Village of Ridgewood v. Sreel Inv. Corp.

• Citation: 28 N.J. 121,145 A.2d 306
• Decision Date: 20 October 1958
• Docket Number: No. A--10,A--10
• Parties: VILLAGE OF RIDGEWOOD, Plaintiff-Respondent, v. SREEL INVESTMENT CORPORATION, a corporation of New Jersey, Defendant-Appellant.
• Court: United States State Supreme Court (New Jersey)

Page 121

28 N.J. 121

145 A.2d 306

VILLAGE OF RIDGEWOOD, Plaintiff-Respondent, v. SREEL INVESTMENT CORPORATION, a corporation of New Jersey,

Defendant-Appellant.

No. A--10.

Supreme Court of New Jersey.

Argued Sept. 22, 1958.

Decided Oct. 20, 1958.

Milton T. Lasher, Hackensack, argued the cause for defendant-appellant.

Samuel Doan, Paterson, argued the cause for plaintiff-respondent (William E. Reinhardt, Ridgewood, attorney; Aaron Dines, Morristown, on the brief).

The opinion of the court was delivered by

PROCTOR, J.

The Appellate Division affirmed a judgment of the Law Division entered upon a jury award of $8,200 as compensation for the taking of a part of defendant's property by the plaintiff municipality in the latter's exercise of its power of eminent domain. N.J.S.A. 40:60--25.1; N.J.S.A. 20:1--1 et seq. On the defendant's petition we granted certification. 27 N.J. 73, 141 A.2d 318 (1958).

The defendant corporation was the owner of a plot of land fronting on the westerly side of Oak Street in the Village of Ridgewood. The property and the surrounding area are zoned and occupied for business purposes. The property had a frontage of 75.40 feet, a depth of 150 feet and a rear width of 75.38 feet. A brick building containing four stores, which are leased by the defendant to tenants, occupies the entire front of the lot. The store on the extreme south of the building is 30 feet in width and 70 feet in depth; the one next to it is 15 by 70 feet and the other two toward the north end are each 15 by 50 feet. Each store has a rear door and a cellar, access to which may be had only through the rear. Access to the rear is gained by defendant's right of way in a 14-foot-wide alley which runs along the southerly side of the building from Oak Street to the rear line of the lot. The rental from these stores brings the defendant an annual gross income of $7,500.

The municipality adopted an ordinance authorizing the acquisition by condemnation or other lawful means of a number of parcels of land, including rights of way, for the purpose, as stipulated, of making 'the lands available to the public for the public parking of vehicles or for other public uses or purposes.' Among the properties enumerated in the ordinance was the rear 70 feet of the defendant's lot. The taking of this part of defendant's property occurred on June 22, 1956, leaving the defendant with a lot 75.40 feet in width and 80 feet in depth. The open space in the rear of defendant's building was thereby reduced to 10 feet in depth behind its two stores at the southerly end and 30 feet in depth behind the others. At the corner of the take-line ten feet back of the southerly end of the building the elevation of the portion condemned is two feet higher than defendant's remaining property. Moving north the height gradually diminishes until it becomes level with the defendant's remaining land on the northerly end. A retaining wall which slopes with this decline is located along this line. Also condemned was the easement of the defendant and others in the 14-foot alley for use as a public right of way.

Pursuant to the procedure under N.J.S.A. 20:1--1 et seq., condemnation commissioners were appointed. From their award of $16,450 the defendant appealed and the village cross-appealed. On a trial in the Law Division the jury rendered a verdict for the defendant in the amount of $8,200 for the land taken and 'no award for consequential damages.' Defendant's motion for a new trial was denied.

On this appeal the defendant first argues that the jury's finding of no consequential damages deprived it of just compensation in the 'constitutional sense.' N.J.Const.1947, Art. I, par. 20; U.S.Const. Amend. XIV.

Where only a part of an owner's land is taken he is entitled to be compensated not only for the value of the land taken but also for any diminution in the value of his remaining land which may be attributed to the taking. Sterner v. Nixon, 116 N.J.L. 418, 185 A. 48 (E. & A.1936); State Highway Commissioner v. National Fire Proofing Corp., 127 N.J.L. 346, 22 A.2d 268 (E. & A.1941); Tennessee Gas Transmission Co. v. Maze, 45 N.J.Super. 496, 133 A.2d 28 (App.Div.1957). However, it is entirely conceivable that under certain circumstances severance will not effect a change in the value of the remaining portion of an owner's property. See In re Parking Authority of City of Hackensack, 30 N.J.Super. 534, 105 A.2d 440 (App.Div.1954). In the light of our ultimate determination that certain errors committed at the trial will require a reversal, it is unnecessary for us to decide whether the jury's finding of no consequential damages deprived the defendant of its property without just compensation.

