113 F. Supp. 681 | Ct. Cl. | 1953
delivered the opinion of the court:
This action is brought to recover just compensation for certain machinery and scrap materials requisitioned by defendant, pursuant to the act of October 16, 1941, 55 Stat. 742, as amended. Defendant has tendered $9,113.45, but plaintiff claims $47,011.88, plus interest.
On March 13, 1943, defendant, acting through the War Production Board, requisitioned and took possession of 86
One 15-ton locomotive crane, with magnet and generator.
Two No. 3 Doelger-Kirsten shears.
One No. 3 United shear.
Two No. 1% Doelger-Kirsten shears.
One Fairbanks Morse truck scale.
The undisputed value of the scrap material is $3,375.68, and the proper valuation of the machinery is the primary issue presented by this case.
Shortly after seizure by the defendant notice of the requisitions was sent to plaintiff, the Bekins Van and Storage Company, and the First National Bank of Omaha, all of Omaha, Nebraska. The Bank and the Bekins Company filed proofs of claims with the War Production Board, hereinafter referred to as the WPB, on May 11 and May 28,1943, respectively, based on the security interest which they had in the property requisitioned. (Finding 2.) Upon the receipt of a letter dated July 2, 1943, and signed “M. Alpirn, Sec’y”, which purported to list items taken and their valuation, the WBP promptly advised plaintiff that the letter could not be considered as a claim and requested the submission of proof of claim in proper form. This request was not complied with until July 9, 1946.
About the time of the requisitioning, the defendant solicited and received bids on the materials taken from three scrap metals dealers in Omaha. The machinery here in question was sold by the defendant as a single lot to the highest bidder, Aaron Ferer & Sons Co., whose bid per item was as follows: five sets of shears, $2,500; one locomotive crane in scrap condition, $150; one magnet and generator, $350; one truck scale, $151.96. Using these prices as a basis, a preliminary determination of just compensation of $6,602.64 for all requisitioned material including the scrap was made by the Board and the interested parties were so notified. Inasmuch as plaintiff had filed no proof of claim, , an award in the above amount was made to “persons unknown” on May 3, 1944. Following a conference between plaintiff’s son and WPB officials in mid-1945, the question of just
This award was rejected by plaintiff as unsatisfactory. Claiming that the taking was illegal, he also refused to accept 50% of the award as provided for by statute because execution of the required release, while reserving the right to sue for additional compensation, would have waived any claim for damages arising from such alleged illegality.
While conceding that fair market value is the proper measure of just compensation in this case, plaintiff contends that he is entitled to an in-place market value. It is further argued that the defendant did not make sufficient effort to obtain the best available price and therefore the amount received did not reflect fair market value. The contention is that the fair market value at the time of requisition was best reflected by the Office of Price Administration ceiling prices for used machinery then in effect. At the time in question the OPA ceiling prices for used machinery of the type here involved was 85% of the new price if the machinery had been rebuilt and guaranteed, and 55% of new price if the machinery was merely operable. It is on the basis of the 85% of new price formula that plaintiff claims $43,636.20 as just compensation for the machinery requisitioned. This amount is arrived at by regarding all the shears, the crane, magnet and generator as rebuilt, guaranteed equipment, and adding $1,200 as the value of the truck scale plus $7,900 as the cost of installing the shears on concrete bases and cover
We turn first to the contention that plaintiff is entitled to in-place value for the five sets of shears and the truck scale. In support of this proposition plaintiff relies primarily on the cases of Arkansas Valley Railway v. United States, 107 C. Cls. 240, and Coombs, Trustee, v. United States, 106 C. Cls. 462. These cases are not sufficiently apposite to be controlling here. The decision .in Arkansas Valley Railway, sufra, does not rest on the theory that in taking the rails the Government rendered the 13 miles of railroad useless to the company and therefore compensable, but rather that the taking of that section of the railroad was complete inasmuch as the right of way from which the rails were taken reverted to the owners of the fee. In the instant case there is no claim that the defendant took anything other than the machinery. Just compensation is restricted to the value of the property taken. After reviewing the basic principles involved in arriving at just compensation the Supreme Court stated in United States v. General Motors Corp., 323 U. S. 373, at page 379:
In the light of these principles it has been held that the compensation to be paid is the value of the interest taken. Only in the sense that he is to receive such value is it true that the owner must be put in as good position pecuniarily as if his property had not been taken. * * *
The Coombs case is also distinguishable in that the valuation of the machinery requisitioned was as an integrated unit comprising a factory with some value as a going business and as such commanded a higher market price than the OPA ceiling prices for individual pieces of machinery taken. It was the market value of a factory and not a computation of the costs of installation which accounts for the additional compensation allowed there. In the case now before us no showing of in-place value is made other than combining the ceiling price for each set of shears and adding the 1943 cost of reproducing the concrete foundations on which they rested plus other installation expenses. The
Plaintiff’s equating of OPA ceiling prices for rebuilt and) guaranteed machinery with the market price of the machinery requisitioned is not justified by the proof. While there is sufficient evidence to support the commissioner’s finding that defendant exerted something less than the best effort to obtain the highest possible price for the five sets of shears, it is equally clear that they were somewhat antiquated and at best merely operable. Nothing in the record indicates that repairs had been made nor indeed that rebuilding would have been practical. In view of these circumstances, the commissioner found their fair market value to be $6,555, which is the OPA ceiling price under the 55% of new price formula. The OPA ceiling price is not the measure of just compensation, but merely the top market price ordinarily allowable during a period in which price controls are in effect. Commodity Trading Corp. v. United States, 339 U. S. 121; Swiss Federal Railways v. United States, 125 C. Cls. 444. Therefore, we adopt the commissioner’s finding not because it is the OPA ceiling price, but because there is sufficient evidence to indicate that had the effort been expended the shears would have brought that amount on the market.
