Schierstead v. City of Brigantine

• Citation: 119 A.2d 5,20 N.J. 164
• Decision Date: 19 December 1955
• Docket Number: No. A--54,A--54
• Parties: Oscar SCHIERSTEAD, Plaintiff-Appellant, v. CITY OF BRIGANTINE, a municipal corporation of the State of New Jersey, and S. D. Walker, Inc., a corporation of the State of New Jersey, Defendants-Respondents.
• Court: New Jersey Supreme Court

Page 164

20 N.J. 164

119 A.2d 5

Oscar SCHIERSTEAD, Plaintiff-Appellant, v. CITY OF BRIGANTINE, a municipal corporation of the State of

New Jersey, and S. D. Walker, Inc., a corporation

of the State of New Jersey,

Defendants-Respondents.

No. A--54.

Supreme Court of New Jersey.

Argued Nov. 28, 1955.

Decided Dec. 19, 1955.

David M. Perskie, Atlantic City, argued the cause for appellant (Perskie & Perskie, Atlantic City, attorneys).

Henry P. Megargee, Jr., Atlantic City, argued the cause for respondent City of Brigantine (John Lloyd, Jr., Atlantic City, attorney).

Elias G. Naame, Atlantic City, argued the cause for respondent S. D. Walker, Inc.

David D. Furman, Deputy Atty. Gen., argued the cause for intervenor, State of New Jersey (Grover C. Richman, Jr., Atty. Gen., Harold Kolovsky, Asst. Atty. Gen., and Lawrence E. Stern, Deputy Atty. Gen., on the brief).

The opinion of the court was delivered by

WACHENFELD, J.

The sole issue before us is the constitutionality of N.J.S.A. 52:27--29.1, the other matters alleged in the complaint having been disposed of.

From the undisputed facts in the complaint, it appears that on and since December 10, 1945 the City of Brigantine, a municipality of the State of New Jersey, was under the control and supervision of the Municipal Finance Commission pursuant to N.J.S.A. 52:27--1 et seq. It then entered into a contract to sell to Samuel D. Walker, or his assignee, certain lots or parcels of land to which it had title or to which it held tax sale certificates. The city further agreed to proceed with the foreclosure of the tax sale certificates which it held. Payment was to be made by Walker pursuant to a schedule set forth in the agreement, which was to continue for a period of ten years from and after the final adoption of a refunding or refinancing agreement with the city's creditors and upon the approval of the Municipal Finance Commission and the Commissioner of Local Government.

The Municipal Finance Commission assented to the contract with Samuel D. Walker on December 20, 1945 and the contract was subsequently assigned by Walker to S. D. Walker, Inc.

From affidavits submitted it appears that at the time of entering into the contract the city had outstanding debts and obligations amounting to approximately $3,500,000. Its assessed valuation was approximately $800,000 and it was necessary to foreclose the tax sale certificates to amortize its debts, its creditors having demanded that the real estate acquired by foreclosure be liquidated and sold.

On July 2, 1955 the present complaint was filed by the plaintiff, a resident and taxpayer of the City of Brigantine, on behalf of himself and other taxpayers of the city, alleging that N.J.S.A. 52:27--29.1, which concededly authorized the contract between the city and Walker, was itself unconstitutional and the contract was therefore void.

The relief sought was not to void all that had transpired under the contract prior to the filing of the suit but, rather, only to enjoin future performance. Initially, other relief was sought in the complaint based upon allegations of fraud, but these matters, as already indicated, were eliminated, leaving the constitutional question the sole issue to be determined here.

Under R.R. 4:37--2 the State of New Jersey intervened, the constitutionality of an act of the Legislature being called into question.

The statute under attack, N.J.S.A. 52:27--29.1, is a single subsection of the Municipal Finance Commission Law and reads 'The governing body of any municipality in which the commission is or may be functioning may, upon the express consent in writing of the commission, sell, exchange or otherwise dispose of any certificate of tax sale or tax title, standing in the name of the municipality, or sell, exchange, lease or otherwise dispose of any real estate or rights or interest therein owned by the municipality and determined by the governing body to be not needed for public use. Any such sale, exchange, lease or other disposition may be authorized by resolution of the governing body and, subject to the consent of the commission as aforesaid, may be at public or private sale, through a broker, agent or otherwise, for cash or upon credit, for such consideration, and subject to such conditions and commissions, as the governing body in its discretion may determine. All moneys received by the municipality from any such sale, exchange, lease or other disposition shall, if the commission so provide, be paid only to the account of the reserve fund referred to in section 52:27--25 of this Title. * * *'

The appellant does not contend that the Municipal Finance Commission Law, N.J.S.A. 52:27--1 et seq., is fundamentally or completely unconstitutional, a contrary determination having already been made in this respect in Hourigan v. North Bergen Tp., 113 N.J.L. 143, 172 A. 193, 785 (E. & A.1934), and Shay v. Delaware Tp., 122 N.J.L. 313, 5 A.2d 53 (Sup.Ct.1939), affirmed 124 N.J.L. 124, 11 A.2d 261 (E. & A.1940). Rather, he seeks an adjudication that the one subsection of the act, above quoted, is invalid 'as an unconstitutional delegation of power by the legislature' to the Municipal Finance Commission because there is no 'norm, standard or condition within or pursuant to which the Municipal Finance Commission may determine to grant or withhold its 'express consent in writing."

The primary support for the appellant's view is said to be centered in Jamouneau v. Local Government Board, 6 N.J. 281, 78 A.2d 553 (1951). There we pronounced N.J.S.A. 40:60--26(d), which authorized the private sale of municipal lands upon the consent of the Director of the Division of Local Government, to be an unconstitutional delegation of legislative power to the Director since there was a total absence of any standard or norm to guide the Director in giving or withholding his consent.

The statutory scheme encountered in the Jamouneau case, supra, is, we believe, entirely unrelated to that found here. Indeed, in Jamouneau we were not dealing with a statutory scheme at all but a single isolated subsection of a statute dealing with the disposition, by private sale, of municipal property.

Here, however, the statute under attack forms but one section of an extensive act, the purpose,...