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Tennessee Gas Transmission Co. v. Maze

Decided: June 21, 1957.

TENNESSEE GAS TRANSMISSION COMPANY, A CORPORATION OF THE STATE OF DELAWARE, PLAINTIFF-RESPONDENT,
v.
M. MONTGOMERY MAZE AND KATHERINE F. MAZE, HIS WIFE, DEFENDANTS-APPELLANTS



Goldmann, Freund and Conford. The opinion of the court was delivered by Conford, J.A.D.

Conford

This is an appeal by landowners from a judgment on a jury verdict awarding them $7,200 as damages for the condemnation, at the behest of the plaintiff, of an easement in their land for the laying of a pipe line to transport natural gas. A number of rulings by the trial judge sustaining objections to offers of evidence by the defendant landowners are assigned as error.

Defendants own a 65.9 acre tract of undeveloped land containing contiguous parcels respectively situated in the Borough of Montvale and the Township of River Vale, both in this state, and in the Town of Orangeburg, New York. There are 61.11 acres in New Jersey and 4.85 acres in New York. The New Jersey sections are zoned for residential use. The entirety is irregularly "L"-shaped and its westerly and southerly extremities have limited access to paved highways. 1,200 feet of frontage is without road access. The easement taken by plaintiff is 50 feet in width, running diagonally across the property and encompassing an area of some 3.134 acres. For all or most of the length of the easement 35 feet of the width was subject to a pre-existing easement, of a total width of 100 feet, for the erection and maintenance of a high-tension electric line in favor of the Rockland Electric Company, empowering that company to trim, cut and remove all trees and to remove all buildings and obstructions, including longitudinal highways. The Rockland Electric easement also prohibits structures closer than 25 feet to the center line of the strip.

Defendants' only direct valuation evidence to establish its loss consequent upon plaintiff's taking was adduced through a realty expert, Charles Raia, Jr. He concluded the damage was $13,365. He arrived at that estimate by first valuing defendants' property as a whole, without regard to either easement, at $148,500, then deducting 10% to reflect the diminution attributable to the Rockland easement, leaving a remainder of $133,650, and, finally, deducting 10% of the balance to reflect the additional devaluation due to the presently disputed easement, or $13,365. The only basis

specifically assigned for his original integral parcel valuation was the sale price of a supposedly comparable tract of 5.5 acres, after allowing for road frontage as to both the parcel sold and the parcel valued. The property sold had intersecting road frontage. No explanation for the basis of the 10% reductions to reflect the diminution of value consequent upon either easement was given by the witness except to say that "I felt that the ten percent deduction for an encumbered piece of property would be a fairly good yardstick to use." Nor could he explain why the second deduction was 10% (i.e. , the same percentage as the first easement deduction), having regard to the fact that the prior easement affected 35 feet of the 50-foot width of the subject easement.

Plaintiff offered two real estate experts, one of whom testified that the damage attributable to the taking was $3,000, and the other gave a damage estimate of $3,200.

Under our Constitution and statutes an owner whose property is being taken for such use as has been ordained entitled to be aided by the condemnation process must receive just compensation. Constitution 1947, Art. I, par. 20. Where the owner's entire interest is taken, the measure of compensation is the fair market value. Ringwood Co. v. North Jersey, etc., Comm. , 105 N.J.L. 165 (E. & A. 1928). This criterion of value may be otherwise stated as the price which, in all probability, would voluntarily be agreed upon in fair negotiations between an owner willing (but not forced) to sell and a buyer willing (but not forced) to buy. City of Trenton v. Lenzner , 16 N.J. 465, 476 (1954). Where the fee in a part of the owner's property is taken and the taking has diminished the value of the land remaining, the resulting diminution must be included in the compensation to the owner. Sterner v. Nixon , 116 N.J.L. 418, 420 (E. & A. 1936). Where, as here, no part of the land is taken in fee, but only a limited interest in the land, the measure of the owner's damages is the difference in the fair market value of the property before and after the taking. Butler Hard Rubber Co. v. City of Newark ,

61 N.J.L. 32, 52 (Sup. Ct. 1897). Cf. Central R. Co. v. Bayonne , 51 N.J.L. 428, 430 (Sup. Ct. 1889).

While in some of the decided cases involving condemnation of easements for laying pipe lines the rule is stated in terms of an allowance of compensation for market value of the interest or estate taken in the easement strip plus the diminution in market value of the remainder of the land, Annotation , 38 A.L.R. 2 d 788, 790 (1954), a more practicable and logically justifiable approach, generally speaking, would be that indicated above, i.e. , the difference in market value of the entire tract before and after the taking. As to the easement itself, were it to be valued separately, the controlling consideration would be the owner's loss, not the taker's gain. United States v. Miller , 317 U.S. 369, 375, 63 S. Ct. 276, 87 L. Ed. 336 (1943); United States v. 29.40 Acres of Land , 131 F. Supp. 84, 87 (D.C.N.J. 1955). To segregate the owner's loss by way of the diminution of the value of the fee in the easement strip itself from the diminution of the value of the entire landholding attributable to the taking would ordinarily be impracticable, from an appraiser's standpoint. Consequently the rule in the pipe-line easement cases is most frequently stated in terms of the difference in fair market value of the entire tract before and after the taking. Annotation, op. cit., supra (38 A.L.R. 2 d , at p. 790). This was the approach taken by all the experts in the present case and was approved in the charge to the jury by the trial court.

As to the specific grievances of the appellants, their major complaint is that the trial judge refused to permit an expert witness to testify concerning the probability of a leak, rupture or explosion in the pipe line, as bearing upon the saleability of the remainder of the tract for residential purposes. Under the circumstances of all of the attendant proofs we do not consider the ruling of the trial court erroneous. Whether or not such an explosion or leak was theoretically probable could not bear upon ...


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