There is considerable conflict in the record as to the condition of the.crane and the value of the scale, but the commissioner who observed the witnesses during the trial has found that by the credible evidence the crane was inoperable, and the fair market value of the crane and scale was $150 and $151.96, respectively. This conclusion would seem to be supported by the fact that upon inquiry of a specialist on such machinery, defendant’s vendee was advised that the crane was beyond repair and ultimately disposed of it as scrap for $150. Similarly, only $12.50 was realized from the sale of the truck scale as j unk. We have found no evidence which
After careful consideration of the entire record we conclude that the fair market value of the machinery at the time of taking was $7,306.96.
There remain for consideration two contentions by defendant hereinbefore unmentioned. The first relates to an alleged assignment by the Bekins Company and the First National Bank of Omaha to plaintiff of their interest in the claim, and the second raises the question of the interest properly allowable in this case.
We have found no purported assignment of an interest in this claim to plaintiff in the record of this case. It might be noted in this connection, however, that all persons exhibiting an interest in the subject matter of this suit were served with notice to appear, and having failed to respond within the required time are now barred from contesting plaintiff’s right to judgment. Public Law 395, section 14 (b), 78th Congress, 2d session, 58 Stat. 663.
, The question of allowable interest here presented involves problems similar to those dealt with in the companion case of A. B. and Morton Alpirn v. United States, 124 C. Cls. 670. On the basis of our findings the plaintiff is entitled.to $10,682.64, which is the sum of $7,306.96 for the machinery and $3,375.68 for the scrap, as just compensation for the material requisitioned. Ordinarily, plaintiff would be entitled to interest on this as a part of just compensation. It should be noted, however, that this rule is subject to qualification and for reasons given below is inapplicable to all periods here involved. We conclude from
We conclude that plaintiff is now entitled to recover $10,682.64, with interest at 4 percent per annum from July 9 to July 16, 1946, together with interest at the same rate on $6,125.91 from July 16, 1946 to November 15, 1949, all interest being allowed not as interest but as a part of just compensation.
It is so ordered.
EINDINGS OE EACT
The court, having considered the evidence, the report of Commissioner Marion T. Bennett, and the briefs and argument of counsel, makes findings of fact as follows:
1. The plaintiff is an individual who has been engaged in the scrap business in Omaha, Nebraska, since about 1892.
2. On January 20,1939, the plaintiff leased to Bekins Van & Storage Company the premises upon which his scrap yard was located, and Bekins then issued to the plaintiff its warehouse receipt covering “all metals of all kinds this date located on [said premises], described in part as scrap iron and steel, and various manufactured metal parts usable and not usable.” This warehouse receipt was then pledged to Bekins as security for a note in the amount of $23,981.47.
3. On March 13, 1943, the defendant, acting through the War Production Board and Metals Reserve Company, served upon the plaintiff two requisitions. One of these described the property requisitioned as follows:
All scrap materials located on the premises of A. B. Alpirn Company, Seventh and Douglas Streets, Omaha, Nebraska, and all machinery and equipment for the preparation of scrap located upon such premises, including two No. iy2 Doelger-Kirsten shears, one No. 2 Doelger-Kirsten shear, one No. 3 Doelger-Kirsten shear, one Fairbanks Morse platform truck scale (including steel work in pit), one magnet and generator, and one locomotive crane in scrap condition.
The other requisition, served the same day, described the property requisitioned as follows:
One No. 1 y2 Doelger-Kirsten shear located at Bekins Van & Storage Company, Omaha, Nebraska.
