Kimball Laundry Co. v. United States

Decision Date11 March 1948
Docket NumberNo. 13494.,13494.
Citation166 F.2d 856
PartiesKIMBALL LAUNDRY CO. v. UNITED STATES.
CourtU.S. Court of Appeals — Eighth Circuit

William J. Hotz, of Omaha, Neb. (Hotz & Hotz, William J. Hotz, Jr., and William F. Dalton, all of Omaha, Neb., on the brief), for appellant.

Wilma C. Martin, Atty., Department of Justice, of Washington, D. C. (A. Devitt Vanech, Asst. Atty. Gen., and Joseph T. Votava, U. S. Atty., and Roger P. Marquis, Atty., Department of Justice, both of Omaha, Neb., on the brief), for appellee.

Before SANBORN, WOODROUGH, and JOHNSEN, Circuit Judges.

SANBORN, Circuit Judge.

The United States, in order to provide laundry and dry cleaning services for members of its armed forces, on November 21, 1942, filed a petition in condemnation under Section 201 of Title II of the Second War Powers Act of March 27, 1942, c. 199, 56 Stat. 176, 177, 50 U.S.C.A. Appendix, § 632, to acquire the right to the temporary use and occupancy of the Kimball Laundry in Omaha, Nebraska, until June 30, 1943, and, at the election of the Secretary of War, from year to year thereafter during the emergency.1 The Kimball Laundry was a large, modern, long-established, profitable and fully equipped laundry and dry cleaning establishment owned and being operated by the appellant, Kimball Laundry Company. The stock of the Company and the management of its affairs were in the hands of the Jacobberger family.

The District Court granted the Government immediate possession of the laundry, and on November 22, 1942, it took over the entire plant, machinery and equipment (except delivery equipment), and, with A. L. Jacobberger (secretary and operations manager of the Company) as superintendent and about 95% of the Company's 185 employees, commenced operating the plant as a military laundry.

The Company, having no means of serving its patrons, went out of business for the duration of the Government's use and occupancy of the plant. The Secretary of War extended the term of occupancy for one year from June 30, 1943, and each year thereafter until June 30, 1946.2

A Board of six appraisers, appointed by the District Court in conformity with Nebraska practice, reported on November 19, 1943, "that the just compensation for the value of the use of the premises taken by the United States of America is the sum of $74,940 per annum, or the sum of $6,245 per month, and we find that said monthly rental was payable on the 21st day of each and every month, commencing on the 21st day of November, 1942, and that all delinquent monthly rentals shall bear interest at the rate of five per cent per annum until paid, to be paid said respondent, Kimball Laundry Company, by the United States of America." The appraisers also reported that they recognized that at the time of the return of the property to the Company there would be damage for loss of patrons, but that a majority of the Board had found that the damage could not be appraised at the time their report was made. The Government and the Company both took appeals from the award of the appraisers.

The trial for the ascertainment of the "just compensation" due the Company began on March 4, 1946, before a jury, and ended March 19, 1946. The Company contended that the Government, while ostensibly taking only the right to use and occupy the laundry, had in legal effect taken all of the Company's physical assets and its business as well, including its trade routes and customers, and was obligated to pay the full market value of what was taken, estimated to be approximately $1,000,000. The Company also contended that if the rental or use value of its laundry was to be used to measure compensation, evidence of the value of its trade routes and customers was admissible as an element of value.

The Government asserted that just compensation was to be measured by the market rental or use value of the laundry during the period in suit, plus the cost of restoring the plant and machinery to the condition in which they were on November 22, 1942.

The District Court was in accord with the Government's theory as to the proper basis for determining just compensation. The court's rulings and its instructions to the jury were in substantial conformity with that theory.

