*1 GREENBERG, IRVING PLAINTIFF-RESPONDENT, v. DON FORNICOLA, ALD LEE, ETC., AL, KENDALL H. ET DEFEND ANTS-APPELLANTS. Argued 19, December Decided March1962.
(1) *3 A. Mr. Felix Be Swrno the cause for argued defendants- Kendall H. appellants Lee and of City Asbury Park. Mr. Charles Franlcel the cause for argued defendant- Donald appellant Eornicola.
Mr. George 8. 81colcos the cause for argued plaintiff- respondent.
The of the court was opinion delivered The C. J. Division a Appellate held that Weintbaub, lease from of the Park to defendant Asbury Eornicola was void failure for to with the law comply to relating 65 N. bidding. J. 104 competitive Super. We (1961). N. certification. 36 J. 28 granted the the lease were to be used “for premises Dnder the desserts, cream, sale of frozen ice drinks and milk (soft) the lease was amended to products.” Subsequently exclude and to substitute therefor “frozen desserts” “cold sandwich coffee, cakes, frankfurters pies, platters, hamburgers.” a also held lease from the of city premises Plaintiff some His lease away. permitted feet sale 500 frankfurters defendant’s sale Deeming hamburgers. these products business, his with as a plaintiff, compete taxpayer, sued to enforce the Fornicóla lease compel originally the trial court drawn. On cross-motions for judgment, found the defendants. Division initiated
Upon appeal Appellate plaintiff the further claim that the lease to Fornicóla was void be- cause of statute. The noncompliance Division the new issue. Thus accepted suit Appellate of a lease became one to void it. performance compel Our court to notice practice permits appellate errors substantial plain affecting rights party, although were not to the attention of the trial brought court. they R. R. 1:5-3 In Howard D. Johnson Co. v. (c). Township Wall, we said: (1962), “* * * authority appellate Unquestionably, of an this court contemplate casually not The rule does not will be invoked. explore questions litigation routinely rerun all which shall * * * may conceivably upon total be involved. But where justice requires of an issue consideration scene it manifest controversy and the lateness central a correct resolution countervailing prejudice, source of hour is not itself a question it, accept may appellate and indeed itself raise court we have.” as on occasions under this residual Division acted Appellate
The First, are twofold. difficulties here justice. to do power below, was tried to what new issue foreign Second, in the developed was not it. light record hence that attacks principle was lost of seemingly sight made. See Robbins seasonably must be contracts *4 229, N. J. 237-239 (1957); 23 Jersey City, City of v.May City Cape May, Ass’n Cottagers’ Cape Summer of of Travis v. Borough Highlands, J. (1955); N. 493 19 of 1947). 199 Ct. J. L. (Sup. 136 the lease should have been contest action to An R. Sub- days. 4:88-15(a). 45 R. least within at brought the may court enlarge rule provides of that (c) paragraph that the interests of is manifest justice it “where period the in a challenged was first brief lease Here require.” The was made. transaction had it after months 14 filed
5 been publicized. The fully to lease is not dis- authority puted, and the had city to with sought comply the bidding statute. Thus the issue not one power of to act. See Homes, Inc., v. Stoeco J. 246, 26 N. 262 (1958). Oldfield Nor is corruption Rather, at alleged. plaintiff projects best a debatable question of concerning sufficiency specifica- tions. It may be doubted that an suit so original long after the event would be entertained except upon moving of explanation and a demonstration of fair- delay ness of a at so late an quarrel hour.
Defendants, however, do not complain, the matter reached the having we will present stage, this addi- accept tional issue.
