1. While coal which plaintiff had purchased through contracts
with producers was in course of transportation over railroads then
under federal control, it was commandeered by the Director General
of
Page 267 U. S. 293
Railroads, acting under orders of the Fuel Administrator, for
use in operating the railroads, and he paid the producer the price
fixed by the Fuel Administrator, which were the same a the prices
named in plaintiffs' contracts.
Held:
(a) That the plaintiff was entitled to be paid the difference
between prices thus paid to its vendors and the market value, which
was higher. P.
267 U. S.
301.
(b) That, by § 206(a) of Transportation Act, 1920, actions
therefor could be maintained in the state court against the agent
designated by the President under that Act. P.
267 U. S.
301.
281 Pa.St. 74 affirmed.
Error to a judgment of the Supreme Court of Pennsylvania
affirming recoveries from the Director General of Railroads, as
agent under the Transportation Act, 1920, on account of coal seized
and appropriated for operating railroads while under federal
control.
Page 267 U. S. 298
MR. JUSTICE McREYNOLDS delivered the opinion of the Court.
These causes present the same points of law, and were heard
together both here and below. No disputed question of fact remains.
In 1919, defendant in error, a
Page 267 U. S. 299
Pennsylvania corporation doing business at Philadelphia,
contracted with producers for large quantities of bituminous coal,
f.o.b. the mines, subject to the regulations of the United States
Fuel Administration. During January and February, 1920, while
thirty-three cars of coal consigned to the corporation under these
contracts were moving over the Philadelphia & Reading Railway,
the Director General of Railroads took possession of them and used
the fuel for operating trains on that line. Eighty cars loaded with
the same character of coal and moving on the Pennsylvania Railroad
were similarly treated. The claim is that the Director General took
this action under lawful rules and orders of the President, acting
through the Fuel Administrator and pursuant to the Lever Act,
approved August 10, 1917, c. 53, 40 Stat. 276, 279, 284. The
producers of the coal were paid the prices specified in the
contracts of purchase, as required by the Fuel Administrator, and
it is now maintained that nothing more can be demanded by the
owner. The owner's claim is for the difference between the amount
received by producers and the market value of the coal --
approximately $1.44 per ton.
The Lever Act conferred upon the President certain powers to
regulate the prices and distribution of fuel, to be exercised for
the efficient prosecution of the war. August 23, 1917, he delegated
these powers to a Fuel Administrator, who freely used them during
the continuation of hostilities. Shortly after the armistice,
substantially all such regulations were suspended and the
Administrator ceased to function, but his appointment was not
cancelled or revoked.
On October 30, 1919, the President undertook to restore former
orders and to employ the Fuel Administrator, as occasion might
arise, to change or make regulations relative to the sale,
shipment, and apportionment of bituminous coal as the latter might
think necessary. The next
Page 267 U. S. 300
day, the Administrator delegated to the Director General of
Railroads the power to divert coal upon the railroads as might seem
"necessary in the present emergency to provide for the requirements
of the country." March 19, 1920, the President suspended all fuel
regulations.
Seeking to recover the difference between the amounts paid to
the shipper -- the purchase price -- and the market value of the
coal, defendant in error commenced these proceedings (June, 1921),
in a state court at Philadelphia, against the Agent appointed by
the President under the Transportation Act 1920, c. 91, 41 Stat.
456, 461, § 206a. Judgments went for it and were affirmed by the
Supreme Court.
Newton Coal Co. v. Davis, 281 Pa. 74. The
latter court held that the war with Germany had ceased prior to
October 30, 1919, and the purpose of the President's order then
issued was to meet an emergency incident to the miners' strike, not
to provide for the efficient prosecution of the war. Also that
seizure and use of the coal by the Director General rendered the
United States liable for just compensation, measured by market
value. And further, that the Director General was not an innocent
third person to whom property has been delivered by the sovereign
for the public welfare, but an agency of the United States for
operating the railroads, and, under the Transportation Act 1920,
plaintiff in error might be sued upon claims arising therefrom.
Seeking to recover the difference between the amounts paid to
the shipper -- the purchase price -- and the market value of the
coal, defendant in error commenced these proceedings (June, 1921),
in a state court at Philadelphia, against the Agent appointed by
the President under the Transportation Act 1920, c. 91, 41 Stat.
456, 461, § 206a The plaintiff in error now insists that the order
of October 30, 1919, and the regulations issued by the Fuel
Administrator and the Director General of Railroads acting
thereunder were authorized by the Lever Act. That, by diverting the
coal to himself, the Director General incurred no obligation except
to pay the amounts due the shippers under the sale contracts -- the
compensation fixed by the orders. That the act of the Director
General in diverting the coal to himself and its use on the
railroads imposed no liability for which an action can be
maintained
Page 267 U. S. 301
against the Agent provided for by the Transportation Act.
From the facts stated, it appears plainly enough that one
hundred and thirteen cars of coal cars of coal belonging to
defendant in error were seized by the United States while upon the
lines of carriers under their control, and thereafter appropriated
and used in the operation of such roads. The taking was for a
public use. The incantation pronounced at the time is not of
controlling importance; our primary concern is with the
accomplishment. As announced in
United States v. New River
Collieries Co., 262 U. S. 341,
262 U. S.
343-344,
"where private property is taken for public use, and there is a
market price prevailing at the time and place of the taking, that
price is just compensation"
to which the owner is entitled. Also,
"the ascertainment of compensation is a judicial function, and
no power exists in any other department of the government to
declare what the compensation shall be or to prescribe any binding
rule in that regard."
Transportation Act 1920, § 206a:
"Actions at law, suits in equity and proceedings in admiralty,
based on causes of action arising out of the possession, use, or
operation by the President of the railroad or system of
transportation of any carrier (under the provisions of the Federal
Control Act, or of the Act of August 29, 1916) of such character as
prior to federal control could have been brought against such
carrier, may, after the termination of federal control, be brought
against an agent designated by the President for such purpose,
which agent shall be designated by the President within thirty days
after the passage of this Act. Such actions, suits, or proceedings
may, within the periods of limitation now prescribed by state or
federal statutes, but not later than two years from the date of the
passage of this Act, be brought in any court which but for federal
control would have had jurisdiction of the cause of action had it
arisen against such carrier."
If the Philadelphia & Reading Railway Company or the
Pennsylvania Railroad Company, while operating its own line, had
seized and used the coal as the United States did while they
operated those roads, the jurisdiction of the state court of
actions to recover damages or compensation would be clear. And so,
under the Transportation Act, that court properly entertained the
proceeding now before us.
Affirmed.