Clapp, Jayne and Francis. The opinion of the court was delivered by Clapp, S.j.a.d.
The principal issue here is whether certain land of the plaintiff can be subjected by the defendant to local property taxes for 1954, even though the taxes were not assessed by the defendant until after the State of New Jersey, through the State Highway Commissioner, had taken possession of the land under condemnation proceedings.
The Highway Commissioner filed his petition instituting the condemnation proceedings June 29, 1953, but, by agreement with the plaintiff, postponed taking possession of the property until September 30, 1953. The 1954 taxes are assessable with reference to the ownership of the property on October 1, 1953 and, in certain connections, with reference to its use on that date. Jabert Operating Corp. v. City of Newark , 16 N.J. Super. 505, 509 (App. Div. 1951). These taxes, if validly assessed, were made a lien on January 1, 1954, N.J.S.A. 54:5-6; cf. Empress Mfg. Co. v. City cf Newark , 109 N.J.L. 131 (E. & A. 1932).
On January 15, 1954 the condemnation commissioners made an award which, with interest from September 30, 1953, was paid into the Superior Court on March 8, 1954. Plaintiff was advised that in order to withdraw this money from the court, it should present proof from defendant's tax collector that all taxes on the property due the defendant were paid. The 1953 taxes had already been paid; however the collector refused to furnish the proof desired, unless taxes for the first half of 1954 were also paid. Accordingly, on June 4, 1954, plaintiff paid these taxes and then brought this suit in the Superior Court, Law Division, to recover the amount of them, with interest. Summary judgment was entered in its favor. Defendant appeals. We deal first with the taxes, then with the interest.
On the oral argument, it was stipulated, first, that the payment of these 1954 taxes to the collector may be deemed to have been not voluntary, and, second, that a determination of the county tax board (made on plaintiff's appeal to the board) that these taxes were not due, may be disregarded by us.
That leaves us with the substantial question, namely (as we see it) this: assuming that title to the property did not vest in the State until the award was paid into court, nevertheless does that title then relate back to the time the State took possession of the property? If so, the assessment made October 1, 1953 was clearly without effect. N.J.S.A. 54:4-3.3. In this view of the case we need not deal with the Apportionment Act, N.J.S.A. 54:4-56.
The State Highway Commissioner, pursuant to statutory authority to "enter upon and take property in advance of making compensation therefor," appropriated to the State the beneficial user of plaintiff's land and buildings on September 30, 1953. R.S. 27:7-22 (the terms of which, though somewhat modified through various amendments, can be traced back to L. 1919, c. 226, p. 524); New Jersey Constitution 1947, Art. I, par. 20; Abbott v. Beth Israel Cemetery Ass'n , 13 N.J. 528, 549-550 (1953); Wheeler v. Essex Public Road Board , 39 N.J.L. 291 (E. & A. 1877).
The terms of this statute (authorizing the Highway Commissioner to "enter upon and take property in advance of making compensation therefor") are inexplicit as to whether or not title passes on the taking of the property. We shall assume however that title does not finally vest in the State until the award is paid or tendered to the parties entitled, or duly paid into court. See Lehigh Valley R. Co. v. McFarlan , 31 N.J. Eq. 706, 725 (E. & A. 1879), where the court was dealing with the eminent domain provisions in the 1824 charter of a canal company, namely, "to enter upon, take possession of and use" lands, subject to making compensation later; Jersey City v. Gardner , 33 N.J. Eq. 622, 627 (E. & A. 1881); Kennedy v. City of Indianapolis , 103 U.S. 599, 604 (1881); Rexford v. Knight , 11 N.Y. 308, 314 (1854); Note, 16 L.R.A. , NS, 537, 539 (1908); cf. Delancey & Stockton Corp. v. Reliable Imp. Co. , 134 N.J. Eq. 71, 75 (E. & A. 1943) -- the court there had no occasion to consider what the effect of N.J.S.A. 27:7-22 would be if in fact the State Highway Commissioner had taken possession of the lands in advance of payment; In re Essex County Park Commission , 80 N.J. Eq. 1 (Ch. 1912), affirmed on other grounds sub nom. Bowers v. Town of Bloomfield , 81 N.J. Eq. 163 (E. & A. 1912); Metler v. Easton & Amboy R. Co. , 37 N.J.L. 222, 224 (Sup. Ct. 1874).
But this does not end the question. It must be apparent that where a condemnor enters property in advance of making compensation, it would be most unjust not only to deprive the owner of the benefit of his property and of the ad interim use of any compensation therefor (except by way of interest paid him subsequently on the award), but also, through taxes, to compel him to bear the burden of local governmental costs allocated to that property. The cases, recognizing this injustice, have made amends for it in two different ways. Compare Sherwin v. Wigglesworth , 129 Mass. 64 (Sup. Jud. Ct. 1880) with In re City of New York , 40 App. Div. 281, 58 N.Y. 58 (App. Div. 1899); In re City of New York (Matter of Riverside Park), 59 App. Div. 603, 69 N.Y.S. 742 (App. Div. 1901), affirmed on opinion 167 N.Y. 627, 60 N.E.
1116 (Ct. App. 1901). See Bowers v. Town of Bloomfield , 81 N.J. Eq. 163, 165 (E. & A. 1912), citing these three cases (not noticing, however, that the condemnor there had entered upon the land) and remarking that the result achieved by them "is manifestly equitable." See also Yara Engineering Corp. v. City of Newark , 136 N.J. Eq. 453, 464 (Ch. 1945), wherein the court, citing condemnation cases and dealing with property turned over to the city, was called upon to fix its value on an equitable basis and, incidentally in so doing, apportioned taxes ...