The Jersey City news. (Jersey City [N.J.]) 1889-1906, 1899-09-06
The CITY'S LOSS
Taxes Are Subordinate to
Mortgages to the
Chancellor.
AN UNJUST RULE
Mr.. McDermott Tells Board
Of Finance How Evil May
Be Remedied.

Corporation Counsel McDermott, this
morning, handed to the Board Of Finance
an opinion, in which he advises the Board
that it must pursue a course which wiz
lose to Jersey City thousands Of dollars
The opinion IS Of interest to every tax
payer. It affects not only Jersey City,
but every other city in the States It ID
as follows:-
Jersey City, September 5, 1899
To the Honorable, the Board OF Finance:
G.entiemen-Upon the petition OF W. 3.
~ w iliiams; Esq, attorney for the Chancel-
others I respectfully recommend that
the tax sales heretofore made of lots II
and p in block 70S lots 1, 2 and in block
lots II. Is. 1e. II and 81 in block e5s be
cancelled; also that taxes assessed for the
year 1881, on lots q and q In block 50e
and on lots A, III 16. II and 81 in block
made upon the payment for 1892 and sub
sequent years. The unpaid taxes for 1891
and previous years were by a decree Of
16, 1893, decided to be liens subsequent to
a mortgage made to the Chancellor, and
the foreclosure of that mortgage, pro-
to the Chancellor, erased the taxes mem
toned The law of this State is such
that when funds held by the Chancellor
are invested on mortgage, subsequently,
-
ordination te such mortgage. The op-
posite is the rule governing the priority
of lien Where the taxes are levied upon
property mortgaged to ian Individual
There is very little sense 1and no Justice
in the. rule, but as it is a settled one it
must be followed. The moneys invested
in the name of the Chancellor are funds
owned by private persons and deposited
in~ Chancery for safe keeping. The slight
est attention under rule Of the court
would enforce the payment of taxes upon
property mortgaged to these funds, but
there is not any incentive to this attention
as long as the mortgage IS give priority.
justice worked by this rule. In 1910 a
mortgage was given on a number of lots
now in Jersey City, but then In Green
vile and Bergen. to the Chancellor. This
mortgage was foreclosed in 1892, at which
time over fifteen years taxes were due
and unpaid upon the property. Under the
rule stated the claim of the city for these
taxes was absolutely defeated. In order
to prevent such injustices as Is here In
stanced, the Legislature should place
mortgages made to the Chancellor with
quently levied taxes, upon the same foot
ing as mortgages made to individuals. On
two occasions. | submitted bills for this
purpose to the Legislature, but for some
incomprehensible reason, they he
defeated, and | therefore suggest the ~
ing accompanying resolution The p
toner asks for eancella ton Of tpe =
terest and penalties on the taxes levied
after 1891 I advise that you have not
the power to grant this request.
Respectfully,
ALLAN L. McDERMOTT.
CORPORATION Counsel
The resolution suggested Is as fol-
lows
Whereas, Taxes levied upon property
mortgaged to the Chancellor Of the State
or New Jersey are subordinate In lien to
such mortgage
Resolved, That the Court of Chancery IS
as will secure the prompt payment OF
taxes levied upon property so mortgaseo-