I. For reasons stated, we have record is satis not too We factory. gather these facts: In the spring erected a city on pavilion boardwalk, its consisting facilities and six cost of bathing stores, approximate at the $450,000. The advertised for for the as it city bids stores was do N. A. 40:61-36 to 40. required Asbury S. Press, Park, Park Inc. v. City Asbury Press, Park, (1955); Asbury City Park Inc. v. Asbury The also communicated city directly operators restaurant to excite their in leading interest the proposals. initial was approach
The the class of specify goods each be sold in store. seven Some advertisements of spec- so phrased ifications were then unproductive. the specifications amended that: provide permitted “The bidder be submit an offer for line some other subject suggested by bidder, approval business Council.” specified Eornicola submitted a bid which he the products to be We he was the sole bidder for the store sold. gather An award made and lease executed. question. *5 tbe best to obtain is
Competitive bidding designed v. Board Weinacht result tbe public. economic of 330, 333 J. 3 N. Bergen, Freeholders County Chosen of of body the public that Inherent is the requirement are that on all matters standard shall common prescribe interested persons end that proposals, material to bid by induced to and will be bid may intelligently that of only specifications which impartiality of promise Branch, L. 98 N. J. Tice v. City Long can give. quality of City, Atlantic City v. 214, & A. Waszen 1922); 215 (E. of Hillside, Union 272, Township 283-284 (1949); of § Sternin, Fereday 317, 322 (1957); County Elizabeth, 27 Pub. Works v. Board Meyer Co. 223 (1958). the provision permitting Division found Appellate bidder enabled each a line of business a bidder to suggest we standard, principles thus violating to fix his own value of premises depends It said the rental have set forth. no and hence there was which are they put, the use to upon course, for the We bidding. agree, standard” “common value, rental use affect may nature of the authorized that the is a common standard we are unable agree but to suggest all have the common right when bidders lacking disapprove use, right notwithstanding reserved. wants to what business he tenant knows
A prospective interest and seeks place starts with that He conduct. him, he is concerned location appeals it. If the further term; and the length amount of space with the he is able are specified, intelligently and term space if the an offer. to submit use of course may affect the
Restrictions bidding. so they operate analytically, by way Perhaps, limiting are interested who rather than persons number e., standard, i. space common and term. At altering is whether are they rate, legally permissible, the question take the form may so, they whether municipality and if here employed. *6 limitations
Although use tend to reduce the likeli- upon hood of the dollar a greatest yield, owner can- yet prudent not be indifferent to the use of uses his Some property. may injure or or degrade premises the the return impair from the remainder of the And in circum- property. special stances the owner use, wish a to further may only particular scene, another interest he has in the total even though use not may Thus, attract the rent. for highest any reasons, suggested dictate that the good management may owner less than best accept the return. something
We think it clear the did not Legislature intend deny the municipality right thus its total protect interest by suitable restrictions use. R. S. 40:61-37 authorizes a expressly such letting terms condi “upon tions it This municipality] may prescribe.” pro [the vision is not as for explicit as, example, provision the statute, another not here involved, which authorizes a munic to lease “to ipality who will rent person pay highest therefor, for use or not detrimental such building the use of the remainder R. by municipality,” S. 40:60-42, but we have no doubt statute here involved embraces the same thought. however,
Plaintiff argues, limitation upon use compatible bidding only statute if the acceptable uses are specified the proposal bids, for hence any use, for proposal subject to disapproval, violates the statutory policy. The statute does not that distinc- express tion, and we should not find it by implication unless the sense the situation so requires.
