author: Pindar, J. S. C.

text:
    GEORGE J. JACKSON, PLAINTIFF, v. DIAMOND T. TRUCKING COMPANY, A CORPORATION, DEFENDANT.
    Superior Court of New Jersey Law Division
    Decided March 8, 1968.

      Mr. Seymour B. Jacobs for plaintiff (Balk, Jacobs, Goldberger & Mandell, attorneys).

      Mr. Frederick A. Frost for defendant (Pitney, Hardin & Kipp, attorneys).
   Pindar, J. S. C.

The issues presented to the Court come before it on motion for summary judgment, R. R. 4:58 et seq. The motion is supported by the pleadings, affidavits, depositions, admissions, answers to interrogatories and certain agreements, the contents of all of which shall be adverted to in the course of this opinion.

Plaintiff, George J. Jackson was an employee of Phillips Specials (Phillips), a New Jersey corporation, wholly owned, however, by a Missouri corporation, Ujay, Inc. (Ujay) which was licensed to do business in this State. Plaintiff sustained a compensable work-related injury for which he received a workmen’s compensation award against Phillips for $7,254.21. This award was docketed in the Hudson County Clerk’s office on November 9, 1966, pursuant to R. S. 34:15-58, and later docketed in the Superior Court on November 23, 1966. The award has not been appealed, nor has it been paid.

Phillips was a trucking company whose principal place of business was on Eisk Street, Jersey City, where its terminal facilities were located. It had as its principal asset an interstate trucking franchise issued by the Interstate Commerce Commission (I.C.C.).

One Wallace T. Taylor desired to acquire the franchise for Diamond T. Trucking (Diamond T), the defendant herein, a Delaware corporation, then with principal place of business in Philadelphia, Pa. Taylor was president, director and principal stockholder of Diamond T.

To effect his purpose Taylor entered into a contract with Ujay to purchase all the capital stock and assets of Phillips. Ujay was owned and controlled by two principal stockholders, William B. Cox and David H. Schleuter, the former acting as secretary-treasurer, the latter as president-vice president of Ujay. Cox and Schleuter were also officers and directors of Phillips.

The contract of sale and its supplementary agreement were executed in St. Louis on March 31, 1966. In the contract Taylor was named as the buyer, although provision was made for the assignment and transfer of the rights and assets covered by the contract to Taylor’s corporate nominee, Diamond T. The contract contained the following highlights: $100,000 consideration for the Phillips stock; $12,436 in consideration for its assets; an $80,000 promissory note executed or to be executed by Diamond T and guaranteed by Taylor individually; the creation of a seller’s security interest in the I.C.C. operating authority; seller’s permission to liquidate, merge or consolidate Phillips; resignations by Phillips’ old officers and directors, and releases by them of any claims they might have against the corporation. Ujay further agreed to pay all debts and liabilities of Phillips of any kind, absolute or contingent, existing on the date of closing, March 31, 1966. Furthermore, Ujay agreed to indemnify and save Taylor harmless from all actions, suits, proceedings, demands, assessments, judgments, costs and expenses incident to any failure of Ujay in fulfilling any terms of the sale contract. Attached to the contract and made a part thereof was “Exhibit D” which listed certain outstanding obligations of Phillips. Included on Exhibit D was plaintiff’s compensation claim beneath which Ujay declared its obligation to accept all liability with regard thereto. Finally, the contract was to be governed by the law of Missouri.

Taylor’s deposition shows that he operated Phillips until March 7, 1967 when the I.C.C. approved the transfer of the interstate franchise to Diamond T. (Apparently, the I.C.C. originally approved the transfer before the compensation award was rendered as appears from a copy of an I.C.C. order dated September 12, 1966 attached to the moving papers. Plaintiff intervened in these proceedings which probably accounts for the delay in obtaining final approval.)

Taylor’s deposition also reveals that he had actual knowledge of plaintiff’s claim at the time he purchased the Phillips stock. After the franchise was transferred, all the trucks and other operating equipment were registered in Diamond T’s name in Pennsylvania. All operations hitherto performed by Phillips were then and are now performed by and under the name of Diamond T. Phillips has no assets in New Jersey and no longer conducts any activities although it has not been statutorially dissolved because, as Taylor says, “I was kind of worried about putting it to sleep until everything was squared away.” Although Diamond T now has title to all Phillips’ assets and is now operating from the Jersey City terminal facilities, no consideration was paid by Diamond T to Phillips, as is revealed by Taylor’s statement that he simply let Phillips’ checking account deplete itself after he transferred all the assets.

Before discussing the applicable law, it should be noted that this action has been commenced in the Law Division of the Superior Court against Diamond T. Taylor, Phillips and Ujay are not named in this action and, therefore, nothing in the nature of a personal judgment can be rendered against them.

