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 dismissing the plaintiff's complaint and the intervening defendants' counterclaim and cross-claim. Thereafter the plaintiff appealed and the intervening defendants cross-appealed to the Appellate Division. We certified before argument in the Appellate Division.
In November 1953 the owners of a 90-acre tract located on the northwest side of the Princeton Pike in Princeton Township submitted a preliminary plat plan to the Township's Planning Board. Their plan contemplated the residential development of the tract on 75 one-acre lots. The Planning Board recommended approval of the plan and on December 14, 1953 the Township Committee gave tentative approval. Rules of the Planning Board, adopted pursuant to authority granted by ordinance, contained no provision for hearing prior to tentative approval but expressly required public hearing on notice to interested parties before final approval. See R.S. 40:55-12. The rules set forth that the final plat shall be submitted to the Planning Board within one year after approval of the preliminary plat, otherwise the preliminary plat shall become null and void unless an extension of time is applied for and granted by the Board.
On January 1, 1954 the Municipal Planning Act of 1953 took effect. L. 1953, c. 433; N.J.S.A. 40:55-1.1 et seq. On June 14, 1954 the Township Committee adopted ordinances which reconstituted the Planning Board as a strong board (see Cunningham, "Control of Land Use in New Jersey," 15 Rutgers L. Rev. 1, 21 (1960)) and prescribed rules and regulations for land subdivision. Pursuant to the Municipal Planning Act, public hearing on notice to interested parties was required before tentative approval which confers certain rights for 3 years as set forth in the act. See N.J.S.A. 40:55-1.18; N.J.S.A. 40:55-1.7; Levin v. Livingston Tp., 35 N.J. 500 (1961); Hilton Acres v. Klein, 35 N.J. 570 (1961). On January 3, 1955, which was 20 days beyond the year specified in the superseded planning
board rules, the Planning Board granted an extension of time to November 23, 1956 for filing the final plat. On December 6, 1955 the Township Committee adopted a revised land subdivision ordinance and a revised zoning ordinance. The subdivision ordinance directed that lot sizes and dimensions conform with the zoning ordinance which placed a large part of the Township, including the 90-acre tract under consideration, in district R-1 which provided for a minimum lot size of 2 acres. The zoning ordinance contained a saving clause which authorized exemption from the 2-acre requirement, for all lots in subdivisions approved between May 1948 and December 1955.
In September 1956 the 90-acre tract was acquired by Bertram F. Bonner who is president and a substantial owner of the plaintiff corporation. Thereafter, Bonner submitted the final plat plan for development of the tract and requested Planning Board approval. The plat conformed generally with the preliminary plat and called for 74 lots each approximating 1 acre in size. On October 1, 1956 the final plat was approved by the Planning Board. No public notice was ever given and no public hearing was ever held in connection with the Board's final approval. Cf. R.S. 40:55-12; N.J.S.A. 40:55-1.18. A surety bond was filed, roads were staked out by March 1957, and boundary monuments were installed by November 1957. In January 1958 Bonner conveyed title in the tract to the plaintiff corporation. In June 1958 the plaintiff entered into a contract for the installation of a drainage system. The Township Engineer, when advised of the contract, notified the plaintiff that although its proposed use of 24-inch pipe had been approved at the time of the submission of the final plat, he considered that it was inadequate and would lead to future drainage problems. It is to be noted that the approval on the Township's behalf had been given by the Township Engineer's predecessor who, while employed part time by the Township as its Engineer, had accepted employment by the developer and had designed the developer's drainage plan. Although this type of dual employment
has not been uncommon in the past, it gives rise to highly offensive conflicts of interest and should not be tolerated hereafter by municipalities. Cf. Conflict of Interest and Federal Service (1960); Reilly v. Ozzard, 33 N.J. 529, 553-554 (1960).
After discussion with officials of the Township, the plaintiff agreed to use 30-inch pipe and proceeded with its installation. Further problems arose in connection with the drainage system and in October 1958 the plaintiff engaged an independent engineering firm. In January 1959 a new drainage plan was approved by the Township Engineer. Work then proceeded and by June 1959 the drainage system, road grading and road paving were substantially completed. Prior thereto the plaintiff had sold 7 contiguous lots abutting Princeton Pike, a pre-existing public road. Five of the lots were sold to Alexander Corporation, an affiliate of the plaintiff, and two were sold to an individual. Building permits for the 7 lots were issued between July 8, 1958 and March 16, 1959 and homes were built thereon although because water pollution was experienced in some of the wells serving the lots, the local Board of Health insisted upon the installation of chlorination equipment where potable water could not otherwise be obtained.
Acting pursuant to a recommendation from the Planning Board, the Township Committee in May 1959 adopted an ordinance repealing the zoning ordinance saving clause which authorized exemption of the plaintiff's tract from the 2-acre requirement. The ordinance was introduced and passed on first reading on April 13, 1959, was duly advertised, was the subject of public hearing, and was finally adopted on May 19, 1959. Although the plaintiff was aware of the pendency of the repealer, it continued with its work on the development and by June 1959 had expended sums approximating $127,000 for engineering fees, storm drainage system, road grading and paving, and incidentals. The Township asserts that only about 36% of the stated amount was actually incurred before the plaintiff knew of the pendency of the repealer. On
August 10, 1959 the plaintiff applied by a single letter to the Township zoning officer for 67 building permits. This represented the original 74 lots less the 7 on which houses had been built. The application was not accompanied by any certification from the local Board of Health with respect to water and sewage facilities (cf. N.J.S.A. 58:11-23 et seq.) or by any building plans and, in the Law Division, counsel for the plaintiff conceded that the application did not comply with the Township's building code. The Township's zoning officer denied the application on August 12, 1959. Thereafter, the plaintiff filed an appeal with the Zoning Board of Adjustment and sought a variance from the 2-acre and lot width requirements of the zoning ordinance. After a hearing, the Zoning Board denied the appeal and sustained the zoning officer's action. In its findings, it pointed out that resubdivision by the plaintiff of its tract so as to comply with the 2-acre and lot width requirements of the zoning ordinance was possible with only "relatively minor ...