
    (357 F. 2d 988)
    R. J. WIDEN COMPANY v. THE UNITED STATES AND COMMONWEALTH OF MASSACHUSETTS, THIRD-PARTY DEFENDANT
    [No. 80-62.
    Decided March 18, 1966]
    
      
      Jerome P. F ocher for plaintiff; A. Frederick Richard, attorney of record. Male <& Dorr, of counsel.
    
      Howard O. Sigmond, with whom was Assistant Attorney General Edwin L. Weisl,Jr., for defendant.'
    
      . Robert L. Meade, Assistant Attorney General, Commonwealth of Massachusetts, for third-party defendant; John,8. Bottomk/, Assistant Attorney General, attorney of record. Edward, W. Brooke, Attorney General, of counsel.
    Before Cowen, Chief Judge, Whitaker, Senior Judge, Laramore, Davis, and Collins, Judges.
    
   Per Curiam:

In this suit plaintiff seeks to obtain just compensation under the Fifth Amendment (1) for injuries to its personal property and business resulting from governmental action in connection with construction of a flood control project, and (2) for the rental value of its lands that were occupied by the government during the initial phases of that project.

The Flood Control Act of 1936, as amended in 1941, authorized federal construction of various flood control projects, including one on the Hoosac River in North Adams, Massachusetts. It also provided that “no money appropriated under authority of this Act shall be expended on the construction of any project until States, political subdivisions thereof, or other responsible local agencies have given assurances satisfactory to the Secretary of War that they will (a) provide without cost to the United States all lands, easements, and rights-of-way necessary for the construction of the project * * *; [and] (b) hold and save the United States free from damages due to the construction works; * * *.” In accordance with these requirements and pursuant to State-enabling legislation, the Commonwealth of Massachusetts, in November 1950, executed an agreement with the United States specifying in part that the Commonwealth would provide, without cost to the United States, all land and easements necessary for the North Adams flood control project and would indemnify the United States for any damages due to the construction work. Thereafter, in January 1957, the Army Corps of Engineers awarded a contract in the amount of some $5,400,000 for construction of the project and in the following month directed the contractor to proceed with work at the physical site.

Plaintiff was the owner of property in North Adams, Massachusetts, situated on the north bank of the Hoosae River, a non-navigable stream. The property consisted of some 50 acres of land on which was located a tannery plant which was specifically designed for the manufacture of specialty leathers, i.e., leathers used for a variety of purposes other than shoe leather. Plaintiff’s property also included a dam constructed across the Hoosae River about one-half mile upstream from the main tannery plant and a set of head-gates behind the dam to control the flow of water from the river into a canal belonging to plaintiff. The canal carried water from the upstream part of the river to the tannery plant and also carried effluent away from the plant to the downstream part of the river. The water from the river was used by the tannery in huge quantities in the processing and manufacture of leather and in the washing away of the effluent, and without such water it was not possible to produce specialty leathers.

In the latter part of March 1957, the Corps of Engineers’ contractor, pursuant to the directive to start work at the site, entered upon plaintiff’s property without its permission, cut trees, bulldozed the land, removed soil, used the land as a dumping ground, and destroyed plaintiff’s dam and head-gates, thus diverting the course of the water from the Hoosae River away from the canal leading to the tannery. This caused the plaintiff to lose its vital water supply, as a result of which it suffered losses of various kinds. Many hides that it had on hand rotted and could not be used in manufacture. Other hides had to be processed in a makeshift manner or to be contracted out to other firms for finishing, resulting in losses or reduced profits to the plaintiff. The lack of water also had a deleterious effect on certain wooden machinery and equipment which dried out and deteriorated without constant moisture. Also, with the termination of its water supply from the river, the plaintiff was effectively forced to abandon the production of specialty leather and alter its operations so as to manufacture lower-grade leather products, thus causing it to lose orders, profits, and customers and to incur expenses in having to redirect its activities.

On July 2, 1957, the Commonwealth of Massachusetts (which as previously indicated had agreed with the United States to acquire all the land, easements, and rights-of-way necessary for the construction of the flood control project and to save the United States harmless from all claims for damages) made a formal taking of a part of plaintiff’s real estate. In 1958 the plaintiff brought suit in the State Superior Court against the Commonwealth for damages resulting from the latter’s taking of its land, easements and water rights. At the trial of that case, a stipulation was entered into between the parties that the dam and water rights were intact on July 2,1957, the date of the formal taking, and that water from the dam was then available to plaintiff. The stipulation was contrary to the actual facts, inasmuch as the dam had been destroyed and the water to plaintiff’s plant cut off by the Corps of Engineers’ contractor in March; the assumption was, however, agreed upon to shorten and simplify the trial by fixing one certain date (i.e., the date of the formal taking) upon which the Commonwealth agreed it would be liable for the damage to the real estate caused by the taking of a portion of plaintiff’s property and of its water rights.

