63 A.2d 284 | N.J. Super. Ct. App. Div. | 1949
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *165 The defendants appeal from an order for restraint pendentelite entered in the Law Division on November 4, 1948, and from an order appointing a custodial receiver entered in the Law Division on November 15, 1948.
By legislation adopted in 1934 and revised in 1946 (P.L. 1946c. 318; R.S. 27:19-26 et seq.) every County, acting through its Board of Chosen Freeholders, was authorized to create a Bridge Commission with authority to acquire bridges, with the consent of the adjoining State where the bridges extended therein, and with the approval of the Board, to issue bonds secured by the tolls or other income from the operation of the bridges. In 1948 this legislation was amended to eliminate the express provision for the consent of the adjoining State and to provide that bonds issued by the Bridge Commission would be lawful trust investments. See R.S. 27:19-28; R.S. 27:19-32.2.
By Chapter 401 of the Laws of 1947 the Legislature amended the Statute under which the Tacony-Palmyra Bridge Company and the Burlington-Bristol Bridge Company were incorporated. The amendment authorized sale of the bridges and stated that any successor to a bridge company shall have all of its rights, privileges and franchises and be subject to all of its statutory restrictions and limitations, provided, however, that if the successor is a Bridge Commission then the Commission's right to *167 charge tolls shall cease forty-five years after the opening of the bridge and in consideration thereof the bridge shall not "be subject to acquisition by, or be subject to becoming the property of, any State or States, municipality or municipalities" under the terms of the Statute and that the right of the Commission in the bridge shall be perpetual. Plaintiffs allege that this amendment enabled a County to organize a Bridge Commission, have it "acquire a privately owned bridge for any price" and thereby, in effect, terminate the rights of the State and Burlington County to acquire the bridge under the formulas prescribed in the pre-existing State and Federal legislation as well as the reversionary right of the State under R.S. 48:5-24 to obtain the bridge free of cost at the expiration of fifty years. Plaintiffs contend that the amendment, as applied to the transactions hereinafter described, constituted "donations of state and county property rights" in favor of private interests in violation of Paragraphs 19 and 20 of Article I of the 1844 Constitution embodied in Article VIII, Section 3, Paragraphs 2 and 3 of the 1947 Constitution. They also contend that it embraces an object not expressed in its title in violation of Article IV, Section 7, Paragraph 4 of the 1844 Constitution embodied in Article IV, Section 7, Paragraph 4 of the 1947 Constitution, and that it grants exclusive privileges to private corporations in violation of Article IV, Section 7, Paragraph 11 of the 1844 Constitution embodied in Article IV, Section 7, Paragraph 9 of the 1947 Constitution.
In their complaint as amended and further amended, plaintiffs, as taxpayers and citizens of the County of Burlington, seek comprehensive relief including declarations that P.L. 1947 c. 401 and the resolutions of the Board of Freeholders and the Bridge Commission relating to the acquisition of the bridges are null and void; rescission of the contracts relating to the acquisition by the Bridge Commission of the stock or property of the Burlington-Bristol Bridge Company and the Tacony-Palmyra Bridge Company; money judgment in favor of the County of Burlington and against defendant Clifford R. Powell and others for damages resulting from the alleged fraudulent conspiracy; an injunction against all acts in furtherance of the resolutions of the Bridge Commission purchasing interests in the Burlington-Bristol Bridge Company or the Tacony-Palmyra Bridge Company or in their bridges; and the appointment of a custodial receiver. On October 26, 1948, four days after the acquisition of the bridges by the Bridge Commission, plaintiffs obtained an adinterim restraint from the Law Division which was followed by the order for restraint pendente lite. Within the terms of the restraint the Bridge Commission is operating the bridges, the tolls which it receives are being maintained within the State, subject only to their use in the actual operation and maintenance of the bridges, and there has been no further distribution or negotiation of the bonds issued by it. The Law Division's subsequent order dated November 15, 1948, appointed a custodial receiver, transferred the operation of the bridges to him, and directed that he restore toll charges which had been reduced by the Commission prior to the filing of the plaintiffs' complaint but this order was stayed pending appeal and the custodial receiver never took possession.
