In condemnation proceedings, the Government obtained a judgment
of "immediate possession" of a pipeline right of way across a tract
of land, and it entered into physical possession in 1943 and laid
the pipeline through the tract. In 1945, the owners conveyed the
tract of land to respondent by a deed which was construed by the
trial court as intended to convey "all their right, title and
interest" in the tract "or in the award to be made for the same."
In 1946, the Government, acting under the Declaration of Taking
Act, filed a declaration covering the pipeline right of way,
deposited compensation in court, and obtained a judgment on the
declaration of taking.
Held: the "taking" occurred in 1943, when the
Government entered into physical possession of the land; the
assignment of the claim for compensation was invalid under the
Assignment of Claims Act; and the respondent was not entitled to
receive the compensation award. Pp.
357 U. S.
18-27.
(a) In view of the trial court's express finding that the
grantors intended to convey their right to the compensation award,
the transfer of the claim was a voluntary assignment, rather than
an assignment taking effect by operation of law, and, therefore, it
was prohibited by the Assignment of Claims Act. P.
357 U. S.
20.
(b) Since compensation is due at the time of taking, the owner
at that time, not the owner at an earlier or later date, is
entitled to receive the compensation award. Pp.
357 U. S.
20-21.
(c) When the Government enters into possession of property prior
to the acquisition of title, it is the former event which
constitutes the act of taking and gives rise to the claim for
compensation. Pp.
357 U. S.
21-22.
(d) A different result is not required by the fact that, after
the conveyance, the Government filed a declaration of taking and
obtained title under the Declaration of Taking Act. Pp.
357 U. S.
22-26.
(e) In cases like this, the total compensation should not be
divided between the first and second owners of the property, the
former taking that portion of the award attributable to the
Government's use of the property until the passage of title and the
latter receiving the balance. Pp.
357 U. S.
26-27.
Page 357 U. S. 18
(f) Equitable considerations do not require that respondent
receive part or all of the compensation award in the circumstances
of this case. P.
357 U. S.
27.
238 F.2d 898 reversed.
MR. JUSTICE HARLAN delivered the opinion of the Court.
The issue in this case arises out of a condemnation proceeding
in which the United States acquired an easement pursuant to its
power of eminent domain. The principal question presented is
whether the claim to "just compensation" vested in the owners of
the land at the time the United States entered into possession of
the easement pursuant to court order in 1943 or whether such claim
vested in the respondent, Dow, who acquired the land in 1945 at the
time the United States filed a declaration of taking in 1946, under
the Declaration of Taking Act of February 26, 1931, 46 Stat. 1421,
40 U.S.C. §§ 258a-258e.
In March, 1943, the United States instituted a condemnation
proceeding in the District Court for the Southern District of Texas
to acquire a right of way for a pipeline over certain lands in
Harris County, Texas, owned by the estate and heirs of John F.
Garrett and James Bute. Among the lands condemned was Parcel 1, a
narrow strip of some 2.7 acres out of a 617-acre tract, the
property involved in the present suit. The Government proceeded
under various statutes, including the Act of August 1, 1888, 25
Stat. 357, 40 U.S.C. § 257, and Title II of the Second War Powers
Act of
Page 357 U. S. 19
March 27, 1942, 56 Stat. 176, 177. As requested in the petition,
the District Court ordered the United States into the "immediate
possession" of this strip. Within the next ten days, the United
States entered into physical possession and began laying the
pipeline through the tract. The line was completed in 1943, and has
been in continuous use since that time.
In November, 1945, the 617-acre tract was conveyed to Dow by a
general warranty deed which specifically excepted the pipeline
right of way as being subject to the condemnation proceedings. In
May, 1946, the Government filed a declaration of taking, under the
Declaration of Taking Act, covering this pipeline strip. Estimated
compensation was deposited in court and judgment on the declaration
of taking was entered. A few months later, the Government amended
its petition to name additional parties, including Dow, who were
alleged to be asserting an interest in the land. The question of
compensation was referred to commissioners under the Texas
practice, which at that time was applicable to federal condemnation
proceedings.
See United States v. Miller, 317 U.
S. 369,
317 U. S.
379-380. After a hearing at which Dow appeared, the
commissioners, in 1948, awarded $4,450 for imposition of the
pipeline easement.
