METROPOLITAN LIFE INSURANCE COMPANY, A CORPORATION, PLAINTIFF-APPELLEE, v. VIOLA M. McGURK, DEFENDANT-APPELLANT

New Jersey Supreme Court1938-01-26

119 N.J.L. 517

Summary · law.co

Holding. The court affirmed the judgment for Metropolitan Life, holding that a tax sale of the servient estate does not extinguish a recorded easement benefiting the adjacent dominant estate, as the tax assessment of the burdened property already reflected the easement's diminishing effect on its value.

Metropolitan Life Insurance Company owned a tract of land in Atlantic City that included rights to use a ten-foot-wide alley. The defendant McGurk claimed she acquired title to the alley through a tax sale under the Tax Act of 1903. The central dispute concerned whether a tax sale of the servient estate (the alley) could extinguish an easement that benefited the dominant estate (MetLife's property) and was recorded against the dominant property.

The court applied established principles of property valuation and tax assessment. When an easement is created from one property to benefit another, the market value of the burdened property decreases while the benefited property's value increases by approximately the easement's value. Consequently, the assessor would have factored this reduced value into the tax assessment of the burdened property. The court determined that a tax sale of the servient tenement does not eliminate an easement of record that is attached to and benefits the adjoining dominant property, absent clear statutory language to that effect.

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

Key issues

Whether a tax sale of the servient estate extinguishes an easement benefiting the dominant estate
Proper valuation of properties burdened and benefited by easements for tax assessment purposes
Scope of the tax lien's paramount status under the Tax Act of 1903

Procedural posture

The defendant appealed a judgment entered by the Circuit Court striking her answer and ruling in favor of the plaintiff in an action for disturbance of an easement.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion · public domain

majority opinion

The opinion of the court was delivered by

Bodine, J.

The appeal is from a judgment in favor of the plaintiff entered pursuant to the order of the Circuit Court striking the answer of the defendant now appellant. The action was brought as in case for the disturbance of an easement. 1 Chit. Pl. 162, 163; Osborne v. Butcher, 26 N. J. L. 308, 310; Metaxas v. Easton Publishing Co. (Md.), 140 Atl. Rep. 603, 605. The plaintiff is the owner of a tract of land in Atlantic City acquired by foreclosure of its mortgage. The lands were described in that instrument and in a long line of prior conveyances by metes and bounds, together with all the right of way in and out of a certain ten-foot-wide alley which the defendant claims to have acquired by virtue of a tax sale title perfected pursuant to the Tax act of 1903. 4 Comp. Stat., p. 5075. Section 6 of that act (4 Comp. Stat., p. 5085) directs that “all real property shall be valued * * * and the assessor shall * * * determine the full and fair value of each parcel of real property situate in his taxing district at such price which in his judgment such parcel would sell for at a fair and bona fide sale by private contract.”

The court below, in reliance upon the case of Ehren Realty Co. v. Magna Charta Building and Loan Association, 120 N. J. Eq. 136, found that: “When an easement is carved out of one property for the benefit of another, the market value of the servient estate is lessened, and that of the dominant increased, practically by just the value of the easement; the respective tenements should therefore be assessed accordingly.” And that a tax sale of the servient tenement pursuant to the General Tax act (Pamph. L. 1918, p. 847, as amended, Pamph. L. 1921, p. 336), did not extinguish the right of way appurtenant to the adjoining property. This was the rule adopted in Tax Lien Co. v. Schultze, 213 N. Y. 9; 106 N. E. Rep. 751, and in Tide-Water Co. v. Bell, (Pa.), 124 Atl. Rep. 351.

Appellant points to section 49 of the Tax act in question (4 Comp. Stat., p. 5129), to the effect that the lien for unpaid taxes is paramount to all prior or subsequent alienations and descents of the land or encumbrances thereon, except subsequent taxes. But as was pointed out in Ehren Realty Co. v. Magna Charta Building and Loan Association, supra, the assessor no doubt included the value of the easement when assessing the dominant tenement, and conversely in assessing the servient tenement omitted the value, and hence the value of the servient tenement was valued subject to the easement. In no other way could true value be determined, and in the absence of more explicit language in the act it is not to be assumed that the legislature intended that by a sale of the servient tenement an easement of record attached to the dominant tenement should be wiped off by a sale of the servient tenement.

The judgment under review will, therefore, be affirmed, with costs.

For affirmance — The Chancellor, Chief Justice, Parker, Lloyd, Case, Bodine, Donges, Heher, Perskie, Hetfield, Dear, Wells, WolfsKeil, Rafferty, Walker, JJ. 15.

For reversal — None.