Plaintiff asks this Court to render a judgment of liability with interest and costs against Diamond T for the workmen’s compensation award rendered against Phillips. Plaintiff’s theories of recovery are three in number. Pirst, plaintiff asks the Court to pierce Diamond T’s corporate veil; or, secondly, find that Diamond T is a continuation in law and fact of Phillips; or, thirdly, to view this proceeding as a garnishment of the indebtedness assumed by Diamond T and owing Ujay for the Phillips stock. The Court feels that the first theory is a procedure generally within the Chancery Division’s practice and would be inclined to transfer the case on its own motion were it clear that plaintiff does not also assert a right cognizable at law. See R. R. 4:41-3. See also, O’Neill v. Vreeland, 6 N. J. 158, 165-166 (1951). As to the garnishment theory, the Court feels such relief would be premature without a full hearing regarding the debt created by the contract and potentially governed by Missouri law. In this light, the Court considers the second expressed theory as a grounds for judgment herein.

While the Court has found New Jersey cases whose facts are sufficiently analogous so as to govern a disposition of the case at bar, none could be found which are direct authority for the theory advanced herein. The law of New Jersey might be considered well settled but unclear in resolving the issue presented. It also seems apparent that there are no theories of recovery as such, but rather factual descriptions or conclusions which have been thought to entitle various kinds of creditors to relief. In this regard, plaintiff’s principal claim for relief is for a judgment of individual liability against Diamond T and this Court thinks it is properly brought in the Law Division. Confusion arises, however, from the fact that most of the reported cases have been brought in equity courts. But see, Parsons Mfg. Co. v. Hamilton Ice Mfg. Co., 78 N. J. L. 309 (Sup. Ct. 1909). This Court agrees with the Louisiana Supreme Court which said in a ease not entirely dissimilar to the one at bar that ''* * * the properties of a corporation constitute a trust fund for the payment of its debts; and that, where there has been a misappropriation of such funds, or * * * the corporation has been divested thereof by consolidation, merger, reorganization, or 'reincarnation,’ not only may the fund be followed, by the aid of equity, for the benefit of the creditor, but he may recover, in an action at law, against the corporation which has taken over such fund, with the business of his debtor.” Wolff v. Shreveport Gas, Electric Light and Power Co., 138 La. 743, 70 So. 789, 794, L. R. A. 1916 D. 1138 (Sup. Ct. 1916). In any event, because in our practice law and equity have been merged, and because the problem here is fairly susceptible to either characterization, the Court will retain the case in this division for purposes of this motion.

No New Jersey case appears to have been called upon to make a comprehensive statement of the law in the area under investigation, but by weight of reason and authority this Court feels our State would adopt Fletcher’s formulation, i. e.,

“Generally where one corporation sells or otherwise transfers all of its assets to another corporation, the latter is not liable for the debts and liabilities of the transferor, except: (1) where the purchaser expressly or impliedly agrees to assume such debts; (2) where the transaction amounts to a consolidation or merger of the corporation; (3) where the purchasing corporation is merely a continuation of the selling corporation; and (4) where the transaction is entered into fraudulently in order to escape liability for such debts.” 15 Fletcher, Cyc. Corporations, § 7122, p. 187 (1961 Perm. Ed.)

To the same effect, 15 A. L. R. 1112, 49 A. L. R. 788; 19 Am. Jur. 2d, § 1546, pp. 923-4; 19 C. J. S. Corporations § 1630d.

Not to be overlooked are five older New Jersey cases (referred to before) which, though uot authority for the proposition advanced herein, would be dispositive had plaintiff sought a different kind of relief. Couse v. Columbia Powder Mfg. Co., 33 A. 297. (Ch. 1895) (not officially reported); Parsons Mfg. Co. v. Hamilton Ice Mfg. Co., supra; Chorpenning v. Yellow Cab Co., 113 N. J. Eq. 389 (Ch. 1933), affirmed, 115 N. J. Eq. 170 (E. & A. 1933); Aetna &c. Co. v. International &c. Corp., 117 N. J. Eq. 190 (Ch. 1934); Fox v. Radel Leather Mfg. Co., 121 N. J. Eq. 291 (E. & A. 1936). Compare, Schmoele v. Atlantic City R. R. Co., 110 N. J. Eq. 497 (E. & A. 1932). None of the foregoing cases, however, give unquestioned support to plaintiff’s proposition that a transferee corporation is responsible for the liabilities of its transferor whenever the transferee continues the business operations of the transferor with the latter’s assets. Nor is the Court prepared to adopt such a sweeping statement, when, indeed such a conclusion is unnecessary for the correct disposition of this case.

In Couse v. Columbia, supra, plaintiff, an attaching creditor of Columbia, brought an order • to show cause why a conveyance of all the stock and assets of Columbia to Maxim Corp. should not be set aside as a fraudulent conveyance. Maxim and Columbia bad common directors, officers and stockholders. In consideration for the transfer Maxim issued its stock to Columbia’s stockholders in addition to giving its promise to pay all of Columbia’s debts. The Court found that in effect the issuance of Maxim stock was a distribution of Columbia’s assets and further that Maxim was not a purchaser in good faith. Maxim was held to hold Columbia’s assets in trust for the benefit of plaintiff.