After a lengthy unexplained delay in the proceedings, the
Government, in May, 1955, filed a motion for summary judgment
against Dow. In March, 1956, the District Court granted this motion
and dismissed Dow as a party. The District Court found as a fact
that Dow's grantors had intended to convey to him "all their right,
title and interest in the said Parcel No. 1 or in the award to be
made for the same." It then went on to rule that, under the
Assignment of Claims Act, 31 U.S.C. § 203, this was a prohibited
assignment of a claim against the United States, and that the deed
was therefore ineffective to convey to Dow the compensation award.
The Court
Page 357 U. S. 20
of Appeals reversed, holding that no assignment was involved
because no claim to compensation against the United States "arose
and vested" until the filing of the declaration of taking in 1946,
and that, because Dow, by that time, had become owner of the land,
he was entitled to the award. 238 F.2d 898. Because the question
presented bears importantly on rights resulting from federal
condemnation proceedings, we granted the Government's petition for
certiorari. 353 U.S. 972.
It is well established, as the Court of Appeals recognized, that
the Assignment of Claims Act prohibits the voluntary assignment of
a compensation claim against the Government for the taking of
property.
United States v. Shannon, 342 U.
S. 288. In view of the express finding of the District
Court that Dow's grantors intended to convey to him their right to
the condemnation award, we think that the transfer of the claim in
this case must be considered to have been such a voluntary
assignment, rather than, as Dow argues, an assignment taking effect
by operation of law, and thus not within the Act's prohibition.
Cf. United States v. Aetna Casualty & Surety Co.,
338 U. S. 366,
338 U. S.
373-376;
see 23 Tracts of Land v. United
States, 177 F.2d 967, 970. We would not be justified in
relaxing the rigor of the Act, especially in view of the fact, that
under its very terms, the way was left open for the parties to
accomplish a transfer of the award by valid means.
* Accordingly, Dow
can prevail only if the "taking" occurred while he was the owner.
For it is undisputed that,
"[since] compensation is due at the time of taking, the owner at
that time, not the owner at an
Page 357 U. S. 21
earlier or later date, receives the payment."
Danforth v. United States, 308 U.
S. 271,
308 U. S. 284;
cf. United States v. Dickinson, 331 U.
S. 745. We hold, contrary to the Court of Appeals, that
the "taking" did not occur in 1946, when the Government filed its
declaration of taking, but rather when the United States entered
into possession of the land in 1943. It follows that the landowners
in 1943 were entitled to receive the compensation award, and that
Dow is not entitled to recover in this action.
Broadly speaking, the United States may take property pursuant
to its power of eminent domain in one of two ways: it can enter
into physical possession of property without authority of a court
order or it can institute condemnation proceedings under various
Acts of Congress providing authority for such takings. Under the
first method -- physical seizure -- no condemnation proceedings are
instituted, and the property owner is provided a remedy under the
Tucker Act, 28 U.S.C. §§ 1346(a)(2) and 1491, to recover just
compensation.
See Hurley v. Kincaid, 285 U. S.
95,
285 U. S. 104.
Under the second procedure, the Government may either employ
statutes which require it to pay over the judicially determined
compensation before it can enter upon the land, Act of August 1,
1888, 25 Stat. 357, 40 U.S.C. § 257; Act of August 18, 1890, 26
Stat. 316, 50 U.S.C. § 171, or proceed under other statutes which
enable it to take immediate possession upon order of court before
the amount of just compensation has been ascertained. Act of July
18, 1918, 40 Stat. 904, 911, 33 U.S.C. § 594; Title II of the
Second War Powers Act of March 27, 1942, 56 Stat. 176, 177
(employed by the Government in the present case).
Although, in both classes of "taking" cases -- condemnation and
physical seizure -- title to the property passes to the Government
only when the owner receives compensation,
see Albert Hanson
Lumber Co. v. United States, 261 U. S. 581,
261 U. S. 587,
or when the compensation is deposited
Page 357 U. S. 22
into court pursuant to the Taking Act,
see infra, the
passage of title does not necessarily determine the date of
"taking." The usual rule is that, if the United States has entered
into possession of the property prior to the acquisition of title,
it is the former event which constitutes the act of taking. It is
that event which gives rise to the claim for compensation and fixes
the date as of which the land is to be valued and the Government's
obligation to pay interest accrues.
See United States v.
Lynah, 188 U. S. 445,
188 U. S.
470-471;
United States v. Rogers, 255 U.
S. 163;
Seaboard Air Line R. Co. v. United
States, 261 U. S. 299. The
owner at the time the Government takes possession "rather than the
owner at an earlier or later date, is the one who has the claim and
is to receive payment."
