On appeal from Superior Court, Law Division.
For reversal -- Chief Justice Vanderbilt, and Justices Heher, Burling, Jacobs and Brennan. For affirmance -- Justices Oliphant and Wachenfeld. The opinion of the court was delivered by Burling, J.
[19 NJ Page 185] This is a taxpayer's action, in lieu of prerogative writ, instituted by Asbury Park Press, Inc., and Wayne D. McMurray, hereinafter called the plaintiffs, against the City of Asbury Park, a municipal corporation, and Aaron
M. Glaser, hereinafter called the defendants, to prevent the making of a lease by the City of Asbury Park to Glaser of stores situated on the Asbury Park boardwalk, owned by the municipality. The relief sought included declaration of invalidity of a municipal enabling resolution of October 26, 1954, and injunctive judgment restraining effectuation thereof. The Superior Court, Law Division, on the defendants' motion, dismissed the complaint, relying on the decision of the former Court of Errors and Appeals in Whirl-O-Ball, Inc., v. City of Asbury Park, 136 N.J.L. 316 (E. & A. 1947). The plaintiffs' appeal to the Superior Court, Appellate Division, prior to hearing there was certified on our own motion.
The judgment of dismissal of the complaint in the present matter was rendered on motion therefor premised on the ground that it failed to state a claim on which relief may be granted, prior to the filing of an answer, and without reception of extraneous matters by the trial court. See R.R. 4:12-2(e). Therefore it is inappropriate to refer to any facts not stated in the complaint although it appears that requests for admissions have been made and answered by the parties to the action.
The factual allegations contained in the complaint in the matter sub judice were stated as follows:
"3. The defendant City of Asbury Park did on October 26, 1954 adopt the following resolution:
'BE IT RESOLVED, that the Mayor and City Clerk be authorized to execute a new lease with Aaron M. Glaser for premises No. 6-8 Casino Building, Boardwalk, for period of four years, beginning January 1st, 1955. and expiring December 31st, 1958, at a yearly rental of $4,000.00, making a total rental of $16,000.00 on lease. Present lease on said premises to be cancelled as of December 31st, 1954. It being the condition of new lease that substantial improvements both interior and exterior are to be made to said premises at the expense of said Aaron M. Glaser as per sketch submitted. Said premises to be used for the sale of postal cards, toys, jewelry and novelties of all kinds. Lease to be in the usual form of Asbury Park beachfront leases.'
4. As a result of said resolution defendant City of Asbury Park is about to enter into a new lease with defendant Aaron M. Glaser whereby a letting of the premises aforementioned will commence
January 1, 1955 and will expire December 31, 1958 at a yearly rental of $4,000.00.
5. Plaintiffs aver that contrary to the statutes hereinafter mentioned no bids were asked or received by the City of Asbury Park for the letting of said premises for the new term and the new lease of four years to begin January 1, 1955 and to end December 31, 1958.
6. Plaintiffs allege that said letting was not advertised in a newspaper circulating within the City of Asbury Park at least ten days prior to receipt of bids contrary to the requirements of the statutes hereinafter mentioned, and contrary to the intent of said statutes, no notice or knowledge of the availability of said premises for letting was given to the public."
Then there followed allegations of illegality of the award of lease by Asbury Park to Glaser and prayers for the relief hereinbefore adverted to.
On the motion the defendants, admitting the facts alleged, contended that the course followed by Asbury Park was valid under the statutes of this State as interpreted in the Whirl-O-Ball case, supra. The trial judge in rendering decision on the motion, resulting in the judgment of dismissal appealed herein, held:
"* * * I am limiting it solely to that, that the Whirl-O-Ball decision controls me and that this case falls squarely within it."
In so ruling the trial court refused to rule on the plaintiffs' contentions that the municipal resolution of October 26, 1954, and the proposed lease purportedly authorized thereby were void for noncompliance with R.S. 40:50-1 in that they contemplated improvements to municipal property contracts which must be let on competitive bidding.
The questions involved on this appeal include: (a) whether the Asbury Park resolution to lease is invalid for lack of advertisement for bids; and (b) whether the Asbury Park resolution is violative of R.S. 40:50-1, supra, as an attempt to evade restrictions on municipal power to contract for improvements.
The danger signal of the potential for evil where public officials do not transact their business frankly and openly in the light of public scrutiny was hoisted in the following
language of Chief Justice Vanderbilt in Driscoll v. Burlington-Bristol Bridge Co., 8 N.J. 433, 475 (1952):
"* * * they must transact their business frankly and openly in the light of public scrutiny so that the public may know and be able to judge them and their work fairly. * * *"
Mr. Justice Oliphant, in Waszen v. City of Atlantic City, 1 N.J. 272, 283-284 (1949), a case involving the compass of specifications upon which bids had been invited by advertising, said:
"The philosophy and purposes of the statutes respecting municipal contracts have been enunciated in our decisions upon numerous occasions. The law is well settled that economy must be secured and fraud, favoritism and extravagance prevented to the end that all bidders will be on the same basis in matters material to the proposed municipal action. As said in Tice v. Commissioners of City of Long Branch, supra [98 N.J.L. 214], and iterated in Rankin v. Board of Education of Egg Harbor Twp., supra (135 N.J.L. 299), 'The rule is one which is rooted deep in sound principles in public policy of general application. It should be rigidly adhered to by the courts, and not frittered away by a careless or indifferent application to specifications, that are not clear, precise and definite on all matters, that are material to the proposals, to which bidders are invited to compete. The necessity of having a common standard, and the importance of definite and precise specifications upon which to found corporate action, are too apparent to require argument.'"
Mr. Justice Eastwood observed in his opinion in the former Supreme Court in the Whirl-O-Ball case, supra, namely Whirl-O-Ball, Inc., v. City of Asbury Park, 135 N.J.L. 382, 385 (Sup. Ct. 1947):
"* * * We hold that it is in the public interest that leases of the type under review be awarded only after due advertisement of the proposed letting is freely circulated in the public press, and then only to the highest responsible bidder. * * *"
There exists a divergent view. In Reade v. City of Asbury Park, 101 N.J.L. 319, 321 (Sup. Ct. 1925), affirmed 102 N.J.L. 221 (E. & A. 1925), later alluded to, this ...