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Borough of Wildwood Crest v. Smith

Decided: May 9, 1986.

BOROUGH OF WILDWOOD CREST, A MUNICIPAL CORPORATION, PLAINTIFF-APPELLANT,
v.
CECILE O. SMITH, ET AL., DEFENDANTS-RESPONDENTS



On appeal from the Superior Court of New Jersey, Law Division, Cape May County.

King, O'Brien and Simpson. The opinion of the court was delivered by O'Brien, J.A.D.

O'brien

Borough of Wildwood Crest (Borough) appeals from a judgment of the Law Division which determined the quantum of real property owned by defendants Monterey Motel, Inc. (Monterey) and Cecile O. Smith (Smith), for purpose of valuation in this condemnation action.*fn1

Both of the properties are beaches fronting on the Atlantic Ocean. The Borough contends that the properties of Smith and Monterey extend only from the established bulkhead to the mean high water line and are both subject to an easement for free and open public bathing beach purposes. Both property owners successfully argued that they had riparian rights in the land extending eastward from the mean high water line at the time of their deed, approximately 4,000 feet into the Atlantic Ocean. Smith successfully argued that the easement to the Borough for public bathing beach purposes, purportedly reserved in the deed to her predecessor in title, was invalid as being given to a third party and prospective, i.e., not a present grant of such an easement.

After a bench trial including testimony of title experts and receipt of various deeds in the chains of title, riparian grants, and various maps, the trial judge rendered a letter opinion. The implementing order entered on December 14, 1984, which appointed condemnation commissioners, provided that the properties

of Monterey and Smith extend beyond the premises described in the schedules attached to the condemnation complaint "to the exterior line of the riparian grant by the State of New Jersey Board of Commerce and Navigation, to Wildwood Crest Realty, dated June 15, 1925." The order further provided that an easement in favor of the Borough for public beach purposes covering both properties was effective as to the Monterey property, but ineffective as to the Smith property. The Borough appeals. We affirm in part and reverse in part.

The property in dispute is included within premises which have been referred to by the parties and the trial judge as Tract 5, which is described as follows:

ALL THAT parcel of land flowed by tide water, BEGINNING in high water line of Atlantic Ocean at intersection of Southwest side of Rambler Road extended Southeast to said high water line; thence (1) South 43 degrees 33 minutes East 3,535.63 feet more or less to exterior line established by Board of Commerce and Navigation; thence (2) South 36 degrees 5 minutes West, 4,567.27 feet along said exterior line to division line established by Agreement between Cape May Real Estate Company and Wildwood Crest Realty Company; thence (3) North 46 degrees 30 minutes West 3,608.8 feet more or less, to a point in approximate high water line as of September 1924; thence (4) North 37 degrees 20 minutes East 4,851.44 feet, more or less, along approximate high water line of September 1924, to place of beginning.

This parcel is labeled as Tract 5 and described as above in a deed dated April 8, 1958 from Norman S. Taylor, Sheriff of the County of Cape May, to Stephen E. McLoughlin, Jr., Trustee (McLoughlin) as a result of a mortgage foreclosure judgment dated January 14, 1958, bearing docket # F2903-56.

Both the Borough and defendants Monterey and Smith trace their chain of title to Wildwood Crest Realty Company/Wildwood Strand Realty Company. Wildwood Strand Realty Company gave a mortgage covering certain premises, including Tract 5, to Robert and David Hammond, dated July 15, 1925, and recorded in Book 225 of Mortgages at page 347 &c. This mortgage was assigned by Robert Hammond and the Estate of David Hammond to Colonial Trust Company, by assignment dated October 25, 1927, and recorded in Book 32 of Assignment of Mortgages at page 240. Colonial Trust Company merged

and consolidated with "Pennsylvania Company for Insurance on Lives and Granting Annuities,' which subsequently changed its name to "Pennsylvania Company for Banking and Trusts.' By assignment dated September 2, 1952, and recorded in Book 55 of Assignment of Mortgages at page 220, Pennsylvania Company for Banking and Trusts assigned the mortgage to McLoughlin. This is the mortgage which McLoughlin foreclosed in 1958 which resulted in the Sheriff's deed conveying Tract 5 to McLoughlin.