A owner would private hardly take the by route urged He would not limit his plaintiff. for the opportunity high- est return in advance the by divining particular he uses would consider to be Rather he appropriate. would welcome all offers and decide whether the then should highest be refused because some in the use disadvantage proposed. The soundness of that course is illustrated experience in this case. The for bids plan for original predetermined approach
uses evoked no whereas the broader response, calculated is well proved productive. approach The broader of the bidding achieve the aim bid, very highest is so unless it statute. It thus with the statute comports incompati- we find beset with the of evil that must prospect on that bility account. statute seeks to prevent predetermined
result for a see favored bidder. We no special prospect evil in a dis any use, this for bids proposal subject Indeed, of a approval. specification by public body use can more readily improper turned to particular *7 use, for end, the more the fewer will be specific Here, speci interested as in other undue parties. settings, See, example, can be the vehicle for favoritism. for ficity City, 272); Waszen v. Atlantic supra (1 of Lake, & Oil v. Borough Spring Gas Co. Shore True, a reserved 1953). right Div. Super. (App. invidiously, oppor could be exercised but overall reject narrowed, a result is for to reach much tunity preconceived refused, would body bid should be the public if the highest judicial under the compulsion opinion Hence a reason for less. accepting review to tenable give a motive corrupt all are is easier to detect in, when bids it contained limitations specific when the is upon than attack reasons an interested person Por these in the specifications. of a fear that from because bidding would not be dissuaded has been contest rigged. in not municipality specify not that a say may We do so if It do may uses will doubtless permit. advance the it Rather is that course reasonable. under the circumstances subject to disapproval that open proposal, we hold with the statute. use, is not incompatible bidding have been reservation could well be that the here may It expressed it well have Por example, might explicit. more e., if injurious i. the use is rejection, the basis of the city interest or premises, prejudicial demised incompatible pur- or remaining property, in its of a a poses boardwalk standard that pavilion. Perhaps nature is and would be inferred. At implicit judicially rate, inclined, date, this to consider we are not at late any could have achieved city which the degree perfection in its of the reservation. ETo bid was fact phrasing and the likelihood that bid deterred is rejected, a completed too remote to warrant transaction. upsetting II. complaint,
This us in the to the issue advanced brings be- no view upon which the Division Appellate expressed cause of void. its that the lease was holding or im- faith,
Plaintiff does arbitrariness not bad charge law, he providence. proposition Rather presses only modification wit, forbade any statute bidding other- Expressed or relaxation of the terms of the lease. wise, competitive contends the plaintiff product modification, if the wish immutable, parties anew to subject and submit the must rescind the lease they competitive bidding. the lease was are these: After facts undisputed in the for another store
executed, the received bid to sell frozen of the bidder purpose being pavilion, was the impediment authority The practical custard. *8 sale of “frozen desserts.” The Eornicola lease for the “frozen desserts” in to delete asked Eornicola to agree cake, sell cold sandwich platters, to permission exchange Later, and coffee. Eornicola but to prior pie agreed. Council, Eornicola was permitted formal approval by also sell under circum- frankfurters, to hamburgers The we will relate. amendment presently stances included these additional items lease as formally approved as well.
Quite to it would not be feasible obviously say meet an need is conditioned unanticipated city’s right risk the result of new a tenant’s willingness bidding. upon The city was the Fornicóla moving party. was agreeable upon his change evaluation of its economic worth. It would have been foolish of him to jeopardize his invest ment and business to accommodate the city. goal statute is not impaired when the public body in its own interest seeks an amendment to meet an unantici pated in development circumstances in which new bidding would be or inappropriate Home impractical. See Owners Rock, Const. Co. v. Borough Glen 34 N. 305, J. It would be unreasonable to construe the act to deny municipality for a opportunity bargain needed change.
So much of the amendment as relates to hamburgers frankfurters presents assume, different if problem, we the record suggests, that permission sell them was not part the bargained consideration. It appears city suggested that Fornicóla handle those delicacies to meet the complaint of visitors and city employees they were not available at the pavilion. We the nearest gather place they could be street bought beyond the city’s ordinance forbade to cross the street anyone attire. The bathing then question is whether the city may relax a restriction use upon to obtain a service the city wishes to be provided.
