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Skakel v. Township of North Bergen

Decided: May 21, 1962.

JAMES C. SKAKEL AND SAMUEL CAFASSO, PLAINTIFFS-RESPONDENTS,
v.
TOWNSHIP OF NORTH BERGEN IN THE COUNTY OF HUDSON, A MUNICIPAL CORPORATION OF NEW JERSEY, ET AL., DEFENDANTS-APPELLANTS. GEORGE BUILDING CO., A NEW JERSEY CORPORATION, PLAINTIFF-RESPONDENT, V. TOWNSHIP OF NORTH BERGEN IN THE COUNTY OF HUDSON, A MUNICIPAL CORPORATION OF NEW JERSEY, ET AL., DEFENDANTS-APPELLANTS



For affirmance -- Chief Justice Weintraub, and Justices Jacobs, Francis, Proctor, Hall, Schettino and Haneman. For reversal -- None. The opinion of the court was delivered by Proctor, J. Weintraub, C.J. (concurring). Haneman, J. (concurring).

Proctor

The defendants Township of North Bergen and Singer City On the Hudson, Inc. (Singer) appealed from a summary judgment entered by the Superior Court, Law Division, in favor of the plaintiffs Skakel and Cafasso, and plaintiff George Building Co. (George) in their consolidated actions in lieu of prerogative writ. This judgment set aside resolutions of the Board of Commissioners of the township, adopted purportedly in pursuance of N.J.S.A. 40:60-26(c), confirming the sale to Singer of municipal lands. While the appeal was pending in the Appellate Division we certified the cause. Prior to oral argument we were notified by the township that it withdrew its appeal. Since George has not filed a brief on this appeal, the only parties who remain are plaintiffs Skakel and Cafasso, and defendant Singer.

The essential facts giving rise to the summary judgment are not in dispute. On March 15, 1961, Singer submitted a detailed proposal to the township offering to purchase for $100,000 certain township-owned lands not needed for public use and to build thereon an apartment development with adjunct facilities; the ultimate improvement to be a "city within a city" and to have a total value of at least $20,000,000. The offer, which was extensive and detailed, set forth a time schedule for completion of certain phases of the project. It provided, among other things, that physical data and financial arrangements on the proposed

project be substantially completed and the construction of at least 350 apartment units be commenced within two years, and that the entire project be completed within seven years. The offer further provided that in the event the offeror failed to complete at least $20,000,000 of improvements within seven years, the township could demand a reconveyance of that part of the tract upon which construction had not begun or a mortgage loan placed. The undertakings were not to be deemed violated if any failure to meet the stipulated schedule was due to certain enumerated causes. At a meeting held the same day (March 15, 1961), the Board of Commissioners of the Township, acting pursuant to N.J.S.A. 40:60-26(c), accepted the offer subject to final approval at a meeting to be held March 29, 1961. The portions of N.J.S.A. 40:60-26 which govern the township's action provide:

"The governing body of any municipality may sell any lands or buildings or any right or interest therein not needed for public use. All such sales or disposition except as provided in sections 40:60-27 to 40:60-29 [not here applicable] of this Title shall be authorized to be made by 1 of the following methods:

(c) In place of the above methods the governing body of any municipality may sell any such properties at private sale, as follows: Upon any offer being made by any person to the municipality to purchase any such property, the said offer shall be submitted to and considered by the governing body thereof at a regular or special meeting, and said governing body may then reject said offer, or may approve the same subject to final approval at a further public meeting of said governing body not less than 10 days after said first meeting. Notice of the said further meeting of the governing body, containing said offer of purchase with a description of the land to be sold, the price thereof and terms and conditions of said sale, shall be published at least once in a newspaper circulated in said municipality, not less than 2 days nor more than 10 days before said further meeting; and at said further meeting the said offer to purchase said property shall be considered by the governing body, which may then reject the same, or may confirm and ratify said sale under said terms and conditions, or a modification thereof; provided, that no higher price or better terms shall then be bid for said property by any other person, in which case the sale is to be made to the highest bidder; and said governing body may then authorize the proper officers thereof either to execute a formal agreement of sale

with the purchaser which shall be binding upon said municipality and upon the purchaser, or may authorize the proper officers to make a deed of conveyance to said purchaser, as the case may require.

