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Carlin v. City of Newark

Decided: May 27, 1955.

LEO P. CARLIN, PLAINTIFF,
v.
THE CITY OF NEWARK, A MUNICIPAL CORPORATION OF THE STATE OF NEW JERSEY, BENJAMIN A. LEVINE AND FLOYD LIEBOWITZ, DEFENDANTS



Ewart, J.s.c.

Ewart

[36 NJSuper Page 78] By this suit in lieu of a prerogative writ Mayor Carlin of the City of Newark, not in his capacity as a city official but as a citizen, property owner and taxpayer of the city, attacks and seeks to have the court invalidate and set aside a resolution adopted by the old city commission on June 30, 1954 by the terms whereof the city authorized the return to the defendant Schreiber of the sum of $35,000 deposited by the latter with the city clerk on March 17, 1954 in connection with Schreiber's offer to purchase from the city a block of land opposite the Pennsylvania Railroad Station at a price of $350,000. And the plaintiff further seeks a judgment forfeiting any claim of the individual defendants in and to the said fund of $35,000 and in and to the lands mentioned. [36 NJSuper Page 79] The facts essential to a determination of this controversy I find to be as follows: On and prior to March 17, 1954 the City of Newark owned the entire block of land opposite the Pennsylvania Railroad Station bounded by Raymond Boulevard, McCarter Highway, Commerce Street and Raymond Plaza West, which land is operated as a parking facility by a lessee of the city. On the morning of that date defendant Schreiber, through his partner Mr. Lancaster, submitted to the city clerk a letter by which Mr. Schreiber offered to purchase from the city the aforesaid property, subject to the rights of the Public Service Coordinated Transport which operates a subway beneath a portion of the land, for the sum of $350,000 payable in cash, and the letter incorporates certain terms and conditions, viz.: (1) that title should be conveyed by bargain and sale deed but should be a marketable title that would be guaranteed by a reputable title insurance company; (2) that the purchaser would construct a brick and concrete building three stories in height above the ground to cost approximately $2,000,000, with provision for stores on the ground floor, offices on the second floor and a convention hall on the third floor with a seating capacity for 5,000 people, together with parking facilities in the basement and on the roof of the building to accommodate approximately 750 cars. A copy of a drawing of the proposed structure was submitted with the letter; (3) that the structure to be erected would comply with the set-back rules of the City of Newark and the plans and specifications for the proposed building would be submitted to the proper city officials and would be subject to their approval; (4) that any reasonable conditions imposed by the city to guarantee the safety of the subway would be complied with; (5) that until construction of the building should commence, the buyer would have the right to utilize the area for public parking; (6) that construction of the proposed building would start within one year from the date of passing title and would be completed within approximately two years thereafter. As evidence of good faith the letter was accompanied by a bank cashier's check to the order of the city for $35,000, representing 10% of the

amount of the offer. And the letter stated that it was understood the sale was being made pursuant to the requirements of N.J.S.A. 40:60-26(c); that the offer was being submitted to the city commission for approval as provided in the statute and that unless the offer were approved on that day there was no assurance that the offer would be repeated.

Upon submission of the offer, a rather lengthy discussion ensued between the members of the city commission, Attorney Lancaster, Mr. Belfatto, the corporation counsel, and a Mr. Spiegel, another prospective bidder for the property, included in which discussion was the subject of a penalty clause whereby the purchaser of the property would suffer certain penalties if he failed to erect the building as described within the period mentioned. That meeting was apparently held during the morning of March 17, 1954. It finally ended with an understanding that Mr. Lancaster, representing the purchaser, and Corporation Counsel Belfatto, representing the city, would collaborate in the preparation of a resolution to be adopted by the city commissioners and present the same for consideration by the city commission at 2 o'clock that afternoon.

