Ericsson Line, Inc. v. United States

Jones, Chief Judge, delivered the opinion of the court: This suit involves the value of the vessel John Cadwalader, her stores, expendable equipment, and spare parts, on July 22,1942. On July 22,1942, the War Shipping Administration, pursuant to section 902 of the Merchant Marine Act of 1936, as amended, 53 Stat. 1255, and Executive Order 9054, 7 Fed. Keg. 837, requisitioned title to and took possession of the vessel, together with her consumable stores, expendable equipment, and spare parts. Plaintiff was the sole owner of the vessel as of that date. Defendant has neither paid nor tendered any amount to plaintiff as just compensation for the requisition and taking of its property, except the sum of $748.18 which was paid to plaintiff for unbroached consumable stores. The record does not reveal the reason for defendant’s failure to make payment. Plaintiff asserts that the reasonable value of the vessel was, at the time of taking, not less than $475,000, and it seeks to recover that sum together with $375.40 for broached consumable stores. Plaintiff also seeks interest from the date of taking to the date of payment of the judgment as a part of just compensation. The John Cadwalader was specifically designed and built in 1926 for use as a combination passenger and freight vessel in overnight daily service between Philadelphia and Baltimore, via the Chesapeake and Delaware Canal; and she was so operated for about ten years, from 1926 to 1936. While so operated her passenger accommodations consisted of 85 staterooms and 158 berths and she was licensed to carry 275 overnight passengers. The vessel’s hull was constructed of steel and her superstructure, above the main deck and waist, was constructed of wood. A full description is set out in finding 6. The actual purchase price of the vessel delivered to the Baltimore & Philadelphia Steamship Company, the original owner, was $395,966.81 in 1926. From 1926 until 1931 the Baltimore & Philadelphia Steamship Company operated the John Cadwalader as a combina — 770 — tion passenger and freight vessel in its overnight service between Philadelphia and Baltimore. From 1931 until 1935 the vessel was chartered to plaintiff and continued in the same service as a combination passenger and freight vessel. In 1935, after the Baltimore & Philadelphia Steamship Company got into financial difficulties and the Philadelphia National Bank foreclosed a mortgage of $350,000 which it held on the John Cadkoalader, plaintiff purchased the vessel from the bank at auction for the sum of $55,000, free and clear of all liens. Plaintiff continued to operate the vessel as a combination passenger and freight vessel for about one year and then discontinued the passenger phase of the operation, and thereafter confined its business to the transportation of freight. In 1938 or 1939 the vessel underwent certain alterations to increase its freight capacity. Plaintiff continued its freight service until November 15, 1941, at which time the vessel was laid up in Philadelphia. It remained in dry dock until requisitioned on July 22, 1942, by defendant. In support of the figure of $475,000 which it claims was the value of the John Oadwalader when requisitioned, plaintiff relies principally upon testimony as to reproduction cost on the date of requisition less depreciation. It is plaintiff’s position that the present case is closely analogous to the Baltimore Steam Packet Company cases, 112 C. Cls. 433, 448, 458, and 469, in which this court, while considering other factors, placed particular emphasis on cost of reproduction less depreciation in arriving at a figure for just compensation for the vessels taken. While we agree that cost of reproduction less depreciation may be a factor to be considered in determining the value of the John Oadwalader, we do not feel that the Baltimore Steam Packet cases are necessarily controlling in the present situation nor do we believe that this court is bound to employ any standard formulae or method in determining the value of the vessel. As was stated by this court in the first Baltimore Steam Packet Company case, 112 C. Cls. 433, 445: While formulae may be useful as guide posts, they are not controlling. Each vessel is an individual thing and its value at the time of the taking must be determined — 771 — from all tbe evidence in the record and in the light of conditions then existing. The John Oadwalader differed from the vessels in the Steam PaeTcet cases in several respects, one being its smaller size, and certain evidence which appears in the present record is different from the evidence in the Steam PaeTcet cases. In establishing a fair and reasonable value for the John Oad-walader, the court must consider and weigh all the evidence in the record before it. There were no sales of vessels comparable to the John Oadwalader in the open market in 1941 or 1942 from which the market value of the vessel can be established as of July 22, 1942. Mr. Rutland, one of defendant’s valuation witnesses, arrived at a figure of $48,447 as the value of the J ohn Oadwalader by considering the records of the War Shipping Administration regarding the sale or transfer of seven other vessels. However, the vessels selected by Mr. Rutland were not comparable to the John Oadwalader and little weight can be given his testimony. Plaintiff produced three valuation witnesses who expressed opinions as to the value of the John Oadwalader when requisitioned. Each of these witnesses formed his opinion by estimating the cost of reproducing the vessel new in 1942, and subtracting from this estimated cost an allowance for depreciation. Certain other items were also deducted, such as the estimated cost of repairs needed at the time of requisition. A full explanation of the method of valuation employed by these witnesses is set out in findings 