Jersey City Merchants Council v. Jersey City

• Decision Date: 26 December 1961
• Docket Number: No. A--835,A--835
• Citation: 176 A.2d 500,71 N.J.Super. 156
• Parties: JERSEY CITY MERCHANTS COUNCIL, a corporation of New Jersey, Harry F. Salomon and Charles B. Swensen, Inc., a corporation of New Jersey, Plaintiffs- Appellants, v. JERSEY CITY, a municipal corporation, and Philip B. Robinson, Defendants- Respondents.
• Court: New Jersey Superior Court — Appellate Division

Page 156

71 N.J.Super. 156

176 A.2d 500

JERSEY CITY MERCHANTS COUNCIL, a corporation of New Jersey Harry F. Salomon and Charles B. Swensen, Inc., a corporation of New Jersey, Plaintiffs- Appellants, v. JERSEY CITY, a municipal corporation, and Philip B Robinson, Defendants- Respondents.

No. A--835.

Superior Court of New Jersey Appellate Division.

Argued Nov. 27, 1961.

Supplemental Briefs filed Dec. 4, 1961.

Decided Dec. 26, 1961.

Atwood C. Wolf, Jersey City, for appellants (Wolf & Baumann, Jersey City, attorneys; Atwood C. Wolf, Jersey City, on the brief).

Joseph G. Mintz, Asst. Corp. Counsel, Jersey City, for respondent Jersey City (Ezra L. Nolan, Corp. Counsel, Jersey City, attorney; Joseph G. Mintz, Jersey City, on the brief).

Benjamin H. Chodash, Jersey City, for respondent Philip B. Robinson (Krieger & Chodash, Jersey City, attorneys).

Before Judges GOLDMANN, FOLEY and ROSEN.

The opinion of the court was delivered by

GOLDMANN, S.J.A.D.

Plaintiffs instituted a taxpayers' action in lieu of prerogative writs to set aside a public sale by defendant municipality to defendant Robinson of certain city-owned land, and to declare such sale, the resolution which authorized it, and the resolution purporting to confirm it, to be Ultra vires and therefore void. The case was tried before the Law Division judge sitting without a jury. His written opinion disposed of all issues in favor of defendants. Plaintiffs appeal the resulting judgment.

I.

Jersey City had acquired the land in question by foreclosure in 1954. On October 20, 1959 the Jersey City Board of Commissioners adopted a resolution authorizing the public sale of some 76 parcels of city-owned lands and buildings, including the subject premises comprising some 60 acres of vacant land. The resolution was published three times in the local newspapers under the caption, 'Public Sale, Monday, Nov. 9th, 1959.'

The resolution announced that in accordance with the provisions of R.S. 40:60--26, as amended and supplemented, N.J.S.A., the listed properties, not needed for public use, would be offered at public sale at the City Hall on Monday, November 9, 1959, at 10 A.M., to the highest bidder at no less than the minimum price set forth for each parcel. All sales were to be made subject 'to such state of facts as an accurate survey may disclose, existing tenancies, rights of persons in possession, zoning ordinances, City Ordinance No. k--1455, easements, conditions, covenants and restrictions of record or otherwise, violations of the regulations and requirements of the Building Department, the Health Department and the Police and Fire Departments of the City of Jersey City. No representations of any kind are made by the City of Jersey City as to the condition or status of the property.'

The 60-odd acres of vacant land with which we are concerned were separately dealt with at the close of the resolution and the public notice. The minimum price was fixed at $60,000 and the sale was to be upon the conditions set out earlier in the resolution, among them those just referred to. It was also to be subject to the following conditions:

'* * * Upon the further condition that the purchaser shall fill and grade the entire lands to one (1) foot above the existing grade of Route 440. The filling and grading shall commence within six (6) months from the date of confirmation of sale and shall be completely filled and graded within two (2) years of the starting date; and

Upon the further condition that the purchaser shall construct a dike or embankment along the westerly property line to retain any and all fill that shall be deposited on the easterly side of said property line. This dike or embankment shall be designed to withstand the pressure of the land filled on the easterly side and it shall be constructed to the satisfaction of the Chief Engineer of the Department of Parks and Public Property of the City of Jersey City; and

Upon the further condition that the purchaser shall erect thereon a nonresidential building or buildings covering a ground area of five hundred thousand (500,000) square feet. The construction of said building or buildings shall be completed within four (4) years of the date of confirmation of the sale. The purchaser shall begin the construction of a non-residential building or buildings covering a ground area of three hundred thousand (300,000) square feet within eighteen (18) months of the date of confirmation of sale and shall complete the construction of the three hundred thousand (300,000) square feet within three (3) years of the date of confirmation of the sale.

