Parlo v. Van Horn, F--1733

• Decision Date: 07 July 1953
• Docket Number: No. F--1733,F--1733
• Citation: 98 A.2d 721,27 N.J.Super. 64
• Parties: PARLO v. VAN HORN et al.
• Court: New Jersey Superior Court

Page 64

27 N.J.Super. 64

98 A.2d 721

PARLO v. VAN HORN et al.

No. F--1733.

Superior Court of New Jersey, Chancery Division.

July 7, 1953.

Herman B. Hoffman, Highland Park, for plaintiff.

Joseph H. Edgar, New Brunswick, for defendant Borough of Highland Park.

EWART, J.S.C.

This litigation arises out of the following circumstances:

June 28, 1935 the Collector of Taxes of the Borough of Highland Park sold to the Borough of Highland Park real estate known as Lots 39 to 41 in Block 49 on the tax duplicate of the municipality, assessed thereon to Mike Kassardo as owner, for unpaid taxes for the second half of 1933, sewer assessment, interest and costs amounting to a total of $223.59, after which the collector, under date of June 28, 1935, executed and issued to Borough of Highland Park certificate of tax sale for said premises subject only to municipal liens accruing after July 1, 1934 and subject to redemption on repayment of the amount of the sale together with interest at the rate of 8% Per annum. Said tax sale certificate was recorded in the clerk's office of Middlesex County May 6, 1952 in Book 1126 of Mortgages, page 464.

By an assignment in writing, executed by the Mayor and Clerk of the Borough of Highland Park, the said borough assigned said tax sale certificate to Angelo Parlo in consideration of the sum of $500 paid by Parlo to the borough, which assignment bears date December 26, 1951 and was recorded in said county clerk's office May 6, 1952 in Book 111 of Assignments of Mortgages at page 410. The assignment is absolute in form, subject only to the right of redemption by the owner and reads in part as follows:

'* * * has granted, bargained, sold, assigned, transferred and set over, and by these presents does grant, bargain, sell, assign, transfer and set over, unto the party of the second part, a certain Tax Sale Certificate, * * * 'To have and to hold the same unto the party of the second part, his heirs, executors, administrators and assigns forever, subject only to the right of redemption of the owner as provided by law. And the Borough of Highland Park hereby makes, constitutes and appoints the said party of the second part its true and lawful attorney irrevocable, in its name or otherwise, but at his proper costs and charges, to have, use and take all lawful ways and means for the recovery of all the said money and interest and in case of payment to discharge the same as fully as the Borough of Highland Park might or could do if these presents were not made.'

Said certificate of tax sale was delivered by the borough to Parlo along with the assignment.

Said property was assessed for the year 1951 at $500. The amount of assessment for other years does not appear. For the year 1951 the total taxes against said property amounted to $37.10. After purchasing said tax sale certificate, Parlo paid to the borough the last half of 1950 taxes and all of 1951 taxes assessed against said lots in the total sum of $71.70. Why he should have paid half of 1950 taxes and all of 1951 taxes, in addition to paying for the tax sale certificate, does not appear.

May 14, 1952 Parlo filed complaint in the Chancery Division of the Superior Court joining Doris L. Van Horn and the State of New Jersey as defendants, in which plaintiff sought to foreclose the equity of redemption in said lots. Doris L. Van Horn was joined as a defendant as owner of the property and the State of New Jersey was made a defendant by reason of a possible inheritance tax lien accruing upon the death of a former owner of the property.

May 16, 1952 the defendant Doris L. Van Horn, or some one in her behalf, paid to the collector of taxes the sum of $1,436.48 for redemption of the tax sale certificate and the amount due thereon. A dispute arose between the plaintiff Parlo and the borough as to who was entitled to the money, Parlo claiming the full amount thereof and refusing to turn in the tax sale certificate unless the amount paid was delivered to him, and the borough claiming that he was entitled only to the $500 he originally paid for the certificate.