23 Tracts of Land v. United States,
supra, 177 F.2d at 970.
Had the Government not subsequently filed a declaration of
taking in this case, there is no reason to believe that these
ordinary rules would not have been applicable; the owners of the
parcel when the Government entered into possession in 1943 would
then have been entitled to compensation. No suggestion to the
contrary has been made by Dow. Instead, Dow contends that, although
there was an entry into possession in 1943 which was an
appropriation of the property sufficient to amount to a "taking,"
the subsequent filing of a declaration of taking vitiated the
effect of the earlier entry, and rendered the filing date the time
of the taking. We think that this contention is founded on a
mistaken view of the Declaration of Taking Act and must be
rejected.
Section 1 of the Declaration of Taking Act provides:
"Upon the filing said declaration of taking (prior to judgment
in a condemnation proceeding) and of the deposit in the court . . .
of the estimated compensation . . . , title . . . shall vest in the
United States . . . , and said lands shall be deemed to be
condemned and taken for the
Page 357 U. S. 23
use of the United States, and the right to just compensation . .
. shall vest in the persons entitled thereto. . . ."
Although it has been recognized that the "exact effect of these
provisions is not entirely clear,"
Catlin v. United
States, 324 U. S. 229,
324 U. S. 240,
past cases in this Court have established certain unchallenged
principles pertinent to the present controversy. The Taking Act
does not bestow independent authority to condemn lands for public
use. On the contrary, it provides a proceeding "ancillary or
incidental to suits brought under other statutes,"
Catlin v.
United States, supra, at
324 U. S. 240.
Such a proceeding can be instituted either at the commencement of
the condemnation suit under the "other statutes" or, as in this
case, after such a suit has been commenced and either before or
after the Government has taken possession. In both situations, the
Taking Act enables the United States to acquire title simply by
depositing funds "for or on account" of the just compensation to be
awarded the owners, rather than by making payment pursuant to a
court order. In those cases where the Government has not yet
entered into possession, the filing of the declaration enables it
to enter immediately and relieves it of the burden of interest from
the time of filing to the date of judgment in the eminent domain
proceedings.
See United States v. Miller, supra, at
317 U. S.
380-381.
The scheme of the Taking Act makes it plain that, when the
Government files a declaration before it has entered into
possession of the property, the filing constitutes the "taking."
But neither the language nor the history of the Act provides a
reliable indication as to the intention of Congress in cases, such
as the one before us, where a declaration is filed after the
Government has taken possession. Nevertheless, a number of
considerations have led us to the view that, in such cases, the
date of "taking" is the date on which the Government entered and
appropriated the property to public use.
Page 357 U. S. 24
In the first place, to adopt the solution urged by Dow would be
to undermine policies determining the other incidents of the
Government's obligation to provide just compensation. As already
noted, in cases where there has been an entry into possession
before the filing of a declaration of taking, such entry has been
considered the time of "taking" for purposes of valuing the
property and fixing the date on which the Government's obligation
to pay interest begins to run. To rule that the date of "taking" is
the time of filing would confront us with a Hobson's choice. On the
one hand, it would certainly be bizarre to hold that there were two
different "takings" of the same property, with some incidents of
the taking determined as of one date and some as of the other. On
the other hand, to rule that, for all purposes, the time of taking
is the time of filing would open the door to anomalous results. For
example, if the value of the property changed between the time the
Government took possession and the time of filing, payment as of
the latter date would not be an accurate reflection of the value of
what the property owner gave up and the Government acquired. In the
graphic language of Chief Justice Shaw:
"If a pie-powder court could be called on the instant and on the
spot, the true rule of justice for the public would be to pay the
compensation with one hand whilst they apply the axe with the
other."
Parks v. Boston, 15 Pick., Mass., 198, 208.
See
also Anderson v. United States, 179 F.2d 281. Similarly,
because interest for delay in payment would not begin to accrue
until payment of compensation is due, the Government would be
absolved of interest until it chose to file a declaration of
taking, even though it had already been in possession, to the
exclusion of the property owner, for some time.
Cf. Seaboard
Air Line R. Co. v. United States, supra.
Page 357 U. S. 25
There is another reason why we cannot regard the time of filing
as the time of the "taking" in cases where the Government has
already entered into possession. Because of the uncertainty when,
if ever, a declaration would be filed after the Government's entry,
manipulations might be encouraged which could operate to the
disadvantage of either the landowner or the United States. The
Government tells us that the declaration of taking procedure may be
invoked "solely in the discretion of the administrative officer."
