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New Jersey Highway Authority v. J. & F. Holding Co.

Decided: May 31, 1956.


Clapp, Jayne and Francis. The opinion of the court was delivered by Jayne, J.A.D.


[40 NJSuper Page 312] A prefatory introduction to this decision is appropriate to explain that the New Jersey Highway Authority, pursuant to the legislative power conferred upon it, acquired by eminent domain the designated parcel of land and the commercially used building situate thereon known as No. 401 Lakeview Avenue in the City of Clifton. Its acquisition was required in the construction of the Garden

State Parkway. The compensatory award was in the sum of $60,000.

The owners in fee of the premises were Robert Goldstein and Gaskel Goldstein (the defendant J. & F. Holding Co., the former owner), and the tenants were Royal Engraving Co., Inc., and Atlas Plumbing Supply Co. The owners and tenants were unable amicably to agree upon a distribution among themselves of the proceeds of the award, hence the plaintiff augmented its initial deposit of $54,000 previously made with the clerk of this court in conformity with the provisions of N.J.S.A. 27:12 B -7 to reach the sum of $60,357.07, which now comprises the condemnation award plus the accrued interest. In that manner the plaintiff concluded its participation in the condemnation proceedings.

The owners thereupon addressed a petition to the Passaic County Assignment Judge of the Superior Court essentially in quest of a judgment directing the payment of the entire deposit to them, but praying that a hearing be conducted upon proper notice to the tenants to adjudge and fix the respective interests, if any, of the latter in the deposited award.

To effectuate the object and purpose of the petition, an order was made by the court directing each of the tenants within the stated time "to file a petition in this cause setting forth in due form the amount and the basis of the claim which it will assert." Such was done and a hearing was conducted at which oral testimony was received. The trial judge disallowed the claims of both of the tenants and determined that the entire deposit belongs to the petitioning fee owners. The conformable judgment, from which both tenants here appeal, directs the clerk of the court to pay the entire deposit, less his legitimate deductions, to the owners. This was the path of procedure pursued in this instance. See N.J.S.A. 20:1-15; R.R. 4:92-10. We perceive no meritorious objection to the practice here adopted. It was in accord with due process.

Accurately to ascertain and determine the market value of the unexpired term of a leasehold interest in real property

taken by eminent domain is not ordinarily a simple task. One might well infer from the current scarcity of officially reported litigation anent the subject, in contrast with the modern increase in the number of condemnation proceedings, that the controversial occasions for such evaluations are relatively rare.

It is said now to be the common practice particularly in metropolitan areas to embody in leases of business properties a contractual provision applicable to the disposition of the proceeds of an award in the eventuality of the deprivation of the landlord's ownership of and the tenant's leasehold interest in the demised premises by eminent domain. 4 Nichols, Eminent Domain 180, § 12.42(3). Such engagements have been regarded as valid. 1 Orgel, Eminent Domain 524, § 121, note 88. This may be a contributing reason for the paucity of fresh decisions specifically addressed to this collateral and sometimes sequential branch of eminent domain workmanship.

For pragmatical purposes the one award of just compensation in obedience to constitutional and statutory requirements is formed to constitute a summation of all of the values of all of the separate interests in the property. Platt v. Bright , 31 N.J. Eq. 81 (Ch. 1879), affirmed sub nom. Bright v. Platt , 32 N.J. Eq. 362 (E. & A. 1880); Zimmerman v. Hudson & M.R. Co. , 76 N.J.L. 251 (Sup. Ct. 1908); Daab v. Hudson County Park Commission , 77 N.J.L. 36 (Sup. Ct. 1908); Herr v. Board of Education , 82 N.J.L. 610 (E. & A. 1912); City of Newark v. Cook , 99 N.J. Eq. 527, 532 (Ch. 1926), affirmed 100 N.J. Eq. 581-582-583-584 (E. & A. 1927).

Certainly under our existing law a lessee is not accorded the initial right to have his tenancy separately and specifically evaluated in the condemnation award. Pennsylvania R. Co. v. National Docks, etc., Co. , 57 N.J.L. 86 (Sup. Ct. 1894), affirmed 57 N.J.L. 457 (E. & A. 1894); Schill v. ...

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