On appeal from Superior Court, Chancery Division.
For affirmance -- Chief Justice Vanderbilt, and Justices Case, Burling and Ackerson. For reversal -- Justices Heher and Oliphant. The opinion of the court was delivered by Burling, J. Oliphant, J. (dissenting). I am requested by Mr. Justice Heher to state he concurs in this dissent.
[5 NJ Page 314] This is an appeal by the defendant from a final judgment of the Superior Court, Chancery Division, Essex County, in which it was ordered and adjudged that the
defendant specifically perform an agreement with the plaintiff to purchase certain real estate. The appeal was addressed to the Superior Court, Appellate Division, but has been certified by this court on its own motion.
A tax sale certificate for the land in question, known and designated on the tax maps of the City of Newark as Block 1833, Lot 16, No. 29 Camden Street, was acquired by the plaintiff on December 28, 1943, at its own sale of the land for unpaid taxes, pursuant to the general provisions of the law relating to the sale of property for unpaid taxes. Foreclosure proceedings to bar rights of redemption were conducted by the plaintiff in compliance with the In Rem Tax Foreclosure Act (1948), L. 1948, c. 96 (N.J.S.A. 54:5-104.29 et seq.), and on November 5, 1948, final judgment was entered in the foreclosure proceedings in favor of the plaintiff. Subsequently, on January 25, 1949, a public sale was held by the plaintiff at which all the right, title and interest of the plaintiff in the said land was sold to the defendant, the highest bidder, for the sum of $100, subject to the acceptance of said bid by the Board of Commissioners, the governing body of the plaintiff. The bid was accepted by the Board of Commissioners by resolution adopted February 9, 1949. At the time of the sale the defendant paid $10 on account of the consideration price and agreed to pay the balance upon delivery to him by the plaintiff of a bargain and sale deed within 30 days from the date said bid was accepted by the governing body of the plaintiff. Within the time prescribed the plaintiff made the requisite tender, but the defendant sought and obtained an extension of time to complete performance. On April 12, 1949, the defendant refused to purchase the land, claiming that the In Rem Tax Foreclosure Act (1948), L. 1948, c. 96 (N.J.S.A. 54:5-104.29 et seq.) is unconstitutional and that the plaintiff therefore had not become vested with a marketable title to the land under the foreclosure proceedings conducted thereunder. The plaintiff thereupon on April 29, 1949, filed its complaint seeking specific performance of the agreement to purchase. The defendant's
answer charges that the aforementioned act is unconstitutional in that (1) it fails to provide, by service of process or by substituted service, for notice to the owner and other persons interested in the lands affected by the foreclosure; (2) it fails to provide for service of process upon infants and incompetents through guardians or other legal representatives; (3) it was here applied to the foreclosure of a tax certificate acquired by the plaintiff prior to the enactment thereof; (4) it impairs the obligation of contracts as existing between the City, as taxing authority, and the owner of the lands under foreclosure; and (5) it deprives the owner and other parties in interest of the right of redemption. By reason of the foregoing objections the defendant claims that the proceedings under the act constitute a denial of "due process" and an impairment of the obligation of a contract.
Upon the plaintiff's motion for summary judgment on the pleadings the trial court entered its judgment in favor of the plaintiff, finding the constitutional objections to be unfounded and the title to the premises to be marketable. It is from this judgment that the defendant appealed.
The primary question to be determined on this appeal is whether the notice prescribed by the act is sufficient to satisfy the requirements of due process. In order to dispose of this question it is necessary to consider the nature of the particular proceeding and the object to be accomplished by the act. The act provides for the foreclosure by municipalities of tax sale certificates held by them for the purpose of summarily barring any rights of redemption in the lands embraced in such tax sale certificates. The right of redemption of land sold for delinquent taxes is not an absolute right but is dependent upon constitutional provisions or statutory grant. In the absence of any constitutional provisions respecting the right it exists only so far as specifically provided for by statute. In Simonton, Tax Sales in New Jersey, 2 d Ed. (1925), at page 84, the following cogent language appears:
"It should also be borne in mind, at the risk of otherwise reaching erroneous conclusions, that neither the right to redeem nor the right
to receive notice of redemption, is an absolute right, existing independently of statute, but occurs solely by legislative grace, which, in the absence of constitutional requirements to the contrary, it is entirely within the power of the law making body to enlarge, curtail or withhold altogether, and that while the right to receive notice can never logically occur without the concomitant right to make redemption, the latter is not necessarily, nor even ordinarily, a correlative from which the right to notice may be implied, but is usually much more extensive, and the right to notice must therefore be independently authorized."
