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Hendlin v. Fairmount Construction Co.

Decided: March 29, 1950.

NATHAN N. HENDLIN AND ANNETTE HENDLIN, ET AL., PLAINTIFFS,
v.
FAIRMOUNT CONSTRUCTION COMPANY, A CORPORATION, AND THE CITY OF NEWARK, A MUNICIPAL CORPORATION, ET AL., DEFENDANTS



Stein, J.s.c.

Stein

[8 NJSuper Page 316] The controversy here presented for decision involves a number of causes of action, some purely equitable in nature, one sounding in mandamus , another seeking review in lieu of certiorari , while all the parties pray for declaratory judgment. Under the former practice these

issues, though between the same parties and though related because of common questions of law and fact, would have had to be tried in different courts. Even Chancery's power to pass upon incidental or related legal questions, once its equitable jurisdiction had been properly invoked, could not extend to those forms of relief which were obtainable only by the machinery of the prerogative writs issuable only out of the former Supreme Court. It is further proof of the merit and efficiency of our new court procedure that this court is enabled by reason of consolidation to hear and dispose of these various actions at the same time and by a single decision. As was pointed out by Chief Justice Vanderbilt in Steiner v. Stein , 2 N.J. 367, at 377:

"Were the trial judge in whichever division he is sitting not to hear the entire case once he has assumed jurisdiction, all of the confusion and waste of judicial effort which the framers sought to eliminate would reappear. * * *"

The actions here to be disposed of were consolidated into the within action by an order made by the Appellate Division of the Superior Court on November 21, 1949. The consolidated actions are now submitted by all the parties by a written stipulation in which it is agreed that the court's decision shall be made upon the following facts and proofs, viz.:

1. All uncontroverted allegations of fact and all admissions of fact contained in the various pleadings of the parties.

2. All the depositions taken in the cause and all exhibits received in evidence in the course of the taking of such depositions.

3. The transcribed proceedings before the Commissioners of the City of Newark at the various hearings relating to what is known as the "Ivy Hill" tract and relating to those actions taken by the said Commissioners which are challenged in this cause.

4. Certain specific facts set forth under sections 4 to 7 (both inclusive) of said stipulation.

5. Such inspection as the court itself would make of the Ivy Hill tract and the surrounding areas and neighborhood.

In response to the request of all counsel in the case and attended by them, I visited the tract in question (which lies wholly within the City of Newark) and also made an extended inspection of the entire section in which the tract is located, including adjacent areas lying in the Village of South Orange, in the Township of Maplewood, and in the City of Newark itself. I was thus afforded a very adequate opportunity of observing the several neighborhoods to which reference is made in the depositions and viewing the types of structures erected thereon. This enabled me better to understand the testimony of the experts, who on some questions were in sharp conflict.

Essentially and primarily this is a zoning case in which property owners challenge the validity of an ordinance passed by the Commissioners of the City of Newark on October 5, 1949, amending the then existing Zoning Ordinance so that the entire Ivy Hill tract (including lands owned by the City and used for public purposes) was changed from a Second Residence District to a Third Residence District, thereby making lawful the erection upon said tract of multiple dwelling houses and apartment houses. A secondary dispute in the case relates to the action of the said Commissioners when on November 2, 1949, they adopted a resolution waiving, releasing and modifying a certain restrictive provision contained in an antecedent deed made on March 12, 1947, by the City of Newark to the defendant Fairmount Construction Company, by which deed there was conveyed to the grantee a tract of 52 acres and which deed contains the following provision restricting the use of the lands conveyed:

"That the use of the premises herein conveyed is restricted to one and two family dwellings, and it is hereby covenanted and agreed that the party of the second part, its successors and assigns, shall forthwith upon the delivery of this deed, commence and diligently prosecute to completion the development of the lands and premises herein conveyed and the construction thereon forthwith of approximately four hundred one and two-family dwellings. Each one-family dwelling house is to cost not less than Seventy-five Hundred ($7500.00) Dollars and each two-family dwelling house to cost not less than Twelve Thousand ($12,000.) Dollars. All improvements

and dwellings are to be made and completed substantially in accordance with the said plan of 'Ivy Hill Park,' and the drawings and specifications annexed thereto, and a contract between the Fairmount Construction Company and The City of Newark, bearing even date herewith, all on file in the office of the City Clerk of The City of Newark."

