Housing Authority of City of East Orange v. Leff

• Decision Date: 10 October 1973
• Citation: 125 N.J.Super. 425,311 A.2d 213
• Parties: HOUSING AUTHORITY OF the CITY OF EAST ORANGE, a body corporate and politic, Plaintiff, v. Florence LEFF, et al., Defendants.
• Court: New Jersey Superior Court

Page 425

125 N.J.Super. 425

311 A.2d 213

HOUSING AUTHORITY OF the CITY OF EAST ORANGE, a body

corporate and politic, Plaintiff, v. Florence LEFF, et al., Defendants.

Superior Court of New Jersey,

Law Division.

Oct. 10, 1973.

Edward Stanton, East Orange, for plaintiff.

Joseph S. Seidel, Morristown, for defendants.

YANOFF, J.S.C., Temporarily Assigned.

This case involves the interaction between N.J.S.A. 20:1--1 et seq. (hereafter 'old statute') and the Eminent Domain Act of 1971, N.J.S.A. 20:3--1 (hereafter 'new statute') which replaced it, effective December 21, 1971. ¹

The issues arise in the following context: On May 7, 1970 an action in eminent domain was instituted by plaintiff ('Authority') pursuant to N.J.S.A. 20:1--36. At the same time Authority deposited $40,000 with the clerk, as required by the statute. Under the statute Authority became entitled to an order for possession 'not exceeding twenty days after such filing.'

By way of context, I find as facts that before institution of the eminent domain action, Lincoln Electric Products Co., Inc., the tenant, was in possession under a lease at the rate of $1050 a month; that on August 19, 1970 Authority asked tenant to sign a rental agreement at that rate. The person with whom Authority's representative spoke was Leff, one of the owners, and also an officer of tenant corporation. Leff said he neither would pay the rent nor move, but would take the matter to the Supreme Court. However, thereafter, tenant deposited $1050 in court in escrow. Authority did not move to evict tenant, and tenant did not physically remove its property at any time, but did on November 15, 1972, turn over the key to Authority.

Testimony was adduced as to fair rental value. The expert who testified for Authority stated that the property was worth $866.67 a month with utilities, and $546.36 a month without utilities. Owner's expert said the property was not rentable after May 7, 1970. The only evidence in the case was that utilities were not cut off. I find as a fact that the property had a fair rental value of $866.67 a month.

Defendants appealed from Commissioner's award and received a jury award of $54,000.

On January 3, 1972 plaintiff paid an additional $15,085 into court. ²

I am told that the interest amounts to $4,074.91. I am told also that during the pendency of the proceedings the owner paid in taxes to the City of East Orange the sum of $8,368.09.

Following the institution of the action, owner and tenant vigorously contested Authority right to condemn. Owner and tenant lost in all courts and pursued the matter so far as to apply for a writ of certiorari to the United States Supreme Court, which was denied on April 17, 1972, 405 U.S. 1064, 92 S.Ct. 1493, 31 L.Ed.2d 794.

On November 15, 1972 owner abandoned the personal property remaining on the premises and gave possession to Authority. Authority at no time sought the assistance of the sheriff in obtaining possession. The condemned premises contained a large quantity of personal property which could be classified as either machinery or junk, and which would have cost a large sum to remove. I infer that in light of American Salvage Co. v. Housing Authority of Newark, 14 N.J. 271, 102 A.2d 465 (1954), Authority did not want to run the risk of having to pay for its removal, and of being held responsible for its loss or damage. The net effect of the conduct of the parties was that Authority was delayed in obtaining possession of the condemned land for a period of approximately three years.

Authority now seeks payment to it of the sum of $1050 plus accrued interest; judgment against tenant in the sum of $28,350 for unpaid rents at the monthly rate of $1050 for the period October 18, 1970 to November 18, 1972; such other relief as may be necessary to permit it to collect the unpaid rents, including an abatement against the fund in court for the period during which it was deprived or possession.

Defendant's arguments in opposition center upon the following theories:

1. That by reason of sections 11, 19, 22, 23 and 26 of the new statute, Authority had neither title nor right to possession until the United States Supreme Court denied certiorari on April 17, 1972. I determine that the new statute is not applicable to passage of title or right to possession, for reasons stated hereafter, and therefore, do not discuss these sections.

2. That there should be no abatement of the funds on deposit because it was not owner, but tenant who was in possession, and the fund is the property of owner. Further, that if there be any abatement, it should be limited to interest on the fund.

