Township of Montville v. Block 69, Lot 10, Assessed to Spitz

376 A.2d 909, 74 N.J. 1, 1977 N.J. LEXIS 140

• Court: Supreme Court of New Jersey
• Decided: June 9, 1977
• Status: Published

Opinions

The opinion of the court was delivered by

Pashman, J.

This ease involves the constitutionality of the notice procedures prescribed by the In Rem Tax Foreclosure Act, N. J. S. A. 54:5-104.29 et seq. The corporate landowner, which moves to reopen a final judgment of foreclosure by the municipality, argues that the act’s requirements of notice by publication and posting fall short of constitutionally guaranteed procedural due process. In doing so, it challenges the continued viability of this Court’s decision in City of Newark v. Yeskel, 5 N. J. 313 (1950), which upheld these procedures against similar constitutional objections.

Both the trial court and the Appellate Division rejected the landowners constitutional argument. In affirming the Law Division’s denial of the taxpayer’s motion, the Appellate Division noted that Yeskel was controlling and stated that any change in its holding had to be made by this Court. We granted certification, 69 N. J. 392 (1976). For the reasons set forth below, we reverse. We hold that the notice provisions of the In Rem Tax Foreclosure Act are unconstitutional under the State and Federal Constitutions and therefore we are constrained to overrule Yeskel.

This appeal originates from a complaint filed by the plaintiff Township of Montville on May 8, 1973 pursuant to the In Rem Tax Foreclosure Act, N. J. S. A. 54:5-104.29 et seq. The complaint sought to bar all rights of redemption to various pieces of property, including six parcels of land assessed to the instant landowner, Montville Industrial Park, Inc. As required under the Act, N. J. S. A. 54:5-19 et seq., each of the parcels had previously been the subject of a tax sale: one tax sale certificate, indicating that a parcel had been sold to the municipality for unpaid taxes, was recorded on December 26, 1967; tax sale certificates for the remaining parcels, also indicating their sale to the municipality, were recorded on January 13, 1967.

Prior to instituting the foreclosure action, the municipality had given the taxpayer several warnings that taxes on the properties in question had not been paid. In compliance with requests by the corporate landowner, the township tax collector mailed statements of tax arrearages to the landowner on June 3, 1971, June 22, 1972 and March 28, 1973. The first statement advised the taxpayer that “[i]f the properties are to be redeemed, please contact this office as soon as possible as they are in the hands of our attorney and in the process of foreclosure.” The second letter noted that the most heavily assessed parcel “may not be redeemable, [and] must be checked with attorney.” [sic]

Neither these letters nor any other communications actually informed the taxpayer that a complaint had been filed seeking to permanently bar it from exercising its statutory right to redeem the property. Although the tax collector knew the address of the corporation, he followed the mandatory provisions of the in rem statute, which only require notice by posting and publication.¹ On August 1, 1973 a final judgment of foreclosure was entered barring tbe taxpayer’s right of redemption. As of April 1, 1973, the total taxes, interest and other charges against the property amounted to $79,092.17. Its assessed value for 1974 was $306,100.

A timely motion to reopen the judgment was filed by the corporation on October 25, 1973. In addition to attacking the constitutionality of the Act, it also alleged various procedural irregularities.² Subsequently, counsel for the corporation offered to settle the matter by paying all back taxes, interest, costs and fees. This offer was informally accepted by the municipality but later rejected. On May 21, 1974 an order denying the taxpayer’s motion was entered.

II

The question which this case presents is whether or not notice by publication is constitutional in a foreclosure of tax delinquent premises where the municipality possesses the name and address of the owner but fails to give notice by mail or otherwise to that address. As in other cases involving due process claims, the Court must first decide whether the Due Process Clause applies to this type of governmental action, and then determine “what process is due.” Morrissey v. Brewer, 408 U. S. 471, 481-483, 92 S. Ct. 2593, 33 L. Ed. 2d 484, 494-495 (1972); Dow v. State, 396 Mich. 192, 240 N. W. 2d 450, 455 (1976) ; Note, “Specifying the Procedures Required by Due Process: Toward Limits on the Use of Interest Balancing,” 88 Harv. L. Rev. 1510 (1975).

