The opinion of the court was delivered by: AVIS
The bill of complaint in this cause contains four counts; the first, in general, alleging that the school district of Runnemede, N.J., is coterminous with the borough of Runnemede, a municipal corporation of the state of New Jersey, and that complainant is the owner and holder of a final judgment, in the amount of $21,776.21, entered in this court on December 5, 1935, against the board of education of said borough on certain bonds, then matured, and overdue coupons, held by said complainant and unpaid; that execution was issued on said judgment, served by the United States Marshal on the officers of said borough as required by law, and returned nulla bona on January 5, 1936; that the officers of said borough have failed and neglected to provide for the payment of said judgment in accordance with the statutes of the State of New Jersey and to make an assessment upon the persons and property in said borough to raise the money to satisfy said judgment and execution.
The first count of said bill further alleges that a mandamus proceeding is pending in this court, which is undetermined.
It is alleged that the failure and refusal of the officers of said borough to make said assessment and levy is based upon the fact that said school district is and has been under the control of the Municipal Finance Commission of the State of New Jersey, under the statutes of said State; and in accordance with the provisions of said statutes no judgment, levy, or execution against such school district or property thereof shall be enforced until otherwise specially ordered by the Supreme Court of the State of New Jersey, or a justice thereof, after notice to the commission, etc.
It is further alleged that the statute authorizing the said commission was passed and approved after the issue of the bonds and coupons, the basis of the judgment so held by the complainant.
The prayers of this count are: (a) That subpoena issue; (b) that defendant Municipal Finance Commission be restrained from functioning in said school district; (c) that said commission be temporarily restrained; (d) that this court adjudge and declare chapter 330, Laws of 1933, as amended, R.S.1937, 52:27-1 et seq., N.J.St.Annuals, § *136 -- 4700(102) et seq., and chapters 195 and 258, Laws of 1935, as amended and supplemented, R.S.1937, 52: 27-46 et seq., N.J.St.Annual 1936, §§ *136 -- 4700(415), 185 -- 105m(1) et seq., unconstitutional and void in so far as they attempt to affect the enforceability of complainant's bonds and judgment by staying proceedings for the enforcement thereof; (e) that the assessing and collecting officers of said borough be restrained from assessing, levying, or collecting any taxes in said borough for the year 1936, without including the amount due on complainant's judgment; (f) that it be adjudged and declared that complainant's right to collect is governed solely by section 35 of the Execution Act, 2 Comp.St.1910, p. 2256, § 35, and section 237 of the School Laws of New Jersey, R.S.1937, 2:26-85, 4 Comp.St.1910, p. 4804, § 237, as cited in the bill of complaint; (g) other and further relief as may be equitable and just.
The second count embodies all of the allegations of fact and law contained in the first count; alleges that it owns bonds of the school district of Runnemede, dated June 1, 1930, numbered 9 to 78, inclusive, in the amount of $1,000 each, with the interest coupons attached, the principal of said bonds accruing serially, and that by reason of the enactment of the statutes relating to the Municipal Finance Commission, which attempt to restrain the enforcement of any obligations of a municipality under the supervision of said commission, a cloud of unenforceability has been publicly cast upon complainant's bonds, and that by reason thereof complainant has been and will continue to be irreparably damaged.
The prayers in this count are: (a) For subpoena; (b) that the cloud be removed by restraint against defendants Wilentz, Martin, and Darby, constituting the Municipal Finance Commission, and the commission restrained from functioning in said school district; (c) that temporary or interlocutory injunction and restraint issue; (d) that the statutes creating the Municipal Finance Commission be declared unconstitutional and void as to complainant's bonds; (e) that complainant's rights to compel a levy and collection of taxes is governed solely by the Execution Act and school laws of the State of New Jersey; (f) for other and further relief as may be equitable and just.
The third count realleges the facts and law as contained in the first count, and further alleges that the commission has approved resolutions of the borough providing for compromise of certain taxes and assessments due said borough by accepting bonds in payment thereof. Alleges that such action gives a preference; that the security of complainant's bonds is thereby impaired, all of which is in violation of the United States Constitution, to wit, article 1, § 10.
The prayers are: (a) for subpoena; (b) that the Municipal Finance Commission be restrained from assenting to such compromises; (c) that said commission be restrained from authorizing or assenting to the acceptance of any medium other than lawful money in payment of taxes; (d) that the tax collector of the borough be restrained from receiving payment of taxes, except upon payment of full amount, interest, and penalties; (e) that said collector be restrained from accepting any medium in payment of taxes other than lawful money; (f) that this court decree that section 6 of chapter 330, Laws of 1933, as amended and supplemented, R.S.1937, 52:27-26, N.J.St.Annual 1933, § *136 -- 4700(212), to be unconstitutional and void as to complainant's judgment and bonds, as being contrary to article 1, section 10, of the United States Constitution; (g) for other and further relief.
Count 4 realleges and reaffirms the facts and law alleged in the first count and in paragraph 2 of the second count, and is in the nature of an action for a declaratory decree as to the right of the complainant to make collection on its bonds and coupons because of the unconstitutionality of the stays contained in the Municipal Finance Commission Acts of the State of New Jersey.
Its prayers are: (a) For subpoena; (b) that this court hold, adjudge, and declare that, as to the school district bonds issued prior to their enactment, the Municipal Finance Commission Acts of the State of New Jersey are unconstitutional and void, contrary to article 1, section 10, of the United States Constitution; (c) that the commission be enjoined in the enforcement and execution of said statutes; (d) that this court restrain the commission and its members from functioning in the school district of the borough of Runnemede; (e) for other and further relief.
The matter came before the court originally on June 29, 1936, when it appeared that the validity of a state statute was challenged, requiring the convening of a three-judge court. Arrangements were made to convene such a court, and on the aforesaid date an order ...