3. That the court may not enter any general judgment for rent against tenant because that can be done only under section 5 of the new statute (N.J.S.A. 20:3--5), reading:

The court shall have jurisdiction of all matters in condemnation, and all matters incidental thereto and arising therefrom, including, but without limiting the generality of the foregoing jurisdiction to determine the authority to exercise the power of eminent domain; to compel the exercise of such power; to fix and determine the compensation to be paid and the parties entitled thereto, and to determine title to all property affected by the action.

It is argued that the new statute must be applied in its entirety, or not at all.

Before resolving these issues, I must refer to section 4 of the new statute (N.J.S.A. 20:3--4), which provides:

This act shall take effect immediately following the approval thereof, and shall apply to all actions instituted thereafter, and to all proceedings taken subsequent thereto in all actions pending on such effective date; except that judgments theretofore entered or awards theretofore made pursuant to law from which no appeal is pending on such effective date, shall not be affected by the provisions hereof.

If the meaning of this section is that as to all matters in condemnation arising subsequent to the effective date of the new statute, except unappealed judgments, the new statute controls, and defendants' arguments must prevail.

The basic issues here are whether the old statute or the new statute determines when title and the right to possession pass, and whether condemnor may obtain a general judgment against tenant in this action, even though no separate action therefor was instituted. No case has yet determined these problems. While Wayne Tp. v. Ricmin, 124 N.J.Super. 509, 308 A.2d 27 (App.Div.1973), held that the new statute controlled interest payable on an award, even on a case initiated before its effective date, it did so as to a payment made into court After that date. Here $40,000 was paid into court before the new statute came into force. Despite Wayne Tp.'s broad definition of the word 'proceeding' in section 4, it cannot be considered to have determined the problems involved here.

The issues raised are both substantive and procedural. One of the problems is to separate matters of substance from procedure. This may not be easy. Busik v. Levine, 63 N.J. 351, 307 A.2d 571 (1973).

The general rule is that as to matters of substance, statutes are ordinarily given prospective effect. In Kopzynski v. Camden County, 2 N.J. 419, 66 A.2d 882 (1949), the court stated:

A cardinal rule in the interpretation of statutes is that words in a statute ought not to have a retrospective operation unless they are so clear, strong and imperative that no other meaning can be annexed to them, or unless the interest of the Legislature cannot otherwise be satisfied. (at 551, 66 A.2d at 884)

This principal has been iterated many times, most recently in Nickell v. Gall, 49 N.J. 186, 189, 229 A.2d 511 (1967).

However, in Neel v. Ball, 6 N.J. 546, 79 A.2d 459 (1951), the court said:

This is not true, however, in the construction of statutes relating solely to procedure, and they are generally held applicable to pending proceedings where such application does not have the effect of disturbing vested rights or impairing the obligation of contracts. (at 551, 79 A.2d at 461)

See also Nickell, supra, 49 N.J., at 189, 229 A.2d 511.

My conclusion is that a distinction must be drawn between those portions of the new statute which affect substance and those which affect procedure, and that defendants are incorrect in their argument that the new statute must be applied to every aspect of the case, or not at all.

There is little doubt that under the old statute title vested in the condemnor immediately upon the filing of the declaration of taking and deposit of the money into court, and that the right to possession adhered to title.

N.J.S.A. 20:1--36 is clear enough:

From the filing of the said declaration of taking and the deposit in court to the use of the persons entitled thereto of the amount of the estimated compensation stated in said declaration, title to the property described as being taken by said declaration shall vest in the housing authority or redevelopment agency (free from the right, title, interest or lien of all persons), and said property shall be deemed to be condemned and taken for the use of the housing authority or redevelopment agency and the right to just compensation for the same shall vest in the persons entitled thereto. Upon the filing of the declaration of taking, the court shall designate a day (not exceeding twenty days after such filing, except upon good cause shown), on which the persons in possession shall be required to surrender possession to the housing authority or redevelopment agency.

Thus, when the new statute became effective, Authority already had title. State v. New Jersey Zinc Co., 40 N.J. 560, 193 A.2d 244 (1963). Significantly, the property is valued as of the date of its taking. Jersey City Redevelopment Agency v. Kugler, 58 N.J. 374, 277 A.2d 873 (1971). If the new statute controlled, the property should be valued as of date of taking under that statute, not the old statute.

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