In March of 1947 the City of Newark owned the original and much larger Ivy Hill tract, upon which it had previously erected two public buildings, an Almshouse and a Convalescent Hospital. It appears from the maps in evidence that the entire tract contained approximately 67 acres. The tract upon which the Almshouse is situate contains about 10 acres and the tract upon which the Convalescent Hospital is situate contains about 5 acres. Subtracting the last two areas from the acreage of the entire original tract, the City was possessed of approximately 52 acres which it offered at public sale. From the transcript of the hearings which are in evidence, it plainly appears that the Commissioners were in 1947 unanimous in their desire that the 52 acres, to be offered for sale, should be so developed as to furnish greatly needed additional housing, with preference to World War veterans. They were not, however, in accord as to the type of housing for which the acreage was to be used. At least one of the Commissioners was strongly for the erection of multiple dwelling structures. The final judgment of the body was that the lands should be sold for the purpose of having erected thereon one- and two-family houses, the former type to cost no less than $7,500 and the latter type no less than $12,000. That these figures, if they assumed probable costs, were fantastically sanguine was later proved by the test of experience. However, the advertised terms of sale expressed both the restriction of use and the minimum cost of construction contained in the provision which eventually was lodged in the deed of conveyance for the 52 acres. The highest bidder was the defendant Fairmount Construction Company. It paid for the lands $165,000 in cash. For the next two and a half years it proceeded with its construction project, erecting 122 dwelling houses. The character of these houses is of some importance.

It is claimed by some of the parties to this suit that all, or nearly all, of these structures are in fact four-family dwelling houses and that therefore any original community scheme or plan limiting the dwellings to two families (if any such community scheme ever existed) was abandoned either by common acquiescence or by common breach. I will deal with this question later in this opinion. I have seen the exterior of all these buildings and on the occasion of a second visit to the properties I inspected the interior of several of them. They are all substantially alike. Each separate structure contains four independent family apartments or flats. Each flat has its own separate living room, dining room, bedrooms, kitchen and bathroom. True, there is a partition wall running from the basement to the roof and on each side of that partition wall are separate entrance doors to the apartments. But all four units have a common front entrance porch and a common chimney. When these structures were being erected there was some complaint made to the City Commission that the Fairmount Construction Company was erecting four-family houses, thereby exceeding the limit imposed by the terms of the deed. The then Corporation Counsel for the City of Newark was of the opinion that the existence of a partition wall made the four units into two two-family houses. No action was taken to compel compliance, and of the 122 such houses erected 92 were sold by the Fairmount Construction Company between 1947 and the date of the commencement of this suit. I cannot accept the argument that these structures are two-family houses. It is impossible to view the exterior and examine the interior without reaching the conviction that they are four-family houses and nothing else. I so hold.

As Fairmount's building project advanced, it began to experience difficulty in selling the houses. Veterans, the intended preferential beneficiaries of this housing development, found it difficult, if not impossible, to purchase or carry the burden of investment and ownership. Somewhere in the course of the argument it was stated and undenied that these [8 NJSuper Page 321] four-family units were being sold at $42,000 per structure. With the Newark tax rate being what it is, of which the court may take judicial notice, and the financial capacity of veterans generally being limited, it is no little wonder that the Fairmount Construction Company realized that it was continuing to build in a lean market for property of that type and cost and that sooner or later it would have to abandon further building. Its problem was not one-sided. The City of Newark is notoriously suffering from a shortage of housing accommodations for the so-called "white collar class." The Fairmount had in its building enterprise utilized about 20 acres of the 52 acres purchased by it from the City. Here remained and lay an unbroken area of 32 acres, by far the largest single parcel in the whole City available for housing development. These 32 acres lay idle and there was every indication that unless some other building project were encouraged this large tract would yield neither housing nor ratables for a long time to come, for both of which benefits there was and is a crying need. When the Fairmount Company addressed itself to the City Commission and asked that it be permitted to erect upon the remaining 32 acres multiple dwelling structures, the Commissioners were hospitable to the idea. They were unanimous in their view that the welfare of the City required as quickly as possible additional housing to take care of a part of the 30,000 residents of Newark who were in need of housing and needed badly the tax dollars which would flow from the increased ratables. The divergence of opinion amongst the Commissioners was confined to the type of multiple housing that should be permitted. They were unanimous in the view that multiple apartments were needed and should be encouraged but were at first undecided as to type of apartment structures. The Commissioners were very deliberate in their study and consideration of the question. There were many public conferences and hearings at which all persons were given the fullest opportunity of advancing their various views. The objectors favored the utilization of these 32 acres for what are commonly called "garden apartments." The real

