Seaboard A. L. R. Co. v. United States

261 U.S. 299, 43 S. Ct. 354 (1923)



An owner's right to just compensation cannot be made to depend upon state statutory provisions. The Constitution safeguards the right and § 10 of the Lever Act, 40 Stat. 276 directs payment. The requirement that "just compensation" shall be paid is comprehensive and includes all elements and no specific command to include interest is necessary when interest or its equivalent is a part of such compensation. Where the United States condemns and takes possession of land before ascertaining or paying compensation, the owner is not limited to the value of the property at the time of the taking; he is entitled to such addition as will produce the full equivalent of that value paid contemporaneously with the taking. Interest at a proper rate is a good measure by which to ascertain the amount so to be added. 


Petitioner owned real property condemned by respondent United States for storage of war supplies under § 10 of the Lever Act, 40 Stat. 276. Petitioner sued to recover just compensation when it disagreed with the amount set by respondent, and was awarded interest, at the statutory rate under state law, on the amount determined from the date of taking. Respondent objected to the award of interest and the court of appeals reversed, ordering a new trial. On writ of error, the court reversed and ordered that the judgment of the district court be affirmed.


Was the district court correct in its award of compensation including interest?




The court held that the rule that in the absence of agreement or statute respondent United States was not liable for interest did not apply, because petitioner's property had been condemned. The court said that the requirement of "just compensation" was comprehensive and meant to put the owner in as good a position as he would have been if his property had not been taken. Therefore, no specific command to include interest was necessary if interest was required to produce full value. The court said that interest at the rate allowed by state law was a fair and reasonable method of providing just compensation.

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