A municipality may deal with its contracts in the same manner as a natural person the absence of or statutory constitutional limitation. Carlin v. City of wark, Ne 74, 92-93 Super. (Law Div. Here 1955). the restriction use upon was not a term of the bidding specifications, and hence the case is unlike Vaccaro v. Asbury Park 42 N. Enterprises, Super. Div. (App. where lands 1956), were sold upon condition that a structure of specified type then, erected and without any justification Inc., Homes, (see Stoeco supra (26 Oldfield 261)), city permitted a which change would have altered the materially basis which bids had been submitted. So far as the present record goes, inter- *9 ested could have for the party proposed bid store use which would have embraced all of the items Eornicola was use here later to sell. Since the restricted permitted was not which all bidders part of the specifications upon bid, had to a restraint simply imposed restriction as The its interest owner. city protect continuing own relax to serve its could the restriction city accordingly law. ends without an issue under the bidding generating lease, of the as dis- We that an amendment appreciate to sell from a revocable permission tinguished grant if frankfurters, city and could hamburgers prejudice should vacant during one of the other stores become is irrevocably Whether the city term of the Eornicola lease. need not explore is not crucial and hence we bound hold the case it is enough Eor the present question. hence could not such permission could grant in the lease. restriction contained to enforce the compelled Division is accordingly of the Appellate The judgment is affirmed. trial court reversed and the judgment opinion argues (dissenting). majority Ekancis, under of the amended lease for persuasively legality But we are not with dealing private property attack. is, unlimited endowed, as he with almost freedom owner Tp., Super. Lieberman Neptune of contract. We are concerned solely Div. 1958). (App. whose to demise the power municipal corporation premises by specific legislation. is circumscribed question S. A. 40:61—36 40. has decreed that of this store any letting
The Legislature bids, advertisement for and shall be granted shall follow R. 40:61-39 to 40. The bidder. S. responsible highest it is to competitive bidding, designed requirement im favoritism, and to competition guard against secure corruption, rooted providence, extravagance deep It is in the principles public policy. highest degree sound a deliberate decision on the mandatory represents part *10 12 con- deprive government of our branch lawmaking
of
limit
discretion, or to
of
officials
municipal
tract-making
mentioned.
the abuses
susceptible
areas
discretion, in
their
is a whole-
scheme
statutory
Uo one can doubt
is to
high purpose
its
or
public policy,
some rule of
in
Consequently,
taxpayers.
maximum protection
afford
must
reference
the sole
the courts
its administration
interest,
safeguarded only by
which can be
to the public
Union County
Hillside
compliance.
Tp.,
demand for strict
Sternin,
Park Press v.
Asbury
N. J. 317
25
(1957);
v.
Park,
183,
N.
188
C.
19
A.
Asbury
(1955);
City of
103,
8 N. J.
108
&
v. Haddon Twp.,
Sons
Schultes
and, as is
necessary
usually
is
competitive bidding
Where
case,
of the work to be
specifications
the terms
or leased
done or the article
to be
or sold
property
bought
or
advertisement, the
forth in the
bids submitted
public
are set
the terms and
material
specifications. Any
must conform to
Moreover, after the conform
invalidates the bid.
departure
in the
of the lease of
lowest bid
case
ing
highest,
(or
contract entered into between the
is
property)
accepted,
and the
must likewise match the terms
bidder
municipality
material
or
there
Any
departure
and specifications.
change
Where the
is
from vitiates the
variance
sub
agreement.
stantial,
to the bidder or to the
advantage
municipality
immaterial;
the same result must follow. Hillside Tp.,
Sternin,
McDermott v. Jersey City,
Union
v.
County
supra;
Trenton,
273,
56 N. J.
276
Ct.
Shaw v.
1893);
L.
(Sup.
Diamond
City
L. 339
Ct.
v.
1887);
(Sup.
