Driscoll v. Burlington-Bristol Bridge Co., BURLINGTON-BRISTOL

Citation86 A.2d 201,8 N.J. 433
Decision Date21 January 1952
Docket NumberBURLINGTON-BRISTOL,No. A--15--22,A--15--22
PartiesDRISCOLL, Governor, et al. v.BRIDGE CO. et al.
CourtUnited States State Supreme Court (New Jersey)

Page 445

Milton M. Unger, Newark, for appellants Gladys Parks, Robert K. Bell, Rickard W. Parks, Theodore R. Hanff, Thomas J. Christensen, Mildred Powell Meader, Paul R. Powell, Irene C. Powell, Clifford R. Powell, Richard C. Nongard, and Tuthill Ketcham and Roland H. Murray, individually and trading as Ketcham & Nongard (Milton M. & Adrian M. Unger, Newark, attorneys).

Page 446

Robert L. Hood, Newark, for appellants Burlington County Bridge Commission, Howard R. Yocum, Daniel Lichtenthal, and Fred C. Norcross, Jr., individually and as members of the Burlington County Bridge Commission, the Board of Chosen Freeholders of Burlington County, Leroy Church, Frank A. Snover, Albert C. Jones, Stanley I. Russ and Clarence G. Price, individually and as members of the Board of Chosen Freeholders of Burlington County, Tacony-Palmyra Bridge Co. and Burlington-Bristol Bridge Co. (Thomas D. Begley, Burlington, attorney).

Donald B. Kipp, Newark, for appellants Chemical Bank & Trust Co. and B. J. Van Ingen & Co. (Pitney, Hardin & Ward, Newark, attorneys; Frank C. O'Brien, William P. Reiss, and Robert P. Hazlehurst, Jr., Newark, on the brief).

James D. Carpenter, Jersey City, for appellants Bacon, Stevenson & Co., Blair, Rollins & Co. (formerly Blair & Co.), Braun, Bosworth & Co., Dolphin & Co., Equitable Securities Corp., John Nuveen & Co., R. S. Pressprich & Co., Welsh, Davis & Co., and Robert Showers (Carpenter, Gilmour & Dwyer, Jersey City, attorneys; Thomas L. Morrissey and Milton A. Dauber, Jersey City, on the brief), and for appellant Stranahan Harris & Co. (McCarter, English & Studer, Newark, attorneys).

Edward A. Markley, Jersey City, for appellant Fitzgerald & Co. (Markley & Broadhurst, Jersey City, attorneys; James J. Langan, Jersey City, on the brief).

Harold A. Price, Morristown, for appellants Estabrook & Co., Harris, Hall & Co., Lyons and Shafto, and R. D. White & Co. (Schenk, Price, Smith & King, Morristown, attorneys).

Walter D. Van Riper, Sp. Counsel to Governor and Atty Gen., Newark, for respondents (Theodore D. Parsons, Atty. Gen).

Page 447

The opinion of the court was delivered by

VANDERBILT, C.J.

These appeals are before this court by way of certification granted on the petitions of the several defendants-appellants to review the judgment of the Chancery Division of the Superior Court entered in the cause. The facts, which it is necessary to recount in some detail, present a disillusioning picture of public officials surrendering their independence and abnegating their obligation of public trust under the influence of prominent persons seeking to further their private interests.

I.

This action was instituted on December 3, 1948 by the Governor and the Attorney-General of the State of New Jersey to set aside the acquisition on October 22, 1948 by the Burlington County Bridge Commission of two toll bridges across the Delaware River between points in Burlington County and Pennsylvania. One of these bridges between Burlington, New Jersey, and Bristol, Pennsylvania, is known as the Burlington-Bristol Bridge, and the other between Palmyra, New Jersey, and the Tacony section of Philadelphia as the Tacony-Palmyra Bridge. The construction of these bridges was authorized by separate special acts of Congress, the Burlington-Bristol Bridge by chapter 351, Session I, 69th Congress, 1926 (44 Stat. Part 2, p. 588), and the Tacony-Palmyra Bridge by chapter 56, Session II, 69th Congress, 1927 (44 Stat. Part 2, p. 1024). The pertinent provisions of each of these special acts of Congress are identical, and for convenience they are here set forth at length:

'Sec. 4. After the date of completion of such bridge, as determined by the Secretary of War, either the State of New Jersey, the State of Pennsylvania, any political subdivision of either of such States within or adjoining which any part of such bridge is located, or any two or more of them jointly, may at any time acquire and take over all right, title, and interest in such bridge and approaches, and interests in real property necessary therefor,

Page 448

by purchase, or by condemnation in accordance with the law of either of such States governing the acquisition of private property for public purposes by condemnation. If at any time after the expiration of twenty years after the completion of such bridge it is acquired by condemnation, the amount of damages or compensation to be allowed shall not include good will, going value, or prospective revenues or profits, but shall be limited to the sum of (1) the actual cost of constructing such bridge and approaches, less a reasonable deduction for actual depreciation in respect of such bridge and approaches, (2) the actual cost of acquiring such interests in real property, (3) actual financing and promotion costs (not to exceed 10 per centum of the sum of the cost of construction of such bridge and approaches and the acquisition of such interests in real property), and (4) actual expenditures for necessary improvements.

