City of Bayonne v. North Jersey Dist. Water Supply Com'n

• Decision Date: 07 May 1954
• Docket Number: No. A--613,A--613
• Parties: CITY OF BAYONNE v. NORTH JERSEY DIST. WATER SUPPLY COMMISSION et al. . Appellate Division
• Court: New Jersey Superior Court — Appellate Division

Page 409

30 N.J.Super. 409

105 A.2d 19

CITY OF BAYONNE v. NORTH JERSEY DIST. WATER SUPPLY COMMISSION et al.

No. A--613.

Superior Court of New Jersey Appellate Division.

Argued Dec. 7, 1953.

Decided May 7, 1954.

William Rubin, Bayonne, for plaintiff-appellant (Abraham J. Slurzberg, Jersey City, on the brief).

Oscar R. Wilensky, Passaic, for defendants-respondents (Oscar R. Wilensky, Passaic, Horace S. Bellfatto, Robert J. McCurrie, Newark, Samuel Allcorn, Jr., Montclair, Thomas J. Markey, Bloomfield, James E. Fagan, Newark, and Benjamin J. Spitz, Paterson, attorneys).

Before Judges CLAPP, GOLDMANN and EWART.

The opinion of the court was delivered

PER CURIAM.

The City of Bayonne brought suit for a declaratory judgment, seeking a construction of N.J.S.A. 58:5--26 and also asking the court to fix the price currently chargeable under that statute for water now being supplied it by the North Jersey District Water Supply Commission. The commission operates the Wanaque Reservoir, and it has now completed and put into use, apparently since the trial below, the Ramapo project. The trial court held that a judgment entered in a 1941 action is Res judicata as to most of the questions raised, and accordingly gave judgment against the city. The city appeals. We will deal with the counterclaim later.

I.

Are the issues raised in the complaint res judicata? Is the plaintiff estopped or in any way precluded from raising those issues?

The 1941 action was brought by the commission against Bayonne for water sold by it to the city for five months in 1941. Apparently the commission was then suing as trustee under an agreement made December 26, 1940, for the benefit of municipalities participating in the Wanaque project. It did not sue on the theory that it was entitled to recover under N.J.S.A. 58:5--26, and the Circuit Court judge in his charge to the jury, and the commission's counsel at the trial, made this clear.

It is true that in the 1941 action the court allowed evidence to be admitted as to the cost of water and, in its charge, seems to say that in fixing the reasonable value of water sold by the commission to a municipality apart from the statute, costs calculated under the formula fixed by N.J.S.A. 58:5--26 should be taken into consideration 'so as not to give an unfair advantage' to the vendee. This, however, was said not on the theory that the suit was based on N.J.S.A. 58:5--26 but on the theory that such costs were one element to be considered by the jury in determining what constituted the reasonable value of the water, apart from the statute.

The cause of action prosecuted in the 1941 suit was obviously not the same as that presented here under N.J.S.A. 58:5--26. The question whether two causes of action are the same may at times present difficulties. Bango v. Ward, 12 N.J. 415, 97 A.2d 147 (1953). But not here.

Where the causes of action are different, there is no ground for invoking the doctrine of Res judicata unless a point to be determined in the later action was in fact litigated and determined in the earlier action. Here, however, the court in the 1941 action made no ruling or determination as to the effect of any provision of the statute. The doctrine of Res judicata is therefore plainly inapplicable. Miller v. Stieglitz, 113 N.J.L. 40, 172 A. 57 (E. & A.1934); Templeton v. Scudder, 16 N.J.Super. 576, 85 A.2d 292 (App.Div.1951); Restatement of Judgments, § 68(2) and comments.

Moreover, the mere fact that Bayonne has for years bought water from the commission, as trustee as stated, apart from the provisions of N.J.S.A. 58:5--26, obviously does not estop the city from availing itself of those provisions. Nor is there anything to indicate that the parties thought their dealings were made with reference to the statute or that by those dealings they were placing a construction upon it. There is therefore no basis for invoking the rule, relied upon by defendants, that a construction put upon an ambiguous statute in practice may be resorted to in determining its significance. Offhouse v. State Board of Education, 131 N.J.L. 391, 36 A.2d 884 (Sup.Ct.1944); 82 C.J.S., Statutes, § 357, p. 758.

II. Adequacy of Supply

That brings us to the principal question in the case, namely, what construction is to be put upon N.J.S.A. 58:5--26. N.J.S.A. 58:5--25 provides that where a municipality desires to take water from any plant, it may file a petition, and the commission is thereupon obliged to call a hearing of the municipalities then under contract with the commission in relation to the water supply. Then follows the statute brought before us for construction, reading in part:

'After such hearing, the commission, If the water supply under its control is adequate for the supply of the applying municipality, may contract with the municipality for the supply to it of water at such price as shall impose upon the municipality an equitable share of the cost of constructing, acquiring and operating such supply * * *.'

