Halpern, Crahay and Ackerman.
Appellant municipality challenges a summary judgment entered on stipulated facts which ordered that it
On January 27, 1972 plaintiff, American Dream, Inc. (American) executed a written option agreement with the owner of the involved premises -- one Goldberger -- to purchase approximately 31 acres of land, the option to endure until January 31, 1973. The consideration for the option was $16,344.96 and, if exercised, the purchase price was to be $250,000. Additionally, plaintiff assumed the responsibility to pay all municipal taxes and assessments.
On January 31, 1973 American and Goldberger extended the option for a period of six months for an added consideration of $5,625.24, that sum representing the aggregate of the monthly installments and real estate taxes for the period from February 1 to July 31, 1973. The purchase price of the property was increased from $250,000 to $260,000. Prior thereto, on December 26, 1972, plaintiff had been informed by the municipality that no assessments were then owing. This admittedly was in error since the township had in fact adopted an ordinance on March 25, 1971 imposing a sewer assessment against the property.
On March 9, 1973 plaintiff contingently contracted to sell its option to a third party -- one Prel Holding Co. (Prel) -- that contract providing that Prel pay plaintiff $100,000 and Goldberger $260,000. In April 1973 Goldberger advised
American that he had received a sewer assessment bill in the amount of $20,719.17.
Plaintiff's complaint sought a declaratory judgment of nonliability for the assessments, reciting basically that
(1) It had received, pursuant to its request, a search for municipal lien on December 26, 1972 indicating that there was no assessments or liens of record and that on March 9, 1973, based upon "all its cost factors," it entered into an agreement with Prel to sell its option.
(2) Having paid consideration for the option, that it was protected by N.J.S.A. 54:5-17. (This was later amended, without objection, to claim exemption under N.J.S.A. 54:5-18.5).
(3) "To allow the continuation of said assessment and lien to remain upon this property would work both a substantial hardship and irreparable harm upon the said American Dream, Inc. More particularly, the transaction between the said American Dream, Inc. and the Prel Holding Co. would be cancelled, wherein damages to the said American Dream, Inc. would be substantial." (Emphasis supplied)
The relief prayed for was the removal of the lien in the stated amount of $20,719.17.
Following argument on the motion for summary judgment, the trial judge granted plaintiff's claim for relief, rejecting the municipality's argument that the holder of an option for the purchase of land does not have such an interest in land to warrant the statutory exemption. The court distinguished State v. New Jersey Zinc Co., 40 N.J. 560 (1963), holding that Zinc dealt with the issue of optionees' entitlement to participate in eminent domain proceedings. It went on to consider as factors in its holding that American had (1) expended monies to improve the property, (2) extended the ...