23, 24, and 25. The average of the valuations placed upon the John Oad-walader by plaintiff’s three witnesses is $478,097 and plaintiff relies chiefly upon their testimony to substantiate its position that the value of the vessel was not less than $475,000 when taken by the defendant. We have given careful consideration to the testimony of these witnesses and we do not feel that the method used by them reflects the true value of the vessel on the date of its requisition. It is unrealistic to place particular emphasis upon the reproduction cost of the vessel when it is very unlikely that a prudent person would have undertaken to reproduce such a vessel in 1942. At the time of its taking the John Oadwalader had been in dry dock for — 772 — about eight months and had earned nothing during this period. Its earnings for a considerable period prior to requisition had been small and its prospects for the future were not bright. It had been designed for a particular purpose, i. e., passenger and freight service between Philadelphia and Baltimore, and the uses to which it could be put were limited. For several years prior to 1942 there had been an increasing amount of truck competition for the freight trade of vessels like the John Gadwalader. Furthermore, the costs of labor and materials were extremely high in 1942. For these reasons we do not believe that a prudent person would have attempted to reproduce such a vessel, nor would a prudent buyer have paid any attention to cost of reproduction new less depreciation, and we cannot agree that this method of valuation is satisfactory in the present situation. Capt. Robert Guiler, a witness for the defendant, stated that in his opinion the John Gadwalader was worth not more than $75,000 when taken by the defendant. Captain Guiler appraised a large number of vessels of various types during the war while senior member of the Joint Merchant Vessel Board. He inspected the John Gadwalader on two occasions, once in 1939 and again in 1940. He based his opinion as to its value mainly upon his inspection of the vessel, his experience in appraising other vessels, and his discussions with commercial operators in the Philadelphia area. Although Captain Guiler is not an expert in the ship appraisal field, his opinion is of some value in view of his wide experience and personal inspection of the vessel. In 1938 plaintiff reduced the amount of insurance carried on the John Gadwalader from $200,000 to $187,500. The insurance coverage was again reduced in 1940 to $125,000 and remained at that figure until the vessel was requisitioned. While insurance coverage alone is not generally an accurate guide in establishing the value of property, it is a factor to be weighed along with all others in determining just compensation. Another factor which the court has considered is the earning record of the John Gadwalader prior to its requisition. A table of plaintiff’s operating revenue and expense appears in finding 19. For the six years prior to requisition plaintiff’s net revenue averaged about $19,000 per year before — 773 — taxes. It is difficult to determine what proportion of the net income should be attributed to the John Oadwalader because the plaintiff did not keep records on a ship-by-ship basis. However, it is clear that at least one other vessel contributed to the earnings each year and that part of the revenue was derived from sources other than operation of the vessels, such as terminal facilities and dock equipment. After considering all the evidence in the record as to earnings, we feel that it is reasonable to conclude that the earnings of the John Oadwalader averaged between $10,000 and $12,000 per annum before taxes for the six years prior to its taking. We feel that this earning record does not justify the high valuation which the plaintiff urges for the vessel. Furthermore, the vessel’s earning prospects for the future were not good at the time of its requisition. Before the war the vessel had been engaged chiefly in a limited operation in collaboration with the Bull Lines in their coastal and island trade. Due to the wartime curtailment of the operations of the Bull Lines and increasing truck competition, the volume of freight declined to such an extent that the vessel was laid up and remained in dry dock for eight months before being requisitioned. Apparently there was not enough freight business to keep the vessel operating between Baltimore and Philadelphia without the Bull Lines connection, and it is noted that when the Bull Lines resumed operations, no replacement was made for the John Oadwalader or for .the service it performed. Nor does the record reveal any attempt by plaintiff to reconvert the vessel for passenger trade, and we must conclude that no great demand existed for that type of service. Although the evidence indicates that some use might have been found for the Jolm Oadwdla-der, it does not appear that her potential earning ability justifies the high valuation which plaintiff seeks. Still another factor which the court has considered involves a sale of stock in the plaintiff company. In January 1941 85 percent of the stock in the plaintiff company was owned by the A. H. Bull Steamship Company and the remaining 15 percent was owned by the Chesapeake & Delaware Steamboat Company. On that date the Bull Company purchased the stock owned by the Chesapeake & Delaware Company for $25,000 in what was described by an officer of — 774 — the Bull Company as an “arm’s-length transaction.” At the time the stock was sold the assets of the company, not including the John Oadwalader which was its principal asset, slightly exceeded its liabilities. This indicates that the net worth of the company was represented primarily by the John Oadwalader. Assuming that $25,000 represented the fair value of 15 percent of the stock in the plaintiff