McGeehan, Colie and Eastwood. The opinion of the court was delivered by Eastwood, J.A.D.
Plaintiffs appeal from an order of the Hudson County Court, denying their motion to strike certain defenses of the defendant, City of Jersey City, and from the judgment entered on the pleadings in favor of the defendants.
A chronology of events will serve to clarify the matter. On January 9, 1942, the City of Jersey City (hereinafter referred to as the "City"), purchased the tax sale certificate to property known as No. 116 Neptune Avenue, Jersey City, and thereafter recorded the same; it took possession and collected the rents; on September 10, 1945, the City filed a bill to foreclose its tax sale certificate; on March 19, 1946, a final decree was entered, whereby the City became vested with title; on October 29, 1946, plaintiff, Anais Clark, was injured by
a portion of the roof and ceiling collapsing and falling on her while she was an invitee in the building, for which injuries this action was instituted; on July 17, 1948, the City permitted the Mortgage Trading Corporation, assignee of the first mortgage, to pay the tax arrearages due the City, although the mortgagee's right of redemption had been foreclosed; on July 26, 1948, to consummate the arrangement with the Mortgage Trading Corporation, the final decree in the foreclosure of the tax sale certificate was vacated and set aside on the City's motion.
In their action for damages, plaintiffs alleged that the City was owner and landlord; that defendants, Netchert and House, were its agents for management of same; that the common roof and ceiling of the building became unsafe and a portion thereof collapsed, seriously injuring plaintiff, Anais Clark. By its fourth separate defense, defendants alleged that they were engaged in a governmental function and that liability was thus precluded. By its seventh separate defense, based on R.S. 54:5-53.1, defendants claimed specific exemption from liability.
Plaintiffs moved to strike the fourth and seventh separate defenses of defendants and the trial court denied their application, and on reargument thereof, affirmed the denial. At the argument of plaintiffs' motion to strike the fourth and seventh defenses, it was stipulated by the parties that the court's determination of the legal sufficiency of these defenses was dispositive of the action. Final judgment was, therefore, rendered in favor of defendants.
Plaintiffs contend that R.S. 54:5-53.1 exempts a municipality from liability only during the period of time it is collecting rents under the tax sale certificate; that this accident occurred after the entry of the final decree of foreclosure had vested absolute title in the City; that the operation of the property subsequent thereto was not, therefore, the exercise of any governmental function, but a proprietary one and the City is liable for any act of negligence; that the opening of the final decree on July 26, 1948, could have had no retroactive
effect upon plaintiffs' cause of action; that the court had no power to vacate and set aside the final decree, in view of the provisions of R.S. 54:5-87.
Under our statutory system for the collection of delinquent taxes by the sale of lands, the tax sale itself does not operate as a final and irrevocable divestiture of the title of the owners of the land. It merely vests the purchaser with an inchoate right or interest subject to a statutory right of redemption, exercisable within a specified time after the sale. At the sale, the purchaser receives a certificate which is his indicia of title. Kurzius v. The Hillside Land Co. , 112 N.J. Eq. 466 (Ch. 1933). Upon the holder of a tax sale certificate taking possession, his rights and duties are akin to those of a mortgagee in possession. Taylor v. Morris , 1 N.J. Super. 410 (Ch. Div. 1948), and cases cited therein.
R.S. 54:5-53.1 authorizes a municipal purchaser of the tax sale certificate to enter into possession of the lands and collect the rents and profits and credit same against the amount due under the tax sale certificate and subsequent assessments. This legislative enactment further provides that:
"Such municipality and its officers, agents or employees shall not be liable or accountable to the owner or to any other person having an interest in said property for failure to collect rents or profits therefrom but said officers, agents or employees shall remain so liable and accountable to said municipality and such municipality and its officers, agents or employees shall not be liable for injury to said property or to the person or property of any other person from the use of the property for the ...