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State v. Township of South Hackensack

Decided: July 9, 1974.

STATE OF NEW JERSEY, BY THE COMMISSIONER OF TRANSPORTATION, PLAINTIFF-APPELLANT,
v.
TOWNSHIP OF SOUTH HACKENSACK, DEFENDANT-RESPONDENT



For affirmance and remandment -- Chief Justice Hughes and Justices Hall, Mountain, Sullivan, Pashman and Clifford. For reversal -- None. The opinion of the Court was delivered by Mountain, J.

Mountain

This is a condemnation case. In the course of constructing Interstate Route 80, the Commissioner of Transportation found it necessary to condemn portions of six north-south streets in the Township of South Hackensack in Bergen County. The commissioners in condemnation made an award in favor of the Township from which the State appealed. A trial de novo in the Law Division resulted in a jury verdict of "no value" for the roadbeds.*fn1 The Appellate Division, in an unreported opinion, reversed the trial court and remanded the case for a new trial. We granted certification upon the State's petition. 64 N.J. 321 (1974).

The principal question for decision is whether this Court should adopt the rule of "substitute facilities" to be applied in those instances, such as this, where the State or some other

condemnor takes part of the roadbed of a street or highway owned by a municipality, or over which it possesses a public easement.*fn2 The substitute facilities doctrine provides that in such cases the award of damages will be in an amount sufficient to pay the cost of constructing a substitute or replacement facility and need not necessarily bear any relationship to the market value of the land taken. The rule has been quite widely accepted elsewhere, especially in the federal courts. We have not hitherto had occasion to consider it.

It is of course today well settled that only upon the payment or tender of "just compensation" may property be taken for a public purpose by an exercise of the right of eminent domain. N.J. Const. (1947) Art. 1, par. 20; Art. 4, sec. 6, par. 3; N.J.S.A. 20:3-29. For most purposes just compensation is said to be the fair market value of the property as of the date of taking. State v. Gorga, 26 N.J. 113, 115 (1958); State v. Cooper, 24 N.J. 261, 268 (1957); State v. Mehlman, 118 N.J. Super. 587, 590 (App. Div. 1972). By this is generally meant the full equivalent in money of the property condemned. Jersey City Redevelopment Agency v. Kugler, 58 N.J. 374, 378 (1971). There seems now to be general agreement that the most satisfactory proof of such value is to be found in a study of comparable sales.*fn3 State of N.J., by Com'r of Cons. v. Vacation Land, Inc., 92 N.J. Super. 471, 478 (App. Div. 1966); 4 Nichols, Eminent Domain (rev. 3d ed. 1962) sec. 12.311[3], p. 93.

Quite obviously the method of determining fair market value by an examination of comparable sales is inappropriate

where the land, the value of which is at issue, is the bed of a street or highway. Comparable sales are not available because roadbeds are not customarily bought and sold. On the other hand sales of properties which can be put to normal residential or commercial use are clearly not comparable nor in any way helpful in seeking to determine the value of a roadbed. Nor, apart from the use of comparable sales, is there any other useful and reasonably accurate way of ascertaining the market value of such property. As one commentator has put it,

While the state or municipality is entitled to be compensated for the acquisition of streets or highways, what is the measure of damage? Clearly it is not market value for these streets and highways do not possess a market value. [ Jahr, Law of Eminent Domain, supra, 254-5]

See also United States v. Certain Property in Borough of Manhattan, 403 F.2d 800, 802-803 (2 Cir. 1968).

Furthermore, the bed of a street is a different kind of property from a tract or strip of privately owned land. Unlike the latter, a highway is not a commodity or asset susceptible to normal economic exploitation. It is not held or used for gain. Rather it is a facility, existing and maintained for the convenient use of the public. Title to streets and highways, whether it be in fee simple or by way of easement, is held in trust for the public use. 10 McQuillin, Municipal Corporations (3rd ed. 1966) sec. 30.36, p. 696-7; Jahr, supra, sec. 161, p. 253. It may be questioned whether a monetary award, unrelated to the cost of replacing the highway, can be said truly to constitute just compensation to the traveling public for the loss of such a facility. The inadequacy and incongruity of a monetary award as compensation for the taking of a roadbed, or of other like public facilities and ...


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