company, then the value of all the stock would appear to have been approximately $166,650, and it is unlikely that the value of the John Oadwalader would have varied greatly from that amount. We realize that a sale of stock may not accurately reflect value because of the numerous factors which may be involved in such a transaction. However, after examining all the evidence, it is our opinion that the sale of the stock bears a relation to the value of the vessel in the present situation. When requisitioned the John Oadwalader was in need of repairs that would have cost an estimated $21,430, but it was otherwise in good condition. The expendable equipment and spare parts taken by the defendant, if considered separate and apart from the vessel, would have a fair value of $16,265.64. However, part of the equipment taken consisted of items such as anchors and bells which form an integral part of any vessel and these items, as well as the spare parts, would normally be considered as part of the vessel on either sale or bareboat charter. Therefore, we did not consider the expendable equipment and spare parts as being separate from the vessel, but instead made allowance for their value in arriving at a figure for just compensation. After considering and weighing all factors in evidence in the entire record including the opinion evidence of the various witnesses, the physical condition and age of the vessel, the amount of insurance carried, the type of service in which the vessel had been engaged, its past earning record, its potential earning ability, and the sale of stock in the plaintiff company, it is our opinion that the value of the vessel together with its expendable equipment and spare parts was $160,000 on July 22,1942. Also taken by defendant were certain consumable stores which were on board the John Oadwalader when it was — 775 — requisitioned. Defendant paid plaintiff $748.18 which was the fair value of the unbroached consumable stores taken. However, no amount was paid plaintiff for broached consumable stores. These stores had a fair and reasonable value of $375.40 which should be added to the value of the vessel, her spare parts and expendable equipment, making a total of $160,375.40. Plaintiff also seeks interest from the time of the taking to the date of payment of the judgment as a part of just compensation, basing its claim upon defendant’s failure to comply with subparagraph (d) of section 902 of the Merchant Marine Act, as amended, 53 Stat. 1256, which reads as follows: In all cases, the just compensation authorized by this section shall be determined and paid by the Commission as soon as practicable, but if the amount of just compensation determined by the Commission is unsatisfactory to the person entitled thereto, such person shall be paid 75 per centum of the amount so determined and shall be entitled to sue the United States to recover such further sum as, added to said 75 per centum will make up such amount as will be just compensation therefor * * * There is no explanation in the record as to why defendant failed to determine and tender just compensation in compliance with its statutory duty. On the other hand, there is no evidence that plaintiff made any request for payment or made any inquiry as to why payment had not been made between the time of the taking and the time of the filing of its petition. Plaintiff’s petition was not filed until July 21, 1948, one day less than six years after the vessel was requisitioned. After the case was referred to a commissioner of the court on July 21,1948, numerous delays occurred in presenting evidence and the case was not tried until February 2,1956. In awarding just compensation the court will include such additional amount beyond the value of the property taken as will be fair and proper in the light of all the circumstances. As stated by the Supreme Court in Shoshone Tribe of Indians v. United States, 299 U. S. 476, 496: * * * The claimant’s damages include such additional amount beyond the value of its property right when — 776 — taken by the Government as may be necessary to the award of just compensation, the increment to be measured either by interest on the value or by such other standard as may be suitable in the light of all the circumstances. It is clear that defendant breached its statutory duty by failing to make payment as soon as practicable after the vessel was requisitioned. However, plaintiff could have minimized its damages by action within a reasonable time. Instead it did not file its petition for almost six years, and then made little attempt to expedite the matter ,so that the case was not tried until 131/2 years after the requisition As set out in our finding 30 it appears that both parties shared the responsibility for the delay in bringing the case to trial. In the light of all the circumstances we feel that as a part of just compensation plaintiff should receive interest at a rate of 3 percent per annum on the amount of this judgment from the time of the taking until payment of the judgment. Judgment will be entered in favor of plaintiff in the sum of $160,375.40 with interest at 3 percent per annum from July 22,1942, until date of payment. It is so ordered. Laramore, Judge; Madden, Judge; Whitaker, Judge; and Littleton, Judge, concur. FINDINGS OF FACT The court, having considered the evidence, the briefs and argument of counsel, and the report of Commissioner Cur-rell Vance, makes the following findings of fact: 1. Plaintiff is, and at all times here involved was, a corporation organized and existing under the laws of the State of Delaware with an office and principal place of business at Pier 6-South, Philadelphia, Pennsylvania. 