#### CITY OF CAPE MAY v. THE UNITED STATES1

[No. E-618.

Decided January 9, 1928]

*On the Proofs*

*Eminent domain; potential revenue from taxes.*— In awarding just compensation to a municipality a claim for potential revenue based on taxes derivable from the property taken will not be considered.

*408
      *The Reporter's*statement of the case:

*Mr. Edmond O. Fletcher*for the plaintiff.

*Mr. Dctm, M.*Jackson, with whom was *Mr. Assistant Attorney General Herman J.*Galloway, for the defendant.,

The court made special findings of fact, as follows:

' I. The plaintiff, city of Cape May, is, and was at all times hereinafter mentioned, a municipal corporation created, chartered, and organized under and by virtue of. a special act of the Legislature of the State of New Jer,sey, approved March 8, 1875, and to be found in the laws of New Jersey of 1875, chapter 78, pages 206-246, to which reference is here made for a fuller statement of the powers conferred by said act.

II. The corporate limits of the city of Cape May embraced, among other lands, a certain tract of land intersected by streets and highways within a tract of land lying east -of the west line of Yale Avenue, thence east to Cold Spring Inlet, with the Atlantic Ocean on its south and Cold Spring Habor on its north, more particularly described as follows:

“ Beginning- for the same at the point of intersection of the westerly line of Yale Avenue if extended in a northerly direction with the high-water line of Cold Spring Harbor, which said avenue is shown on a certain plan of lots of the Cape May Beal Estate Company, which said plan is called ‘ Plan A,’ and is duly recorded in the office of the Clerk of the County of Cape May, New Jersey, in Plan Book No. 1, pages 31 and 32; thence in a general easterly, then southerly, and then westerly direction following the hagh-water line of Cold Spring Harbor, Cold Spring Inlet, and the Atlantic Ocean, to its point of intersection with the westerly line of paid Yale Avenue extended in a southerly direction; thence in a line of said Yale Avenue to the point of beginning, containing in all three hundred and forty-nine acres, more or less.”

III. Pursuant to the provisions of an act of Congress of October 6, 1917, 40 Stat., chapter 7, p. 344, entitled “An act to provide for the acquisition of an air station for the United States Navy,” as amended by an act of Congress of July 1, 1918, 40 Stat., chapter 114, pp. 704, 720-721, 738, the President of the United States, by a proclamation dated Decern-*409ber 2, 1918, took over for and upon behalf of the United States, for the use of a naval aviation station, the title to and the immediate possession of the tract of land hereinbe-fore described, together with all improvements on said tract of land not then owned by the United States, and together with all rights, privileges, and easements whatsoever appurtenant to or appertaining in any way to said above-described tract of land.

IV. Pursuant to the authority conferred upon the President of the United States by the provisions of the aforesaid act of Congress, the President, on August 10, 1921, acting through the Secretary of the Navy, determined the sum of $9,700 to be the amount of just compensation due from the United States to the city of Cape May as payment for its property herein described. On September 8, 1921, plaintiff was notified of the President’s aforesaid determination and award. On or about September 25, 1921, plaintiff rejected said award and determination. On November 10, 1925, the plaintiff notified the Secretary of the Navy that said finding and award of the President was unsatisfactory in amount and thereupon demanded the immediate payment of seventy-five per centum thereof, to wit: $7,275.00. On November 80, 1925, the plaintiff also notified the President that his said finding and determination was unsatisfactory in amount and demanded the immediate pajanent of seventy-five per centum thereof. No part of said award was ever paid to plaintiff.

On December 21, 1925, the city of Cape May filed its petition in this court (No. E-618) to recover additional compensation, and on April 15, 1926, filed its petition (No. F-129) to recover 75 per cent of the amount of said award. These two cases have been by order of court consolidated and heard as one.

V. Prior to December 2, 1918, the city of Cape May had made certain improvements within the commandeered property involved herein, consisting of the following .items: It constructed a water main on Beach Avenue from Yale Avenue to Sewells Point; also, a water main on Yale Avenue to Coastal Air Station; it graded and graveled the right of way adjoining the dock at Sewells Point, the gravel, freight, lumber, and other material being furnished by plaintiff *410together with labor for such construction. Plaintiff had also, in conjunction with the Cape May Real Estate Company, constructed a bulkhead and board walk along Beach Avenue from Yale to Sewells Point.

