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City of Bayonne v. North Jersey District Water Supply Commission

Decided: May 7, 1954.


Clapp, Goldmann and Ewart.

Per Curiam

The City of Bayonne brought suit for a declaratory judgment, seeking a construction of N.J.S.A. 58:5-26 and also asking the court to fix the price currently chargeable under that statute for water now being supplied it by the North Jersey District Water Supply Commission. The commission operates the Wanaque Reservoir, and it has now completed and put into use, apparently since the trial below, the Ramapo project. The trial court held that a judgment entered in a 1941 action is res judicata as to most of the questions raised, and accordingly gave judgment against the city. The city appeals. We will deal with the counterclaim later.


Are the issues raised in the complaint res judicata ? Is the plaintiff estopped or in any way precluded from raising those issues?

The 1941 action was brought by the commission against Bayonne for water sold by it to the city for five months in

1941. Apparently the commission was then suing as trustee under an agreement made December 26, 1940 for the benefit of municipalities participating in the Wanaque project. It did not sue on the theory that it was entitled to recover under N.J.S.A. 58:5-26, and the Circuit Court judge in his charge to the jury, and the commission's counsel at the trial, made this clear.

It is true that in the 1941 action the court allowed evidence to be admitted as to the cost of water and, in its charge, seems to say that in fixing the reasonable value of water sold by the commission to a municipality apart from the statute, costs calculated under the formula fixed by N.J.S.A. 58:5-26 should be taken into consideration "so as not to give an unfair advantage" to the vendee. This, however, was said not on the theory that the suit was based on N.J.S.A. 58:5-26 but on the theory that such costs were one element to be considered by the jury in determining what constituted the reasonable value of the water, apart from the statute.

The cause of action prosecuted in the 1941 suit was obviously not the same as that presented here under N.J.S.A. 58:5-26. The question whether two causes of action are the same may at times present difficulties. Bango v. Ward , 12 N.J. 415 (1953). But not here.

Where the causes of action are different, there is no ground for invoking the doctrine of res judicata unless a point to be determined in the later action was in fact litigated and determined in the earlier action. Here, however, the court in the 1941 action made no ruling or determination as to the effect of any provision of the statute. The doctrine of res judicata is therefore plainly inapplicable. Miller v. Stieglitz , 113 N.J.L. 40 (E. & A. 1934); Templeton v. Scudder , 16 N.J. Super. 576 (App. Div. 1951); Restatement of Judgments , § 68 (2) and comments.

Moreover, the mere fact that Bayonne has for years bought water from the commission, as trustee as stated, apart from the provisions of N.J.S.A. 58:5-26, obviously does not estop the city from availing itself of those provisions. Nor is there anything to indicate that the parties thought

their dealings were made with reference to the statute or that by those dealings they were placing a construction upon it. There is therefore no basis for invoking the rule, relied upon by defendants, that a construction put upon an ambiguous statute in practice may be resorted to in determining its significance. Offhouse v. State Board of Education , 131 N.J.L. 391 (Sup. Ct. 1944); 82 C.J.S., Statutes , § 357, p. 758.


Adequacy of Supply

That brings us to the principal question in the case, namely, what construction is to be put upon N.J.S.A. 58:5-26. N.J.S.A. 58:5-25 provides that where a municipality desires to take water from any plant, it may file a petition, and the commission is thereupon obliged to call a hearing of the municipalities then under contract with the commission in relation to the water supply. Then follows the statute brought before us for construction, reading in part:

"After such hearing, the commission, if the water supply under its control is adequate for the supply of the applying municipality, may contract with the municipality for the supply to it of water at such price as shall impose upon the municipality an equitable share of ...

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