Conford, Gaulkin and Kilkenny. The opinion of the court was delivered by Kilkenny, J.A.D. Conford, S.j.a.d. (concurring).
This is an appeal by Circulation Associates, Inc. (hereinafter "Circulation") from a summary judgment entered in the Superior Court, Law Division, setting aside a sale of lands owned by the defendant City of Hackensack (hereinafter "city") and sold by it to Circulation. The city does not appeal and takes no position herein, being willing to abide by the decision of this court. Plaintiff sued to set aside the sale as a taxpayer of the city.
On September 16, 1960 one Joseph Novotny offered in a writing addressed to the city to make a minimum bid of $12,000 per acre for the purchase of Lot 38 in Block 308 B, consisting of 9.48 acres, provided the property would remain subject to its then existing zoning as a C-1 zone. As an evidence of good faith, Novotny deposited with his said proposal the sum of $5,000. The zoning ordinance then permitted in a C-1 zone -- a limited commercial zone -- residential buildings, including multiple-family dwellings, as well as structures for light industry and general business purposes.
On October 18, 1960, without having acknowledged
Novotny's offer, the city council adopted a resolution authorizing the public sale on November 1, 1960 of lot 38 B in Block 308 B, generally described in the resolution and referred to therein as containing approximately 5.2 acres, the minimum acceptable price for this property being specified as $13,550 per acre. As we understand, the city had subdivided lot 38 , separating the 9.48 acres into two parcels because part of the entire acreage was park land that could not be sold. Lot 38 B represented the part that could be sold as no longer needed for public use, pursuant to N.J.S.A. 40:60-26.
The resolution authorizing the sale provided that the sale would be made "subject to the following conditions" pertinent here:
"(1) That the purchaser erect upon the land non-residential structures to cost not less than $100,000 exclusive of the cost of piling and preparing the land for said structures within two years from the date of delivery of the Deed; such structures to be erected in accordance with local ordinances.
(2) The purchaser shall enter into an agreement with the City of Hackensack in fulfillment with the conditions imposed.
The City reserves the right to reject any or all bids." The published notice of sale set forth the aforesaid conditions.
On October 27, 1960 Novotny's attorneys wrote a letter, addressed to the mayor and council of the city, referring to Novotny's earlier offer and the resolution of October 18, 1960, particularly condition (1) above quoted, and pointed out that dwellings and apartment houses were permitted in a C-1 zone. They sought advice prior to the date fixed for sale as to whether their understanding of the condition was correct. They phrased their interpretation of the condition as follows:
"We therefore, take it that what the condition intends is that not less than $100,000.00 shall be spent on a nonresidential structure and that as to such portion of the property as may not be required for such nonresidential structure all of the uses permitted by the zoning ordinance will be allowed.
We also understand that the condition will be a personal obligation on the part of a purchaser and will not run with the land."
The aforesaid letter and the inquiry therein were not answered in any way prior to the time of sale. However, it was the subject of an inter-office communication on October 28, 1960 from the city's building inspector to the city manager, wherein the building inspector agreed with the interpretation of Novotny's attorney, advising "that once the $100,000.00 structure is erected, any remaining lands could be then used for any legal use under the Zoning Ordinance." In addition, the building inspector expressed the belief that the stated conditions should run with the land.
The public sale was conducted at a regular meeting of the mayor and city council on November 1, 1960. The minutes of the meeting show that the city clerk read the public notice of sale and then the mayor announced:
"The minimum bid is $70,400 based upon the $13,550 per acre factor. The sale, insofar as the conditions set forth in the advertisement which states that non-residential structures at a cost of not less than $100,000.00 must be erected within two years, it is the intention of this Council that there shall be no residential structures built; and restrictions against use shall run with the land."
One of the members of the council referred to the opinion of the building inspector and stated that he "would like to ask the opinion of the City Attorney." ...