On certification to the Superior Court, Appellate Division.
For Modification and Affirmance -Chief Justice Wilentz, and Justices Clifford, Handler, Pollock, O'Hern, Garibaldi and Stein. Opposed -- None. The opinion of the Court was delivered by Pollock, J.
In Wattles v. Plotts, 120 N.J. 444, 577 A.2d 131 (1990), decided today, we imposed a constructive trust for the benefit of a tax-sale certificate holder on the interest of an heir hunter that had located heirs interested in the property covered by the certificate. This action involves an attempt by an heir hunter, defendant, Continental Searchers, Inc. (Continental), to upset title to property now owned by plaintiff O & Y Old Bridge Development Corp. (O & Y). Title to the property had been quieted in a 1957 proceeding that Continental claims was defective.
The Chancery Division entered a final judgment declaring that Continental had no interest in the property and that O &
Y's title was good. In an unreported opinion, the Appellate Division affirmed. We granted Continental's petition for certification, 118 N.J. 229, 570 A.2d 981 (1989), and now modify and affirm the judgment of the Appellate Division.
The property is a 44.36-acre parcel in Old Bridge (formerly Madison Township), Middlesex County, that O & Y acquired in four separate conveyances as part of the development of a 2,600-acre tract. Title to all four parcels may be traced to a common grantor, Arthur Brown, who was the immediate grantor of one of the parcels and the mesne grantor of the other three. At one time, Brown's grandfather, William J. Morrell, apparently owned the property, but no deed in Morrell's name was of record in Middlesex County. Until the 1950s, however, Old Bridge listed Morrell or his estate as the owner. Brown has lived his entire life on adjacent property, and formerly maintained a garden on the property in question. After the death of his grandparents, Brown began to pay the real estate taxes "to hold the property."
Brown consulted the tax collector about clearing the title. On the tax collector's advice, Brown stopped paying taxes for two years. On January 16, 1953, he purchased a tax-sale certificate on the property. He then consulted an attorney who was familiar with the long involvement of Brown's family with the property. In 1957, believing that Brown was in peaceable possession of the property and that he met the other requirements of N.J.S.A. 2A:62-1, the attorney proceeded with a quiet-title action, instead of an action to foreclose the tax-sale certificate pursuant to the Tax Sale Law, N.J.S.A. 54:5-1 to -129. Included among the named defendants was one Henry A. Moore, a former record holder from New York. Moore was one of Morrell's predecessors in title, and in 1891 had leased the property to John and Irene Morrell. The record does not indicate the relationship between John and Irene Morrell and
William J. Morrell. Also joined were Moore's heirs and others. The attorney, with the help of New York counsel, searched in vain for Moore and his heirs. No defendant appeared, and in 1958 the Chancery Division entered a judgment by default. The judgment quieted title in favor of Brown and adjudicated that Moore and his heirs had no interest in the property.
Unfortunately for O & Y, Brown, as it now turns out, had not satisfied the requirement of peaceable possession necessary for a quiet-title action. Among other requirements for such an action, the party seeking relief must have been assessed and must have paid the taxes for five consecutive years immediately prior to suit. N.J.S.A. 2A:62-2.
Through searching title on a nearby property, Continental learned of the defect in Brown's title. Sensing an opportunity, it offered to "clear up the title" for O & Y. That was the second time that Continental had solicited O & Y. Previously, Continental had learned of another outstanding interest in the 2,600-acre tract, had obtained a ...