At the city commission meeting starting at 2:00 P.M. on March 17, 1954 a resolution, apparently the joint product of Messrs. Belfatto and Lancaster, was presented to the commissioners for consideration. The resolution as prepared did not contain any penalty clause referred to above, but it was suggested that the resolution be adopted on that day as the first step looking to a sale of the property as provided by the statute and that penalty clauses could be prepared prior to the next meeting at which the matter would be taken up for further consideration. Accordingly, there was introduced at the commission meeting on the afternoon of March 17, 1954 and unanimously adopted on roll call vote, a resolution which recited the fact of ownership of said premises by the city; the fact that it was intended to offer the property for sale because it was not needed for the public use, pursuant to the provisions of N.J.S.A. 40:60-26(c); a particular description by metes and bounds of the property is included in the

resolution; the terms of the offer incorporated in Mr. Schreiber's letter referred to above were recited; the terms of the section of the statute above cited were set forth in recitals in the resolution; and it was formally resolved that the said property was owned by the city and was not needed for public use; that the offer as contained in Mr. Schreiber's letter, upon the terms and conditions set forth, was approved but subject to final approval at the next meeting of the board of commissioners to be held March 31, 1954, and subject to the conditions and requirements of the said statute; that title should be conveyed by bargain and sale deed containing the reservations and restrictions recited in the offer; directing the Director of the Department of Public Parks and Property to cause publication of the aforesaid offer and approval to be made in the manner prescribed by the statute, with notice that the matter would be further considered at the next meeting of the commissioners to be held March 31, 1954; that in the event of final approval and acceptance of the aforesaid offer at the meeting to be held March 31, 1954 title should close and the balance of the purchase price should be paid and deed delivered within 60 days thereafter; that in the event of a rejection by the board of commissioners at the meeting to be held March 31, 1954 of the said offer of Mr. Schreiber, then said deposit of $35,000 should be forthwith returned to him; and that any offer which might be submitted by others at the meeting of March 31, 1954 must be accompanied by deposit of not less than 10% of the amount of such offer.

Notice of the offer submitted by Mr. Schreiber and of the various terms and conditions contained therein, together with a description of the property, was duly published in the Newark Star-Ledger on March 25, 1954, which publication contained notice that said offer of Mr. Schreiber and any other offer of a higher price or better terms would be considered and accepted or rejected pursuant to the statute at the next regular meeting of the board of commissioners to be held in the Council Chambers, City Hall, at 2 P.M. on March 31, 1954.

At the meeting of the city commissioners held March 31, 1954 the city clerk brought up the question of the sale of said property and Mr. Schreiber's bid of $350,000 therefor; invited any one present to make additional offers for the property; no additional offers were submitted, but Mr. Schreiber, in whose name the original bid was submitted, appeared and stated that his clients had received information disclosing that there might be quicksand beneath the surface of the lands in question and requested that consideration of the matter be postponed for two weeks to enable his clients to make further investigation with respect to the condition of the sub-soil of said premises; after a discussion participated in by Mayor Carlin, Corporation Counsel Belfatto, and Mr. Schreiber, the request for a continuance was refused, whereupon Mr. Schreiber stated:

"We withdraw our offer before there has been any formal acceptance."

Again there was some further discussion and Mr. Schreiber again stated:

"Then I withdraw the offer. I withdraw the offer formally."

Prior to the attempted withdrawal of the offer by Mr. Schreiber as above set forth, Mayor Carlin called attention that at the time of the adoption of the resolution on March 17 there was left open the question of the preparation of a penalty clause and the following dialogue ensued:

"Mayor Carlin: Now the Law Department has corrected that resolution so that the penalty clause has been inserted. Has that been done?

Mr. Belfatto: That is right.

Mayor Carlin: So that as far as we are concerned we have no further consideration. We have to either accept or reject your offer."

Immediately following the attempted withdrawal of the offer by Mr. Schreiber, Commissioner Bontempo inquired whether the matter was ready for action; Mayor Carlin

inquired whether there were any further bidders, to which inquiry there was no response, and the following action was taken as shown by the minutes of the said meeting of March 31, 1954:

"Commissioner Bontempo: I move its approval.

Mayor Carlin: Motion has been made that the offer of $350,000 for the property as outlined in the resolution be accepted.

Mr. Schreiber: I want to point out one other thing, that this resolution, if adopted by the Commission, does not conform in toto with the offer that was made in writing to the Commission.

Mr. Belfatto: We think it does.

Mayor Carlin: The Corporation Counsel is of the ...


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