On or about May 25,1903, the Cape May Real Estate Company, then the owner of a tract of about 1,030 acres of unimproved marshy land located within the eastern boundary limits of said city, for a valuable consideration conveyed to the plaintiff, for use and occupation as a public street and highway and while used as such, a portion of said land skirting the Atlantic Ocean for a distance of approximately 2% miles, to wit, a strip of land 102 feet in width and over 11,000 feet in length, described as Beach Avenue, but the grantor reserved to itself the fee to the land thus granted. The grantor in said conveyance, and the plaintiff, on May 25, 1903, entered into another agreement in writing, by the terms of which the plaintiff agreed, among other things, to expend the sum of $70,000 and the real estate company the sum of $35,000 toward the construction and improvement of Beach Avenue, including a board walk thereon with a protecting bulkhead. Thereafter, on July 16, 1912, the Cape May Real Estate Company, for a valuable consideration, granted and conveyed to plaintiff for use and occupation as a public street and highway, as aforesaid, another strip of land 102 feet in width by 240 feet in length, designated as an extension to Beach Avenue to Cape May Avenue east. In this deed, as in the former one, the grantor reserved to itself the fee in the lands so granted. On or about May 25, 1903, the sa,id real estate company also granted to the plaintiff, under similar conditions to those already mentioned, an easement in what was called New Jersey Avenue, being about 90 feet in width by about 1,000 feet in length, for use as a public street, but reserving the fee in the land, as aforesaid.

In June, 1903, the real estate company subdivided a portion of its land into lots and blocks along Beach Avenue and New Jersey Avenue, .intersected by various other streets and highways, causing the same to be spread upon the map and plat designated as “ Plan A” of said company. This plan was duly recorded in the office of the clerk of the county of Cape May. Within this plan there were designated cer*411tain open streets and highways, namely, Beach Avenue and New Jersey Avenue, running lengthwise, and Yale, Princeton, Harvard, Cincinnati, California, and Cape May Avenue east, runping crosswise, and said company granted to the plaintiff the aforesaid strips for use and occupation as public streets and highways so long as they might be used as such, but reserved to itself the fee in the lands thus granted. This conveyance, as were the others, was accepted by the plaintiff.

In February, 1911, the plaintiff entered into a 10-year contract in writing with the owner of the majority of stock in the Cape May Keal Estate Company whereby the latter undertook to expend $500,000 by way of improvements upon the lands owned by the company, including the operation of the Hotel Cape May for at least three months of each year, and the plaintiff agreed to fix a tax assessment of the company’s unimproved property in each year for the period of 10 years at the same amount and no more as that fixed in the year 1910. The assessments were not increased during said period of 10 years by the plaintiff..

In 1912 the Cape May Beal Estate Company issued a plan or map upon which was laid off other lands owned by it into lots and blocks, streets, and highways designated as “ Plan B ” of said company, covering about 242 acres of land lying immediately north of lands covered by “ Plan A” and extending northward to Cold Spring Harbor. This harbor has an average depth of 30 feet and is connected with the Atlantic Ocean by Cold Spring Inlet. Ocean-going steamships and similar water craft enter this harbor for refuge from the Atlantic Ocean. This Cold Spring Inlet was constructed by the United States at a cost of about one million ¡dollars and the Cape May Beal Estate Company expended about $100,000 thereon: Plaintiff erected at this place a wharf or dock for the accommodation of passengers and freight traffic. The real-estate company also set aside on *“*Plan B ” a strip of 60 feet in width by about 3,100 feet in length for use and occupation as a public street, designated as Yale Avenue on “ Plan B,” being an extension of Yale Avenue in “ Plan A,” running from the Atlantic Ocean northward to Cold Spring Harbor. This avenue was graded *412and graveled and had sidewalks and curbing thereon, all done by the Cape May Real Estate Company. The plaintiff city accepted said Tale Avenue in “ Plan B ” and undertook to keep it in fair condition and otherwise improve it with electric lights and water mains. It was used as a public street and was open and traveled until the taking in December, 1918. By way of improving the whole of Beach Avenue east of Yale Avenue and to Cold Spring Inlet with grading, graveling, and board walks, the plaintiff and the Cape May Beal Estate Company jointly participated in the expense thereof under said agreement of May 25, 1903, and this Beach Avenue-from the time of its conveyance to plaintiff as aforesaid, was used as a public street and highway until the taking and appropriation above-mentioned. The total area of all of said streets was 1,200,711 square feet. The lands of the Cape May Real Estate Company, included in the lands taken by the President’s proclamation, were regularly assessed for taxation by the plaintiff city. The plaintiff collected taxes upon the lands taken under the President’s proclamation in the amount of $6,274.99 for the taxable year 1918. It had also collected taxes upon said lands for many years prior thereto.

VI. On December 2, 1918, the fair and reasonable market value of all property, rights, easements, and interests of the City of Cape May, of every character and description, lying within the commandeered area was $20,150.

The court decided that plaintiff was entitled to recover $20,150 with interest from December 2, 1918, to date of payment.

Certiorari denied.

*Moss,'Judge,*

delivered the opinion of the court:

The sole question to be determined in this case is the .fair and reasonable market value on December 2, 1918, of the property taken by the Government. The court has found such value to be $20-,150.

Plaintiff claims, amongst other items set forth in its petition, the right to recover as a part of its just compensation, a large sum as representing potential revenue based on taxes to be derived from the property taken. A claim of *413this nature does npt constitute a proper element for consideration in arriving at just compensation.

Ghaham, *Judge;*Booth, *Judge;*and Campbell, *Chief,*Justice, concur.