. Stats. 1918, IT. S. Comp. Stats. Ann. Supp. 1919, section 3115%a), from date of demand.
HUMPHREY, CRAWFORD & MIDDLETON and WILLIAM LOW for appellant.
T. G. ANDERSON for appellee. .

Opinion:
Opinion op the Court by
Sandidge, Commissioner
Affirming.
The appellee, Consumers' Fuel Company, is a Kentucky corporation engaged in the coal brokerage- business at Middlesboro, Kentucky. In the month of March, 1920, it purchased from various mines in the Middlesboro district 46 carloads of coal which it had shipped over the lines of appellant, Southern Railway Company, consigned to ports on the Atlantic seaboard at Charleston, South Carolina, and Savannah, Georgia, as it alleges, for export. The coal in question was confiscated by appellant. Appellee sued to recover the value of the coal, which it alleged was worth $7,801.51, admitting receipt of $5,765.-10, received, however, under stipulation preserving the rights of the parties as to the controversy, and asking-judgment for the balance of $2,036.41. Appellant sought to justify the taking- under the provisions of section 25 of the act of Congress, approved August 10, 1917, commonly known as the Lever Act, and the executive orders issued by the President under authority of same, and claimed that the $5,765.10 paid by'it to appellee settled .for the coal in question at the prices fixed by executive orders issued under authority of the act above. Appellee claimed that the -act above, in so far as Congress and the executive undertook to fix the rate at which coal might be paid for when confiscated under the circumstances, is in contravention of the Fifth Amendment of the Federal Constitution and hence void, and that it was entitled to recover the market value of the coal at the time and place taken. The above in brief recites the issues made by the pleadings. The court below by instructions directed the jury in substance, to find for appellee such a sum in damages as it had suffered by the conversion of the coal in question, fixing the measure of damages as the fair market value of the coal at the time and place taken. A peremptory instruction was offered by appellant to find for it, which the court overruled. The jury found for appellee the amount sued for, to-wit, $2,036.41, and judgment was entered thereon in favor of appellee. Appellant filed its motion and grounds for a new trial in due time, which were overruled, and this appeal has been prosecuted.
As presented by the appeal, its settlement turns upon a determination of the question as to the constitutionality of section 25 of the Lever Act and the executive orders issued thereunder, in so far as they undertook to fix the price which a railroad company should pay for coal confiscated by it under authority from them. It is urged by appellant that the emergency arising out of the war with Germany authorized and validated the legislation with reference to the coal industry of the United States and its price-fixing features as provided for in the act above. Appellee contends that that section of the Lever Act is violative of the Fifth Amendment and that the state of war and the emergency growing out of same did not and could not supersede the provisions of the Fifth Amendment to the Federal Constitution.
In so far as involved by this appeal, a number of cases have recently been before the United States Supreme Court involving the same question. In United States v. Cohen Grocery Company, 255 U. S. 81, 65 L. Ed. 516, that court said:
"We are of opinion that the court below was clearly right in ruling that the decisions of this court indisputably establish that the mero existence of a state of war could not suspend or change the operation upon the power of Congress of the guaranties and limitations of the Fifth and Sixth Amendments as to questions such as we are here passing' upon. Ex Parte Milligan, 4 Wall. 2, 121-127, 18 L. Ed. 281, 295-297; Monongahela Nav. Co. v. United States, 148 U. S. 312, 336, 37 L. Ed. 463, 471, 13 Sup. Ct. Rep. 622; United States v. Joint Traffic As., 171 U. S. 505, 571, 43 L. Ed. 259, 288, 19 Sup. Ct. Rep. 25; McCray v. United States, 195 U. S. 27, 61, 49 L. Ed, 78, 97, 24 Sup. Ct. Rep. 769, 1 Ann. Cas. 561; United States v. Cress, 243 U. S. 316, 326, 61 L. Ed. 746, 752, 37 Sup. Ct. Rep. 380; Hamilton v. Kentucky Distilleries & Warehouse Co., 251 U. S. 146, 156, 64 L. Ed. 194, 199, 40 Sup. Ct. Rep. 106. It follows that, in testing' the operation of the Constitution upon the subject involved, the question of the existence or nonexistence of a state of war becomes negligible and we put it out of view."
