Nelson Cooney & Son, Inc. v. South Harrison, Tp.

• Decision Date: 25 January 1971
• Citation: 57 N.J. 384,273 A.2d 33
• Parties: NELSON COONEY & SON, INC., Plaintiff-Respondent, v. TOWNSHIP OF SOUTH HARRISON, a municipal corporation of the State of New Jersey, Defendant-Appellant.
• Court: New Jersey Supreme Court

Page 384

57 N.J. 384

273 A.2d 33

NELSON COONEY & SON, INC., Plaintiff-Respondent, v. TOWNSHIP OF SOUTH HARRISON, a municipal corporation of the State of New Jersey, Defendant-Appellant.

Supreme Court of New Jersey.

Argued Nov. 9, 1970.

Decided Jan. 25, 1971.

Joseph Mennite, Woodbury, for defendant-appellant (Fred A. Gravino, Woodbury, attorney).

John H. Mohrfeld, III, Camden, for plaintiff-respondent.

The opinion of the Court was delivered by

HALL, J.

Plaintiff, the sole mobile home park operator in defendant township, challenged, by this action in lieu of prerogative writ, various amendatory provisions of the township's ordinance licensing and regulating such parks. The attack with which we are concerned was directed to the validity of a 1968 amendment which increased, from $12 to $18, the amount of a monthly fee imposed upon the park operator for each mobile home space occupied in excess of one week during the previous month. The fee was declared to be imposed for revenue purposes. This monthly exaction, together with a $200 annual operating fee (which was not challenged and may well be said not to exceed beyond permissible limits the costs of regulation prescribed by the ordinance), represents the municipal charge for the yearly business license required by the ordinance.

The Law Division struck down the increase in the monthly fee as confiscatory and excessive on the basis that, while the increased fee bears a reasonable relation to the value of local governmental services furnished to the inhabitants of the park and properly includible in the monthly fee, it prevents a fair margin of profit to the operator and renders the park non-competitive with similar facilities in adjacent municipalities where the license fee is lower. Defendant was ordered to return to plaintiff the amount of the increase ($2904) which the latter had paid. The Appellate Division affirmed this ruling, as well as all other aspects of the trial court judgment, in an unreported decision adopting the opinion of the trial court. We granted certification on the township's petition. 56 N.J. 480, 267 A.2d 62 (1970).

The only question actually presented on this appeal--really raised for the first time in this court--is the propriety of considering profit margin and competitive ability in passing upon the validity of the amount of a municipal license fee for trailer parks. Resolution of that question depends upon and makes it necessary first to review, however, the deeper matter of the legitimate object and scope of such fees and the true nature thereof. ¹

The operation of plaintiff's 50 space park is typical. Each mobile home is individually owned. The owner leases a space for it from the park operator on a monthly rental basis. The operator furnishes water, sewage and other utility facilities and connections. The mobile homes, although of considerable size and fully equipped for permanent modern living and not simply transient camping facilities, are freely moveable by special towing equipment. Many remain in the same park for years; others move more frequently to similar parks elsewhere. The mobile home in a park is indeed a hybrid--a readily moveable one-family dwelling of substantially less cost and value than a conventional housing structure, owned by the occupant, but located somewhat temporarily in a semi-attached fashion on the land of another.

While resident in a park, the mobile home occupant receives all of the general benefits and particular services of the local and county government that are available to persons living in conventional housing accommodations as owners or tenants, and who pay for them, directly or indirectly, primarily through Ad valorem property taxation on realty. Mobile homes, however, are not taxable, under present statutes in this state, as either real or personal property. ² The park itself is taxed only on the value of the land and the improvements constructed thereon by the operator.

The space charge, almost universally imposed by New Jersey municipalities having mobile home parks within their boundaries as part of the license fee for the park, is expected to be and is in fact passed on to and paid by the trailer owner through inclusion in his space rental. Here, when the monthly fee went from $12 to $18, plaintiff increased the space rental from $45 to $51. The obvious pragmatic object of such a fee--and it was so testified by a member of the township governing body in this case--is to force mobile home residents to pay indirectly something, in lieu of property taxes, for the governmental benefits and services that they receive or are available to them, which otherwise would be obtained without charge and at the expense of the real property owners in the municipality.