As of July 30, 1952, the Borough was the owner of 24 tax sale certificates, which included certificates numbered 1432 covering Block 118A, and 1436 covering Block 126A, in front of which lie the premises, owned by Smith and Monterey, described in the schedules attached to the condemnation complaint. In 1952, the Borough filed an action in the Chancery Division, bearing docket # F1952-51, to foreclose the right of redemption in these tax sale certificates against Wildwood Gables Corporation, the Pennsylvania Company for Banking and Trusts, the Township of Lower and the State, in which default was entered against the defendants. The court fixed September 2, 1952 as the time and place for redemption of the lands in question. At that time and place, McLoughlin, as assignee of a mortgage upon the lands covered by 21 of the tax sale certificates, appeared and paid a sum of money to redeem the 21 tax sale certificates pursuant to N.J.S.A. 54:5-54, including # 1432 and 1436 covering Blocks 118A and 126A which were then assigned to McLoughlin. On the application of McLoughlin, he was substituted as plaintiff in the action to foreclose the right of redemption in these tax sale certificates assigned to him by the Borough.

Thereafter, on October 20, 1952, the right of redemption of the named defendants was foreclosed and title in fee simple in the premises in question was vested in McLoughlin. This included Block 118A and Block 126A. A certified copy of the

judgment of foreclosure was recorded on October 23, 1952 in Deed Book 786 at page 116.

Contrary to the finding by the trial judge, the mortgage held by McLoughlin, which included Tract 5, was not foreclosed by the proceedings resulting in the judgment of October 20, 1952. That judgment was solely a foreclosure of the owner's right of redemption in premises covered by tax sale certificates pursuant to N.J.S.A. 54:5-85 et seq. Included within that section is N.J.S.A. 54:5-104 which provides as follows:

When in a judgment in an action to foreclose the right of redemption, the lands are described in a manner other than that contained in the certificate of tax sale, the judgment shall bar the defendant's right of redemption in and to all the lands described in the judgment, and that property only.

The judgment in this case described the property both by block number, including Blocks # 126A and # 118A, as well as by metes and bounds, the first and second course of which extend to and along the high water line and include the beach properties being condemned by the Borough. The judgment in that cause bars redemption only in the lands described in the complaint. See Newark v. Lodato, 139 N.J. Eq. 471, 472 (Chan.1947). Proceedings to foreclose a tax sale certificate are not followed by a public sale, nor by a deed from a sheriff or other public official as in a mortgage foreclosure. The final judgment bars rights of redemption, but does not otherwise enlarge the right, title and interest of the certificate holder. His certificate does not become merged into the judgment; it subsists as the indicia of title. Merger, in any event, is a matter of intention and not favored in equity. See Kurzius v. The Hillside Land Co., 112 N.J. Eq. 466, 468 (Ch.1933); see also 13 N.J.Prac. (Liebman Abstracts and Titles) (3rd Ed.1966), ยง 944, p. 568; see also Bron v. Weintraub, 42 N.J. 87, 91-92 (1964).

Tract 5 was not included in either of the blocks identified in the tax sale certificates nor in the metes and bounds description in the judgment. Title to Tract 5 remained in Wildwood Crest Realty Company or Wildwood Strand Realty Company/Wildwood Gables Corporation, to whom it had been conveyed by a

riparian grant from the State,*fn2 subject to the mortgage held by McLoughlin, as mortgagee by assignment from Pennsylvania Company for Banking and Trusts. Thus, while it is true that the mortgage apparently encumbered Tract 5, the mortgage was not foreclosed as part of the foreclosure of the right of redemption in the tax sale certificates, as held by the trial judge. We therefore disagree with the statement by the trial judge in his written opinion:

The mortgagee in 1952 obviously intended to foreclose all of the mortgagor's rights in said property including the mortgagor's riparian rights.

The mortgage was not foreclosed by McLoughlin, until the judgment of the Chancery Division dated January 14, 1958, bearing docket # F2903-56, which resulted in the sheriff's deed from Norman S. Taylor, Sheriff of the County of Cape May, to McLoughlin, dated April 8, 1958, and recorded in Book 968 of Deeds at page 166, which, as noted, included Tract 5.

In the meantime, McLoughlin had conveyed to Bayview Corporation (Bayview) premises including Blocks 118A and 126A, by warranty deed dated May 1, 1954, and recorded in Book 825 of Deeds at page 207. This deed contains a recital that these were the premises acquired by McLoughlin through the tax sale foreclosure judgment recorded in Deed Book 786 at page 116 &c. By warranty deed dated May 1, 1954 and recorded in Book 825 of Deeds at page 199, Bayview conveyed Block 126A, also described by metes and bounds, to E. H. Zimmer, which deed contains a recital:

TOGETHER with the Riparian Rights of the party of the first part but under and subject to an easement to be given by the party of the first part to the Borough of Wildwood Crest for the area from the mean high water line to 150 feet westerly thereof, the purpose of ...


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