A

It can hardly be doubted that interests in real estate are protected by the Due Process Clause. The Fourteenth Amendment to the Federal Constitution provides: “No State shall make or enforce any law which shall . . . . deprive any person of life, liberty or property, without due process of law.” This is consistent with Article I, par. 1 of our State Constitution, which also protects a person’s right to acquire, possess, and protect property.³ That the property interests mentioned in both Constitutions refer to interests in real estate have been settled by innumerable decisions by both this Court and the United States Supreme Court. See, e. g., Bd. of Regents v. Roth, 408 U. S. 564, 571-72, 92 S. Ct. 2701, 33 L. Ed. 2d 548, 557 (1972); Jones v. Haridor Realty Corp., 37 N. J. 384, 391 (1962) (“There is no doubt that the right to acquire, own and dispose of real property is within the protective scope of the Fourteenth Amendment, or that such right is recognized by Article I, paragraph 1, of our State Constitution.”)

Applicability of the Due Process Clause is not affected by the municipality’s sale of the property for unpaid taxes and issuance of a certificate to the purchaser. State law, which is controlling on whether or not there is a property interest,⁴ uniformly holds that a tax sale alone is not an outright conveyance of the property in question and does not constitute a final irrevocable divestiture of title. Brewer v. Porch, 53 N. J. 167 (1969); Newark v. Sue Corp., 124 N. J. Super. 5, 7 (App. Div. 1973); Clark v. Jersey City, 8 N. J. Super. 33, 37 (App. Div. 1950). Cf., Grasso v. Deiter, 126 N. J. Super. 365 (App. Div. 1974). Thus, it has been held that a statute taking away, reducing the time for or otherwise impairing a right of redemption which has already vested, would be an unconstitutional deprivation of property rights. Harrington Co. v. Chopke, 108 N. J. Eq. 297, 301 (Ch. Div. 1931), aff’d 110 N. J. Eq. 574 (E. & A. 1932) ; Rodgers v. Cressman, 98 N. J. Eq. 209 (Ch. Div. 1925).

It is beyond question that any procedure which deprives an individual of a property interest must conform to the dictates of the Due Process Clause. Mathews v. Eldridge, 424 U. S. 319, 333, 96 S. Ct. 893, 47 L. Ed. 2d 18, 32 (1976); Bell v. Burson, 402 U. S. 535, 91 S. Ct. 1586, 29 L. Ed. 2d 90 (1971). Accordingly, the United States Supreme Court has held that procedural due process applies where state law does not entirely extinguish the taxpayers’ property interest until foreclosure. See Nelson v. New York, 352 U. S. 103, 77 S. Ct. 195, 1 L. Ed. 2d 171 (1956) (tax foreclosure proceeding measured against due process requirements); Covey v. Somers, 351 U. S. 141, 76 S. Ct. 724, 100 L. Ed. 1021 (1956) (same).⁵

Although the Supreme Court dismissed an appeal for want of a substantial federal question where the statute in question did utilize the foreclosure procedure to terminate the landowner’s interest, Botens v. Aronauer, 414 U. S. 1059, 94 S. Ct. 562, 38 L. Ed. 2d 464, dismissing appeal from 32 N. Y. 2d 243, 344 N. Y. S. 2d 892, 298 N. E. 2d 73 (1973), in that ease mail notice was actually given. See Note, “The Constitutionality of Notice by Publication in Tax Sale Proceedings,” 84 Yale L. J. 1505, 1510 (1975). The judge in Wager v. Lind, 389 F. Supp. 213 (S. D. N. Y. 1975) correctly assessed Botens, supra, when he said: “I am not prepared to say that the Supreme Court in its summary dismissal did more than declare the lack of a substantial federal question on the precise fads Botens presented to it.” Id. at 216; emphasis in original. See also, Comment, “The Precedential Weight of a Dismissal by the Supreme Court for Want of a Substantial Federal Question : Some Implications of Hicks v. Miranda,” 76 Colum. L. Rev. 508 (1976). In referring to Botens, supra, and Wager, supra, the Comment states:

[W]hen the Supreme Court dismisses a challenge to a state statute, it does not necessarily mean that the statute is valid under all circumstances ; it signifies only that the challenge is not a ‘substantial’ one in the precise circumstances of that case.