2. Plaintiff was incorporated in 1931 for the purpose of combining and operating the inland water transportation service then being operated by the Baltimore & Philadelphia Steamboat Company and by A. H. Bull Steamship Company between Philadelphia, Pennsylvania, and Baltimore, Maryland, via the Chesapeake and Delaware Canal. — 777 — 3. On July 22, 1942, plaintiff was the sole owner of the American steamship John Oadwalader. On that date, at Philadelphia, Pennsylvania, the Administrator, War Shipping Administration, acting for and on behalf of defendant under and pursuant to section 902 of the Merchant Marine Act of 1936, as amended, 53 Stat. 1255, 46 U. S. C. 1242, and Executive Order 9054 of February 7, 1942, 7 Fed. Reg. 837, requisitioned the title to and took possession of the John Oadwalader for public use, together with her consumable stores, expendable equipment, and spare parts, whether on board or ashore. 4. Immediately after taking possession of the vessel, the United States Maritime Commission caused a “requisition inventory” to be made of the vessel’s consumable stores, expendable equipment, and spare parts, whether on board or ashore; and, on October 14, 1942, it transmitted to plaintiff a typed copy of the completed inventory. 5. On August 5,1942, the War Shipping Administration forwarded plaintiff a data questionnaire for execution and return to facilitate determination and payment of just compensation for the taking of the John Oadwalader. Plaintiff returned the completed questionnaire on March 25, 1943. In an interoffice memorandum from the Appraisal Committee to the War Shipping Administration dated June 21,1943, the value of the John Oadwalader was stated to be $42,740.59 based on the original cost to plaintiff in 1935 which was $55,000, appreciated under the 1935-1939 Maritime Commission scale of appreciation in shipbuilding cost, and depreciated under what was described as the Martin Scale; However, no offer was made to plaintiff pursuant to this appraisal and defendant has neither paid nor tendered to plaintiff any sum on account of just compensation for the requisition and taking of the vessel, or for her consumable stores, expendable equipment, and spare parts, except the sum of $748.18 paid by defendant to plaintiff as just compensation for the wnbroached consumable stores. 6. The John Cadwalader, Official No. 226007, was a combination passenger and freight vessel built in 1926 at Wilmington, Delaware, by The Pusey & Jones Company. Her hull subdivided by six transverse watertight bulkheads, was — 778 — constructed of steel, as were her main deck, bulwarks and waist. Her superstructure, above the main deck and waist, was constructed of wood. Her length overall was 230 feet (registered 219 feet 2 inches); her beam 45 feet (registered 43 feet 6 inches); and her depth 15 feet 8 inches (registered 14 feet 8 inches). Her gross tonnage was 1,478 tons; her net tonnage 805 tons; and her deadweight capacity for cargo, including fuel, fresh water and supplies, about 700 tons. When requisitioned her cargo-carrying capacity in cubic feet was about 44,800 on the main deck and about 12,000 in the hold, or a total of about 56,800 cubic feet. Her speed was 17^4 statute miles per hour. Her propulsion equipment consisted of a single screw, triple-expansion 4-cylinder reciprocating engine, powered by two water-tube boilers, and oil burning furnaces. 7. The John Cadwdlader was specifically designed and built for the Baltimore & Philadelphia Steamboat Company for use as a combination passenger and freight vessel in overnight daily service between Philadelphia and Baltimore, via the Chesapeake and Delaware Canal; and she was so operated for about ten years, from 1926 to 1936, first by the Steamboat Company, until 1931, and then by plaintiff, until 1936. While so operated, her passenger accommodations consisted of 85 staterooms and 158 berths, and she was licensed to carry 275 overnight passengers, viz.: 168 first-cabin, 6 second-cabin, and 101 deck or steerage passengers. At such times she was also licensed to carry 1,005 daytime passengers, whenever operating on rivers only, or when operated within the three-mile limit between April 15 and November 15. In addition to her staterooms and berths, she also had a social hall and dining saloon for the use of her passengers. These public spaces were located on the after end of the main deck. 8. From 1926 until 1931, the Baltimore & Philadelphia Steamboat Company operated the John Cadwalader as a combination passenger and freight vessel in its overnight service between Philadelphia and Baltimore. In 1931, after plaintiff was organized to take over the water transportation services then being operated by the Baltimore & Philadelphia Steamboat Company and A. H. Bull Steamship Company, — 779 — the vessel was continued in the same service as a combination passenger and freight vessel, operating under charter from the Steamboat Company to plaintiff. In 1935, after the Baltimore & Philadelphia Steamboat Company got into financial difficulties and The Philadelphia National Bank foreclosed a mortgage of $350,000 which it held on the JoJm Oadwalader, plaintiff purchased the vessel from the bank at auction for the sum of $55,000, free and clear of all liens. Thereafter, until the time of her requisitioning in 1942, she was owned by plaintiff and operated, until November 1941, in its overnight service between Philadelphia and Baltimore. 