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Schierstead v. City of Brigantine

Decided: December 19, 1955.

OSCAR SCHIERSTEAD, PLAINTIFF-APPELLANT,
v.
CITY OF BRIGANTINE, A MUNICIPAL CORPORATION OF THE STATE OF NEW JERSEY, AND S.D. WALKER, INC., A CORPORATION OF THE STATE OF NEW JERSEY, DEFENDANTS-RESPONDENTS



On appeal from the Superior Court, Chancery Division, Atlantic County.

For affirmance -- Chief Justice Vanderbilt, and Justices Heher, Oliphant, Wachenfeld, Burling, Jacobs and Brennan. For reversal -- None. The opinion of the court was delivered by Wachenfeld, J.

Wachenfeld

The sole issue before us is the constitutionality of N.J.S.A. 52:27-29.1, the other matters alleged in the complaint having been disposed of.

From the undisputed facts in the complaint, it appears that on and since December 10, 1945 the City of Brigantine, a municipality of the State of New Jersey, was under the control and supervision of the Municipal Finance Commission pursuant to N.J.S.A. 52:27-1 et seq. It then entered into a contract to sell to Samuel D. Walker, or his assignee, certain lots or parcels of land to which it had title or to which it held tax sale certificates. The city further agreed

to proceed with the foreclosure of the tax sale certificates which it held. Payment was to be made by Walker pursuant to a schedule set forth in the agreement, which was to continue for a period of ten years from and after the final adoption of a refunding or refinancing agreement with the city's creditors and upon the approval of the Municipal Finance Commission and the Commissioner of Local Government.

The Municipal Finance Commission assented to the contract with Samuel D. Walker on December 20, 1945 and the contract was subsequently assigned by Walker to S.D. Walker, Inc.

From affidavits submitted it appears that at the time of entering into the contract the city had outstanding debts and obligations amounting to approximately $3,500,000. Its assessed valuation was approximately $800,000 and it was necessary to foreclose the tax sale certificates to amortize its debts, its creditors having demanded that the real estate acquired by foreclosure be liquidated and sold.

On July 2, 1955 the present complaint was filed by the plaintiff, a resident and taxpayer of the City of Brigantine, on behalf of himself and other taxpayers of the city, alleging that N.J.S.A. 52:27-29.1, which concededly authorized the contract between the city and Walker, was itself unconstitutional and the contract was therefore void.

The relief sought was not to void all that had transpired under the contract prior to the filing of the suit but, rather, only to enjoin future performance. Initially, other relief was sought in the complaint based upon allegations of fraud, but these matters, as already indicated, were eliminated, leaving the constitutional question the sole issue to be determined here.

Under R.R. 4:37-2 the State of New Jersey intervened, the constitutionality of an act of the Legislature being called into question.

The statute under attack, N.J.S.A. 52:27-29.1, is a single subsection of the Municipal Finance ...


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