objection advanced before the Commissioners was not the erection of long rows of garden apartments but the erection of buildings that would go up "in the air." The argument was pressed that the erection of a 10- or 12-story building or buildings would create a public menace, in that the greater influx of population would produce a shortage or inadequacy in public school facilities, water service and pressure, and fire-fighting facilities, and, further, would create an undue congestion of vehicles parked on the public highways. It was even suggested by some of the objectors that the Fairmount Company had neither the experience nor the capacity to complete a project involving tall apartment houses accommodating approximately 2,000 units or apartments. After the Zoning Ordinance was amended on October 5, 1949, and before the Commissioners adopted on November 2, 1949, the resolution relating to the restriction in the deed, several objectors stated at an open meeting of the Commission that if the apartment house project were undertaken by such a concern as "Levin Brothers," whose building experience and financial stability were much lauded, the project would be well handled. Within that same interim the Fairmount Construction Company concluded a transaction with the same "Levin Brothers," whereby the latter agreed to purchase the entire tract, provided they were free to erect thereon apartment houses which would "go up in the air," they being of the opinion that that type of construction is the only economically sound one for those lands and that such was the best and highest use to which the lands could be put. At hearings before the Commissioners and by depositions taken in this cause, the "Levin Brothers," who are parties herein both as defendants, counterclaimants, and cross-claimants, have with considerable detail committed themselves to the number and type of apartment houses proposed to be erected. Of this I shall speak later.

It will here be noted that when the Board of Commissioners of the City of Newark amended on October 5, 1949, the then existing Zoning Ordinance, it changed from a Second Residence

District to a Third Residence District not only the 32 undeveloped acres involved in the proposed apartment house project but also the two tracts owned by the City of Newark, consisting of the Almshouse tract and the Convalescent Hospital tract. (See map Exhibit D-3 and the amending ordinance which is Schedule "B" attached to the "Complaint in Lieu of Certiorari.") It may well be assumed that by including in the change the two city-owned parcels of about 15 acres, the Commissioners intended to evidence their judgment that not only are the 32 acres owned by the Fairmount appropriate for apartment house construction but also the City's own retained 15 acres, if and when it should be the policy of the City to move those institutions elsewhere. Already there has been discussion in the public press of the City building a new hospital elsewhere in Newark and integrating therewith a convalescent hospital in lieu of the one at Ivy Hill.

It should also be observed that the restriction contained in the deed from the City to Fairmount was not fully waived, released or modified by the resolution of November 2, 1949, but only in a limited way. The resolution expressly states that the action is taken "so as to permit the erection of buildings for multiple dwellings and apartment houses," and that the resolution is adopted upon the undertaking of the owner that any apartment house or houses erected upon the lands will conform to the following restrictions, viz.:

1. No such building or structure will be erected nearer than fifty feet from the line of Irvington Avenue and from the line of Mt. Vernon Place (the only two streets upon which said acreage fronts).

2. The aggregate coverage of all such apartment houses (exclusive of garages) will not exceed in area 17% of the total area of the above described premises.

3. In addition to 1 and 2 aforesaid, the owner will render available to the Public Service Coordinated Transport land adequate in area and location for use as a loop for its buses, the same to be upon terms (as to each detail) mutually agreeable to the owners and said transportation company.

From the foregoing it is apparent that not only did the City Commission concern itself with the matter of proper

set-back but also with the more important question of the building coverage. The owners are by the terms of the resolution limited to a building coverage of 17% of the total area. That translates itself into a coverage area of 5.44 acres, leaving 83% or 26.56 acres of the vacant land for lawns, playgrounds, approaches, and parking areas. Even this self-imposed limitation was ...


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