For reversal and remandment -- Chief Justice Weintraub and Justices Jacobs, Francis, Proctor, Hall, Schettino and Haneman. For affirmance -- None. The opinion of the court was delivered by Haneman, J.
The facts, pleadings and issues in connection herewith are well stated by the trial judge, Palisades Properties, Inc. v. Brady, 79 N.J. Super. 327, 334-341 (Ch. Div. 1963), as follows:
"This consolidated action involves a dispute over the use of a tract of land which is located just south of the George Washington Bridge in the Borough of Fort Lee. Because of the complexities of the legal issues presented it is necessary, in limine, to relate in some detail the factual background which spawned the present controversy. The limited stipulation of facts agreed upon by the parties serves as a convenient beginning point in this regard.
In April 1927 the Borough Council of Fort Lee approved, by resolution, a map entitled 'Map of Hudson Bridge Park Estates,' which included a tract of land (herein the Estates) situated south of the George Washington Bridge and on the top of the geographic area known as the Palisades.
Directly to the south of this tract are lands now owned by the Palisades Interstate Park Commission (herein the Commission), which had been, in large part, the site of a Revolutionary War fortification. The Commission's acquisition of this property was in furtherance of a plan to restore the fortification as part of a recreational park and to help preserve the scenic integrity of the entire Palisades.
In acquiring much of its property the Commission received considerable aid in the form of substantial philanthropic contributions from John D. Rockefeller, Jr., who, by the mid-1930's had donated over 652 acres of land to the Commission at a cost in excess of 19 million dollars.
In 1952 a proposal was made to erect a multi-story apartment house development in Fort Lee within the Estates tract. The Commission, upon learning of this proposal, and in order to block the
erection of the apartment houses, offered to purchase the lots owned by the borough in the Estates.*fn1 Negotiations ensued and the Commission enlisted the aid of Sealantic Fund, Inc. (herein Sealantic), a charitable corporation of the State of New York founded by John D. Rockefeller, Jr.
A plan was then devised whereby the Estates area was divided into two parcels, 'A' (the western half of the Estates) and 'B' (the eastern half of the Estates), Parcel 'B' going to the Commission and Parcel 'A' to be disposed of by Sealantic for commercial development subject, however, to certain height and sign restrictions.
In December 1953 Sealantic offered to purchase all of the lots owned by the borough (137 out of 195) for $250,000. The offer was subsequently accepted. Thereafter, a dispute arose as to the necessity, advisability and validity of the transaction, and prolonged litigation ensued in the federal courts. While the exact nature of that controversy is not particularly relevant to the matter presently before the court, suffice it to say that the conflict arose, in part, out of the borough's concern over loss of ratables and a desired modification of certain height restrictions.
In June 1956 a compromise solution was agreed upon and effectuated by the litigants in the federal court action. The transactions which resulted from the agreement and which form the core of the instant litigation are as follows:
(1) The borough executed and delivered a deed to Sealantic conveying a total of 137 lots for the sum of $300,000;
(2) The borough executed and delivered a deed to Sealantic conveying 12 additional lots;
(3) Sealantic agreed to convey to the borough all of the property owned by or to be conveyed to it in Parcel 'A,' together with 10 additional lots which it had previously acquired;
(4) Sealantic agreed to convey to the Commission, without consideration, 74 lots in Parcel 'B.'
As a result of the consummation of the transactions above described, Sealantic divested itself of all property ownership in the Estates. However, the deed from Sealantic to the borough contained the following restrictions:
'The within described property is conveyed with the following restrictions which shall run with the land:
The Grantee as part of the consideration for this conveyance hereby covenants and agrees for itself, its successors and assigns with the Grantor, its successors and assigns, for the benefit of the property conveyed to the Grantor by deed bearing even date herewith and adjoining the premises hereby conveyed on the east:
1. That no building, improvement or structure of any kind or character whatsoever shall ever be constructed or maintained on the premises hereby conveyed or on the premises described in paragraph 3
below or on any part of either thereof which shall extend in height above a horizontal plane at an elevation of 320 feet above mean sea level at the George Washington Bridge:
2. That no structure consisting of a sign, display or similar device, whether illuminated or not illuminated, shall ever be constructed or maintained on, above or east of the easterly wall of any building, improvement or other structure which may at any time be erected on the premises hereby conveyed or on the premises described in paragraph 3 below or on any part of either thereof and that during any period of time, no building improvement or structure (other than a sign, display or similar device) is erected or maintained on said premises or on any part thereof, no such sign, display or similar device shall ever be constructed or maintained on the premises hereby conveyed or on the premises described in paragraph 3 below or on any part of either thereof east of a line drawn parallel to and distance 100 feet easterly from Hudson Terrace, as now laid out.
3. The premises in addition to the premises hereby conveyed on which the restrictions set forth in the foregoing paragraph 1 and 2 are imposed by the Grantee are identified as:
Lots 3, 16, 18, 20, 38 and 40, Block 2; Lot 8, Block 4; Lots 8 and 21, Block 1; and Lots 1, 8, 10, 13, 14 and 16, Block 3, all as shown on a certain map entitled: "Map of Hudson Bridge Park Estates, Fort Lee Borough, Bergen Co., N.J." filed in the Bergen County Clerk's Office on May 11, 1927, as Map No. 2262.'
Simultaneous with the execution and delivery of the deeds, the borough executed a separate instrument, captioned 'Declaration of Restrictions and Covenants,' by which it, in effect, iterated the restrictions and convenants contained in the deed from Sealantic.
The aforementioned height and sign restrictions were imposed by the conveyance and the 'Declaration' upon 15 lots within the Estates, title to which was in the borough from the outset and at no time in Sealantic. Thus, following the 1956 transactions, the borough owned 100 lots in the Estates upon which height and sign restrictions were imposed. Sealantic, in return, was content in the knowledge that its avowed purpose of preserving the scenic beauty of the Palisades was protected through the restrictions imposed upon the lots in Parcel 'A.'
The next matter of any consequence occurred on March 18, 1959, when, following a duly advertised offer, 96 of the 100 lots owned by the borough were sold to an agent of Palisades Properties, Inc. (herein Properties) for $128,500. The other four lots owned by the borough were sold to the Port of New York Authority and are not involved in this action.
At the time of the 1956 agreement between Sealantic and Fort Lee, and at the time of the March 1959 sale, these 96 lots were in an 'R-4' zoning district which limited buildings to 35 feet or 2 1/2 stories in height. In April 1959 the borough's zoning ordinance was amended, pursuant to an express condition in the offer of sale, changing the zoning ...