Kimball Laundry Co. v. United States
338 U.S. 1 (1949)

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U.S. Supreme Court

Kimball Laundry Co. v. United States, 338 U.S. 1 (1949)

Kimball Laundry Co. v. United States

No. 63

Argued December 7-8, 1948

Decided June 27, 1949

338 U.S. 1

Syllabus

Under an Act authorizing condemnation proceedings to acquire property for military purposes, the United States, on November 21, 1942, petitioned the District Court to condemn the temporary use of a laundry, for a term ending June 30, 1943, subject to renewal annually. The Government took possession of the property on November 22, 1942, and the term was renewed annually until June 30, 1946. Meanwhile the laundry suspended service to its regular customers. As just compensation to the owner, a jury awarded an annual rental of $70,000 and $45,776.03 for damage to the plant and machinery beyond ordinary wear and tear. The District Court entered judgment on the verdict. Interest was allowed from November 22, 1942, on the amount due for the period ending June 30, 1943, from the beginning of each annual term on the amount due for that term, and from the date of the award on the amount of damage to the plant and machinery. No compensation was awarded for diminution in the value of the business due to the destruction of trade routes, a proffer of evidence thereof having been rejected.

Held:

1. The award of compensation made for the temporary taking of the land, plant, and equipment was correct. Pp. 338 U. S. 6-8.

(a) The proper measure of compensation for the temporary taking was the rental that probably could have been obtained, not the difference between the market value of the fee on the date of the taking and its market value on the date of its return. Pp. 338 U. S. 6-7.

Page 338 U. S. 2

(b) The award for damage to the plant and machinery beyond ordinary wear and tear was justified on the theory that such indemnity would be payable by an ordinary lessee, though not fixed in advance as part of his rent because not then ascertainable. P. 338 U. S. 7.

(c) The amounts awarded by the jury as rental value of the physical property and as compensation for damage to the plant and equipment in excess of ordinary wear and tear were adequately supported by the evidence. Pp. 338 U. S. 7-8.

2. The basis for the award of interest was appropriate. The Government was not liable for interest on the total amount of the award from the date of the taking. P. 338 U. S. 21.

3. The Government having for all practical purposes preempted the trade routes for the period of its occupancy, it must pay compensation for whatever transferable value their temporary use may have had, and the case must be remanded to the District Court to determine what that value, if any, was. Pp. 338 U. S. 8-21.

(a) When the Government has taken the temporary use of business property, it would be unfair to deny compensation for a demonstrable loss of going concern value upon the assumption that an even more remote possibility -- the temporary transfer of going concern value -- might have been realized. P. 338 U. S. 15.

(b) In determining the compensable value of the temporary use of the trade routes, the District Court should consider any evidence which would have been likely to convince a potential purchaser as to the presence and amount of the laundry's going concern value, including (by way of example, and subject to certain cautions set forth in the opinion) the record of past earnings and expenditures for soliciting business. Pp. 338 U. S. 16-21.

(c) If the District Court should find petitioner's evidence adequate to submit to the jury for a finding as to presence and amount of the value of the trade routes, it must instruct the jury as to computation of the compensation due, which must not exceed the value of their temporary control. Pp. 338 U. S. 20-21.

166 F.2d 856 reversed.

A judgment of the District Court, entered on the verdict of a jury in a condemnation proceeding, was affirmed by the Court of Appeals. 166 F.2d 856. This Court granted certiorari. 335 U.S. 807. Reversed and remanded, p. 338 U. S. 21.

Page 338 U. S. 3

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