[76 Colum. L. Rev. at 532]

B

Having determined that due process principles apply when the owner’s right to redemption is to he terminated, we turn to the remaining question of whether or not notice by publication satisfies the requirements of that clause under state and federal guarantees. We hold that it affords insufficient protection for landowners under both constitutional provisions.

1.

The seminal case in this area is Mullane v. Central Hanover B. & T. Co., 339 U. S. 306, 70 S. Ct. 652, 94 L. Ed. 865 (1950). There it was stated:

An elementary and fundamental requirement of due process in any proceeding which is to be accorded finality is notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections, * * * The, notice must be of such nature as reasonably to convey the required information, . . . , and it must afford a reasonable time for those interested to make their appearance.

[339 U. S. at 314, 70 S. Ct. at 657, 94 L. Ed. at 873; emphasis supplied.]

In that case the Court considered the sufficiency of notice by publication in a New York Statute governing the administration of trust funds. Since the statute required only notice by publication to known trust beneficiaries who might be affected by a proposed pooling of smaller trusts, the Court held the statute unconstitutional under the Eourteenth Amendment. Justice Jackson, writing for the majority, stated:

As to known beneficiaries of known place of residence, . . . , notice by publication stands on a different footing. Exceptions in the name of necessity, do not sweep away the rule that within the limits of practicability notice must be such as is reasonably calculated to reach interested parties. Where the names and post-office addresses of those affected by a proceeding are at hand, the reasons disappear for resort to means less likely than the mails to apprise them of its pendency.

[339 U. S. at 318, 70 S. Ct. at 659, 94 L. Ed. 875]

Significantly, Mullane discarded the fictional distinction between in rem and in personam actions which had been utilized as a basis for upholding notice by publication in several decisions decided at the turn of this century.⁶ See, e. g., North Laramie Land Co. v. Hoffman, 268 U. S. 276, 45 S. Ct. 491, 69 L. Ed. 953 (1925); Ballard v. Hunter, 204 U. S. 241, 27 S. Ct. 261, 51 L. Ed. 461 (1907); Leigh v. Green, 193 U. S. 79, 24 S. Ct. 390, 48 L. Ed. 623 (1904); Huling v. Kaw Valley R. & Improv. Co., 130 U. S. 559, 9 S. Ct. 603, 32 L. Ed. 1045 (1889); Winona & St. Peter Land Co. v. Minnesota, 159 U.S. 526, 16 S. Ct. 83, 40 L. Ed. 247 (1895); Longyear v. Toolan, 309 U. S. 414, 28 S. Ct. 506, 52 L. Ed. 859 (1908). Noting that this distinction was more appropriate under the substantive law of property as it existed under the ancient Roman law, the Court foreclosed any contention that procedural due process might depend upon whether an action was technically in personam or in rem. The Court concluded:

[W]e think that the requirements of the Fourteenth Amendment to the Federal Constitution do not depend upon a classification for which the standards are so elusive and confused generally and which, being primarily for state courts to define, may and do vary from state to state.

[339 U. S. at 312, 70 S. Ct. at 656, 94 L. Ed. at 872]

Two months after the United States Supreme Court decided Mullane, this Court upheld the constitutionality of the In Rem Tax Foreclosure Act in City of Newark v. Yeskel, 5 N. J. 313 (1950). Rather than follow the Supreme Court’s application of due process principles to in rem proceedings, this Court distinguished Mullane. It attempted to draw a distinction' between notice required in a “proceeding by a political subdivision of the state to enforce the payment of taxes which have been regularly assessed and levied,” and other proceedings which impinge less directly on govern-' mental interests, such as the trust account procedure implicated in Mullane. 5 N. J. at 321. In light of subsequent decisions applying the general principles announced in Mullane to a wide variety of proceedings which impinge directly' on governmental interests, this distinction can no longer be considered tenable. See, e. g., Robinson v. Hanrahan, 409 U. S. 38, 93 S. Ct. 30, 34 L. Ed. 2d 47 (1972) (notice by certified mail to automobile owner’s home violated due process in forfeiture proceedings where the state knew that the owner was being held in the county jail); Schroeder v New York, 371 U. S. 208, 83 S. Ct. 279, 9 L. Ed. 2d 255 (1962) (posting near premises and publication insufficient notice in condemnation proceeding); Walker v. Hutchinson, 352 U. S. 112, 77 S. Ct. 200, 1 L. Ed. 2d 178 (1956) (newspaper publication alone violates due process in condemnation proceeding); New York v. New York, N. H. & H. R. Co., 344 U. S. 293, 73 S. Ct. 299, 97 L. Ed. 333 (1953) (publication insufficient notice under bankruptcy reorganization). In none of the above cases did the Court find that publication was a sufficient substitute for mail notification. Indeed, in Robinson v. Hanrahan, supra, the Court held that even mail notice under the circumstances did not meet the constitutional test of notice reasonably calculated to apprise interested parties of the pendency of proceedings.

