UNITED STATES V. TORONTO NAV. CO., 338 U. S. 396 (1949)

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U.S. Supreme Court

United States v. Toronto Nav. Co., 338 U.S. 396 (1949)

United States v. Toronto, Hamilton & Buffalo Navigation Co.

No. 39

Argued November 9, 1949

Decided December 12, 1949

338 U.S. 396


Under authority of § 902 of the Merchant Marine Act of 1936, as amended, the United States requisitioned respondent's fresh water car ferry on Lake Erie. The vessel was built in 1916, was in service on Lake Erie from that year until 1932, and, except for a 2-year charter period, was idle from 1932 until requisitioned in 1942. In determining the amount of just compensation required by the Fifth Amendment to be paid respondent, the Court of Claims, absent evidence of "market value," relied upon the earnings of the vessel from 1916 to 1932 and upon the "demand" for such a vessel for use between Florida and Cuba.


1. On the record in this case, the Court of Claims erred in relying on the vessel's 1916-1932 earnings. Pp. 338 U. S. 402-403.

(a) Where, as here, it is impossible to determine "market value" as a basis for just compensation, other measures of value may be relevant. Pp. 338 U. S. 402-403.

(b) Past earnings are significant in assessing value only when they tend to reflect future returns. P. 338 U. S. 403.

(c) On the record, the vessel's 1916-1932 earnings were without relevance on the issue of its capacity to earn after 1942, on the Great Lakes or elsewhere. P. 338 U. S. 403.

2. On the record in this case, the Court of Claims erred in according weight to Florida values. Pp. 338 U. S. 404-407.

(a) To justify consideration of Florida values, the burden was on the respondent to show that it was likely that a prospective Florida buyer would have investigated the Great Lakes market and considered a vessel like respondent's moored to its Ohio dock, or that the ordinary Great Lakes owner would have taken the trouble and expense to send a vessel to Florida for a possible sale, or that either of these possibilities would have had an effect on price had respondent's vessel been sold on the Great Lakes. P. 338 U. S. 406.

(b) The question in such case is what the ordinary businessman in the trade would have done, not what the owner would have done. P. 338 U. S. 406.

Page 338 U. S. 397

(c) Respondent's burden of proof was not met by a bare record of five sales, three of which were to the United States, and but one on the Great Lakes for Florida use -- and that after the war's end. P. 338 U. S. 406.

(d) A finding by the Court of Claims that there were probabilities of sale in Florida in 1942 sufficient to warrant consideration of demand there in fixing the value of respondent's vessel, on substantial evidence not now before this Court, is not foreclosed, but the Court of Claims is not bound to accept any geographic price range at full value. Pp. 338 U. S. 406-407.

112 Ct.Cl. 240, 81 F.Supp. 237, reversed.

In an action against the United States to recover just compensation for a vessel requisitioned under § 902 of the Merchant Marine Act of 1936, as amended, the Court of Claims awarded judgment in favor of the claimant, respondent here. 112 Ct.Cl. 240, 81 F.Supp. 237. This Court granted certiorari. 336 U.S. 965. Reversed and remanded, p. 338 U. S. 407.

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