On appeal from Superior Court of New Jersey, Law Division, Mercer County.
[174 NJSuper Page 323] In order to obtain final subdivision approval plaintiff posted a performance guarantee in the amount of $142,665.55 by posting a performance bond in the amount of $71,332.75 and cash in the same amount. During the course of development requests for partial reduction of the performance guarantee were honored by the municipality by approving reductions in the performance bond. By resolution adopted June 13, 1978 the municipality,
upon recommendation of its engineer, determined that all of the improvements had been completed and that upon posting a maintenance guarantee and a cash escrow for completion of certain minor items, the balance of the performance bond and the cash deposited would be released. By resolution of September 12, 1978 the municipality approved the issuance of a check to plaintiff for the return of the cash deposited. Through clerical errors the check was not delivered to plaintiff until January 12, 1979, the date upon which a motion for summary judgment was heard.
The cash deposited was invested by the municipality. Plaintiff contends that it should be paid the interest received by the municipality on the cash deposited. The trial judge allowed recovery to plaintiff of the interest received by the municipality on the amount deposited from September 8, 1976, the date when demand was first made for interest. The actual date of deposit of the money with the municipality cannot be definitely established from the record, but it was between December 21, 1973 and March 15, 1974. The judgment was for $11,081.68. Plaintiff appeals from so much of the judgment as provides that its right to interest commences September 8, 1976 rather than the date of deposit. Defendant cross-appeals from so much of the judgment as requires the payment of any interest.
The performance guarantee was posted in accordance with § 3 of the subdivision ordinance which provided in part:
The requirement for a performance guarantee at that time was authorized by N.J.S.A. 40:55-1.21. No question has been raised about the validity or reasonableness of the ordinance. It is to be noted that at the present time an ordinance requiring a
performance guarantee under N.J.S.A. 40:55D-53 may require no more than 10% of the total performance guarantee to be in cash. N.J.S.A. 40:55D-6.
The ordinance is clear that the cash deposited by a developer will while held by the municipality be invested in the manner prescribed by law for municipal funds. It makes no provision for the payment of any interest received by the municipality to the developer. It states specifically that upon satisfactory completion of the improvements and the posting of a maintenance bond, "the principal amount" will be refunded to the developer. No statute has been cited to us requiring the payment to one depositing funds with a municipality of any interest that may have been received by the municipality on the investment of such funds.
In Consolidated Police, etc., Pension Fund Comm'n v. Passaic , 23 N.J. 645 (1957) the court stated:
And in this country interest is generally of statutory origin. Ordinarily, interest is not due as "compensation for the use of ...