A. W. Duckett & Co. v. United States

Background

A private company that leased Pier No. 8 at the Bush Terminal sought payment from the United States for the value of its lease interest. The lease ran through September 30, 1919. Under a 1916 law the President authorized seizure of transportation facilities during the war. A general order dated December 31, 1917, declared possession and control of parts of the Bush Terminal “to whom it may concern” and promised that steps would be taken to determine fair compensation. Notice came in early January 1918, and the Government took possession of the pier on January 31, 1918, forcing the tenant to vacate.

Reasoning

The Court addressed whether that wartime order created an implied contract requiring the Government to pay the tenant for temporary use. The opinion said the taking acted like an eminent-domain seizure of the physical piers, not just a change in the owner’s title, and that such a taking carries an implied promise to compensate existing interests in the thing taken. The broad “to whom it may concern” notice, the promise to ascertain fair compensation, and the appointment of appraisers supported treating tenants as entitled to payment. The Court distinguished a different case where a government requisition did not take a private contract because, here, the tenant’s possession under its lease was itself part of the res. The Court therefore found jurisdiction and reversed the dismissal.

Real world impact

Tenants who are turned out when the Government temporarily seizes leased property for wartime or government use can recover compensation directly. A later private arrangement between the Government and the property owner does not eliminate the tenant’s independent claim. The Court sent the case back to the Court of Claims with instructions to calculate the tenant’s interest and award proper compensation.