Document: 409 U.S. 470 93 S.Ct. 791 35 L.Ed.2d 1 ALMOTA FARMERS ELEVATOR AND WAREHOUSE COMPANY, Petitioner,v.UNITED STATES. No. 71-951. Argued Oct. 18, 1972. Decided Jan. 16, 1973. Syllabus Before and during the last of several successive leases, petitioner made substantial permanent improvements that had a useful life in excess remaining lease term. With 7 1/2 years to run on then-current term, United States contracted acquire underlying fee began condemnation proceedings for leasehold. The Court Appeals reversed District Court's ruling just compensation required be valued place over their life, without limitation remainder Held: In proceeding, concept 'just compensation' is measured by what willing buyer would have paid improvements, taking into account possibility might renewed as well it not. Pp. 794—797. 450 F.2d 125, judgment reinstated. Lawrence Earl Hickman, Colfax, Wash., petitioner. Kent Frizzell, Washington, D.C., respondent. Mr. Justice STEWART delivered opinion Court. Since 1919 petitioner, Almota Farmers Elevator & Warehouse Co., has conducted grain elevator operations land adjacent tracks Oregon-Washington Railroad Navigation Company State Washington. It occupied under series leases from railroad. 1967, Government instituted this eminent domain proceeding petitioner's property interest condemnation. At time there were extensive buildings other been erected thencurrent run. 2 contended leasehold interest, including structures, should 'the fair market value legal rights possessed defendant virtue date taking,' no consideration given any additional based expectation renewed. urged that, rather than technical 'legal theory,' pay an open 3 As practical matter, controversy centered upon valuation placed structures appurtenances. parties stipulated need these right remove them. But stipulation afforded only scant salvage bring. offered loss use occupancy term lease. fail award with since such expect continue place. buildings, machinery, equipment substantially greater at end purchaser anticipated savings he realize not having construct new himself. sum, dispute concerned whether satisfied its consequent or was entitled reflecting beyond 4 pretrial ruling, accepted theory held compensated full 'and building thereon . ., total said interests company therein could then sold considering all elements possibilities whatsoever found affect those including, but exclusive of, renewal landlord requiring removal event being renewal.' court accordingly ruled they stood taking, existing 5 On appeal, Ninth Circuit reversed, 125; Government's tenant's expectancy compensable included tenant built property. rejected 'compensation expectations disappointed exercise sovereign power domain, legally protected right, 'a speculation chance." F.2d, 129. explicitly refused follow en banc decision Second Circuit, relied Court, which purposes lessee are assessed regard v. Certain Property, Borough Manhattan, etc., 388 596, 601. 6 view conflict circuits, we granted certiorari, 405 1039, 92 1312, 31 579, decide important question law: 'Whether, leasehold, receive lease, because renewed.'1 We find accord established principles just-compensation law Fifth Amendment, therefore reverse before us reinstate Amendment provides private shall taken public compensation.' 'And means monetary equivalent taken. owner put same position monetarily if his taken.' Reynolds, 397 14, 90 803, 805, 25 12 (footnotes omitted). See also Miller, 317 369, 373, 63 276, 279, 87 L.Ed. 336. To determine equivalence, early 'market value': taking. New York Sage, 239 57, 61, 36 25, 26, 60 143. supra, U.S., S.Ct., 805; 374, 280. And normally ascertained 'what cash seller.' Ibid. Virginia Electric Power 365 624, 633, 81 784, 790, 838. 8 By failing life—taking not—the case failed recognize improvements. If condemnation, continued buyer's ability life. Judge Friendly wrote Circuit: 9 'Lessors do desire, after all, keep properties leased, usually inside track kinds reasons—avoidance costly alterations, saving brokerage commissions, perhaps even ordinary decency part landlords. Thus, when expired, will often force abandon fixtures long otherwise to, deprive him opportunity deal two people whom unaffected heavy costs disassembly reassembly. condemnor benefit assumptions, contrary common experience, removed expiration stated term.' 601 602 (footnote 10 seems particularly likely price reflected unbroken succession 1919, railroad, owner, leasing property, facilities, order promote shipments lines. free market, hardly who facilities retaining thereafter facilities—in effect, salvage. 'Because diminish removal, measure damages less constitute compensation. '(I)t intolerable state, condemning factory warehouse, surrender stock secondhand machinery so doing discharge duty." 1,132.50 Acres Land, Etc., Upper Allegheny Sand Gravel Cir., 441 356, 358.2 11 Petty Motor 327 372, 66 729, primarily relies, does lead result. did indicate terms elevate interest. dealing Unlike Motor, here creating cognizable where none existed, compensating mere incorporeal expectation.3 constructed seeks value. read allow escape paying argues unreasonable compensate purchase wait until take possession land.4 Once purchased fee, argument goes, further used assuredly require dam one act against owners interests.5 'taking' facilities. must 'probably within scope project committed it.' 377, 281. Cf. 16—18, 805—806. may advantage depreciation attributable itself. Id., 635—636, 791—792. case, sought asked though use.6 That how improvements; Almota. 13 'The constitutional requirement derives much content basic equitable fairness, Commodities Trading Corp., 339 121, 124, 70 547, 549, 94 707 (1950), concepts law.' Fuller, 490, 803. is, course, true better buyer. surely worse. 14 15 Reversed 16 POWELL, DOUGLAS joins, concurring. 17 I join add few words implicit rejection claim Almota's landlord. 