Bergen County Sewer Authority v. Borough of Little Ferry

• Decision Date: 08 August 1951
• Docket Number: No. A--198,A--198
• Citation: Bergen County Sewer Authority v. Borough of Little Ferry, 15 N.J.Super. 43, 83 A.2d 4 (N.J. Super. App. Div. 1951)
• Parties: BERGEN COUNTY SEWER AUTHORITY v. BOROUGH OF LITTLE FERRY.
• Court: New Jersey Superior Court — Appellate Division

Page 43

15 N.J.Super. 43

83 A.2d 4

BERGEN COUNTY SEWER AUTHORITY v. BOROUGH OF LITTLE FERRY.

No. A--198.

Superior Court of New Jersey Appellate Division.

Argued July 30, 1951.

Decided Aug. 8, 1951.

Alfred W. Kiefer, Hackensack, argued the cause for appellant.

Walter H. Jones, Hackensack, argued the cause for respondent.

Before Judges JAYNE, WM. J. BRENNAN, Jr., and VANDERWART.

The opinion of the court was delivered by

JAYNE, J.A.D.

The Bergen County Sewer Authority, a body corporate and politic in law, was created by the Board of Chosen Freeholders of the County of Bergen pursuant to the terms and provisions of the legislative enactment of 1946 P.L.1946, c. 123, p. 571; R.S. 40:36A--1, et seq. N.J.S.A. To accomplish its objects and purposes it is clothed with power to acquire both private and public lands by eminent domain. R.S. 40:36A--36, N.J.S.A.

In furtherance of a resolution adopted on September 8, 1949, a petition was addressed to the judge of the Superior Court and filed on September 30, 1949, for the acquisition by condemnation of three tracts of vacant land situate within and owned by the Borough of Little Ferry. In response to the prayer of the petition the judge of the Superior Court on December 16, 1949, appointed three commissioners to examine and appraise the lands in conformity with the procedure prescribed by the applicable statute. R.S. 20:1--1 et seq., N.J.S.A.

The three tracts have some distinguishing characteristics Tract No. 1 containing 6.269 acres is principally meadowland. Tract No. 2 comprising 6.153 acres has a frontage of 650 feet on the Hackensack River. Tract No. 3 consisting of 118.5 acres embraces some land of a higher elevation, a so-called lake which has resulted from excavations previously made by a manufacturer of brick, and meadowland in its southern portions. The tracts subjected to condemnation are not excised from a larger area and accordingly the borough is not left with the ownership of remaining lands in that locality.

The borough promptly prosecuted an appeal from the order appointing the condemnation commissioners. 7 N.J.Super. 213, 72 A.2d 886 (App.Div.1950), appeal dismissed on procedural grounds, 5 N.J. 548, 76 A.2d 680 (1950). The statute authorizing the creation of the sewer authority was held to be constitutional, and the power of the sewer authority to condemn land owned by the municipality was sustained.

On August 16, 1950, the report of the commissioners was filed in which they announced the just and equitable appraisement of the value of said lands and property and the damage by reason of the taking thereof to be $79,100.

The borough appealed from the report of the commissioners to the Superior Court where the struck jury on November 3 1950, granted an award to the borough in the sum of $68,341.90. On November 17, 1950, an order was made by the judge of the Superior Court directing 'that the sum of $2,984.25, representing interest at 4% Upon the amount of $68,341.90 from September 30, 1949, to November 3, 1950, be paid by the petitioner to the respondent.' On December 2, 1950, judgment was entered in favor of the borough 'for the sum of $68,341.90, without costs' thus ignoring therein the allowance of interest,

A review of both the order for the payment of interest and of the judgment is sought by the borough in the prosecution of the present appeal.

Counsel for the appellant has assembled his argument under 13 points, and we have considered them in the order in which they are presented in the beiefs.

In the present proceeding the sewer authority in the exercise of the privilege conferred upon it by the Legislature assumed possession of the lands upon the filing of the petition and 'in advance of making compensation therefor.' R.S. 40:36A--36, N.J.S.A. But see, Delancey & Stockton Corp. v. Reliable, etc., Co., 134 N.J.Eq. 71, 33 A.2d 848 (E. & A.1943).

Where the condemnor has by virtue of legislative authority entered into possession of the property before the payment of compensation, it has in the great majority of jurisdictions been held that interest on the award shall be allowed as part of the just compensation to which the one whose property is taken is entitled under the constitutional requirements. 18 Am.Jur., Eminent Domain, 912, sec. 272.

