Document: 338 U.S. 1 69 S.Ct. 1434 93 L.Ed. 1765 KIMBALL LAUNDRY CO.v.UNITED STATES. No. 63. Argued Dec. 7, 8, 1948. Decided June 27, 1949. [Syllabus from pages 1-3 intentionally omitted] Mr. William J. Hotz, Omaha, Neb., for petitioner. George T. Washington, Asst. Sol. Gen., D.C., respondent. Justice FRANKFURTER delivered the opinion of Court. On November 21, 1942, United States filed a petition1 in District Court Nebraska to condemn plant Kimball Laundry Company Nebraska, use by Army term initially expiring 30, 1943, and be extended year at election Secretary War. The granted immediate possession facilities company, except delivery equipment, requested period. was subsequently several times. last year's extension end on 1946, but property finally returned March 23, 1946. 2 is family corporation principal stockholders which are three brothers who also its officers. Laundry's business has been established many years; large well equipped with modern machinery. After took over plant, Quartermaster Corps ran it as laundry personnel Seventh Service Command. Most 180 employees were retained, one stayed operating manager. Having no other means serving customers suspended duration Army's occupancy. 3 19, board appraisers appointed Court, accordance law, reported that 'the just compensation value premises taken America sum $74,940 per annum * *.' made award damages loss patrons they recognized probable because time amount could not appraised. Government both appealed appraisers' award, question tried jury awarded an annual rental $70,000—a total $252,000 whole term—and $45,776.03 damage machinery beyond ordinary wear tear. intended cover taxes, insurance, normal depreciation, return physical assets. Interest rate 6 cent added 22, day possession, due period between date each thereafter beginning until paid. adjudged run verdict, since had then returned. 4 Appeals Eighth Circuit assigning numerous errors admission exclusion testimony instructions jury. affirmed 8 Cir., 166 F.2d 856, we petition certiorari, 335 807, raised novel serious questions determining what 'just compensation' under Fifth Amendment. 5 These resolved familiar formulas available conventional situations gave occasion their adoption. As Brandeis observed, 'V lue word meanings.' Southwestern Bell Telephone Co. v. Public Comm., 262 276, 310, 43 544, 554, 67 981, 31 A.L.R. 807. For purposes Amendment, course, only 'value' need considered attached 'property,'2 approaches step problem definition. springs subjective needs attitudes; owner may therefore differ widely taker. things, however, have general demand gives them transferable another. opposed such personal variant standards particular whose taken, this external validity makes fair measure public obligation compensate incurred result taking his use. In view, liability all condemnation common good, nontransferable values deriving unique or idiosyncratic attachment it, like exercise police power properly treated part burden citizenship. See Omnia Commercial States, 261 502, 508—509, 437, 438, 773. Because gain taker, hand, wholly unrelated deprivation imposed upon owner, must berejected requite deprivation. McGovern New York, 229 363, 33 876, 57 1228, 46 L.R.A.,N.S., 391; ex rel. T.V.A. Powelson, 319 266, 63 1047, 87 1390. compensable therefore, capable transfer thus exchange some equivalent. Its But brought about eminent domain voluntary exchange, can determined guess, informed possible, equivalent would probably place. If exchanges similar frequent, inference strong arrived haggling market offered accepted, 'market price' becomes so important standard reference.3 when kind seldom exchanged, price,' recourse ascertaining value, including even indicative potential owners enjoying same rights. Cf. Old South Association Boston, 212 Mass. 299, 99 N.E. 235. considerations special relevance where 'property' 'taken' fee indeterminate 7 Approaching temporary petitioner's land, believe correct. Petitioner insists, should applied difference return. known outset temporary, determination occupancy approached supposition free bargaining petitioner hypothetical lessee interest place usual framework negotiations. We agree lower courts, proper obtained, held two recent cases dealing takings. General Motors Corp., 323 373, 65 357, 89 311, 156 390; Petty Motor Co., 327 372, 66 596, 90 729. Indeed, if measure, there might frequently receive whatever decreased during taker's courts below equipment excess tear, having adjusted include allowance depreciation. does object think appropriate point out find justified theory indemnity payable lessee, though fixed advance rent determination. 9 objections sufficiency evidence support amounts Suffice say these awards adequately supported. 10 At core claim denied contention included diminution destruction 'trade routes.' routes' serves designation lists built up solicitation years continued hold patronage. 11 trial prove trade routes expert witness based gross receipts attributable class customers, officers show disappeared one-half plant.4 It further cost building customer lists, capitalized charged expense, losses after resumption operations while being rebuilt. attempted introduce net income eighteen preceding taking, dividends paid, ratio officers' salaries capital stock surplus, shed additional light going business. court rejected offers bearing 'fair taken' instructed consider because, opinio , 'The did take intend take, obviously Company's business, customers.' page 860. 