The position adopted in Yeskel has been undercut even more dramatically by-the application of the general principles in Mullane specifically to in rem procedures. Eor instance in Covey v. Somers, supra, the Court held that au iucompeteut landowner who received only mail notification of an impending foreclosure of tax delinquent premises was denied due process. In requiring special protection fox the taxpayer in that case, the Court reiterated the general rule:

An elementary and fundamental requirement of due process in any proceeding which is to be accorded finality is notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections. . . . [W]hen notice is a person’s due, process which is a mere gesture is not due process. The means employed must be such as one desirous of actually informing the absentee might reasonably adopt to accomplish it. Mullane v. Central Hanover Bank & Trust Co., 339 U. S. 306, 314-315, 70 S. Ct. 652, 94 L. Ed. 865, 873, 874.

[351 U. S. at 146, 76 S. Ct. at 756, 100 L. Ed. at 1026]

In Nelson v. New York, 352 U. S. 103, 77 S. Ct. 195, 1 L. Ed. 2d 171 (1956), the Court held that a landowner was not deprived of due process where mail notification of a foreclosure was sent, but misplaced by the taxpayer’s bookkeeper. However, its holding clearly indicated that Mullane was applicable to the type of foreclosure statute involved in that case:

We conclude, therefore, that the City having taken steps to notify appellants of the arrearages and the foreclosure proceedings and their agents having received such notices, its application of the statute did not deprive appellants of procedural due process

[352 U. S. at 108, 77 S. Ct. at 198, 1 L. Ed. 2d at 175]

Elsewhere in the opinion the Court reaffirmed the conclusion that due process requirements apply to foreclosure proceedings:

We hold that nothing in the Federal Constitution prevents [foreclosure] where the record shows adequate steps were taken to notify the owners of the charges due and the foreclosure proceedings.

[352 U. S. at 110, 77 S. Ct. at 199, 1 L. Ed. 2d at 176]

Equally important, we cannot accept the Yeskel court’s apparent conclusion that the efficient operation of the municipality’s tax system outweighs any constitutional claims to notice and an opportunity to be heard prior to foreclosure. While the importance of the government’s taxing power cannot be ignored, we must not forget that governmental concern for convenience or simplicity does not outweigh individual rights. This was made clear by the United States Supreme Court in Marchetti v. United States, 390 U. S. 39, 88 S. Ct. 697, 19 L. Ed. 2d 889 (1968) when it stated:

The Constitution of course obliges this Court to give full recognition to the taxing powers and to measures reasonably incidental to their exercise. But we are equally obliged to give full effect to the constitutional restrictions which attend the exercise of those powers.

[390 U. S. at 58, 88 S. Ct. at 707, 19 L. Ed. 2d at 903.]⁷

In fact, abuses of -the tax power, more than any other factor, led to the adoption of constitutional guarantees to protect against future government excesses.⁸ See, G.M. Leasing Corp. v. U. S., 429 U. S. 338, 355, 97 S. Ct. 619, 630, 50 L. Ed. 2d 530 (1977), (noting that “one of the primary evils intended to be eliminated by the Eourth Amendment was the massive intrusion on privacy undertaken in the collection of taxes pursuant to general warrants and units of assistance.”)

3.

