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West Park Ave. Inc. v. Township of Ocean

Decided: November 7, 1966.


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 Weintraub, C.J.


Plaintiff sued to recover $17,700 which it paid defendants, allegedly under duress. The trial court found the payments were in fact made unwillingly but held they nonetheless were "voluntary" in law and therefore unrecoverable because plaintiff ought to have sued to restrain the defendant municipality from pressing its illegal demand. We certified plaintiff's appeal before argument in the Appellate Division.


Plaintiff acquired 60 lots from one Leon Massar, which lots were part of a subdivision plan. After completing a model home, plaintiff erected signs advertising its tract, whereupon plaintiff was told by municipal officials that it could not use a billboard or receive further building permits or certificates of occupancy unless it agreed to pay to the defendant Board of Education the sum of $300 per house.

As we have said, the trial court found that plaintiff yielded unwillingly to this imposition. That finding, we think, was inescapably correct. Plaintiff feared it could not survive if its project stood still during a period of litigation. It also sensed a danger of hostile enforcement of ordinances bearing upon the construction of homes. This was especially understandable because of the boldness with which the dollar demand was made, for the municipality did not so much as adopt an ordinance to give color to the exaction. Rather the demand was made at the administrative level by minor officials who, pursuant to instructions from above, simply refused to obey their duties of office.

When plaintiff yielded, counsel for the municipality prepared a writing, with a flimsy contractual overlay, calling for a payment of $300 "upon the closing of title and delivery

of deed to a purchaser for each house and lot," said moneys to be placed "in a trust fund or sinking fund, to be established for capital improvements of said school system and the erection of additional or adequate school construction in the said Township of Ocean." There were two such agreements, one executed in February 1959 for some of the 60 lots and the other in April 1960 for the balance of them.

In point of time, those transactions followed close upon our decision in Daniels v. Borough of Point Pleasant, 23 N.J. 357 (1957), in which we struck down an ordinance which attempted to impose a tax for revenue purposes upon new construction. In form the ordinance increased the fees for building permits. We said (at p. 362):

"* * * Admittedly, the purpose of the ordinance was to raise revenue to defray the increased cost of school and other government services. The philosophy of this ordinance is that the tax rate of the borough should remain the same and the new people coming into the municipality should bear the burden of the increased costs of their presence. This is so totally contrary to tax philosophy as to require it to be stricken down; see Gilbert v. Town of Irvington, 20 N.J. 432 (1956). Admittedly, these fiscal problems confronting many of our rapidly growing municipalities are grave ones and would seem to call for legislative action; the remedy must come not from the municipalities nor from the courts but from the Legislature."

The Legislature has not been unaware of the over-all problem. It dealt with it in its statute relating to subdivisions. N.J.S.A. 40:55-1.21 reads:

"Before final approval of plats the governing body may require, in accordance with the standards adopted by ordinance, the installation, or the furnishing of a performance guarantee in lieu thereof, of any or all of the following improvements it may deem to be necessary or appropriate: street grading, pavement, gutters, curbs, sidewalks, street lighting, shade trees, surveyor's monuments, water mains, culverts, storm sewers, sanitary sewers or other means of sewage disposal, drainage structures, and such other subdivision improvements as the municipal governing body may find necessary in the public interest."

But with respect to the impact of housing developments upon the educational scene, the Legislature went no further than

to provide that the governing body or planning board "shall be permitted to reserve the location and extent of school sites, public parks and playgrounds shown on the master plan or any part thereof for a period of one year after the approval of the final plat or within such further time as agreed to by the applying party," but "Unless during such one-year period or extension thereof the municipality shall have entered into a contract to purchase or instituted condemnation proceedings according to law, for said school site, park or ...

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