The opinion of the Court was delivered by
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 Hack-ensaсk 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. 1 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 whethеr this Court should adopt the rule of “substitute facilities” to be applied in those instances, such as this, where the State or some other
It is of course today well settled that only upon the payment or tender of “just compensation” may property be taken for а public purpose by an exercise of the right of eminent domain. N. J. Const. (1947) Art. 1, par. 20; Art. 4, see. 6, par. 3; N. J. S. A. 20:3-29. Eor 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 mеant 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. 3 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 in
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 (3 Cir. 1968).
Furthermore, the bed of a strеet 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. 353. 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 conveniences, as well as the difficulties inherent in determining the amount of such an award, led to thе development of the doctrine that with respect to such property, just compensation should take, not the form of market
It is clear that the constitutional requirement of just compensation can be met in other ways than by a .payment of market value.
There is no precise and inflexible rule for the assessment of just compensation. The Constitution does not contain any fixed standard of fairness by which it must be measured. Courts have been careful not to reduce the concept to a formula. The effort has been to find working rules and practical standards that will accomplish substantial justice such as, but not limited to, market value. [Jersey City Redevelopment Agency v. Kugler, supra, 58 N. J. at 383-384]
The Supreme Court has pointed out that in condemnation cases the use of fair market value as the test of just cоmpensation “is not an absolute standard nor an exclusive method of evaluation.” United States v. Virginia Electric & Power Co., 365 U. S. 624, 633, 81 S. Ct. 784, 791, 5 L. Ed. 2d 838, 847 (1961).
The doctrine of substitute facilities has been very widely accepted in the federal courts, where it has been appliеd to the taking of many kinds of public facilities, including highways, United States v. Certain Lands Located in the Townships of Raritan and Woodbridge, Middlesex County, New Jersey, 246 F. 2d 823 (3 Cir. 1957); State of Washington v. United States, 214 F. 2d 33 (9 Cir. 1954), cert. den. 348 U. S. 862, 75 S. Ct. 86, 99 L. Ed. 679 (1954); a public bath and recreation center, United States v. Certain Property in Borough of Manhattan, supra, 403 F. 2d 800 (2 Cir. 1968); a sewer system, Town of Clarksville v. United States, 198 F. 2d 238 (4 Cir. 1952), cert. den. 344 U. S. 927, 73 S. Ct. 495, 97 L. Ed. 714 (1953); school grounds, United States v. Board of Education of Mineral County, 253 F. 2d 760 (4 Cir. 1958); a playground, United States v. Certain Land in Borough of Brooklyn, 346 F. 2d 690 (2 Cir. 1965) and an entire town, Brown v. United States, 263 U. S. 78, 44 S. Ct. 92, 68 L. Ed. 171 (1923) (dictum).
We think the rule of substitute facilities is a just and sensible one. Henceforth, therefore, when the State or some other condemnor takes property which is already devoted to some рublic use by a municipality or other agency of government, the requirement of just compensation will be met by the condemnor furnishing an adequate, substantially equivalent substitute facility, which need not, however, be an exact duplicate of what has been taken. This may either be done by the condemnor actually constructing the replacement facility, as the Commissioner claims to have done here,
A word is perhaps in order as to burden of proof. In the ordinary condemnation case, where the only issue to be resolved is thе amount of compensation that the condemnee is to receive, neither party carries this burden. “The burden of proof concept has no place in such an inquiry.” Paterson Redev. Agency v. Bienstock, 123 N. J. Super. 457, 460 (App. Div. 1973). However, on the issue as tо whether a replacement facility is adequate, the concept does come into play and we think the burden of proof should be borne by the condemnor. If then the trier of fact, whether judge or jury, determines that the substitute facility is adequate, that will be the end of the matter. If, however, it is found to be inadequate, then the further question must be resolved, as to what monetary amount is needed to bring the facility to a state of еquivalency. In considering this issue, the notion of burden of proof again becomes irrelevant.
Here the State, as part of the construction of Route 80, built one or more overpasses to accommоdate north-south traffic in South Hackensack. At the same time it rearranged some storm and sanitary sewers that lay in the beds of the streets. It is the contention of the Commissioner of Transportation that these new faсilities constitute an adequate replacement of the roadways that are no longer available and that the sewer systems have been in fact improved because henceforth they will require less mаintenance. The Commissioner suggests that since the evidence before the trial court will support a finding that the substitute facilities are
The judgment of the Appellate Division is affirmed, but for the reasons set forth above, and the case is remanded to the Law Division for further proceedings consistent with this opinion.
For affirmance and remandment — Chief Justice Hughes and Justices Hall, Mountain, Sullivan, Pashman and Clieeokd — 6.
For reversal — Mone.
Notes
A very small, triangular-shaped park was also included in the taking. A jury award of $1,575 for this particular property was not appealed and hence is not before us at this time.
Althougli this ease is concerned only with the taking of certain roadbeds, the rule of “substitute facilities” has been held applicable with respect to the condemnation of other municipally owned facilities as well, such as parks, playgrounds and the like. See citations, in fra.
Other recognized methods of determining market value include the capitalization of earnings where the property is income-producing and reproduction cost less depreciation. Jahr, Law of Eminent Domain, 225-234, 241-249.