Port of New York Authority v. Hackensack Water Co.

• Decision Date: 23 March 1962
• Docket Number: No. L--13156,L--13156
• Citation: 73 N.J.Super. 332,179 A.2d 778
• Parties: The PORT OF NEW YORK AUTHORITY, Plaintiff, v. HACKENSACK WATER COMPANY, a corporation of the State of New Jersey, Defendant.
• Court: New Jersey Superior Court

Page 332

73 N.J.Super. 332

179 A.2d 778

The PORT OF NEW YORK AUTHORITY, Plaintiff, v. HACKENSACK WATER COMPANY, a corporation of the State of New

Jersey, Defendant.

No. L--13156.

Superior Court of New Jersey

Law Division.

March 23, 1962.

[179 A.2d 779] Francis A. Mulhern, Newark, for plaintiff (Sidney Goldstein, New York City, of counsel).

Joseph Keane, Jersey City, for defendant (Samuel W. Zerman, Weehawken, attorney).

McGEEHAN, J.S.C.

The Port of New York Authority (Authority) is a body created by compact between the States of New Jersey and New York, with the approval of the Congress. The Hackensack Water Company (Hackensack) is a privately owned public utility corporation of the State of New Jersey. On June 4, 1959 the Authority instituted suit against Hackensack seeking to recover from defendant the sum of $23,049.04 paid by plaintiff to defendant for relocating certain water mains, valves, hydrants, etc., owned by defendant, which were, prior to the relocation, located in public streets and highways in New Jersey at or adjacent to plaintiff's George Washington Bridge (Bridge) and Lincoln Tunnel (Tunnel). The Bridge and Plaintiff wrote a letter, dated May 29, 1953, to defendant, setting forth:

Tunnel are trans-Hudson vehicular facilities connecting the States of New Jersey and New York.

'As you are aware, the Port of New York Authority is engaged in the construction of connecting ramps between the George Washington Bridge and the Palisades Interstate Parkway. In order to construct these ramps, it will be necessary to relocate your * * *'

followed by a description of the facilities, then

'In order to make way for these ramps and to provide for the widened toll booth plaza and main approach of the George Washington Bridge, the Port Authority desires and hereby directs you to relocate your facilities as shown on the aforementioned drawings.

The Port Authority will reimburse your company for the cost of these relocations calculated on a time and material basis with application of standard percentages for overhead costs.

This reimbursement of your company by the Port Authority will be made, however, upon the distinct understanding:

1. That if the Port Authority shall, within the time prescribed by law, decide that it was under no legal obligation to do so, it may institute such litigation as it may consider or may be advised is necessary for the purpose of adjudicating the question of its legal obligation, if any, to make such payments, and recovering from your company any and all of the money paid for such reimbursement, without interest, and, further, the execution of this letter agreement and the making of any such payment by the Port Authority or the receipt thereof by your company shall not be deemed or construed as in any manner whatsoever limiting, waiving, prejudicing or affecting the legal rights or defenses, whether statutory, or otherwise, of the Port Authority or of your company, in any manner whatsoever; and

2. That your company will cause to be kept accurate records of the cost of materials furnished and labor performed in connection with such relocation of its above-mentioned facilities, which records will be subject to the inspection of the Port Authority at reasonable times.

If your company is willing to accept reimbursement under the conditions herein stated, will you be good enough to so indicate by signing and returning to the Port Authority the attached duplicate original of this letter.

Very truly yours,

THE PORT OF NEW YORK AUTHORITY

By MATTHIAS E. LUKENS

First Asst. to Executive Director HACKENSACK WATER COMPANY is willing to accept the reimbursement provided for in the foregoing letter upon the conditions therein stated.

Dated: May , 1953

HACKENSACK WATER COMPANY

By GEORGE H. BUCK'

Plaintiff wrote a similar letter to defendant, dated July 2, 1956, in connection with the construction of a third tube for the Lincoln Tunnel, and this letter was signed by representatives of plaintiff and defendant, but the date of acceptance by defendant was filled in and dated 'July 11, 1956.' It is to be noted that the date of defendants acceptance of plaintiff's letter of May 29, 1953 is not set forth in the written acceptance itself, and no evidence was adduced to show the actual date of such acceptance; also, that plaintiff's letter of July 2, 1956 was accepted nine days later, on July 11, 1956.

Subsequent to the transmittal of each of the letters to defendant, and the endorsement of copies and returns thereof by defendant to plaintiff, the work referred to in each letter was done by defendant. The actual cost of the work done under the terms and conditions set forth in the letter of May 29, 1953 was $22,720.04, and this amount was paid to defendant by plaintiff on October 20, 1954. The amount paid to defendant under and in accordance with the terms and conditions of the letter of July 2, 1956 was $329.