18 clear, first vary depending major probable future conduct experience nearly half century evident self-interest predicted considerable confidence. There every significant present transaction between seller, can doubt accorded appropriate weight. 19 different facts, significantly lower. If, example, railroad relocated entered picture, valueless market. A risk took erecting relocate tracks, proved poor one. if, independently navigation project, intention operating it, decided discontinue operation. Under circumstances, properly acted landlord, lessees expected bear use. 20 Here, however, acquisition both interests. point, condemned single separate proceedings, bore change plans, forced condemn Where multiple particular pre-existing each. Neither nor condemnee 'an alteration itself.' (1970); cf. 791—792, 838 (1961); 281, (1943). 21 result merely arranged negotiation Apart cases where, Rands, 389 88 265, 329 (1967), antedating bounds unjust 'salami tactics' reduce amount owner's acquiring adjoining piece another owner. While 729 (1946), arguably establishes exception principle, subscribe narrow construction case. 22 REHNQUIST, THE CHIEF JUSTICE, WHITE, BLACKMUN join, dissenting. 23 Petitioner 'property' concede unexpired portion 20-year owned Co. near recognizes limited nature real taken, concludes way include probability expiration. 24 plausibility about resounding endorsement 'fair value' touchstone valuation, reached me quite odds our prior cases. Even sharply reading concedes itself compensated. permits saying least computed acquired structure tenants inpossession various terms. agreed rent. considered argument, essentially raised here, history past creates expectancy, solely basis 380, 600. deciding, stated: 26 fact some leaseholds mutual consent periods rights. Emery Boston Terminal 178 Mass. 172, 185, 59 N.E. 763 (per Holmes, C.J.): 27 "It appeared habit renewing petitioners' .. Changeable intentions land, although added practically holding, determining respondent pay. They nothing tenants' rights, for. saleable addition represent chance, right." 380 n. 9, 28 holding consistent line effect require, expectancies profit, frustration licenses contractual pertain specifically vested Omnia Commercial States, 261 502, 510, 43 437, 438, 67 773 (1923); Sinclair Pipe Line 152 Ct.Cl. 723, 728, 287 175, Chicago, M., St. P. P.R. R.I. 138 268, 270—271 (C.A.8 1943), cert. denied, 320 804, 64 486 (1944). 29 inquiry identical ones, cannot divorced seriously undermining number rules evolved decisions through years. landowner, interested, terminology describe condemnor, money cause little remorse learn hope pay, breath told lesser owns hoped-for renewal. 30 notion universal formula Amendment. 280, 336 (1943), value: 'Respondents correctly say insist element goes make up moment discarded eliminated. think proposition too broadly stated.' 32 apparent operates prosperous retail establishment command more sale enterprise 'private property' meaning Yet Mitchell 267 341, 45 293, 69 644 (1925), stands squarely existence going business property: 33 'No recovery therefor now business. finding government business, intended destroyed, destruction unintended incident land.' 345, 294. 34 More recently, ex rel. TVA Powelson, 319 266, 283, 1047, 1056, 1390 generalized further: 'That likewise thing destroyed impaired lands States. like 'taken' due landowner unless Congress provides.' either applied reasoning applies too, desired question, prevents continuing indefinite anticipated. says expired years, rise level 37 permissible mothods thus totally set purport value, difficult see why standards Although purchasers increment located today. difference compensable, assured concededly 38 extent unsettle obscured parties, motivated lawyers' well-known propensity enter factual stipulations abstract questions decision, amounts awarded party prevails. difficulty lucidly demonstrated late Madden referring similar Tenth Scully 1061 (1969): 39 'If go awarding never materialized, 'took' subject should, Scully, e.g., year five occupancy, 50 perpetual occupancy? instant actuarial computation prospective free-ranging guesswork?' 22.95 129 (C.A.9 1971). 40 conclusion gains support citation recognized principle itself, diminished river improvement depressing makes contention here. While, law, diminution resulting proposed construct, hazard nonrenewal non-renewal certainty, undoubtedly diminishes results, materialization transfer ownership always subject. 41 partially cutting loose developed departs settled doctrine numerous rigorously adhered affords occasion 488, 801, 16; (1967). '(D)amage alone gives courts actual property.' Willow River 324 499, 65 761, 767, 89 1101 (1945). '(T)he generate Constitution ..' Reichelderfer Quinn, 315, 319, 53 177, 178, 77 331 (1932). purports well-established determined actually represents departure doctrine. dissent. This statement presented opposing grant petition certiorari. phrased decide: 'In situated thereon, great inherent excluded not, status right.' (Emphasis added.) 'totally (its) interest,' dissent suggests. Post, 484. acknowledges valued, losses. unable operate elsewhere; lose profits values that. 644, hold obliged losses caused provide taken—dismiss them worth scrap value—simply intend Indeed, 'adaptability business,' id., 344, 294, thereon. Hence, seeking lost opportunities, 281—282, 1055—1056, 1390, 773. Government. Nor potential connection (Government) permit lands,' 494, neither action location contributed oral while railroad's trial appeal. 'It frequently happens erects puts own attached estate pass conveyance remain personal absence special agreement contrary, continuation provided injury freehold. rule, exists entirely protection tenant, invoked condemnor. estate, treated award. apportioning award, credited tenant,' Nichols, Eminent Domain § 13.121(2) (3d rev. ed. 1971) Similarly, today materialized. 'taking,' renewed,

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