Arkansas Valley Ry., Inc. v. United States

68 F. Supp. 727, 107 Ct. Cl. 240
CourtUnited States Court of Claims
DecidedDecember 2, 1946
Docket46066
StatusPublished
Cited by10 cases

This text of 68 F. Supp. 727 (Arkansas Valley Ry., Inc. v. United States) is published on Counsel Stack Legal Research, covering United States Court of Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Arkansas Valley Ry., Inc. v. United States, 68 F. Supp. 727, 107 Ct. Cl. 240 (cc 1946).

Opinions

WHALEY, Chief Justice.

The plaintiff is a corporation of the State of Kansas, and on July 16, 1942, owned and operated 63 miles of railroad within the State of Kansas between Hutchinson and Wichita, with a branch from Van Arsdale to Newton.

On that date, July 16, 1942, the defendant, acting through the War Production Board and the Metals Reserve Company, requisitioned the rails, track fastenings and other metal track material of the entire line, and, pursuant to the requisition, took possession.

Thereafter three segments were returned to the plaintiff intact by means of wash sales, it appearing that there was a need for them as transportation facilities in time of war.

The aggregate mileage of these three segments was approximately 2 miles, leaving a net requisition of 61 miles.

The defendant dismantled the remaining mileage and the War Production Board offered the plaintiff the sum of $109,569.53. as its share of just compensation for the taking, and $54,817.02 to the counties of Harvey, Reno, and Sedgwick as their share of just compensation. The county shares, were delinquent taxes due the counties, from plaintiff for the years 1934, 1935, 1936. and 1937, which were a lien on the materials taken.

The counties, with plaintiff’s consent,, were paid in full to the satisfaction of the-county authorities, but the plaintiff was not satisfied with the award. The War Production Board therefore under the statute-paid plaintiff $54,784.76 only, which is one-half of $109,569.53, and plaintiff now sues, to recover sufficient more to make up what it conceives to be just compensation. Under these circumstances the payment of $54,817.02 is to be treated as a payment: made to the plaintiff, and it will be so considered, so that there has been paid by the defendant, by way of just compensation-for the taking, the aggregate sum of $109,-601.78 on an award of $164,386.55, a difference of $54,784.77.

The plaintiff in its petition avers that the defendant is entitled to a credit $109,101.78' (presumably the sum of $109,601.78).

The defendant admits that the plaintiff' was entitled to just compensation — the question is as to the amount.

The defendant’s contention is that plaintiff is entitled only to the detached value of the material taken; the plaintiff counters with the proposition that the value to-be considered is a so-called “in-place”' value.

We think the in-place value must govern except as to the 43 miles hereinafter described. The fact cannot be escaped that when the requisition was served, the company was operating the railroad. We so find. That does not mean that val[729]*729ues are thereby to be raised inordinately. But the railroad was in fact in operation when the requisition was served and the •dismantling took place afterwards. ■

There is here no room for application of the “severance” doctrine whereby taking of a part that results in direct damage to the remainder justifies additional compensation. A more inclusive taking can hardly be imagined than that which took place here. With the taking of the tracks there was a complete disappearance of the railroad and an end to the easement. The right of way vanished and the land reverted to the holder of the fee. The little that was left, ties and some poles, were salvaged by the plaintiff and are not here claimed upon. There was nothing left of the railroad; the defendant took it all, not even the shell was left. There is no such thing as a railroad without rails and a right of way.

The case of Coombs, Jr., Trustee, v. United States, 65 F.Supp. 1014, 106 Ct.Cl. 462, is along this line. In that case, the Navy Department requisitioned articles which comprised a factory and offered the owner compensation based on prices set article by article without considering the fact that the whole comprised a factory. This Court held that what was taken constituted a factory and, for that reason, had a special value which must be recognized in fixing just compensation.

It appears that the Office of Price Administration had set up certain maximum prices which governed the bulk of the metallic material here involved and that defendant’s officers based their award upon these prices. The case was originally submitted to the court, after the report of a commissioner, upon testimony which the court deemed lacking in sufficiency. The case was remanded to the commissioner with instructions to:

1. Require the plaintiff to produce evidence as to the value of the property taken by the defendant at the time of taking.

2. Require the defendant, if it so elects, to produce •

A. Evidence of the value of the property taken at the time of taking, or

B. The factors which were taken into consideration by the Office of Price Administration in arriving at the price placed upon the property by that Administration, or

C. Any other factors which should be taken into consideration in arriving at the money equivalent of the property taken at the time of taking.

Testimony was taken on the remand and the commissioner again filed a report. The parties accordingly have had full opportunity to offer evidence. The court is not satisfied that O.P.A. ceiling prices are the proper measure of just compensation. See A. D. Walker v. United States, 64 F.Supp. 135, 105 Ct.Cl. 553. However, in that case the ceiling price had' been removed at the time of requisition.

The plaintiff was paid for demolition on a contract with defendant therefor.

The plaintiff was a going concern, the railroad was operating, the Intestate Commerce Commission had not yet issued its Certificate of Public Convenience and Necessity permitting an abandonment that had on January 30, 1942, been requested of the Commission. In fact, this certificate was not issued until July 20, 1942, four days after defendant’s requisition. The certificate, therefore, was without legal effect.

There were two sections of requisitioned track that had market value as track in place. One was a stretch of 13 miles between Hutchinson and Burrton. On this section the findings place a fair market value of $85,814.42 with track in place.

The other section was 5 miles- between Valley Center and the Ripley plant, on which there is found a fair market value of $29,484.25 with track in place.

Plaintiff’s line was being placed on the market in sections, not as a whole. Its value as a whole had apparently disappeared before the time of requisition. In fact the plaintiff had taken the legal preliminary steps necessary to its abandonment. This fact must be and is taken into consideration.

[730]*730The remainder of the road, 43 miles (excluding the two segments referred to immediately above and those returned by wash sales), had no fair market value as track in place, in which condition the taking was effected, beyond that of a salvage value of $180,155.81 (Finding 25).

There were certain outstanding taxes for the years 1932 to 1937, inclusive,'imposed by the Counties of Harvey, Reno and Sedgwick, that constituted a lien on plaintiff’s railroad. These three counties had by contract with the plaintiff agreed to remit these taxes provided the plaintiff would continue to operate its line, except for yearly payments of $100 to each of the counties during the years of operation.

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Arkansas Valley Ry., Inc. v. United States
68 F. Supp. 727 (Court of Claims, 1946)

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Bluebook (online)
68 F. Supp. 727, 107 Ct. Cl. 240, Counsel Stack Legal Research, https://law.counselstack.com/opinion/arkansas-valley-ry-inc-v-united-states-cc-1946.