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State v. Nordstrom

Decided: May 19, 1969.


For reversal -- Chief Justice Weintraub and Justices Jacobs, Francis, Proctor, Hall, Schettino and Haneman. For affirmance -- None. The opinion of the court was delivered by Proctor, J.


In this condemnation case, initiated by the State as part of its Green Acres program, the trial court awarded the condemnees, Mr. and Mrs. John Nordstrom, interest in addition to the jury's determination of the value of the land. Interest was computed for the period between the filing of the State's complaint and the jury award, even though the State did not take title or enter into physical possession of the land until after the verdict. The State appealed only that part of the judgment represented by the trial court's granting of interest. The Appellate Division reversed in an unreported opinion, holding that since the State had not actually entered into possession of the land, or taken title, interest could not be allowed. We granted the condemnees' petition for certification. 52 N.J. 494 (1968).

The facts are not in dispute. In the summer of 1963, the Commissioner of Conservation and Economic Development publicly announced that the State planned to acquire a large section of Caldwell Township (now known as the Borough of Fairfield) as part of the State's Green Acres program. N.J.S.A. 13:8 A -1 et seq. In December, 1964, the State confirmed that at least part of the Nordstroms' land was to be condemned. In June, and again in August 1965, the State offered to pay the petitioners $1,250 per acre for the land, amounting to $57,000 for 47 acres. These offers were rejected, and this concluded the State's efforts to settle. On March 9, 1966, the State filed a complaint pursuant to the procedure set forth in the general condemnation statute, N.J.S.A. 20:1-1 et seq. An order appointing condemnation commissioners was entered shortly thereafter, but the hearing before the commissioners was postponed several times until February 1967, primarily upon the State's request. At the hearing the State's expert valued the property at $70,662. The commissioners' report, valuing the land at $375,000, was filed on March 27, 1967, more than one year after the complaint was filed. The State appealed

and the matter was set down for a jury trial on July 5, 1967. However, due to further adjournments requested by the State, the case was not tried until September 17, 1967. At the trial the State's new expert testified that the land was worth $150,400. The jury returned a verdict of $305,500. Upon application of the condemnees, interest was awarded from the date of the filing of the complaint, March 9, 1966, to the date of the verdict, September 26, 1967, computed by the court at a rate of 6% on the difference between the amount of the verdict, $305,500, and the highest appraisal given by the State's expert, $150,400. The interest award totalled $14,346.75, from which the State appealed.

Both our state and federal constitutions prohibit the taking of private property for public use without "just compensation." N.J. Const. Art. I, ยง 20; U.S. Const. Am. V. "Just compensation" is a principle grounded in fundamental concepts of fairness. See generally Michelman, "Property, Utility, and Fairness: Comments on the Ethical Foundations of 'Just Compensation' Law", 80 Harv L. Rev. 1165 (1967). A condemnee must be made whole as a result of the condemnation proceeding. Although a sum of money equal to "fair market value" cannot always be a perfect measuring stick for determining the worth of property to a landowner, the State must try as nearly as possible, employing objective standards, to replace the land which has been earmarked for public use with equivalent public funds.

The statutory condemnation procedure in this State requires the condemnation commissioners, and if there is an appeal, a jury, to value the land in question as of the date the complaint was filed. N.J.S.A. 20:1-9; State, by State Highway Com'r v. Seaway, Inc., 46 N.J. 376, 381-382 (1966). In the present case the commissioners in February, 1967, and the jury in September, 1967, determined how much the Nordstrom property had been worth when the complaint was filed in March, 1966. A considerable period of time can go by after the filing of the complaint before compensation is paid to the landowner. In the meantime the

landowner remains responsible for the payment of taxes, plus interest payments on a mortgage, if any. These expenses cannot be considered by the commissioners or the jury, nor can they take notice of any rise in value of the property since the filing of the complaint. See Acquackanonk Water Co. v. Weidmann, etc., Co., 99 N.J.L. 175, 176-177 (E. & A. 1923).

In Metler v. Easton and Amboy Railroad Co., 37 N.J.L. 222 (Sup. Ct. 1874), the considerations with regard to interest payments for a time period prior to the jury's verdict were set forth as follows:

"Interest for the intermediate period is allowable, not strictly as damages for the taking, but as an equitable mode of compensating the owner for the necessary delay in ultimately ascertaining the amount he is entitled to be paid, and as the means of reaching the full measure of the just compensation which, by the constitution must precede the taking of the property of a private citizen for public uses.

"This general rule for the allowance of interest is liable to be controlled by the circumstances of each particular case. If the owner has not been disturbed in the possession, and has had a profitable use of the premises, or has received the rents for them pending the appeal, these circumstances should be taken into account and the interest abated accordingly. Possibly the like effect may be given to a tender and payment into court, where the statute provides for such proceeding * * *.

"Interest on demands of this character, not being a matter of contract, or of positive law, is allowed on equitable principles ...

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