United States v. 40,379 SQUARE FEET OF LAND, ETC.

• Decision Date: 17 November 1944
• Docket Number: No. 6728.,6728.
• Citation: 58 F. Supp. 246
• Parties: UNITED STATES v. 40,379 SQUARE FEET OF LAND, MORE OR LESS, IN CITY OF NEWTON, MIDDLESEX COUNTY, MASS., et al.
• Court: U.S. District Court — District of Massachusetts

58 F. Supp. 246

UNITED STATES v. 40,379 SQUARE FEET OF LAND, MORE OR LESS, IN CITY OF NEWTON, MIDDLESEX COUNTY, MASS., et al.

No. 6728.

District Court, D. Massachusetts.

November 17, 1944.

Edmund J. Brandon, U. S. Atty., and Philip P. A. O'Connell, Sp. Asst. U. S. Atty., both of Boston, Mass., for plaintiff.

C. Keefe Hurley and Joseph E. Casey, both of Boston, Mass., for defendants N. L. Steffens and others.

C. Keefe Hurley, of Boston, Mass., for defendant Anna L. Steffens.

Hugh S. Boyd, of Newton, Mass., for defendant North Congregational Church.

WYZANSKI, District Judge.

May 26, 1943, the Government, expressly acting under the authority of § 201 of the Second War Powers Act of March 27, 1942, c. 199, 56 Stat. 176, 177, 50 U.S.C.A. Appendix, § 632, which incorporates by reference the Act of August 1, 1888, c. 728, 25 Stat. 357, 40 U.S.C.A. §§ 257, 258, filed in this Court a petition for the condemnation of 29-41 Chapel Street, Newton, Massachusetts. That property was then owned by a nominee of Steffens. The property was subject to certain liens not now material. Part of it was rented by Steffens to Raytheon Production Company; another part was used by Steffens as a storage warehouse where he kept in cubicles goods stored by his clients. The petition sought immediate possession of the entire property, but was not accompanied by any deposit of funds. On the same day, Judge Sweeney caused the entry of an order authorizing the Government through a designated officer to take immediate possession of the property; that officer took possession forthwith; and on May 29, 1943 a deputy marshal of this Court served notice of the order by delivering a copy of the order to N. L. Steffens and by posting another copy on the premises. Thereafter Steffens did not collect rent. By July 1, 1943 Steffens had moved from the premises his personal property, his clients' goods, and the cubicles in which the clients' goods were stored. R. 137, 148 Ex. 10.

August 2, 1943, the Government, expressly acting pursuant to §§ 1, 2 and 4 of what is commonly called The Declaration of Taking Act of February 26, 1931, c. 307, 46 Stat. 1421, 40 U.S.C.A. § 258a et seq., filed in this Court a declaration of taking of the same property. This declaration was accompanied by a deposit of $30,800. On the same day Judge Ford caused the entry of a judgment decreeing that title to the property was vested in the Government.

November 6, 1944 a jury returned a special verdict to the effect that: (1) as of both May 26, 1943 and August 2, 1943 the fair market value of the property at 29-41 Chapel Street, excluding cubicles and egresses, was $45,180; (2) that on the same dates the egresses were valueless and the cubicles were worth $5,820; (3) at the time the cubicles were installed the then landlord and tenant both intended the cubicles to be part of the real estate; (4) the owner sustained damages of $5,500 from being forced to move from 29-41 Chapel Street the goods which were being stored there by his clients on May 26, 1943; and (5) the fair market value for the use and occupancy of 29-41 Chapel Street for the period from May 26, 1943 to August 2, 1943 was $1,500.

These questions of law are presented: (1) in estimating the value of the property was the jury justified (a) in including $5,820 on account of the cubicles and (b) in not giving any value to the egresses; (2) is the claimant entitled to damages on account of his expenses incurred in moving his clients' goods from Chapel Street; (3) in addition to $45,180 is the claimant entitled to $1,500 or to interest, and if so, at what rate.

First: (a) The cubicles were in the nature of walls. They were affixed by thousands of nails to the building; and their removal would cause obvious defacement and discoloration of the remaining structure. In view of these physical facts and the jury's finding as to the intention of the landlord and tenant at the time of installation of the cubicles, the cubicles were, as a matter of law, fixtures and were part of the real property on May 26, 1943. Moreover, prior to May 26, 1943 Steffens' nominee had acquired both the prior lease and the reversion and merged them, so that the cubicles on the premises became even more clearly a part of the real property. Thus, if the Government had taken title to the property as of May 26, 1943 the jury would have been justified in including $5,820 on account of the cubicles. But the Government, as is explained more fully in the third part of this opinion, never acquired title on or as of May 26, 1943 under the Act of August 1, 1888, 40 U.S.C.A. §§ 257, 258 or under any other act. It acquired title solely under the Declaration of Taking Act, 40 U.S.C.A. § 258a et seq., and as of August 2, 1943. By that date the cubicles were no longer a part of the real property. The Government never had the use of those cubicles and never had title to them. Their value should not be included in any judgment in this case.

