Lehigh Valley R. Co. v. Mayor & Aldermen of Jersey City

• Decision Date: 16 August 1927
• Docket Number: No. 245.,245.
• Citation: 138 A. 467
• Parties: LEHIGH VALLEY R. CO. v. MAYOR AND ALDERMEN OF JERSEY CITY et al.
• Court: New Jersey Supreme Court

138 A. 467

LEHIGH VALLEY R. CO.

v. MAYOR AND ALDERMEN OF JERSEY CITY et al.

No. 245.

Supreme Court of New Jersey.

Aug. 16, 1927.

(Syllabus by the Court.)

Proceeding by the City of Jersey City to sell lands of the Lehigh Valley Railroad Company for water rent. To review the proceedings, the Lehigh Valley Railroad Company brings certiorari. Proceedings set aside.

Argued May term, 1927, before PARKER and CAMPBELL, JJ.

John Milton, of Jersey City, for prosecutor.

Thomas J. Brogan and Stephen M. Egan, Jr., both of Jersey City, for respondents.

CAMPBELL, J. The writ of certiorari brings before us for review propeedings upon the part of the city of Jersey City to sell lands of the prosecutor for alleged arrears of water rents and, to review the alleged charges as shown by the records of the water department of the city, the statement thereof certified by the city collector, and the advertisement of sale.

The collector's return to the writ contains a copy of the statement of the water department certifying arrears of water rents amounting to $50,930.93 of principal and $15.000, interest, a total of $64,935.93. The amount advertised by the collector is $82,297.10, which includes an item for unpaid taxes and interest which is pending in the courts on appeal from a tax assessment. No point is made, however, of the inclusion of such taxes in the proceeding to sell.

Accepting the concession in respondents' brief, that "the facts that are material to the issue are set out in the brief for prosecutor, and, as they appear therein, are substantially correct," we quote such facts as follows:

"On May 23, 1908, the city and prosecutor entered into a contract for a supply (of water) by the city to the Johnston avenue terminal yard of prosecutor, in Jersey City. Pursuant thereto prosecutor installed a meter, the registration of which, under the contract, should 'form the basis upon which bills shall be rendered to and payment made by' the prosecutor, at a specified rate. On the morning of September 14, 1922, the city began a test of this meter which lasted 48 hours, ending on the morning of September 16th. This test indicated that the meter, during that 48-hour period, registered but 53 per cent. of the water passing through it. Thereupon, upon the assumption that this defect had been constant during the prior period (back to May, 1918), the director of streets and public improvements entered charges on the books of the city representing the difference between 100 per cent. and 53 per cent., covering a period from May 23, 1918, to August 23, 1922 (4 years and 3 months), and rendered a bill amounting to $50,930.93 of principal. Prosecutor refused to pay this bill, although it did pay a bill which included the deficiency during the test period. On this refusal the director of streets and public improvements certified the $50,930.93 plus interest to the city collector as an arrearage of water rents, and the latter advertised the premises for sale. Upon publication of the notice of intention of the city to sell the porperty of the railroad company for such alleged arrearages of water rents, the company applied to the Court of Chancery for an injunction to restrain the sale upon the ground that the moneys claimed were not due and that the proceedings were otherwise irregular. The court denied a preliminary injunction because it conceived that there existed an adequate remedy at law by certiorari. Such refusal of relief was necessarily followed by an immediate application to this court for a writ of certiorari which was allowed by Mr. Justice Black. The return certifies the test, the application of the same percentage of inaccuracy to the preceding period, the entries on the city's books, rendition of bill, and refusal to pay. After the filing of the return and reasons, and the taking of depositions under the rule had begun, the city, by stipulation, enlarged its claim by including a still earlier period (December 16, 1908, to May 28, 1918) and increasing its demand $73,507.95, so that the record before the court discloses a claim made by the city amounting to $124,438.88 of principal, covering a period of 13 years and 8 months, based on a test made in 1922 lasting but 48 hours. This enlargement of the city's claim resulted from the discovery during the taking of depositions that the meter had been put in service in 1908 instead of 1918."

The reasons filed are sixteen in number and are argued under seven heads or points, as follows:

(1) The theory on which the city bases its claim is unsound.

(2) The so-called test is not...