[14 NJSuper Page 143] The plaintiff corporation is the owner of vacant land on both sides of Fairway Place in the Township of Parsippany-Troy Hills. Fairway Place is a partially-developed street shown on map of Lake Intervale Corporation, which map was approved by the township and filed in the county clerk's office of Morris County. On May 31, 1950, the plaintiff applied to the township committee requesting it to extend the water main on Fairway Place for 600 feet. At its regular meeting on June 6, 1950, the application of the plaintiff for an extension of the water main came up but no action was taken. On June 14, 1950, the plaintiff was notified that its request for an extension would not be granted. On July 12, 1950, an application for an extension of water mains for 2,110 feet was granted to Radiant Builders, Inc., upon condition that all water revenues derived from taps along the extension be collected by the township and that 75 per cent thereof be returned to Radiant Builders, Inc., for a maximum of ten years or until the sum advanced by Radiant Builders, Inc., i.e. , $3,951.35 was repaid, and if not fully repaid within the ten-year period, that Radiant Builders, Inc., relinquish its right to receive the balance. The township
retained 25 per cent of the revenues to cover maintenance and pumping charges to the extension granted.
Extensions of water mains, varying from approximately 400 to 1,600 feet, have been made both before and after the denial of, or non-action on, the plaintiff's application. It is contended that these established "usual terms and conditions" upon which extensions would be made. The evidence is that each application was granted or denied upon a study of each and that there were no "usual terms and conditions" followed as a criterion.
On June 14, 1950, a letter signed "Township Committee by W. P. Stephenson, Township Clerk" was sent to the plaintiff. It reads in part:
"In order to benefit the Township by having your development built up in 100 foot lots * * * we are willing to reduce your improvement costs by supplying all the labor for installing whatever mains, hydrants, fittings, etc. are needed on your land for a water system; and by rebating to you over a period of years out of water rental received from your parcels fronting on the said water system thus installed on your land the cost of the materials needed in such system -- providing you revise your map in 100 foot frontage lots approved by the Planning Board."
The plaintiff filed an amended complaint in lieu of prerogative writ, seeking to compel the township to "take such steps as may be necessary to furnish the plaintiff with water extensions, under the usual terms and conditions." The township's answer was, in the main, a general denial of the complaint and a separate defense that the complaint failed to state a claim upon which relief could be granted because it sought to compel the performance by the municipality of a governmental function.
Thereafter, the plaintiff moved to strike the aforesaid separate defense and for summary judgment in its favor. The motion was denied and the matter came on for trial.
The pretrial order in this case limited the issues to two: (1) is the installation of an extension of water mains in a municipally-owned and operated water system the exercise
of a governmental or proprietary act; and (2) if the latter, was the refusal to grant the application for the extension an abuse of discretion on the part of the township.
There appears to be no decision in this State precisely applicable to this case. In Lehigh Valley R.R. Co. v. Jersey City , 103 N.J.L. 574 (Sup. Ct. 1927); affirmed O.B. , 104 N.J.L. 437 (E. & A. 1928), the Supreme Court held that a municipality has two classes of powers:
"1. Legislative and governmental by virtue of which it exercises a governmental and police power ...