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Jersey City Redevelopment Agency v. Kugler

Decided: May 24, 1971.

JERSEY CITY REDEVELOPMENT AGENCY, A BODY CORPORATE AND POLITIC OF THE STATE OF NEW JERSEY, AND JOHN JOSEPH MARCHESE, INDIVIDUALLY AND AS A COMMISSIONER AND TREASURER OF THE JERSEY CITY REDEVELOPMENT AGENCY, PLAINTIFFS-APPELLANTS,
v.
GEORGE F. KUGLER, JR., ATTORNEY GENERAL OF THE STATE OF NEW JERSEY; GOLDHAND LTD., A LIMITED PARTNERSHIP; ORIENTAL ATLANTIC CITY CORPORATION, A CORPORATION OF NEW JERSEY; RAYMOND PAPP AND JACQUELINE PAPP, HIS WIFE; AND GEORGE OSWALD AND CAROLYN OSWALD, HIS WIFE, DEFENDANTS-RESPONDENTS



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

Francis

The plaintiffs in this action sought a judgment declaring that certain 1967 amendments (L. 1967, c. 217 and c. 218) to the Blighted Area Act, N.J.S.A. 40:55-21.1 et seq., and the Eminent Domain Act, N.J.S.A. 20:1-1 et seq. are unconstitutional. The trial court in an unreported opinion granted defendants' motion for summary judgment and the Appellate Division affirmed. Jersey City Redevelopment Agency v. Kugler, 111 N.J. Super. 50 (App. Div. 1970). Plaintiffs appealed to this Court. R. 2:2-1(a)(1).

By a February 2, 1960 resolution, the Board of Commissioners of Jersey City declared blighted a land area of approximately 24.8 acres. The area which consists of 220 separate parcels is known as the Henderson Street Urban Renewal Project. Acquisition of the property for redevelopment was to be financed two-thirds by the United States through the Department of Housing and Urban Development and one-third by Jersey City. Nine years passed before the plaintiff-Agency instituted condemnation proceedings to acquire the property. In the meantime, the Legislature, by Chapters 217

and 218, L. 1967 amended the Blighted Area Act, subsection 21.10 (N.J.S.A. 40:55-21.10), and the Eminent Domain Act, subsection 9 (N.J.S.A. 20:1-9), with respect to the compensation to be paid when property is acquired in eminent domain proceedings in connection with the development or redevelopment of a blighted area. Specifically, both amendments provided that in such cases "the value of any property sought to be acquired shall be fixed and determined to be no less than the value as of the date of the declaration of blight by the governing body * * *."

Plaintiffs charge that the amendments violate the Fifth Amendment of the United States Constitution and Article I, paragraph 20 of the New Jersey Constitution which provide that private property shall not be taken for public use without just compensation. They assert that ascertainment of the sum representing just compensation is a judicial function, and that the Legislature has no power to impose upon the courts an arbitrary and binding rule for the admeasurement of such compensation in cases involving the taking of land for redevelopment purposes after it has been declared blighted. More particularly, they claim that the lawmakers cannot impose upon the courts a requirement to fix the value of the property as of a fictitious taking date rather than the actual taking date. Such a test, it is contended, introduces an invalid artificial factor into the constitutional mandate for payment of just compensation for the land when it is in fact taken. The Appellate Division disposed of these arguments in favor of defendants, and we agree with that result. 111 N.J. Super., supra, at 57-60. However, we believe that some additional discussion may be helpful.

Other constitutional issues were raised by plaintiffs; likewise defendants interposed a challenge to plaintiffs' standing to maintain the action. We are satisfied that those issues require no treatment beyond that which they were given in the Appellate Division.

It may be said as a general rule that just compensation in condemnation cases is measured as of the date of

the public taking. 3 Nichols, Eminent Domain § 8.5 [1], pp. 29-31 (3d ed. 1965); 4 Id. § 12.23, p. 72. In the ordinary case in our State, prior to the 1967 amendments here involved, the statute provided that the amount to be paid for the property taken should represent its value as of the date of the commencement of the condemnation action. N.J.S.A. 20:1-9; State by State Highway Com'r v. Jones, 27 N.J. 257 (1958); State by State Highway Com'r v. Gorga, 26 N.J. 113 (1958). Value in this context means the full equivalent in money of the property taken. United States v. Miller, 317 U.S. 369, 373, 63 S. Ct. 276, 87 L. Ed. 336, 342 (1943); Monongahela Navigation Co. v. United States, 148 U.S. 312, 13 S. Ct. 622, 37 L. Ed. 463 (1893); 27 Am. Jur. 2d, Eminent Domain § 266, p. 53 (1966). If, however, a public agency possessed of the power of eminent domain enters into possession of private property and puts it to public use without payment of compensation, the owner may utilize mandamus to compel payment of its value, to be determined ordinarily as of the time of appropriation. See State by State Highway Com'r v. Cooper, 24 N.J. 261, cert. den. 355 U.S. 829, 78 S. Ct. 41, 2 L. Ed. 2d 42 (1957); Haven Homes v. Raritan Tp., 19 N.J. 239 (1955); Brown v. Murphy, 136 N.J.L. 183, 185 (E. & A. 1947); Yara Engineering Corp. v. Newark, 136 N.J. Eq. 453, 464 (Ch. 1945); 26 Am. Jur. 2d, Eminent Domain § 152, pp. 815-16 (1966).

In the ordinary case the generally prevailing view is that if, after the taking and before the condemnation action, the property is reduced in value because of alterations by the public agency or otherwise, the owner would be entitled justly to the higher valuation as of the date of the taking. Cf. N.J.S.A. 27:7-22. As this Court suggested in Jones such rule "may well be compelled by the constitutional guaranty of just compensation." State by State Highway Com'r v. Jones, supra, 27 N.J. at 262. But if, after the taking and before the condemnation action, the property increases in value because of alterations, the owner would not be entitled

to the higher valuation. Id. at 262; United States v. Miller, supra, 317 U.S. at 377, 63 S. Ct. 276, 87 L. Ed. at 345; 3 Nichols, supra, § 8.5 [1], pp. 29-31; 27 Am. Jur. 2d, supra, § 266, pp. 54-55; and cf. ...


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