This concept of the right of redemption was recognized by the Supreme Court of the United States, in 1879, in Keely v. Sanders, 99 U.S. 441, 25 L. Ed. 327 (1879), wherein it was said:
"While it may be admitted that a statutory right of redemption is to be favorably regarded, it is, nevertheless, true, that it is a statutory right exclusively, and can only be claimed in the cases and under the circumstances prescribed."
See also 54 A.L.R. 756, where, in a prefatory statement to an annotation of cases dealing with notice in proceedings to perfect tax titles, including notice of the tax sale and notice to redeem from the tax sale, it is said: "As will appear, the right to notice in tax proceedings is purely statutory and therefore each particular case must be referred to the statute in force at the time." It was recognized by our former Court of Errors and Appeals in City of Paterson v. O'Neill, 32 N.J. Eq. 386 (E. & A. 1880), wherein it was said (at page 389):
"* * * In the charters of Elizabeth and Trenton, drawn under review in this respect in the cases of Campbell v. Dewick, 5 C.E. Gr. 186, and Trustees, &c., v. Trenton, 3 Stew. 667, notice to the mortgagee was made necessary before his title could be divested. But such requirement is one of legislative discretion, and must be regarded merely as an additional protection for the mortgagee."
The statutes in some states provide for the barring of a redemption right by the mere passage of a specified period of time after the tax sale without any requirement on the part of the purchaser at the sale to give notice to bar or take any
further proceedings in court or elsewhere to establish his absolute title to the lands purchased at the sale. See 51 Am. Jur., Taxation, Par. 1097, pp. 953, 954, and Par. 1116, p. 964. Indeed, our first statute on the subject permitted redemption after the expiration of one year from the time of sale but did not require that any notice to redeem be given. L. 1863, c. 274, p. 497. See Simonton, supra. Thus it appears that the right of redemption is such that it can be barred without any notice if the statute creating the right so provides. While the constitutionality of statutes which provide for in rem or summary foreclosure of delinquent tax liens on real property has been challenged on many occasions on the ground that they violate the due process clause of the State and Federal Constitutions, the courts have uniformly sustained the constitutionality of such statutes. The only expression of judicial opinion contra, furnished to us, appears in an advisory opinion of the Supreme Court of Maine wherein the court, pursuant to a request of the state legislature, stated that a proposed statute which provided for notice to be given by the tax officer to the owner, at the expiration of eight months and within one year after the accrual of taxes, demanding payment of said tax within 10 days after service or mailing of said notice; providing for the recording of a certificate within 10 days thereafter in the event of nonpayment; and further providing that at the expiration of 18 months after the recording of said tax lien, if the tax has not previously been paid or the tax lien redeemed, the town shall be conclusively presumed to have acquired an absolute title to the real estate described in such tax lien, was unconstitutional as it "would provide a method by which a person might be deprived of his property without due process of law." See Opinion of the Justices, 139 Me. 420, 38 A.2d 561 (Me. Sup. Ct. 1943). No reasons were given by the court in that case as a basis for its conclusion.