The chief difficulty is with the italicized words 'if the water supply under its control is adequate.' 'Adequate' after providing for what? The draftsman of the statute has left us with hardly a clue. Does the statute mean, as defendants contend, 'adequate' after providing the participating municipalities with the water allotted to them under contracts, even though they do not use the water? If so, there is none available, since (as we are informed) the entire yield of the Wanaque and Ramapo projects has already been so allotted. Or does it mean--as we think it does--'adequate' after providing for the current demands of the participants? Under this latter construction, the commission may dispose of the unused allotments. Indeed, Bayonne has been availing itself of these unused allotments since 1930.

The words of the statute perhaps give rise to a faint suggestion that the Legislature was dealing with unused water, and not with the water remaining after contractual allotments have been provided for. For the statute states that 'the water Supply' must be 'adequate for the Supply' of the applicant; and it might perhaps be drawn from this language that the statute had in view, not the matter of allotments, but the adequacy of the supply to meet the demands of the contracting municipalities. But that is much too thin a suggestion to be made the basis of this decision.

We must look deeper into the matter. The State undoubtedly is under a dut to control and conserve its water resources for the benefit of all of its inhabitants. City of Trenton v. State of New Jersey, 262 U.S. 182, 43 S.Ct. 534, 67 L.Ed. 937 (1922). And indeed the great concern which the State has in those resources has been spoken of in our cases. Collingswood v. State Water Supply Commission, 84 N.J.L. 104, 110, 86 A. 660 (Sup.Ct.1913), affirmed 85 N.J.L. 673, 674, 90 A. 277 (E. & A.1913). To meet these public obligations in a measure, the Legislature created the North Jersey District Water Supply Commission. Its public responsibilities are reflected in various parts of the law. Thus, in N.J.S.A. 58:5--27 (Borough of Oakland v. Board of Conservation and Development of the State of New Jersey and the City of Bayonne, 98 N.J.L. 806, 122 A. 311; 126 A. 534 (E. & A.1923)) it is made unlawful for any municipality to obtain, without the commission's consent, a new or additional water supply. Again in N.J.S.A. 58:5--24 the commission is required to hold its water supply plant, works and appurtenances, in trust, not only for the contracting municipalities, but also for such municipalities as may in the future be 'entitled' to share in the water supply.

A municipality has a duty to provide for its future, and in this case the participating municipalities have, in buying up allotments, contracted to take more water than they presently need in order to establish reserves for their future. However, it seems unreasonable to suppose that the Legislature in allowing the commission to sell the water, if the supply is 'adequate,' contemplated that a municipality could contract for the entire yield and leave the commission without further authority to deal with other municipalities applying for water. That would enable the contracting municipality to reject the application of any other municipality wholly at its whim and allow the water, which it has no use for, to go over the dam. With these considerations in mind, we have concluded that the commission under N.J.S.A. 58:5--26 had the authority to sell 'unused allotments' (as it is termed in the commission's contracts).

The mere fact that the demands of the participants may exceed the supply perhaps after 1962 (we do not determine the matter) does not prevent Bayonne from sharing in that supply until the supply becomes inadequate to meet the requirements of the participants. A contract under N.J.S.A. 58:5--26 may be made terminable on such reasonable notice as comports with public policy. Indeed we are informed that water is now being supplied Bayonne on a day-to-day basis.

III.

Significance of the word 'may.' The power to enter into

voluntary arrangements.

The word 'may,' italicized in N.J.S.A. 58:5--26 above, is also obscure. This word is to be given a mandatory significance where it is employed in a statute to delegate a power, the exercise of which is important for the protection of public interests and where, it can clearly be taken from the nature and the object of the statute, a mandatory significance was intended. Kennelly v. City of Jersey City, 57 N.J.L. 293, 30 A. 531, 26 L.R.A. 281 (Sup.Ct.1894); McDonald v. Board of Chosen Freeholders of Hudson County, 99 N.J.L. 170, 122 A. 801 (E. & A.1923); Leeds v. Harrison, 9 N.J. 202, 87 A.2d 713 (1952); Maxwell, Interpretation of Statutes (8th ed.), 1937; 3 Sutherland,Statutory Construction (3d ed.), § 5803; Endlich, Interpretation of Statutes, p. 416 (1888).

The word 'may' here doubtless was used because the draftsman felt he could not...