Court Opinion

ID: 9419773
Source: CourtListenerOpinion
Date Created: 2023-08-02 22:51:26.501729+00
Date Added: 2024-06-11T17:22:20.570485
License: Public Domain

Mr. Justice Rutledge,
concurring.
I agree with the result and with the Court’s opinion, but with an important reservation which I think should be made expressly.
In United States v. General Motors Corp., 323 U. S. 373, the problem was stated as one of first impression, namely, to ascertain the just compensation the Fifth Amendment requires where, under power of eminent domain, temporary occupancy of part of a leased building is taken from a tenant holding under a long-term lease. The Court distinguished the case from others where the taking is of the owner’s entire interest, whether a fee, a term of years or some other interest. Sensing the danger of applying to such a situation the strict rules limiting the amount of compensation in the latter types of cases, the Court said this would open a way for the Government to devise its condemnation, by chopping the owner’s interest into bits, taking some and leaving him with others in suspended animation, so that the Amendment’s guaranty might become an instrument of confiscation, not one of just compensation for what was taken. Such a procedure, the Court further stated, would be “neither the ‘taking’ nor the ‘just compensation’ the Fifth Amendment contemplates.” 323 U. S. at 382.
*382The novelty of such a form of taking, together with the obviously confiscatory consequences, in a practical sense, for the owner, led the Court to hold that the usual measure of just compensation applicable when all the owner’s leasehold is condemned, namely, payment of only the long-term rental of an empty building fixed by the terms of his lease or by market value, or less, would not suffice to compensate for carving out of the lease a right of “temporary use.” Other elements were required to be taken into account as evidence of the value of what was taken.
These included (1) “what would be the market rental value of such a building on a lease by the long-term tenant to the temporary occupier,” 323 U. S. at 382, which in addition to the bearing of the long-term rental as one element would include as other elements affecting “certainly and directly . . . the market price agreed upon by a tenant and a sublessee in such an extraordinary and unusual transaction,” 323 U. S. at 383, (2) the reasonable cost of moving out the property stored on the premises and of preparing the space for occupancy by the subtenant, including the cost of labor, materials and transportation ; and possibly also the cost of storage of goods removed against their sale or the cost of their return to the premises. In addition, for fixtures and permanent equipment destroyed or depreciated in value by reason of the taking, the Court held that the tenant whose lease was so cut up was entitled to compensation as for property taken, under the settled rule of cited authorities. 323 U. Si at 383.
Finally, in a footnote the Court pointed out that after judgment the Government had been allowed to amend its petition so as to include in the interest taken a yearly right of renewal, after which the trial court entered a new judgment for the original figure. Stating that these facts were not taken to alter the question presented here, which involved only the original taking for one- year, the Court *383went on expressly to rule: “If, on remand, the case be treated as involving the Government’s option of renewal, the additional value of that interest must be included in the compensation awarded!” 323 U. S. at 376, note 3.
Thyg the Court applied a rule of compensation to the case of carving out a temporary or short-term use from a longer term very different from that generally applicable when the owner’s entire intérest is taken. The purpose and the basis for this were to give substance, in practical effect, to the Amendment’s explicit mandate for payment of “just compensation” in cases of such extraordinary “takings” and to prevent those words from being whittled down by legalistic construction into means for practical confiscation.
In this case the Court has construed all of the takings as being of the tenant-owners’ entire interests. This is clearly the case, on the record, with respect to all except Petty Motor Co. As to it I have doubt but I accept the Court’s construction that the Government has condemned its entire leasehold interest in the premises and therefore must pay the full value of that term according to the usual rules in such cases.
My reservation, however, has to do with a possibility this record does not present as an accomplished fact in the case of the Petty Co., but does pres iat as a contingency which might be realized and, in that event, would have a direct and inescapable relation to the ruling concerning the quantum of compensation in the General Motors case.
In that case the interest taken was for one year out of a twenty-year term which had six years to run from the time of the original condemnation. There was also added by the later amendment the right of renewal from year to year which, if exercised, might have extended the term taken to the end of the leasehold interest.
In this case a converse sort of taking is presented by the Petty Motor situation. That cofnpany held a lease expiring October 31,1943, with an option for an additional *384year which if exercised would extend the term to October 31, 1944. The condemnation petition was filed November 9, 1942, when the Petty lease had almost one year to run in any event and two if the option should be exercised. The Government sought to take the' use of the building through June 30, 1945, but with the option to surrender the premises on June 30,1943, or June 30,1944, on giving sixty days advance notice in writing.
It is this option which I think makes dubious the ruling that all of the Petty Motor Company’s interest was “taken.” In my opinion it was only “taken” contingently. For, if the option is valid, quite obviously the Government was free to surrender, by giving notice, on June 30, 1943, in which event Petty’s lease would have been in force until the following October 31 in any event, or on June 30,1944, in which case Petty’s lease might have continued in force until October 31, 1944. In either event the case would have fallen squarely within the General Motors situation and ruling.
In my opinion that ruling and the requirement of paying compensation according to the measure it prescribes apply whether the Government carves out part of the tenant-owner’s term by one method of stating what it takes or another. That is, for this purpose, it makes no différence whether the Government “takes” the temporary use for part of the term but adds to this a right of renewal periodically which if exercised will extend the term taken beyond the term of the lease; or, on the other hand, purports to take a term which extends beyond that of the leasehold interest, but reserves the- right to cut this down periodically so that -in fact it may surrender the premises before the leasehold expires and thus carve out of it a shorter term, just as in the General Motors taking.
Whether the chopping up is accomplished one way or the other, the effects for the owner are the same, the “taking” is in substance the same, and the compensation *385is required, under the General Motors decision, to be the same. That ruling cannot be avoided by inverting the length of the term specified and, correlatively, the character of the option added. Nor can it be avoided by construing the term taken, in view of the. contingent option, in cases of the Petty type as including all of the interest of the lessee, if in fact the Government exercises the option and surrenders the premises before the lessee’s term expires. Upon such a showing the General Motors rule would apply and the owner-lessee would be entitled to recover compensation including all of the elements specified in that rule, subject only to making proof of them.
This question I think sufficiently important to be explicitly reserved for decision when a case arises requiring application of the General Motors rule to such a situation. I do not understand the Court to rule to the contrary, since there is no showing on this record that the Government has exercised its option. I therefore concur in the decision as it is rendered upon the record which has been presented.