12 land site tends high reasonably earnings situated justify, specially adapted exceeds scrap assumption income-producing. And income, case service industry, presupposes Since fully compensated property, separate contribution earning capacity greater skill management more effective patronage than commonly given combination equipment. product contributions intangible compendiously designated 'going-concern value,' portmanteau phrase unpacking. 13 Though compounded factors addition relations element going-concern contributed superior extent momentum likely felt new succeeded property. maintained application energy skill, gradually spend itself effort turn expended. Paton, Advanced Accounting 427, 435 (1941). Only managerial efficiency, future profitability will give purchaser; effect increasing current reducing expenses operation spent year. expenditure money soliciting patronage, although likewise limited duration, differs efficiency derives merely qualities original investment plowing back income. sometimes readily asset business.5 clear, any rate, elements, combination, regarded identical alleged inhere routes. 14 Assuming, then, defined above, arises whether character alone precludes it. answer far seek. already dependent inseparable individual attitudes, these, obviously, intangible. market, summary expression forecasts attitudes past counterparts future. Ithaca Trust 279 151, 155, 49 291, 73 647; cf. Bonbright, Valuation Property 222 (1937). distinction made, generate those tangible tenacity past's future: latter forecast usually certainty, people continue want goods services hat look supplier them. likely, words, persist wanting done keep sending laundry. probability gains strength, become obliterated, acquires purchaser different business's Amendment requires latter, former, shown present 'taken,' compensable. observed Galveston Electric Galveston, 258 388, 396, 42 351, 355, 678. 'In buyer seller, good organization often elements Where least circumstances.' Des Moines Gas Moines, 238 153, 165, 35 811, 814, 59 1244; McCardle Indianapolis Water 272 400, 414, 47 144, 149, 71 316. 15 What, circumstances intangible? Not, indeed, title denial rests very concrete justification: taken. Such cases, most decided State constitutions provisions comparable condemned, leaving move location. E.g., Bothwell 254 231, 41 74, 238; Banner Milling 240 N.Y. 533, 148 668, 1019. situation reason taker pay business' secured vendor covenant refrain entering into competition him. true difficulty finding suitably will, loss, moving, consequential. Joslin Mfg. Providence, 676, 684, 688, 1167. retains, keeps, remainder dissipated removal contribute paid transferee vacated premises, perhaps prospect induce higher price building. 383, 361, 390. When condemnor saying vary owner's fortune lack suitable transference value. transferred; speculative proof justifiably excluded. Sawyer Commonwealth, 182 245, 52, L.R.A. 726, Holmes, C.J. By reasoning reached available. Mitchell 267 341, 45 293, 644. 16 otherwise, condemned intention carrying public-utility governmental authority. If, case, City Omaha 18 180, 30 615, 54 991, 48 1084, see Denver Union 246 178, 191, 38 278, 282, 62 649; Orgel, Eminent Domain § 214 (1936), cited. utility cannot ordinarily operated profitably monopoly, former duplicating profitable assured freedom competition. retains nothing formerly possessed; control concerned, occupies shoes. 17 plainly explained fact received benefit utility's compensation, difficult justify farm firing range swamp sandy waste equally suited purpose. 344—345, 294, deny owner. compare, e.g., rationale remained inevitable depriving 'taking' 378, 359, Causby, 328 256, 1062, 1206. occurred, Government's disposal chooses avail apt oft-quoted remark is, What lost? not, gained.' Boston Chamber Commerce 217 189, 195, 459, 460, 725. before us comes within principle. completely appropriated opportunity profit promise undertake operate anywhere else Omaha. year; meantime bound reversion Even funds inauguration obtainable otherwise sale liquidation old one, faced imminent plants hands, hardly profit. There do, wait. Besides, independently associated, realm conjecture sold longer farfetched, moreover, suppose transferred recaptured. 19 arguable, sure, conceivably reasonable terms me own enabled stay without irrelevant happened available, irrelevant, strict 644, fee. consequent realization remote possibility unable location unfair demonstrable possibility—the value—might realized. interruption final severance greatly narrows alternatives open condemnee substantially increases condemnor's degree wide enough require result. Compare 390, 729.6 20 conclude, practical preempted routes, had. accordingly remanded determine any, was. making determination, convince presence this, pointed, out, do mean foreclose consideration types techniques appraisal, indicate briefly possibl 21 One index record earnings. found unusually proportion persuasive indication work.7 measured capitalizing, account risk8 number effect, adequate risk it.9 figure chosen representing involve duplication reflected valuation site.10 22 substitute influenced records payments deliverymen customers. Instead resulting capitalizing reach direct contribution, long-term effectiveness, assets legitimacy expenditures purpose resulted later for, necessarily depends experience it.11 This, matter proof. 