This is an action in lieu of prerogative writs brought by Suburban Golf Club (hereinafter called Suburban) to compel the State of New Jersey (hereinafter the State) to condemn certain lands alleged to be owned by Suburban which were taken by the State for highway purposes without compensation to Suburban. The State contends that Suburban does not have any title in the lands and, therefore, there is nothing to condemn.
The facts are stipulated.
Suburban has been the owner for many years of a golf course in the Township of Union, Union County. A portion of said golf course fronts on Morris Ave., at one time known as Morris Turnpike and now designated as New Jersey State Highway S-24.
Sometime in November 1936 the State, through its agent the State Highway Commissioner, and Suburban entered into an agreement under which Suburban was to convey two parcels of land, namely, 14A and 14B on Exhibit PD-6, to the State in exchange for a consideration of $7,500 and the conveyance to it by the State of eight parcels of land, designated 106X, 101BX, 14V1A, 14V2A, 14V1B, 14V2B, 14V1C and 14V2C on that exhibit. The transfer of title from the State to Suburban was by quitclaim deed. This transaction was part of the State project designed to straighten out a bend in Morris Avenue, the State Highway Commissioner having determined that it was necessary to procure the two parcels owned by Suburban and that the eight parcels to be conveyed to Suburban were no longer required by the State for highway purposes.
In consummation of the agreement, the deeds for the respective parcels and the $7,500 consideration paid by the State to Suburban were exchanged on March 24, 1937, and Suburban's deed from the State for the parcels which covered the old road bed of Morris Avenue was recorded in the office of the Register of Union County on April 13, 1937. These parcels, which are six in number, appear as 14V1A, 14V2A, 14V1B, 14V2B, 14V1C and 14V2C on the above-mentioned exhibit.
Suburban has remained in possession of the property set forth in the above-mentioned deed from the State, except for the hereinafter referred to parcels taken by the State and put to highway use in 1963 which are now the subject matter of this action, and paid taxes continuously thereon to the Township of Union and generally exercised the rights of ownership over the property concerned from the date of the transfer of title to it. Since the property was conveyed to Suburban in 1937 and prior to its taking by the State in 1963, it had been used as part of the "rough" of the seventh hole of the golf course. The old road bed was impassable because of growth over the years of trees and underbrush thereon, and it was not accessible to the public because of
possession and use by Suburban and the fences erected and maintained by the State Highway Department along Morris Avenue.
Sometime during the year 1963 the State Highway Commissioner determined that it would be necessary to construct a new road known as a "jug handle," adjacent to Morris Avenue, to facilitate the movement of traffic to and from a large shopping center recently erected across from Suburban's golf course and to relieve congestion and facilitate safety because of the increasingly large volume of traffic on that part of Morris Avenue. Upon learning through its title search that Suburban had never applied to the County of Union for vacation of its highway use easement over the six parcels above mentioned, the State Highway Commissioner, without the knowledge or consent of Suburban, applied to the County of Union for and received a vacation of two of the parcels named above, i.e., 14V1C and 14V2C, and for portions of two of the other parcels also named above, i.e., 14V1B and 14V2B, for the construction of the "jug handle." These parcels constitute the subject matter of this suit.
After procuring the resolution from the Board of Freeholders of Union County vacating any highway use easement that they may have had affecting parcels 14V1C, 14V2C, 14V1B and 14V2B, the State Highway Commissioner entered upon the land and took it for public highway purposes. He has offered to compensate Suburban for all lands the State has taken except the above-mentioned four parcels which lie in the old road bed of Morris Avenue, the Commissioner contending that the deed to the latter parcels was ultra vires and void as not having been given in compliance with N.J.S.A. 27:12-1, and also that the State had no title to said parcels which it could convey by the above-mentioned deed and, therefore, that no title exists in Suburban.
Four primary issues arise in this action: (1) whether the State Highway Commissioner's deed of March 24, 1937 to Suburban for parcels 106X, 101BX, 14V1A, 14V2A, 14V1B, 14V2B, 14V1C and 14V2C was ultra vires and void; (2)
whether the State is estopped from asserting title in derogation of its deed to Suburban if the same is valid; (3) whether the State is equitably estopped under the stipulated facts, and (4) what title Suburban received to the parcels in question through the State Highway Commissioner's deed, if such deed is valid and the State is not estopped.
The case law of New Jersey is sparse on the issues above enumerated. The court's research has therefore extended to other jurisdictions and sources of legal information.
Is the State's deed to Suburban ultra vires and void? In order to be valid the procedure followed must comply with N.J.S.A. 27:12-1, entitled "Disposition of property not needed for public use" and which provides:
"When real estate or any right or interest therein has or shall have come into the possession or control of the commissioner, or when he has or shall have taken real estate or any right or interest therein, in the name of the State for the use of the State in the improvement, betterment, reconstruction or maintenance of a State highway, and the commissioner has or shall have determined that the property so acquired is no longer required for such use, he may:
c. Sell at public sale to the highest bidder; and
d. Exchange for other lands --
All or any portion of such real estate, or any interest therein, with or without improvement thereon, including the hereditaments, appurtenances, easements and rights of way, and make the necessary conveyance of same."
(The amendments of L. 1938, c. 407 and L. 1954, c. 74 made no changes in the above cited portion of N.J.S.A. 27:12-1 in effect at the time of the conveyance with which the court is here concerned.)
The deed from the State to Suburban, executed on March 24, 1937 by the then State Highway Commissioner Sterner, recites a consideration of "One Dollar ($1.00)" and "other valuable consideration" and does not indicate on its face whether the transfer was by "sale" or "exchange" under the provisions of N.J.S.A. 27:12-1. However, Exhibit PD-1, the "Stipulation of Facts," indicates the nature of the transaction there involved. Paragraph 1 states that "Suburban agreed to sell to the Commissioner, parcels 14A and 14B, in
exchange for a conveyance by the Commissioner to Suburban of certain other parcels, namely, 106 X, 101BX, 14V1A, 14V2A, 14V1B, 14V2B, 14V1C ...