There should be little doubt that under the Mullane test notice by publication is insufficient in a tax foreclosure proceeding where a landowner’s name and address are at hand. Although YesJcel emphasized dicta in Mullane which might be read as supporting notice by publication, that language refers only to a situation in which publication is used in conjunction with other steps which are likely to notify a landowner that he is about to be deprived of his property. The Court in Mullane stated:

Nor is publication here reinforced hy steps likely to attract the parties’ attention to tbe proceeding. It is true that publication traditionally has been acceptable as notification supplemental to other action which in itself may reasonably be expected to convey a warning. * * * Hence, libel of a ship, attachment of a chattel or entry upon real estate in the name of the law may reasonably be expected to come promptly to the owner’s attention. When the state within which the owner has located such property seizes it for some reason, publication or posting affords an additional measwre of notification.

[339 U. S. at 316, 70 S. Ct. at 658, 94 L. Ed. at 874; emphasis added.]

The Court clearly noted its rejection of publication unaccompanied by any other notice:

Publication may theoretically be available for all the world to see, but it is too much to suppose that [a person] does or could examine all that is published to see if something may be tucked away in it that affects his property interests.

[339 U. S. at 320, 70 S. Ct. at 660, 94 L. Ed. at 876.]

Although the Supreme Court has stated that there is no mechanical rule for determining “what process is due,” see Schroeder v. New York, supra, 371 U. S. at 212, 83 S. Ct. at 282, 9 L. Ed. 2d at 259; Walker v. Hutchinson, supra, 352 U. S. at 116, 77 S. Ct. at 202, 1 L. Ed. 2d at 182, it has repeatedly found that notice by publication is insufficient where the names and addresses of persons to receive such notice are known. In Schroeder, the Court repeated the criticism of notice by publication which it had stated in Multane:

Chance alone brings to the attention of even a local resident an advertisement in small type inserted in the back pages of a newspaper, and if he makes his home outside the area of the newspaper’s normal circulation the odds that the information will never reach him are large indeed. The chance of actual notice is further reduced when, as here, the; notice required does not even name those whose attention it is supposed to attract, and does not inform acquaintances who might call it to attention. 339 U. S. at 315, 70 S. Ct. at 652.

[371 U. S. at 212, 83 S. Ct. at 282, 9 L. Ed. 2d at 259]

The same theme is also repeated elsewhere in the opinion in the form of a rule:

The general rule that emerges from the Mullane case is that notice by publication is not enough with respect to a person whose name and address are known. . . .

[Id. at 212-213, 83 S. Ct. at 282, 9 L. Ed. at 259]

Other opinions reinforce this conclusion. See Walker v. Hutchinson, supra, 352 U. S. at 116, 117, 77 S. Ct. at 203, 1 L. Ed. 2d at 182, 183 (“It is common knowledge that mere newspaper publication rarely informs a landowner of proceedings against his property * * * In too many instances notice by publication is no notice at all.”); New York v. New York, N. H. & H. R. Co., supra, 344 U. S. at 296, 73 S. Ct. , 97 L. Ed. at 336 (“Notice by publication is a poor and sometimes a hopeless substitute for actual service by notice. Its justification is difficult at best.”)

