City of New Brunswick v. United States
| Decision Date | 09 April 1928 |
| Docket Number | No. 260,260 |
| Citation | 48 S.Ct. 371,72 L.Ed. 693,276 U.S. 547 |
| Parties | CITY OF NEW BRUNSWICK et al. v. UNITED STATES et al |
| Court | U.S. Supreme Court |
Messrs. John W. Davis and Edward L. Patterson, both of New York City, for petitioners.
[Argument of Counsel from Pages 548-550 intentionally omitted] Mr. W. D. Mitchell, Sol. Gen., of Washington, D. C., for respondents.
[Argument of Counsel from Page 551 intentionally omitted] Mr. Justice SANFORD delivered the opinion of the Court.
The question here relates to the validity of certain taxes assessed by the City of New Brunswick, New Jersey, upon real estate to which the United States Housing Corporation held the legal title.
The Housing Corporation was organized by authority of the President, pursuant to an Act of May, 1918,1 for the purpose of providing housing for employees of the United States and workers engaged in industries connected with the national defense during the late war; for which an appropriation was made. The entire capital stock of the Corporation is held for and on behalf of the United States. For the purpose stated the Corporation purchased in 1918 a tract of land in New Brunswick, subdivided it into lots, and erected houses upon them.
By an amendment of July, 1912,2 providing for winding up its affairs, the Corporation was authorized and directed to sell and convey all its property remaining undisposed of after the termination of the war, 'Provided, however, That no sale or conveyance shall be made hereunder on credit without reserving a first lien on such property for the unpaid purchase money.' Section 1. Pursuant thereto the Corporation entered into to contracts for the sale of the New Brunswick lots to various purchasers. Each contract provided that the Corporation should sell and the purchaser should buy the property at a stipulated price, to be paid in instalments, the first on the execution of the contract, and the remainder in equal monthly payments, with interest; that after the purchaser had paid ten per cent. of the purchase price the Corporation should execute and deliver a special warranty deed for the property and the purchaser should execute and deliver a note or notes with mortgage on the property to secure the balance of the purchase price in accordance with the terms of the contract; that taxes should be apportioned as of the date of the contract and all thereafter becoming due should be paid by the purchaser, and if he failed so to do and they were paid by the Corporation, the amount thereof should be added to the purchase price; and that if the purchaser defaulted for thirty days in the performance of the terms of the contract the Corporation might retain all payments made thereon as liquidated damages, and the purchaser should be relieved from any further obligation under the contract.
The purchasers entered upon and took possession of the lots upon the execution of their respective contracts. Either then or later each paid the Corporation the entire percentage of the purchase price which entitled him under the terms of his contract to receive a deed. Nearly all of such payments were made prior to October 1, 1920. But because the City had meanwhile assessed certain taxes on these properties, which remained unpaid, the Corporation refused to execute deeds to the purchasers; and they, consequently, did not execute notes and mortgages for the balance of the purchase price.
While the Corporation thus continued to hold the legal title to the lots the City assessed them for taxation to the purchasers for the years 1920 to 1923, inclusive. These taxes were not paid. And thereupon, to prevent threatened tax sales the Corporation brought this suit, in which the United States joined as a plaintiff, in the federal court for New Jersey, to have the assessments canceled and sales for the collection of the taxes enjoined. None of the purchasers were parties to this suit.3
The District Court held that the assessment for the year 1920 was invalid, but, being of opinion that the equitable title had passed to the purchasers under their contracts in such manner as to render the lots taxable as their property after the dates on which they had become entitled to their deeds, sustained the validity of the assessments for the year 1921 and subsequent years on all lots for which the purchasers had become entitled to deeds prior to the date of the assessment, and denied...
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