On appeal from the Division of Tax Appeals.
For affirmance -- Chief Justice Vanderbilt, and Justices Case, Oliphant, Wachenfeld, Burling and Ackerson. For reversal -- None. The opinion of the court was delivered by Wachenfeld, J.
This appeal, certified here on our own motion, is from a judgment of the Division of Tax Appeals. The question is whether a real estate tax may be levied against a vendee in possession under an executory contract for sale when legal title to the premises is in a public body exempt from taxation.
The Trustees for the Support of Public Schools acquired the property by foreclosure in 1935. One of the tenants occupying factory space at the time was a firm in which the defendant Fischer was a partner. In December, 1937, the Trustees entered into a contract for the sale of the premises to Fischer which provided, inter alia, that he would remain in possession until the closing of title. The date fixed for closing in the contract was October 2, 1942, almost five years later, and the purchase price was $44,000, of which $5,000 was payable on the execution of the contract, $8,000 in equal installments on the first day of October, 1938, 1939, 1940 and 1941, $9,000 on delivery of the deed, and the balance of $22,000 by purchase money mortgage given to the Trustees.
Fischer was to pay the Trustees interest at the rate of four per cent annually on the unpaid portion of the purchase price, this amount to be in addition to the principal payments stated above.
It was agreed in the contract that:
"Taxes, if any, on said premises prior to the date of passing title, shall be paid by the party of the first part (the Trustees), and insurance premiums, and taxes, if any, shall be adjusted, apportioned and allowed as of the day of delivery of said deed."
The Trustees further agreed:
"If at the time for the delivery of the deed, the premises or any part thereof shall be or shall have been affected by an assessment or assessments which are or may become payable in annual installments of which the first installment is then due or has been paid, then for the purpose of this contract all the unpaid installments of any such assessment, including those which are to become due and payable after the delivery of the deed, shall be deemed to be due and payable and to be liens upon the premises affected thereby and shall be paid and discharged by the seller thereof, upon the delivery of the deed."
The closing of title was first delayed because it was discovered that a small triangular piece was not covered by the mortgages through which the Trustees acquired title in the foreclosure action. A bill to quiet title resulted in a decree favorable to the Trustees on January 10, 1944.
Meanwhile the Trustees and the purchaser had executed an agreement extending the time for closing to October 1, 1943. Fischer professes himself ready, willing and able to close title at any time, but a continuing controversy over tax assessments on the property and the extensive litigation resulting from it have delayed consummation of the transaction up to the present. The Norbet Corporation, successor in interest to Fischer, remains the vendee in possession under an executory contract for sale, legal title still being vested in the Trustees.
The city levied assessments against the property in the name of the Trustees for the years 1935 to 1943 with the exception of 1938 and 1939, when no levy was made. The
assessments for the other years were set aside in Trustees v. Murphy, 130 N.J.L. 434 (Sup. Ct. 1943). Assessments against the property levied in Fischer's name for the years 1944 and 1945 were cancelled by the county board of taxation as there was no statutory ...