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City of Atlantic City v. C-11

Decided: June 9, 1977.


For affirmance -- Chief Justice Hughes, Justices Mountain, Sullivan, Pashman, Clifford and Schreiber and Judge Conford. For reversal -- None. The opinion of the court was delivered by Pashman, J. Conford, P.J.A.D., Temporarily Assigned, concurring in result. Justice Mountain and Justice Clifford join in this opinion. Mountain and Clifford, J.J., and Judge Conford concurring in the result.


[74 NJ Page 36] This is a companion case to Township of Montville v. Block 69, Lot 10, et al., 74 N.J. 1 (1977) decided this day. Although the landowner in this case similarly challenges the constitutionality of notice requirements embodied in the In Rem Tax Foreclosure Act, N.J.S.A. 54:5-104.29 et seq., she also questions the applicability of that statute to her property and asserts various procedural reasons in support of her motion to reopen a final judgment of foreclosure in favor of the plaintiff, City of Atlantic

City, under the Act. Both lower courts denied her motion, and we granted certification, 69 N.J. 394 (1976). We affirm the denial of appellant's motion.


This suit involves a parcel of land designated as Block C-11, Lot 11 on the Atlantic City tax map. The Synor Company purchased the property on April 12, 1938. Although that corporation subsequently became defunct, municipal tax records have always listed the record owner of the property as "Synor Co.," with a mailing address of "Hotel Mark, 3100 Pacific Ave., Atlantic City, N.J."

The appellant, Mrs. Rose Schoenthal, filed an affidavit asserting that the property had previously been owned by her husband, Sylvan Schoenthal. She alleges that he conducted a hotel on the premises until 1960, when they were divorced. She asserts that, although no deed ever passed to her and the property technically still belongs to the defunct corporation, as "part of the divorce proceedings . . . the property in question * * * became [her] property." In support of her claim that she is the real party in interest, she states that since 1960 she has continuously dealt with the parcel as her own, paying taxes on it from 1960 to 1965. She applied for a tax deduction in her own name in 1962 and 1964, and received a refund in 1963 for an overpayment on her 1961 property tax. In 1972, appellant obtained a municipal permit and demolished the deteriorating building. Later that year she applied for and received a reduction in her building assessment from $49,100 to $25,000.

The arrearages on the property began to accumulate as early as 1965. Appellant received a notice of default with her 1967 tax bill and a warning that her property might be sold for unpaid taxes. The City did in fact conduct a tax sale of the premises on September 19, 1967, purchasing the property itself for unpaid 1966 taxes plus interest aggregating

$5,209.40. A tax sale certificate noting the sale was recorded on January 15, 1968.

Mrs. Schoenthal paid no part of the 1966 or any subsequent tax bills. As of November 30, 1972, the total taxes and interest due amounted to $52,579.57. She alleges that the property was worth $135,000 at that time. Appellant contends that she offered to pay $5,000 toward her tax bill on July 10, 1970, but was refused by the Deputy Tax Collector. In an answering affidavit, he denied appellant's allegations and asserted that had she offered to pay any part of the taxes, he would have referred her to the Tax Collector or the Director of Revenue and Finance.

On January 8, 1973 the City instituted in rem tax foreclosure proceedings to bar any rights of redemption in the property. Both the complaint in the action and the foreclosure notice listed Synor Co. as the "record owner" and the "transferee of purchaser of title." R. 4:64-7. This notice was published and posted in accordance with N.J.S.A. 54:5-104.42 and R. 4:64-7(b), (d). Additionally, an affidavit was filed on behalf of the City alleging that a copy of the foreclosure notice was mailed on February 24, 1973 "to each person whose name appears as an owner in the Tax Foreclosure List, at his last known address as it appears on the last municipal tax duplicate * * *."

The Chancery Division entered a final judgment of foreclosure on May 23, 1973. Claiming to have learned of the proceeding in late September, Mrs. Schoenthal filed a motion to vacate the judgment on November 3, 1973. It was denied on March 30, 1974. In an unreported opinion, the Appellate Division affirmed the trial court's denial of the motion, holding (1) that appellant had no standing to contest the foreclosure; (2) that the notice provisions of the foreclosure act were constitutional under City of Newark v. Yeskel, 5 N.J. 313 (1950), and that the City was not bound to send notice of the ...

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