[82 NJSuper Page 259] In East Orange the State Highway Department has commenced to acquire properties and demolish buildings as part of the East-West Freeway project. In connection with the same project the New Jersey Highway Authority is carrying on similar activities. This case arises out of those activities. The City of East Orange sues for relief in two forms: To enjoin the Highway Commissioner and the Authority from demolishing buildings without complying
with city ordinances and, especially, without first obtaining demolition permits from the city; and to require certain taxes to be paid to the city on real estate acquired for the freeway.
The city has moved for summary judgment against the defendants Palmer and Kervick and they have made a counter motion. By stipulation, claims against and defenses of the Highway Authority also are to be considered as though similar motions for and against them had been made formally.
The allegations that East Orange has power to control the State Highway Department and the Highway Authority with respect to demolition work can be disposed of easily. Town of Bloomfield v. New Jersey Highway Authority , 18 N.J. 237 (1955), considered essentially the same question of municipal power and rejected the claims of the municipality. That case and the authorities collected in it dictate the conclusion the State Highway Department and the Highway Authority are immune from the ordinance provisions which the city sues to enforce. Defendants' motions will therefore be granted as to those portions of plaintiff's case alleging that the Highway Commissioner and the Highway Authority are subject to municipal ordinances relating to demolition work.
The demand for tax payments is limited in scope. The city contends that property privately owned on any October 1st -- the statutory assessment date -- is subject to taxes for the whole of the following calendar year no matter what change in ownership occurs before the end of that year. Defendants concede taxes must be paid up to the closing of title; they claim full exemption beyond that point in spite of an assessment made as of the October 1st preceding the closing. There are allegations made and admitted in the pleadings which furnish a specific example. The State purchased property at 53 South Harrison Street, East Orange, taking title on February 4, 1964. Is the city entitled to complain about the refusal of
the State to pay, or to take effective steps to assure the payment of, anything more than taxes for the month of January and the first four days of February?
Strictly speaking, the question just stated is not one of tax exemption. The city agrees with the general proposition that the State and the Highway Authority are exempt from taxation on land acquired for this project; the controversy here is over the date on which exemption begins. As to some taxfree owners, it has been held that titles taken during a year for which an assessment has been made are subject to taxes for the whole of that year. In Shelton College v. Borough of Ringwood , 48 N.J. Super. 10 (App. Div. 1957), the plaintiff's property, though acquired on February 16, 1954, was held subject to taxes for the entire year. The essential reasoning of the court was:
"Ever since Jersey City v. Montville Tp. , 84 N.J.L. 43, 85 A. 838 (Sup. Ct. 1913), affirmed on the opinion below in 85 N.J.L. 372, 91 A. 1069 (E. & A. 1913), it has been uniformly recognized by the tax administration authorities of this State that the status of property for purposes of exemption vel non is conclusively determinable upon the basis of whether or not the statutory criteria of ownership and use were met on the day fixed by the statute as the assessing date, which now and long past has been October 1 preceding the tax year. N.J.S.A. 54:4-1; and see N.J.S.A. 54:4-23, 35. Application of that test determines the right of exemption or the burden of taxation for the entirety of the ensuing tax year (but see L. 1949, c. 144, infra)." (at p. 11)
Fifty-odd years ago, when May 20 rather than October 1 was the tax assessment date, Jersey City purchased from a private owner land in the Township of Montville. The city then sued to establish that its tax-exempt status -- apparently unchallenged -- should take effect on October 10, the day title passed. Rejecting the city's claim, the Supreme Court held the assessment made as of May 20 preceding the transfer would have to be honored for the following tax year just as though the property in question had remained in private hands. Jersey City v. Montville Tp. , 84 N.J.L. 43 (Sup. Ct. 1913), affirmed o.b. 85 N.J.L. 372 (E. & A. 1913)
supra. Among other things in the opinion are ...