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Lieberman v. Township Committee of Township of Neptune

Decided: May 16, 1958.


Goldmann, Freund and Conford. The opinion of the court was delivered by Freund, J.A.D.


[50 NJSuper Page 195] Shark River Hills Estates, Inc. (hereinafter referred to as "Shark River") appeals from a final

judgment entered in the Superior Court, Law Division, in favor of the plaintiff Lieberman and the intervener Shapiro, declaring void a sale of lands made by the Township of Neptune to Shark River at a public sale on March 19, 1957, and ordering that the lands be reconveyed to the Township of Neptune. The township does not appeal and the plaintiff and intervener have submitted a joint brief.

The essential facts are not in dispute. The township advertised that a number of lots it owned, no longer needed for public use, would be sold in bulk at public sale, subject to certain terms and conditions: inter alia , that the minimum sale price was $21,500; that each bidder was required to deposit $4,300 by certified check with the township clerk at least three days prior to the date of the sale, to be forfeited as liquidated damages should the depositor be the highest bidder and fail to consummate the sale; and the township committee reserved the right to reject any or all bids.

The sale was held as advertised and the property struck off and sold to Shark River for $22,750, the sale being confirmed by the township committee at an evening meeting on the same day. Plaintiff contends that the sale is invalid because the conditions as to qualification to bid and permitting rejection of all bids are illegal.

The testimony discloses that Lieberman, with Bernard D. Karasic, his attorney, attended the sale as advertised. At the commencement of the bidding Karasic had in his possession $4,300 in cash. On behalf of the plaintiff, he stated to the township clerk, who was conducting the sale, that he was tendering the $4,300 as a deposit on bids he was making on behalf of Littlecraft and Silco Builders, trade names used by Lieberman. He put the money on the clerk's desk and the latter refused to accept it as being too late. Before the property was eventually struck off to Shark River on a bid of $22,750, Karasic addressed the clerk and made a bid of $25,000, which the clerk ignored. Lieberman testified that he had not seen the notice of the advertised sale, but heard about the sale the day before it was to be held.

On March 26, 1957 plaintiff filed the present complaint

in an action in lieu of prerogative writs. On the same day a temporary restraint was issued to enjoin the actual conveyance of the lands to Shark River, but the restraint was vacated upon discovery that the conveyance had already been executed and delivered. Both parties made application for summary judgment and both applications were denied. On May 2, 1957, more than 30 days after the sale was confirmed by the township committee, Shapiro, a taxpayer of the township, moved for leave to intervene to assert the same objection to the sale which plaintiff had raised. (The amendment to R.R. 4:88-15, extending from 30 to 45 days the time within which such proceedings for review must be commenced was not effective until September 4, 1957.) On July 25, 1957, by order, Shapiro's application to intervene was granted, as well as leave to file an amended complaint.

At the conclusion of the trial, the trial judge stated his determinations as follows: (1) that Lieberman had sufficient interest and standing to prosecute the instant suit inasmuch as he was arbitrarily deprived of his right to submit a bid; (2) that Shapiro had a right to intervene as a taxpayer and was not barred by the provisions of R.R. 4:88-15 as he is regarded as a proper but not an indispensable party to the action; (3) that the requirement of a $4,300 deposit three days before the sale was unauthorized by statute, was unreasonable, and constituted an invalid restriction upon the sale; and (4) the township had no right to fix as conditions for the same sale both a minimum price and a reservation of the right to reject any and all bids.

Defendant argues that Lieberman, not being a taxpayer of Neptune Township but only an unsuccessful bidder at the sale, cannot challenge the sale. The rule is well established that an unsuccessful bidder has no standing to attack a sale in which he took part. McGovern v. Trenton , 60 N.J.L. 402 (Sup. Ct. 1897); Waszen v. City of Atlantic City , 1 N.J. 272, 276 (1949); Camden Plaza Parking v. City of Camden , 16 N.J. 150, 158-159 (1954). The rationale of the rule is that one cannot, after endeavoring to take advantage of a contract involving illegalities, seek

to have the contract set aside when unsuccessful in bidding. Waszen v. City of Atlantic City, supra (1 N.J. , at page 276). Lieberman, however, is not suing as an unsuccessful bidder but as one who was precluded from bidding -- prevented from participating in the sale. Where the plaintiff is arbitrarily and unreasonably deprived of his right to bid at a public sale, he has standing to maintain an action to challenge the sale to another bidder. Juice Bar Corp. v. Township Committee of Neptune Tp. , 36 N.J. Super. 164, 171 (App. Div. 1955); Escrow, Inc. v. Borough of Haworth , 36 N.J. Super. 469, 474 (App. Div. 1955). The determination of Lieberman's standing must therefore ...

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