Prior to the work referred to in plaintiff's letter of May 29, 1953, defendant had relocated certain of its facilities at the request of plaintiff, and the relocation was done by contractors of plaintiff at plaintiff's expense or, if done by the utility, the utility was reimbursed therefor by plaintiff. The prior policy of plaintiff and the reasons therefor are set forth in a letter from plaintiff to defendant dated November 14, 1930, which reads:

'SUBJECT: Hudson River Bridge--Alterations to the Mains of the Hackensack Water Company in Fort Lee

Dear Sir:

At the request of Mr. Earl Talbot, your Vice-President, made to our Assistant Chief Engineer, Mr. Edward W. Stearns, I desire to advise you that, as a matter of public policy, the Port Authority considers it more appropriate to charge the costs of any relocations of public utilities against the bridge, where they will be ultimately charged against the users of the bridge, rather than to attempt to charge them against the Public Utility Companies where they will be ultimately charged against the consumers who as a class will not necessarily be benefited by the construction of the bridge. We feel that this is in accordance with the fundamental principles of public policy and economics underlying the organization of the Port Authority.'

This defendant maintains its pipes and other facilities in the public roads, streets and alleys, by virtue of R.S. 48:19--17, N.J.S.A.

Plaintiff owns and operates a total of 21 facilities, consisting of two interstate tunnels, four interstate bridges, four airports, one heliport, four piers, two motor truck terminals, one bus terminal, one freight terminal, one grain terminal and one port. However, the status and rights of the Port of New York Authority in the construction, maintenance and operation of its facilities other than the Bridge and Tunnel are not involved in this case.

Defendant's facilities, which were relocated because of alterations being made in the approaches to the Bridge, are located in Fort Lee, and defendant's facilities, which were relocated because of alterations being made in the approaches to the Tunnel, are located in Weehawken. Defendant paid excise taxes on its franchise to use public streets, etc., under N.J.S.A. 54:30A--18 et seq. Payment of such taxes to Fort Lee amounted to $9,767.19 for 1953, $11,360.07 for 1954, and a total of $323,540.77 from 1922 to 1961, inclusive, and payment of such taxes to Weehawken from 1922 through 1961 amounted to $165,669.65. Defendant also paid personal property taxes to the municipalities involved, and taxes for the privilege of doing business in New Jersey.

Defendant is a privately-owned water utility corporation which maintains its pipes and other facilities in the 'public roads, streets, and alleys' by virtue of a direct legislative grant of authority to do so 'free from all charge to be made by any person or body politic whatsoever for such privilege,' R.S. 48:19--17, N.J.S.A.

A utility company which maintains racilities in the public streets by virtue of such a grant has no vested right to maintain its facilities in any specific location in the public streets, its right being conditioned upon its obligation to remove and relocate them from one place to another at its own expense when the public convenience or necessity requires. Walker v. Township of North Bergen, 84 N.J.L. 248, 86 A. 63 (Sup.Ct.1913); Postal Telegraph Cable Co. v. Delaware L. & W.R.R. Co., 89 N.J.Eq. 99, 104 A. 141 (Ch.1918) affirmed o.b., 90 N.J.Eq. 273, 106 A. 892 (E. & A. 1919); New Jersey Bell Tel. Co. v. Delaware River Joint Comm., 125 N.J.L. 235, 15 A.2d 221 (Sup.Ct. 1940). This common law rule has been followed in New York (New York City Tunnel Authority v. Consolidated Edison Co., 295 N.Y. 467, 68 N.E.2d 445, rearg. den. 296 N.Y. 745, 70 N.E.2d 551 (Ct.App.1946), and was applied in Port of New York Authority v. Consolidated Edison Co., 27 Misc.2d 45, 205 N.Y.S.2d 781 (Sup.Ct.1960), a case in which the present plaintiff sued to recover money expended by it in the relocation of facilities of Consolidated Edison Company made necessary by the construction of a New York public highway approach to the George Washington Bridge. This rule has been recognized in other jurisdictions. Delaware River, etc. v. Pennsylvania Pub. Util. Comm., 393 Pa. 639, 145 A.2d 172 (Sup.Ct.1958); First Nat. Bank of Boston v. Maine Turnpike Auth., 153 Me. 131, 136 A.2d 699 (Me.Sup.Jud.Ct.1957), where numerous cases on the subject are reviewed and analyzed.

In Walker, above, the prosecutor attacked the award of a contract by the defendant for construction of a sewer under a public road. He urged that the contract was invalid because it imposed an improper burden of expense, in that it saddled the taxpayers with the cost of shifting the water pipes of the Hackensack Water Company and the gas pipes of the Public Service Company. The court held:

'This contention is sound. These companies are private corporations. They exercise functions of a public nature in the distribution of...