The purchaser shall begin the construction of a non-residential building or buildings covering an additional two hundred thousand (200,000) square feet of ground area within thirty-six (36) months from the date of confirmation of the sale and complete the construction of the additional two hundred thousand (200,000) square feet within one (1) year of the starting date.'

Five bidders appeared at the November 9 sale. Before bidding began, William P. Black, Assistant Tax Collector of Jersey City, read the terms and conditions of the sale in full and then addressed the bidders as follows:

'I direct your attention to Paragraph 2. As to the existing tenancies, all tenants are 30-day tenants with the exception of the Incinerator Authority who occupies a portion at the will of the City Commission. At any time when you feel they interfere with your developing the property, their tenancy can be terminated on notice to the City Commission. They are engaged in filling city owned lands.'

Black testified that he then asked of those present, 'Do these facts interfere with your bidding in any way?' Receiving a 'No' answer from the five bidders, he announced, 'we will now proceed with the bidding. The first bid is $60,000 (the advertised minimum price).' After a prolonged series of increased bids, the property was struck down to defendant Robinson for $125,000. The sale was confirmed by resolution adopted by the City Commission by a 4--1 vote on November 17, 1959. Plaintiffs instituted the present action soon after

II.

N.J.S.A. 40:60--26, the statute here involved, provides that a municipal governing body may sell any lands or buildings not needed for public use one of four ways, the first of which is by public sale to the highest bidder after public advertisement thereof in a newspaper circulating in the municipality where the lands are situate. In such case the governing body may by resolution fix a minimum price, to be included in the public notice of sale. The final paragraph of the statute provides that

'* * * The governing body may also impose any restrictions on the use to be made of such land and any conditions of sale as to buildings or structures to be erected thereon, or as to the type, size, or other specifications of such buildings or structures, * * * and the time within which such conditions of sale in the manner and to the same extent as any other vendor of real estate * * *; provided, however, that * * * the restrictions on the use to be made of the land and the conditions of sale shall be set forth at length in any advertisement of sale hereinabove required. * * *'

III.

Plaintiffs' first attack upon the resolution and notice of sale is directed to the requirement that the successful bidder construct a dike or embankment, designed to withstand the pressure of the land fill, 'to the satisfaction of the Chief Engineer' of the Parks and Public Property Department. They contend that the absence of a norm, standards or details of construction by which the engineer's approval would be granted or withheld, voids the sale under the statute.

In Lieberman v. Neptune Twp., 50 N.J.Super. 192, 198--199, 141 A.2d 553, 556 (1958), we observed that the final paragraph of N.J.S.A. 40:60--26, permitting a municipal governing body to impose restrictions and conditions on the sale of lands no longer needed for public use, does not permit a municipality to deal with its real estate absolutely and without limit, and to impose upon potential bidders any restrictions or conditions whatsoever:

'* * * The municipal action is always subject to scrutiny to insure that the conditions and restrictions imposed be reasonable and consistent with the public policy underlying the statute to prevent favoritism and assure uniform conditions for bidding and the best deal for the benefit of all the taxpayers of the municipality. Case v. Trenton, 76 N.J.L. 696, 699, 74 A. 672 (E. & A. 1908); Juice Bar Corp. v. Township Committee of Neptune Tp., supra, 36 N.J.Super. (164), at pages 170--171, 115 A.2d 131; Escrow v. Borough of Haworth, supra (36 N.J.Super. 469, 116 A.2d 526 (App.Div.1959)); Summer Cottagers' Ass'n of Cape May v. Cape May, 34 N.J.Super. 67, 78, 111 A.2d 435 (Law Div.1954); Samuel v. Wildwood, 47 N.J.Super. 162, 169, 135 A.2d 583 (Ch.Div.1957). * * *'

The public policy noted in Lieberman is the same as that which underlies the other competitive bidding statutes. See N.J.S.A. 40:50--1; Hillside Twp. v. Sternin, 25 N.J. 317, 322, 136 A.2d 265 et seq. (1957); Greenberg v. Fornicola, 65 N.J.Super. 104, 109, 167 A.2d 177 (App.Div.1961), certification granted 36 N.J. 28, 174 A.2d 656 (1961); 10 McQuillin, Municipal Corporations (3d ed. 1950), § 29.52, p. 312. N.J.S.A. 40:60--26, like N.J.S.A. 40:50--1, is for the benefit of the taxpayers and not the bidders, and should be construed with sole reference to the public good. Our courts have uniformly declared invalid municipal transactions where performance was required to be 'to the satisfaction' of a particular municipal officer, or even the governing body. See Juice Bar Corp. v. Neptune Township Committee, 36 N.J.Super. 164, 115 A.2d 131 (App.Div.1955) (approval of the building inspector or other official designated by the township committee); Tice v. Long Branch, 98 N.J.L. 214, 119 A. 25 (E. & A. 1922) (satisfaction of the board of commissioners);...