On appeal from Superior Court, Chancery Division, whose opinion is reported in 49 N.J. Super. 335.
For reversal -- Chief Justice Weintraub, and Justices Heher, Burling and Proctor. For affirmance -- Justices Jacobs and Francis. The opinion of the court was delivered by Burling, J. Weintraub, C.J. (concurring). Jacobs, J., joined by Francis, J. (dissenting). Weintraub, C.J., concurring in result.
[29 NJ Page 306] This is an action for a refund of moneys paid by plaintiffs Henry Dvorkin and Esther Dvorkin, his wife, to defendant Township of Dover, County of Ocean, for an assignment of a tax sale certificate on lands subsequently redeemed by a party in interest. The facts were stipulated and the Superior Court, Chancery Division, entered a judgment in favor of the defendant. Plaintiffs prosecuted an appeal to the Superior Court, Appellate Division, and while the cause was pending there this court certified it on our own motion.
On May 22, 1956 defendant, pursuant to the provisions of N.J.S.A. 54:5-114.2 et seq. (L. 1943, c. 149, p. 425, § 1), and after duly advertising and posting notice, held a public sale of a tax sale certificate covering lands in the township. The notice set forth the date and time of sale; that the sale was being held pursuant to a resolution of the township committee; that the subject matter of the sale was a "Certificate of Tax Sale No. 1209 covering Lot 25, Block 192, as shown on Tax Map of said Township, the owner of which land is Jonathan Johnson's heirs, as shown in Collector's list"; that no bid of less than $564.68 would be accepted, said sum representing the full amount due the township upon the certificate with all interest and costs and subsequent taxes to the end of the year 1956, and that the governing body would consider confirmation of the sale at its next regular meeting after the sale.
At the sale the township attorney publicly announced that the township made no representations as to the area or acreage of lot 25 and that the township was selling its interest in the lands covered by the tax sale certificate "as is"; that the purchaser would not get a deed from the township but would only get an assignment of the tax sale certificate. It was further announced: "that no claim for any refund of any part of the purchase price for any reason whatsoever need be recognized by the Township." Opportunity was afforded prospective bidders to examine the township tax map and to ask questions of the township attorney. No one availed himself of these opportunities.
Thereupon, 37 separate bids were made for the certificate by four interested bidders -- the certificate being struck off to plaintiffs as high bidder for the sum of $2,810, plus $43.15 incidental expenses. On June 12, 1956 the township committee adopted a resolution confirming the sale and authorized the execution and delivery of the assignment of the tax sale certificate. Plaintiffs then recorded it in the Ocean County Clerk's office.
On January 24, 1957 James W. Clayton, a person having an interest in the land, redeemed the property by the payment
to the tax collector of the township of the sum of $593.35, this amount representing the amount due on the certificate with interest to the date of redemption. A certificate of redemption was then executed by the tax collector.
Plaintiffs, after making demand for the $2,810 paid by them for the assignment of the tax sale certificate, commenced the instant action for refund. The Superior Court, Chancery Division, held that plaintiffs are limited to recovering the amount paid by the redeemer and may not recover the full amount bid by them at the public sale. 49 N.J. Super. 335.
The question at issue is one of first impression in this State: May an assignee of a tax sale certificate purchased at public sale pursuant to N.J.S.A. 54:5-114.2(a) recover from the municipality the excess of the price bid for the assignment over the amount required for redemption, in the event that the property is subsequently lawfully redeemed by the owner or the person having an interest in the property?
N.J.S.A. 54:5-114.2 provides in pertinent part:
"The governing body of any municipality may sell any certificate of tax sale including all subsequent municipal liens held by such municipality by one of the following methods:
(a) At public sale to the highest bidder. * * *; or
(b) The governing body may from time to time determine by resolution the certificates of tax sale including all subsequent liens held by such municipality which such municipality deems advisable to sell for an amount lower than the total amount due, together with interest and costs on the certificate of sale. * * * Upon the receipt of any bid which the governing body may be inclined to accept, the governing body shall give public notice setting forth the amount of the bid for the certificate of tax sale including subsequent municipal liens together with interest and costs, the description of the several lots and parcels of land covered by such certificate of sale and subsequent municipal liens, the name of the owner of the land as contained in the collector's list and also the total amount which would otherwise be required for redemption to the date of proposed sale and stating in substance that the governing body will accept or reject such bid at a regular meeting of the governing body and setting forth the place, time and date of such regular meeting. * * *"
The parties to this appeal lay stress upon N.J.S.A. 54:5-114.8 which states:
"When in any action, brought to bar the right of redemption, under a certificate or certificates sold pursuant to the provisions hereof, any defendant to said action or any other person in interest shall redeem said property by paying the full amount found to be due by the court, the assignee shall only be entitled to receive out of said moneys the amount actually paid to the municipality for said assignment together with lawful interest thereon from the date of payment and the taxed costs of said action, the balance shall be paid to the municipality." (L. 1943, c. 149, p. 429, § 7.)
