On certification to the Superior Court, Appellate Division, whose opinion is reported at 333 N.J. Super 476 (2000).
The opinion of the court was delivered by: Stein, J.
Argued September 17, 2001
This appeal requires our review of a Chancery Division determination, affirmed as modified by the Appellate Division, BTD-1996 NPC 1, L.L.C. v. 350 Warren, L.P., 333 N.J. Super. 476 (2000), holding unconstitutional as applied to plaintiff a provision of N.J.S.A. 22A:4-8 authorizing the collection of a Sheriff's fee based on a settlement that occurred subsequent to the entry of a final judgment of foreclosure and issuance of a Writ of Execution. The Chancery Division determined that the fee in question was essentially equivalent to a tax. The Appellate Division agreed, a divided panel of that court also concluding that the levy was unenforceable in the absence of legislative intent to impose a tax on the users of Sheriffs' services. Id. at 484.
We conclude that the record before us clearly is inadequate to support the Chancery Division's conclusion that the charge authorized by the statute "?is intended primarily to raise revenue, and not to compensate the governmental entity for the cost of providing the service.'" Id. at 479. Moreover, absent any procedural challenge to the enactment of N.J.S.A. 22A:4-8, see N.J. Const. art. IV, § 6, ¶ 1 (requiring that revenue bills originate in the General Assembly), we disagree with the holding of the majority below that the statute, if determined to be a tax, is unenforceable absent a legislative intent to impose a tax. Accordingly, we reverse the judgment below.
The facts are essentially undisputed. In May 1997, plaintiff BTD 1996, NPC 1, L.L.C. (BTD) filed a complaint in foreclosure against 350 Warren L.P. (350 Warren). In December 1997, the court entered a judgment in foreclosure in the amount of $3,830,913.23, and issued a Writ of Execution. In response to BTD's request, the Hudson County Sheriff scheduled a foreclosure sale and required BTD to pay a $1000 deposit to be applied against the Sheriff's expenses. The Sheriff scheduled the sale for July 9, 1998, placing the required notices of sale at the premises and in legal advertisements in local newspapers. The parties stipulated that the actual cost of the direct services performed by the Sheriff's office in preparing for the sale – exclusive of indirect costs for personnel, equipment, supplies, office space and other expenses essential to the operation of the Sheriff's office – amounted to $974.14.
Prior to the sale, BTD requested that the Sheriff's office cancel the sale, informing them that the underlying dispute had been resolved by 350 Warren's payment of $2,400,000. Pursuant to N.J.S.A. 22A:4-8, the Sheriff sent BTD an invoice for $30,408.64, representing the fee for services rendered in connection with the foreclosure proceeding. That statute, entitled "Fees and mileage of sheriffs and other officers," provides in pertinent part:
When a sale is made by virtue of an execution the sheriff shall be entitled to charge the following fees: On all sums not exceeding $5,000.00, 4%; on all sums exceeding $5,000.00 on such excess, 2½%; the minimum fee to be charged for a sale by virtue of an execution, $20.00.
When the execution is settled without actual sale and such settlement is made manifest to the officer, the officer shall receive ½ of the amount of percentage allowed herein in case of sale.
After BTD refused to pay the Sheriff's fee, the Hudson County Sheriff instituted proceedings in the Chancery Division through an Order to Show Cause to compel payment. The Sheriff's supporting papers essentially related the relevant facts supporting the demand for payment of the fee. The papers in opposition, consisting of a brief and certification by an attorney associated with BTD's counsel, alleged that the Sheriff's direct costs of $971.14 were facially disproportionate to the fee assessed against BTD. No other proofs were proffered by either party. After the initial hearing on the Sheriff's application, the Chancery Division ordered that notice of the proceeding be provided to the Attorney General, see R. 4:24-4, and also permitted Warren, Somerset, Hunterdon, Morris and Monmouth counties, as well as the Sheriff's Association of New Jersey, to participate as amici curiae. The Attorney General declined to participate.
On the next hearing date, the Chancery Division dismissed the Sheriff's application, holding that N.J.S.A. 22A:4-8, as applied to BTD, imposed a tax, and that the tax was unenforceable pursuant to art. 4, § 7, ¶ 4 of the New Jersey Constitution, which provides that "every law shall embrace but one object and that shall be expressed in the title." The court reasoned that N.J.S.A. 22A:4-8 violated that constitutional mandate because its title – "Fees and mileage of sheriffs and other officers" – does not disclose that the statute imposed a tax. Explaining its conclusion that the fee at issue was essentially equivalent to a tax, the court observed
that N.J.S.A. 22A:4-8 is unconstitutional as applied to the plaintiff in this case, where the disproportion between the charge and the cost of the service is excessive, the charge imposed is intended primarily to raise revenue, and not to compensate the governmental entity for the cost of providing the service. Resolution Trust v. Lanzaro [140 N.J. 244 (1995)].
As a result, the charge is essentially the equivalent of a tax, measured by the sale price of the foreclosed property. [I]t is apparent in this case that the charge is grossly disproportionate to the cost of the services rendered under any measure, and it is premised solely on the statutory authorization appearing in 22A:4-8, which permits the Sheriff to receive one-half of the amount of the percentage allowed in the event a sale is made.
A divided panel of the Appellate Division affirmed the Chancery Division's judgment. The entire court agreed that the fee imposed constituted a tax because the amount charged was disproportionate to the value of the services rendered. The majority rejected the trial court's view that the single object clause of the constitution rendered the statute unenforceable, observing that "?[t]he constitutional provision is complied with when the title gives notice to the Legislature and the public of the general purpose of the act.'" 333 N.J. Super. at 483 (quoting General Public Loan Corp. v. Director of Div. of Taxation, 13 N.J. 393, 403 (1953)). Nevertheless, the court held that the statute could not be enforced in the absence of evidence that the Legislature intended to impose a tax on the users of Sheriffs' services. The court stated that "we cannot enforce a tax where the Legislature did not intend to impose one." Id. at 484 (citing Kingsley v. Hawthorne Fabrics, Inc., 41 N.J. 521, 529-30 (1964) and Fedders Fin. Corp. v. Director, Div. of Taxation, 96 N.J. 376, 386 (1984)). The dissenting member disagreed that the statute could not be enforced, asserting that the majority had disregarded the presumption of validity to which the statute was entitled. Id. at 491-92 (Steinberg, J., dissenting).
Although the Appellate Division opinion, id. at 482-83 n.4, refers to a predecessor statute to N.J.S.A. 22A:4-8 enacted in 1948, L. 1948, c. 273, our research suggests that the statutory roots of N.J.S.A. 22A:4-8 go back at least as far as 1799. In Sinnickson v. Gale, 16 N.J.L. 21 (Sup. Ct. 1837), the Supreme Court of Judicature determined that the sheriffs' fee statute then in effect contemplated that the fee would be assessed on the basis of the amount generated for the party executing on the property, and not on amounts realized in excess of that which was required to satisfy the execution. Id. at 22. In its opinion the court noted that an earlier version of the statute, enacted in 1799, allowed the Sheriff "?for serving every execution, if for one hundred Dollars or less, one dollar; and if above that sum, two cents on every dollar, to be computed on the debt, or damages, paid, or secured to the plaintiff.'" Id. at 21. An 1823 ...