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Maltese v. Township of North Brunswick6/20/2002
municipal corporation and the irregular exercise of a basic power under the legislative grant in matters not in themselves jurisdictional. The former are ultra vires in the primary sense and void; the latter, ultra vires only in the secondary sense which does not preclude ratification or the application of the doctrine of estoppel in the interest of equity and essential justice. . . . But there cannot be such relaxation of the conditions laid down in the grant of the power as to defeat the public policy intended to be served. The question is essentially one of legislative intention. Are the conditions made prerequisite to the very existence of the power -- a limitation of the power itself?
In Bauer v. City of Newark, 7 N.J. 426 (1951), we noted the distinction between an utterly void contractual undertaking for want of municipal capacity no matter what the circumstances and a contract within the general powers of the municipality but void and unenforceable for lack of an appropriation, or for nonconformance with a statutory conditions precedent, "as distinguished from an ultra vires contract merely voidable for want of authority or for an irregularity in the exercise of the contractual power"; and the holding that the purported contract was rendered null and void by the statute, and could be adopted or ratified only by full compliance with the statutory prerequisites to contractual liability in the first instance; the law would not imply a promise to pay when that course would flout an explicit statutory mandate; and, by the same token, there could be no recovery on a quantum meruit. The ruling consideration there was that the statutory policy may not be set at naught by indirection.
. . . . While it was the original rule that a contract ultra vires was void ab initio and could not be validated by performance or by application of the law of estoppel, the rights of persons innocently entering into ultra vires contracts with private corporations came to be recognized in the refusal to apply the doctrine[.] . . . But the opposing public policy cannot be disregarded. The limitations of the power are presumed to be commonly known. [Other internal citations omitted.]
In Summer Cottagers' Ass'n, supra, a group of local taxpayers challenged the validity of the sale and conveyance to the defendants of real property owned by the municipality at a private sale based upon noncompliance with the statutory requirement that the municipality sell to the highest bidder after public advertisement. 19 N.J. at 497-98. After the private sale, the defendants developed the property. Id. at 506. The Court concluded that the plaintiffs, who failed to protest against or take any action to vacate the sale until development of the property, were estopped from seeking an order declaring the sale void. Ibid. In Bauer, supra, the mayor and Newark's corporate counsel engaged plaintiff as an expert economist for the sum of $15,000 to act on behalf of the City in a telephone rate case then pending before the Board of Public Utilities. 7 N.J. at 429. The plaintiff was paid a $5,000 retainer and completed his work. Ibid. The City refused to pay the balance due on the contract, contending "that the mayor and the corporation counsel, either singly or together, did not have authority to obligate the municipality to pay for such service, and there was no ratification of the purported employment." Id. at 429-30. Specifically, there was no appropriation authorized by the City in its budget or by ordinance to cover the expenditure. Id. at 432-34. Our Supreme Court addressed the issue, as follows:
Generally, an ultra vires contract, being void, is not subject to ratification, express or implied. . . . On principle
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