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Hudson City Contracting Co. v. Jersey City Incinerator Authority

Decided: January 24, 1955.

HUDSON CITY CONTRACTING COMPANY, INC., A CORPORATION OF NEW JERSEY, PLAINTIFF-APPELLANT,
v.
JERSEY CITY INCINERATOR AUTHORITY, A PUBLIC CORPORATION, AND CITY OF JERSEY CITY, A MUNICIPAL CORPORATION, ET AL., DEFENDANTS-RESPONDENTS



On appeal from Superior Court, Law Division.

For reversal -- Chief Justice Vanderbilt, and Justices Heher, Oliphant, Wachenfeld, Burling, Jacobs and Brennan. For affirmance -- None. The opinion of the court was delivered by Burling, J.

Burling

[17 NJ Page 300] This is a civil action. The plaintiff, Hudson City Contracting Company, a New Jersey corporation (hereinafter called Hudson), by this action, instituted in the Superior Court, Law Division, sought payment for services rendered by it in the collection of refuse substances in the City of Jersey City (hereinafter referred to as the city), the municipal corporation made a defendant herein. Performance of these services had been initiated by Hudson under contracts between it and the defendant Jersey City Incinerator Authority, a public corporation (hereinafter called the authority). These contracts were declared ultra vires in an independent taxpayer's suit in lieu of prerogative writ.

Scatuorchio v. Jersey City Incinerator Authority, 14 N.J. 72 (1953). Prior to the decision on the appeal in the Scatuorchio case, supra, Hudson filed its complaint in the present action. In the present action, on February 8, 1954 Mae A. Healy, a taxpayer (hereinafter called the intervenor) was permitted by the Superior Court, Law Division, to intervene as a defendant to Hudson's claims. The intervenor filed an answer opposing the claims absolutely. The city and the authority had answered, admitting liability. Subsequently summary judgment for the defendants was rendered by the Superior Court, Law Division. Hudson's appeal, addressed to the Superior Court, Appellate Division, was certified on our own motion prior to hearing there.

The highlights of the factual genesis of this action are hereinafter briefly stated. The details, except as otherwise adverted to in this opinion, are described in the opinion of this court in the Scatuorchio case, supra.

The authority, created in December, 1951, after an abortive solicitation of bids by the city in October, 1952, and rejection of bids received pursuant to the authority's advertisement in November and December 1952, purported to declare an emergency and enter into an emergency contract on December 31, 1952 with Hudson for garbage and refuse removal in Jersey City.

Hudson began performance of the December 31, 1952 contract January 1, 1953. On the complaint of taxpayers, Marjorie A. Scatuorchio and Michael A. Scatuorchio, Inc., the Superior Court, Law Division, on January 6, 1953 issued an order to show cause why the city and the authority should not be restrained from making payments to Hudson "in connection with" the December 31, 1952 contract. On January 16, 1953, hearing on the return of the order to show cause was continued to January 23, 1953, the city and the authority were restrained from paying Hudson any money beyond 7/31st of the sum of $100,800 (the January 1953 payment set forth in the December 31, 1952 contract), until further hearing, provided Hudson should continue to collect

and remove garbage and refuse in Jersey City until January 23, 1953. Temporary restraint against further payments to Hudson under the contract was ordered by the Law Division, pending final hearing on the Scatuorchio complaint, on January 23, 1953.

The authority had readvertised for bids, to be received January 19, 1953, for a contract to begin March 1, 1953. The forthcoming bids were rejected and on February 3, 1953 the authority, having received Hudson's refusal to continue performance of the December 31, 1952 contract in view of the then existing restraining order, purported to declare an emergency and award a per diem contract to Hudson for February 1953. Hudson, without intervening cessation of service, entered into performance thereof. Then Scatuorchios filed an amended complaint in the prior action, seeking invalidation of the February 3, 1953 per diem contract, and on February 5, 1953 the Superior Court, Law Division, entered an order restraining further payments to Hudson. Hudson subsequently ceased performance. It was stipulated in the present case that its total period of performance was January 1, 1953 through February 7, 1953, inclusive. The authority, after February 7, 1953, performed the work itself until Michael A. Scatuorchio, Inc. began work (March 1, 1953) under a contract let on competitive bidding.

On April 6, 1953, in the Scatuorchio suit, the Superior Court, Law Division, entered judgment setting aside the December 31, 1952 and February 3, 1953 contracts heretofore alluded to and enjoining the city and the authority from making any payment to Hudson.

Hudson, on May 1, 1953, while its appeal from the April 6, 1953 judgment in the Scatuorchio suit was yet undecided, filed its complaint in four counts, hereinafter detailed, namely two counts based on contract and two counts based on the quantum meruit, in the present matter hereinbefore referred to, in the Superior Court, Law Division. Hudson moved for summary judgment (the authority had filed an

answer admitting liability), but the Superior Court, Law Division, denied the motion pending the outcome of the appeal in the Scatuorchio case, ante.

This court on November 23, 1953 sustained the judgment of the Superior Court, Law Division, in the Scatuorchio case, supra, insofar as it constituted the determination that the December 31, 1952 and February 3, 1953 contracts between the authority and Hudson were ultra vires and unenforceable against the authority (14 N.J., at page 93), but instructed the Superior Court, Law Division, to modify the judgment to permit the present action to proceed on the quantum meruit claims asserted by Hudson. (14 N.J., at pages 94-95).

A pretrial order in the present action was filed on April 15, 1954, in which it was established that the judgment in the Scatuorchio case, supra, disposed of (i.e., under the doctrine of res adjudicata) the first and third counts of the complaint in this case (for payment for services under the contract terms, i.e., respectively the December 31, 1952 written one-year contract and the February 3, 1953 per diem contract). In the agreed facts it was recited that the decision of this court in the Scatuorchio case, supra, "gives Hudson leave to seek recovery in quantum meruit under the Second and Fourth Counts." It was agreed that "Hudson collected garbage from January 1st, to February 7th, 1953 (both dates inclusive)," and that Hudson had received a total of $26,177.95 under the contracts (before imposition of restraining orders) which, if Hudson were to prevail on the quantum meruit, should be credited to the defendants. The city and the authority in the pretrial order admitted liability for "actual reasonable expenses incurred" by Hudson for services rendered, but denied Hudson's claim to profits. The intervenor opposed Hudson's claim under the quantum meruit counts on any basis, and asserted (seemingly in conflict with the agreed statement of facts, ante) that our decision in the Scatuorchio case, supra, was res adjudicata as to these counts as well as to the contract counts hereinbefore mentioned.

The pretrial order summarized the issues ...


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