Given the Court’s repeated statements that due process demands nothing less than notice which is reasonably calculated to inform any interested party, it is clear that newspaper publication would suffice only where it is not reasonably possible or practicable to give more adequate notice. Numerous courts have so held. See, e.g., Ricker v. United States, 417 F. Supp. 133 (N. D. Me. 1976); Scoggin v. Schrunk, 344 F. Supp. 463 (D. Or. 1971), rev. on other grounds, 522 F. 2d 436 (9 Cir. 1975) cert. den. 423 U. S. 1066, 96 S. Ct. 807, 46 L. Ed. 2d 657 (1976); Laz v. Southwestern Land Co., 97 Ariz. 69, 397 P. 2d 52 (en banc 1964); Olsen v. Goss, 26 Ariz. App. 172, 547 P. 2d 24 (Ct. App. 1976); Johnson v. Mock, 19 Ariz. App. 283, 506 P. 2d 1068 (Ct. App. 1973) ; Bd. of Sedgwick County Commissioners v. Fugate, 210 Kan. 185, 499 P. 2d 1101 (1972); Pierce v. Bd. of County Comm'rs of Leavenworth Co., 200 Kan. 74, 434 P. 2d 858 (1967); Dow v. State, 396 Mich. 192, 240 N. W. 2d 450 (1976); Note, “The Constitutionality of Notice by Publication in Process in Tax Sales in New York: The Insufficiency of Notice by Publication,” 25 Syr. L. Rev. 769 (1974); Note, “Requirements of Notice in In Rem Proceedings,” 70 Harv. L. Rev. 1257, 1267-68 (1957); Note, 5 Rutgers L. Rev. 425 (1950). Cf., Balthazar v. Mari Ltd., 301 F. Supp. 103 (N. D. Ill. 1969), aff’d p.c. 396 U. S. 114, 90 S. Ct. 397, 24 L. Ed. 2d 307 (1969); Fisher v. Muller, 53 Mich. App. 110, 218 N. W. 2d 821 (Ct. App. 1974) (failure to give mail notice of tax increase barred subsequent tax lien and sale); Meadowbrook Manor, Inc. v. St. Louis Park, 258 Minn. 266, 104 N. W. 2d 540 (1960) (notice by publication insufficient in special assessment). But see, McMaster v. Santa Rosa, 27 Cal. App. 3d 598, 103 Cal. Rptr. 749 (Ct. App. 1972); Botens v. Aronauer, supra; Cascade Tree Farms, Inc. v. Clackamas County, 250 Or. 401, 442 P. 2d 606 (en banc 1968); Umatilla County v. Porter, 12 Or. App. 393, 507 P. 2d 406 (Ct. App. 1973); Marlowe v. Kingdom Hall of Jehovah’s Witnesses, 541 S. W. 2d 121 (Sup. Ct. Tenn. 1976).

4.

We also believe that the notice requirements of the statute are violative of due process under our State Constitution. While we have not yet specifically addressed ourselves to the problem of notice under Art. 1, par. 1, we have at various times interpreted the state provision to substantially encompass rights guaranteed under the Federal Constitution, see Penn.-Reading S. S. Lines v. Bd. of Pub. Utility Comm’rs, 5 N. J. 114-26 (1950), cert. den. 340 U. S. 876, 71 S. Ct. 122, 95 L. Ed. 637 (1950); Washington Nat’l Ins. Co. v. Bd. of Review, 1 N. J. 545 (1949), including the right to a hearing where governmental action affects an individual’s property interests. See Cunningham v. Dept. of Civil Service, 69 N. J. 13, 19 (1975); McFeely v. Bd. of Pension Comm’rs, 1 N. J. 212, 216 (1948). Our interpretation of the State Constitution need not rest on the Supreme Court’s interpretations of similar provisions. In fact, we have at times interpreted our State Constitution to provide greater protections than those existing under analogous Eederal provisions. See, State v. Johnson, 68 N. J. 349 (1975); Robinson v. Cahill, 62 N. J. 473, 490 (1973) (dictum), cert. den. sub nom., Dickey v. Robinson, 414 U. S. 976, 94 S. Ct. 292, 38 L. Ed. 2d 219 (1973); So. Burlington Cty. NAACP v. Tp. of Mt. Laurel, 67 N. J. 151 (1975), cert. den. and appeal dism’d, 423 U. S. 808, 96 S. Ct. 18, 46 L. Ed. 2d 28 (1975); King v. So. Jersey Nat. Bank, 66 N. J. 161, 180 et seq. (Pashman, J., dissenting). Nevertheless, we are satisfied that under the facts of this case, the interpretation given the Due Process Clause by the United States Supreme Court under Mullane and Covey offers a sound basis for interpreting our similar state provision. Cf., State Bd. of Milk Control v. Newark Milk Co., 118 N. J. Eq. 504, 518 (E. & A. 1935). Accordingly, we hold that Art. I, par. 1 of our State Constitution provides an independent ground for our decision today.

