Port of New York Authority v. Hackensack Water Co.

• Decision Date: 06 November 1963
• Docket Number: A--4,Nos. A--3,s. A--3
• Citation: 195 A.2d 1,41 N.J. 90
• Parties: The PORT OF NEW YORK AUTHORITY, Plaintiff-Respondent, v. HACKENSACK WATER COMPANY (a corporation of New Jersey), Defendant-Appellant. The PORT OF NEW YORK AUTHORITY, Plaintiff-Appellant, v. PUBLIC SERVICE ELECTRIC AND GAS COMPANY, a corporation of the State of New Jersey, Defendant-Respondent. The PORT OF NEW YORK AUTHORITY, Plaintiff-Appellant, v. NEW JERSEY BELL TELEPHONE COMPANY, a corporation of the State of New Jersey, Defendant-Respondent.
• Court: New Jersey Supreme Court

Page 90

41 N.J. 90

195 A.2d 1

The PORT OF NEW YORK AUTHORITY, Plaintiff-Respondent, v. HACKENSACK WATER COMPANY (a corporation of New Jersey),

Defendant-Appellant.

The PORT OF NEW YORK AUTHORITY, Plaintiff-Appellant, v. PUBLIC SERVICE ELECTRIC AND GAS COMPANY, a corporation of

the State of New Jersey, Defendant-Respondent.

The PORT OF NEW YORK AUTHORITY, Plaintiff-Appellant, v. NEW JERSEY BELL TELEPHONE COMPANY, a corporation of the

State of New Jersey, Defendant-Respondent.

Nos. A--3, A--4.

Supreme Court of New Jersey.

Argued Sept. 9 and 10, 1963.

Decided Nov. 6, 1963.

Francis A. Mulhern, Newark, for The Port of New York Authority (Sidney Goldstein and Daniel B. Goldberg, New York City, of counsel).

Joseph Keane, Jersey City, for appellant Hackensack Water Co. (John B. O'Neill, Jersey City, of counsel; Samuel W. Zerman, Weehawken, attorney).

Henry J. Sorenson, Newark, for respondent Public Service Elec. and Gas Co.

Michael J. O'Neil, Newark, for respondent New Jersey Bell Telephone Co. (Thomas Glynn Walker and Sidney D. Weiss, Newark, of counsel).

The opinion of the court was delivered by

WEINTRAUB, C.J.

Improvements undertaken by the Port of New York Authority (herein Port Authority) with respect to the George Washington Bridge, Holland and Lincoln Tunnels, and Port Newark Marine Terminal required the relocation of facilities of utility companies in the public streets. The question is whether the Port Authority or the utility companies must absorb the cost of relocation. The work was done under agreements reserving that issue. In its suit against Hackensack Water Company, the Port Authority prevailed. Port of New York Authority v. Hackensack Water Co., 73 N.J.Super. 332, 179 A.2d 778 (Law Div.1962). In its suits against Public Service Electric and Gas Company and New Jersey Bell Telephone Company, another judge of the trial court took a different view and held for the companies. Port of New York Authority v. Public Service, etc., Co., 76 N.J.Super. 359, 184 A.2d 659 (Law Div.1962). We certified the appeal in the first case on our own motion and granted the Port Authority's petition for certification in the other matters. 39 N.J. 468, 189 A.2d 55 (1963).

In 1921 the States of New Jersey and New York entered into a compact with the consent of the Congress whereby they pledged their faithful cooperation in the planning and development of the Port of New York and created the Port Authority 'as an instrumentality or agency of the two states to effectuate such pledge of co-operation.' R.S. 32:1--25, N.J.S.A. The States adopted a comprehensive plan for the development of the port, which plan contemplated bridges, tunnels, and sundry terminal facilities. R.S. 32:1--26 et seq., N.J.S.A. The States agreed, R.S. 32:1--33, N.J.S.A.:

'The Port of New York Authority is hereby authorized and directed to proceed with the development of the port of New York in accordance with said comprehensive plan as rapidly as may be economically practicable and is hereby vested with all necessary and appropriate powers not inconsistent with the constitution of the United States or of either state, to effectuate the same, except the power to levy taxes or assessments. * * * The port authority shall be regarded as the municipal corporate instrumentality of the two states for the purpose of developing the port and effectuating the pledge of the states in the said compact, but it shall have no power to pledge the credit of either state or to impose any obligation upon either state, or upon any municipality, except as and when such power is expressly granted by statute, or the consent by any such municipality is given.'

In 1931 the States by concurrent legislation agreed 'in the interest of the users of such bridges and tunnels and the general public' that the bridges and tunnels then or thereafter authorized be unified as to construction, maintenance, operation and control 'to the end that the tolls and other revenues therefrom shall be applied so far as practicable to the costs of the construction, maintenance and operation' of such facilities as a group, 'it being the policy of the two said states that such bridges and tunnels shall as a group be in all respects self-sustaining.' R.S. 32:1--118, N.J.S.A. The Port Authority was authorized to levy 'such tolls and other charges as it may deem necessary to secure from all of such bridges and tunnels as a group, at least sufficient revenue to meet the expenses of the construction, maintenance and operation of such bridges and tunnels as a group, and to provide for the payment of the interest upon and amortization and retirement of and the fulfillment of the terms of all bonds and other securities and obligations which it may have issued or incurred in connection therewith.' R.S. 32:1--121, N.J.S.A. The States declared, R.S. 32:1--131, N.J.S.A.

