On appeal from Superior Court, Law Division.
For reversal and remandment -- Chief Justice Vanderbilt, and Justices Heher, Burling and Jacobs. For affirmance -- Justices Oliphant and Wachenfeld. The opinion of the court was delivered by Burling, J.
[23 NJ Page 51] In Asbury Park Press v. City of Asbury Park, 19 N.J. 183 (1955), this court held that the leasing of beachfront properties of municipalities bordering the Atlantic Ocean could only be accomplished through advertisement
and competitive bidding. R.S. 40:61-36 et seq. The instant case presents two of the same antagonists but the dispute centers upon whether the spirit and purpose of the bidding law was subverted or fulfilled.
Defendant Beach Amusement Company has been a tenant of the city on one of its prominent ocean properties since 1932. In 1944 the leased area was substantially increased and now represents the largest property which the city leases except for its Convention Hall. The Beach Company maintains stores, a merry-go-round and a large number of amusement devices, and is currently operating under a four-year lease which expires December 31, 1956.
It appears that the city in the past has attended to new leases in the fall of the year of expiration. Nevertheless on December 3, 1955 the Beach Company wrote a letter to the Mayor and City Council of Asbury Park requesting that "immediate action" be taken to advertise and receive bids upon a lease (commencing January 1, 1957) for the premises in question. The urgency was based upon the desire of the Beach Company to secure its present position before investing in "thousands of dollars of new equipment" (said to be an annual necessity) and a "very expensive" air cooling system.
The request was taken under advisement and on December 27 the city council passed a resolution authorizing the City Manager to advertise for bids. On December 29 the advertisement appeared in the Asbury Park Press. Bids were to be received on January 9 following, at 11 A.M. Specifications were available in the meantime from the city clerk. The right to reject any bid was reserved.
The sole bid was received from the Beach Amusement Company. Two other persons called for specifications but we know nothing more of this unexplored fact. The Beach Company offered to pay a rental of $37,500 annually, which represented an increase of $3,500 over its present rental. The city council deferred action on the sole bid at its meeting of January 10, 1956, but on January 24 the offer was accepted by resolution.
The complaint charged a frustration of the bidding laws by the city in awarding the lease to the Beach Company and asked that it be declared void. The action of the city was alleged abusive of the bidding laws and municipal discretion in several alleged respects. The city offices were closed on five days of the 11-day period between the advertisement and receipt of bids, thus unduly restricting prospective bidders from obtaining the specifications and a copy of the lease; the length of time between the public advertisement and receipt of bids (ten days -- the statutory minimum) did not give prospective bidders a sufficient opportunity to seriously consider an investment of such proportion; the unannounced departure from past custom of awarding leases in the fall of the year of expiration served to chill the potential market.
Plaintiffs took depositions of the mayor, city manager and one of the councilmen. Defendants moved for summary judgment with supporting affidavits and plaintiffs filed a cross motion therefor. The trial court granted the former and denied the latter, holding that in the absence of a charge of dishonesty, fraud, bad faith or willful lack of discretion the municipal action could not be attacked. He found no violation of the bidding statute, R.S. 40:61-39 and 40. Plaintiffs filed a notice of appeal with the Superior Court, Appellate Division, and we certified the cause prior to a review below.
It would not have been wholly unreasonable to anticipate that the City of Asbury Park, following this court's decision in the Asbury Park Press case, supra, would have taken steps to achieve the real purpose and spirit of the bidding laws rather than proceed with a mere technical compliance, a lip service to form only and putting to one side any calculated endeavor to encourage competitive bidding which would have enhanced the possibility of obtaining the best return on public-owned property.
The bidding laws, whether for the purchase of goods and service or for the lease of municipal property, lay down a principle of the market ...