After completion of the testimony, the Judge instructed the jury, in accordance with applicable Massachusetts law, that the plaintiff was entitled to receive the fair market value of that portion of the real estate formally taken, and severance damages for the diminution in value of the remainder of the property not actually taken, which latter item represented the difference in market value of plaintiff’s remaining real estate before and after the destruction of its water supply from the river.

Plaintiff obtained a jury verdict in the amount of $171,-090.20, and this amount was paid by the Commonwealth. Thus, the plaintiff concededly has been fully compensated for damages to its real estate as a result of the July 1957 taking by the Commonwealth of its land, water rights, and dam, and as a result of the diminution in value of its remaining real estate caused by the cut-off of its source of water from the river. However, the applicable Massachusetts law did not authorize recovery for incidental or consequential damages resulting from the Commonwealth’s taking (infra, pp. 1030-31) and, therefore, no award of damages was recoverable by plaintiff in the Superior Court proceeding and no issue was actually litigated therein for: (1) damage to any personal property, including spoilage of hides; (2) damage to movable machinery and equipment; (3) business expenses incurred as a result of the loss of water; or (4) loss of profits. Plaintiff seeks here to recover for these items, contending that the destruction of its personal property and injury to its business as a result of the action of the Corps of Engineers’ contractor in March 1957 constituted a direct “taking” by the United States for which compensation is due under the Fifth Amendment or under an implied promise to pay for property appropriated.

For the reasons indicated below, it is concluded that the government contractor’s entry in March 1957 upon plaintiff’s land and its destruction of the dam and headgates, without plaintiff’s permission, were authorized acts of government and hence constituted a taking by the United States of plaintiff’s real estate and water rights. It is further concluded that there was no taking in the constitutional sense of plaintiff’s personal property and business and that the damages thereto, all of which were occasioned by the termination of plaintiff’s water supply from the river, were incidental to, or the consequences of, the government’s taking of the real estate and water rights, and as such are not compensable.

It seems clear at the outset that the action which was taken here — the entry upon plaintiff’s land and the destruction of its water rights without its permission — was a governmental act (through an authorized contractor) performed pursuant to Congressional authorization under the Flood Control Act of 1936, as amended. See United States v. Lynah, 188 U.S. 445, 465-66 (1903); Portsmouth Harbor Land aNd Hotel Co. v. United States, 260 U.S. 327, 330 (1922); North American Transp. & Trading Co. v. United States, 253 U.S. 330, 333 (1920). Cf. Hooe v. United States, 218 U.S. 322 (1910). For while that Act prohibits the expenditure of flood control funds on a project until the state or a local subdivision or agency has given assurance that it ivill provide the land without cost and indemnify the United States for damages, it also provides that “where the total authorization for a project heretofore * * * authorized by Congress is not sufficient to complete plans that may have been made the Chief of Engineers is authorized in his discretion to * * * make expenditures on preparations for the project, such as the purchase of lands [and] easements * * See footnote 2, supra. As the legislative history indicates, this latter provision was inserted in order to give the Chief of Engineers broad authority to begin and prosecute needed projects without delay, even though authorizations at the time might be insufficient to complete all the work. H. Eept. No. 759,77th Cong., 1st Sess. (1941), pp. 6-7. From this it seems evident that under the statute the Chief of Engineers was authorized to start the present project and acquire the necessary lands and easements as soon as he received assurances that the Commonwealth would reimburse the United States for the cost of such acquisitions and hold it free from liability for damages. This being the case, the acts of the government’s contractor, on behalf of the United States, constituted a “taking” by the United States of plaintiff’s real estate and water rights which gave rise to an obligation— since satisfied by the Commonwealth — to pay just compensation therefor.

