Norbet Corp.. v. City Of Newark

• Decision Date: 04 March 1947
• Docket Number: No. 249.,249.
• Parties: NORBET CORPORATION v. CITY OF NEWARK et al.
• Court: New Jersey Supreme Court

135 N.J.L. 314

51 A.2d 541

NORBET CORPORATION

v.CITY OF NEWARK et al.

No. 249.

Supreme Court of New Jersey.

March 4, 1947.

Certiorari by Norbet Corporation, a New Jersey corporation, against the City of Newark and others to review an assessment made by the taxing district of the defendant against certain realty.

Writ dismissed.

January term, 1947, before Justices BODINE, PERSKIE, and WACHENFELD.

Frederick C. Vonhof, of Newark, for the prosecutor.

Thomas L. Parsonnet, of Newark (Vincent J. Casale, of Newark, of counsel), for respondents.

WACHENFELD, Justice.

The sole question presented by this writ is the validity of an assessment made by the taxing district of the City of Newark for the period from May 1, 1946 to December 31, 1946, against land and buildings located at 2-20 Orange Street and known as Lot 1, Block 11, in the name of Charles Fischer. It is stipulated that prosecutor and Charles Fischer are the same and no point is made that the property was incorrectly assessed to the latter.

The prosecutor is the vendee under an executory contract for the sale of the property and has been in possession and taking rents therefrom since December 14, 1937. The legal owner of the property and the vendor under the contract are the Trustees for the Support of Public Schools of the State of New Jersey, who had been tax exempt. Trustees for the Support of Public Schools v. Murphy, 130 N.J.L. 434, 33 A.2d 570. The terms of the contract provide for payment over a period of six years with title closing on October 2, 1943, which has been delayed by a bill to quiet title and unsuccessful attempts prior to 1946 by the City of Newark to assess the prosecutor as equitable owner. The present assessment was made under and by virtue of R.S. 54:4-1, as amended by Chapter 242, Laws of 1946, N.J.S.A. 54:4-1, expressly effective May 1, 1946, which provides: ‘An executory contract for the sale of land, under which the vendee is entitled to or does take possession thereof, shall be deemed for the purpose of this act, a mortgage of said land for the unpaid balance of purchase price.’

This amendatory provision was enacted for the purpose of taxation of properties purchased on long-term contracts from the federal government so that municipalities may not be deprived of their opportunity to secure legitimate tax revenues and in order that competing businesses are not placed at an unfair disadvantage.

The prosecutor does not seek shelter under the prior tax immunity of the Trustees but contends that under the executory contract for the purchase of the property it has no taxable interest, relying mainly on ABR Corporation v. City of Newark, 131 N.J.L. 147, 35 A.2d 473, affirmed 133 N.J.L. 34, 42 A.2d 296. That case, however, is inapplicable since the court did not have before it a statute which expressly made taxable a vendee's interest under a contract to buy realty. There the court decided that the controlling statute did not cover equitable interests of this type.

The question now presented is whether the statute as amended is within the power of the Legislature. The amendment, it must be noted, only applies to vendees in possession. Such interest is not merely fictional but substantial. Possession includes enjoyment of all the services provided by the City, such as fire and police protection, water service, usage of streets, etc. The right to recover damages for trespass is available; losses due to fire, the elements or deterioration must be suffered. The interest of the vendee is one which passes by inheritance....