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Murphy v. Town of West New York

Decided: April 6, 1945.

FRANCOS D. MURPHY, PROSECUTOR,
v.
TOWN OF WEST NEW YORK, CHARLES SWENSEN, CLERK OF THE TOWN OF WEST NEW YORK, AND ISADORE GLAUBERMAN, DEFENDANTS



On certiorari.

For the prosecutor, Anthony J. Armore.

For the defendant Isadore Glauberman, Collins & Corbin (Edward A. Markley, of counsel).

Before Justices Parker, Heher and Perskie.

Heher

The opinion of the court was delivered by

HEHER, J. On August 12th, 1942, the Board of Commissioners of the defendant municipality adopted a resolution declaring that an "emergency has arisen with respect to litigation in connection with funds on deposit in the closed

New Jersey Title Guarantee and Trust Company," for which "no adequate provision" had been made in the current budget, and providing for an "emergency appropriation" of $10,000, "pursuant to R.S. 40:2-31 (1)." This action was set aside on certiorari on the ground that there was, in fact, no emergency within the purview of the statute; and there was also a direction that certiorari issue to review a resolution adopted by the local governing body on October 5th, 1942, authorizing the payment of $7,500 to the defendant Glauberman, from the money so appropriated, as "a retainer as special counsel" to the municipality in the matter adverted to, and also a contract made with him for such services. Murphy v. West New York, 130 N.J.L. 341. This latter resolution was also set aside as a corollary of the judgment vacating the appropriation; but there was no ruling as to the validity of the contract. 130 Id. 569.

A reargument was had on the prosecutor's motion. He seeks an adjudication that the contract itself is invalid in toto as in contravention of R.S. 40:2-29 and 40:50-6. Challenging this contention, the defendant Glauberman also urges a re-examination of the question of the validity of the resolution authorizing the payment of the "retainer" of $7,500. It is argued that, since the retainer has been paid to Glauberman, the question is now moot, and that the payment was not, in point of fact, made from money raised under the resolution in question, but from the town's "current account fund," and there was, moreover, an appropriation of $9,700 for "Special Services" in the 1942 budget, and therefore the payment was not made in violation of the statutes invoked. The cases of State, Hoxsey, Pros., v. Paterson, 40 N.J.L. 186; Heston v. Atlantic City, 93 Id. 317, and Sleight v. Board of Education of Paterson, 112 Id. 422, are cited in support of this position.

But the town's comptroller testified, without contradiction, that there was no "appropriation sufficient to cover the payment" at issue "in the year 1942," except that made by the "emergency resolution" of October 12th. If this was not so, why was it deemed necessary to use the emergency authority conferred by R.S. 40:2-31?

R.S. 40:2-1, et seq., regulates "county and municipal" budgets. Section 40:2-29 ordains that, "Except as may be otherwise provided in section 40:2-31 * * *, no officer, board, body or commission shall, during any fiscal year, expend any money (except to pay notes, bonds, or interest thereon), incur any liability, or enter into any contract which by its terms involves the expenditure of money: a. For any purpose for which no appropriation is provided in the budget or by temporary appropriation pursuant to section 40:2-12 * * *, or b. In excess of the amount appropriated for any such purpose;" and that "Any contract, oral or written, made in violation hereof shall be null and void as to the county or municipality, and no moneys shall be paid thereon." The making of contracts and the expenditure of money for "capital projects to be financed in whole or in part by the issuance of notes, or bonds," and the making of contracts of lease or for services for a period exceeding the fiscal year in which such contract is made, "when otherwise provided by law," are excluded from this prohibition. Concededly, section 40:2-12 has no application. And section 40:50-6, as amended by chapter 189 of the laws of 1941 (Pamph. L. 576), directs that "No municipality shall enter into any contract, the cost of which is to be met by funds not included in the budget of appropriations for the year, unless prior thereto there shall have been regularly adopted by the governing body an ordinance authorizing an appropriation sufficient to meet the cost of carrying out the provisions of the contract." This particular section is not applicable to "the use of funds of departments, for the operation of which budget appropriations are not made, nor to contracts for professional services for the liquidation or foreclosure of tax title liens in such municipalities wherein it is agreed that the cost of the services are to be paid, in all or in part, from the funds derived, or to be derived from the redemption of liened property or the sale of foreclosed property, subject to approval of the Department of Local Government."

These are peremptory legislative mandates designed to incorporate sound business principles and practices into the fabric of the local economy, ...


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