Considered now 'against this background is plaintiff’s contention that the destruction of its personal property and injury to its business as a result of the action of the government’s contractor in March 1957 constituted a direct taking of its personal property for which just compensation is due. It is quite correct, as plaintiff indicates, that to constitute a taking under the Fifth Amendment it is not necessary that property be absolutely “taken”in the narrow sense of that word to come within the protection of this constitutional provision ; it is sufficient if the action by the government involves a direct interference with or disturbance of property rights. See e.g., Pumpelly v. Green Bay Co., 80 U.S. 166 (1871); United States v. Lynah, 188 U.S. 445 (1903); United States v. Cress, 243 U.S. 316 (1917). Nor need the government directly appropriate the title, possession or use of the properties in question since it is “the deprivation of the former owner rather than the accretion of a right or interest to the sovereign [which] constitutes a taking. Governmental action short of acquisition of title or occupancy has been held, if its effects are so complete as to deprive the owner of all or most of his interest in the subject matter to amount to a taking.” United States v. General Motors Corp., 323 U.S. 373, 378 (1945). For example, it has been held consistently that an overflow of water resulting from government construction projects which materially impairs the use and enjoyment of lands constitutes a constitutional taking of such lands despite the absence of appropriation of title or occupancy. Pumpelly v. Green Bay Co., supra; United States v. Lynah, supra; United States v. Cress, supra. See also Cotton Land Co. v. United States, 109 Ct. Cl. 816, 75 F. Supp. 232 (1948). The principle is applicable to personal property where “the owner is deprived of its use ... as the natural consequence of the deliberate, intended exercise of an asserted power” of the government. Causby v. United States, 109 Ct. Cl. 768, 772, 75 F. Supp. 262, 264 (1948). See also Kimball Laundry Co. v. United States, 338 U.S. 1 (1949); Todd v. United States, 155 Ct. Cl. 87, 94-6, 292 F. 2d 841, 845-46 (1961); Seery v. United States, 142 Ct. Cl. 234, 161 F. Supp. 395 (1958). The decisive factor in each of these cases, and in the others which follow the same principle, is that the personal property or other rights had been directly appropriated or destroyed by actions of agents or officials of the government. The losses of property involved in these cases were not merely incidental or indirect consequences of a taking of other property; rather, they were the direct products of the actual invasion or taking of the property involved. United States v. Causby, 328 U.S. 256, 265-66 (1946). And “it is the character of the invasion, not the amount of damage resulting from it, so long as the damage is substantial, that determines the question whether it is a taking.” United States v. Cress, supra, p. 328. Undoubtedly, the United States could here have “taken” plaintiff’s personal property and business, in which case just compensation would be due. . But this was not done. The only taking in the present case was of the plaintiff’s real estate and water rights, for which compensation has been fully paid by Massachusetts : The additional losses claimed in this proceeding are in the nature of consequential damages, that is to say, they were “an unintended incident” of the actual taking. Mitchell v. United States, 267 U.S. 341, 345 (1925). See also e.g., Bothwell v. United States, 254 U.S. 231 (1920); Joslin Mfg. Co. v. Providence, 262 U.S. 668 (1923); Southern Counties Gas Company v. United States, 141 Ct. Cl. 28, 157 F. Supp. 934 (1958), cert. den. 358 U.S. 815.

It is settled law that in the absence of specific statutory mandate, compensation under the Fifth Amendment may be recovered only for property taken and not for incidental or consequential losses, the rationale being that the sovereign need only pay for what it actually takes rather than for all that the owner has lost. See Monongahela Navigation Co. v. United States, 148 U.S. 312, 326 (1893); Mitchell v. United States, supra. See also Eminent Domain Valuations In An Age of Redevelopment; Incidental Losses, 67 Yale L.J. 61, 67-8 (1957) . Hence the incidental spoliation of the plaintiff’s inventory and equipment, the reduction or loss of its good will and profits, and the expenses incurred in having to re-adjust its manufacturing operations are non-compen-sable under long-established legal principles. As the Su-. preme Court stated in United States v. General Motors Corp., supra (323 U.S. 379-80) :

The sovereign ordinarily takes the fee. The rule in such a case is that compensation for that interest does not include future loss of profits, the expense of moving removable fixtures and personal property from the premises, the loss of good-will which inheres in the location of the land, or other like consequential losses which would ensue the sale of the property to someone other than the sovereign. No doubt all these elements would be considered by an owner in determining whether, and at what price, to sell. No doubt, therefore, if the owner is to be made whole for the loss consequent on the sovereign’s seizure of his property, these elements should properly be considered. But the courts have generally held that they are not to be reckoned as part of the compensation for the fee taken by the Government. We are not to be taken as departing from the rule they have laid down, which we think sound. Even where state constitutions command that compensation be made for property “taken or damaged” for public use, as many do, it has generally been held that that which is taken or damaged is the group of rights which the so-called owner exercises in his dominion of the physical thing, and that damage to those rights of ownership does not include losses to his business or other consequential damage.

Massachusetts case law is to similar effect in denying, in the absence of specific enabling legislation, damages incident to a taking or condemnation, such as personal property and business losses. See e.g., N.Y., N.H. & H. RR v. Blacker, 178 Mass. 386, 59 N.E. 1020 (1901); Bailey v. Boston & P. R. Corp., 182 Mass. 537, 66 N.E. 203 (1903); Boston Belting Co. v. Boston, 183 Mass. 254, 67 N.E. 428 (1903); Nashua River Paper Co. v. Commonwealth, 184 Mass. 279, 68 N.E. 209 (1903); Connor v. Metropolitan District Water Supply Commission, 314 Mass. 33, 49 N.E. 2d 593 (1943). The Commonwealth’s order of taking of July 2, 1957 formalized whát had already become an accomplished fact — the taking by the United States of such real estate and water rights some three months before, with the formal order issued so that the Commonwealth would assume liability for the permanent taking in conformity with its agreement with the United States to provide the latter the necessary lands and easements without cost. Furthermore, if in March 1957 the Commonwealth, rather than the United States, had taken plaintiff’s real estate and water rights without a formal order, plaintiff’s measure of recovery against the Commonwealth for the damages caused by such taking (which is referred to in Massachusetts as a taking in pais) would have been the same as the measure of recovery it actually received under the formal order of taking, namely, the fair market value of the property taken, plus severance damages for the diminution in value of the remainder of the property not taken. See Holbrook v. Massachusetts Turnpike Authority, 338 Mass. 218, 154 N.E. 2d 605 (1958); Sullivan v. Commonwealth, 335 Mass. 619, 142 N.E. 2d 347 (1957). Plaintiff having obtained the full measure of damages permitted under Massachusetts law for the taking, the United States is not obligated to pay it more. There is no reason “why the protection given to ‘private property’ under the Fifth Amendment imposes upon the United States a duty to provide a higher measure of compensation for * * * [plaintiff’s property] than * * * [is] imposed by the Fourteenth Amendment upon the state * * * [as] the taker. Nor has any reason based on considerations of equity and fair dealing been advanced for justifying a higher measure of compensation in the instant case because the * * * [property was] * * * taken for a public project sponsored by the United States rather than by * * * [Massachusetts]. The warrant or authority for putting the United States at such a disadvantage is not apparent.” United States ex rel. T.V.A. v. Powelson, 319 U.S. 266, 279 (1943). [Emphasis in original.]

