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Clay v. City of Jersey City

Decided: May 22, 1964.

HENRY CLAY, A NEW JERSEY CORPORATION, PLAINTIFF-RESPONDENT, AND VAN LEER MANUFACTURING CORP., A NEW JERSEY CORPORATION, PLAINTIFF-RESPONDENT AND CROSS-APPELLANT,
v.
CITY OF JERSEY CITY, A MUNICIPAL CORPORATION OF THE STATE OF NEW JERSEY, DEFENDANT-APPELLANT AND CROSS-RESPONDENT



Gaulkin, Foley and Lewis. The opinion of the court was delivered by Foley, J.A.D.

Foley

The City of Jersey City (city) appeals from judgments entered in favor of the plaintiffs in the Chancery Division. Van Leer Manufacturing Corp. (Van Leer) cross-appeals from the amount of the judgment which was awarded to it.

Henry Clay, a corporation (Clay) and Van Leer, owner and lessee respectively of an industrial building premises located at 110 Hoboken Avenue, Jersey City, brought action against the city for injunctive relief, and for damages resulting from the alleged defective condition of a sanitary and storm sewer main owned and maintained by the city. This main is located about eight feet below ground level and runs through a right of way on the Clay property about 25 feet from the Clay building.

The issues of liability and damages were separately tried. Following the trial of the liability phase, the trial judge filed an opinion in which he ruled that in operating the sewer system the city was engaged in a proprietary, as distinguished from a governmental function, and he found as a fact that the city was guilty of negligence in its operation which proximately resulted in damage to both plaintiffs. Following the trial of the issue of damages the court awarded $100,512 to Clay, of which $78,797 was found to be the reasonable cost of repairs, $21,200 the cost of removal and subsequent installation of heavy machinery, and $515 for expenditures made in an effort to avert harm to the building. Van Leer was awarded $4,834 for interference with its business. The court also enjoined the city to abate the nuisance.

The city moved for a new trial on the grounds that the factual findings of the trial court on the issues of liability and damages were against the weight of the evidence and contrary to law, and that the injunctive relief granted had the same infirmities. In connection with this motion the city also served notice that, upon the argument thereof, it would use an affidavit of one William Robertson, Jr., to which was attached an appraisal of the property, made subsequent to the

filing of the trial judge's opinion respecting the issue of damages. This affidavit recites, inter alia , that the deponent had on a number of occasions, dating from 1949, inspected the subject property and submitted to the city detailed appraisals of its value for use in tax appeal litigation. The court denied the motion for a new trial. It likewise refused to reopen the case and permit Robertson to testify.

Initially, the city argues that the trial court erred in holding that the construction and operation of the sewer was a proprietary function. On the contrary, says the city, the function was purely governmental and as such there could be no municipal liability except for active wrongdoing; hence, the trial court's finding of simple negligence does not support the judgment.

In holding the sewer operation to be proprietary in nature, the court relied chiefly upon Cloyes v. Delaware Tp. , 23 N.J. 324 (1957). As it bears on the question of whether the function here involved was proprietary or governmental, the Cloyes case is factually distinguishable from the case at bar in the respect that Cloyes concerned a sewage disposal plant operated on a compensated utility basis. However, our reading of the case convinces us that even had the disposal plant been operated by the township as a municipal service for which no charge was made, the decision would have been the same. In Cloyes , the court, tracing the historical background of the function in question, said:

"Sewage disposal is not one of the public services anciently furnished by local government. Nor is it uniformly so furnished today. On the contrary, in some places in our State the service is still rendered by private utility companies formed under R.S. 48:13-1 et seq. , and in some places there is no sewage system at all. And although the State Department of Health may compel a municipality to provide for sewage disposal to end pollution of waters, * * * the underlying statutes do not impose a general duty upon municipalities to install a sewage system.

Rather, our statutes merely authorize a municipality to install sanitary sewers and disposal plants (R.S. 40:63-1), and to operate the system as a service supported by general taxation or as a public utility with charges against the users on the basis of use, R.S.

40:63-7 and 8, * * *. The service may be extended into another municipality and a service charge made. R.S. 40:63-19, a municipality may sell or lease its sewage plant pursuant to R.S. 40:62-3, where, it may be noted, such activity is grouped under a chapter headed 'Public utilities municipally owned.' A municipality may acquire existing sewage plants by purchase or condemnation under R.S. 40:63-23. R.S. 40:63-30 provides that all revenues derived from the operation of any sewer plant acquired pursuant to the article of which that section is a part, shall be annually devoted in this order: to payment of interest on the ...


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