Opinion
12-07-1888
TRUSTEES OF PUBLIC SCHOOLS v. SHOTWELL et al.
W. J. Johnson, for complainants. G. Berry, for city of Rahway.
On bill to foreclose.
Bill by the trustees for the support of public schools against Sallie J. Shotwell and others. The charter of the city of Rahway, passed in 1865, (P. L. 1865, p. 499, § 57,) provides that all taxes and assessments which shall be assessed or made upon any lands or real estate in the city shall be and remain a lien thereon until paid, for the amount of such taxes or assessments, with interest thereon at the rate of 12 per cent. per annum, and all costs and fees; and that such lien shall remain upon such lands and real estate, notwithstanding any devise, descent, alienation, mortgage, or other incumbrance thereof, and notwithstanding any mistake in the name of the owner or owners, or omission to name the owner or owners of such lands and real estate; and that any assessment of taxes, in which such mistake or omission occurs, shall be valid and effectual in law, and, if unpaid, shall be returned in the list of delinquent taxes; and such lands and real estate shall be proceeded against and sold in the manner provided by the act. By a supplement to the charter (P. L. 1874, p. 475) it is provided that the lien of taxes shall begin from and after the day on which the taxes are declared to be due and payable, which is fixed by the charter as on the 15th of October. The eighty-third section makes the assessments for benefits in opening or widening streets, etc., a lien on the land and real estate assessed from the time when the improvements shall have been made. The sixty-fifth section provides that no mortgagee, whose mortgage shall have been duly recorded before sale, for any tax or assessment, shall be divested of his rights in the property sold, unless six months' notice, in writing, of such sale, shall have been given to him by the purchaser, or by any person or persons claiming under him, etc. The sixty-sixth section provides that the owner, mortgagee, occupant, or any person or persons having a legal or equitable interest in any lands and real estate sold for taxes, or for any assessment under the provisions of the act, may redeem in two years from the sale, and, if the person redeeming be a judgment creditor or mortgagee, he shall have a lien on the property for the amount paid by him, with interest at 7 per cent. per annum, as if included in his judgment or mortgage, and may enforce payment thereof in the usual manner. The fifty-seventh section gives priority of lien to assessments for benefits, as well as to taxes.
W. J. Johnson, for complainants. G. Berry, for city of Rahway.
BIRD, V. C. The bill and the proof show that the complainants' mortgage was given in May, 1858, and in August of that year assigned to the complainants, who have held it ever since. The property embraced in the mortgage lies within the limits of the city of Rahway. In the year 1870 the city imposed an assessment for the city improvements, and afterwards other assessments, none of which have been paid. The city claims that these assessments are prior liens to the complainants' mortgage, by virtue of the act of the legislature giving to such assessments the favor of a first lien in all cases; andthe insistment is that, under the circumstances of this case, this is so, notwithstanding the case of Trustees v. City of Trenton, 30 N. J. Eq. 667, which declares that the property of the state is not subject to the provision of the act upon which the city of Railway now relies. The circumstance which it is thought so qualifies the case now to be decided is that the complainants never had the assignment by which they hold their mortgage recorded. Because of this omission, it is insisted that the city was misled to their prejudice, and that the state is estopped. Under the common law, I very much doubt if the state would have been in any peril of losing the benefit of the high prerogative accorded to it in the case cited, by holding undisclosed their mortgage by an assignment. We have, however, a statute respecting the assignments of mortgages, and authorizing the recording of such assignments, passed in 1853. Has this enactment so far changed the rule of the common law as to subordinate the complainants' mortgage to these assessments? I think the only penalties to be visited upon the party not complying with the act are fixed by the act. The first section (Revision, p. 708, pl. 32) declares that such assignee "shall be bound by the proceedings and sale in any foreclosure suit against any previous holder." The third section provides "that any payments made to the assignor in good faith, and without actual notice of such assignment, and any release of said mortgaged premises, or any part thereof, to a person not having actual notice of such assignment, shall be as valid as if said mortgage had not been assigned." 1 do not find anything in the registry acts which will justify me in regarding this case as outside of the one above cited. In my judgment the complainants' mortgage is entitled to priority in payment.