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 Jacobs, J.
The Law Division entered judgment for the defendants for the reasons expressed in its opinion reported at 68 N.J. Super. 118 (1961). See 16 Rutgers L. Rev. 469 (1962). The Appellate Division reversed and remanded the case for further proceedings not inconsistent with its opinion reported at 73 N.J. Super. 120 (1962). We granted certification on the defendants' application. 37 N.J. 231 (1962).
In 1956 the plaintiffs-respondents' predecessor (Ze-Essex Realty) assembled a 131-acre tract in the Township of Raritan for residential development. The tract was divided into five sections with a separate subdivision map for each section. The subdivision maps, along with a drainage plan, were prepared by Mr. Finnegan, a licensed engineer and surveyor who was also the Township Engineer. On June 11, 1956 the Township Mayor advised Ze-Essex that his letter would serve as preliminary approval of the Ze-Essex Map prepared by Mr. Finnegan, "conditioned upon the tract being able to have sanitary sewer facilities and the lot sizes being 70 x 100." On July 27, 1956 the Township Committee adopted formal resolutions which approved the plats of sections 1, 2 and 3, contingent upon the execution of a developer's agreement, the posting of a performance bond, the construction of a sewage disposal plant, and the filing of the plats. The resolutions set forth that the plats were to be filed within one year but contained no stated time limits for the performance of the other contingencies. A contemporaneous resolution, adopted on July 27, 1956 by the Township Committee, authorized the formation of the Raritan Valley Sanitation Company, which was to construct and operate the disposal plant. On August 23, 1956 a developer's agreement between the Township and Raritan Ridge, Inc. (apparently a purchaser under contract with Ze-Essex) was duly executed. This agreement related to section 1 as did a performance bond which was executed on August 23, 1956 by Raritan Ridge and its surety.
While all of the foregoing was taking place the Township had no planning board ordinance or any ordinance regulating
land subdivision and the approval of the plats was evidently pursuant to the provisions of the old Map Act (L. 1953, c. 358). On October 1, 1956 the Township Committee adopted ordinances establishing a planning board and regulating land subdivision. N.J.S.A. 40:55-1.4, 40:55-1.14. On November 5 and 6, 1956 building permits and board of health permits were issued for the construction of four model homes in section 1. On November 12, 1956 a meeting of the Township Committee was held and during its course the Township Mayor reported that although sections 1, 2 and 3 had been officially approved by the Committee, official approval of sections 4 and 5 had been "inadvertently overlooked." He further reported that the Township Attorney had advised that the effective date of the land subdivision ordinance could be deferred to enable official approval of sections 4 and 5. Accordingly, the Township Committee adopted an amendatory ordinance which postponed the effective date of the land subdivision ordinance to December 12, 1956; in the interim, on December 7, 1956, the Township Committee adopted resolutions approving the plats for sections 4 and 5 with contingencies similar to those set forth in the earlier approvals of sections 1, 2 and 3.
In the early spring of 1957 work was begun on the four model homes in section 1 and there was testimony indicating that they were "85 to 90 per cent completed" by the fall of 1957. In addition curbs and sidewalks were placed in front of the homes, road grading and graveling was done, utility poles were installed, and some other work was completed during the spring of 1957. On July 25, 1957 the Township Committee adopted a resolution which extended until August 9, 1957 the time for executing the developer's agreement for sections 2 and 3 and the time for filing the plats for sections 1, 2 and 3. On August 7, 1957 the Township Committee further extended such times until November 1, 1957. On October 31, 1957 the developer's agreement relating to sections 2 and 3 was executed by Ze-Essex and the Township officials. Performance bonds were executed a day earlier by
Ze-Essex and the surety. Approval of sections 1, 2 and 3 was endorsed on the three plats on October 31, 1957 by the Mayor and Clerk of the Township and the plats were filed on November 1, 1957 in the Monmouth County Clerk's office. An endorsement by the Township Engineer on each of the plats certified that it conformed with "all the laws of the State and the municipal ordinances and requirements applicable thereto." On November 14, 1957 the Township Committee adopted a resolution extending the time for filing the plats of sections 4 and 5 until December 7, 1959. Although the resolution contained a reference to the installation of "the sewerage plant and other facilities," it set forth no time limitations with respect to their installation.
On July 14, 1958 the Township adopted its first zoning ordinance. The zoning map which accompanied the ordinance sketched the lots as laid out in sections 1, 2, 3, 4 and 5 and placed them in an area zoned for residential purposes. In addition the zoning ordinance contained a provision designed generally to protect the interests of developers who had obtained Township approval of their subdivision maps prior to the adoption of the zoning ordinance. In October 1958 the plaintiffs made arrangements to take over the development of the 131-acre tract which had remained relatively dormant since 1957. Some of them had an interest in the development from the start but before they took it over in its entirety they conferred with the Township officials and satisfied themselves that there would be no obstacles to their filing of plats for sections 4 and 5, to their completion of the model homes, and to their proceeding with the development. By December 1, 1958 the plaintiffs had acquired title to the entire tract and thereafter they proceeded expeditiously with steps towards its full development for residential purposes.
The testimony for the plaintiffs was that at the time of their acquisition of title they had made payments and had assumed obligations totaling about $440,000 and thereafter they became obligated to pay $68,000, making a total of payments or obligations in the sum of $508,000. In addition
they state that they agreed to indemnify a prior party in interest for such loss as it might suffer under a $100,000 bond it had executed in connection with the filing of the plats for sections 1, 2 and 3. There was further testimony that after acquiring title the plaintiffs commenced negotiations with an engineering firm for the construction of the proposed sewage treatment plant, with a water company in connection with the service of water to the development, with the Federal Housing Administration in connection with certain suggested modifications of plans, with the Board of Public Utility Commissioners in connection with rates to be charged by the Raritan Valley Sanitation Company for use of the sanitary sewage system, and with the Garden State Parkway in connection with the acquisition of an additional tract which was actually acquired on April 4, 1959. The four model homes were repaired and completed in October or November 1959 with an additional outlay of approximately $13,000.
On April 15, 1959 the Township's Planning Board adopted a resolution recommending that the subject property be rezoned. Thereafter, the Township Committee obtained an opinion from its attorney advising that it would be "on firm ground in attempting to rezone this area" and on August 19, 1959 the Planning Board recommended that the Township's zoning ordinance be amended to allow "light manufacturing exclusively and to prohibit residential use" in the area in question. The plaintiffs state that the first knowledge they had of the proposed rezoning was in August 1959. Pursuant to their request they were afforded the opportunity of appearing before the Planning Board in September 1959. At about that time the Raritan Valley Sanitation Company was advised by the State Department of Health that its application for approval of its proposed sewage disposal plant had been reviewed and that it might expect to receive "formal ...