In 1940 the plaintiff, a Swiss firm, purchased 420 metallic railway tires from an American firm, but was unable to ship them to Switzerland through the existing British blockade. Plaintiff then made extensive efforts to dispose of the tires, but because of their unusual dimensions was able to sell only 212 of them. In 1943, defendant, the United States Government, requisitioned the remaining 208 tires and awarded the plaintiff $1,003.14, the value of the tires as scrap iron. Plaintiff refused the award claiming that even though no market was available for the unsold tires, the tires should have been valued at the existing price of $8,100.84 on the domestic market or $9,180.95 on the foreign market. Held: because no adequate market value was available, the actual value of the tires in light of the surrounding facts, circumstances, and conditions was $4,000.
The power to requisition private property for public use is limited by the constitutional guarantee of just compensation. The conventional criterion for just compensation is the price the property would bring on the open market by a "willing seller" to a "willing buyer." But market value cannot be a rigid standard in all cases, for occasionally the existing market price may be a wholly inadequate measure of just compensation. This may be true where the market price includes enhancement of value arising from the government's demand for the requisitioned property. Conversely, market value may be just as inadequate where it fails to include all relevant considerations of value.
Charles J. Burmeister,
Recent Cases: Eminent Domain — Retention Value as an Element of Valuation,
33 Neb. L. Rev. 106
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