Finally, plaintiff seeks just compensation for the use and occupancy of its property by the United States from March 25,1957 to July 2,1957, a period during which plaintiff was deprived of the use and enjoyment of a part of its land without receiving compensation either from the United States or the Commonwealth. In view of the fact that the Commonwealth’s taking was made on July 2, 1957 and the State Court proceeding was tried on the assumption that the property was intact on that date, it would appear that plaintiff could not have recovered anything from the Commonwealth for the use and occupancy by the United States prior to July 2, 1957. Nor does it appear that the stipulation entered into by the parties during the course of the State Court proceeding was intended to cover such use and occupancy. Since the United States effectively appropriated the land in question for an ascertainable period, thereby interfering with a recognizable property interest of plaintiff, the United States is obliged to pay plaintiff the fair rental value of that property for the period involved. United States v. General Motors Corp., 323 U.S. 373, 382 (1945); Kimball Laundry Co. v. United States, 338 U.S. 1, 7 (1949); United States v. 40.379 Square Feet of Land, 58 F. Supp. 246, 250-52 (D.C. Mass. 1944); Jacobsen v. Superior Court, 192 Cal. 319, 219 Pac. 986 (1923). The taking by Massachusetts was a permanent taking of the fee on July 2nd; the occupation by the United States in March began a prior temporary taking which lasted some three months. In the circumstances of this case, the two takings must be viewed as separate. Plaintiff has recovered for the permanent taking, but it is also entitled to compensation, i.e. rent, for the previous temporary taking; for that seizure, the Federal Government is liable. Temporary takings are recognized in the law of federal eminent domain. See, e.g., United States v. General Motors Corp., supra; Kimball Laundry Co. v. United States, supra; Eyherabide v. United States, 170 Ct. Cl. 598, 345 F. 2d 565 (1965).

The plaintiff is entitled to recover the fair rental value of that part of its land which was used and occupied by the United States during the period from March 25, 1957 to July 2, 1957. ; Judgment is entered to that effect. The amount of recovery will be determined under Rule 47(c).

Whitaker, Senior Judge,

dissenting in part:

I dissent from the opinion of the majority only to this extent : I do not think plaintiff is entitled to recover from the United States for a temporary taking of its property between the date of the condemnation proceedings by the Commonwealth of Massachusetts in July 1957, and March 1957, the time the contractor, employed by the United States, entered upon plaintiff’s property, cut trees, bulldozed the land, removed soil, used the land as a dumping ground, and destroyed plaintiff’s dam and headgates, thus diverting the course of the water from the Hoosac River away from the canal leading to the tannery. March 1957 is the date of the taking of plaintiff’s property by the United States. Plaintiff is entitled to recover the value of the land taken.at that time. If this value is greater than the value in July 1957 when the Commonwealth of Massachusetts condemned the land, plaintiff is entitled to recover the difference, but if there was no difference in the value of the land on the two dates, plaintiff is entitled to recover nothing in addition to the amount awarded in the condemnation proceedings instituted by the Commonwealth of Massachusetts.

The taking by the United States was not a temporary one but a permanent one, and, hence, I cannot agree that plaintiff is entitled to the rental value of the land between March and July.

Otherwise, I concur in the opinion of the majority.

FINDINGS OF FACT

The court,- having considered the evidence, the report of Trial Commissioner Herbert N. Maletz, and the briefs and arguments of counsel, makes findings of fact as follows:

1. The plaintiff, R. J. Widen Company, is a corporation organized and existing under the laws of the Commonwealth of Massachusetts, with-its usual place of business in North Adams, Massachusetts.

2. In. March 1957, the land, buildings, dam and water rights, and other real and personal property in question in this litigation were owned by the plaintiff and by Widen Tanning Company, also a Massachusetts corporation.

3. The plaintiff, R. J. Widen Company, and Widen Tanning Company were merged in 1958 as a result of which the plaintiff succeeded to all property and causes of action formerly owned by plaintiff, R. J. Widen Company, and Widen Tanning Company. For convenience the R. J. Widen Company and Widen Tanning Company will be referred to interchangeably as “plaintiff”.