In Chorpenning v. Yellow Cab Co., 113 N. J. Eq. 389, supra, plaintiff was a judgment creditor of Public Service Cab Company. One Harding, as agent for and with money from Public Service Coordinated Transport, purchased all the capital stock of the Public Service Cab. Co., thereafter, as president, paying several creditor’s claims, excluding however, the plaintiff’s which at the time had not been reduced to judgment. Thereafter, the Public Service Cab Company was legally dissolved, subsequent to which plaintiff obtained his judgment. Harding was, thereafter, elected president and director of Yellow Cab Company of Camden, again acting as agent for Public Service Co-Ordinated Transport, which was anxious to eliminate competition. Harding, apparently acting as trustee in dissolution for Public Service Cab Company transferred all its capital assets to Yellow Cab Company for $1.00. The Court there held that the conveyance was without consideration under the Uniform Fraudulent Conveyance Act (no citation given) and that Yellow Cab Company was primarily liable for the full-amount of plaintiff’s judgment despite the fact that at that time the assets transferred were of nominal or junk value. Interest and costs were awarded.

In Aetna Casualty Co. v. International Corp. supra, Liberty Insurance Co. transferred all its assets to Independence Insurance Company for “one dollar and other good and valuable consideration,” which other consideration was the exchange by Liberty stockholders of their stock for Independence stock, in effect a dissolution of Liberty. Despite the fact that Liberty had obtained re-insurance with International Insurance Corp. for its contingent liabilities, the Court found that among other things, the transfer of assets was both a common law fraud and a fraudulent transfer under Uniform Fraudulent Conveyance Act. Since International knew through its president and directors of the fraudulent transfer between Liberty and Independence, the Court impressed a trust on the assets received by International in favor of Liberty’s creditors.

In Parsons Mfg. Co. v. Hamilton Ice Co., supra, plaintiff was a seller who sued for the balance due on a promissory note allegedly assumed by defendant’s successor corporation. The note in suit was signed by one Armstrong as treasurer of the predecessor. Subsequent to the execution of the note Armstrong and one McDougall, a manager of the old company, formed The Hamilton Ice Co., the difference in form being the addition of the article “The” to the name of the old corporation, and transferred all the property and assets of Hamilton to The Hamilton, later selling the assets and retaining the proceeds. In addition to discussing principles of novation and estoppel, the Court said: “there is ample authority also to support the proposition that the defendant, having taken over the assets of the former company for the purpose of carrying on its business, without apparent change in the personnel of the concern, is liable for the payment of the debts of the former concern. It is held to take the benefits and advantages cum onere * * *” Id., at p. 312. (No New Jersey supporting authority was cited.)

Finally, in Fox v. Radel Leather Mfg. Co., supra, plaintiff was a former stockholder of defendant’s predecessor, to which predecessor plaintiff had sold all his capital stock. The predecessor company was dissolved, hut later re-incorporated under the exact same name with the same officers, directors and stockholders and the same assets. Defendant admitted it assumed its predecessor’s liabilities but the Court implied that even if it hadn’t, it would be liable as a matter of law repeating the dicta from the Parsons case, supra, citing Parsons and Ghorpenning cases as authority. The .Court allowed interest on the plaintiff’s judgment.

While the dicta of the Parsons case, repeated in the Fox case, give support to plaintiff’s proposition the accuracy of the statements is open to question. For instance, suppose that in Parsons, The Hamilton Ice Co. had paid a full consideration for the transfer to assets from Hamilton lee Co. and further that Hamilton continued in existence as a holding company. In such a case there would be no need or reason to pursue the new corporation despite the fact that there were common personnel and despite the fact the new corporation continued the business operation of the old.

“It is generally held that if one corporation purchases the assets of another and pays a fair consideration therefor, no liability for the debts of the selling corporation exists in the absence of fraud or agreement to assume the debts * * *. That there is no liability is true even though the purchasing corporation is organized by the stockholders or by the members of the vendor corporation, or by some of them, or by the bondholders of the corporation * * 19 Am. Jr. 2d § 1546, pp. 922-3.

See, 15 Fletcher, op cit., § 7122, p. 196; see also, Luedecke v. Des Moines Cabinet Co., 140 Iowa 223, 118 N. W. 456, 457, 32 L. R. A., N. S., 616 (Sup. Ct. 1908). Compare however, the situation confronting the Kentucky Court of Appeals in American Railway Express Co. v. Commonwealth, 190 Ky. 636, 228 S. W. 433, 30 A. L. R. 543 (Ct. of App. 1920), appeal dismissed, 263 U. S. 674, 44 S. Ct. 4, 68 L. Ed. 500 (1923) where the transferor was not dissolved and in fact was capable of paying plaintiff’s judgment, but the transferor had no assets in Kentucky, and therefore, the transferee was' held liable on a trust fund theory.

