United States v. Seaboard Air Line Ry. Co.

• Decision Date: 07 February 1922
• Docket Number: 1921.
• Citation: 280 F. 349
• Parties: UNITED STATES v. SEABOARD AIR LINE RY. CO. et al.
• Court: U.S. Court of Appeals — Fourth Circuit

280 F. 349

UNITED STATES v. SEABOARD AIR LINE RY. CO. et al.

No. 1921.

United States Court of Appeals, Fourth Circuit.

February 7, 1922

Francis H. Weston, U.S. Atty., of Columbia, S.C. (G.L.B. Rivers Asst. U.S. Atty., of Charleston, S.C., and Howard W. Ameli of Washington, D.C., on the brief), for the United States.

George L. Buist, of Charleston, S.C. (Buist & Buist, of Charleston S.C., on the brief), for defendants in error.

Before WOODS and WADDILL, Circuit Judges, and WEBB, District Judge.

WADDILL Circuit Judge.

This is a writ of error to a judgment of the United States District Court for the Eastern District of South Carolina, in an action at law, wherein the plaintiff in error was defendant and the defendant in error was plaintiff. The facts of the case are briefly these:

On the 23d day of May, 1919, the President of the United States, pursuant to the provisions of the act of Congress of the 10th of August, 1917 (Comp. St. 1918, Comp. St. Ann. Supp. 1919, Secs. 3115 1/8e-3115 1/8kk, 3115 1/8l-3115 1/8r), familiarly known as the Lever 'National Defense Act,' requisitioned and possessed himself of certain lands mentioned and described in the proceedings, for governmental purposes, in order to provide storage facilities for supplies necessary to the support of the army, and other public uses connected with the public defense; and the President, pursuant to section 10 of said act (section 3115 1/8ii), caused to be appropriately ascertained what was just compensation to be paid by the government for the property taken, with which valuation the plaintiff was dissatisfied, and instituted this suit for the purpose of recovering such reasonable and fair valuation as he alleged would constitute just compensation for the lands taken. The government duly appeared, admitted the facts as to the taking of the property, and its possession thereof, but denied the valuation placed on the land by the plaintiffs, and insisted that the government valuation was the fair and full value therefor, and constituted just and ample compensation, which amount the government was ready to pay.

Issue being joined, on plaintiff's motion, a jury was impaneled to ascertain what would constitute just compensation for the property taken, and on the 5th of May, 1920, a verdict was returned, awarding to the plaintiff $6,000, the value as of the date of the taking of the property. On the 9th of May, 1920, judgment was entered upon the verdict against the United States, for the amount thereof, with interest from the 23d day of May, 1919, the date on which the property was taken, at the rate of 7 per cent., the court stating that to be the statutory rate of interest in South Carolina. To the entry of this judgment, the United States, by its attorney, excepted, and the case is here upon writ of error to test the validity of the same.

Several assignments of error are presented, but the one pressed and relied upon by the government, all other questions being in effect waived, is as to the allowance of interest on the judgment from any time and at any rate. Did the District Court err in awarding interest at the rate of 7 per cent. upon the verdict, from the date of the taking of the property, some two years antedating the rendition of the same? This is the sole question at issue in this case.

Section 10 of the Lever Act provides that the President may requisition foods, feeds, fuels, and other war supplies, and necessary storage facilities, and that he shall ascertain and pay just compensation therefor, and, if any person is not satisfied with the President's award, he is to receive 75 per cent. of the award, and for the balance of the claim 'shall be entitled to sue the United States * * * and jurisdiction is hereby conferred on the United States District Court to hear and determine all such controversies. ' Under this section, the District Court is given full and complete jurisdiction to hear and determine all controversies arising from taking property of the kind in question, where the amount fixed by the President is deemed by the property owner insufficient, and he may sue, and the parties are entitled to a trial by jury to ascertain the just compensation for the property taken. United States v. Pfitsch (decided June 1, 1921) 256 U.S. 547, 41 Sup.Ct. 569, 65 L.Ed. 1084.

