United States v. Becktold Co.

• Decision Date: 15 August 1942
• Docket Number: No. 12173.,12173.
• Citation: 129 F.2d 473
• Parties: UNITED STATES v. BECKTOLD CO.
• Court: U.S. Court of Appeals — Eighth Circuit

129 F.2d 473 (1942)

UNITED STATES v. BECKTOLD CO.

No. 12173.

Circuit Court of Appeals, Eighth Circuit.

July 13, 1942.

Rehearing Denied August 15, 1942.

COPYRIGHT MATERIAL OMITTED

Harry C. Blanton, U. S. Atty., of Sikeston, Mo. (Norman M. Littell, Asst. Atty. Gen., Roger P. Marquis, and Vernon L. Wilkinson, Attys., Department of Justice all of Washington, D. C., on the brief), for appellant.

Milton Yawitz, of St. Louis, Mo. (Rassieur, Long & Yawitz, of St. Louis, Mo., on the brief), for appellee.

Before GARDNER, WOODROUGH, and JOHNSEN, Circuit Judges.

GARDNER, Circuit Judge.

This was a proceeding brought by the United States under the Historic Sites Act of August 21, 1935, Title 16 U.S.C.A. § 461, to condemn certain real estate owned by the Becktold Company, of St. Louis, Missouri. The property was described in the Government's petition for condemnation as, "A lot of ground in Block 61 of the City of St. Louis, fronting 54 feet 6 inches, more or less, on the west line of Second Street, by a depth westwardly of 153 feet 9 inches, more or less, to an alley. Bounded north by Pine Street, and south by the north line of property now or formerly of the William G. Mueller Estate, said line being the center of an 18-inch party wall." The Government by its petition sought to take and acquire by condemnation the property described "in absolute fee simple, free and clear and discharged from all liens, incumbrances, servitudes, charges, restrictions and covenants whatsoever."

On November 23, 1938, a commissioner's report was filed, awarding compensation of $40,902.00. Each of the parties filed exceptions and demanded a jury trial. On June 15, 1939, the United States filed a declaration of taking pursuant to the Act of February 26, 1931, 40 U.S.C.A. § 258a, and deposited estimated compensation of $32,334.00. Thereupon the court entered judgment on the declaration, and directed the owner to surrender possession by a date fixed by the order. For convenience, we shall refer to the Government as plaintiff and to the Becktold Company as defendant. After the entry of judgment a stipulation was entered into and filed, by which it was agreed by the parties that machinery and equipment might be removed by defendant without prejudice to the rights of either party. On trial, the jury fixed defendant's damages at $76,148.00, and on a general verdict for that amount the court entered judgment.

The property is located in the river-front area of St. Louis. In 1859, there was constructed on it an ornate bank building with marble facing on the front and very elaborate cast iron ornamentation. Defendant leased the premises about 1870, and since that time, until the Government took possession under this proceeding, it has carried on a book binding business in the building. In 1925, the then owner of the property was unwilling to strengthen the building so as to accommodate heavier machinery required by defendant in its business, and it then purchased the property for $45,000.00. In 1927 and 1928, it remodeled the building at a cost of $25,000.00. In 1930, it constructed in the building a special fire proof air-brush room, at a cost of $6,000.00. At the time plaintiff instituted condemnation proceedings, defendant was operating its book binding plant on this property and on adjoining property which it had leased.

It was the contention of the Government in the lower court, and it renews that contention here, that it was liable to compensate defendant only for the land and the building, without any reference to the machinery and equipment installed therein. On the other hand, it was and is the contention of defendant that the Government was liable to compensate it for a completely integrated plant, including land, building, equipment and machinery, less a credit to the Government for the market value of the machinery which it had removed pursuant to stipulation of the parties. Defendant's evidence was first submitted, and, over the objection of the Government, embodied a valuation of the property as it stood at the time of taking, including the land, the building, the machinery and equipment. The Government's evidence was limited to the value of the land and the building, excluding all machinery, fixtures and equipment.