In other words, the factual conclusion that the transferee corporation is a continuation of the transferor corporation does not inexorably lead to the legal conclusion that the transferee is therefore liable for its transferor’s obligations. Many facts and policy factors must be weighed in the balance, most importantly, the policy protecting corporate creditors must be weighed against the equally important policy respecting separate corporate entities.

In reviewing the New Jersey cases discussed above, and abstracting the elements common to all the cases the Court notices that in each case there was (1) transfer of corporate assets (2) for less than adequate consideration (3) to another corporation which continued the business operation of the transferor (4) when both corporations had at least one common officer or director who was in fact instrumental in the transfer (except in the Aetna cáse where there was, however, actual knowledge of the transferor’s financial condition) and (5) the transfer rendered the transferor incapable of paying its creditors’ claims because it was dissolved in either fact or law.

In the case at bar Phillips’ assets (including the I.C.C. operating authority) were transferred to Diamond T for nominal consideration or none at all as appears from Taylor’s statement that Phillips has a checking account with only a few dollars in it, which in any event is located in Philadelphia. The assets were valued in excess of $100,000 judging from the contract of sale between Taylor and Ujay. Furthermore, Taylor as president, director and principal stockholder of both Phillips and Diamond T was instrumental in affecting the transfér; he had actual knowledge of plaintiff’s claim and such knowledge must be imputed to Diamond T, and, therefore, Diamond T’s good faith could be open to question even if there were some consideration. Diamond T is presently opéráting some of Phillips’ trucks and in fact now conducts'its operations .out of the same • terminal facilities originally leased to Phillips in- Jersey City.' It is clear that Phillips has insufficient assets to pay plaintiff’s claim, but even if it did, it has no intention of paying and furthermore, accordng to Taylor, will be formally dissolved when the present litigation is concluded, and in any event, is' presently dissolved in fact, no longer conducting any operations whatsoever.

The record here shows that there is palpably ho genuine issue of material- fact and plaintiff is clearly entitled to a judgment as a matter of law together with costs and interest from the date the compensation award was entered. This conclusion follows from consideration of the cases hereinbefore cited as well as upon plaintiff’s so-called continuation theory as discussed above. It is understood that this individual judgment against Diamond T is not limited to following any of Phillips’ assets should execution be necessary, but may be satisfied, as' provided by law, from any property in Diamond T’s name.

An additional comment seems appropriate regarding plaintiff’s failure to join Ujay as a party defendant in the present action. Despite the fact that Ujay is apparently liable to plaintiff under its contract with Taylor, it is by no means certain that plaintiff would obtain satisfactory relief. While Ujay is licensed to do business in New Jersey and is therefore amenable to personal service, plaintiff is not a party to the Taylor-Ujay contract which purports to protect him and Diamond T. The contract in any event is governed by Missouri law which may not provide plaintiff a right on the contract. Further, assuming that plaintiff recovered a judgment on the contract it is not certain that plaintiff could satisfy his judgment without going to St. Louis. These and perhaps other considerations no doubt played a part in plaintiff’s decision not to join Ujay.

Furthermore, the conclusion herein accords with the strong public policy protecting creditors. Viewed from another approach this Court believes that what has been actually accomplished here is a combination of a de facto dissolution and merger without any observance of the statutory safeguards prescribed at least in part for the protection of creditors. Even if Diamond T were not subject to our own statutory merger provisions, Phillips as a domestic corporation should not be permitted-to evade the obligations it incurred while enjoying New Jersey’s favorable corporate climate. See N. J. S. A. 14:12-1 et seq.; R. S. 14:13-1 et seq. Diamond T having absorbed Phillips is liable for Phillips’ obligations. Such would be the result in Delaware. See Drug, Inc. v. Hunt, 35 Del. 339, 168 A. 87 (Sup. Ct. 1933). A similar result would probably be reached in Pennsylvania. See, Marks v. Autocar Company, 153 F. Supp. 768 (D.C.E.D. Pa. 1954). Even if Diamond T’s domiciliary state’s law were to the contrary, New Jersey law might control the ultimate disposition for the protection of its creditors. Dr. Hess & Clark Inc. v. Metalsalts Corp., 119 F. Supp. 427 (D. C. N. J. 1954). The authorities cited supra are also in accord with such a result. See also, Applestein v. United Board & Carton Corp., 60 N. J. Super. 333 (Ch. Div. 1960), affirmed, 33 N. J. 72 (1960).

But this Court is content to rest its decision on the five elements discussed above which clearly indicate that Diamond T is a continuation of Phillips of a kind which entitles plaintiff to his judgment.

Accordingly summary judgment will be entered in plaintiff’s favor.


source: Caselaw Access Project

author: Stamler (Joseph.) J. S. C.

license: Public Domain

text:
    MYRON C. WEINSTEIN, CITIZEN AND RESIDENT, STATE OF NEW JERSEY, PLAINTIFF, v. CITY OF NEWARK, A MUNICIPAL CORPORATION, STATE OF NEW JERSEY, DOMINICK SPINA, IN HIS CAPACITY AS DIRECTOR OF POLICE DEPARTMENT, CITY OF NEWARK, KENNETH MELCHIOR, IN HIS CAPACITY AS COMMANDANT OF BUREAU OF TRAFFIC AND SIGNALS, CITY OF NEWARK, EDWARD CYR, IN HIS CAPACITY AS TRAFFIC ENGINEER, CITY OF NEWARK, DEFENDANTS.
    Superior Court of New Jersey Law Division
    Decided March 18, 1968.