The jury by its verdict, filed March 20, 1946, determined that the compensation due the Company for the use and occupancy of its laundry for 3.6 years (November 22, 1942, to June 30, 1946) was $297,776.03, consisting of use or rental value of $70,000 per annum, or $252,000 for the term, and $45,776.03 additional compensation for failure to return the property in the same condition as it was on November 22, 1942. Judgment was entered on the verdict. The court added interest at 6% (1) from November 22, 1942, until paid, on the amount adjudged due for the use of the laundry from November 22, 1942, to June 30, 1943, and (2) upon the amount due each year thereafter from the beginning of that year until paid, giving credit to the Government for the sums deposited as estimated compensation. Interest was also added from March 20, 1946, until paid, on the sum of $45,776.03 awarded for failure to return the property in the same condition as when taken.

On March 23, 1946, the Government returned the laundry to the Company, and on June 11, 1946, the Government paid into court $98,124.27, the amount required to satisfy the judgment. The Company was permitted by the court to withdraw $75,000 of this sum without prejudice to the Company's right of appeal.

For the purposes of this case, we shall assume, without deciding, that under § 258a of Title 40 U.S.C.A., the Company could accept $75,000 of the amount which the Government had deposited in court to satisfy the judgment, without waiving the right to challenge its validity.

In the Company's brief, "Points Relied upon for Reversal" are numbered from I to XXXII. They relate to the instructions of the court and to rulings with respect to pleadings and evidence. Most of them are not argued in the brief and virtually all of them reflect the divergence of views of counsel for the Company and those of the trial court relative to the proper standards for ascertaining just compensation. An unargued assertion of error is no more helpful to an appellate court than is an unsupported allegation of fact to a trial court. The burden of demonstrating error is upon an appellant,3 and errors assigned, but not argued in his brief, are waived.4

In its brief, under the heading "Statement of the Case," the Company says:

"At the outset appellant believes this statement of the case would be lacking if counsel neglected to now state that errors are assigned principally for the failure of the court to permit the introduction of competent evidence as to the fair market value of the corporation assets as a going concern with its existing established trade routes at the time of taking on November 22, 1942, and to instruct the jury accordingly. Instead, the trial court took the position during the trial that just compensation should be measured only as interest at some per cent on the intrinsic value of the land, on the intrinsic value of the building, and on the intrinsic value of the machinery, and so instructed the jury, and excluded other evidence offered as to fair, reasonable market value. Evidence of estimated cost of repairing damaged property was permitted by government agents unfamiliar with the actual damages. The government did not repair or restore the damages to appellant's property. Its agents merely estimated what it would cost to place machinery, etc., again as it was on November 22, 1942."

It thus appears that the Company complains mainly of (1) the standards adopted for measuring just compensation, and (2) the evidence of the Government relating to the probable cost of repairing or restoring the damage to the plant and machinery attributable to the Government's use and occupancy.

The Company, in its brief, argues four "Propositions of Law." We shall discuss them in their order.

The first proposition is stated as follows:

"When all the physical assets of a going business, such as a laundry and dry cleaning corporation, are condemned for the purpose of governmental operation of the same business for the exclusive use of the army, thus putting the condemnee corporation out of business entirely, the fair, reasonable market value to the corporation as a going concern on the date of the taking forms the proper legal basis upon which to measure such just compensation. The established laundry trade routes, when so proven to have a readily ascertainable value on the market, form a part of the composite fair market value on the date of taking. These routes are distinguished from the noncompensable items of good will, loss of profit, and loss of further business. If it is proven that these routes would be destroyed as a natural consequence known to the condemnor as a direct and proximate result of the taking of the physical plant owned by the condemnee, their value forms a part of the total value of the compensable property taken. The refusal of the trial court to receive competent evidence offered to prove such value is reversible error."

We cannot accept this proposition as the law. The Government took exactly what it purported to take, namely, the temporary use and occupancy of the Company's laundry. The Government did not take or intend to take, and obviously could not use, the Company's business, trade routes or customers. No doubt the Government's occupation of the plant disrupted and damaged the Company's business, although it could hardly have destroyed the demand for laundry service in the city of Omaha or disabled the Company from ever re-establishing its business. If the taking of the temporary occupancy of the Company's laundry were to be given the effect of the taking of fee title to the laundry, it is certain that the damage done to the Company's business would not be compensable under the Fifth Amendment.5

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