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HOWELL v. PORT OF NEW YORK AUTH.

August 28, 1940

HOWELL
v.
PORT OF NEW YORK AUTHORITY



The opinion of the court was delivered by: WALKER

1. The complaint filed herein alleges: The Port of New York Authority (hereinafter referred to as "The Authority") deposited funds with the Ocean City National Bank (hereinafter referred to as "Bank") at various times, and the Bank secured said deposits with certain negotiable securities, a part of which were sold after the bank suspended business and from the proceeds thereof The Authority was paid the full amount to its credit at the time business was suspended and the difference was remitted to the Bank, together with the unsold securities.

2. The Bank, by its receiver, contends that securing the deposits was illegal, void and ultra vires and the payment to The Authority should be held in trust for it.

 3. The Authority moves to dismiss said complaint on the grounds that:

 (a) The Port of New York Authority was created by a Compact between the sovereign states of New Jersey and New York, who are the real parties in interest.

 (b) The Compact clothed The Authority with the sovereign immunities of each state.

 (c) Immunity from suit was not expressly or impliedly waived.

 (d) The 11th Amendment to the Federal Constitution forbids a suit or action against any one of the United States by citizens of another state.

 4. The Bank, answering the motion, admits for the purposes herein, that: The statute by which The Authority was established, does not expressly authorize it to sue or be sued, that such authority cannot be implied from the terms of the Acts, and that an entity organized as an arm of a state government to perform governmental functions, is not subject to suit and thereby the question is narrowed to: Is the Port of New York Authority a sovereign agency of the states of New York and New Jersey, immune from suit in the absence of express consent?

 5. It seems advisable to briefly review the history of the agreement or Compact between states and the conditions which gave rise to The Authority.

 (X) 6. In many instances the colonies, over a period of years preceding the Revolution, settled their boundary disputes through joint commissions, the agreements arrived at, required the approval of the Crown, and in the event of disagreement, an appeal to the Crown was usually followed by reference to a Royal Commission, with appeal therefrom to the Privy Council.

 7. The framers of our Constitution were familiar with the foregoing modes of settlement and the Philadelphia Convention wrote both methods into the Constitution.

 8. The applicable provisions of Section 10 of Article I are:

 "No State shall enter into any Treaty, Alliance, or ...


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