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Haines v. Burlington County Bridge Commission

Decided: January 10, 1949.

HENRY S. HAINES AND RICHARD J. LIPPINCOTT, PLAINTIFFS-RESPONDENTS,
v.
BURLINGTON COUNTY BRIDGE COMMISSION, A PUBLIC BODY CORPORATE OF NEW JERSEY, ET AL., DEFENDANTS-APPELLANTS



Jacobs, Eastwood and Bigelow. The opinion of the court was delivered by Jacobs, S.j.a.d.

Jacobs

The defendants appeal from an order for restraint pendente lite entered in the Law Division on November 4, 1948, and from an order appointing a custodial receiver entered in the Law Division on November 15, 1948.

The Legislative Background

The defendant Tacony-Palmyra Bridge Company was incorporated in 1926 under Chapter 247 of the Laws of 1925 (R.S. 48:5-13 et seq.) and constructed a bridge across the Delaware River from Palmyra, New Jersey, to Tacony, Pennsylvania, which was completed in 1929. The defendant Burlington-Bristol Bridge Company was incorporated under the same Act in 1928 and constructed a bridge across the Delaware River from Burlington, New Jersey, to Bristol, Pennsylvania, which was completed in 1931. When the bridges were built the Statute provided that New Jersey, acting in conjunction with any adjoining State or municipality thereof, would have the right to acquire them at and after the expiration of five years from the date of completion at a cost formula therein

prescribed and that at the end of fifty years they would revert to the State without cost. See R.S. 48:5-22; R.S. 48:5-24. Plaintiffs allege that under this formula the bridges could have been acquired in 1948 by New Jersey, acting in conjunction with Pennsylvania, for approximately $5,420,000.00. Pertinent Federal laws authorizing the construction of the bridges likewise provided that they could be acquired by New Jersey or Pennsylvania, or political subdivisions thereof adjoining the bridges, by purchase or condemnation in accordance with State law and that if they were so acquired after twenty years compensation therefor would be limited to the cost formula therein set forth. See 44 Stat. Part 2, pp. 588, 1024. Plaintiffs allege that the Tacony-Palmyra Bridge would become subject to the Federal formula in 1949, that the Burlington-Bristol Bridge would become subject thereto in 1951, and that both bridges would be available thereunder in 1951 to New Jersey and Burlington County at an aggregate cost approximating $5,000,000.00.

By legislation adopted in 1934 and revised in 1946 (P.L. 1946 c. 318; R.S. 27:19-26 et seq.) every County, acting through its Board of Chosen Freeholders, was authorized to create a Bridge Commission with authority to acquire bridges, with the consent of the adjoining State where the bridges extended therein, and with the approval of the Board, to issue bonds secured by the tolls or other income from the operation of the bridges. In 1948 this legislation was amended to eliminate the express provision for the consent of the adjoining State and to provide that bonds issued by the Bridge Commission would be lawful trust investments. See R.S. 27:19-28; R.S. 27:19-32.2.

By Chapter 401 of the Laws of 1947 the Legislature amended the Statute under which the Tacony-Palmyra Bridge Company and the Burlington-Bristol Bridge Company were incorporated. The amendment authorized sale of the bridges and stated that any successor to a bridge company shall have all of its rights, privileges and franchises and be subject to all of its statutory restrictions and limitations, provided, however, that if the successor is a Bridge Commission then the Commission's right to

charge tolls shall cease forty-five years after the opening of the bridge and in consideration thereof the bridge shall not "be subject to acquisition by, or be subject to becoming the property of, any State or States, municipality or municipalities" under the terms of the Statute and that the right of the Commission in the bridge shall be perpetual. Plaintiffs allege that this amendment enabled a County to organize a Bridge Commission, have it "acquire a privately owned bridge for any price" and thereby, in effect, terminate the rights of the State and Burlington County to acquire the bridge under the formulas prescribed in the pre-existing State and Federal legislation as well as the reversionary right of the State under R.S. 48:5-24 to obtain the bridge free of cost at the expiration of fifty years. Plaintiffs contend that the amendment, as applied to the transactions hereinafter described, constituted "donations of state and county property rights" in favor of private interests in violation of Paragraphs 19 and 20 of Article I of the 1844 Constitution embodied in Article VIII, Section 3, Paragraphs 2 and 3 of the 1947 Constitution. They also contend that it embraces an object not expressed in its title in violation of Article IV, Section 7, Paragraph 4 of the 1844 Constitution embodied in Article IV, Section 7, Paragraph 4 of the 1947 Constitution, and that it grants exclusive privileges to private corporations in violation of Article IV, Section 7, Paragraph 11 of the 1844 Constitution embodied in Article IV, Section 7, Paragraph 9 of the 1947 Constitution.

The Transactions Under Attack

We come now to a general description of the pertinent transactions as alleged by the plaintiffs and as outlined in the papers submitted on their behalf. Prior to October, 1948, defendants Clifford R. Powell and others acquired the stock of Burlington-Bristol Bridge Company. Thereafter, they proceeded with various steps which were calculated to and did result in the acquisition by the Burlington-Bristol Bridge Company of the stock of the Tacony-Palmyra Bridge Company, the creation of the defendant, Burlington County Bridge Commission by the defendant, Board of Chosen Freeholders of the County of [1 NJSuper Page 168] Burlington, on October 22, 1948, followed on the same day by the Bridge Commission's purchase of the stock of the Burlington-Bristol Bridge Company for the sum of $12,000,000.00, its issuance of bonds in the sum of $12,400,000.00, the election of the three members of the Bridge Commission as officers and directors of the Burlington-Bristol Bridge Company and the Tacony-Palmyra Bridge Company, the dissolution of the companies and the transfer of their property to the Bridge Commission. Plaintiffs allege that the members of the Board of Freeholders and the members of the Bridge Commission in taking the above steps, "were acting not in the exercise of their own endeavor, judgment and volition, but under the improper influence, direction, control and solicitation of the defendant, Clifford R. Powell, who exercised influence in the selection of said Bridge Commissioners by the Board of Chosen Freeholders of Burlington County, acting not only on his own behalf, but on behalf and with the full knowledge of the other defendant stockholders of the Burlington-Bristol Bridge Company", that the transactions were completed without notice and with such haste as to render impossible "any fair consideration of the legality, business merits, public policy or prudence" thereof, and that in connection therewith the defendant, Clifford R. Powell and other individual defendants committed acts of fraud for their own private gain. Plaintiffs further allege that the acquisition by the Bridge Commission of the corporate stock of the Burlington-Bristol Bridge Company was in violation of Article I, Paragraph 19 of the Constitution of 1844 embodied in ...


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