Ill

The minimal effort necessary to provide due process undercuts any argument of governmental necessity which might be raised in justification of the statute. See Schroeder v. New York, supra, 371 U. S. at 214, 83 S. Ct. at 283, 9 L. Ed. 2d at 260 (Notice is “an obligation which the mailing of a single letter would have discharged”); Dow v. State, 46 Mich. App. 101, 207 N. W. 2d 441, 447 (1973) (Gillis, J., dissenting), rev’d Dow v. State, supra (“All such a holding would require is the use of a postage stamp”). The burden imposed by this duty hardly outweighs an individual’s interest in retaining possession of a home which may have been purchased with a lifetime’s worth of earnings, or property necessary to sustain a family’s income. In the instant case the owner will lose property valued at $306,000 to satisfy a tax lien totaling $79,029.17. See also, Scoggin v. Schrunk, supra (land worth $10,000 sold for unpaid street assessment of only $209.37); Wager v. Lind, supra (home worth $15,000 sold for $174.37 in back taxes). As Justice Oliphant concluded, dissenting in Yeslcel:

[T]o divest ownership without personal notice and without direct compensation out of the excess value is the instance where constitutional government approaches most nearly to an unrestrained tyranny. Redemption is the last chance of a citizen to recover his property.

[5 N. J. at 339.]

Consequently, we hold under both state and federal constitutional guarantees, that where an owner’s name and address appear on the municipality’s tax rolls, notice must be sent by mail before a taxpayer’s right to redeem his property may be foreclosed.⁹ In order to avoid upsetting settled titles based on foreclosure proceedings, we grant the requested relief to the landowner in this case, but hold that our decision should be applied prospectively only. See State v. Nash, 64 N. J. 464 (1974); Note, supra, 84 Yale L. J. at 1517; Note, “Notice by Publication: Walker v. City of Hutchinson,” 24 U. of Chicago L. Rev. 553, 560 (1975). Accordingly, where a complaint is filed against an owner in a foreclosure proceeding after the date of this decision, or is presently pending, the municipality must mail notice to him before his right of redemption may be barred. We also note that an affidavit of compliance with this requirement should be filed by the municipality in the foreclosure proceeding. This procedure would remove any title objection arising from this opinion.

The lower court's denial of the motion to reopen the final in rem foreclosure proceeding is reversed.

1 N. J. S. A. 54:5-104.42 provides that a copy of the complaint-filed in the office of the county recording office, together with publication and posting of notice, “shall be notice to the world including all persons claiming any right, title, interest in or lien upon the land sought to be affected by said complaint, whether or not the names of said persons appear in said complaint. . . .” N. J. S. A. 54:5-304.48 provides for notice to owners who request in writing within the previous five year period that they wish to receive notice of foreclosure. However, it also states that failure to send such notice does not invalidate any action brought pursuant to the Act. Under the Court Rules, which also govern these procedures, mailing notiee to each person whose name appears as an owner in the tax foreclosure list is premissive. R. 4:64-7(c).

While our decision today is limited to the constitutionality of the in rem, foreclosure procedures, we note that under the statutory scheme it is possible for a taxpayer not even to receive notice that his property was the subject of the tax sale which precedes foreclosure. N. J. S. A. 54:5-27 does provide for notification of known owners when the property is to be sold and a tax certificate issued, but adds that “[fjailure to mail the notice shall not invalidate any proceedings hereunder.”

2 Specifically, the taxpayer alleged that the complaint filed against its property was defective. It argued that the municipality failed to comply with R. 4:64-7(a), which requires the complaint to set forth the “book and page or date and instrument number of the instrument by which the [landowner] acquired title.” Additionally, it argued that the complaint had failed to include certain words required under R. 4:64-7(b). Since we hold that the notice procedures mandated by the statute are unconstitutional, we need not consider these alleged irregularities.

3 That provision states:

Natural and unalienable rights

1. All persons are by nature free and independent, and have certain natural and unalienable rights, among which are those of enjoying and defending life and liberty, of acquiring, possessing, and protecting property, and of pursuing and obtaining safety and happiness.

4 The question arises only in the context of whether or not the tax sale which precedes the foreclosure terminates the property interest. The United States Supreme Court has clearly indicated that this type of question can only be answered by reference to state law.

Property interests, of course, are not created by the Constitution. Rather, they are created and their dimensions are defined by existing rules or understandings that stem from an independent source such as state law —■ rules or understandings that secure certain benefits and that support claims of entitlement to those benefits.