It would thus lie within the power of such an officer to reduce the
"just" compensation due the property owner by staying his hand
until a market situation favorable to the Government had developed.
Conversely, landowners might be in a position to increase unduly
the Government's liability. For instance, if a single tract of land
were worth more than the sum of its component parcels,
cf.
United States v. Runner, 174 F.2d 651, owners of adjacent
condemned properties could consolidate their holdings after the
Government's entry solely for the purpose of obtaining a larger
award.
We cannot attribute to Congress the intention to promulgate a
rule which would open the door to such obvious incongruities and
undesirable possibilities.
We are not persuaded by any of the countervailing considerations
put forward by Dow. It is claimed that much needed certainty would
ensue in condemnation matters were the Court to hold that the
Government's filing under the Taking Act invariably established the
date of the "taking" of this property. But certainty is not lacking
under the rule advocated by the Government, which fixes the
"taking" at the time of the entry into physical possession -- a
fact readily ascertainable whether or not the Government makes use
of condemnation proceedings and whether or not it ever files a
declaration of taking.
Page 357 U. S. 26
It is also argued that a property owner might be prejudiced
under the Government's view because the project could be abandoned
and the condemnation proceedings discontinued before title passed
to the Government. But the possibility of such an abandonment
exists whenever the Government enters into possession of property
without filing a declaration of taking and without otherwise
providing compensation for acquisition of the title. In any event,
such an abandonment does not prejudice the property owner. It
merely results in an alteration in the property interest taken --
from full ownership to one of temporary use and occupation.
O'Connor v. United States, 155 F.2d 425;
Moody v.
Wickard, 78 U.S.App.D.C. 80, 136 F.2d 801;
cf. Cherokee
Nation v. Southern Kansas R. Co., 135 U.
S. 641,
135 U. S. 660.
In such cases, compensation would be measured by the principles
normally governing the taking of a right to use property
temporarily.
See Kimball Laundry Co. v. United States,
338 U. S. 1;
United States v. Petty Motor Co., 327 U.
S. 372;
United States v. General Motors Corp.,
323 U. S. 373.
Nor can we accept the suggestion that, in cases like the present
one, the total compensation should be divided between the first and
second owners of the property, the former taking that portion of
the award attributable to the Government's use of the property
until the passage of title and the latter receiving the balance.
Cf. United States v. 40,379 Square Feet of Land, 58 F.
Supp. 246. To require the Government to deal with more than one
party, particularly when division of the condemnation award would
entail a complex apportionment, might severely impede the orderly
progress of condemnation proceedings, and would conflict with the
policies underlying the Anti-Assignment Act.
See Hobbs v.
McLean, 117 U. S. 567,
117 U. S. 576;
United States v. Aetna Casualty & Surety Co.,
supra.
Page 357 U. S. 27
Dow relies on
Danforth v. United States, supra, and
United States v. Dickinson, supra, but neither case is in
point on the issue before us. In
Danforth, the Court
rejected the landowner's claim for interest on the ground,
inter alia, that the construction of a set-back levee near
his land did not amount to a "taking" because the Government, by
such action, had not yet appropriated the property to its use. The
expressly limited holding in
Dickinson was that the
statute of limitations did not bar an action under the Tucker Act
for a taking by flooding when it was uncertain at what stage in the
flooding operation the land had become appropriated to public use.
In the present case, there is no dispute over the fact that the
United States appropriated Parcel 1 on the date that it entered
into physical possession under order of the District Court.
Finally, we see no merit in the suggestion that it is
inequitable to deny Dow recovery in this action. Dow took his deed
with full notice of the condemnation proceeding brought by the
United States. There were readily available contractual means by
which he could have protected himself
vis-a-vis his
grantors against the contingency that his claim against the United
States would be subsequently invalidated by the Anti-Assignment
Act. And whatever may be the equities between the former owners and
Dow, or between the Government and the former owners, whose claim
to compensation Dow asserts may be barred by the statute of
limitations, such equities cannot serve to prevent the application
of the correct rule of law as between the Government and Dow in
this case.
Cf. McKenzie v. Irving Trust Co., 323 U.
S. 365,
323 U. S.
369.
Reversed.
* The Assignment of Claims Act provides that assignments of
claims which it would otherwise nullify are nevertheless valid
if
"they are freely made and executed in the presence of at least
two attesting witnesses, after the allowance of such a claim, the
ascertainment of the amount due, and the issuing of a warrant for
the payment thereof. . . ."