      Mr. Myron C. Weinstein, appearing pro se.

      Messrs. Harry Del Plato and Ronald H. Schachman for defendants (Mr. Norman N. Schiff, Corp. Counsel, attorney).
   Stamler (Joseph.) J. S. C.

Plaintiff who appears pro se and describes himself as “Myron O. Weinstein, Citizen and Besident, State of New Jersey” brings this action against defendants the City of Newark; Dominick Spina, Director of the Police Department; Kenneth Melchior, Commandant of Bureau of Traffic and Signals; and Edward Cyr, Traffic Engineer.

Plaintiff, a resident of the Township of Millburn and a licensed driver in this State, asserts in the first count that the defendants have erected, placed, maintained and enforced regulatory traffic signs throughout the City which do not conform to law. This attack is directed to parking prohibition, exclusion and restriction signs. Plaintiff contends that the signs are illegal because of color, shape, sharp corners and multiple messages per sign. The “sharp corner” argument was abandoned at trial.

On this count plaintiff demands judgment as follows:

(a) a declaration that the traffic signs so described are illegal and of no force or effect;
(b) a declaration that the enforcement of the signs is ultra vires j
(c) a mandatory injunction against the Commandant of the Bureau of Traffic and Signals ordering the removal forthwith of all such signs;
(d) a prohibitory injunction against the Director of the Newark Police Department restraining him and his department from enforcing the signs pending their removal;
(e) a mandatory injunction ordering the Commandant of the Bureau and the Traffic Engineer to install “valid signs in accordance with the directive of local and State law.”

The second count is limited to traffic control signals. Each and every traffic light in the City of Newark was erected and is maintained illegally, plaintiff contends. Then charging that “said illegal action has caused and will continue to cause plaintiff irreparable injury in that it represents an unlawful use of the police power by the City of Newark directly and indirectly obstructing plaintiff’s common easement of travel and transport”, he asks the court to declare each and every traffic control signal in the City of Newark without force and effect. A prohibitory injunction is sought forthwith against the enforcement of any traffic light violation anywhere in the City. At the trial plaintiff asserted and defendants agreed that after the complaint herein had been filed the City continued to install, erect and relocate traffic control signals following, precisely the same procedure as it had theretofore.

Defendants assert that the traffic signs and signals were legally erected and enforced. But in bar at the outset defendants contend: plaintiff has no standing to sue; the Attorney General is an indispensable party; the statute of limitations has run. These defenses in bar are first considered for if tenable, it will not be necessary to proceed to the merits.

I. STANDING TO SUE

The Declaratory Judgment Act (N. J. S. 2A:16-53) provides :

“A person . . . whose rights, status or other legal relations 'are affected by a statute, municipal ordinance, contract or franchise, may have determined any question of construction or validity arising under the instrument, statute, ordinance, contract or franchise and obtain a declaration of rights, status or other legal relations thereunder.”

The Appellate Division said in Rego Industries, Inc. v. American Modern Metals Corp., 91 N. J. Super. 447. (App. Div. 1966):

. “The purpose of a declaratory judgment proceeding is to provide a means by which rights, obligations and status may be adjudicated in cases involving a controversy that has not yet reached the stage ait'- which either party may seek a coercive remedy. Such proceeding is intended to serve as an instrument of preventive justice, to relieve litigants of the common law rule that no declaration of right may be judicially adjudged until that right has been violated, and to permit adjudication of rights or status without the necessity of a prior breach.” (at p. 452)

Id addition to the foregoing statement, R. R. 4:92A makes it very clear that “the existence of another adequate remedy does not preclude a judgment for declaratory relief in cases where it is appropriate.”

Plaintiff is a licensed driver subject to Newark’s signs and signals. He contends that the City displays unauthorized signs and signals and that this is an unlawful restriction of his privilege to park and to traverse the streets.

