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Popular Refreshments Inc. v. Fuller''s Milk Bar and Recreation Center Inc.

Decided: December 8, 1964.


Conford, Kilkenny and Lewis. The opinion of the court was delivered by Kilkenny, J.A.D.


Plaintiff, lessee of a portion only of a larger single tract of land, was denied specific performance of a written option to purchase the demised premises, solely because the local planning board had denied the lessor's application for approval of the subdivision. Plaintiff appeals from this adverse judgment of the Chancery Division.

The option to purchase at a price of $35,000 was contained in a written 10-year lease, dated January 4, 1955, "to be exercised not sooner than five years from the commencement of this lease nor later than sixty days prior to the termination of this lease, by notice in writing addressed to the landlord." Plaintiff duly exercised the option by written notice to the landlord, dated April 1, 1960 and admittedly received by the landlord. It has been ready, willing and presumably able to close title ever since that time.

The demised premises are particularly described in the lease by metes and bounds. They are on the northeasterly side of Route 23 in the Township of Wayne, with a frontage of 130.53 feet along that highway and a depth of about 200 feet more

or less, as shown on a survey dated May 21, 1960 received in evidence. The lessor's entire tract of 3.8 acres has a frontage of 230.53 feet along Route 23 and varies in depth from 640 feet on the southerly side to 900 feet on the northerly side, both more or less. The basic width of the demised premises, computed at an angle of 90 degree, is only 118 feet, differing from the frontage of 130.53 feet because of the angle at which the highway runs at the premises. So, too, the basic width of the remainder of the plot is only about 87 feet, more or less, even though its frontage is 100 feet, for the same reason.

There is a building on the demised premises, in which plaintiff has been conducting its business commonly referred to as a "Milk Bar." The remainder of the tract is generally vacant land and has been used principally as a miniature golf course, a use discontinued in 1959, according to defendants, and in 1962, according to plaintiff. Plaintiff has had the privilege of using the front part of the retained portion for the parking of customers' vehicles.

After defendant lessor received notice of plaintiff's exercise of the option, an application for approval of a subdivision plat, dividing the entire tract into two lots, one covering the demised premises and the other representing the portion to be retained, was submitted by defendant on June 1, 1960 to the township planning board. When the board first considered the application at a meeting on June 23, 1960, attended by the attorneys for both parties, it indicated its dissatisfaction with the proposed subdivision especially because the portion of the tract to be retained by the lessor would have a width of less than 100 feet in this business district. The board suggested consideration of a revision of the subdivision to avoid this situation and reserved decision.

Thereafter, defendant lessor advised the planning board by letter of July 7, 1960 that a revised subdivision plat would not be submitted and requested a decision on the application that had been filed. Thereupon, the planning board, at a meeting held on July 12, 1960, denied approval of the subdivision, stating as its reason:

"It is the Board's opinion that, in consideration of the protection of the health, safety and welfare of the citizens of the Township of Wayne, no subdivision in this Business Area should have a lesser minimum width than 125 feet."

Obviously, neither of the subdivided lots along the highway business area would satisfy that minimum width requirement.

No appeal was taken by either party from this decision of the planning board. Instead, the lessor refused to convey, relying upon N.J.S.A. 40:55-1.23 which prohibits a contract to sell or a conveyance of only part of a plot or tract of land, without having obtained municipal approval of the subdivision, and subjects violators to a fine or imprisonment. This section also allows the municipality to obtain injunctive relief and to have a conveyance set aside and invalidated where a certificate of compliance with the statute has not been issued. Plaintiff filed its specific performance action on August 1, 1960, joining the lessors as defendants but not joining the planning board or the municipality as parties to the action. Thus, specific performance alone was demanded against defendant property owners and no relief was sought as to the municipal disapproval of the subdivision.

After the matter was pretried, the trial court made an order on January 17, 1963 granting the Township of Wayne leave to intervene in this action.

The matter was submitted for decision on a stipulation of facts supplemented by oral argument, with the result first noted above. The trial court was not asked to review the propriety of the action taken by the planning board. In fact, the local planning board has never been a party to the proceedings. The Township of Wayne intervened, but, as their attorney remarked during oral argument at the trial, its only interest was ...

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