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Elizabethtown Water Co. v. Bontempo

Decided: April 5, 1961.


Goldmann, Foley and Collester. The opinion of the court was delivered by Foley, J.A.D.


This is an appeal from a summary judgment in defendants' favor in an action brought in the Chancery Division for a declaratory judgment.

The issue presented is whether the trial court properly concluded that the basic dispute between the parties might be more effectively determined if a pending administrative hearing initiated by the defendant Water Policy and Supply Council (Council) is permitted to proceed.

In 1918 plaintiff obtained from the Board of Conservation and Development (predecessor of the Council) approval to divert 20 million gallons of water per day from the Raritan and Millstone Rivers. It began to divert water under this claimed "right" in 1930. The aforesaid approval contained the following two conditions:

"6. The Board hereby expressly reserves the right, in case it shall be necessary in the future to provide storage of storm waters along the Raritan and Millstone Rivers or their tributaries for the purpose of supplying municipalities or water companies that may lawfully take water from the said rivers and their tributaries, to apportion the expense of providing the necessary storage among the petitioners and such other companies or municipalities as may at the time have a right to take water from said rivers, their tributaries, or either of them for public or domestic use, as may be equitable.

9. In the event that any of the conditions hereby imposed are violated and such violation shall be established to the satisfaction of this Board, this approval may thereby be abrogated upon the passage by this Board of a resolution to that effect."

During 1959 Elizabethtown had a number of conferences with state officials, especially members of the Council, with respect to obtaining additional water from Spruce Run Reservoir, and also as to condition 6, above. The State apparently took the position that Elizabethtown should make a capital contribution to the cost of constructing the Spruce Run Reservoir, while Elizabethtown maintained that condition 6 would be satisfied if it merely purchased water from the reservoir.

Subsequent to these conversations, plaintiff was served with notice that a public hearing would be held on March 10, 1960 by the Council under authority of N.J.S.A. 58:1-2 et seq. in connection with the 1918 approval of the Elizabethtown Water Company's application to divert water from the Raritan and Millstone Rivers, and more particularly with reference to condition 6, as the same might be affected by chapters 34 and 35 of the Laws of 1958, authorizing the Round Valley-Spruce Run water supply facilities.

Plaintiff secured an ex parte order with preliminary restraint from the Chancery Division on March 2, 1960 requiring defendants to show cause on March 11, 1960 why an interlocutory injunction should not be entered prohibiting defendants from taking any action against the plaintiff under the notice of public hearing or the provisions of the New Jersey Water Supply Law of 1958 (c. 34; N.J.S.A. 58:22-1 et seq.). Consequently, the public hearing was cancelled and has not yet been held. By stipulation, the order to show cause and the preliminary restraint were continued until March 18, 1960, on which date the Chancery Division refused to enter a further restraint on the ground that the Department before which the hearing was to be held has jurisdiction of the matter. An appropriate order was entered denying the motion for an interlocutory injunction, and plaintiff then moved before this court for leave to appeal. We denied leave on April 20, 1960. Thereafter, defendants moved for summary judgment dismissing the entire action, particularly the count seeking a declaratory judgment. Summary judgment was granted, and it is from this order that plaintiff appeals.

N.J.S. 2 A:16-61 vests discretionary power in the trial court to refuse to render or enter a declaratory judgment if to do so would not terminate the uncertainty or controversy giving rise to the proceeding. See National-Ben Franklin Fire Ins. Co. v. Camden Trust Co. , 21 N.J. 16, 23 (1956), affirming 36 N.J. Super. 249 (App. Div. 1955). There seems to be no dispute over the fact that a

declaratory judgment in the case sub judice would terminate the ...

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