Summary

Portrait of Stanley Forman Reed Stanley Forman Reed United States v. Petty Motor Company…

There was a complete taking of the entire interest of the tenants in the property. It has been urged that to measure just compensation for the taking of a leasehold by its value on the market or by the difference between a fair rental as of the time of taking and the agreed rent, is unfair. It is said the unfairness comes from the fact that there is really no market for leaseholds; that their value is something peculiarly personal to the lessee. [6] The same thing is true as to incidental and consequential damages to the owner of a fee.
Source: Wikisource

Portrait of Stanley Forman Reed Stanley Forman Reed United States v. Petty Motor Company…

The novelty of such a form of taking, together with the obviously confiscatory consequences, in a practical sense, for the owner, led the Court to hold that the usual measure of just compensation applicable when all the owner's leasehold is condemned, namely, payment of only the long-term rental of an empty building fixed by the terms of his lease or by market value, or less, would not suffice to compensate for carving out of the lease a right of 'temporary use.' Other elements were required to be taken into account as evidence of the value of what was taken.
Source: Wikisource

Portrait of Stanley Forman Reed Stanley Forman Reed United States v. Petty Motor Company…

While the condemnation proceedings were pending the owner of the property made arrangements with the United States which resulted in the dismissal of the action against the owner. There is no claim by the United States that this arrangement released it from liability to the tenants for its taking of their leaseholds. As the value of the use of the totality of property, which was taken, thus lost all meaning, the Government accepts a separate responsibility to compensate the tenants for any legally recognized interest which they may have in the property.
Source: Wikisource

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