On appeal from the Superior Court, Law Division, Passaic County.
King, Brody and Ashbey. The opinion of the court was delivered by Ashbey, J.A.D.
At issue in this appeal are the damages due an assignee of a municipal tax sale certificate which is invalid as a result of municipal error. In Manor Real Estate & Trust Co. v. City of Linden, 8 N.J. Super. 114, 116-117 (App.Div.1950), we held that the assignee was not entitled to any refund. We now hold that the assignee is entitled to a refund plus lawful interest under N.J.S.A. 54:5-43.
On December 3, 1982, there being no purchaser at the sale, the tax collector of the city of Paterson (City) sold to the City tax sale certificate # 82-00357 for premises known as 431 River
Street, pursuant to N.J.S.A. 54:5-34 and N.J.S.A. 54:5-46. On September 14, 1984, the collector sold to the City tax sale certificate # 84-00123 for premises known as 369 Union Avenue.
On April 28, 1986, the City assigned both the certificates by private sale to plaintiff pursuant to N.J.S.A. 54:5-113. At the time of the assignments, both were invalid. On April 11, 1986, the collector had accepted payment of the taxes due on the 369 Union Avenue property (Certificate # 84-00123), thus invalidating that certificate. On the other hand, the certificate on 431 River Street had been invalid when the premises were sold because taxes had never been in arrears. See N.J.S.A. 54:5-19. These errors were discovered by plaintiff when his counsel conducted the search needed to institute tax sale certificate foreclosure proceedings.
In December 1986, plaintiff filed a "Notice of Claim Under Tort Claims Act" with the City, requesting that the City refund his money, together with interest, fees and costs. The City responded that it would refund the purchase price, but not the interest and expenses, and tendered a check for the purchase price which plaintiff refused. Plaintiff filed this complaint. Both parties moved for summary judgment and by order dated November 2, 1987 the Law Division granted summary judgment in favor of the City and against plaintiff, with costs.*fn1
Although plaintiff filed his claim under the Tort Claims Act (Act), he sought contract damages. The City asserted the Act's immunity, and this appeal requires us to examine the relationship between the Tax Sale Law (Law) and the Act. Under the Law, particularly N.J.S.A. 54:5-104.30(f), plaintiff acquired by the assignment a "[t]ax lien title" derived from a tax sale to
satisfy a municipal tax lien. The following is an excerpt from the assignment # 84-00123:
"the city . . . does hereby grant, bargain, sell, assign, transfer, and set over unto the said party of the second part, her, his or its heirs, successors and assigns, all that certain tax sale certificate(s) bearing No.(s) 84-00123 made by the Collector of Taxes of said City of Paterson to said Nicholas Tontodonati for the sum of $2,184.49.
Together with all right, title, and interest acquired by virtue of said Certificate of Tax Sale and to the premises ...