9. After acquiring title to the vessel in 1935, plaintiff continued to operate her as a combination passenger and freight vessel for about one year. Then, in the latter part of 1936, plaintiff discontinued the passenger phase of its service, and thereafter confined its business to the transportation of freight between Philadelphia and Baltimore. Passenger service was discontinued because plaintiff did not deem it advisable to incur the expense of complying with certain safety requirements for passenger vessels established by the Coast Guard, which included installation of an automatic sprinkler system, and also because plaintiff’s president did not desire to continue such service. No alterations were made in the passenger accommodations of the vessel in 1936; but in 1938 or 1939 plaintiff altered areas on the main deck designed for public passenger use in order to more effectively utilize the main deck space for freight service. The alterations included removal of bulkheads, partitions, and floor coverings and a few other minor changes. At the time of the requisitioning in July 1942, all of the vessel’s original passenger accommodations were in serviceable condition, except for the converted areas on the main deck. These could have been reconverted to passenger service at a cost of about $20,000. 10. At the time of her requisition, the John Oadwalader was licensed to carry only freight. But plaintiff could have obtained a license to again carry passengers by restoring the public spaces on the main deck, at a cost of about $20,000, and by meeting certain fire protection requirements of the United States Coast Guard, at a cost of about $8,000 to — 780 — $10,000. In general, the work which would have' been required by the Coast Guard consisted of converting the existing sprinkler system to an automatic sprinkler system and the installation of a break-glass fire alarm system. ¡ ■ 11. On November 15,1941, the John Gadwalader was.laid up at Pier 30, Philadelphia, but protective measures were taken to prevent the deterioration of her hull, engines, boilers and other equipment. The lay-up was due to a gradual decline in the volume of freight resulting from truck competition and war conditions, including the fact that the coast-wise vessels of the A. H. Bull Steamship Company, to which and from which plaintiff had been carrying a substantial volume of freight, were diverted by the Government to other services for national defense reasons. The vessel remained in drydock until requisitioned eight months later. 12. On July 23,1942, the day after the John Oadwalader was requisitioned, the United States Maritime Commission, Maintenance and Bepair Division, caused a condition survey to be made of the vessel while she was lying in dry dock at the shipyard of the Sun Shipbuilding & Dry Dock Co., Chester, Pennsylvania. This survey covered the entire vessel and, except for a few items which defendant’s surveyor estimated could be repaired at a cost of about $21,430, the John Gadwalader was found and reported to be “maintained in a factually seaworthy and cargo condition such as will insure the vessel’s classification at this time.” The aforesaid repairs, in the amount of $21,430 were stated in the survey report to be “necessary to put the ship in good condition for continued service on inland waters.” 13. The John Gadwalader was built at Wilmington, Delaware, by The Pusey & Jones Company for the Baltimore & Philadelphia Steamboat Company, pursuant to a written contract dated October 17, 1925, and designated as contract No. 1030. The contract price was $395,000 which, according to the specifications annexed to the contract, was intended to represent the price of the vessel — exclusive of the cost of her main engines and hotel equipment — delivered to her owner at Philadelphia, complete and ready for service. The specifications provided, however, that the owner would furnish the main engines and certain hotel equipment for in — 781 — stallation by the builder. There is no evidence as to how much the owner paid either for the engines or for the hotel equipment. The actual price of the vessel delivered to the owner, including certain “extras” but excluding the unknown cost of the main engines and hotel equipment, was $395,966.81. 14. Mr. Hodge, a witness for the plaintiff and an employee of the Pusey & Jones Company, testified that the actual cost of the vessel to the builder in 1926, including the cost of installing the main engines and hotel equipment furnished by the owner, was $420,867. The same witness testified that if an exact duplicate of the same vessel had been reproduced at the Pusey & Jones shipyard in July 1942 the reproduction cost would have been $1,003,894, exclusive of the cost of the main engines and hotel equipment. He arrived at this figure by estimating what the materials and labor that went into the orginal construction of the vessel would have cost in 1942. He included certain items in his estimate, such as labor insurance, which had not been expenses in 1926, and his figure included a 10% profit for the builder. Mr. Hodge also testified that no one would Have undertaken to reproduce such a vessel in 1942 because it would have been illegal to operate it. 15. The evidence establishes that the fair and reasonable value of the broached consumable stores taken by the defendant at the time of the requisition of the vessel was $375.40. No amount has been paid plaintiff for broached consumable stores. Plaintiff was paid $748.18 for unbroached consumable stores taken which was their fair value. There were items of expendable equipment and spare parts requisitioned along with the vessel which, if considered ■separate and apart from the vessel, would have a fair value of $16,265.64. However, the equipment included items such as anchors, bells, search lights, and wall cabinets which form an integral part of any vessel, and included no special and unusual equipment. 