of
Mankato,
48,
89 Minn.
bids.’ the contract *11 upon had, renders from the terms and conditions the is which contract, sense, private permit in the in a To such the a one. open awarding by public would to contracts officers be thing favoritism, the law wide the door for and defeat the which requiring safeguard, be bids in to let intended the contracts specifications. unimportant on whether the made advertised It is stipulation in awarded to one who additional contained contract the advantage responsible an in itself is not the bidder be lowest change, and therefore or If material not. it constitutes departure bidding, element and becomes an from the basis of is and best of who the lowest or consideration in the determination So., bidder, at into.” it invalidate the contract entered will p. 682. into substantial represents
When the contract entered no that is of consequence from the it departure proposal, or faith one or the other in or that acted parties good act is in fact If the forbidden both derived some benefit. intent void reference done, the contract without done; follows, course, such result as of which was it Diamond v. City wake of the transgression. in the W., Mankato, at Assertion munic 93 N. 913. by p. supra, action, of their justification officials, way by ipal ends was to accomplish legitimate chose they the method law and by produced provided gain than the one better as futile. only can regarded Chippewa body, the public Durand, W., 99 N. at 610. supra, p. Co. v. Bridge have concluded that the field of public the courts Plainly, into the to look minds and hearts it difficult is too contracts are opposed which the taxpayers’ for motives of men which symbols by external such motives interests, are indicated are too difficult to search out evaluate. Consequently, they have espoused the doctrine that legislative can purpose be effectuated only by automatic condemnation of such contract which is materially different from the bid. as the
Assuming premise of that under the majority circumstances of special this case an bid of open the nature employed this instance is statutorily permissible see, (but revision of proposed 40A incl., S. :6-17 to 19 Report & Commission, County Law Revision Municipal March 1961), what are the significance and the application principles just bid, discussed? The 12, Eornicola made May $39,885 for a ten-year lease of particular boardwalk store to be used “for sale of frozen desserts, ice cream, drinks and milk products.” On 26 a (soft) May lease was executed in accordance with the bid authorizing use of the “as a premises store for the sale of frozen desserts, ice cream, drinks and milk (soft) products, and * * for no other whatsoever purpose *.” Yery shortly thereafter the was altered agreement mutual consent on two occasions. The amended lease in its final form with- (cid:127) drew the sell frozen custard and right conferred au- *12 in much to broader thority engage operations. More par- the of use is for ticularly, present scope sale of cream, “ice drinks milk cold products, sandwich (soft), platters, cakes, coffee, and frankfurters and pies, and for hamburgers, no other whatsoever.” The extent purpose of the change on indicated the store by signs it as a describing “luncheon- a milk ette” bar) (instead “Ducky’s Shop, Luncheonette, Service, Breeze Soda Sea Fountain Cream, Franks, Sodas, Sundaes, Hamburgers, Breakfast, Ice Milk Sandwiches, Salads, Shakes, Soups, Drinks, Orangeade, Fresh Fruit Lemonade, Limeade, Tea, Coffee, Lunch.” tactic, instead of the bid
If, open the had city advertised to lease the store in question for bids for the purpose of desserts, ice cream, “frozen drinks selling (soft) milk $39,885 had and Eornicola offered for products,” such a ten-
15
lease,
the
year
under
legal
discussed
principles
above would
not
the
authority
let
been
necessarily have
limited to
such
?
a
purposes
If
lease had been entered into immediately
which omitted frozen custard and included instead cold
sandwich platters, cakes,
coffee,
pies,
frankfurters
ham
would not
burgers,
the modification have
constituted
material
from
departure
the terms of the public advertise
for
ment
bids? To me, an affirmative answer is
only
one
can
reasonably be
a contract,
Such
with
given.
its materially altered
in
subject matter,
conflict
being
bid,
would have to be declared void as violative of the
mandate
open,
it
competitive
would not be
bidding;
the contract
for.
bid
And would
it
make no
difference
such ease that Fornicóla
to be
bidder.
happened
only
Ervin,
v.