Pursuant to these two requisitions, the defendant requisitioned and actually took possession of the following machinery and materials:
One 15-ton locomotive crane, with magnet and generator;
Two No. 3 Doelger-Kirsten shears;
One No. 3 United shear;
Two No. 1 y2 Doelger-Kirsten shears;
One Fairbanks Morse truck scale;
382.7 net tons of iron and steel scrap; and
3.85 net tons of scrap rubber.
4. On March 31,1943, notice of the service of these requisitions was mailed by the War Production Board to Bekins Van & Storage Company, A. B. Alpirn, Morton Alpirn, and the First National Bank, all of Omaha, Nebraska. On May 11, T943, the First National Bank of Omaha, filed a claim based upon its interest in the property as holder of the plaintiff’s note to Bekins in the original amount of $23,981.47
Under date of July 2,1943, the plaintiff, in a letter to the War Production Board signed “M. Alpirn, Sec’y”, submitted a schedule entitled, “Claim for Equipment,” which listed the items of equipment allegedly requisitioned, and the claimed value of each, such values totaling $31,577.75. By letter dated July 9, 1943, the plaintiff was advised that such letter could not be considered a claim in proper form, and was requested to file a proper claim. No such claim was filed by the plaintiff until July 9,1946.
5. On July 10, 1943, the War Production Board made a preliminary determination of just compensation for the requisitioned material, in the sum of $6,602.64, and gave notice of such determination to all interested parties. This determination was based upon the amount received by the defendant for all of the material requisitioned, sold as a single lot after receipt of the bids.
On May 3, 1944, the War Production Board made an award of compensation in the same amount, payable to “persons unknown.” This was necessary because the plaintiff had submitted no proper proof of claim establishing its ownership of the requisitioned property.
6. In about the middle of 1945, Morton Alpirn, plaintiff’s son, had a conference with officials of the War Production Board with respect to the award of compensation in this case. This was the first information which the defendant had as to the plaintiff’s contentions with respect to the determination of value. As a result, the War Production Board caused a review to be made of this award of compensation. In making this review, attention was paid to the sums received by the defendant’s vendee on its resale of the requisitioned material. It was found that the five sets of shears plus the magnet and generator had been sold by him for $5,650, as contrasted with an OPA ceiling price of $6,986
However, as a result of this review, the War Production Board wrote the plaintiff on January 16,1946, advising him that the award would be increased from $6,602.64 to $9,113.45 and on July 16, 1946, subsequent to the receipt of the plaintiff’s proof of claim, the War Production Board did amend its award to such amount, and also amended it to provide for payment to the plaintiff, Bekins Van & Storage Company, First National Bank of Omaha, Morton Alpirn, and the Western Smelting & Refining Company.
Payment of such award was tendered the plaintiff and rejected by him. Payment of 50 percent of the award was then tendered the plaintiff, pursuant to the statute, but the plaintiff refused to execute the release required as a condition of such payment because he believed that the taking had been accomplished illegally. The tendered form of release would have preserved the plaintiff’s statutory right to sue for an additional amount as just compensation, but would have waived such rights as he might have to damages because of such illegality, if any.
7. The plaintiff had built a concrete base for each of the shears, as well as open wooden sheds to cover them. One of the shears, a No. 1% Doelger-Kirsten, had been removed from its base several months prior to the requisition and moved to the Bekins warehouse, where it was located when requisitioned. The foundation for at least one, and possibly two, of the shears was located on land which the plaintiff rented from the Union Pacific Railroad, rather than on land owned by the plaintiff.
8. The shears not only had concrete foundations and were covered by sheds but had, as necessary auxiliary equipment, electric motors, starters, fuse boxes and wiring. No compensation was awarded to the plaintiff for in-place value of the machinery and no allowance was made for foundations, electrical equipment or sheds without which the shears could not have been operated and which were without value
There is no evidence that the foundations and auxiliary equipment left with the plaintiff after requisition of the shears were used by the plaintiff or removed by the plaintiff or that he was able to or attempted to obtain a salvage value for the same or that they had any market value. The reasonable cost of installing three No. 3 shears in 1943, including cost of concrete foundations, electrical equipment, wiring and sheds was $6,300. The reasonable cost of installing two No. 1 y2 shears, including concrete foundations, electrical equipment, wiring and sheds was $1,600.
9. During the two years prior to the requisition the plaintiff’s scrap yard operated at a lower rate than it had previously. The plaintiff had only two or three employees in the yard, as contrasted with approximately 70 in the yard of the adj oining scrap dealer. Not more than one or two shears were operated at one time, and they sometimes did not operate at all. The crane customarily did not operate more than two or three days a month, and the evidence does not establish to what extent, if at all, it operated subsequent to March 1942. There is no evidence that the scale was used subsequent to August 1942.
