On appeal from Superior Court, Law Division.
For affirmance -- Chief Justice Vanderbilt, and Justices Heher, Oliphant, Wachenfeld, Burling, Jacobs and Weintraub. For reversal -- None. The opinion of the court was delivered by Burling, J.
The instant complaint in lieu of prerogative writ sought to attack the validity of certain leases negotiated between defendants City of Jersey City and Seton Hall College of Medicine and Dentistry, a body corporate of this State and an educational institution. Following entry of summary judgment for the defendants the plaintiffs pursued an appeal in the Superior Court, Appellate Division, and we certified the cause prior to a review below.
Jersey City owns and operates a large Medical Center. It is a vast physical plant consisting of ten main buildings. The financial burden attending the operation of the center has not been a light one. Enormous "yearly deficits" have been the rule without exception.
Early in 1954 the city officials caused a study to be made, the end in view being to economize the operation through consolidation of services into compact building units. The facilities of the Center were in excess of the public requirements. Inefficiency resulted by spreading the operation throughout the numerous buildings rather than concentrating the use to an area proportionate to the need. Heating and maintenance of an entire building proved unwarranted where only half the building was in use.
By effecting a consolidation of the operation it was thought that the large Clinic building might be vacated and leased. The city was interested in renting this 16 story structure to a public or private interest which would use the facility as a medical and dental school. There had been previous
attempts to lease a part of the center to the Federal and State Governments for this purpose. With this project in mind the city, through public advertisement, invited any duly accredited college or university to submit proposals for the use of the Clinic building as a medical and dental school. A prospectus was compiled and distributed to interested parties.
There were responses to the invitation. Among them was that of Seton Hall College of Medicine and Dentistry. Negotiations were entered into between this institution and the city which resulted in the entire Clinic building being leased to the college for a term of 50 years at an annual rental of $275,000.
The date of the Clinic building lease was December 10, 1954. On the following December 16 a complaint in lieu of prerogative writ was filed by one John Gimenez, a taxpayer of Jersey City, attacking the validity of the lease. Gimenez was the nominee of a group called the "Jersey City Fact Finding Committee" which sponsored and paid for the suit.
The complaint in the Gimenez suit sought to have the lease voided on several grounds: absence of competitive bidding, inadequate consideration, and a charge that the Clinic building was presently needed for a public use. The suit ended in a summary judgment for the city and college and no appeal was taken. A further charge that the city was illegally delegating the management and operation of the Medical Center to a sectarian institution (the college being associated with the Roman Catholic Church) was, in effect, dismissed without prejudice for the reason that the city and the college had not entered a management agreement although the lease contemplated a working accord for the management of or the rendition of professional services to the Center.
Following the termination of the Gimenez action the city sought to interest the college in surrendering three floors of the Clinic building and to accept in lieu thereof an equal amount of space in the nearby Isolation building
which at the time was completely vacant. This plan, the record advises, would save the city an estimated expenditure of some $300,000 in transferring the out-patient clinics from the Clinic building to other buildings and would also serve to benefit both patients and students alike if the clinics were operated in the same building as the medical school. It was proposed that the Isolation building be used as the dental school and the city would reserve space there for a dental clinic. This suggestion was the subject of negotiation between the respective parties, the college at first rejecting the overture. Finally, on November 28, 1955, the change in plan was effected by a lease of a portion of the Isolation building to the college and a release by the latter of the first three floors of the Clinic building.
The college authorities geared their plans to the fall of 1956 as the opening date for classes. Renovations were commenced in December 1955, and by February 1956 the cost of alterations had reached $187,000. The architectural firm submitted a bill on account for $50,000. The college obligated itself for laboratory equipment in a sum over $200,000, and clerical and administrative expense approximated $50,000.
The instant complaint was filed on February 8, 1956, sponsored by the same interests who underwrote the Gimenez suit but now incorporated as the Jersey City Association for the Separation of Church and State. The present attack presents the same contentions raised in the Gimenez suit but now has two targets -- the Clinic building lease and the Isolation building lease. Defendants did not file an answer but moved for summary judgment with supporting affidavits. Plaintiffs filed a cross-motion for summary judgment. The trial court gave judgment to defendants, generally upon the ground that the Gimenez suit was res judicata as to the lease of the Clinic building and that the same decision had a stare decisis effect upon the validity of the Isolation building lease. The question of whether the city was illegally delegating management control of the medical center to a sectarian institution, which is plaintiffs' principal cause of
concern, was again thought to be premature inasmuch as no management agreement had yet been resolved.
On this appeal plaintiffs contend the leases to be void (1) for lack of advertising and competitive bidding; (2) because the declaration by resolution that the buildings are not needed for a public use is untrue; (3) because the consideration received for the leases was inadequate, thereby constituting a municipal gift in violation of N.J. Const. 1947, Art. VIII, Sec. III, pars. 2 and 3. The charge that the city is illegally delegating the management of the Medical Center is renewed, and the constitutionality of L. 1955, c. 22 (N.J.S.A. 30:9-23.6 et seq.), providing for various types of hospital affiliation agreements between governmental bodies and colleges of medicine and dentistry, is attacked. Defendants' position is simply to raise a ...