Mayor v. N. Jersey St. Ry. Co.

Decision Date16 July 1909
Citation73 A. 609,78 N.J.L. 72
PartiesMAYOR, ETC., OF JERSEY CITY v. NORTH JERSEY ST. RY. CO.
CourtNew Jersey Supreme Court

Action by the Mayor and Aldermen of Jersey City against the North Jersey Street Railway Company. Judgment for plaintiff.

James J. Murphy and Harry Lane, for plaintiff.

Frank Bergen, William D. Edwards, and Sherrerd Depue, for defendant.

SWAYZE, J. This is the same case that has previously been before the court on demurrer. 70 N. J. Law, 360, 57 Atl. 445; 71 N. J. Law, 367, 59 Atl. 15; 72 N. J. Law, 383, 61 Atl. 95. The pleas not already disposed of are two: (1) Nil debet; (2) release. The issues joined on these pleas were originally tried before Justice Fort and have been argued before me on the evidence then taken.

The plea of release is thought to be sustained by proof that no license fees have been exacted or collected by the city since 1867, and the failure to rebut any presumption arising therefrom. The defendant relies on the language of Mr. Justice Dixon in 70 N. J. Law, 363, 364. Justice Dixon undoubtedly there suggested that a release might be presumed if there were no circumstances to rebut the presumption; but he was then dealing only with the question of pleading. What he actually decided was that a release would not be presumed on demurrer merely because the declaration showed that no license fees had been paid since 1868. A release, he held, must be specially pleaded. He was not called upon to consider what proof would be required to establish a release. In a proper case a release may be presumed from lapse of time. Such a case was Given v. Wright, 117 U. S. 648, 6 Sup. Ct. 907, 29 L. Ed. 1021. But in order that a release may be presumed it is essential that the party who is presumed to have executed the release should have authority to do so. When that party is an individual, as in the cases cited, no difficulty arises. An individual of full age may execute a release, as well as make a contract; but when the party is a municipal corporation, as in the present case, the authority to execute a release must appear before the execution can be presumed. Justice Pitney hinted at this difficulty in the opinion reported in 72 N. J. Law, 392, 61 Atl. 95. To my mind it is insuperable. The plea fails to aver any consideration for the release, and, since a valid release may be executed without any consideration, it is not necessary to assume that there was any. A release may well be voluntary. The exact question then may be thus stated: Is it competent for a municipality without express legislative authority to give away to a private corporation a portion of the city's revenues, not merely revenues then due, but revenues to accrue in the future for years thereafter. To state this question is to answer it. The doubt has never been whether such an act required express legislative authority, but whether it was even within the power of the Legislature to authorize such a donation. Since the decision in Loan Association v. Topeka, 20 Wall. 655, 22 L. Ed. 455, it has been thought beyond the power of the Legislature itself to authorize municipal aid to private corporations, and certainly such aid has been impossible since the amendments to our Constitution in 1875. Article 1, §§ 19, 20. I cannot distinguish in principle between direct pecuniary aid, and aid by means of a release from a pecuniary burden. I am equally unable to distinguish between a release of the city's claim to revenue from license fees, and its claim to revenue from taxation. A municipality cannot exempt persons or property from taxation without legislative authority. Cooley on Taxation (2d Ed.) 200, 201; 12 Am. & Eng. Ency. (2d Ed.) 283, note 2. That is the necessary result of the principle that a municipal corporation can levy no taxes unless the power be plainly and unmistakably conferred (Dillon, § 763), and the statutory mode must be pursued (Dillon, § 769). So strictly have our courts construed this power of exemption that we have held that the statutory authority to a municipality to issue bonds exempt from taxation was abrogated by our constitutional amendment of 1875. Merchants' Ins. Co. v. Newark, 54 N. J. Law, 138, 141, 142, 23 Atl. 305. The reason that municipal corporations cannot without express authority exempt property from taxation is that the effect of such exemption is to increase the burden upon those who are not so favored. The same effect follows where the municipality gives up any source of revenue, and the same reasoning is applicable. I am not pointed to any statutory authority which permitted Jersey City to release the defendant from the payment of these license fees, and, in the absence of such power, a release is not to be presumed.

A somewhat similar case relating to taxes is Wells v. Savannah, 181 U. S. 531, 21 Sup. Ct. 697, 45 L. Ed. 986, where the city leased certain lots on ground rents, and did not tax them for nearly a century. The court said: "We are unable to see that any contract of exemption has been proved. The payment of taxes on account of property otherwise liable to taxation can only be avoided by clear proof of a valid contract of exemption from such payment, and the validity of such contract presupposes a good consideration therefor. If the property be in its nature taxable, the contract exempting it from taxation must, as we have said, be clearly proved. It will not...

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20 cases
  • Atty. Gen. v. Hendrickson
    • United States
    • New Jersey Supreme Court
    • June 22, 1944
    ...re Voorhees' Estate, supra), or whether it be denominated as a ‘pecuniary burden’ which is in fact ‘released’ (Jersey City v. North Jersey St. Ry. Co., 78 N.J.L. 72, 73 A. 609), or whether it be denominated by its true, statutory name, a tax debt, which is in fact remitted, canceled and aba......
  • Atty. Gen. v. Hendrickson
    • United States
    • New Jersey Court of Chancery
    • July 20, 1943
    ...respecting interest, although they may be referred to as separate and distinct obligations. In Jersey City v. North Jersey St. R. Co., 78 N.J.L. 72, at page 74, 73 A. 609, at page 610, Justice Swayze stated: ‘I cannot distinguish in principle between direct pecuniary aid, and aid by means o......
  • Salomon v. Jersey City
    • United States
    • New Jersey Supreme Court
    • May 18, 1953
    ...to them by the Legislature. Jersey City v. Martin, 126 N.J.L. 353, 360, 19 A.2d 40 (E. & A.1941); Jersey City v. North Jersey Street Ry. Co., 78 N.J.L. 72, 74, 73 A. 609 (Sup.Ct.1909). Cf. Edwards v. Mayor, etc., of Borough of Moonachie, 3 N.J. 17, 21, 68 A.2d 744 (1949). The bulk of munici......
  • Switz v. Kingsley
    • United States
    • New Jersey Superior Court
    • May 9, 1961
    ...recognized that a municipality cannot exempt property from taxation without legislative authority. Jersey City v. North Jersey Street Railway Co., 78 N.J.L. 72, 73 A. 609 (Sup.Ct.1909); Whipple v. Teaneck Township, 135 N.J.L. 345, 52 A.2d 44 (E. & A. Thus a delegation in New Jersey must be ......
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