## Facts

- West Park Ave., Inc., a residential subdivision developer, acquired 60 subdivision lots in Ocean Township, New Jersey, and began building homes.
- After the developer erected advertising signs and sought continued approvals, municipal officials stated the developer would not be allowed to use billboards and would not receive further building permits or certificates of occupancy unless it paid $300 per house to the Township’s Board of Education.
- The $300-per-house demand had no statutory authorization and was not imposed by ordinance; it was asserted administratively through threats to withhold approvals.
- The developer paid because it feared the project would halt during litigation and that officials would engage in hostile enforcement affecting construction.
- Township counsel drafted a written “agreement” requiring payment upon each closing, with funds to be held for school-related capital purposes.
- The developer paid $17,700 under the arrangement and then sued to recover the payments as illegal and made under duress.

## Issues

1. Whether payments extracted by municipal officials as an unlawful condition for permits and occupancy certificates were “voluntary” and thus unrecoverable, or were paid under economic duress and subject to restitution.
2. Whether restitution is barred because the developer did not first sue to restrain the unlawful demand before making payment.

## Decision

- The New Jersey Supreme Court reversed the judgment for the defendants.
- The court held the $300-per-house charge was unauthorized and illegally demanded outside any ordinance or statutory scheme.
- The court held the developer’s payments were not voluntary; they were made under business compulsion (economic duress) induced by wrongful threats to withhold essential governmental approvals.
- The court held the developer was not required to stop its project and pursue pre-payment injunctive relief to preserve a right to restitution.
- The developer was entitled to recover $17,700.

## Legal Principles

- A payment exacted by public officials through wrongful withholding (or threatened withholding) of required governmental approvals, when the payor faces serious and imminent economic harm, may be treated as involuntary and recoverable as paid under duress.
- The availability of pre-payment injunctive or declaratory relief does not, by itself, convert a coerced payment into a voluntary one; the inquiry centers on wrongful compulsion and practical economic pressure.
- Municipal exactions tied to development approvals must rest on legislative authorization and lawful enactment (such as an ordinance); informal administrative demands are invalid even if directed to public purposes like school construction.

## Conclusion

The court required restitution of an unauthorized per-house payment extracted as a condition of permits and occupancy certificates, holding that economic pressure created by unlawful governmental threats can constitute duress and that a developer need not risk halting its business by litigating before paying.


West Park Ave., Inc. v. Township of Ocean, 48 N.J. 122, 224 A.2d 1 (N.J. 1966)