16. At the time of her taking on July 22, 1942, the John Oadwalader was 16 years old, and the evidence establishes that she had been well maintained by her owners and was still in good condition when taken by defendant. — 782 — During her entire life, she had been operated on an easy, sheltered run in fresh water between Philadelphia and Baltimore, first in the service of her original owner, the Baltimore & Philadelphia Steamboat Company, and later in the service of the plaintiff. While there is no evidence as to the manner in which she was maintained by her original owner, it is clear that after she was purchased by plaintiff in August 1935, she was dry-docked annually by plaintiff and inspected each year by the Bureau of Marine Inspection and Navigation of the Department of Commerce, either at Philadelphia or Baltimore. Such repairs as were found to be necessary from time to time were usually made by shipyards, but painting and other work in the nature of routine maintenance were performed at Baltimore by employees of the A. H. Bull Steamship Company. During the period from 1935, when plaintiff acquired the vessel, to 1942, when she was taken by defendant, plaintiff had expended a total of $27,966 on the vessel for repairs and maintenance and other work. 17. The John Gadwalader was equipped with side ports through which cargo was loaded and unloaded by longshore labor without the use of derricks, booms, and other cargo-lifting gear. The cargo could be moved from its place of stowage on the pier direct to its place of stowage on the vessel, and could be discharged at destination in the same manner. This method of loading and unloading was well suited for the type of freight service conducted by plaintiff. The vessel was also equipped with a freight elevator between the main deck and the lower hold which was used for transporting cargo to or removing it from the lower hold. However, the elevator was used only when all of the cargo could not be stowed on the main deck because its use caused a delay in the loading or unloading of the vessel. 18. While employed in plaintiff’s freight service, the vessel’s daily schedule called for her departure from one terminal at 5:00 p. m. and her arrival at destination on the following morning at 7:00 o’clock. The distance between the two terminals was only about 110 miles by water, so that her schedule called for the maintenance of a terminal-to-terminal average speed of about 8 miles per hour. Her available speed of about 17% miles per hour — 783 — made it easy for her to maintain this schedule without straining her engines, regardless of weather, way landings, or other conditions which might delay her normal running schedule. Prompt arrival at destination was an important factor in the Philadelphia-Baltimore overnight trade for several reasons. The consignees of that part of the freight which was intended for local delivery at the port of destination wanted and expected to receive their shipments early on the morning of arrival, so that it would be available for distribution or use the same day. That part of the freight intended for transshipment to on-carriers also had to arrive on time, in order to avoid delaying or missing the on-carriers’ sailing schedules. Prompt arrivals were also essential to the maintenance of plaintiff’s own schedule, for the vessel had to be discharged and reloaded within 10 hours, in order that she might maintain her scheduled sailing at 5:00 p. m. on the same day. 19. In each of the years from 1936 to 1941 the plaintiff employed two or more vessels in conducting its freight service. Concurrently with its acquisition of the John Oad-walader in 1935, plaintiff obtained two other vessels, the Ruth and Louise, for use in its overnight service. Subsequently the vessel Georgewrma was chartered from the Bull Lines and used by plaintiff. Two vessels were normally employed each day by plaintiff in conducting its daily overnight operations between Philadelphia and Baltimore. The earnings of plaintiff were not kept on a ship-by-ship basis, but on a total-operation basis. The total operating revenues and net earnings before taxes derived from plaintiff’s services from 1936 to 1941 were as follows: Operating revenue and expense, Mricsson Line, Inc. [In thousands of dollars] Year Operating revenue Expense Net revenue 1936-476 431 45 1937-436 439 13 1938. 439 411 28 1939-481 456 25 1940-607 496 11 1941-481 473 «8 — 784 — The evidence does not establish what proportion of the net revenue set out above was earned by the John Cad-walader. However, it is clear that at least one other vessel contributed to such earnings each year and that part of the revenue was derived from miscellaneous sources other than vessels, such as terminal facilities and dock equipment. From all of the evidence in the record as to earnings, it is reasonable to conclude that the earnings of the John Cad-walader averaged betwen $10,000 and $12,000 per annum before taxes for the six years prior to its taking. 20. When plaintiff acquired the John Cadwalader in 1985, it insured the vessel for $200,000. In 1938 the insurance was reduced to $187,500. The insurance coverage was again reduced in 1940 to $125,000, and the John Cadwalader was insured for that amount when requisitioned. 21. In 1935 when plaintiff acquired its floating equipment and terminal facilities, including the John Cadwalader, the company was capitalized for $125,000 with 1,200 shares of capital stock issued and outstanding. In January 1941, the A. H. Bull Steamship Company owned 85 percent of the stock and the Chesapeake & Delaware Steamboat Company owned 15 percent of the stock. On that date the Bull Company purchased the stock owned by the Steamboat Company for $25,000. By that time most of the floating and operating equipment of the plaintiff had been sold and the John Cad-walader was the principal remaining asset. The assets of the company, not including the John Cadwalader, exceeded the liabilities. The purchase of the stock was described by an officer of the A. H. Bull Company as an “arm’s-length transaction.” 22. There were no sales of vessels comparable to the John Cadwalader in open market in 1941 or 1942 from which the market value of the vessel could be established as of July 22,1942. 