4. In 1957, plaintiff was the owner of certain real estate in North Adams, Massachusetts, situated on the north bank of the Hoosac River, which is a non-navigable stream. The real estate consisted of (i) approximately 50 acres of land, improved with a complex of industrial buildings operated as a tannery; (ii) a dam (called the “Barber Dam”) constructed across the Hoosac River and located approximately one-half to three-quarters of a mile east of, or upriver from, the main tannery plant; and (iii) a set of headgates located on the north bank of the river immediately behind the Barber Dam to control the flow of water from the river into a canal belonging to plaintiff, which canal carried water from the upstream part of the river to the tannery plant, and also carried effluent from the plant to the downstream part of the river.

5. The plaintiff’s tannery contained a great deal of equipment and machinery which was movable and could be taken out of the buildings without dismantling. Some equipment, such as vats, pits and piping, was built into the plant.

6. Plaintiff’s plant was specifically designed for the manufacture, production and sale of “specialty leathers”, which are leathers used for a variety of purposes other than shoe leather. Thus, specialty leathers are used for handbags, billfolds, gloves, luggage, camera cases, etc.

7. The process of tanning hides involves several different operations in which the hides are washed to loosen and remove soil, salt, manure, blood, etc. The hides are then soaked in various chemical solutions to de-hair them and loosen the fat and fleshy tissue not essential to the final leather product. The fleshy tissue is then tom off by various machine operations. The chemicals are washed away and the hides are soaked in other solutions to soften the leather, dye it various colors, and give it the finished appearance desired. The solids from the waste products or effluent derived from these various processes are removed by screening machines. The remaining effluent is quite concentrated and emits a very obnoxious odor so that it must be diluted and flushed away from the plant to prevent a serious nuisance.

8. The use of water was essential to the operation of the plaintiff’s tannery, and the water which was carried from the Hoosac River via the canal to its tannery was used in huge quantities in the processing and manufacture of leather and in the washing away of the effluent from the plant back to the river. To carry the effluent away, it was necessary that the canal be filled to capacity. There were times during the summer months when there was not a sufficient amount of water in the river to keep the canal filled to capacity.

9. In addition to the water from the river, plaintiff’s tannery had two other sources of water, namely, a well on its property and the city water supply.

10. Without the source of water from the river, it was not possible for plaintiff to operate its tannery for the production of specialty leathers.

11. For at least 80 years, the tannery which stood on plaintiff’s property had taken water from the Hoosac River for use in tannery operations.

12. In November 1950, pursuant to authority granted by Chapter 649 of the Acts and Resolves of Massachusetts, approved July 20, 1950, the Commonwealth of Massachusetts, by its Commissioner of Public Works, executed an agreement with the United States to carry out the project authorized by Public Law No. 738,74th Congress (49 Stat. 1570,1572), as amended by Public Law No. 228, 77th Congress (55 Stat. 638, 639). The agreement entitled “Assurances for North Adams, Massachusetts Flood Control Project” related to the proposed construction of a flood control project on the Hoosac River in and around North Adams, Massachusetts, and provided, as contemplated by the statutes, that the Commonwealth would provide, without cost to the United States, all land, easements, and rights-of-way necessary for channel improvements, construction of levees, walls and other related improvements for flood protection of the City of North Adams in accordance with maps to be furnished by the United States. The agreement also provided that the Commonwealth would indemnify the United States for any and all damages due to the construction work.

. 13. Early in March 1957, plaintiff’s office manager observed and reported to his superiors that a State survey party was on plaintiff’s property in the vicinity of the dam cutting down trees and setting out surveyors’ stakes. On March 21, 1957, the Petricca Construction Company of Pittsfield, Massachusetts (Petricca), which had entered into a contract on January 31, 1957 with the U.S. Army Corps of Engineers in the amount of $5,400,638.60 estimated as required for the construction of the North Adams flood control project, advised the plaintiff that it was about to enter upon plaintiff’s property, remove its dam, and install a new one in its stead. Petricca also advised plaintiff that no provision had been made for the continuance of the then existing headgates and canal which carried water from the river to plaintiff’s tannery. On or about March 25,1957, Petricca, in carrying out its contract with the Army Corps of Engineers and in accordance with a Corps of Engineers’ directive to commence physical work at the site, entered on plaintiff’s property and thereafter cut trees, bulldozed plaintiff’s land, removed soil and used plaintiff’s land as a dumping ground.

14. On March 25,1957, Petricca, acting under its contract with the Corps of Engineers, destroyed the Barber Dam and headgates which belonged to plaintiff, and diverted the course of the water away from the canal leading to plaintiff’s plant.

15. At no time did the Corps of Engineers or Petricca obtain any permission from the plaintiff to enter upon its land, do any act with respect to the land, or destroy its property.

16. No formal taking of the plaintiff’s property was made by the United States, and no eminent domain or condemnation proceedings were ever instituted by the United States with respect to plaintiff’s property.

