State by State Highway Commissioner v. Hankins

• Decision Date: 18 October 1960
• Docket Number: No. A--445,A--445
• Citation: 63 N.J.Super. 326,164 A.2d 615
• Parties: STATE of New Jersey, By the STATE HIGHWAY COMMISSIONER, Plaintiff-Appellant, v. Wilbur F. HANKINS et al., Defendants-Respondents.
• Court: New Jersey Superior Court — Appellate Division

Page 326

63 N.J.Super. 326

164 A.2d 615

STATE of New Jersey, By the STATE HIGHWAY COMMISSIONER Plaintiff-Appellant, v. Wilbur F. HANKINS et al., Defendants-Respondents.

No. A--445.

Superior Court of New Jersey Appellate Division.

Argued Oct. 3, 1960.

Decided Oct. 18, 1960.

Murry Brochin, Deputy Atty. Gen., for appellant (David D. Furman, Atty. Gen., attorney).

Milton H. Gelzer and John F. Russo, Toms River, for respondents (Hiering & Grasso, Toms River, for respondents Ferguson; Robert A. Lederer, Toms River, for respondent Wilbur F. Hankins).

Before Judges GOLDMANN, FREUND and KILKENNY.

The opinion of the court was delivered by

KILKENNY, J.A.D.

The State appeals from an amended judgment of the Superior Court, Law Division, insofar as it awarded the defendants interest on the $9,000 sum fixed by the jury as the value of their land condemned for state highway purposes. The State alone had appealed from an earlier $9,500 award made by condemnation commissioners. The disputed interest allowance by the trial court amounts to only $456.25, having been calculated at 5% On the $9,000 jury verdict for the period from June 12, 1958, the date the condemnation commissioners made their report, to June 17, 1959, the date of the jury verdict.

Proceedings by the State for condemnation of a portion of defendants' lands, consisting of a vacant strip about 70 feet wide by about 241 feet long bordering the northerly line of Route 37, Dover Township, Ocean County, were instituted on July 23, 1957, pursuant to R.S. 20:1--1 et seq., N.J.S.A. The State did not file any declaration of taking and did not deposit with the court the estimated value of the land to be acquired. It did not take actual physical possession of the land during the pendency of the condemnation proceeding. Condemnation commissioners were appointed and, by their report actually filed June 13, 1958, made an award of $9,500 to the defendants.

On the State's appeal to the Law Division, and after a jury trial, the value to be paid by the State to the defendants was fixed by the jury at $9,000, or $500 less than the commissioners' award. Judgment was ordered on the jury verdict on June 22, 1959, and the order was entered on July 2, 1959. That judgment made no reference to and contained no provision for interest on the $9,000 sum fixed by the jury.

The State did not take actual physical possession of the condemned land of the defendants until November 25, 1959, by which time it had paid the sum due defendants as provided in the aforesaid Law Division judgment.

As the result of a motion by defendants based on R.R. 4:62--1, originally made returnable November 20, 1959 and argued December 4, 1959, the trial court, by order of January 13, 1960, amended the judgment of June 22, 1959 in the amount of $9,000 'by the addition of 5% Interest on said sum of June 12th, 1958 to June 17th, 1959 to wit Four hundred and fifty six dollars and twenty five cents ($456.25).'

The sole issue on appeal is whether the trial court committed error by amending its original judgment to allow interest on the condemnation sum determined by the jury for the above specified period. Both sides agree that there is no statutory provision for the payment of interest, applicable to the facts of this case. Likewise, both concede that equitable principles alone determine the propriety of the allowance of interest to the defendants here.

In pressing for interest defendants urged in the trial court, as they urge here, that in 1955 Hankins had applied to the building inspector of the Township of Dover, where the property was located, for a permit to construct a gasoline and service station on property of which the condemned land formed a part. The building inspector refused to issue a permit unless defendants received written approval from the State Highway Department, since the land bordered State Highway Route 37. The Department issued the permit upon its request, but told Hankins that part of their property lay in the line of a proposed right of way which the Department expected to utilize for the expansion of Route 37. The defendant Hankins was advised that any gasoline pumps should not be nearer than 75 feet from the then existing northerly line of Route 37, because the State contemplated acquiring the 70-foot strip. Defendants acquiesced in this advice and accordingly placed their gasoline pumps beyond the 75-foot line. However, the 70-foot strip subsequently condemned was continuously used by defendants and their patrons in driving from Highway 37 into and out of defendants' gasoline service station. So that, beyond the State's friendly admonition in the face of prospective action and the acceptance of the advice given, the State did not exercise any possessory rights in the strip in question, or interfere with defendants' beneficial use thereof prior to November 25, 1959, by which time the defendants had been paid as aforesaid. The trial court properly found that the 1955 incident did not constitute a taking of defendants' lands, or a going into possession thereof, at that time.

In New Jersey Highway Authority v. Ellis, 24 N.J. 1, 7, 130 A.2d 601, 604 (1957), this rule is laid down:

'Whether interest must be paid on the value of land taken in a condemnation proceeding constitutionally depends on whether there is a lapse of time between the date of the Actual taking of the property and the tender of or payment of the value of the property so taken. The amount of interest and when it should be paid in turn depends on specific provisions with respect to interest in a statute or where there is no such provision then on general equitable principles.' (Emphasis supplied.)

'* * * In condemnation proceedings interest is allowed Where the condemnor goes into possession without full payment and the owner * * * is deprived not only of his property but of the profits and increments from the use and for this latter deprivation interest is allowable on equitable principles.' (Emphasis supplied.)

Citing Acquakanonk Water Co. v. Weidmann Silk Dyeing Co., 99 N.J.L. 175, 122 A. 825 (E. & A. 1923).

In the Acquakanonk case, supra, the condemners also Took possession from the time of filing the petition to condemn and obviously the owners were deprived of their property from that date. Since the value of the land is fixed as of the filing of the proceedings, if the property owner is actually deprived of possession at that time, without payment of compensation, he should be entitled equitably to interest on the award for the period between the government's going into possession and the payment of the award.

In Bergen County Sewer Authority v. Little Ferry Borough, 15 N.J.Super. 43, 83 A.2d 4, 7 (App.Div.1951), where the addition of interest at 4% On the jury award was upheld, the condemning authority 'assumed possession of the lands upon the filing of the petition 'and in advance of making compensation therefor. " There the court reiterated the rule, as laid down in the cases cited, that '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.'

On the other hand, as noted in Board of Education of City of Vineland v. Ross, 32 N.J.Super. 79, 107 A.2d 833 (Law Div.1954), an owner whose property was condemned was not entitled to interest on the award from the date the petition was filed, Where the condemning agency did not take possession until after the award was made. The allowance of interest on an award made to a landowner for property taken under eminent domain should be determined according to considerations of equity and fair dealing in order to accomplish justice in each particular case. In the Ross case, supra, the court found that 'the owners remained in possession. The condemnors, other than to institute proceedings to condemn, did not interfere with owner's use between the date of filing of the petition and the final award.' Accordingly, interest was disallowed.

Also, we observe this language in the Ross decision, which we adopt as pertinent to the instant appeal:

'Nor does the court feel that interest should be allowed between the date the commissioners made their award and the time the final award was entered by the Court. The position of the owner, condemnee, remained unchanged during this interval.' (Italics supplied).

The record below clearly indicates that the defendants continued to use the subject strip of land in the same manner after the condemnation proceedings were instituted and throughout these proceedings until payment of the reduced award fixed...