23. Plaintiff’s first valuation witness was William R. Bagger, a consulting engineer, surveyor and appraiser of vessels, who had been practicing his profession for 36 years. He is a graduate of the Webb Institute of Naval Architecture and of the University of Michigan with a degree of Bachelor of Mechanical Engineering. He is licensed as a first assistant — 785 — engineer of ocean vessels of unlimited tonnage. During World War I lie served as an Assistant Naval Constructor in the U. S. Navy and member of a three-man board of appraisal for the Third Naval District. He has surveyed and appraised all types of vessels on behalf of owners, underwriters, etc., including the United States Government, and at the beginning of World War II he was requested to head the Bureau of Vessel Appraisal for the Government, which he declined. In his opinion the value of the John Oadwalader, when she was requisitioned on July 22,1942, was $426,000. He arrived at his opinion as to the value of the vessel by taking the reproduction cost at the time of the requisition in 1942, and deducting from this amount depreciation and certain additional charges as follows: He calculated the reproduction cost of the Oadwalader in 1942 to be $800,000, and assumed that the vessel had a life expectancy of at least 24 more years because her total life expectancy was at least 40 years and the vessel was only 16 years old in 1942. By applying a depreciation rate of 2% percent per year, or taking 24/40ths of the reproduction cost of $800,000, he arrived at the intrinsic value of the John Oadwalader in July 1942 of $480,000 in sound condition. From this amount he subtracted the sum of $21,430, estimated in the condition survey to be the cost of putting the vessel in a sound condition, the sum of $10,000 for fire protection requirements if the vessel was to be used in the passenger trade, the sum of $20,000 to $25,000 for the restoration of the quarters on the main deck, or a total reduction of approximately $54,000. This resulted in a net value of $426,000 as of July 22,1942. 24. Plaintiff’s second valuation witness was James Donald, a naval architect and ship appraiser, who received his early training in a Glasgow shipyard, advancing to a management position there, and then becoming chief draftsman for a United States west coast shipyard. He served as chief naval architect for the New York Shipbuilding Company, leaving there to open his own office as a consulting naval architect in London. During World War I he served as president, manager, and operator of four steamship companies. He — 786 — later returned to this country and entered into a partnership with George Sharp, naval architect, subsequently going into business for himself. During World War II he served as administrator of Mr. Sharp’s office, which supervised the construction of vessels in the Kaiser Shipyards. He has appraised the floating property of the New Haven Railroad, the ships of the Kerr Line, and the Fall River Line, among others. Mr. Donald, who knew of no sales in 1941 or 1942 of vessels comparable to the John Oadwalader, appraised the fair and reasonable value of the vessel to be $554,720 on July 22, 1942. This valuation was based upon a reproduction cost of a ship like the John Oadwalader in 1942 of $905,126. After assuming that the vessel would have a normal useful life expectancy when operating on the inland waters of the United States of a minimum of 40 years, he deducted 2% percent depreciation from the balance for each year of the 16 years of the ship’s age. He further deducted $6,000 for the cost of installing an automatic sprinkler system in the passenger quarters, as required before the vessel could carry passengers ; the cost of a manual fire alarm system, also required, in the amount of $1,500; $20,000 for restoring passenger arrangements; and $21,430 for the repairs as shown by the condition survey. This made a total deduction of $48,930 which he deducted from $603,650, leaving the balance of $554,720, which was his value of the John Oadwalader as of July 22,1942. 25. Plaintiff’s third valuation witness was Mr. Eads Johnson, a naval architect and marine engineer, who has a degree of Bachelor of Engineering from Tulane University, and a degree of Mechanical Engineering from Cornell University, where he specialized in Naval Architecture and Marine Engineering. He had experience in shipyards and served as a superintendent of construction for the United States Lighthouse Department. From 1911 to 1917 he was engaged in professional practice as a naval architect and marine engineer designing commercial craft and surveying for underwriters. During World War I he was in charge of shipbuilding in the New York District for the United States Shipping Board. From 1918 to 1922 he served as an officer — 787 — of two shipbuilding companies. Since 1922, except for a period of two years during which he served as a deputy commissioner in charge of municipal ferry operations for New York City, he was engaged continuously in practice as a naval architect and marine engineer, until the beginning of World War II. During World War II, he served as a special representative of the Secretary of the Navy and in an advisory capacity on the landing craft program as well as on many other special assignments for the Government. Since the end of World War II he has resumed private practice as a naval architect and marine engineer. For the past 20 years he has been engaged in appraising the value of vessels. Mr. Johnson’s appraisal of the value of the John Oad-(walader in sound condition as of July 1942, was $453,570, based upon a replacement cost of the John Cadwalader in July 1942, of $940,000. Using the condition survey made by the Maritime Commission surveyors, he determined that the ' vessel’s hull had depreciated 40 percent, the vessel’s superstructure 50 percent, and the vessel’s machinery 65 percent, resulting in a value of $475,000 as of July 1942. He further reduced this value by the sum of $21,430, the amount the condition survey estimated as the cost of repairs to place the vessel in good condition, and arrived at his estimate of $453,570. 