Goldmann, Conford and Haneman. The opinion of the court was delivered by Haneman, J.A.D.
Application having heretofore been made to and leave having been granted by the Appellate Division, defendants appeal from an order of the Law Division granting plaintiffs leave to amend their complaint.
Ernest, Joseph, Vincent and Leo Ippolito, individually and as partners doing business as Ippolito & Company (Ippolito), and Pietro Federico (Federico) filed a complaint in an action in lieu of prerogative writs contesting the validity of a certain contract between M. Iommetti & Sons, Inc., a corporation (Iommetti), and the City of Hoboken (Hoboken) for the collection and disposal of garbage. Ippolito sues as an unsuccessful bidder for said contract and Federico as a resident and taxpayer of Hoboken.
The original complaint alleges that on March 18, 1959, pursuant to provisions of the statute of the State of New Jersey and ordinances and regulations of Hoboken in such case made and provided, Hoboken advertised for sealed bids for garbage collection service for alternative periods of one, three and five years. On that date bids were submitted by Ippolito, Iommetti and Anthony Rotondo (Rotondo). The bids so received were as follows:
A. Rotondo $152,000 $459,000 $840,000
Ippolito & Co. 175,000 500,000 None
M. Iommetti & Sons, Inc. 209,000 627,000 1,045,000
Rotondo's bid for three years, having been considered by Hoboken as the lowest, was accepted by resolution of the Mayor and City Council of Hoboken on March 25, 1959. On April 1, 1959 Hoboken and Rotondo entered into a formal contract.
Plaintiffs further allege that Iommetti and Rotondo did "collude, conspire and confederate together to commit a fraud upon the plaintiffs and all of the other citizens, residents and taxpayers of the City of Hoboken, New Jersey, and upon the said City of Hoboken," (having been apprised of Ippolito's intended bid on January 7, 1959 when all bids were rejected for the technical deficiency of Ippolito's bid in not having furnished the three-year dumping permit), to cheat and defraud Hoboken and its citizens, residents and taxpayers by agreeing to share the work to be done and the profits to be realized from an award of the contract to either of them. Iommetti and Rotondo are alleged to have entered into an agreement, prior to the receipt of bids by Hoboken, under which Iommetti would submit a "high" and Rotondo a "low" bid, with the understanding that each of them was to have a common interest in each bid. Plaintiffs allege that said agreement so to bid was contrary to the public policy of the State of New Jersey and the applicable statutes and that the award of the contract to Rotondo was therefore null and void. Plaintiffs bottom this conclusion upon the allegation that the pre-bid agreement tended to promote a monopoly and foreclosed opportunity for competition, and that as a result bidders were not on terms of equality. Plaintiffs also assert that at a recent public hearing before a committee of the New Jersey Senate, created under Senate Resolution No. 4 (1958) and reconstituted under Senate Resolution No. 3 (1959), it was disclosed that Iommetti and Rotondo had so illegally and collusively agreed with the result that Rotondo's moral integrity has been impugned and he is therefore not the lowest responsible bidder.
Plaintiffs conclude that the action of the officials of Hoboken in awarding the contract to Rotondo is "unreasonable, unlawful, arbitrary, capricious and discriminatory, and constitutes a gross abuse of discretion and, as well, has the further effect of promoting favoritism and collusion" and that the award of the contract to Rotondo is illegal, null and void.
After all defendants had filed answers and discovery proceedings had been completed, pretrial was requested by the judge of the Law Division to whom the cause had been assigned. Plaintiffs thereupon moved to amend their complaint. The amendment concerned itself with adding an additional paragraph to the original complaint, alleging that Rotondo's bid was further defective in that he had failed to comply with the dumping site requirements of the specifications, and the addition of two counts to the original complaint, designated second and third counts, respectively.
In the second count Federico alleges that Tony, Chester and Pompeo Iommetti were associated together as co-partners trading as M. Iommetti & Sons (Iommetti & Sons) in the year 1956 and were then engaged in the business of collecting, removing and disposing of garbage, refuse and other waste matter. During the year 1956 Rotondo had been engaged in a like business. Both Iommetti & Sons and Rotondo had been so engaged for some years prior to 1956 and were employed in various municipalities of this State as public scavengers. On or about March 10, 1956, bids having theretofore been received for the collection and disposal of garbage, a contract was awarded to Iommetti & Sons by Hoboken for a period of three years at the price of $183,000 per year. The contract of March 10, 1956 included a specification which provided:
"Sec. 25. ASSIGNMENT OF CONTRACT.
There shall be no assignment, subletting or transfer of the contract nor of any part thereof, nor of any money to become due thereon, without the consent of the Council or the Mayor and Council of the City of Hoboken expressed by resolution."
Contrary to the above quoted provision of the specifications, Iommetti & Sons did "assign, sublet, transfer and sub-contract the said contract" to Rotondo, paying him an approximate sum of $9,675 per month, and since Iommetti & Sons, under the contract, were entitled to approximately ...