17. No formal taking of plaintiff’s property was made by the Commonwealth of Massachusetts until July 1957. An Order of Taking under the authority of the Massachusetts Department of Public Works was dated July 2,1957, and the plaintiff received notice of this on or about August 21, 1957.

18. Between March 25 and July 2,1957, the Corps of Engineers, through Petricca, its contractor, used and occupied land belonging to, and of value to, the plaintiff, and the United States made no payments to the plaintiff for this use and occupation, or for any other purpose.

19. Water from the Hoosac Eiver was not available for use in the plaintiff’s manufacturing operations from March 1957 until in or about July 1960 when water was restored to the canal.

20. When the Barber Dam was destroyed in March 1957 by the Corps of Engineers’ contractor, Petricca, and the water from the Hoosac Eiver diverted, the plaintiff’s water supply was cut off in a matter of hours and production of specialty leathers had to cease. At that time, the plaintiff had a large inventory of raw hides in storage and in various stages of processing, a large number of which were in a perishable condition. Because of the lack of adequate water supply, many of the hides could not be further processed' and spoiled or deteriorated; many of the hides on which processing was begun were finished in a makeshift manner, and others were sent out to various tanneries for processing; some hides were sold as waste materials. In brief, as a result of lack of water, the plaintiff suffered economic loss through the destruction of some hides and the reduction in value or profit on others.

21. The lack of water also had a deleterious effect on various items of machinery and equipment in plaintiff’s plant. Thus, various items such as paddle wheels that were made of wood dried out and deteriorated. Some machinery which had to be idled became corroded.

22. As a result of the cutoff of the water supply, the plaintiff suffered substantial business losses due to cancellation of orders and loss of customers. Finally, plaintiff was compelled to abandon completely its specialty leather, business and re-equip its plant for production of shoe leather in order to survive.

23. As a result of the cutoff of its water supply and the consequent curtailing of its operations, the number of employees of the plaintiff dropped from over 100 to less than 25.

24. The operations of plaintiff which had been profitable for the three years prior to the cutoff of the water supply were rendered unprofitable for some three years after the water supply was cut off due to the fact that the plaintiff’s business was severely disrupted and that the specialty leather business had to be abandoned.

25. In March 1958 the plaintiff brought suit against the Commonwealth of Massachusetts in the Superior Court, Berkshire County, for damages resulting from the July 1957 taking by the Commonwealth of Massachusetts of its land, easements, water rights and other rights. The petition which was brought under Chapter 79 of the General Laws of Massachusetts alleged in part as .follows:

1. * * * The-Petitioner seeks to recover against the Bespondents the damages resulting from such takings and all acts of the Bespondents incidental thereto including the destruction by them or their agents of the Petitioner’s property and their diversion of the waters of the Hoosac Biver resulting in the deprivation of the water supply of the Petitioner and the diminution in value of the portion of the Petitioner’s property not ■actually taken.
* * * * *
4. On or about March 21, 1957, the Commonwealth of Massachusetts and/or the City of North Adams by its or their agents, servants, or employees, against the will of Widen Tanning Company, wrongfully entered upon certain portions of its land above described, took possession thereof, cut down valuable trees, removed soil therefrom, used the same as a dumping ground, blew up a dam belonging to it in the Hoosac Biver, diverted the course of the said river which water it was entitled to use and wholly deprived it of the water from said river which it had been using and which was and is necessary to permit it to carry on its tanning business at said tannery, and the Respondents have continued to occupy those portions of said property of which they took possession as above set forth, have continued to deprive Widen Tanning Company and the petitioner of the use of the water of said river, and have continued to exercise dominion and control over and exclude the Petitioner from its said property.

26. (a) At the State Court trial, the parties, R. J. Widen Company and the Commonwealth of Massachusetts, entered into the following stipulation:

1. That this case is to be tried upon the assumption that the Commonwealth made a formal taking of a portion of the petitioner’s property and certain rights and interests therein on July 2, 1957, and that the petitioner’s right to damages vested on that date. The case is also to be tried upon the assumption that as of that date the dam referred to as the Barber Leather Company dam or the petitioner’s dam was intact and no construction work had been started prior to that date and that water from its dam was then available to the petitioner.
2. The petitioner is to have, the right to introduce evidence ,of damage which will include damage to certain wood portions of machinery and installations which the petitioner contends were damaged by reason of the lack of water following the taking.
3. As against the Commonwealth only, the petitioner waives its claim for damages alleged to have been caused to certain hides, leather and merchandise in process of manufacture.
4. That the agreement which is contained in paragraph No. 1 above may be read to the jury.

(b) In view of this stipulation, the State Court proceeding was tried on the assumption that the Commonwealth’s taking had occurred on July 2, 1957, and that at that time the dam and water rights were still intact. This assumption was contrary to the facts since the dam had actually been destroyed and the water to the plant cut off by the Army Engineers’ contractor, Petricca, on March 25, 1957. See finding 14. However, the assumption was stipulated to by the parties in the State Court proceeding in order to shorten and simplify the trial by fixing one certain date, i.e., July 2, 1957, the date of the formal taking, upon which the Commonwealth, agreed it would be liable for the damage to plaintiff’s real estate caused by the taking of a portion of its property and of its water rights.