26. Defendant’s first valuation witness was Capt. Robert Polk Guiler, Jr., a retired Naval officer. During 36 years of service following graduation from the United States Naval Academy, he had been assigned to all phases of work involving repair and overhaul in navy yards and had served from Junior Officer to Commanding Officer on naval vessels. He had been an instructor in marine engineering, naval construction and machine design at the Naval Academy and had been assigned to the Portsmouth Navy Yard as assistant manager. From 1939 to 1945 he was Assistant Port Director of the Fourth Naval District, with headquarters at Philadelphia, and in that capacity served as senior member of the Joint Merchant Vessels Board. While a member of that Board, his duties included the placing of a commercial appraised value on each vessel inspected. He spent approximately six years on this assignment during which time he — 788 — inspected and appraised approximately 200 vessels of various types and classes. Captain Guiler made an informal inspection of tbe J ohn Cadwalader in tbe latter part of 1939 and concluded that tbe vessel could not be used by tbe Government for any purpose. In October 1940, a formal inspection was made by a full complement of tbe Joint Merchant Vessels Board, consisting of Captain Guiler, an Army representative, a Naval constructor and a machinist. Tbe Board submitted a report in which it placed a valuation of $75,000 on the vessel at time of inspection. Captain Guiler testified that in bis opinion tbe John Cad-walader bad a fair value of not more than $75,000 when it was requisitioned in 1942. He admitted that be was not an expert in tbe ship appraisal field and based his opinion upon his inspection of the vessel, his experience in appraising vessels during the war, and his discussions with commercial operators in the Philadelphia area. 27. Defendant’s second valuation witness was Frederick W. Schilpp of Baltimore. Mr. Schilpp has had 34 years of experience in making inspections, appraisals and valuations of all types of vessels in the general area of Chesapeake Bay and its tributaries, and particularly in the Baltimore-to-Norfolk area. His main appraisal work has been in connection with hull and cargo inspections for insurance purposes. Mr. Schilpp testified that in his opinion the John Cad-walader had little more than scrap value when requisitioned in 1942. He based this valuation principally upon his personal observation that the traffic between Philadelphia and Baltimore had diminished to such an extent that it was no longer profitable to operate a vessel in this trade. He expressed the view that the vessel’s narrow construction and top-heavy superstructure made her too unstable to be useful in an operation where the water was rough and boisterous. 28. Defendant’s third valuation witness was Wade H. Rut-land who has surveyed and appraised vessels for many years. From 1943 to 1946 he was connected with the War Shipping Administration in the Division of Small Vessel Procurement. Mr. Rutland stated that in his opinion the fair value of the John Cadwalader was $48,447 in July 1942. He based — 789 — bis valuation primarily upon data he had obtained from the War Shipping Administration records regarding the sale or transfer of seven other vessels. However, the vessels which he selected were not similar to the John, Cadwalader and had no actual relationship to the value of that vessel in 1942. 29. The evidence indicates that for several years prior to 1942 trucks had been competing with vessels like the John Gackoalader for freight trade, and that this competition, coupled with the defendant’s requisition of vessels, had caused severe curtailment of services such as were performed by the John Cadwalader. However, the proof also indicates that some demand still existed for this type of service, especially where there existed rail or other feeders. The evidence also reveals that the John Cadwalader was engaged chiefly in a limited operation in collaboration with the Bull Lines in their coastal and island trade. At the time of her requisition the vessel had been laid up due mainly to curtailment of the operations of the Bull Lines, and since restoration of the operations of the latter there has been no replacement for the John Cadwalader or the service it had performed. 30. Plaintiff filed its petition in this case on July 21,1948, and the case was referred to Commissioner Currell Vance on September 10, 1948. Numerous delays occurred. The first hearing was held in New York on June 10-13, 1952. Other delays occurred before all the evidence was submitted. The case was argued and submitted on the merits on February 2, 1956. It is not clear just who was principally responsible for the long delay in bringing the case to trial. Apparently neither party made any special effort to expedite the matter. 31. The fair and reasonable value of the vessel John Cad-walader, together with her expendable equipment, spare parts, and broached consumable stores, was $160,375.40 as of July 22, 1942. CONCLUSION OE LAW Upon the foregoing findings of fact, which are made a part of the judgment herein, the court concludes that as a matter of law the plaintiff is entitled to recover, and it is therefore adjudged and ordered that it recover of and from — 790 — the United States one hundred sixty thousand three hundred seventy-five dollars and forty cents ($160,375.40), with interest, not as interest but as a part of just compensation, at 3 percent per annum from July 22,1942, until date of payment. Footnotes [1] Iluu ivoui [2] Service disrupted by Government diversions oí Bull S. S. Line vessels from coastwise trades in 1941.