There were 150 different machines in the building, all bolted to the floor, among them thirteen folding machines weighing from 7,000 to 10,000 pounds each, the larger of these being ten feet high by twenty-five feet long. There were six knife cutting machines, with an average weight of 7,500 pounds each, and three knife trimmer machines, of an average weight of 12,000 pounds each; there was a gathering machine, fifty feet in length, weighing about 10,000 pounds, two smashing machines weighing about 5,000 pounds each, a packing machine, weighing about 10,000 pounds, a Murray back liner, twenty-five feet in length and weighing about 11,000 pounds, two case-making machines, weighing about 3,000 pounds each, five embossing machines, weighing from 7,000 to 15,000 pounds each, and two gang wire stitchers, about thirty feet in length. These are mentioned by way of illustration. The machinery was for the most part very heavy. Much of it could neither be installed in the building nor removed therefrom through any of the normal openings, but it was necessary to remove the windows and window casings, and part of the walls of the building. On occasion the walls had to be torn down for a width of about fifteen feet in order to admit machinery into the plant. The plant as a bindery had a capacity of 15,000 books per day of twenty-four hours. When defendant purchased the building, it was with a view of making it a permanent location for its business and to retain the machinery there permanently, and it was remodeled in 1927 and 1928 with that in view. Various spots in the building were reinforced by running steel beams or heavy joists in order to support the heavy machinery.

Plaintiff seeks reversal on the ground that the court erred in admitting evidence as to value of the property taken, and it asserts that the verdict is not supported by competent evidence.

It is important to determine at the outset the nature or character of the property which plaintiff has taken and for which it is liable to compensate the owner. It is described in the petition as real estate located in St. Louis, Missouri. Counsel for plaintiff say the Government simply wants the property as a historic site and that it has made no attempt to acquire the book binding business. It is true that it has not attempted to acquire the book binding business, and injury to a business is not an appropriation of property for which compensation must be made by the Government. But neither is plaintiff desirous of acquiring the structure on this land, yet it is liable for the value of the land as enhanced, if at all, by any permanent structure that is upon it. Plaintiff's own evidence includes the value of the original structure. The question is not what value the property may have to the Government, but what damage defendant suffers by the taking of the property. Bauman v. Ross, 167 U.S. 548, 17 S.Ct. 966, 42 L.Ed. 270; Campbell v. United States, 266 U.S. 368, 45 S.Ct. 115, 69 L.Ed. 328; Boston Chamber of Commerce v. Boston, 217 U.S. 189, 30 S.Ct. 459, 54 L.Ed. 725; City of St. Louis v. Brown, 155 Mo. 545, 56 S.W. 298. The Federal Constitution guarantees the property owner just compensation. If the machinery, fixtures and equipment in this building formed a part of the realty and tended to enhance the value of the realty, then it was being taken by the Government the same as the building on the lot described was being taken. As said by the Court of Appeals of New York in Jackson v. New York, 213 N.Y. 34, 106 N.E. 758, L.R.A. 1915D, 492, Ann.Cas.1916C, 779, speaking through Judge Cardozo, later Mr. Justice Cardozo,

"`Condemnation' is an enforced sale, and the state stands toward the owner as buyer toward seller. On that basis the rights and duties of each must be determined. It is intolerable that the state, after condemning a factory or warehouse, should surrender to the owner a stock of secondhand machinery and in so doing discharge the full measure of its duty. Severed from the building, such machinery commands only the prices of secondhand articles; attached to a going plant, it may produce an enhancement of value as great as it did when new. The law gives no sanction to so obvious an injustice as would result if the owner were held to forfeit all these elements of value. An appropriation of land, unless qualified when made, is an appropriation of all that is annexed to the land, whether classified as buildings or as fixtures, and so it has frequently been held."

Whether or not these fixtures and machinery under the facts disclosed constituted a part of the realty was dependent upon the law of the State of Missouri, the lex loci rei sitae. This was a question of real estate law which must always be determined by the law of the state in which the realty is located. Clarke v. Clarke, 178 U.S. 186, 20 S.Ct. 873, 44 L.Ed. 1028; United States Truck Co. v. Pennsylvania Surety Corp., 259 Mich. 422, 243 N.W. 311; Restatement Conflict of Laws, § 208. This is true regardless of how the court may have acquired jurisdiction, or where the court may be located. The same principle is applicable in the determination of the question as to what law governs in the ascertainment of whether certain articles are or are not fixtures. The law of the state where the property is situate also controls in deciding whether annexation of a chattel to a freehold makes it a part of the realty. Triumph Electric Co. v. Patterson, 8 Cir., 211 F. 244; Manufacturers Bank & Trust Co. v. Lauchli, 8 Cir., 118 F.2d 607; Bergh v. Herring-Hall-Marvin Safe Co., 2 Cir., 136 F. 368, 70 L.R.A. 756; Minor v. Cardwell, 37 Mo. 350, 90 Am.Dec. 390.

We therefore look to the law of Missouri. It is well...