HUDSON COUNTY PARK COMMISSION, PROSECUTOR, v. FELIX S. JACOBSON, COLLECTOR OF TAXES OF THE TOWN OF KEARNY, DONALD ALLEN, CLERK OF THE TOWN OF KEARNY, AND THE TOWN OF KEARNY, IN THE COUNTY OF HUDSON, RESPONDENTS

New Jersey Supreme Court1944-12-13

132 N.J.L. 287

Summary · law.co

Holding. The court set aside the tax assessments and resulting tax sale certificates as void because public property used for public purposes is exempt from taxation, including special assessments for local improvements. The procedural rule presuming validity of tax certificates does not apply to assessments that are invalid ab initio, and delay in challenging such an assessment does not constitute laches or deprive the property owner of the right to contest it.

The Hudson County Park Commission acquired land in Kearny between 1907 and 1911 for public park purposes, which was improved and used as part of West Hudson Park since 1913. In 1924, the Town of Kearny assessed the park property for a proportionate share of street improvement costs on adjacent streets. When the Commission failed to pay, the town sold the property to itself in 1937 and recorded tax certificates. In 1943, the town sued to foreclose on its tax liens.

The court held that publicly owned property used for public purposes is statutorily exempt from taxation. The court reasoned that special assessments for local improvements constitute taxation regardless of their label and purpose, and therefore cannot be levied against tax-exempt public property. Since the assessment was invalid from its inception, the tax sale certificates based on it were also void. The court rejected the town's argument that a two-year procedural rule prevented challenge of the assessment, finding that this rule only applies to valid assessments and cannot validate an assessment that was unlawful from the start.

The court further held that the Commission's delay in challenging the assessment did not constitute laches or waiver. An invalid municipal act cannot gain legitimacy through passage of time, and the delay caused no prejudice to the town or other parties. The Commission was entitled to treat an illegal assessment as void without being required to immediately seek judicial declaration of its invalidity.

Summary generated by law.co from the public-domain opinion. The opinion text itself is public domain.

Key issues

Whether publicly owned property used for public purposes may be subject to special assessments for local improvements
Whether a two-year procedural bar to challenging tax certificates applies to assessments that are void from inception
Whether delay in challenging an invalid assessment constitutes laches

Procedural posture

The Town of Kearny instituted a Chancery suit to foreclose on tax liens arising from special assessments levied against park property in 1924, with tax certificates recorded in 1937 and foreclosure action filed in 1943; the Commission filed an answer asserting the illegality of the assessment and obtained a writ of certiorari to determine validity of the tax sale certificates.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion · public domain

majority opinion

The opinion of the court was delivered by

Porter, J.

The questions submitted hv this writ are the legality of tax assessments for local benefits levied against lands of prosecutor and its right to attack the assessments after a lapse of more than two years from the date of the recording of certificates of tax sales.

Brom the facts as stipulated, it appears that the prosecutor, a body politic, acquired certain lands for public park purposes in the Town of Kearny during the years 1907 to 1911, inclusive. These lands were later improved and have been used for park purposes since 1913. They are a part of wdiat is known as West Hudson Park. In 1924 the town graded and improved Duke and Devon Streets which are adjacent to the park property, and on March 12th and 16th. 1924, assessed a proportionate share of the cost of the paving against the park lands. Upon failure of prosecutor to pay the assessments, the town by appropriate proceedings sold the premises so assessed on June 29th, 1937, to itself. The three tax certificates covering the sale were recorded in the register’s office for Hudson County on September 15th, 1937. On December 22d, 1943, respondents instituted a suit in Chancery to foreclose its tax liens.

The pertinent statute, Pamph. L. 1918, p. 849 (now R. S. 54:4-3.3), exempts from taxation publicly owned property used for public purposes. This property comes within this exemption and was so recognized by the town, as no taxes of any kind had been levied against it until the assessments in question for local improvements. Hot being subject to tax, this property may not, we think, be taxed under the guise of a special assessment for local improvements. This is taxation by whatever name called, notwithstanding the fact that the proceeds are to pay for local improvements rather than to be used for general municipal expenses. Compare Sigler v. Fuller, 34 N. J. L. 227; Agurs v. Newark, 35 Id. 168; Shaler v. McAleese, 73 N. J. Eq. 536., There is no statutory authority for a municipality to levy a tax by special assessment for local improvements to property publicly owned and used for public purposes. Compare Trustees of Public Schools v. Trenton, 30 Id. 667 (at p. 681); Green v. Hotaling, 44 N. J. L. 347; affirmed, 46 Id. 207; Leggett v. Plainfield, 97 Id. 341; Passaic Valley Sewerage Commissioners v. Jersey City, 93 Id. 427; Lucas v. Montclair, 128 Id. 149.

The sole point argued by respondents is that under R. S. 54:5 — 52 the certificate of the tax sale is presumed to be valid, and no evidence to rebut such presumption may be admitted in any court after two years from the recording of the certificate unless same was procured by fraud. This statute does not apply to an assessment which was void ab initio. Its only purpose is, we think, to aid in the enforcement and collection of unpaid taxes and assessments validty made. It cannot give validity to a void assessment. This being an invalid assessment, there was no duty imposed bjr it on prose cutor to institute any proceeding to have it so declared. It treated the assessment as an illegal one and only found it necessary to challenge it when the foreclosure suit in Chancery was instituted. It then filed an answer setting up the illegality of the assessment. Chancery granted leave under B. 8. 54:5 — 101 to apply for a writ of certiorari to determine the validity of the tax sale certificates and stayed the proceedings in that court for this purpose. - We conclude that the property of prosecutor being exempt from tax as stated, the levy of this assessment was void and of no effect and there was no valid tax lien sale.

Failure of prosecutor in challenging this tax assessment sooner does not constitute laches. The delay caused no hardship or loss to anyone. The tax assessment proceeding was absolutely void, and prosecutor was within its rights in so treating it. The lapse of time could not give life or validity to the ultra vires act of the municipality in attempting to levjr an illegal assessment. Compare Peckham v. Newark, 43 N. J. L. 576; Bogert v. Elizabeth, 27 N. J. Eq. 568.

The assessments and the tax sale certificates based thereon are set aside, with costs.