'The construction, maintenance and operation of vehicular bridges and tunnels within the said Port of New York District (including the said Holland tunnel and the said Midtown Hudson tunnel), are and will be in all respects for the benefit of the people of the states of New York and New Jersey, for the increase of their commerce and prosperity and for the improvement of their health and living conditions; and the port authority shall be regarded as performing an essential governmental function in undertaking the construction, maintenance and operation thereof and in carrying out the provisions of law relating thereto, and shall be required to pay no taxes or assessments upon any of the property acquired or used by it for such purposes.'

Two small items here involved relate to the Port Newark Marine Terminal, operated by the Port Authority under a lease from its owner, the City of Newark, pursuant to legislation of the States of which the New Jersey counterpart is N.J.S.A. 32:1--35.28 et seq. These terminal facilities are in the public use. See Port of New York Authority v. City of Newark, 20 N.J. 386, 120 A.2d 18 (1956).

The utility companies placed their property in the public ways under the authority of acts of the Legislature. We find no language in any of them which controls the issue before us, and hence it is enough merely to cite the statutory sources as they presently exist. R.S. 48:7--1, 2; 48:17--8, 10, 11, 12; 48:19--17, N.J.S.A.

I.

The companies contend they have a 'vested right' in the streets which may not be taken except by condemnation and may be burdened, short of a taking, only by the exercise of the police power as in the case of property rights generally. Although the companies agree a utility may be required to relocate at its own cost (subject to constititonal limitations to which we will later refer), they say the obligation can arise only when an order to relocate is given by an authority that possesses the police power to give the order. They say the power so to order rests in the State as the ultimate sovereign over public roads, Hackensack Water Co. v. Ruta, 3 N.J. 139, 146, 69 A.2d 321 (1949), and that although the power may be delegated to the State's subdivisions and agencies, it has not been delegated to the Port Authority in express terms. And, the argument continues, a delegation ought not to be implied in view of the doctrine of strict construction heretofore expressed in another connection with respect to the powers of another agency in Driscoll v. Burlington-Bristol Bridge Co., 8 N.J. 433, 490, 86 A.2d 201 (1952), cert. denied, 344 U.S. 838, 73 S.Ct. 25, 97 L.Ed. 652 (1952).

If the case turned upon a delegation of such power, we would find it, but we think the utilities misconceive the source of their obligation to relocate. That obligation does not originate in a specific order to relocate. Rather it antedates the occasion for relocation and rests upon the common law's view of the rights and responsibilities of the recipient of a so-called franchise to use the public streets. A utility company is permitted to locate its lines within the public right of way as a use ancillary to the principal and primary use of the way by the public. Nicoll v. New York & New Jersey Telephone Co., 62 N.J.L. 733, 735, 42 A. 583 (E. & A. 1899); Laurel Garden Corp. v. New Jersey Bell Telephone Co., 109 N.J.L. 171, 160 A. 549 (E. & A. 1932). It is permitted to use the public way because it serves a public interest, but since its venture is for gain and since in any event the primary purpose of the public easement is the public's own use of it, the utility's interest in the public way is subordinate to the public's enjoyment of it. Hence the utility runs the risk that the public welfare may require changes in the road which will call for relocation of its facilities. New Orleans Gaslight Co. v. Drainage Comm., 197 U.S. 453, 461, 25 S.Ct. 471, 49 L.Ed. 831, 835 (1905).

This view of the subject was clearly expressed a century ago in Jersey City v. City of Hudson, 13 N.J.Eq. 420 (Ch.1861), and was later restated in Postal Tel. Cable Co. v. Delaware, L. & W.R.R., 89 N.J.Eq. 99, 104 A. 141 (Ch.1918), affirmed o.b. 90 N.J.Eq. 273, 106 A. 892 (E. & A. 1919); see also Walker v. North Bergen, 84 N.J.L. 248, 86 A. 63 (Sup.Ct.1913), and New Jersey Bell Tel. Co. v. Delaware River Joint Comm., 125 N.J.L. 235, 15 A.2d 221 (Sup.Ct.1940). The thesis is well supported elsewhere. See Southern California Gas Co. v. City of Los Angeles, 50 Cal.2d 713, 329 P.2d 289, 290 (Sup.Ct.1958); Los Angeles County Flood Control Dist. v. Southern California Edison Co., 51 Cal.2d 331, 333 P.2d 1, 3--4 (Sup.Ct.1958); New York City Tunnel Authority v. Consolidated Edison Co., 295 N.Y. 467, 68 N.E.2d 445, 448 (Ct.App.1946); New Rochelle Water Co. v. State, 10 N.Y.2d 287, 220 N.Y.S.2d 809, 177 N.E.2d 771, 772 (Ct.App.1961); State v. Public Util. Dist. No. 1 of Clark County, 55 Wash.2d 645, 349 P.2d 426 (Sup.Ct.1960); 18 Am.Jur., Eminent Domain § 161, p. 792 (1938); 12 McQuillin, Municipal Corporations (3d ed. 1950), § 34.72, p. 240; Rhyne, Municipal...