It has long been recognized, by an almost unbroken line of federal decisions, as well as by the invariable practice of the executive departments, that interest will not be allowed against the government, save where payment thereof is expressly stipulated for by contract, or is given in terms by the act of Congress under consideration. Citations from the Supreme and inferior courts to sustain this view, might be given almost without number, but only a few need be mentioned. In Pacific Coast Steamship Co. v. United States, 33 Ct.Cl. 36, Judge Howry, at page 49, aptly states the doctrine as follows:

'Interest, therefore, as a rule, is the creature of the statute. The courts have announced this proposition so often, and text-writers have so generally accepted the same as correct, it may now be said to be axiomatic that unless the warrant for the payment of interest be found in the statute interest cannot be collected. The principle is well settled that the United States are not liable to pay interest on claims against them in the absence of statutory direction. This is so whether such claims originate in contract or in tort, or whether they arise in the ordinary course of business with the government, or under legislation making appropriations for specific relief. The only recognized exceptions are where the government stipulates to pay interest, and where it is expressly given by an act of Congress, either by the name of interest or by that of damages. The practice has long prevailed in the departments of not allowing interest on claims presented, liquidated or unliquidated, except in some way specially provided for. The Supreme Court adopted this rule from a succession of the opinions of the Attorneys General of the United States in a well-considered case on the subject, from which we know of no settled departure. Angarica v. Bayard, 127 U.S. 251. See, also, Gordon v. United States, 7 Wall. 188, and Harvey v. United States, 113 U.S. 243, 249; United States v. New York, 160 U.S. 619.'

In one of the very latest cases, United States v. Rogers, 255 U.S. 163, 41 Sup.Ct. 281, 65 L.Ed. 566, relied on by the lower court, in which interest was allowed in condemnation proceedings instituted by the government, Mr. Justice Day, speaking for the court, said:

'It is unquestionably true that the United States upon claims made against it, cannot, in the absence of a statute to that end, be subjected to the payment of interest. Angarica v. Bayard, 127 U.S. 251, 260; United States v. North Carolina, 136 U.S. 211, 216, cited and approved in National Volunteer Home v. Parrish, 229 U.S. 494, 496. In the present case the landowners did not sue upon a claim against the government, as was the fact in United States v. North American Transportation & Trading Co., 253 U.S. 330.'

In the Rogers Case, Mr. Justice Day cited United States v. North American Transportation Co., 253 U.S. 333, 334, 335, 336, and 337, 40 Sup.Ct. 518, 64 L.Ed. 935, a suit in its essential features like the one here, save that the latter came from the Court of Claims, and nearly 20 years had elapsed between the taking of the property and the rendition of the judgment. In the last-named case, Mr. Justice Brandeis most comprehensively reviews the authorities bearing on the entire subject, from which it will readily be seen that irrespective of what may be done in condemnation proceedings, brought by the government against a citizen, interest will not be allowed where the government is being sued. This case would seem to remove all doubt on this generally accepted well settled question, and shows that the government, entirely regardless of what may be said of the injustice of its position, has hitherto consistently held to its right as at common law, not to be charged with the consequences of loss arising from delays, even if hardships ensue. The result in this respect is similar to the refusal to allow costs to be taxed against the government, or to be held responsible for the tortious acts of its agents. These conditions necessarily arise in dealing with the sovereign, and for which there is no redress.

The case of Tillson v. United States, 100 U.S. 43, 25 L.Ed. 543, will be found of special application here. There, Congress referred to the Court of Claims to 'investigate * * * and 'ascertain * * * the amount equitably due'' as damages for alleged breach of contract, and the question arose as to whether, by the use of the word 'equitable,' it was not intended by the act that interest should be allowed on the award. The Supreme Court, speaking through Chief Justice Waite, said, at page 46 of 100 U.S. (25 L.Ed. 543):

'But if Congress had desired to grant such authority, it would have been easy to have said so in express terms; and, because it did not say so, we are led irresistibly to the conclusion that it did not intend to give any such power.'

Cases arising under section 1 of the Act of March 3, 1887 (now section 24, par. 20, of the Judicial Code (Comp. St. Sec 991)), conferring on District and Circuit Courts jurisdiction to hear certain claims against the government, though the inhibition against the allowance of interest applies only to the Court of Claims, and not specially to those courts, they invariably, as far as is known, disallow interest, unless the same is either stipulated for, or given by act of Congress. Marvin v. United States (C.C.) 44 F. 405; United States v. Barber, 74 F. 483, 20 C.C.A. 616; ...