Goldmann, Freund and Haneman. The opinion of the court was delivered by Haneman, J.A.D.
Point Pleasant Manor Building Co. (Point Pleasant) appeals from a summary judgment entered upon plaintiffs' motion in a suit for possession of certain lands situate in Brick Township.
Plaintiffs have included in the counter-statement of facts on this appeal references to the record at the trial and to the opinion of this court in a prior suit between these parties, Pt. Pleasant Manor Building Co. v. Brown , 42 N.J. Super. 297 (App. Div. 1956), certification denied 23 N.J. 140 (1957). They assert that we may take judicial notice of those proceedings. Point Pleasant has moved to strike those references, basically upon the ground that the record of the prior proceeding was neither offered in evidence nor considered by the trial court in the present action. A review of the opinion of the trial court on plaintiffs' motion for summary judgment dispels any doubt that it relied upon the facts adduced in the prior proceedings in reaching the conclusion to grant plaintiffs' motion. (Note, also, that the same trial judge sat in both cases.) Even though the trial court had not so relied, a consideration of the record of the prior proceedings is vital to the resolution by this court of the issue framed on the motion. On their motion, plaintiffs raised the issue of res judicata. The solution of that issue, which is the fiber of the motion, must be predicated upon a careful study of the entire record of the prior proceedings. Only then can the court determine the scope of the prior judgment. See Robinson-Shore Development Co. v. Gallagher , 26 N.J. 59, 67-76 (1958); Nystrom v. Pennycook , 29 N.J. Super. 456, 461 (App. Div. 1954). There is no doubt that we may take judicial notice of the record of the prior proceeding, see Taylor v. New Jersey Highway Authority , 22 N.J. 454, 459 (1956); In re Selser , 15 N.J. 393, 401 (1954), including the recorded testimony of witnesses; In re Breckwoldt , 22 N.J. 271, 275 (1956). The better practice, however, is to offer the record, judgment and transcript of the prior proceedings as an exhibit in the
matter before the trial court, see Russell v. Tenafly Bd. of Adjustment , 53 N.J. Super. 539 (App. Div. 1959); Locher v. Locher , 112 N.J. Eq. 25 (Ch. 1932), or to include in the appendix so much thereof as may be material to the resolution of the issues raised on appeal. In a similar situation, where the record was not offered below, Robinson-Shore Development Co. v. Gallagher, supra (26 N.J. at page 68), the court said:
"In this connection, it might be noted that we have found the excerpts of the record of the proceedings in Ocean City Association v. Cresswell, supra , contained in the present record lacking in several respects and we have obtained and utilized the entire record in the cause of Ocean City Association v. Cresswell, supra , as contained in the bound volume (vol. 306) of the record in the Court of Errors and Appeals for the year 1906."
In 1955 Point Pleasant commenced an action in the Law Division seeking a judgment declaratory of its rights in and to the identical lands here involved. The judgment of the trial court in that cause declared that these same lands were "dedicated for the use of the public and of the school district of the Township of Brick and the Township of Brick." Plaintiffs' complaint was dismissed. On appeal, that judgment was affirmed, Pt. Pleasant Manor Building Co. v. Brown, supra. The Supreme Court denied Point Pleasant's petition for certification (23 N.J. 140). For further factual background consult the opinion of this court on the prior appeal (42 N.J. Super. 297).
Thereafter, plaintiffs commenced the action from which stems the present appeal. They sought possession of the dedicated tract, including houses erected thereon by Point Pleasant. Point Pleasant, Joseph and Helen McCarthy and four other parties who had purchased portions of the dedicated lands from Point Pleasant, were made defendants to the action. Only Point Pleasant and the McCarthys filed answers. Judgment by default was entered against the four remaining named defendants. Point Pleasant appealed. The
McCarthys cross-appealed but have since abandoned the cause. Thus, only the Point Pleasant appeal is before us.
In its answer Point Pleasant admitted the prior judgment. It raised the following affirmative defenses: (1) plaintiffs were guilty of "inequitable acts" and by reason of their attempts to unjustly enrich themselves are not entitled to possession until they have adequately and properly compensated defendant for the buildings; (2) the lands in question are neither suitable nor adaptable for the dedicated purposes; (3) Point Pleasant has offered to convey ten acres in lieu and in place of the lands here involved, and plaintiffs' refusal to accept is oppressive, harassing and inequitable and for the sole purpose of unjustly enriching themselves; (4) plaintiffs are estopped by their actions -- which consist in (a) their approval of a subdivision map of these lands; (b) their issuance of building permits; (c) their remaining silent during the construction of houses by Point Pleasant; (d) their inspection of the premises and the issuance of certificates of occupancy; (e) their acceptance in the school system of children residing in the houses constructed on the lands; (f) their furnishing fire and police protection to defendants -- from now demanding the relief sought; (5) Point Pleasant's construction of houses on the lands in question was done in good faith and under the mistaken belief of a right to so construct.
The pretrial order discloses that by way of counterclaim Point Pleasant demanded a judgment enjoining plaintiffs' interference with its possession of that tract or, alternatively, (1) compelling plaintiffs to compensate it for the value of the improvements constructed upon said lands or permit the removal of the buildings by defendants, or (2) directing plaintiffs to accept another tract of land in exchange for that previously dedicated. Defendants also asked for "such other relief as may be just and equitable."
The defenses fall into two categories: (1) plaintiffs are estopped from obtaining possession by the acts of their public officials; (2) plaintiffs should compensate Point Pleasant
for the reasonable cost of the improvements made by it upon the land.
Plaintiffs urge here, as in the trial court, that defendant is estopped from asserting the above defenses and from obtaining any relief on its counterclaim by ...