On Certification to the Superior Court, Appellate Division, whose opinion is reported at 161 N.J. Super. 561 (1978).
For vacation and remandment -- Chief Justice Hughes and Justices Mountain, Jacobs, Pashman, Clifford, Schreiber and Handler. Opposed -- None. The opinion of the court was delivered by Mountain, J.
[80 NJ Page 463] This is a condemnation suit. The State of New Jersey, acting through the Commissioner of Transportation,
initiated proceedings to condemn a portion of defendant's property in order to widen a highway in the City of Camden. The taking included a strip of land and about 10% (31') of the front of a building that faced the highway. The trial court found that the fair market value of the property prior to the taking was $159,000 and that after taking the value of the property, still encumbered with the remnant of the building, was zero. It concluded that the landowner was entitled to the difference, viz., $159,000, plus the cost of demolition, found to be $29,912, less the value of the then remaining vacant land, determined to be $11,400. In accordance with these findings, an award was entered in the sum of $177,512. 145 N.J. Super. 63, 71 (Law Div. 1976). The Appellate Division affirmed. 161 N.J. Super. 561 (App. Div. 1978). We granted the State's petition for certification. 78 N.J. 394 (1978).
The method of valuation here employed followed what is sometimes called the "before and after rule." 4A Nichols, Eminent Domain § 14.23 at 14-83 to 14-94 (3rd ed. 1976). This formula requires that the value of the parcel before taking be first determined. Then the value of the remainder after taking is found. Finally the latter is subtracted from the former. The difference will equal fair compensation. Village of South Orange v. Alden Corp., 71 N.J. 362, 367 (1976).
The "before taking" value of $159,000 is not seriously challenged here. The trial court further found that the cost of repairing the building would well exceed the fair market value of the premises after restoration. Parenthetically, those factual determinations are amply supported by substantial credible evidence in the record. Hence, the trial court concluded, the after taking value of the property was zero. 145 N.J. Super. at 68.
The court really decided that the taking, although denominated partial, had in fact drained the property of all economic worth. Where such a result can be reasonably foreseen -- as was probably the case here -- it would normally
be the better practice for the public condemnor to undertake to condemn the whole property in the first place. To have done so would have avoided the creation of an "uneconomic remnant" with its accompanying problems.
The State points out that it did not actually require all of the property for the public purpose of widening the highway. It apparently entertained the fear that to take the whole might be unjustifiable as constituting excess condemnation. The argument has, indeed, been made on a number of occasions that to take more property than is absolutely necessary -- excess condemnation -- is beyond the power of the state. But in New Jersey, especially in recent years, both the Legislature and the courts have adopted an extremely liberal and comprehensive interpretation of public use. State v. Davis, 87 N.J. Super. 377, 380 (App. Div. 1965); Essex County v. Hindenlang, 35 N.J. Super. 479, 491 (App. Div. 1955). Relying principally upon New Jersey statutory and case law, one commentator has said:
A taking is considered in the public interest when condemnation of the entire parcel is the least expensive alternative to the condemnor. [ Comment, Excess Condemnation -- to Take or not to Take -- A Functional Analysis, 15 N.Y.L.F. 119, 124-25 (1969)]
This is a concise statement of the pragmatic principle set forth in State v. Buck, 94 N.J. Super. 84 (App. Div. 1967).
[W]hen the State condemns all of a tract except a portion too small to comply with the zoning ordinance, the State must pay not only for what it takes but also for the damage to the remainder. Therefore when, as here, the value of the whole is little more than the value of the major part, it is sound business judgment and in the public interest to take the entire parcel. This avoids the ...