[1 — 4] That plaintiff seeks other and further relief beyond the simple declaration (i. e. injunction) does not preclude this court from exercising jurisdiction. N. J. S. 2A :16-60. Numerous cases in New Jersey direct that a liberal construction and administration be given to the Declaratory Judgment Act. Union County Board of Chosen Freeholders v. Union County Park Commission, 41 N. J. 333 (1964). One of the mam purposes of the Declaratory Judgment Act is to definitively establish private rights, duties and obligations and thereby forestall a multiplicity of actions and, in addition thereto, avoid costly and burdensome separate trial proceedings. Hartford Accident and Indemnity Co. v. Selected Risks, Indemnity Co., 65 N. J. Super. 328 (App. Div. 1961). The defendants question whether plaintiff has a right and has standing to bring this action. If we were to refuse to hear this complaint, we would then impose upon the plaintiff the obligation of parking in a prohibited location, remaining too long in a limited parkng zode and running a red light in order to test the validity of. Newark’s traffic control devices. -Although it has been held that one may not ward off a criminal prosecution by gambling on the ultimate outcome of a suit for a declaratory judgment (see Lucky Calendar Co. v. Cohen, 19 N. J. 399 (1955)). a distinction can be drawn between the efforts of the retail merchant who sought to establish in advance that his contest was not a gambling vehicle and the driver on the highways of our State who may be subject to numerous parking fines or a temporary suspension of driving privileges for a moving violation. Under the liberal construction of the Declaratory Judgment Act plaintiff has standing to sue although there is another remedy available. But even if there can be no suit unless there is no other available remedy, the other remedy must be an “adequate remedy”, and to require a citizen licensed to drive on the streets of our State to violate the law to test its validity is not an adequate remedy.

Plaintiff is entitled to relief from the uncertainty and insecurity as to the legal limitations and obligations which confront him each day on the streets of the City.

II. THE STATUTE OE LIMITATIONS

Defendants contend that plaintiff is barred for he did not promptly pursue his rights within 45 days after the passage of the ordinance authorizing the parking signs. Defendants rely on R. R. 4:88-15.

The right to question the activities of Newark in this case has been yet accrued. It will first truly accrue when plaintiff is arrestéd for running a red light or summoned for illegal parking. Defendants inconsistently contend that plaintiff’s present action is premature and out of time. Neither position is tenable.

Defendants add laches, the equitable statute of limitations. They protest that plaintiff did not object to the traffic signs and signals which have been and continue to be erected in the City. Such defense cannot be used to give vitality to an ordinance which never came into legal being or to an act which may require an ordinance for it to be validly performed. Catalano v. Pemberton Tp. Bd. of Adjustment, 60 N. J. Super. 82, 97 (App. Div. 1960).

Plaintiff as a licensed driver seeks to enforce a right to use and traverse the streets of a municipality without the imposition of allegedly illegal prohibitions or limitations. This is a continuing right and that right is not lost by a failure to seek judicial relief within a specified number of days after the posting of a sign or the erection of a traffic signal. Cf. Yanuzzi v. Mayor and Council of Borough of Spring Lake, 22 N. J. 567, 570 (1956).

III. THE ATTORNEY GENERAL AS AN INDISPENSABLE PARTY

The Attorney General had notice of this litigation, asked for time to consider intervention and determined not to do so.

There is no challenge directed here to the constitutionality of the Motor Vehicle and Traffic Regulation Act or to irregular activity by the Director of the Division of Motor Vehicles. If there were, R. R. 4:37-2 would require formal invitation or naming of the Attorney General. What is here in issue is a question of the alleged failure of the defendants to comply with State law.

It is concluded that the Attorney General’s presence is not indispensable to a determination of the issues here raised.

IV. TRAFFIC SIGNS

The traffic signs questioned in the ease sub judice are exclusively “parking” signs. These comprise exclusionary, prohibitive and restrictive tj'pe signs. The New Jersey Courts have shown awareness of the serious parking problems confronting urban municipalities. See DeLorenzo v. City of Hackensack, 9 N. J. 379, 384 (1952); Lenzner v. City of Trenton, 22 N. J. Super. 415, 422 (Law Div. 1952), affirmed, 29 N. J. Super. 514 (App. Div. 1954), affirmed 16 N. J. 465 (1954), certiorari denied 348 U. S. 972, 75 S. Ct. 534, 99 L. Ed. 757 (1955). In Board of Commissioners of City of Newark v. The Local Government Board, 133 N. J. L. 513 (Sup. Ct. 1945), the following appears:

“Parking in the public streets in its broader connotation is a privilege in derogation of the common easement of travel and transport, and the uses incident thereto not inconsistent with the correlative rights of other travelers, and the abutting owner’s qualified additional right of ingress and egress; and its control is therefore intimately identified with traffic regulation in its larger aspect and thus related to the essential public welfare.” (at p. 517)

In Davidson v. Fornicola, 38 N. J. Super. 365, 379 (App. Div. 1955), certification denied 20 N. J. 467 (1956), the court said that in civil actions such objects of common and conventional size, shape and appearance as stop signs, traffic signals and devices, safety isles, and pavement markings as may be placed in or over and on public streets and highways must be presumed to have been lawfully erected, placed and maintained, in the absence of evidence which would render such a presumption unavailable, but that such a presumption is rebuttable. Notwithstanding that in Davidson the court may have applied such a presumption only in a negligence case, plaintiff herein has raised sufficient evidence and argument to require careful scrutiny of whether the erection, placement and maintenance of the signs were and are lawful.

