Opinion ID: 340009
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Heading: Interest As a Part of Just Compensation.

Text: 8 Payment of just compensation to one from whom property is taken by eminent domain is required by the Fifth Amendment. United States v. Miller, 317 U.S. 369, 63 S.Ct. 276, 87 L.Ed. 336 (1943); Jacobs v. United States, 290 U.S. 13, 54 S.Ct. 26, 78 L.Ed. 142 (1933); Seaboard Air Line Ry. Co. v. United States, 261 U.S. 299, 43 S.Ct. 354, 67 L.Ed. 664 (1923); United States v. Rogers, 255 U.S. 163, 41 S.Ct. 281, 65 L.Ed. 566 (1921); cf. United States v. Thayer-West Point Hotel, Inc., 329 U.S. 585, 67 S.Ct. 398, 91 L.Ed. 521 (1947). Just compensation in eminent domain cases consists of the full equivalent of the value of the (property) . . . paid contemporaneously with the taking. Phelps v. United States, 274 U.S. 341, 47 S.Ct. 611, 71 L.Ed. 1083 (1927). This full and perfect equivalent means that the owner shall be put in as good position pecuniarily as he would have been if his property had not been taken. Seaboard Air Line Ry. Co. v. United States, supra; United States v. Miller, supra. This standard requires that a court ascertain the extra amounts necessary in order that the owner shall not suffer loss and shall have the 'just compensation' to which he is entitled. Seaboard Air Line Ry. Co. v. United States, supra. Accordingly, an extra amount must be paid when the taking precedes the payment of compensation; (i)nterest at a proper rate is a good measure. Id. This is true because he who pays $1.00 tomorrow to discharge a debt of $1.00 due and payable today, pays less than he owes. A zero rate of interest, for economic purposes, does not exist. 9 These principles are applicable to takings pursuant to the Declaration of Taking Act. The purpose of the Act is to provide a means by which the United States can acquire quickly a fee simple absolute title to land taken for the use of the United States. 40 U.S.C. § 258a (1970). 2 As a consequence, we treat the Act as one authorizing a particular means by which the power of eminent domain can be exercised. 3 10 Takings under the Act do not involve the payment of interest on the amount deposited in the court as an estimate by the acquiring party to be just compensation. The payment of such interest is specifically disallowed. This in no way contravenes the Fifth Amendment. The amount deposited is on account of the just compensation and is available to the parties in interest. Id. With respect to this amount there is no delay in payment for which interest would compensate. 11 This is not true with respect to any deficiency. Just compensation requires that the owners of the land be compensated for the delay in the deposit of this amount. The appellant argues that the principles of just compensation are not applicable because the failure of the proper official to deposit the entire amount of just compensation is akin to an appropriation of property by government officials without authority of the Congress. See United States v. Goltra, 312 U.S. 203, 207, 61 S.Ct. 487, 85 L.Ed. 776 passim (1941); Seaboard Air Line Ry. Co. v. United States, 261 U.S. 299, 305, 43 S.Ct. 354, 67 L.Ed. 664 (1923). Claims arising from such unauthorized appropriations are at most tort claims against the United States, not rights protected by the Fifth Amendment. As such, the argument goes, the owner from whom land was taken is entitled only to that interest provided by the Act, viz., 6 percent. 12 We reject this construction of the Act. To accept it would impose on good faith estimates of just compensation by proper officials, which are determined to be inadequate, a characterization undeserved factually. In addition, there is nothing in the language of the Act to suggest that Congress regarded an official who employed an estimate more prudent than subsequent events justified as acting beyond the scope of his authority. Finally, the appellant's view of the statute mingles tort and eminent domain notions in an awkward manner not likely to have been intended by Congress. For these reasons, we cannot accept the view that a claim of interest with respect to a deficiency stands on the same footing as does a claim for consequential damages, such as future loss of profits, certain moving expenses, etc. Cf. United States v. Miller, 317 U.S. 369, 376, 63 S.Ct. 276, 87 L.Ed. 336 (1943); United States v. General Motors Corp., 323 U.S. 373, 379, 65 S.Ct. 357, 89 L.Ed. 311 (1945). 13 These observations lead us to conclude that the 6 percent figure employed by Congress in the Declaration of Taking Act cannot be viewed as a ceiling on the rate of interest allowable in computing just compensation with respect to a deficiency. It will, of course, operate as a floor. No lesser rate than 6 percent is consistent with the intent of Congress; a rate no greater than 6 percent in some instances will contravene the Fifth Amendment. 14