The rationale of the decisions sustaining such statutes is that the speedy collection of taxes, unfraught with procedural complications, is indispensable for the support of the government
and that proceedings for the collection of taxes are in rem and require no personal service of notice upon the owners or lienors of the land since, once the taxes on the land are duly assessed in accordance with the requirements of due process, the owners or lienors may be presumed to know that the land will be sold for nonpayment of taxes. This philosophy has been expressed by the Supreme Court of the United States on many occasions. In Winona & St. Peter Land Co. v. Minnesota, 159 U.S. 526, 40 L. Ed. 247 (1895), it is said, at p. 251 L. Ed.:
"* * * Questions of this kind have been repeatedly before this court, and the rule in respect thereto often declared. That rule is that a law authorizing the imposition of a tax or assessment upon property according to its value does not infringe that provision of the 14th Amendment to the Constitution which declares that no state shall deprive any person of property without due process of law, if the owner has an opportunity to question the validity or the amount of it either before that amount is determined or in subsequent proceedings for its collection. McMillen v. Anderson, 95 U.S. 37 (24:335); Davidson v. New Orleans, 96 U.S. 97 (24:616); Hagar v. Reclamation Dist. No. 108, 111 U.S. 701, (28:569); Spencer v. Merchant, 125 U.S. 345 (31:763); Palmer v. McMahon, 133 U.S. 660 (33:772); Lent v. Tillson, 140 U.S. 316 (35:419); Pittsburg, C.C. & St. L.R. Co. v. Backus, 154 U.S. 421 (38:1031). That the notice is not personal but by publication is not sufficient to vitiate it. Where, as here, the statute prescribed the court in which and the time at which the various steps in the collection proceedings shall be taken, a notice by publication to all parties interested to appear and defend is suitable and one that sufficiently answers the demand of due process of law."
In Lehigh v. Green, 193 U.S. 79, 48 L. Ed. 623 (1904), it is said, at page 627, L. Ed.:
"In the statute under consideration, for the purpose of collecting the public revenue, the state has provided for the enforcement of a lien by the purchaser at a tax sale, and authorized him to proceed against the land subject to the tax, to enforce the right conferred by the state. The state has a right to adopt its own method of collecting its taxes, which can only be interfered with by Federal authority when necessary for the protection of rights guaranteed by the Federal Constitution. In authorizing the proceedings to enforce the payment of the taxes upon lands sold to a purchaser at tax
sale, the state is in exercise of its sovereign power to raise revenues essential to carry on the affairs of state and the due administration of the laws. This fact should not be overlooked in determining the nature and extent of the powers to be exercised. 'The process of taxation does not require the same kind of notice as is required in a suit at law, or even in proceedings for taking private property under the power of eminent domain. It involves no violation of due process of law when it is executed according to customary forms and established usages, or in subordination to the principles which underlie them.' Bell's Gap R. Co. v. Pennsylvania, 134 U.S. 232, 239, 33 L. Ed. 892, 896, 10 Sup. Ct. Rep. 533, 535.
"In authorizing the proceedings under the statute to enforce the lien of the purchaser, who has furnished the state its revenue in reliance upon the remedy given against the land assessed, the state is as much in the exercise of its sovereign power to collect the public revenues as it is in a direct proceeding to distrain property or subject it to sale in summary proceedings.
"Nor is the remedy given in derogation of individual rights, as long recognized in proceedings in rem, when the 14th Amendment was adopted. The statute undertakes to proceed in rem, by making the land, as such, answer for the public dues. Of course, merely giving a name to an action as concerning the thing rather than personal rights in it cannot justify the procedure if in fact the property owner is deprived of his estate without due process of law. But it is to be remembered that the primary object of the statute is to reach the land which has been assessed. Of such proceedings, it is said in Cooley on Taxation, 2d ed. 527: 'Proceedings of this nature are not usually proceedings against parties; nor, in the case of lands or interest in lands belonging to persons unknown, can they be. They are proceedings which have regard to the land itself rather than to the owners of the land; and if the owners are named in the proceedings, and personal notice is provided for, it is rather from tenderness to their interests, and in order to make sure that the opportunity for a hearing shall not be lost to them, than from any necessity that the case shall assume that form.'"
In North Laramie Land Co. v. Hoffman, 268 U.S. 276, 69 L. Ed. 953 (1925), it is said, at page 957, L. Ed.:
"All persons are charged with knowledge of the provisions of statutes, and must take note of the procedure adopted by them, and when that procedure is not unreasonable or arbitrary, there are no constitutional limitations relieving them from conforming to it. This is especially the case with respect to those statutes relating to the taxation or condemnation of land. Such statutes are universally in force and are general in ...