27. (a) Under Massachusetts law, the measure of damages for a formal taking of a portion of real estate is determined by Chapter 79, Section 12 of the General Laws, and is the fair market value of the portion of real estate actually taken, plus the diminution in value of the part remaining, i.e., the difference in value before and after the taking.

(b) There can be no recovery under this provision of Massachusetts law for personal property and other business damage resulting from a formal taking of real estate.

28. On occasion, the Commonwealth of Massachusetts has, in adopting legislation authorizing a taking, permitted recovery not only for damage to the realty but also for consequential damages such as moving expenses, loss of profits, and the like. Chapter 649, Acts of 1950, the legislation by which the Commonwealth gave the Department of Public Works the right to take lands for the federal flood control project in North Adams (see finding 12), contained no provision authorizing recovery of consequential damages. Hence plaintiff’s measure of damages for the taking of its property was that prescribed by Chapter. 79, Section 12 of the General Laws.

29. In the State Court proceeding, the Judge instructed the jury that in determining the fair market value of plaintiff’s property it must consider the following, among other things: the physical characteristics of the property and the buildings and improvements thereon; all the uses for which the land was adaptable at the time of taking; the opinions expressed by the expert witnesses and the owners of the property; the assessed valuation of the property; and its actual or potential rental value. He also charged the jury that the petitioner was entitled to have the fair market value of its property determined upon the basis of the highest and best use possible for the property, adding that the jury had to determine “the fair market value of this property as a piece of real estate -with, certain water rights but in so doing * * * [it] must consider the fact that it was used for a tannery and * * * must consider its adaptability for that use as well as all other uses * * The Judge further instructed the jury as follows:

* * * first you determine the fair market value of the property immediately before the taking of July 2,1957, and then you. determine the fair market value of the property as it was reduced by the taking of July 2,1957, having in mind that the Commonwealth in its taking took the dam, the site on which it was located and the river bed. So that difference between those two figures is the measure of damages to which this Petitioner is entitled.' Now in arriving at the fair market value after the taking you must consider the land and rights actually taken and you must consider the effect of that taking upon the balance of the property.

30. Since the applicable Massachusetts law (i.e., Chapter 79, Section 12 of the General Laws) did not authorize recovery for incidental or consequential damages resulting from the taking here (see findings 27, 28), no award of damages was recoverable by the plaintiff in the State Court proceeding and no issue was actually litigated therein for: (1) damage to any personal property, including spoilage of hides, (2) damage to any machinery or equipment not considered to be fixtures, (3) business expense incurred as a result of the loss of water, or (4) loss of profits.

31. The plaintiff’s petition for assessment of damages against the Commonwealth resulted in a jury verdict for plaintiff in the amount of $171,090.20 and this amount was paid by the Commonwealth. Thus, the plaintiff has been fully compensated for damages to its real estate (1) as a result of the July 1957 taking by the Commonwealth of plaintiff’s land, water rights and dam, and (2) as a result of the diminution in value of the plaintiff’s remaining real estate caused by the cut-off of the water supply.

32. The plaintiff has no further right to recovery against the Commonwealth of Massachusetts because of the latter’s taking in 1957 of plaintiff’s property. .

■ 33. The United States was not a party to the State Court proceeding nor did it voluntarily appear.

34. At the pretrial conference the parties entered into a stipulation, approved by the Commissioner, that the trial would be limited to the issues of law and fact relating to the right of the plaintiff to recover, reserving the determination of the amount of recovery, if any, for further proceedings.

CONCLUSION OK Law

Upon the foregoing findings of fact, which are made a part of the judgment 'herein, the court concludes as a matter of law that plaintiff is entitled to recover the fair rental value of that part of its land which was used and occupied by the United States during the period from March 25,1957 to July 2,1957, with the amount of recovery to be determined pursuant to rule 47(c) (2). Judgment is entered accordingly. 
      
      This opinion incorporates, with minor added discussion, the opinion prepared, at the direction of the court under Rule 57(a), by Trial Commissioner Herbert N. Maletz.
     
      
       Public Law 7,38, 74th Cong., 49 Stat. 1570 (1936)!, as amended by Public Law 228, 77th Cong., 55 Stat. 638 (1941).
     
      
       Section 2 of the 1941 amendment to the Flood Control Act also provided that “in any case where the total authorization for a project heretofore * * * authorized by Congress is not sufficient to complete plans that may have been made the Chief of Engineers is authorized in his discretion to plan and make expenditures on preparations for the project, such as the purchase of lands, easements, and rights-of-way * *
     
      
       No formal taking of plaintiff’s property was ever made by the united States, nor has the United States ever Instituted eminent domain or condemnation proceedings with respect to the property.
     
