United States v. Merchants Transfer & Storage Co. ( 1944 )

HEALY, Circuit Judge.

Skinner & Eddy Corporation is the owner and Merchants Transfer & Storage Company the lessee of a warehouse on the Seattle waterfront. The property is situated in the Port of Embarkation, an area largely taken over by the government after the nation’s entry into the war. On July 29, 1943, acting Secretary of War Patterson requested the Attorney General to institute proceedings to condemn this warehouse, and to procure from the court an order for immediate possession pursuant to the Act of March 27, 1942, the Second War Powers Act, 50 U.S.C.A.Appendix, § 631 et seq. In his official letter the Secretary stated that the warehouse was “to be used for the storage of military supplies and for other military purposes and the utmost haste in expediting this project is vital to the successful prosecution of the war.” The estate requested to be condemned was one for a term of years ending June 30, 1944, extendible for yearly periods thereafter during the existing national emergency at the government’s option.¹

Four days later the United States, through a special assistant to the Attorney General, instituted suit in the court below to condemn the property. The petition recited the various acts of Congress under authority of which it was filed, and stated the substance of the Secretary’s opinion as to the necessity for the taking and the nature of the estate sought to be condemned. It prayed that condemnation be adjudged, that immediate possession be authorized by the court, and that compensation be determined.

Merchants moved to dismiss the petition on the ground, among others, that the pleading failed to show public necessity for the taking. Hearings on the request for an order granting immediate possession followed. Witnesses for the government testified that the warehouse was to be used for the storage of materials intended for the repairing, outfitting and supplying of ships-of the Army Transport Command; that the volume of military traffic through the port was increasing steadily and that the use of the building would be absolutely required within thirty days; that the warehouse was entirely surrounded by property of the United States, hence immediate possession was essential not only to the war effort but to the establishment of uniform police and fire protection for all the buildings in the Port of Embarkation; and that the necessary elasticity of the port of entry work required the pier sheds to be kept clear of all such heavy material as would be stored in the warehouse. On the other side witnesses testified to the saturation of general warehouse facilities in Seattle, and in the event this property were taken, to the impracticability of maintaining service by large merchandising companies which used Merchants as a distribution point from which retail outlets were supplied.

On August 13 the court announced its view that it was not presently necessary that the government acquire the warehouse for the purposes stated. Counsel thereupon asked leave to introduce further evidence on the point, but the request was denied. The opinion of the court is officially reported in 51 F.Supp. 905 under the caption United States v. 43,355 Square Feet of Land. We do not stop to analyze it. In essence, while protesting the contrary, the court substituted its judgment on the question of public necessity for that of the Secretary, compare United States v. Montana, 9 Cir., 134 F.2d 194; United States v. 243.22 Acres of Land, 2 Cir., 129 F.2d 678, 683, and this, as is now known, at a moment when operations in the Pacific were approaching a critical stage. The prayer for an order granting immediate possession was denied. The court declined, however, to rule upon defendants’ motion to dismiss.

On September 8, 1943 the War Department through the instrumentality of the Army, seized the premises and posted guards.² Thereupon the owner and lessee filed what was termed “petition for rule and attachment in re contempt,” wherein the seizure was set out and a violation of the court’s order alleged. The petition prayed that attachment issue for contempt against two local officers (Sherman Green and Major Tidemon) and against Undersecretary Patterson and Secretary Stimson; and that the possession of the premises be forthwith restored to the petitioners. The court issued an order to show cause why the named persons should not be held in contempt and why the relief asked should not be granted.³ The United States interposed a plea to the jurisdiction of the court; and a motion to quash the order was filed by the individuals cited. Secretary Stimson and Undersecretary Patterson appeared specially for the purpose of the motion, asserting absence of jurisdiction of their persons because of the want of valid service of process.

There followed a hearing at the conclusion of which it was found that the four natural persons had done nothing forbidden by the court and were not in contempt. However, the court found “that the plaintiff, United States of America, has taken possession of the property in issue unlawfully and without right and contrary to this Court’s order of August 13, 1943, denying it immediate possession.” It was adjudged that the United States “forthwith return said property” to the possession of the petitioners, and that “if upon the entry of this order possession is not forthwith restored to said parties named, then the United States of America will be later assessed as for contempt damages the amount thereof to be ascertained by further hearings herein, at which hearings consideration may be given to such damages as those entitled to possession will suffer from day to day during the time that the United States of America wrongfully withholds that possession.”

The government’s appeal is from this order. There js a cross-appeal by the petitioners from the portion of it absolving the individuals of contempt.

In the briefs much is said of the general power of appropriation vested in the Secretary of War, cf. United States v. North American Transportation & Trading Co., 253 U.S. 330, 40 S.Ct. 518, 64 L.Ed. 935. Extensive argument is devoted to the question whether, under that part of the Second War Powers Act providing for the immediate taking of possession, the government was legally empowered to seize the property after having instituted its action to condemn, funds being then available for the payment of compensation for the property.⁴

We do not reach these questions since we are of opinion that the court was without jurisdiction to order the United States to vacate or to adjudge the United States liable in damages in the event of its failure to obey the injunction. The court had made no order prohibiting the United States from taking possession of the warehouse, nor did it possess power to make such an order. Cf. Hurley, Secretary of War, v. Kincaid, 285 U.S. 95, 52 S.Ct. 267, 76 L.Ed. 637. It had merely declined, in the exercise of its discretion, to grant the government’s request for an order of immediate possession. The question of the sovereign’s authority to occupy the property in the absence of judicial permission was no part of the subject matter of the suit pending before the court.

