Shay v. Del. Tp

• Decision Date: 29 March 1939
• Docket Number: No. 257.,257.
• Citation: 5 A.2d 53,122 N.J.L. 313
• Parties: SHAY et al. v. DELAWARE TP. et al.
• Court: New Jersey Supreme Court

5 A.2d 53

122 N.J.L. 313

SHAY et al.

v. DELAWARE TP. et al.

No. 257.

Supreme Court of New Jersey.

March 29, 1939.

Certiorari proceeding by Thomas M. Shay and others against the Township of Delaware and another, to review the assignment of a certificate of tax sale.

Writ dismissed.

Argued January term, 1939, before CASE and PORTER, JJ.

Patrick H. Harding, of Camden, for prosecutors.

Ralph W. Wescott and Wilfred B. Wolcott, both of Camden, for defendants.

CASE, Justice.

The writ brings up the assignment of a certificate of tax sale covering approximately sixty four acres of land, with buildings, owned by Thomas M. Shay and in which the remaining prosecutors have interests which are not all clearly described but which may be regarded as flowing from the owner. On April 20, 1936, the Township Collector of the Township of Delaware sold the property to the Township for unpaid taxes and assessments for the years 1929 to 1934, inclusive, amounting, with the charges thereon, to $21,594.23. The legality of the sale and of the certificate of sale is not in dispute. Therefore the cases which hold that when a municipal corporation has undertaken to sell real estate for taxes the sale will be set aside unless all conditions precedent appear to have been performed have no application. Prosecutors had, and still have, the right of redemption; but they have not paid any of the taxes or accumulated charges represented by the certificate, they have not paid any of the subsequent taxes, and they have not tendered the sum necessary to redeem. Consequently, the lenient attitude of the courts toward one who would redeem his property by paying the arrears in taxes, with incurred costs, is not invoked.

On April 2, 1937, the Township assigned the tax sale certificate to Edwin S. Dickerson, Jr., and the question before us, as stated by the prosecutors, is this: "Is the sale or assignment of the tax certificate in question by the Township of Delaware to Dickerson a valid one?" A secondary question which we think should be added is whether the invalidity, if there be such, is one of which the prosecutors may avail themselves.

Mr. Dickerson, on April 25, 1938, filed a bill in Chancery, 1937 Revision 54:5-85 et seq., to foreclose the right of redemption. To that bill the present prosecutors interposed an answer which automatically, 1937 Revision, 54:5-101, stayed the proceedings in Chancery for a period of four months, with privilege to the owners during that time to sue out a writ of certiorari "to review the legality of the tax or other municipal lien". Within the designated time the present writ was allowed. We doubt whether the matters brought up by the writ are within the purview of the statute; but the issuing of a writ of certiorari has ether than statutory authority and we shall decide the issues as presented.

Prosecutors' points are: First, that the assignment of the tax certificate to Dickerson was invalid because it was not an integral part of any comprehensive refunding program of the municipality and that the Township did not receive the consent of the holders of at least eighty-five per centum of the outstanding bonds for a comprehensive refunding program; second, that the act entitled "An Act concerning municipal finances", being chapter 340, Pamph.Laws 1931, 1937 Revision 52:27-2, et seq., is a private or special act and therefore unconstitutional; and, third, that the assignment was without adequate or legal consideration.

The first point is based upon ch. 265, P.L.1936, 1937 Revision 52:27-29.2, which is an amendment to the 1931 finance act, supra, and is the statute under which the Township Committee entered upon the assignment transaction. It provides that "Any municipality in which the [municipal finance] commission is functioning may, with the approval of the commission, accept its own bonds * * * in payment of all or any part of the purchase price of tax title liens and assessment title liens held by such municipality * * * and may exchange such tax title liens and assessment title liens * * * for such bonds at such times and for such prices as the governing body of such municipality shall determine, subject to the approval of the [municipal finance] commission. * * * No municipality may avail itself of the authority contained in this section for the acceptance of bonds in payment of the purchase price of * * * tax title liens and assessment title liens except that the sale of such property and liens shall be an integral part of the comprehensive refunding program, which program shall have received the consent of the holders of at least eighty-five per cent of the amount of bonds outstanding." The Township of Delaware was in default in its bond obligations, and its finances had, by judicial order, been placed in the control of the Municipal Finance Commission under the 1931 statute. The Township Committee, having acquired the tax sale certificate, resolved to assign that certificate together with 1935 and 1936 taxes to Mr. Dickerson for the consideration of $15,000, face value, in past due bonds of the Township, plus cash payment for the accrued portion of 1937 tax. The Municipal Finance Commission gave its approval. The transaction was in accord with a plan which the Township had pursued for several years whereby defaulted township bonds and notes were liquidated by receiving them, with interest waived, in settlement or partial settlement of taxes and assessments. There is positive testimony that the Township had secured the consent of eighty-five per centum of the bondholders to that plan, and, lacking clear contradiction, we find that to be the fact. The plan, in operation, resulted in an annual receipt and cancellation by the Township of its defaulted notes and bonds in rather large volume. The total amount of bond settlements accepted during the years 1933 to 1938, inclusive, appears to be...