Following the entry of the orders under appeal, the Attorney General submitted to the Governor of New Jersey a report with respect to the acquisition of the bridges by the Bridge Commission and thereafter an information and complaint against the defendants herein and others was filed by the Governor and Attorney General in the Chancery Division of the Superior Court. On November 23, 1948, plaintiffs filed their *170 further amended complaint in the Law Division. The defendants contend that we are not at liberty to consider the plaintiffs' further amended complaint or, indeed, any of the occurrences subsequent to the entry of the orders appealed from. It may well be doubted whether, in view of the public nature of the proceeding and the important issues presented, justice would be served by disregarding events which have admittedly occurred during the pendency of the appeal. In any event, if the subsequent events would alter our conclusions, the proper procedure presumably would not be dismissal, as defendants contend, but rather a remand to the Law Division. However, this need not be pursued since we are satisfied that our determinations may rest on the papers before the Law Division at the time its interlocutory orders were entered, and that, although they may be strengthened, they would not otherwise be affected by the subsequent occurrences.
Bearing in mind that we do not now have before us the ultimate merits of the controversy which must await full trial and adjudication, and that the only question before us is whether the interlocutory orders restraining the defendants pendente lite and appointing a custodial receiver should be permitted to stand pending such trial and adjudication, we have no present occasion to consider the appellants' contentions other than the following: (1) that the plaintiffs as taxpayers and citizens have no standing to maintain this proceeding; (2) that no restraintpendente lite should have issued in view of the doubts on the ultimate merits; (3) that no custodial receiver should have been appointed; and (4) that plaintiffs are estopped from seeking relief.
The standing of taxpayers and citizens, under appropriate circumstances and without any showing of increased tax burden, to maintain proceedings seeking to remedy wrongful acts of public officials has long been recognized in our State. Thus, in Ferryv. Williams, supra, Mr. Justice Dixon pointed out (at p.
337) that, "our courts have exercised a large discretion in annulling the illegal acts of municipal bodies and officers, and compelling the performance of their public duties at the instance of citizens and taxpayers who were not otherwise interested in the controversy than was the rest of the community", and cited(at p. 338) "instances of interference by the courts with official action affecting only public rights at the suit of private persons, where questions of taxation were not at all concerned, or were so remote from the matters complained of as not to be noticed in the decision." Cf. Tube ReducingCorporation v. Unemployment Compensation Commission,
Broad and wholesome recognition of taxpayers' suits as an effective means for restraining official misconduct is found not only in our own State but in other States throughout the country. See Simpson, Fifty Years of American Equity, 50 Harv. LawRev. 171, 231 (1936) and the authorities cited in Note on "Taxpayers Suits as a Means of Controlling the Expenditure of Public Funds", 50 Harv. Law Rev. 1276, 1281 (1937). InMiller v. Milford,
"The excessive cost of the plant, which consumers must pay, would postpone the time the city would obtain title to the plant. It cannot be said that consumers would not be benefited by an earlier acquisition of ownership of the plant, free from debt, and the fixing of rates based on a debt free plant. The securing of the plant at the lowest price possible through the mandatory requirements of the statute is of substantial interest to the citizens of the town. If appellants' contention were sustained, no recourse could be had to the courts for relief from void, extravagant, ultra vires action of the city council, because there would be no one who had authority to institute the suit to prevent a public wrong, except the state in certain circumstances. The public welfare requires that such right be lodged in the citizens of a community."
We are satisfied that within the cited authorities and upon sound reason the plaintiffs' standing should be sustained. They *173 raise constitutional questions and make serious charges of official misconduct affecting the public interest. Plaintiffs instituted their action with dispatch thereby aiding in maintaining the status quo and although the Governor and Attorney General subsequently filed a related information and complaint, they have not evidenced any desire that plaintiffs be displaced in this proceeding. On the contrary, the Attorney General appeared before the Law Division in support of plaintiffs' restraint pendente lite. Considering all of these circumstances and the interlocutory stage of the proceeding, it seems clear that the interests of complete and effective justice to the public as well as the parties require that the defendants' efforts to dismiss the proceeding, on the ground that the plaintiffs have no standing, should fail.
In support of their position that the appointment of the custodial receiver should be vacated, the defendants urge, in the first place, that the plaintiffs have made no showing of danger to the bridge properties sufficient to justify the extraordinary displacement of the Bridge Commission in favor of a receiver.Cf. Orshefsky v. Mechanics Trust Co.,
The order dated November 4, 1948, for restraint pendente lite is affirmed; and the order dated November 15, 1948, for appointment of custodial receiver is vacated without prejudice to application for restoration by the Bridge Commission of the tolls at the rates charged immediately prior to October 22, 1948. *177