The United States may not be sued except with its consent. “The objection to a suit against the United States is fundamental, whether it be in the form of an original action, or a set-off, or a counterclaim. Jurisdiction in either case does not exist unless there is specific congressional authority for it.” Nassau Smelting & Refining Works v. United States, 266 U.S. 101, 106, 45 S.Ct. 25, 69 L.Ed. 190. For other holdings announcing this elementary principle see Illinois Central R. Co. v. Public Utilities Commission, 245 U.S. 493, 504, 38 S.Ct. 170, 62 L.Ed. 425; United States v. Shaw, 309 U.S. 495, 60 S.Ct. 659, 84 L.Ed. 888; United States v. United States Fidelity Co., 309 U.S. 506, 60 S.Ct. 653, 84 L.Ed. 894. As stated in the latter case, 309 U.S. at page 514, 60 S.Ct. at page 657, 84 L.Ed. 894, “consent alone gives jurisdiction to adjudge against a sovereign. Absent that consent, the attempted exercise of judicial power is void.”

No act of Congress has been cited authorizing the rendition against the United States of such a judgment as was entered here. The condemnation statutes imply no authority for it. Moody v. Wickard, 78. U.S.App.D.C. 80, 136 F.2d 801. Cf. New York Telephone Co. v. United States, 2 Cir., 136 F.2d 87. Appellees rely on the statement in The Thekla, 266 U.S. 328, 45 S.Ct. 112, 113, 69 L.Ed. 313, to the effect that “when the United States comes into Court to assert a claim it so far takes the position of a private suitor as to agree by implication that justice may be done with regard to the subject matter.” Appeal to the doctrine of The Thekla is fruitless. The authority of that holding has been limited to the necessities of proceedings in admiralty, where the court is obliged to determine the cross-libel as well as the original libel to reach its conclusion. Shaw v. United States, supra, 309 U.S. at pages 502-504, 60 S.Ct. at pages 662, 663, 84 L.Ed. 888.

We think there is no merit in the cross-appeal. The court found that the individuals before it had done nothing forbidden by its order and had not failed to do anything commanded. The parties, including the cross-appellants, have proceeded throughout, both below and here, on the assumption that the seizure effected September 8 was made under authority and at the direction of the Secretary of War. There is ample showing to support the assumption, and there is no warrant in the record for any other. The findings and judgment of the trial court proceed expressly on that basis.⁵

Presumably because of the controversy giving rise to the appeal, the condemnation suit has not been proceeded with in the normal manner. Declaration of taking should now he filed or just compensation for the taking be determined speedily under the general statutes governing suits to condemn.

The decree ordering the United States to return the property and holding the United States liable in damages as for contempt is reversed.

1 The letter indicates that appraisal reports and title evidence were then in process of being obtained, but the probable date of availability thereof was not given.

2 At the hearing below counsel for the government stated (and the statement was not controverted) that Merchants was not required immediately to vacate. It was not allowed to bring in any more merchandise, but was permitted to liquidate goods in storage as of the time of the seizure.

3 The order was served on the officials by mail and telegram.

4 Title II of the Second War Powers Act, 50 U.S.C.A.Appendix, § 632, which amended the corresponding statute enacted during the First World War (Act of July 2, 1917, 50 U.S.C.A. § 171), so far as pertinent, reads as follows: “The Secretary of War * * * or any other officer * * * authorized by the President * * * may cause proceedings to be instituted in any court having jurisdiction of such proceedings, to acquire by condemnation, any real property, temporary use thereof, or other interest therein * * * that shall be deemed necessary, for military * * * purposes, such proceedings to be in accordance with the Act of August 1, 1888 (25 Stat. 357) [Title 40, §§ 257, 258], or any other applicable Federal statute. * * * Upon or after the filing of the condemnation petition, immediate possession may be taken and the property may be occupied, used, and improved for the purposes of this Act [this section and section 171 of Title 50], notwithstanding any other law.”

5 No formal testimony appears to have been taken in the contempt proceeding. The reason, is obvious. Aside from averments of illegality, tke factual allegations of the sworn petition in re contempt together with the attached exhibits were accepted as true by the court and by the parties, including Secretary Stimson who, as has been said, appeared specially through counsel in response to the show cause order. The petition expressly alleged that the United States, acting through the War Department, had seized the property; that Secretary Stimson, with full notice of the court’s order of August 13, had by himself and through named subordinates unlawfully violated that order by forcibly taking possession of the premises. The entire petition proceeds on the express basis of an unlawfiul seizure by order and direction of the Secretary. The notice served on the occupants, a copy of which was attached to the petition, states that the United States is taking immediate possession, and that the Secretary of War has delegated authority to do so to the officer signing the notice.

When the court announced its purpose to hold the United States in contempt, the assistant attorney general, referring to the seizure of September 8, said: “The fact of the matter is that the war power is being exercised by direction of the Secretary of War, that these officers [referring to the local officers of the Army] are obeying the command of the Secretary of War.” No contrary contention was at any time expressed during the course of the hearing.