196 A. 716 | N.J. Super. Ct. App. Div. | 1938
We are here concerned with two questions. (1) Should the court below, under the circumstances here exhibited, have finally determined the rights of the parties in a summary manner?
(2) May a mortgagee who has acquired title to property, by virtue of a sale under a foreclosure suit, set off against taxes due the municipality on the property so acquired, the amount of rent which the municipal officer of that municipality, as receiver, under the Stout act (P.L. 1933 — special session —ch. 6 p. 1304) allegedly should have collected, but did not collect? Our answer to both questions is no.
The facts which give rise to these two questions are substantially these: Appellant, complainant below, the director of revenue and finance of the city of Camden, N.J., was appointed rent receiver ex officio of the property in question on October 19th, 1936, pursuant to the provisions of the Stout act. Supra (at p. 1305). At that time the property was in the possession of a tenant. Respondent Camden Securities Company, defendant below, owned a mortgage upon the premises, and, prior to complainant's appointment had instituted foreclosure proceedings. The mortgagee, however, yielded to complainant its right under the act (supra, p. 1305), to have a foreclosure receiverpendente lite appointed. On February 23d 1937, the respondent mortgagee acquired a deed for the property by virtue of a sale under the foreclosure suit which it had instituted, and on March 1st, 1937, it began collecting $32 per month rent from the tenant therein. On April 26th, 1937, complainant, alleging in a duly verified petition that he had received no money, and had been unable to collect any rent, sought to be discharged as rent receiver. *226 Respondent objected to the discharge and filed an affidavit setting forth that it was because of the failure or neglect of the complainant or his agents that no rent was collected from the time complainant was appointed receiver on October 19th, 1936, until respondent itself made collections on March 1st, 1937. Respondent's affidavit further alleged that the fair and reasonable rent for the premises during the receivership was $32 a month. Then, despite the averment in the complainant's verified petition that "the receiver made diligent effort to secure the rents due upon the property" and that "no money came into the hands of the petitioner," the learned vice-chancellor advised a decree, which was subsequently entered, compelling complainant to account to respondent for the occupational value of the premises,and that in lieu thereof, respondent should receive a credit upon the taxes due the municipality on the premises in the sum of $148, "that being the fair and reasonable occupational value for the premises for the time that said premises were in possession of the complainant." Complainant appeals from this decree.
First: Apart, primarily, from any consideration of the merits, it is manifest that, in compelling an accounting and, in lieu thereof, allowing respondent a credit upon the taxes due, the learned vice-chancellor determined summarily, upon complainant's verified petition and respondent's affidavit only, that complainant was negligent, and further, that his negligence was chargeable to the municipality of which he was the director of revenue and finance. The municipality was not made a party to these proceedings. It was error to resolve these issues in a summary fashion. Complainant was entitled to a hearing "as at a trial at law before a jury." Chancery rule No. 123. Bowen v.Pursel,
Assuming, but not deciding, that complainant became liable *227
to respondent either upon the theory of negligence; or upon the theory that complainant occupied the position of a mortgagee in possession and thus became "liable for rent whether he received it or not," since "by taking possession he assumes the position of owner, and is, therefore, chargeable with the profit a provident owner could have made" (Dawson v. Drake,
What, in the final analysis, are taxes? Our courts have uniformly held that a tax in its essential characteristics is not a debt, nor in the nature of a debt. A property tax is an exaction, an impost, levied by authority of a municipality upon property within its borders for the support of the municipality. It is neither a debt nor a contractual obligation. It is a charge upon the land in question. City of Camden v. Allen (SupremeCourt),
We are entirely satisfied that "the general rule prevailing throughout the United States * * * that taxes are not subject to * * * set-off on the part of the taxpayer" (Village ofCharlotte v. Keon,
Accordingly, the decree is reversed, costs to abide the event.
For affirmance — None.
For reversal — THE CHIEF-JUSTICE, PARKER, LLOYD, CASE, BODINE, DONGES, HEHER, PERSKIE, DEAR, WELLS, WOLFSKEIL, RAFFERTY, JJ. 12. *229