On appeal from the Superior Court, Law Division, Union County.
Pressler, Baime and Ashbey. The opinion of the court was delivered by Pressler, P.J.A.D.
This protracted and procedurally complex litigation arises out of a contract for the sale of a portion of its Walton School property by the Board of Education of the Township of Springfield (board) to Green Springs Estates, Inc., (Green Springs). Green Springs appeals from that portion of the judgment which, although validating the contract, nevertheless required title to pass subject to the restrictive covenant in the deed by which the property had been conveyed to the board by the Township of Springfield. This restriction limited the use of the tract to public school and other public purposes. The board cross-appeals, claiming that the trial judge erred in not setting the sale aside. We are satisfied that the trial judge correctly concluded that the property remained subject to the restrictive covenant. We are, however, persuaded, for the reasons stated herein, that this conclusion compelled the corollary remedy of rescission of the sale.
The tract, approximately 25 acres in size, was conveyed to the board by the township in 1949. The deed included this provision:
The party of the second part [board] covenants and agrees that the premises hereby conveyed are restricted to use solely for public school purposes, athletic, recreation and accessory public uses.
The property, which came to be known as the Walton School tract, was used for school purposes by the board until 1983 when it determined that about half of it was no longer needed for school use. It accordingly adopted a resolution in August of that year so stating and authorizing the public sale of the
approximately twelve acres here in controversy, which also included the school building. The bid documents made no reference to the restrictive covenant and imposed no limitation based thereon on the prospective use of the property. The sale was, however, to be subject to easements and restrictions of record. Green Springs was the sole bidder at the sale, offering $1,055,000 for the tract. It was Green Springs' intention to use the property for residential development. The bid was accepted by the board by resolution adopted in October 1983, and a contract of sale was shortly thereafter executed by those parties. This litigation, as well as related judicial and administrative litigation, ensued.
In broad outline, the township, attempting to obtain a judicial invalidation of the sale, instituted this action. Initially, it challenged the sale only on the ground that the contract was void by reason of its failure to comply with N.J.S.A. 40:55D-55, which requires an agreement for the sale of a portion of a single tract to be expressly conditioned on subdivision approval. Although that basis of attack was ultimately obviated by an amendment of the contract by the board and Green Springs to so provide, the board itself subsequently decided to attempt to repudiate the contract, having concluded that the premises were indeed required for school use.*fn1 Thus, in May 1984,
shortly before the entry of a judgment dismissing all other remaining claims as against all other parties, who by that time included the individual board members, the board moved for leave to amend its cross-claim against Green Springs in order to allege procedural defects in the bidding process. The motion was granted and the controversy, in its then posture, was pretried. After the pretrial in June 1985, the board sought and was granted leave to file a third-party complaint against the township challenging the validity of its 1977 subdivision ordinance pursuant to which Green Springs had obtained subdivision approval in early 1984. This pleading was followed by an amended third-party complaint by which the board also challenged the township's zoning map and official map, claiming them to be in conflict with each other and with the land use element of the master plan by having designated the Walton School tract as a residential rather than a public use. The township by its answering pleading finally raised the issue of the restrictive covenant and sought to enjoin the sale by the board to Green Springs on the basis thereof.
Following trial, the judge, by letter opinion, concluded that (1) the bidding process was not materially defective; (2) the board's assertion of its continuing need for property for school use was precluded by reason of the Commissioner's of Education prior determination, in a contested case, that the board's earlier decision that it did not need the property was not arbitrary or unreasonable; (3) the restrictive covenant was binding on Green Springs both by reason of N.J.S.A. 18A:20-10 and because it constituted a restriction of record running with the land; (4) the official map was invalid as to this property, and (5) the subdivision ordinance was valid. A conforming judgment was entered.
Before considering the substantive issues, we address the procedural issues raised by Green Springs, namely, the propriety of the trial judge's orders permitting the board to file the amended ...