[Bd. of Regents v. Roth, 408 U. S. at 577, 92 S. Ct. at 2709, 33 L. Ed. 2d at 561.]

5 These cases are distinguishable from those construing state procedures which do hot utilize the foreclosure procedure to extinguish a landowner’s property interest. For instance, in Paschall v. Christie-Stewart, Inc., 414 U. S. 100, 94 S. Ct. 313, 38 L. Ed. 2d 298 (1973), vacating and remanding 502 P. 2d 1265 (Okl. Sup. Ct. 1972), reh. den. 414 U. S. 1138, 94 S. Ct. 884, 38 L. Ed. 2d 763 (1974), the Court considered an Oklahoma statute, under which the certificate deed (which is analogous to our tax sale proceeding) conveyed absolute title to the property if notice had been given prior to the issuance of the certificate. See Walker v. Hoffman, 405 P. 2d 57 (Okl. Sup. Ct. 1965). The Court, in vacating the judgment of the Oklahoma Supreme Court and remanding the case, stated that there may have been an independent ground supporting the judgment of the state court. Significantly, the Oklahoma Supreme Court has indicated that the Due Process Clause does apply at the point when the landowner’s property interest is terminated, upon issuance of the certificate deed. Id., 502 P. 2d at 1268.

Similarly, in Pearson v. W. P. Dodd, 429 U. S. 396, 97 S. Ct. 581, 50 L. Ed. 2d 574 (1977), the Court was called upon to review another state statute under which the property interest was completely terminated without foreclosure. The Court noted that plaintiff was not challenging the notice required to transfer the interest to the State, but only the procedures by which the State subsequently sold her property to a third person. 429 U. S. 396 at 396-398, 97 S. Ct. at 581-582, 50 L. Ed. 2d at 576-577.

6 See Note, supra, 84 Yale L. J. at 1506 et seq.; Note, “Requirements of Notice in In Rem Proceedings,” 70 Harv. L. Rev. 1263-64 (1957) ; Note, “Due Process in Tax Sales in New York: The Insufficiency of Notice by Publication,” 25 Syr. L. Rev. 769 (1974).

7 In Marchetti v. United States, supra, and the companion case of Grosso v. United States, 390 U. S. 62, 88 S. Ct. 709, 19 L. Ed. 2d 906 (1968), the Court held that federal wagering tax statutes unconstitutionally infringed upon a taxpayer’s Fifth Amendment privilege against self-incrimination. In Efrain T. Suarez, 58 T. C. 792 (1972), subsequent proceedings 61 T. C. 841 (1974), the Tax Court also rejected the notion that tax considerations outweighed constitutional protections. Applying Fourth Amendment guarantees to federal tax jeopardy assessment procedures, the court concluded

that any competing consideration based upon the need for effective enforcement of civil tax liabilities . . . must give way to the higher goal of protection of the individual and the necessity for preserving confidence in, rather than contempt for, the processes of Government.

[58 T. C. at 805.]

8 Surely, the importance of the individual’s property interest, even when measured against the Government’s need to collect taxes, is reflected in Pitt’s famous denunciation of the English “Cyder Tax”:

The poorest man may in his cottage bid defiance to all the forces of the Crown. It may be frail — its roof may shake — the wind may blow through it — the storm may enter, the rain may enter — all his force dares not cross the threshold of the ruined tenement !

[15 Hansard, Parliamentary History of England (1753-1765), cited in Frank v. Maryland, 359 U. S. 360, 378, 79 S. Ct. 804, 815, 3 L. Ed. 2d 877, 889 (1959).]

9 Although not constitutionally impelled in this regard, we concur that registered or certified mail, return receipt requested, should be utilized to notify a landowner of the foreclosure proceeding. If the letter is refused, or simply not accepted, notice by ordinary mail should be sent to that address and to the clerk of the court. This result comports with various Court Rules which concurrently deal with notice requirements. R. 1:5-2; 4:4-4 (a) ; 4:4-5.

Since the present rule governing foreclosures, R. 4:64-7 fails to make notice by mail mandatory in foreclosure proceedings, we are submitting this matter to the New Jersey Supreme Court Committee on Civil Practice to revise the rule in accordance with this opinion and submit its proposal to us for formal adoption.