In our own jurisdiction, consult: Metler v. Easton and Amboy Railroad Co., 37 N.J.L. 222 (Sup.Ct.1874); Newark v. Weeks and Knecht, 71 N.J.L. 448, 455, 59 A. 901 (Sup.Ct.1904); Acquackanonk Water Co. v. Weidmann, &c., Co., 98 N.J.L. 413, 119 A. 782 (Sup.Ct.1923), affirmed 99 N.J. Law 175, 122 A. 825 (E. & A.1923); North Hudson County R. Co. v. Booraem, 28 N.J.Eq. 450 (E. & A.1877); New York and Greenwood Lake Ry. Co. v. Stanley's Heirs, 35 N.J.Eq. 283 (E. & A.1882).

The initial point asserted by counsel for the appellant relates to the alleged impropriety of the order allowing interest on the award at the rate of four Per centum rather than at the rate of six Per centum per annum.

This criticism of the order seems to project the fundamental question whether the allowance of interest on the award is to be regarded as a legitimate charge for the forbearance of an indebtedness, or whether the allowance in the circumstances of such cases is an equitable method of compensating the owner for any loss suffered by him by reason of the intermediate period of delay between the actual taking of the property and the ultimate ascertainment of the amount of the award in conformity with the statute, which allowance theoretically becomes an integrant essential to the completeness of just compensation.

The answer to that question is expressed in the following quotation from Metler v. Easton and Amboy Railroad Co., supra: 'Interest for the intermediate period is allowable, not strictly as damages for the taking, but as an equitable mode of compensating the owner for the necessary delay in ultimately ascertaining the amount he is entitled to be paid, and as the means of reaching the full measure of the just compensation which, by the constitution, must precede the taking of the property of a private citizen for public uses.

'This general rule for the allowance of interest is liable to be controlled by the circumstances of each particular case. If the owner has not been disturbed in the possession, and has had a profitable use of the premises, or has received the rents for them pending the appeal, these circumstances should be taken into account and the interest abated accordingly. Possibly the like effect may be given to a tender and payment into court, where the statute provides for such proceeding.'

Of particular pertinency to the present proceeding in this regard is the quotation from the decision of the former Court of Errors and Appeals in the Acquackanonk Water Company case: 'As to the alleged error in adding the interest to the verdicts we are of the opinion that the action of the trial court in this regard was not error. The record shows that the condemnors were in possession and diverting the water from the time of the filing of the petition to condemn, and manifestly the landowners were deprived of their property from that date without just compensation. And where the statute does not in terms provide for an allowance of interest, equitable principles require that it be allowed. Metler v. Easton and Amboy Railroad Co., supra. But the appellants insist that it should be calculated by the jury and included in their verdict, as was done in the Metler case, where the jury found the interest as a separate item as directed by the court, Mr. Justice Depue, in the opinion of the court, saying: 'By the Postea it appears that the jury was directed to make the calculation of interest separately, that it might be submitted to this court whether the plaintiff was entitled to interest.' Thus recognizing the power of the court to disallow the interest, if circumstances equitably required it, and to order a judgment after eliminating the interest.

'If this be so, then the converse of the proposition would be sound in law, and the court may add interest to make full compensation in a case where the jury is required by statute, and the instruction of the court, to find the damages as of the time of taking the land prior to the date of trial. As Mr. Justice Depue said, in the case last cited, 'interest on demands of this character, not being a matter of contract, or positive law, is allowed on equitable principles.' It seems to us that when a statute like the one under consideration restricts a jury in ascertaining damages to the date of the taking of the land, which is long prior to the trial, and the landowner is entitled, on equitable principles, to interest on the sum awarded for the value of his land taken, it is not an erroneous procedure for the trial court to add to the verdict by way of legal interest such sums as will compensate him for his property, and order judgment for the sum thus arrived at. There was no disputed question of fact not settled by the jury, and the ascertainment of the amount of the interest was a mere matter of calculation, and the only error in the proceeding complained of, if it was one was that the court calculated the interest instead of the jury, which does not affect the substantial rights of any of the parties. Section 27 of our Practice Act provides, 'no judgment shall be reversed for error as to matters of pleading or procedure, unless, after examination of the whole case, it shall appear that the error injuriously affected the substantial rights of a party.' This cures the proceedings adopted by the court, even if it was error.' (99 N.J.Law 175, 122 A. 826.)

The principle of noticeable significance expressed in the foregoing decisions is that interest on such demands, if granted, is allowed on equitable considerations in the light of the circumstances of the particular case, and the landowner is not entitled as a matter of right in all such proceedings to the...