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U.S. Supreme Court

Brooks-Scanlon Corp. v. United States, 265 U.S. 106 (1924)

Brooks-Scanlon Corporation v. United States

Nos. 37, 385

Argued January 8, 1924

Decided May 12, 1924

265 U.S. 106


1. Orders of the Emergency Fleet Corporation directed to a shipbuilder expropriated a vessel in process of construction under a contract between the builder and the plaintiff, together with the materials purchased by the builder for its completion, the benefits and advantages of payments made, and of plans, specifications and prior inspection service provided, by the plaintiff, and placed the Fleet Corporation in the plaintiff's shoes with respect to the past and future execution of the contract by the builder. The United States thus obtained the ship early, and the benefit of prices much lower than those prevailing at time of requisition.


(a) That the plaintiff's rights under the contract with the builder were taken. P. 265 U. S. 119.

(b) That the just compensation to which the plaintiff was entitled did not depend upon the title to the materials used in the construction, and was not to be gauged by the progress payments made, or by the compensation payable if the government had merely cancelled the contract, but was to be measured by the value of the plaintiff's rights under the contract at the time of the taking. P. 265 U. S. 121.

(c) Just compensation is the sum which, considering all the circumstances, uncertainties of the war, etc., probably could have been obtained for an assignment of the plaintiff's rights under the contract -- i.e., the sum that would in all probability result from fair negotiations between an owner willing to sell and a purchaser desirous of buying. P. 265 U. S. 123. chanroblesvirtualawlibrary

Page 265 U. S. 107

(d) The value of such ships at the time of requisition, the then probable value at the time fixed for delivery, the contract price, payments made and to be made, the time to elapse before completion and delivery, the possibility that, by reason of the government's activity in controlling materials, the contractor might not have been able to complete the ship on time, loss of the use of money to be sustained, other expenditures to be made between requisition and delivery -- all should be given consideration in determining the plaintiff's loss caused by the taking. P. 265 U. S. 125.

2. Replacement cost not necessarily the sole measure of or guide to value in ascertaining just compensation. Id.

58 Ct.Clms. 274 reversed.

Appeal and cross-appeal from a judgment of the Court of Claims in an action to recover a balance alleged to be due as just compensation for the taking by the Shipping Board of the plaintiff's rights under a contract for the construction of a ship. chanroblesvirtualawlibrary

Page 265 U. S. 114

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