23 carried books, obvious losing 'excess' A relevant method estimating employed excess-profits tax base businesses. Appeal Metropolitan B.T.A. 1062; Pioneer Commissioner, 821. generally used so, relevant.12 24 categories tend establish consequence inadequacy complete this: needed fix required existence amount. buildings assumed claimant proves he ipso facto entitled compensation. intangible, demonstrate failed sustain proving whatever. This burden, sustained solid evidence; approximate Particularly issues left juries sophistical abstruse basis findings nor apply sensible too elusive. 25 mind cautions, submit necessary instruct computation due. Consistently approach seeks aid data normally interests Since, noted, sort estimated computing discounted on; year.13 here, hitherto, illustrate prescribe course remand case. 26 protests against interest. argues Government, award. rejected, possible rest—that follows our holding came renewal occupancy, installment date. 27 proceedings inconsistent opinion, reversed remanded. 28 Reversed 29 RUTLEDGE, concurring. I understand t e simply recognize short-term takings entail Rules developed simple irrevocably severed forced fit complex consequences piecemeal successive interests. involved nature things With much agree. compensability interests, subscribe formulation theoretical rules defining prescribing measurement. seems theoretically sound unworkable judicial administration. permit empirical testing approaches, join Court's opinion. 32 DOUGLAS, whom THE CHIEF JUSTICE, BLACK REED concur, dissenting. order Army, public. trade-routes useless never Yet constitutional doctrine forged 34 Heretofore settled reestablished elsewhere. 644; 238. That followed rule consequential 281—283, 1055—1056, 1390; 377—378, 599, permanent public1 trade-routes. said supra, 345, 'If destroyed, unintended incident land.' conceded concession precedent control. alike respect. moving preparing space allowed insofar bore ruled 'proof peculiar respondent, goodwill injury respondent' 'as fee,' excluded reckoning, 362. today repudiates ruling holds temporary. depreciation (I assume) Why mystery. academic dissertation imports accounting literature conceals answer. 36 truth gets loses. represents Petitioner, assume, lost government's government indeed way Hence startling. promises swollen Congress generosity Constitution compels. 37 Constitution. obtained seven months equal almost half plant2 plus restore condition.3 Under authorities increased unless sit Committee Claims damages. 201 Title II Second War Powers Act 56 Stat. 177, 50 U.S.C.Appendix, 632, U.S.C.A.Appendix, 632. Const. Amend. V: '* shall private use, compensation.' Once actual giving rise 414 view necessity postulating sale, care avoid extremes hand excluding uses supposing either idiosyncrasies compare Little Rock Junction Ry. Woodruff, Ark. 381, S.W. 792, Am.St.Rep. 51, Producers' Wood Preserving Commissioners Sewerage, 227 Ky. 159, S.W.2d 292, opportunities armed domain, Chandler-Dunbar 53, 667, 1063; York Olson 292 246, 704, 78 1236; el. Although various always defined, import clear preclude rejecting meaningless. Treasury insist 'deferred charges' capitalized. note post. line drawn inclusion costs less lessee's full recognition restriction condemnee's adjust himself taking. 382, comparing observed: 'It altogether another entire interest, form proceeding chops bits, takes wants, however few minute, leaves him remainder, him, refusing value' chips cut off. neither contemplates.' 379, 600, 729, said: 'There fundamental lease lease. leasehold responsibility lease, lessee. decision. continuing leaseholds, rights lessees, affected removal.' average five low $650,000, $39,375.39, 6%. witnesses respectively valued allowing $455,000 $433,500, 9%. us, assume 6% rather 5% lowest importance varying risks percentage obtain emphasized Securities Exchange Commission 77 B reorganizations. (11 U.S.C.A. 207) Note, 55 Harv.L.Rev. 125, 133 Fisher, Nature Capital Income c. 16, Risk Element' (1906); Angell, Problems (Practicing Law Institute, 1945). Yang, Goodwill Other Intangibles cc. 5, (1927); Simpson, Encyc.Soc.Sci. 698, 699 (1931). systematic discussion steps estimate, Accountants' Handbook 869 et seq. (Paton ed., 1944). arrive adding capitalization way, 11, (1937); Dewing, Financial Policy Corporations, bk. II, (4th 1941); Consolidated Products Du Bois, 312 510, 525—526, 61 675, 684 685. 85 982; Group Institutional Investors Chicago, M., St. P. & P.R. 318 523, 540—542, 727, 738 739, 959. subject inaccuracy discounting nonrecurrent entered (even projection expressly continue), hazards prediction conditions May, footnote Value, 72 Accountancy 225 (1941); 216 (1936). reduced confining predicted certainty sufficient persuade o p. 18, arise wherever neighborhood undeveloped acquired reason, reflect enhancement advantages location, increase avoided, using entice competitors area confined service, income-producing quite Houston Natural Corp. solicitors non-deductible contributing years. Tax predecessor, Board Appeals, Courts analogous circulation newspapers certain forms advertising expenditures. collections Mertens, Federal Taxation 25.18 25.27 (1942). Dodd Baker, Cases Materials Business Associations 1125—26 (1940). materials decedent's estate collected Paul, Estate Gift 18.16 (1942), (1946 Supplement). Proceeding businesses uniform characteristics, volume expenditure. cited offer refinement ratios varied wi h straight line, convenient treat did. analysis compound-interest methods (1941), insight ways decline computed. id. 435; Canning, Economics Accountancy, 13, (1929); (1927). respects payment 218 202—203, 619 620, 1084. Compensation tear fixing above separately re Condemnation Lands, 250 F. 314, 315; Certain Parcels Land, F.Supp. 257, 263; 5,901.77 Acres 454; 14.4756 1005.

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