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Stamato v. Borough of Lodi

Decided: February 14, 1950.

FRANK STAMATO & CO., A CORPORATION, PLAINTIFF-APPELLANT,
v.
BOROUGH OF LODI, A MUNICIPAL CORPORATION, DEFENDANT-RESPONDENT



On certification to the Appellate Division of the Superior Court.

For reversal -- Chief Justice Vanderbilt, and Justices Case, Heher and Ackerson. For affirmance -- Justices Oliphant, Wachenfeld and Burling. The opinion of the court was delivered by Vanderbilt, C.J.

Vanderbilt

On February 26, 1943, the plaintiff corporation entered into a written contract with the defendant borough for furnishing scavenger service in the borough for a term of two years and ten months, commencing March 1, 1943. By the contract the plaintiff agreed to make separate collections of combustible and non-combustible refuse and to dispose of the combustible material at the North Jersey Incinerator in Lodi or wherever else directed by the defendant (a service which the defendant borough agreed by the contract to furnish) and to cart the non-combustible material to dumping grounds likewise to be provided by the defendant. The specifications of the contract stipulated that the borough would strictly enforce the rule requiring the residents of Lodi to keep their garbage, which was defined as table and food waste only, in separate receptacles.

During the first month of collections under this contract the North Jersey Incinerator, claiming that the garbage being delivered to it by the plaintiff as combustibles also contained non-combustible material, refused to accept further deliveries from the plaintiff. The plaintiff thereupon notified the mayor and street superintendent of the borough and was directed by them to take both the combustibles and the non-combustibles to the defendant's dump in Lodi. In June, 1943, because of complaints made to and by the State Board of Health, the defendant's dump was closed and the plaintiff duly notified the mayor of this fact. The mayor told the plaintiff's president that the borough was to blame but that nothing could be done about the matter and that the plaintiff would

have to find its own dumping grounds. No formal demand, however, was ever made by the plaintiff upon the borough to furnish new dumping facilities, nor was the mayor ever expressly authorized to speak for the governing body of the borough. Although the plaintiff's representative appeared before the council of the borough informally on numerous occasions at its finance meetings to present the situation and the members of the council were well aware of the turn of events, the governing body never took any formal action, apparently relying on the provisions of the contract that "the said contractor shall or will not claim or be entitled to any compensation for any extra work performed under this contract. It shall be presumed that any and all work is done as part of this contract and compensation for the same is included in the amount to be paid monthly, as above expressed, and no further compensation for the same shall be charged or collected therefor."

The plaintiff seeks to recover the costs of renting dumping grounds after the defendant failed to supply them as well as the added expense of hauling its collections thereto, all of which are alleged as damages flowing directly from the defendant's breach of its obligation to supply dumping grounds. The defendant by way of separate defense alleged that it had never authorized the plaintiff to act as it did in obtaining other dumps and that it did not ratify the plaintiff's acts in so doing. It also counterclaimed against the plaintiff on the ground that the plaintiff had breached the contract by failing to segregate combustible garbage from its non-combustible collection of refuse and that by virtue of this alleged breach of contract the plaintiff was unjustly enriched.

The pretrial conference order stated that the action was one to recover damages arising out of the breach of a written contract; that "defendant maintains that there was no official action on the part of the defendant municipality other than the contract itself; that the contract was carried out by defendant and that all moneys due thereunder were paid; and charges that the plaintiff itself breached the contract" and was therefore liable to the defendant. The case was tried

and submitted to the jury on the basis of the issues set forth in the pretrial order, the jury returning a verdict in favor of the plaintiff for $11,250 on the complaint and a verdict of no cause of action on the defendant's counterclaim. On appeal the Appellate Division reversed the judgment below in favor of the plaintiff (but not the judgment of no cause of action on the defendant's counterclaim) on the ground that "on the failure of the defendant to furnish dumping grounds, the plaintiff was relieved from a further performance of his contract and had its cause of action for damages" and "since the plaintiff in hiring these dumping grounds and in involving itself in the expense of cartage thereto, acted without contractual authority and without authorization or ratification by the defendant, the defendant cannot be held liable." We thereupon granted the plaintiff's petition for certification.

On the appeal here the plaintiff contends (1) that notwithstanding the breach of the contract by the defendant the plaintiff was legally entitled to complete its performance of the contract and to sue the defendant for damages resulting from the breach; (2) that no ratification of the plaintiff's acts in completing the contract was necessary in order to subject the municipality to liability for damages arising out of its breach of the contract; and (3) that the Appellate Division erred in basing its decision upon a theory different from that on which the case was tried.

The defendant's failure to furnish the plaintiff with dumping grounds constituted a substantial breach of its contractual obligation to the plaintiff. So also was its failure to carry out its agreement "that the rule requiring residents to keep garbage in separate receptacles will be strictly enforced by the Borough of Lodi." Indeed, it was this latter default which undoubtedly led to the commingling of combustibles and non-combustibles, with the result that the North Jersey Incinerator refused to accept deliveries from the plaintiff. Notwithstanding these two ...


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