Plaintiffs contend that the words "out of said moneys" ought to be excised from the statute through the process of interpretation -- thus providing express statutory authorization for the refund in question. Defendant, on the other hand, asserts that the statute means what it says and that the term "out of said moneys" logically compels the conclusion that an assignee of the tax sale certificate may only recoup, upon redemption, the moneys paid by the redeemer.
In our view N.J.S.A. 54:5-114.8 is totally inapplicable to the problem at hand and enlightenment must be found from other sources. This conclusion can most readily be demonstrated by an examination into the history and basic purposes of the various methods by which a municipality may assign tax sale certificates held by it.
There are four basic statutory provisions authorizing the sale or assignment of municipally held tax sale certificates. All of these provisions are designed to convert tax sale certificates into usable cash without the necessity of the municipality first proceeding to bar or foreclose the right of redemption under R.S. 54:5-77 et seq.; N.J.S.A. 54:5-85 et seq. or N.J.S.A. 54:5-104.29 et seq.
R.S. 54:5-112 (L. 1922, c. 227, § 1) provides that "When a municipality has or shall have acquired title to real estate by reason of its having been struck off and sold to the municipality at a sale for delinquent taxes or assessments, the governing body thereof may, by resolution * * *, sell such real estate at private sale to such person
and for such sums, not less than the amount of municipal liens charged against the same, as shall seem to be to the best interest of the municipality. * * *"
Although not necessary to a disposition of this cause, it might be observed that R.S. 54:5-112, in effect, relates to assignments of tax sale certificates, rather than the sale of municipally-owned real estate such as under R.S. 40:60-26, as amended. This is made evident by the last sentence which provides, "Such sales shall not include real estate, title to which has been perfected by the municipality." While the statute provides that the municipality shall execute and deliver a deed without covenants to the purchaser, it seems clear that the purchaser obtains, in effect, an assignment of the tax liens subject to the equity of redemption. R.S. 54:5-112 has never been construed by the courts, and in light of R.S. 54:5-113, referred to hereafter, may presently be superfluous. We have engaged in this parenthetical digression from the main stream of thought to highlight the fact that our examination of the various methods for disposing of tax sale certificates has revealed that they have been the result of piecemeal efforts to deal with specific problems as they arose. Areas of overlap and possible problems resulting from provisions unclear in import could, it is suggested, be greatly minimized by comprehensive revision of the legislation in this field. Refer to Governor Edge's veto message of Senate Bill No. 177 (May 1, 1945).
Apparently R.S. 54:5-112 was not sufficiently flexible to meet the diverse needs of municipalities holding tax sale certificates and desiring to assign them for ready cash, especially in those instances where the amount of the liens chargeable against the land exceeded its assessed value. Therefore, R.S. 54:5-113 (L. 1927, c. 235, § 1, as amended by L. 1928, c. 124, § 1) provides in part that the municipality may:
"authorize a private sale of the certificate of tax sale therefor, together with subsequent liens thereon, for not less than the amount of liens charged against such real estate. The sale shall be made by assignment executed by such officers as may be designated in the
resolution. When the total amount of the municipal liens shall, at the time of the proposed sale or assignment, exceed the assessed value of the real estate as of the date of the last sale thereof for unpaid taxes and assessments, the certificates, together with subsequent liens thereon, may be sold and assigned for a sum not less than such assessed value."
But again the legislative objective of enabling local governments to realize taxes without first expending money to foreclose or bar the equity of redemption was frustrated in certain instances, i.e., where the amount of the liens and the assessed value of the property both exceeded the fair market value of the property. To remedy this situation the Legislature in 1941 enacted N.J.S.A. 54:5-114.1 (L. 1941, c. 232, § 1). N.J.S.A. 54:5-114.1 is exactly the same as N.J.S.A. 54:5-114.2 except that under N.J.S.A. 54:5-114.1 the sale does not include municipal liens accruing since the date of the issuance of the tax sale certificate. The purpose of N.J.S.A. 54:5-114.1 is made clear by the introducer's statement which reads:
"This bill provides two additional methods for disposing of tax sale certificates when held by a municipality. When the assessment on the land covered by the certificate and the amount necessary to redeem the certificate both exceed the value of the land, so far as the purchaser is concerned, the municipality is unable to dispose of the certificate under our present law. The two methods provided by this bill will ...