Jayne, Wm. J. Brennan, Jr., and Vanderwart. The opinion of the court was delivered by Jayne, J.A.D.
[15 NJSuper Page 47] 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. 40:36 A -1, et seq. To accomplish its objects and purposes it is clothed with power to acquire both private and public lands by eminent domain. R.S. 40:36 A -36.
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.
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 (App. Div. 1950), appeal dismissed on procedural grounds, 5 N.J. 548 (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 four per cent 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 briefs.
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. 40:36 A -36. But see, Delancey & Stockton Corp. v. Reliable, &c., Co. , 134 N.J. Eq. 71 (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 (Sup. Ct. 1904); Acquackanonk Water Co. v. Weidmann, &c., Co. , 98 N.J.L. 413 (Sup. Ct. 1923), affirmed 99 N.J.L. 175 (E. & A. 1923); North Hudson R.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 cent rather than at the rate of six per cent 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 ...