Ranchlands, Inc. v. Township of Stafford

156 N.J. 443, 720 A.2d 339 (1998)
  • Opinion Date: December 2, 1998

MUNICIPALITIES; INDUSTRIAL COMMISSIONS—The determination of a municipality’s industrial commission to convey land to a prospective user can not bind the municipality to convey the subject land to the user.

By statute, a municipality may create an industrial commission and by the same statute, the municipality’s mayor is an ex officio member of the commission, but has no voting privilege. The commission has the power to acquire title to vacant land for the purpose of resale or lease to industries. The statute requires the commission to notify the mayor of any contract for the sale of real estate and the mayor has ten days to veto the transaction. One of the factors that a mayor may use in exercising veto power is whether the action is environmentally compatible with the community. Here, a municipality’s industrial commission contracted to sell a piece of land for use as a recycling center for tree stumps, asphalt, and concrete. Performance by the commission was contingent on the commission obtaining clear title to the property from the municipality. When the municipality’s governing body adopted a resolution determining that it would not transfer title to the industrial commission because of certain environmental concerns, the recycler sued the municipality to force it to honor the contract. In the view of the Court, however, the contract did not bind the municipality, regardless of the mayor’s participation in the process. Further, the municipality was not estopped from declining to convey title to the property. The Court recognized that although the doctrine of equitable estoppel is rarely invoked against governmental entity, it may be applied where the interests of justice, morality and common fairness clearly require it. In this case, however, the Court was persuaded that the circumstances did not justify estoppel. Specifically, the recycler was subject to a variety of approval contingencies as well as the transfer of title contingency. Consequently, the recycler had to know of the risk of an adverse legislative vote, especially when contracting with an entity that did not own the land. All in all, the recycler had no enforceable expectations that the full governing body would adopt an ordinance transferring title to the property. This is especially true where the governing body took no official action on which the recycler could reasonably rely.