McMenamin v. Evesham Municipal Utilities Authority

• Decision Date: 07 January 1969
• Docket Number: No. C--322,B--4,5 and 6,C--322
• Citation: 249 A.2d 21,104 N.J.Super. 161
• Parties: Francis B. McMENAMIN and Rose M. McMenamin, his wife, Plaintiffs, v. EVESHAM MUNICIPAL UTILITIES AUTHORITY, a public body corporate and politicunder N.J.S.A. 14, in the Township of Evesham, Burlington County,New Jersey, Defendant.
• Court: New Jersey Superior Court

Page 161

104 N.J.Super. 161

249 A.2d 21

Francis B. McMENAMIN and Rose M. McMenamin, his wife, Plaintiffs, v. EVESHAM MUNICIPAL UTILITIES AUTHORITY, a public body corporate and politicunder N.J.S.A. 14B--4, 5 and 6, in the Township of Evesham Burlington County,New Jersey, Defendant.

No. C--322.

Superior Court of New Jersey Chancery Division.

Jan. 7, 1969.

Joseph S. Georgiana, Camden, for plaintiffs (Capehart & Scatchard, Camden, attorneys).

James M. Davis, Jr., Mt. Holly, for defendant (Powell & Davis, Mt. Holly, attorneys).

WICK, J.S.C.

This matter involves cross-motions for summary judgment in order to determine whether, under New Jersey law, a municipal utilities authority has the power to shut off the water supply to an owner's premises in order to compel the payment of arrears due from a former owner. The relevant facts are undisputed and are set forth below.

Defendant Evesham is a municipal utilities authority established pursuant to N.J.S.A. 40:14B--1 et seq. Plaintiffs Mr. and Mrs. Francis B. McMenamin are the present owners of the premises known as 25 Princess Avenue, in Evesham Township, New Jersey. They acquired title to these premises on August 2, 1965 by a deed from Evesborough West Corporation for a purchase price in the amount of $13,990. Before making settlement the purchasers employed a title company for the purpose of obtaining a tax search pertaining to the premises, which search, dated July 22, 1965, did not reveal any recorded lien with respect to the water and sewer charges.

Two years later, on October 20, 1967, the purchasers received a letter from the Evesham Municipal Utilities Authority advising them that the prior owners had not paid the water and sewer bills for the years 1963, 1964 and part of 1965, in the sum of $160.74, and stating that subsequent purchasers were responsible for the payment of such charges. It is not disputed that the McMenamins did not contract for such water and sewer services during the years in question, nor were they owners or occupants of the premises when the services were provided. Futhermore, at the time the McMenamins purchased the premises they had no knowledge or notice of such unpaid charges.

On September 23, 1968 the authority sent another letter to the McMenamins demanding payment of the unpaid charges and threatening to discontinue water service if payment was not made. Thereafter the McMenamins filed this suit to enjoin the authority from discontinuing the water and sewer service to their premises.

Under R.R. 4:58--3 a party is entitled to a summary judgment when the pleadings, depositions and affidavits on file show palpably that there is no genuine issue of material fact and the party is entitled to judgment as a matter of law. In this case, since the facts are not in dispute, the issue remaining for determination by the court is which party is entitled to judgment under the law.

It is well settled that in the appropriate circumstances a court of equity has the power to enjoin a municipal authority or private water company from shutting off a consumer's water service inasmuch as irreparable damage to the consumer might otherwise result. McDowell v. Avon-By-The-Sea Land and Improvement Co., 71 N.J.Eq. 109, 63 A. 13 (1906); Home Owners' Loan Corp. v. City of New Brunswick, 124 N.J.Eq. 305, 1 A.2d 854 (E. & A. 1938).

The circumstances in which a municipality (or here, a municipal authority) is justified in terminating a consumer's water service are strictly circumscribed by statutory and common law principles. The general rule followed in New Jersey is that in the absence of a statutory or contractual basis or a valid lien on the premises, a municipality or private water company may not discontinue water service to a property in order to coerce the present owner into paying charges incurred by a former owner for service rendered before the present owner acquired title. McDowell v. Avon-By-The-Sea Land and Improvement Co., supra; Home Owners' Loan Corp. v. City of New Brunswick, supra; Millville Improvement Co. v. Millville Water Co., 92 N.J.Eq. 480, 113 A. 516 (1921); Howe v. City of Orange, 70 N.J.Eq. 658, 62 A. 777 (1905); Sims v. Alabama Water Co., 205 Ala. 378, 87 So. 688, 28 A.L.R. 463; 19 A.L.R.3d 1227, 1251.

McDowell v. Avon-By-The-Sea Land and Improvement Co., involved a suit by hotel owners to restrain a private water company from cutting off the water supply to the hotel. The water company threatened to do so because of the failure of a previous owner to pay arrears of water rents. The court held that in the absence of any statute authorizing termination of service or making arrearages a lien on the lands, the private water company's regulation which authorized a shut-off was unreasonable as impairing the subsequent beneficial use of property by requiring a subsequent owner to perform obligations of a former owner. See also Vanderbilt v. Hackensack Water Co., 113 N.J.Eq. 166, 166 A. 298 (1933).

In Home Owners' Loan Corp. v. City of New Brunswick, supra, the court held that status of the municipality with respect to its supplying water to properties outside the city limits was that of a private water company. Therefore, under the statute the municipality had no lien or other basis for authorizing the termination of water service where the present owner refused to pay the arrears of water charges owing from a previous owner.

In Howe v. City of Orange, supra, a property owner sought to enjoin the municipality from shutting off the water where a former owner had failed to pay water rents. The municipality acted pursuant to a statute, Act of 1876 (1 Gen.Stat. p. 649, § 10), which provided that in case prompt payment of any water rents shall not be paid when they become due, the water shall be shut off from the premises in question. On the basis of that statute the court held the municipality had the right to shut off the water from the premises and the suit to enjoin was dismissed. I feel that the crucial difference exists between the statute relied upon in Howe and the statute applicable in the instant case. The former legislation (since repealed) contained no provision granting a bona fide purchaser of property the right to take free and clear of an unrecorded municipal lien arising from unpaid water charges. On the other hand, N.J.S.A. 40:14B--42 provides that a subsequent bona fide purchaser shall not be bound or affected by such an unrecorded...