July 21, 1952 Parlo filed an amended complaint setting forth the fact of the payment to the collector of the borough of the said sum of $1,436.48 in redemption of said tax sale certificate, including subsequent taxes and municipal liens and interest thereon, but not including plaintiff's costs of the suit; claiming the full amount thereof was due to him together with costs of suit and demanding, in the alternative, judgment directing the defendant borough to pay the plaintiff the monies so received in redemption of said tax sale certificate.

July 29, 1952 a consent order was entered dismissing the defendant Doris L. Van Horn as a party defendant and leaving only the borough and the State of New Jersey as parties defendant.

October 15, 1952 the defendant borough filed an answer to the amended complaint and a counterclaim for interpleader. In the counterclaim the borough demands judgment as to what disposition the borough shall make of the payment of $1,436.48 received by the tax collector in redemption of said tax sale certificate; whether the plaintiff Parlo is obliged to cancel or assign the tax sale certificate to the defendant Van Horn; what portion of the sum of $1,436.48 paid in redemption is to be retained by the borough and what portion the borough should be directed to pay to the plaintiff Parlo.

While the plaintiff filed no formal answer to the counterclaim, it was stipulated at the pretrial conference that it will be considered that plaintiff filed a formal answer in which he joins in the demand for judgment determining the proper disposition of the said fund of $1,436.48 as between himself and the defendant borough.

It is further stipulated in the pretrial order that inasmuch as Doris L. Van Horn, the record owner, had been dismissed as a party defendant, the plaintiff abandons that part of the suit seeking to foreclose the equity of redemption.

All of the foregoing statements of fact appear as matters of record in this suit or have been stipulated in the pretrial order. No proofs have been taken. Counsel stipulated that no proofs are required; that no formal hearing would be necessary, but that the facts stipulated are sufficient for determination of the controversy.

Upon the foregoing state of facts, I have reached the following conclusions of law:

There are several methods by which a municipality may sell and assign a tax sale certificate held by it. Under the provisions of L.1927, c. 235, as amended (R.S. 54:5--113, N.J.S.A.), a municipality may, by resolution of the governing body, authorize a private sale of the certificate, together with subsequent liens thereon, for a sum not less than the amount of the liens charged against the real estate and, when the total amount of the municipal liens shall, at the time of the proposed sale and assignment of the certificate, exceed the assessed valuation of the real estate as of the date of the last sale thereof for unpaid taxes, the certificate, together with the subsequent liens thereon, may be sold and assigned for a sum not less than such assessed valuation.

Under the provisions of L.1941, c. 232 (R.S. 54:5--114.1, N.J.S.A.), the municipality, after having given public notice, may sell such certificate of tax sale held by the municipality at public sale to the highest bidder, subject to confirmation by the governing body at its next regular meeting after the sale, but such sale shall not include any municipal liens subsequent thereto. Or the governing body may from time to time determine by resolution which certificates of tax sale held by the municipality shall be sold for an amount lower than the amount due thereon and in such event, after having given public notice of sale, the municipality may receive bids for the sale of such certificate, not including, however, any municipal liens subsequent thereto. At the meeting of which notice shall be given, the governing body may accept or reject any bid theretofore received for the certificate of tax sale or may accept or reject any higher bid which may be made at the meeting for the sale of said tax sale certificate.

Or under the provisions of L.1943, c. 149 (R.S. 54:5--114.2, N.J.S.A.), the municipality may sell, either at public or at private sale, after due advertisement, any certificate of tax sale, including municipal liens subsequent to the original sale, but the collector shall not deliver up or give possession of such tax sale certificate until the one who purchased the certificate from the municipality, his agent or nominees, shall have prosecuted the tax sale certificate to final judgment and in case of redemption prior to final decree or foreclosure, the assignee of the certificate from the municipality shall only be entitled to receive out of the redemption monies the amount actually paid to the municipality for the assignment, together with interest thereon and the taxed costs of suit, with the balance of the redemption monies being paid over to the municipality. L.1943, c. 149 as amended (R.S. 54:5--114.7 and 8, N.J.S.A.).

Under both the 1941 and 1943 statutes above cited relating to sale by municipality of tax sale certificates held by it, the municipality retains an interest in the tax lien (under the 1941 act the sale and assignment does not include subsequent taxes...