(b) The egresses were structures added to the building by a particular tenant for its purposes. The jury took a view of these structures. The jury could reasonably have believed that the egresses were useless except for the particular tenant; were unsightly; and added nothing to, and perhaps subtracted from, the market value of the property. Thus the jury was justified in not giving any value to the egresses.

Second: When the Government took possession of the Chapel Street property Steffens had in storage goods belonging to his customers. He moved them to another site at a loss to himself which the jury has found to be $5,500. There is no showing that Steffens was under a legal obligation to his customers to move their goods. In transporting the goods, Steffens apparently acted as a volunteer, motivated by the hope that he could carry on his storage business at a new site.

The loss incurred in this undertaking is similar to the business loss which the ordinary occupier of business property sustains when his property is taken by the Government. The ordinary occupier loses the business good will which is associated with the particular premises. For his business protection he may choose to build up through commercial effort, advertising or other ways a comparable good will for another site. Steffens lost the special advantage of having his customers' goods on the Chapel Street property. For his business protection he had to build up through moving expenses and other ways a comparable store of goods on another site. The obligation of the Government to pay just compensation to an owner of property taken by paramount authority does not include an obligation to recompense him for the loss of his business opportunities or for the losses his business incurs through being forced to move. United States ex rel. T.V.A. v. Powelson, 319 U.S. 266, 281-283, 63 S.Ct. 1047, 87 L.Ed. 1390; Bothwell v. United States, 254 U.S. 231, 41 S.Ct. 74, 65 L.Ed. 238; Gershon Bros. v. United States, 5 Cir., 1922, 284 F. 849; Parcels of Land in City of Philadelphia v. United States, D.C.E.D.Pa., 57 F.Supp. 768; Connor v. Metropolitan Dist. Water Supply Comm., 314 Mass. 33, 41, 49 N.E.2d 593. If General Motors Corp. v. United States, 7 Cir., 140 F.2d 873 be to the contrary, I decline to follow it. As Mr. Justice Douglas said in Powelson's case, pages 281, 282 of 319 U.S., page 1055 of 63 S.Ct., 87 L.Ed. 1390: "There are numerous business losses which result from condemnation of properties but which are not compensable under the Fifth Amendment. * * * the sovereign must pay only for what it takes, not for opportunities which the owner may lose. * * * `Frustration and appropriation are essentially different things.'" From these principles it follows that Steffens cannot recover the expense of moving his customers' furniture, regardless of whether his motive was merely to re-establish his business or whether he was under a legal obligation to move his clients' goods out of the way. In either event the furniture storage business was not "taken" by the Government and need not be paid for by the Government.

Third: The most difficult question in this case is what, in addition to the $45,180 (found by the jury to be the value of the property excluding cubicles and egresses) is the owner entitled to recover on account of (a) the period from May 26, 1943 through August 1, 1943, an interval during which the Government occupied the property but had neither made a deposit in Court nor acquired title to the property, and (b) the period from August 2, 1943 when the Government deposited $30,800 in Court and acquired title until the day judgment shall be entered in this controversy.

Some of the difficulty arises from the ambivalent procedures adopted by the Government. First on May 26, 1943 it utilized the Act of August 1, 1888, c. 728, 25 Stat. 357, as amended by the Act of March 3, 1911, c. 231, § 291, 36 Stat. 1087, 1167, 40 U.S.C.A. §§ 257, 258, to file a petition for condemnation and to secure an order for immediate possession. Then on August 2, 1943 it utilized the Declaration of Taking Act of February 26, 1931, c. 307, 46 Stat. 1421, 40 U.S.C.A. § 258a et seq. to file a declaration of taking, to make a deposit of $30,800, and to secure an order recognizing the Government's title. There is no legal obstacle to the Government's course in adopting these two procedures in succession. Section 4 of the Declaration of Taking Act of February 26, 1931, c. 307, 46 Stat. 1421, 1422, 40 U.S.C.A. § 258d. But the practical consequence is that the two periods referred to in the preceding paragraph are governed by somewhat variant legal rules.

As to the period from May 26 through August 1, 1943, three contentions might be made: (1) that the owner is entitled to receive $1,500 which the jury has found to be the value of the use and occupancy of the premises during that period; (2) that he is entitled to receive for that period interest on $45,180 at 4% in accordance with ...