N. J. S. A. 39 :4-198 in relevant part reads as follows:

“No ordinance, resolution or regulation enacted, passed, or adopted by local authorities nor any regulation adopted by the State Highway Commissioner under any power given by this chapter or any supplement thereto shall be effective unless due notice thereof is given to the public by placing a sign at the places where the ordinance, resolution or regulation is effective, and by briefing its provisions on signs according to .specifications contained in. this, chapter or any supplement thereto. These signs shall be so placed as to be easily read by pedestrians or operators of vehicles.”

N. J. S. A. 39 :4-183.2-requires that all traffic signs conform “in all respects”-to the provisions of the act.

In appropriate part N. J. S. A. 39 :4-183.17 provides:

“The design and location of other regulatory signs shall be as follows:
(a) Shape-Rectangular with longer dimension vertical.
(b) Colors-White background, black letters and border, except on prohibited parking signs which shall have white background, red letters and border, and limited parking signs which shall have white background, green letters and border.
* * * * * * # *
(d) Messages and dimensions-Standard regulatory signs shall have 1 of the messages in the following table, with minimum dimensions to conform to the specifications adopted by the Director of the Division of Motor Vehicles.”

N. J. S. A. 39 :4-183.7 in relevant part reads as follows:

“All traffic signs shall be of the shape and color indicated in the table below. All corners shall be rounded and all signs shall have a border.
Type Regulatory Movement Shape Background Message
Rectangle with Stopping and longer dimension Standing vertical White Red
Parking Prohibition Rectangle with longer dimension vertical White Red
Restriction Rectangle with longer dimension vertical White Green”

By way of illustration, plaintiff complains of six types of signs. They are as follows:

The outer physical dimension of each of the metal signs is longer vertically than horizontally. In Figs. A, B, C and D the separate messages are longer in the horizontal.

Fig. A. may be described as follows: The upper part has red messages on a white background within a red border directing “NO PARKING 7-9:30 a.m.”; “NO STOPPING OR STANDING 4-6 p.m.”; and these messages are followed by “EXCEPT SATURDAYS & SUNDAYS.” The lower portion is encompassed by a green border on a white background with the time limit on a green background containing a white time period “1 HOUR LIMIT” alongside the green lettered, white background message reading “METERED PARKING 9:30 a.m.-4 p.m. MONDAY TO FRIDAY; 7 a.m. - 6 p.m. SATURDAYS ONLY”.

Fig. B is similar to Fig. A in color and in the upper half contains: “NO PARKING THIS SIDE 7-9 a.m. EXCEPT SATURDAYS AND SUNDAYS” in red letters and on the lower half “2 HOUR LIMIT” with white lettering on a green background and “METERED PARKING 9 a.m. to 6 p.m. EXCEPT SUNDAYS” in green letters on a white background.

Fig. C is similar and as depicted above has the upper half of the message in red letters with a white background and the lower half in green letters on a white background except for the color inversion where the “1 HOUR LIMIT” appears.

Fig. D, with red letters on a white background, contains the following messages: “NO PARKING THIS SIDE ANY TIME; NO STOPPING OR STANDING 7-9:30 a.m., 4-6 p.m., EXCEPT SATURDAYS & SUNDAYS.”

Fig. E reads as follows: “NO STOPPING, STANDING OR PARKING HERE TO CORNER ANY TIME.” Here all letters and border are red on a white background.

Fig. F demonstrates color inversion, a green background with white letters “1 HOUR LIMIT”.

Plaintiff contends invalidity of the illustrative signs as follows:

1) Figs. A through D contain messages which have a longer horizontal rather than a longer vertical dimension;

2) Figs. A, B, C and E make use of a color inversion for the parking restrictions (the hour limitations have white letters on a green background rather than green letters on a white background);

3) Figs. A through E have multiple messages and N. J. S. A. 39 :4-183.17 (d) permits but one.

In State v. Callaghan, 46 N. J. Super. 289 (Cty Ct. 1957), the word “shall” as used in this statute is held to be mandatory and municipalities are precluded from varying the standards and specifications for signs as set forth in the act. But there the applicable statutory requirements for one-way street signs were crystal clear and there was no doubt that the municipality violated the requirements for that particular sign.

The questions to be determined on this issue are:

1) In N. J. S. A. 39 :4-183.7 and N. J. S. A. 39 :4-183.17 (a) , is it the message or the physical outside dimensions of the sign which must be rectangular with longer dimension vertical ?
2) Do N. J. S. A. 39:4-183.7 and N. J. S. A. 39:4-183.17 (b) prohibit a partial color inversion for emphasis?
3) When N. J. S. A. 39:4-183.17 (d) speaks of “1 of the messages in the following table” did the Legislature intend “only 1” (as plaintiff contends) or “1 or more” (as defendants contend) ?

Considered first is whether the dimensional provision applies to the message or to the sign. There is no precise statutory requirement for a certain size of lettering on a standard regulatory sign. There is an implied requirement that the letters be legible and that they be made larger, if need be, to achieve this result. The second sentence of N. J. S. A. 39:4-183.9 reads:

“Where conditions require greater visibility necessitating a larger sign, standard shapes and colors shall be used, and standard proportions shall be retained, so far as practicable.”

