Daniel J. Brennan, J.s.c.
This matter comes before the court on plaintiff's motion for judgment on the pleadings and on the motion for the same relief on the counterclaim and cross-claim filed in behalf of the defendant Parking Authority of the City of Hackensack. The attorney for the defendant City of Hackensack appeared on oral argument in support of the allegations contained in its answer and in response to notices of these motions now before the court. Relief sought is an adjudication and declaration of the rights, status or other legal relations of the parties under written contracts of January 24, 1951, April 1, 1951, and June 4, 1951, made between the defendants, and an adjudication of the validity of these contracts.
The contracts embrace three tracts of land in the City of Hackensack and by the terms thereof the authority leases to the city and the city leases from the authority for the term ending December 31, 1983, each of several projects, the parking areas referred to in paragraph 1 of the contracts, at an annual rental of the several amounts set out in the annexed schedule of installments of rent. The authority, under the terms of the contracts, has the right to
"mortgage any of its property and thereby to grant to, or agree with, or for the benefit of any holders of any of its bonds, whether past, present or future, the same shall comprise a lien prior to that of the City hereunder, and further, the Authority shall have the right to pledge or assign either in whole or in part any and all instalments of rent due and to grow due to it hereunder as security or otherwise for the payment of the interest upon and principal of any and all bonds issued by it on such terms and in such manner as it may determine."
Plaintiff's attack on the validity of the contracts falls into two parts and will be considered accordingly. The first point of plaintiff's argument is that the city entered into the contracts by resolution and without the adoption of an
ordinance authorizing an appropriation sufficient to meet the cost of carrying out the provisions of the said contracts; that the only appropriation for funds made by the city in its budget of appropriations was that required to meet the payments due in the current year of 1951. It is urged that R.S. 40:50-6, which provides 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,"
is a legal deterrent to such course of procedure. It is undisputed that the appropriation required to be met for the year 1951 was included in the annual budget of the city for that year. This is sufficient satisfaction of the law, and that more is not necessary is indicated in Debow v. Lakewood Township , 131 N.J.L. 291 (Sup. Ct. 1944). In that case the court said, at page 296:
"Clearly it would have been absurd to have included the total estimated costs (about $30,000) in the budget of the year when the contract was executed. There could have been no point in appropriating $30,000 and thus raise the tax rate accordingly when there was no need for any such sum that year. The money so needed was on hand. As for moneys which thereafter might be needed annually, the township, as we have seen, agreed annually to appropriate about one-sixth of the estimated total costs out of which respondent was to be paid. This would appear to be a practical and business-like arrangement. It does not unnecessarily add in one tax year to the none too light burdens of the taxpayer. It spreads that burden. Comparable contractual arrangements have been held free from illegality."
In Viracola v. Long Branch , 1 N.J. Misc. 200 (Sup. Ct. 1923), the court said:
"The amount required to pay for the removal of garbage and ashes for the first year is included in the budget for the year 1923. We are of the opinion that the above section does not require the passage of an ...