Since New Jersey also has no special statute relating to the collection of revenue from mobile home park residents to cover governmental benefits, as do many states, ³ authority for a municipality of this state to exact a fee for this purpose has to be found in our general business licensing statute. N.J.S.A. 40:52--1 and 2. Section 1 provides in pertinent part:

The governing body may make, amend, repeal and enforce ordinances to license and regulate:

d. * * * trailer camps and camp sites * * *.

Section 2 says:

The governing body may fix the fees for all such licenses, Which may be imposed for revenue * * *. (Emphasis supplied). ⁴

This case was framed and tried by both sides on the basic assumption that this authority to impose a business license fee 'for revenue' legally encompasses the right to fix the amount of that fee in reasonable relation to the special impact of the particular business upon local governmental benefits and services and the financial consequences thereof. The controversy below rather revolved around whether governmental costs which would ordinarily be covered by Ad valorem taxation could properly be included in a license fee and so in effect be chargeable to mobile home owners as a peculiar class, as well as the method of computation thereof (see footnote (1), Supra). The basic assumption and the scope and method of computation utilized here, approved by the trial judge, are correct and adequately grounded in prior decisions of this court.

The present view of the basic meaning and scope of 'for revenue' in N.J.S.A. 40:52--2 stems from Salomon v. Jersey City, 12 N.J. 379, 97 A.2d 405 (1953). There the city of Jersey City passed an ordinance requiring all businesses having a situs in the city to be licensed and to pay very substantial license fees. The ordinance had no regulatory features and admittedly was designed only to provide additional municipal revenue. There was no claim that the businesses exerted any special impact upon the governmental services or finances. All of them were clearly subject to taxation, directly or indirectly, though Ad valorem property levies. The ordinance was struck down, first, on the ground that N.J.S.A. 40:52--1 did not authorize licensure of all businesses but only of the categories specified therein, and secondly, because the 'for revenue' provision of N.J.S.A. 40:52--2 was not intended to be a grant of broad and untrammeled taxing power to municipalities. The court's view of the scope of the licensing statute was summed up in the following paragraph, which, of course has to be read in the light of the factual pattern involved:

In the light of all of the foregoing we consider that the primary and overriding purpose of the Legislature in enacting R.S. 40:52--1 and R.S. 40:52--2 was to authorize municipalities to license and regulate, as police measures for the public health, safety, morals or welfare, the local businesses described therein, and only incidentally to impose on the businesses thus licensed and regulated license fees for revenue which may, at least within reasonable limits, exceed the regulatory cost. (12 N.J. at 390, 97 A.2d at 410).

The first Post-Salomon case in which the matter of special impact was considered is Bellington v. East Windsor Township, 17 N.J. 558, 112 A.2d 268 (1955). ⁵ There a trailer park licensing ordinance, containing customary regulatory features, imposed, for revenue, a license fee of $200 per annum plus a $2 weekly space charge. The fee was attacked primarily on the basis of Salamon. That case was distinguished and limited generally on the bases just mentioned. The court sustained the principle of the fee as within the licensing statute on the basis of the special impact of the regulated business in this language:

Here, we have a fundamentally regulative ordinance in the undoubted exercise of the police power to an essential public end, levying also a tax for revenue as an incident of the regulation, and so a tax, complementing the license fee proper, that is legally sufficient if it be reasonably related to the value of the public services and facilities afforded the users of the regulated areas and the benefits of the regulations themselves and the consequent governmental supervision and control; and thus a correlated exercise of both the police and the taxing powers conformably to the statutory grant.

The Quantum of the fee of necessity depends upon the nature and circumstances of the regulated category. The tax concept may be expressed in terms of the duty of the sharers of the benefits of government to bear its burdens equitably and justly. Trailer camps are peopled in great part by transients who use and enjoy the community's services and facilities without sharing the cost; and the inclusion in the license fee of a tax designed in some measure to equalize the common burden is within the statutory tax for revenue as an incident of the police regulatory power. In Edwards v. Borough of Moonachie, Supra, we cited, for example, a substantial increase in the school enrollment and the special health and sanitation problems attending the operation of the trailer court. And such is also the case here. (17 N.J. at...