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REPORT OF DECISIONS

OF

THE SUPREME COURT

IN COURT OF CLAIMS CASES

THE UNITED STATES, PETITIONER THE TORONTO, HAMILTON AND BUFFALO NAVIGATION COMPANY

[No. 46435)

[112 C. Cls. 240; 338 U. S. 396] On writ of certiorari (336 U. S. 965) to review a judgment of the Court of Claims holding the plaintiff, owner of the Maitland No. 1, a car ferry operating on the Great Lakes, requisitioned by the Government in 1942, was entitled to recover just compensation on the basis of a valuation of $161,833.72, against which the defendant was entitled to a credit of $54,375 paid on June 10, 1944, and that plaintiff was further entitled to recover as compensation interest at 4 percent per annum for delay in payment on $161,833.72 from August 20, 1942, to June 10, 1944, and on $107,458.72 from June 10, 1944, to date, under the Merchant Marine Act of 1936, as amended.

The judgment of the Court of Claims was reversed December 12, 1949, and the cause remanded for further proceedings in the light of the opinion of the Supreme Court.

The opinion of the Supreme Court was delivered by Mr. Justice Clark. The syllabus of the Supreme Court is as follows:

Under authority of 8 902 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. În determining the amount of just compensation required

115 C. Cls.

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. Held:

1. On the record in this case, the Court of Claims erred in relying on the vessel's 1916–1932 earnings.

(a) Where, as here, it is impossible to determine "market value" as a basis for just compensation, other measures of value may be relevant.

(b) Past earnings are significant in assessing value only when they tend to reflect future returns.

(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.

2. On the record in this case, the Court of Claims erred in according weight to Florida values.

(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.

(b) The question in such cases is what the ordinary businessman in the trade would have done, not what the owner would have done.

(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.

(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. Mr. Justice Douglas took no part in the consideration or decision of this case.

Mr. Justice Frankfurter filed a concurring opinion.

835

THE UNITED STATES, PETITIONER v. WILLIAM

WINTERS AND JOHN T. PAYNE, COPARTNERS, D/B/A WILLIAM WINTERS & CO.

[No. 47719)

[114 C. Cls. 394; 338 U. S. 903)

Government contract; liability of contractor on bid bond where right to proceed was terminated by defendant for failure to furnish performance and payment bonds; second contract awarded plaintiffs for same work at higher figure. Judgment for plaintiffs.

Defendant's petition for writ of certiorari denied by the Supreme Court December 19, 1949.

THE UNITED STATES, PETITIONER v. CUMBER

LAND PUBLIC SERVICE CO.

[No. 46963)

[113 C. Cls. 460; 338 U. S. 451]

On writ of certiorari (338 U. S. 846) to review a judgment of the Court of Claims holding that where upon the evidence adduced the sale of corporate assets had in fact been made by the stockholders who had first offered to sell their stock and then, in accordance with a counter offer, caused a liquidation of the corporation and distribution of its assets in kind, the gain on the sale was not to be imputed to the corporation.

The decision of the Court of Claims was affirmed by the Supreme Court January 9, 1950, in an opinion by Mr. Justice Black. The syllabus of the Supreme Court's decision is as follows:

A closely held corporation made to its shareholders a distribution of assets in kind and was dissolved. The stockholders transferred the property to a purchaser. In an action by the corporation for refund of a capital gains tax on the sale, the Court of Claims found, upon proper supporting evidence, that the sale was made by the shareholders rather than by the corporation, and

115 C. Cls.

entered judgment for the corporation. Held: The record does not require a finding that the sale was made by the corporation rather than by the shareholders, and the judgment of the Court of Claims is affirmed. Commissioner v. Court Holding Co., 324 U. S. 331, distinguished.

(a) A corporation may liquidate or dissolve without subjecting itself to the corporate gains tax, even though a primary motive is to avoid the burden of corporate taxation.

(b) In this case it was for the Court of Claims (the trial court), upon consideration of the entire transaction, to determine the factual category in which the trans

action belonged. Mr. Justice Douglas took no part in the consideration or decision of this case.

THE UNITED STATES, PETITIONER, V. MOORMAN,

ET AL., DOING BUSINESS AS J. W. MOORMAN & SON

[No. 46439]

[113 C. Cls. 159 ; 338 U. S. 457] On writ of certiorari (338 U. S. 810) to review a judgment of the Court of Claims holding that under the provisions of a Government construction contract, where a decision of the contracting officer was affirmed on appeal by the Board of Contract Appeals, acting for the Secretary of War, the decisions of the contracting officer and the head of the department could not be sustained under the facts and the specifications and drawings, and that the decisions of the contracting officer and the head of the department were not final and conclusive by virtue of the provisions of the specifications.

The decision of the Court of Claims was reversed January 9, 1950, by the Supreme Court in an opinion by Justice Black The syllabus of the Supreme Court's decision is as follows:

Specifications attached to and made a part of a government construction contract on the standard form provided that, “if the contractor considers any work

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