The iron and steel scrap in the yard was some of the material there in January 1939 when the transactions between the plaintiff and Bekins, described in finding 2, occurred.
10. On March 13, 1943, the five sets of shears were old and in poor but operable condition. The crane was not in satisfactory operating condition, being in need of substantial repairs. The record is not clear as to the condition of the magnet and generator, but they were apparently operable. There is likewise no evidence as to the condition - of the truck scale.
11. The defendant, in December 1942, solicited three bids on the scrap and machinery located at the Alpirn yard as a basis for establishing the valuation of material about to be requisitioned. None of those solicited to submit bids were especially anxious to bid. None of them needed the machinery which Alpirn had. No attempt was made to adver
This buyer sold two No.'3 shears, the magnet and generator to a brother. One set of shears he kept and the other two were sold to people who wanted them.
12. With respect to the 15-ton locomotive, self-propelled Industrial Brown Hoist crane, the purchaser did not use it or attempt to resell it. He bought it from the Government at a junk price of $150 and cut it up for scrap. The only other bid in evidence was for $125, admitted by the bidder to be a junk bid, too. The weight of the credible evidence is that this crane was not in operable condition at the time of requisition and that the cost of repairs would have been prohibitive. It is found that $150, representing scrap value, was- the fair value of this equipment on March 13, 1943. A new crane of this type would have cost $24,900 in 1943 and under the applicable OPA formula of 55% of new price such a used but operable crane with complete equipment would have brought $13,695. If completely overhauled and a guaranteed rebuilt job an 85-percent formula would have been applicable, representing $21,165, which figure is claimed by the plaintiff in this case. Repairs to the crane in question were made in 1941 but the record is silent as to their character and extent. At the time of requisition the supply of operable locomotive cranes was scarce and they were in ready demand.
13. The five shears, after requisition, were sold by the defendant for a lump sum of $2,500. The magnet and generator for the crane were sold for $350. The only other bids in evidence on these items were for $2,000 and $25, respectively.
When these items were sold by the defendant’s vendee they brought the total sum of $5,650 which the defendant allowed
As heretofore pointed out, in finding 11, the bidders were reluctant and were limited by the defendant in number. When the successful bidder sold the machinery he did not make an effort to get the best prices possible under the OPA ceilings on second-hand machinery although at the time such machinery was scarce and in demand. Considering all of the circumstances surrounding the bids made to the defendant and the subsequent sale by the defendant’s vendee, together with the condition of the shears, generator and magnet, it is found that $7,005 would have been a fair and reasonable price for these items in March 1943.
14. The plaintiff’s Fairbanks-Morse truck scale taken by the defendant was sold by it for $151.96. The next highest bid in evidence was for $10. After requisition the scale was never used but was dismantled, moved to the buyer’s scrap yard and put in a warehouse. It was held for several months and then was scrapped. Its value scrapped was $12.50. There is no specific evidence establishing whether or not the scale was in operating condition when taken. The scale compared generally in size with those then in use in the area. The defendant’s vendee made no genuine effort to sell the scale before scrapping it. One witness for the plaintiff testified the scale was worth $700 and in place in a concrete pit prepared for scales of this type, an additional $500. The plaintiff claims $1,200 as the reasonable value of the scale. The witness mentioned had been an employee of the plaintiff from 1922 to 1928 as yard foreman. He later went into the same type of business for himself and was the party who bid $10 to the defendant for the scale. It is found that $151.96 is just compensation to the plaintiff for requisition of the scale in Mareh 1943.
16. By stipulation the plaintiff claims no interest after May 7,1951. It is further found that plaintiff was responsible for delays in litigation from November 15,1949, to May 7,1951.
conclusion op law
Upon the foregoing findings of fact, which are made a part of the judgment herein, the court concludes that as a matter of law the plaintiff is entitled to recover, and it is therefore adjudged and ordered that he recover of and from the United States ten thousand six hundred eighty-two dollars and sixty-four cents ($10,682.64) with interest at the rate of 4 percent per annum from July 9 to July 16, 1946, together with interest at the same rate on six thousand one hundred twenty-five dollars and ninety-one cents ($6,125.91) from July 16, 1946, to November 15, 1949, all interest being allowed not as interest but as a part of just compensation.
The Western Smelting and Refining Company was at one time a corporation, then later a trade name under which plaintiff carried on his scrap metal business.
Defendant was apparently referring to a purported assignment by the Bekins Company and the Bank to Morton Alpirn, who Is not a plaintiff here. Pursuant to the cited statute notices to appear were served on the Bekins Van & Storage Co. (corporation), Bekins Van & Storage Co. (a partnership), First National Bank of Omaha, Morton Alpirn, Western Smelting and Refining Co. (a corporation), and Western Smelting and Refining Co. (a partnership), none of whom have responded thereto.