In United States v. New River Collieries, 262 U. S. 342, a case in which the New Eiver Collieries had sued the United States to recover the value of 60,000 tons of coal requisitioned from it under the provisions of section 10 of the Lever Act, judgment was given the company in accordance with the verdict of the jury fixing the prices in excess of those allowed by the President. We quote the following from that opinion as being conclusive of the question presented by this appeal:
' ' Section 10 of the Lever Act, in obedience to the Fifth Amendment, provides for just compensation. The war or the conditions which followed it did not suspend or affect these provisions. United States v. Cohen Grocery Co., 255 U. S. 81, 88. The owner was entitled to the full money equivalent of the property taken, and thereby to be put in as good position pecuniarily as it would have occupied if its property had not been taken. Seaboard Air Line Ry. Co. v. United States, 261 U. S. 299, and cases cited. The ascertainment of compensation is a judicial function, and no power exists in any other department of the government to declare what the compensation shall be or to prescribe any binding rule in that regard. Monongahela Navigation Co. v. United States, 148 U. S. 312, 327. Where private property is taken for public use, and there is a market price prevailing at the time and place of the taking, that price is just compensation. Vogelstein & Co. v. United States, decided this day, ante, 337; United States v. Chandler-Dunbar Water Power Co., 229 U. S. 53, 80, 81; Boom Co. v. Patterson, 98 U. S. 403, 407. More would be unjust to the United States and less would deny the owner what he is entitled to."
The authorities seem to be unanimous in holding that the emergency of war may justify a summary taking of private property for public use; but that no emergency, however great, ever supersedes the provisions of the Fifth Amendment requiring that just compensation must be paid to its owners when so taken. No case has ever upheld an attempt on the part of the legislative or executive departments of the government to fix the rate at which compensation shall be paid for or the value of property so taken. It has been uniformly held that the question of just compensation for private property taken for public uses in any emergency and under any circumstances is one for judicial ascertainment alone. Hence, we conclude that section 25 of the act of Congress, supra, and the executive orders issued under its authority, in so far as they undertook to fix the rate at which a railroad company might pay for coal confiscated by it, are violative of the Fifth Amendment and void; and that for coal confiscated under the act above and executive orders issued thereunder, a railroad company is liable to its owner for its market price, to be ascertained by judicial proceeding.
In the case now under consideration, appellee established by proof the allegations of its petition as to the quantity and weight of the coal taken by appellant. It established that there was at Middlesboro, Kentucky, from which all this coal was shipped, an export market for coal. It established that the value of the coal sought to be recovered by the petition was at the then prevailing market price for export coal at that place. It established that it bought this coal from the mines and had it consigned to seaports on the Atlantic coast for export purposes, and that it had this coal sold for export trade. There was no testimony to the contrary in the record. As said in United States v. New River Collieries above: "The owner was entitled to the full money equivalent of the property taken, and thereby to be put in as good position pecuniarily as it would have occupied if its property had not been taken." The court below properly admitted the evidence as to the market for coal for export purposes at the place from which this coal was shipped, and properly instructed the jury to find for plaintiff the value of the coal converted by defendant at its fair market value.
In the motion and grounds for a new trial, appellant complained of the action of the trial court in changing the instruction given with reference to the date from which the judgment should draw interest and having the jury change its verdict in conformity thereto after the verdict had been reported. When the verdict was reported by the jury, it was discovered that a mistake had been made in the instruction with reference to the date from which, plaintiff was entitled to have interest on the judgment in the event the jury found for it. The instruction given authorized interest from April 5, 1921, instead of 1920, as it should have been. When this mistake was called to the attention of the court, and before the jury had been discharged, the correction was made and the verdict of the jury changed in conformity with the changed instruction.
We perceive no error in this, as the appellee was entitled to interest from the date demand was made of appellant for the amount due it. There is no controversy about. April 5,1920, being the date appellee demanded of appellant the additional sum of $2,036.41. The changing of the date in the instruction and the change of the verdict accordingly to provide'for interest from the correct date in nowise prejudiced the rights of defendant. The real question to be submitted to and decided by the jury was the value of the coal taken. The jury's determination of the real issue submitted to it in favor of plaintiff entitled it to interest from the date of demand, and the change in the instruction and in the verdict of the jury, conforming to the instruction, in nowise prejudiced the rights of defendant.
For the foregoing reasons, the judgment in this case is affirmed.
Whole court sitting.