City
See
Bemidji
Le Tourneau
supra;
Hugo,
Proctor, *13 lease with that Fornicola’s the city was valid when majority us, I also from the record agree, before made. the alter with Eornieola to the lease properly agree could city sold, items frozen namely, products, certain to be by deleting others, platters, cold sandwich substituting namely, There is the could cakes, city coffee. no pies suggestion have the sale of frozen give up products induced Eornieola him the substituted items. It without to sell permitting was to further the seems to me there good-faith bargaining e., in interests of i. its income and city, augment the store. pavilion by leasing crease vacant Under activity I that this alteration the these circumstances cannot of say letter lease violated the or the of the spirit public bidding the statutes. But that the amended lease part permitting of sale of frankfurters and another matter. hamburgers quite Ho need be cited establish the authority proposition these “delicacies” are with seashore resort highly popular visitors. There was no for this pro profitable gain quid quo The by Eornieola. later inclusion the sale permitting of frankfurters and the hamburgers increased attrac obviously tiveness and value of the lease. Eornieola never bargained lease, for such inclusion at the time nor original was such inclusion for when he bargained his gave up right to sell frozen in return for products to sell cold right cakes, sandwich platters, The amendment pies coffee. lease relates to frankfurters and hamburgers to Eornieola gratuity by valuable thing, i. permission to his business expand the terms beyond bargained for. To me this action seems to circumvent the statutes, public A. bidding J. S. 40:61-36 to which prevent city from its leasing out buildings except to after highest responsible bidder proper advertising. See Park, Park Asbury Press v. City Asbury fact that the city suggested Eornieola handle frankfurters and hamburgers to meet the convenience visitors and city has no employees significance. The city cannot disregard goal statutes when it seeks to of a enlarge scope lease. We are concerned here with a valuable addition to the terms original
17 lease, not burdensome favor Eornicola render the might All city. boardwalk refreshment stands are for the con- venience of bathers and strollers. Such convenience is trans- lated into the lessee’s profits and is the reason very why his lease becomes more valuable when he is permitted .to expand the scope his operations.
I would uphold the lease original as amended to permit Eornicola to sell cold sandwich platters, cakes, pies and coffee in lieu of frozen products. I would invalidate that part of the amendment which permits Eornicola sell frankfurters and hamburgers. J. (dissenting). While I agree with the dissenting
Hall, opinions of Justices Eeancxs I would go Peoctoe, further and hold the Eornicola lease to be void as did the Appellate Division. 65 N. J. Super. (1961).
The majority appears to me to hold that a municipality like Park Asbury its owning beachfront and pavilions, stores and other buildings thereon, which are designed to remain in public ownership perpetually and rented for commer cial operation lease continuously, may its properties in com pliance with the applicable statute, R. S. 40:61—36 et seq. ways. Eirst, two it may specify permissible use and invite bids for that purpose only. Considering overall I circumstances see no legal objection method, this provided the limitation is reasonable, consistent with a fair plan for proper development use of the entire area in the highest public interest and the is, lease of course, awarded to the highest responsible bidder. Secondly, majority says it is valid to here, advertise bids, for open merely with the specification the use will be “suggested bidder, subject to the approval of City Council.” Implicit in the holding that the governing body need not award the lease to the bidder highest for use but only to the party naming highest price for that offered use decided, after the bids are opened, to be the which, one will be accepted and exclusively permitted.
This affords the means of conclusion, me, destroying the vitals of this decisions in the cases of prior court's two Park, Press Asbury Park 19 N. J. 183 Gity Asbury J. 50 The first of these deci (1955) sions held the intent legislative require advertising on bids uniform and award to specifications highest second, bidder in the case of and the beachfront property, *15 that action in this must municipal regard fairly comport with the of the laws. These purpose spirit bidding conclusions are bottomed on the fundamental propositions that, directs, where the so Legislature municipalities may deal real owner, not with their would property private favoritism and the of favoritism are possible image to be the maximum strictly safeguarded against revenue, consistent with the over-all interest and shall be obtained. Entire faith in a purpose, par good ticular transaction affords no excuse to from the statu vary tory mandate.
The method of here sanctioned does obviously not these as the Division principles, Appellate conform to I cannot conceive that the in R. out. S. pointed language 40:61-37, body specify “terms permitting governing was intended to allow and conditions" of leasing, The policy result here reached. behind the strict legisla- If is a one. it is salutary tion not strong thought reasons, business variation practical be workable can Courts should not only permitted Legislature. authorize from clear departure undertake to legislative and provisions. policy affirm the judgment Appellate
I would Division. Justice Weintraub, For reversal—Chief and Justices and Haneman—4. Jacobs, Schettino and Hall—2. For affirmance—Justices Erancis Proctor—1. For modi'ficalio'nr—Justice