Kimball Laundry Company v. United States

Supreme Court of the United States · 1948 · Property

338 U.S. 1 (1949)

Updated July 23, 2026

PropertyEminent DomainJust CompensationTemporary TakingsFifth Amendmenttemporary takingrental valuegoing-concern value

Facts

In 1942 the United States condemned Kimball Laundry's plant in Omaha for Army use for a temporary term that was repeatedly extended until the plant was returned in 1946. During the Army's occupancy, Kimball suspended its own business because it had no other means of serving its customers, while the Army operated the plant as a laundry and retained most employees. A jury awarded annual rental value for the plant and compensation for damage to machinery and equipment beyond ordinary wear and tear. The trial court excluded evidence aimed at proving loss of the laundry's trade routes and going-concern value, and instructed the jury not to award compensation for diminution in the value of the business.

Issue

When the Government temporarily takes a business's physical plant, does the Fifth Amendment require compensation only for rental value and physical damage, or also for the temporary use value of transferable going-concern value embodied in customer routes that the taking effectively preempts? A related issue was whether the proper measure of compensation for the temporary taking itself was rental value rather than the difference in fee value before and after the taking.

Rule

Just compensation under the Fifth Amendment is limited to value transferable from owner to owner. For a temporary taking of land, plant, and equipment known from the outset to be temporary, the proper measure is the rental that probably could have been obtained, not the difference between fee value at the beginning and end of the taking. If a temporary taking of business property for practical purposes preempts transferable going-concern value so that the owner cannot preserve or transfer it during the period of occupancy, the Government must pay for the temporary use value of that intangible, but only upon solid proof that such value existed and had a market value a purchaser would pay.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

The federal government condemns a commercial cold-storage warehouse in Toledo for a 24-month period to store military food supplies. At the outset, everyone knows the owner, Harbor Peak Storage, will get the building back at the end of the term, and the building's fee value is the same on the return date as on the date possession began.

What is the proper measure of just compensation for the temporary taking of the warehouse itself?

Explanation. For a taking known from the outset to be temporary, compensation for the land, plant, and equipment is measured by the rental that probably could have been obtained in a hypothetical lease. The before-and-after fee-value measure is inappropriate because it could yield no compensation even when substantial temporary use was taken. The taker's gain and the owner's business losses are not the measure.