Marion Rye Valley Ry Co v. United States

• Decision Date: 01 March 1926
• Docket Number: No. 315,315
• Parties: MARION & RYE VALLEY RY. CO. v. UNITED STATES
• Court: U.S. Supreme Court

270 U.S. 280

46 S.Ct. 253

70 L.Ed. 585

MARION & RYE VALLEY RY. CO.

v UNITED STATES.

No. 315.

Argued Jan. 6, 1926.

Decided March 1, 1926.

Messrs. Ben B. Cain and Milton C. Elliott, both of Washington, D. C., for appellant.

Mr. A. A. McLaughlin, of Des Moines, Iowa, for appellee.

Mr. Justice BRANDEIS delivered the opinion of the Court.

The Marion & Rye Valley Railway Company, a short line railroad, brought this suit in the Court of Claims to recover $14,425.94 as compensation for the alleged taking possession and use by the United States of its railroad during the period beginning December 28, 1917, and ending June 29, 1918. That sum is the amount which, on September 30, 1922, a board of referees appointed by the Interstate Commerce Commission, pursuant to section 3 of the Federal Control Act, March 21, 1918, c. 25, 40 Stat. 451, 454 (Comp. St. 1918, Comp. St. Ann. Supp. 1919, § 3115 3/4 c) found to be just. The application for the appointment of the board was made after the Director General had refused to pay the company any compensation.¹ The suit was begun after he had refused to accept the report as a basis for settlement. The case was heard upon a stipulation of the facts which the court adopted as its findings. The government denied liability. It contended that there was not a legal taking, because the President did not take actual possession of the railroad, did not operate it, and did not otherwise exercise control. It contended, also, that, even if there was a technical taking of possession, the plaintiff was not entitled to any compensation because it suffered no pecuniary loss. Both contentions were sustained by the court, and judgment was entered for the defendant on January 26, 1925. 60 Ct. Cl. 230. The appeal was duly taken under section 242 of the Judicial Code (Comp. St. § 1219). We have no occasion to determine whether in law the President took possession and assumed control of the Marion & Rye Valley Railway. For even if there was technically a taking, the judgment for defendant was right. Nothing was recoverable as just compensation, because nothing of value was taken from the company, and it was not subjected by the government to pecuniary loss. Nominal damages are not recoverable in the Court of Claims. Grant v. United States, 7 Wall. 331, 338, 19 L. Ed. 194.

Power to take possession and assume control of any railroad, on account of the war emergency, had been conferred upon the President by Act of August 29, 1916, c. 418, 39 Stat. 619, 645 (Comp. St. § 1974a). See Northern Pacific Ry. Co. v. North Dakota, 39 S. Ct. 502, 250 U. S. 135, 142-147, 63 L. Ed. 897; Missouri Pacific R. R. Co. v. Ault, 41 S. Ct. 593, 256 U. S. 554, 556-557, 65 L. Ed. 1087; St. Louis, Kennett & Southeastern R. R. Co. v. United States, 45 S. Ct. 245, 267 U. S. 346, 69 L. Ed. 649. The President issued, on December 26, 1917, a proclamation which recited that '(I) do hereby * * * take possession and assume control at 12 o'clock noon on the twenty-eighth day of December, 1917, of each and every system of transportation * * * consisting of railroads, * * *' and a Director General was appointed. 40 Stat. 1733. Some general notices or orders by the Director General were received by the Marion & Rye Railway Company shortly after the issue of the proclamation; but no order dealing specifically with that railroad was given by him. He did not at any time take over the actual possession or operation of the rail- road, did not at any time give any specific direction as to its management or operation, and did not at any time interfere in any way with its conduct or activities. The company retained possession and continued in the operation of its railroad throughout the period in question. The railroad was operated during the period exactly as it had been before, without change in the manner, method or purpose of operation. The railroad did not serve any military camp, nor did it transport troops or munitions. The character of the traffic remained the same. Nothing appears to have been done by the Director General which could have affected the volume or profitableness of the traffic or have increased the requirements for maintenance or depreciation, and apparently it retained its earnings, expended the same as it saw fit, and, without accounting to the government, devoted the net operating income to the company's use.

The company urges that the claim sought to be enforced rests upon a statutory right to the just compensation specifically defined in section 1 of the Federal Control Act (Comp. St. 1918, Comp. St. Ann. Supp. 1919, § 3115 3/4 a); that the compensation there prescribed is for the rental value at the rate of the average annual railway operating income for the three years ended June 30, 1917; that by the taking, although technical, the government agreed to pay the compensation defined in the statute; that the function of the board of referees, acting under the statute, was to find that sum 'as nearly as may be'; and that by its report it had done so. It is true that in this case the claim is founded upon 'a law of Congress'-not upon a 'contract, express or implied.' Judicial Code, § 145, par. Frist (Comp. St. § 1136). Recovery cannot be sought upon the contract implied in fact which, in view of the constitutional obligation justly to compensate for property taken by eminent domain, ordinarily arises on a taking of private property by the government pursuant to law, where no provision is made by statute for ascertaining the amount of compensation or for enforcing payment. Compare United States v. Great Falls Manufacturing Co., 5 S. Ct. 306, 112 U. S. 645, 28 L. Ed. 846; Great Falls Mfg. Co. v. Garland, 8 S. Ct. 631, 124 U. S. 581, 31 L. Ed. 527; Tempel v. United States, 39 S. Ct. 56, 248 U. S. 121, 129, 63 L. Ed. 162. Here both the method of determining the amount and the means of enforcing payment are prescribed by statute. Compare William Cramp & Sons, etc., Co. v. International Curtis Marine Turbine Co., 38 S. Ct. 271, 246 U. S. 28, 62 L. Ed. 560. But the question remains what is the amount recoverable. Did the Federal Control Act merely confer authority upon the President to enter into an agreement to pay as much as the so-called 'standard return,' or did it also direct him, if such an agreement was not reached, to make payment on the basis of the 'standard return'?

Congress has power to recognize moral obligations. United States v....