The most significant of the trial errors which the defendant complains were prejudicial relates to the court's charge to the jury as to the relationship between the part taken and the remainder of the property.

Defendant called Smith and Schwenn as its experts. They testified that the rear of the property (the part taken) had been used as a parking lot by the defendant in which it rented space on a monthly basis and from which it received an annual gross income of $1,272. Four spaces were reserved without charge for tenants occupying defendant's stores. In addition, this area was used for access to the rear delivery entrances to the stores. According to these witnesses, the taking of this land would result in a diminution in the value of the defendant's remaining property because of the following factors: (1) the elimination of possible future expansion of the building; (2) the difficulty of making rear-door deliveries to the stores; (3) the loss of rear parking privileges by the tenants; (4) the loss of the private right of way in the alley for the tenants' convenience; (5) the impossibility of turning a truck or automobile at a right angle from the alley into the remaining 10-foot space behind the building, and (6) because of the foregoing, the creation of an undesirable substandard property which would lessen its attraction to future tenants with a resulting loss in rentals. It was admitted by the defendant that the store tenants' written leases did not expressly provide for the privilege of parking or using the rear area for deliveries.

Smith stated that he valued the entire tract at $75,000 before the taking and $50,350 after the taking, or a difference for the taking and the consequential damages of $24,650. Of the last amount he attributed $16,000 to the land actually taken. Schwenn estimated the entire property to be worth $73,500 before the taking and $43,800 afterwards, or a loss of $29,700. Both experts based their computations on the theory that prior to the taking defendant's lot was a functional entity with the value of the building partially dependent upon the availability of the vacant area in the rear.

The plaintiff's experts, Bogert and Clark, testified that in their opinion there was no damage to the remainder of the property as a result of the taking and that the defendant's sole loss was the value of that part of the land actually condemned. Bogert valued the land taken at $7,230 on a replacement-less-depreciation basis, and at $7,600 on a capitalization-of-income basis. Clark, using the same methods, arrived at valuations of $7,230 and $8,160, respectively. Their conclusion that there was no consequential damages was based upon their opinion that the rents for the remainder would be the same following the taking as before; that access to the rear of the defendant's stores would in no way be impaired and might well be improved; and, as stated by Bogert, 'the possibility of a second front door in the rear.' The last statement undoubtedly referred to the opportunity for customer access to defendant's stores from the proposed parking lot.

In charging the jury the trial court, after adequately setting forth the appropriate standard of damages, proceeded to state 'The highest and best use of a particular parcel of land might require the entire parcel for one use, or for a related or connected use. For example, you are all familiar with supermarkets. The building, the market place, occupies a portion of the land, and there is a parking area for the customers. However, the entire parcel is occupied for the use of a market place and for the related use of the parking of automobiles of the customers who go to that market place. In that event, when the entire parcel is being used for its highest and best use, every part of the entire parcel of land is used in conjunction with the whole. In other words, there is a functional relationship between every part of the parcel of land, and the highest' and best use requires that every part of the parcel be for that purpose, or for a purpose and its related purposes; and in that event, the parcel of land cannot be divided without destroying the highest and best use for which the entire parcel is available. If, therefore, a part of the parcel is taken, the remaining portion would suffer a diminution in value, because the remaining portion would not be available for the highest and best use to which the whole had been put and, therefore, the remaining portion would not be as productive proportionately as it would have been as a part of the whole.

'However, a parcel of land, in order to put it to its highest and best use, may require its division into parts, and then the income from the several parts, independent of each other, would produce the highest amount of rentals. That often happens when a farm is bought and subdivided into building lots. Building lots collectively bring more than the farm as a whole used for farming purposes would bring. When that happens, where a parcel of land is used in parts and by that means it produces the highest income, and then a part is taken without damaging the other part, there is no diminution in value to the remaining parcels.

'That is the problem that we have here. ...