'Sec. 5. If such bridge shall be taken over and acquired by the States or political subdivisions thereof under the provisions of section 4 of this Act, the same may thereafter be operated as a toll bridge; in fixing the rates of toll to be charged for the use of such bridge, the same shall be so adjusted as to provide as far as possible a sufficient fund to pay for the cost of maintaining, repairing, and operating the bridge and its approaches, to pay and adequate return on the cost thereof, and to provide a sinking fund sufficient to amortize the amount paid therefor within a period of not to exceed thirty years from the date of acquiring the same. After a sinking fund sufficient to pay the cost of acquiring such bridge and its approaches shall have been provided, the bridge shall thereafter be maintained and operated free of tolls or the rates of toll shall be so adjusted as to provide a fund not to exceed the amount necessary for the proper care, repair, maintenance, and operation of the bridge and its approaches. An accurate record of the amount paid for acquiring the bridge and its approaches, the expenditures for operating, repairing, and maintaining the same, and of the daily tolls collected shall be kept, and shall be available for the information of all persons interested.'

The two bridges were constructed pursuant to these grants of authority from the Federal Government by the Burlington-Bristol Bridge Company and the Tacony-Palmyra Bridge Company, respectively, New Jersey corporations organized and existing under and by virtue of chapter 247 of the Laws of 1925 (R.S. 48:5--13 et seq., N.J.S.A.) entitled 'An Act to authorize the formation of companies for the purpose of constructing, maintaining and operating bridges over the Delaware river, and regulating the same.' Section 9 of this act (R.S.

Page 449

48:5--22, N.J.S.A.) provides for the acquisition by the State of New Jersey of any bridge constructed by a company organized thereunder:

'The state reserves to itself the right, acting in conjunction with any adjoining state or municipality thereof, to acquire any bridge constructed by any such company at the following times and upon the following terms:

'a. At the expiration of five years after the opening of any bridge for public use, for the total costs thereof of whatever nature and upon assumption of all obligations or liabilities of the bridge company, for the construction of the bridge, with the approaches thereto and appurtenances thereof, plus fifteen per cent of the cost;

'b. At any time thereafter, at such total cost and upon assumption of such obligations or liabilities, plus fifteen per cent of the cost, less two per cent per annum of the total cost for each year after the expiration of five years from the date of the opening of the bridge for public use.

'Every company organized under this article consents to the acquisition by the state pursuant to this section of any bridge constructed by the company.'

While it does not appear that the Secretary of War has ever certified the date of completion of either of the bridges, the Burlington-Bristol Bridge was actually completed and opened for traffic on about May 1, 1931 and the Tacony-Palmyra Bridge on about August 15, 1929. Since those dates the bridges were continuously owned and operated by their respective companies until the time of their acquisition by the Burlington County Bridge Commission on October 22, 1948.

Some time in 1946 the defendants Robert K. Bell, Thomas J. Christensen, Theodore R. Hanff, Tuthill Ketcham, Richard C. Nongard, Rickard W. Parks, and Clifford R. Powell became interested in purchasing the stock of the Burlington-Bristol Bridge Company, then owned by a small group of stockholders in Pittsburgh, with an eye toward selling the bridge to some public agency. Toward this end they organized themselves into a syndicate with a specific role intended for each. Bell, counsel for the Cape May Bridge Commission, was to render advice with respect to the acquisition,

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operation and resale of the bridge. Christensen and Parks, who were in the investment business, were to sell preferred stock to assist in the financing, although as the matter developed this became unnecessary. Hanff, a bridge-painting contractor, was acquainted with the Pittsburgh stockholders and was to conduct the negotiations with them. Ketcham and Nongard, members of a Chicago firm specializing in bridge securities, were to arrange the mortgage financing for the purchase. Powell was to put through the resale of the bridge to Burlington County, a role for which he was peculiarly well equipped. Long the dominating political figure in Burlington County, he had for years represented it in the Legislature, first as a...

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