      
       In the Superior Court proceeding, the plaintiff was faced with a serious dilemma. The Commonwealth there took the position that it was not responsible for any real estate damage prior to July 1957, when it made the formal taking. Since the united States was not and could not be a party to that proceeding, it thus could not be charged with real estate damage its action had caused. The first two days of trial in the Superior Court reflected this dilemma in the exclusion of evidence offered by the plaintiff which antedated the Commonwealth’s formal taking. The practical resolution of this difficulty was the stipulation of the parties by which the assumption was made that on July 2, 1957 all of the real estate was intact when the Commonwealth made its taking.
     
      
       The applicable Massachusetts statute, General Laws (Ter. ed.) c. 79 § 12, provided In part that “The damages for property taken under this chapter shall be fixed at the value thereof before the taking, and in case only part of a parcel of land is taken there shall be included damages for all injury to the part not taken caused by the taking * *
     
      
       The award also covered machinery and installations which were fixtures and thus part of the real estate.
     
      
       Plaintiff also seeks to recover the rental value of that part of its land which was occupied by the government’s contractor during the period extending from March 25, 1957 to July 2, 1957. This claim is considered in a later part of this opinion.
     
      
       It is immaterial whether the theory of the present suit is that there was a taking of property under the Fifth Amendment or that there was an implied promise to pay for it. In either case, the claim is based upon the Fifth Amendment and a promise is implied because of the duty to pay imposed by that Amendment. See Cotton Land Co. v. United States, 109 Ct. Cl. 816, 830-32, 75 F. Supp. 232, 234—35 (1948), and cases there cited.
     
      
       Thus, the House Report stated In part “There have * * * been placed In section 2 of this bill some Important provisions which will permit Initiation and partial accomplishment of projects which might otherwise be delayed for long periods of time due to lack of sufficient advance authorizations for the completion of large projects.” Id. p. 6. The report also stated: “In section 2 of this bill the Chief of Engineers is given the authorization to begin and prosecute projects in whatever way he may determine to be advantageous under the conditions and circumstances that obtain from time to time.” Id. p. 7. Manifestly, the authorization of $2,178,000 which was provided in the Flood Control Act amendments of 1941 (55 Stat. 638) for the North Adams and two other projects was insufficient considering that the contract for the construction of the North Adams project was itself in excess of $5,000,000.
     
      
       A universal exception to this rule is where a portion of the property has been taken causing diminution in value of the remaining property. To prevent serious injustice, the courts uniformly require in such cases (as did the Massachusetts court here) payment for so-called “severance damages” to the remainder. United States v. Grizzard, 219 U.S. 180, 185-86 (1911) ; United States v. Miller, 317 U.S. 369, 375-76 (19131) ; 1 Orgel Valuation Under Eminent Domain (2d ed. 1953) § 4. Also in the case of temporary takings, the Supreme Court, in order to avoid special hardships, has allowed proof of consequential losses such as removal expenses and loss of trade routes to be received in evidence as a factor bearing on the market value of the property interests taken. United States v. General Motors Corp., 323 U.S. 373 (1945) ; Kimball Laundry Co. v. United States, 338 U.S. 1.(1949).
     
      
       In United States v. Petty Motor Co., 327 U.S. 372, 37, 7-78 (1946), the Supreme Court made the following comment: “* * * It has come tó be recognized that just compensation is the value of the interest taken. This is not the value to the owner for his particular purposes or to the condemnor for some special use but a so-called ‘market value.’ It is recognized that an owner often receives less than the value of the property to him but experience has shown that the rule is reasonably satisfactory. Since ‘market value’ does not fluctuate with the needs of the condemnor or condemnee but with general demand for the property, evidence of loss of profits, damage to good will, the expense of relocation and other such consequential losses are refused In federal condemnation proceedings.” See also Bothwell v. United States, 254 U.S. 231 (1920); Joslin Mfg. Co. v. Providence, 262 U.S. 668 (1923); Omnia v. United States, 261 U.S. 502 (1923).
     
      
       See footnote 5, supra. Plaintiff contends that § 10 of c. 79 of the Commonwealth’s laws authorizes an allowance for personal property, but it is clear, from the decisions of the Supreme Judicial Court, that § 10 does not itself give a right to damages; the section merely provides the procedure for recovering such damages when that right is given, by some other provision, of law. In this case there is no such provision. Chapter 649 of the Acts of 1950 (authorizing the Commonwealth to give indemnity assurances to the Federal Government) did not empower the state courts to grant relief of the scope sought here. That statute, with its limited purpose of complying with Congressional enabling legislation, does not speU out the specific right to consequential damages which would be necessary if the state’s general law of eminent domain were to be modified for this particular project.
     
      
       The petition, also included the City of North Adams as a respondent. North Adams was later dismissed as a party.
     
      
       Prior to the stipulation, the Commonwealth contended that it was not liable in the. State Court proceeding for the damage to plaintiff’s real estate caused by the March 1957 taking by the united States of plaintiff’s property and water rights.
     