The United States has the authority to take private property for public use by eminent domain but is obliged by the Fifth Amendment to provide "just compensation" to the owner thereof. "Just compensation" means in most cases the fair market value of the property on the date it is appropriated. Under this standard, the owner is entitled to receive what a willing buyer would pay in cash to a willing seller at the time of the taking.
Petitioner manufacturer owned tracts of timberland. Respondent government attempted to appropriate 2,175.86 acres of that land. The manufacturer had approved of the proposal for that designation and declared a voluntary moratorium on logging in the designated area. Congress rejected the proposal and enacted legislation creating a much larger national preserve. The government was to acquire the land within the boundaries of the preserve. The straight-condemnation method prescribed in 40 U.S.C.S. § 257 was to have been used. The government initially attempted to acquire the acreage owned by the manufacturer through a negotiated purchase but the negotiations broke down. The government ultimately acquired title to the land.
Was interest due on the condemnation award paid to the manufacturer?
The court held that there was not an interference with the manufacturer's property interests severe enough to give rise to a taking because until title passed to the government, the manufacturer was free to make whatever use it pleased of its property. Mere commencement of straight condemnation proceedings, where respondent government did not enter into possession, did not constitute a taking. Thus, the court held that the manufacturer failed to demonstrate that its interests were impaired in any constitutionally significant way before the government tendered payment and acquired title in the usual course.