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Housing Authority v. Myers

Decided: August 2, 1971.


Goldmann, Leonard and Fritz. The opinion of the court was delivered by Fritz, J.A.D.


In addition to other questions presented in this appeal, we are faced squarely with the question of whether the expenses of moving industrial equipment constitute an item of "just compensation" in condemnation proceedings. Until the decision in State v. Gallant , 42 N.J. 583 (1964), there seemed no doubt of the negative answer to this inquiry. American Salvage Company v. Housing Authority of Newark , 14 N.J. 271 (1954). Gallant and the very recent pronouncements in Jersey City Redevelopment Agency v. Kugler , 58 N.J. 374 (1971) have supplied that doubt, and it is with that posture of things that we are here concerned.

In this action, plaintiff Housing Authority, acting in accordance with proper statutory warrant in connection with a federally funded urban redevelopment project, condemned defendants' property for proper public purpose.

The premises in question were owned by defendants and were operated as a dress factory and retail outlet store. The

building which housed defendants' operations was furnished with equipment typical of that necessary to the dress manufacturing operation there conducted and the retail store. This included, among other equipment, 6 sewing machine line systems, 11 sewing machines and tables, 2 cutting tables, 53 special lighting fixtures, 4 dressing booths, 5 garment hang rails ceiling-anchored, 1 garment hang rail floor-anchored, and 5 other garment rails, a work bench, a press table and hand irons which included steam piping and electric wiring and which was floor-anchored, a press which was steam and electric-connected, 2 steam boilers, and shelving and a mirror which were wall-anchored.

At the condemnation hearing before commissioners an award of $50,000 was entered. Defendants appealed, plaintiff cross-appealed, and a jury trial followed. By the time of the trial defendants had removed the equipment to a different location where they had reinstalled it and from whence they had continued the dressmaking and selling operation.

At the trial defendants offered an expert to prove "the value of the property at the time of taking," including the value of the "machinery and equipment and various other pieces of equipment or fixtures, as you might call them," which defendants contended "were an integral part of this building" and, therefore, an element contributing to the value of the premises. The court sustained an objection to the offer.

Defendants then made a "secondary offer" to prove the costs of removal. Objection to this was also sustained.*fn1

In his rulings the trial judge distinguished Gallant on the basis that defendants had chosen to remove the equipment

from the premises. He relied on language from American Salvage Company where it is said:

The owner is ordinarily obliged to pay the expense of the removal of any movable personalty that he does not decide to abandon. This is because it is generally held that damages for injury to such personalty not included in the taking or the expense of moving it are not proper elements of compensation. Cf. City of Newark v. Cook , 100 N.J. Eq. 581 (E. & A. 1927), affirming 99 N.J. Eq. 527 (Ch. 1926); City of Newark v. Eisner , 100 N.J. Eq. 101 (Ch. 1926); 18 Am. Jur., Eminent Domain, sec. 255, p. 894; Annotations 34 A.L.R. 1523; 156 A.L.R. 397. On the other hand, the owner is at liberty to abandon such personalty as he chooses when he surrenders possession, and in such case the condemnor takes the land as it is and must remove the personalty at its own expense. [14 N.J. at 280]

We turn first to a consideration of whether an owner-condemnee may demonstrate the value of the premises taken by including in proof of such value its enhancement attributable to personal property used by the owner in his operations on the premises. The policy considerations involved in the question, the growth of the law and its present state are all cogently synthesized in State v. Gallant, supra. Despite prior pronouncements, for the most part collated in Gallant , we need look no further back than that relatively recent case.

Plaintiff, realizing as we do that Gallant gently commences a refurbishment of condemnation doctrine by substituting contemporary considerations for anachronistic aphorism, attacks the application of Gallant here in a manner sufficiently interesting to be worthy of comment. Plaintiff first points out, correctly enough, that the Gallant facts and the facts here are different, at least to the extent that in Gallant the machinery was difficult and expensive to remove whereas here the machinery was "easily dismantled and transported to a new location and reassembled." (We pass for the moment the fact -- unmentioned by plaintiff in its brief -- that ...

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