All sales, either public or private, may be for cash or upon credit. The governing body may by resolution fix the time for settlement and payment of the consideration and when the sales are upon credit the municipality may accept a purchase money mortgage to be given by the purchaser or purchasers, the terms and conditions of which mortgage shall be fixed by the resolution of the governing body of the municipality; provided, however, that any such mortgage shall be fully payable within 5 years from the date of the sale and shall bear interest at a rate not less than 5% per annum. The governing body may also impose any restrictions on the use to be made of such land and any conditions of sale as to buildings or structures to be erected thereon, or as to the type, size, or other specifications of such buildings or structures, or as to demolition, repair, or reconstruction of buildings or structures, and the time within which such conditions shall commence or be concluded, or any other conditions of sale in the manner and to the same extent as any other vendor of real estate, whether such sale shall be made at public or private sale; provided, however, that any conditions for the payment of the consideration upon credit and the restrictions on the use to be made of the land and the conditions of sale shall be set forth at length in any advertisement of sale hereinabove required. In all sales made pursuant to paragraphs (a), (c) or (d) of this section, the governing body of any municipality may pay a commission to any real estate broker or other person other than the purchaser actually consummating such sale, but said commissions shall not be more than 5% of the sale price."

In compliance with the statutory provisions the township, on March 24, published in the Hudson Dispatch, a newspaper with local circulation, the offer in its entirety together with notice of the meeting to be held on March 29.

The March 29 meeting of the Board of Commissioners was opened at 11 A.M. Present, in addition to township officials and prospective bidders, was at least one taxpayer, Loccoruba, who expressed his opinion as to the insufficiency of the offered price. Shortly after the meeting opened, Singer presented to the Board three typewritten pages of amendments "in full substitution for the last three pages of said offer heretofore submitted." The clerk then read aloud the original offer together with the amendments. [37 NJ Page 374] The effect of the amendments was: (1) To extend from two years to two and one-half years the period in which the offeror was bound to complete the "physical data and financial arrangements" concerning the project and to "commence construction of at least 350 apartment units"; (2) to extend from seven years to nine years the time period allowed the offeror to complete at least $20,000,000 worth of improvements; (3) to add to the list of causes absolving the offeror from liability for failure to meet time schedules any "delays in obtaining satisfactory financing through any Federal governmental agency"; and (4) to extend from seven years to nine years the period in which the township was bound to permit Singer to complete $20,000,000 of improvements before a failure on Singer's part would give the township the right to demand reconveyance of that part of the tract upon which construction had not begun or a mortgage loan placed. The amendments did not alter Singer's bid price on the land. Skakel and George, wishing to compete in the bidding, requested the Board adjourn the meeting for two weeks to permit them and any other prospective bidders the opportunity to review the amendments. The Board denied the requests. Thereupon, Skakel submitted an "informal offer" to purchase the land for $130,000 and to erect thereon an apartment development with supporting facilities. His offer was expressly made informal "because there had been no opportunity to consider the offer as modified by a statement made in behalf of Singer." George prepared a written offer to purchase the property "as advertised in the Hudson Dispatch on March 24, 1961, together with the proposed amendments as read by the City Clerk today on behalf of Singer City Corp." for $140,000 plus brokerage, and submitted the offer together with a certified check for $14,000 to the Board. Then, at 1 P.M. the Board recessed for lunch. After it reconvened at 3 P.M., the Board adopted a final resolution confirming the sale to Singer on the terms of its offer as amended. In its resolution the Board, after

noting that Singer's offer had been properly advertised, found: The "offeror modified its offer by enlarging" the time periods which the offeror had to commence and complete construction; George's bid was "without any undertakings or conditions whatsoever as to the development of the property"; and that Singer's offer "contains better terms and is a higher bid than that offered by the said George Building Company." The Board did not hold any hearing to inquire further into the merits of the Skakel or George bids.

The plaintiffs Skakel and Cafasso, the latter a resident and taxpayer of the township, filed a complaint in lieu of prerogative writ against the township and Singer demanding judgment declaring the resolutions of the Board illegal and restraining the defendants from taking any steps in furtherance of the resolutions. They alleged the amendments constituted "substantial changes" of Singer's original offer and contended the action of the Board in making the sale to Singer and in denying the requests for an adjournment was in violation of N.J.S.A. 40:60-26(c) and "detrimental to the best interests of the citizens and taxpayers of the defendant Township." George commenced a similar action against the same defendants but, in addition to the relief sought by Skakel and Cafasso, it demanded the township be ordered to sell the lands to it as the highest bidder.

The two actions were consolidated and all plaintiffs moved for summary judgment based on the pleadings, exhibits and affidavits. In granting the motion and setting aside the Township's resolutions, Judge Artaserse held:

"[T]he amendments which were submitted on the day the award was granted were substantial; they were material. I believe that those amendments should have been advertised. And the fact that they were ...


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