Lora, Crane and Michels. The opinion of the court was delivered by Lora, P.J.A.D.
Defendant-appellant Central and Lafayette Realty Company, Inc. (Central) owned an office building in Newark which was gutted by a fire. The improvements on the land were insured by the defendant Royal Globe Insurance Companies for $480,000. Central's insurance claim was settled for $400,600.
Newark had assessed the property in question for $251,900, which represented $176,900 for the land and $75,000 for the improvements. Unpaid real estate taxes and delinquencies for the years 1973-1976 totalled $80,742.91. There is no allegation or proof that Central agreed to insure for the benefit or protection of Newark.
Plaintiff City of Newark sued in the Chancery Division seeking to have Royal and Central enjoined from paying out or receiving any proceeds from any policies covering loss by fire on the premises until plaintiff was paid for costs and expenses to be incurred in demolishing the building and until the tax arrears were satisfied from the proceeds of the insurance policies. The trial judge applied the doctrine of equitable conversion and held that Newark was entitled to satisfy its tax lien out of the proceeds of the fire policy but not the costs of $15,900 incurred by it to demolish the fire-gutted building. Central appeals from that portion of the judgment which directs that the real estate taxes be paid out of the insurance proceeds. Newark has not appealed.
Central first contends that the trial judge erred in expanding the manner in which real estate taxes shall be collected; that proceedings to collect real estate taxes are strictly in rem and the owner of real estate incurs no personal liability for delinquent real estate taxes.
In Murphy v. Jos. Hollander Inc. , 131 N.J.L. 165, 170-171 (Sup. Ct. 1943) it was held that
Where the legislature has provided a special method for the collection of taxes, such is ordinarily an exclusive procedure, and remedies based upon general legal rules may not be invoked. The maxim " expressio unius est exclusio alterius ," governs in the absence of provision otherwise, express or fairly to be implied. Freeholders of Atlantic v. Weymouth , 68 N.J.L. 652, supra; Baker v. East Orange , 95 N.J.L. 365, affirmed , 96 Id. 267. Yet, where the statutory means of collection have been exhausted, resort to other measures to enforce payment of the tax, and thus to obviate a failure of justice, have been deemed legally justifiable; and the tax is considered a "debt" in the sense of an obligation or liability for which a creditors bill will lie.
See also, Bayonne v. Murphy & Perrett Co. , 7 N.J. 298, 310-311 (1951); Wrightstown v. Salvation Army , 97 N.J.L. 89, 90-91 (Sup. Ct. 1922); Camden v. Allen , 26 N.J.L. 398, 399-400 (Sup. Ct. 1857).
The Legislature has provided specific statutory means by which Newark can collect its delinquent taxes, i.e. , the Tax Sale Law (N.J.S.A. 54:5-1 et seq.), and the supplementary In Rem Tax Foreclosure Act (N.J.S.A. 54:5-104.29 et seq.). Since Newark has concededly not begun to avail itself of the statutory means to enforce collection, much less exhausted them, we are of the view that the trial judge erred in expanding the manner in which real estate taxes could be collected.
Further, we are in accord with Central's contention that a tax on real estate is simply a lien against the real estate on which the taxes were assessed and not a personal obligation of the landowner. In re Taylor , 30 N.J. Super. 65, 69-70 (Cty. Ct. 1954); Bea v. Turner & Co. , 115 N.J. Eq. 189, 192 (Ch. 1934); Wrightstown v. Salvation Army, supra , 97 N.J.L. at 91. Plaintiff is then precluded from obtaining a personal judgment against Central in order to satisfy the tax lien.
Central next maintains that the trial judge erroneously extended the doctrine of equitable conversion in order to bring the situation here involved within its comprehension. We agree. As stated by then Judge (later Chief Justice) Weintraub in N.J. Highway Auth. ...