Subsection. (d) of N. J. S. A. 39:4-183.17 speaks of “minimum dimensions”.

The illustrative signs (Figs. A-P) are almost the same in outer perimeter notwithstanding that one may look larger or smaller in the photographs marked in evidence. The amateur photography of the pro se plaintiff is unintentionally misleading.

If we assume arguendo that more than one message may be on a sign (as we must do for the dimensional issue to arise at all with respect to the signs and messages for which it is raised) and that each message must be rectangular with the longer dimension vertical (such as in Fig. E), then we must project a sign twice as long vertically for a two message sign and three times as long vertically for a three message sign. The bottoms of such signs are required to be not less than 5 feet and not more than 7 feet above the crown of the pavement, except where parked vehicles may obstruct the required visibility. In such case the bottom of the signs shall not be less than 7 feet and not more than 9 feet above the pavement (N. J. S. A. 39:4-183.14). The increase in height above the pavement of the highest message may from common experience remove it from the ordinary field of vertical vision of the driver of a moving vehicle and as such this would violate N. J. S. A. 39:4r-198, which in part states:

“These signs shall be so placed as to be easily read by pedestrians or operators of vehicles.”

Consequently, to interpret the statute as requiring the messages in Figs. A-D to be rectangular with longer dimension vertical could only result in either illegally small lettering or in some messages being too high above the pavement.

Prior to the 1956 amendment to the Motor Vehicle and 'Traffic Regulation Act, N. J. S. A. 39 :1-1 (“Definitions”) included the following:

“ ‘Sign’ means a device, mark, marker, board, plate, or other contrivance so designed as apparently to guide traffic or to inform •of a traffic regulation.”

The 1956 amendment deleted this definition of sign and in its place substituted:

“ ‘Official traffic control devices’ means all signs, signals, markings, and devices not inconsistent with this subtitle placed or erected by authority of a public body or official having jurisdiction, for the purpose of regulating, warning, or guiding traffic.” (N. J. S. A. 39:1-1).

The use of the word “sign” and “message” is not synonymous. A “sign” is a physical object of “metal or comparable durable material” (N. J. S. A. 39 :4-183.8) of minimum dimension (N. J. S. A. 39:4-183.9) of a certain color (N. J. S. A. 39:4-183.7; 183.17) carrying a “message” (N. J. S. A. 39:4-183.10).

The Legislature in N. J. S. A. 39:4-183.7 and in N. J. S. A. 39:4-183.17 (a) did not say “shape of message”. “Shape” as used in these sections describes the sign and not the message. As such each of the illustrative signs conform.

Considering next the color inversions found in the parking restriction messages in Figs. A, B, C and N. J. 8. A. 39:4-183.6 provides:

“The Director of the Division of Motor Vehicles may determine the character, type, location, wording or symbol, and use of all traffic signs on the highways of this State; may adopt a manual and specifications for a uniform system of traffic signs consistent with the provisions of this act for use upon public highways within the State. Such uniform system shall correlate with and so far as possible conform to the system then current as specified in the ‘Manual on Uniform Traffic Control Devices for Streets and Highways.’ ”

On January 2, 1962 the Acting Director of the Division of Motor Vehicles deposited with the Secretary of State a copy of the “Manual on Uniform Traffic Control Devices for Streets and Highways”. This Manual was prepared by a joint committee consisting of representatives from the American Association of State Highway Officials, Institute of Traffic Engineers, National Committee on Uniform Traffic Laws and Ordinances, National Association of County Officials and the American Municipal Association, and was published by the Federal Bureau of Public Roads.

The Director filed this Manual in accordance with the provisions of Title 39 and indicated to the Secretary of State that he had adopted this Manual as the official State Manual and specifications for a uniform system of traffic signs, markings, signals, islands, traffic controls for highway construction and maintenance operations and signing for Civil Defense, “except for those portions which are in conflict with Title 39 of the Revised Statutes.” (Letter, Jan. 2, 1962, Acting Director of Motor Vehicles to Secretary of State).

There is no doubt but that the Legislature intended to make provision for “a uniform system of traffic signs”. See N. J. S. A. 39 :4 — 183.6. Courts also have expressed the wisdom of public policy in the promotion of uniformity in the regulation of traffic. See Eveler v. Atlantic City, 91 N. J. L. 135, 137 (Sup. Ct. 1918); State v. Callaghan, 46 N. J. Super. 289, 292 (Cty. Ct. 1957). The Eveler case was recently cited with approval by the Supreme Court in Visidor Corp. v. Cliffside Park, 48 N. J. 214, at page 223 (1966). There Justice Jacobs spoke of advancing “the interests of safety and uniformity in traffic regulation.” See also Librizzi v. Plunkett, 126 N. J. L. 17, 20 (Sup. Ct. 1940).

Who now was to determine where conflict with Title 39 existed, if any, by the broad terms of the Manual’s adoption F It is the Director who is permitted (by N. J. S. A. 39 :A-183.6) to determine “the character, type, location, wording or symbol, and use of all traffic signs on the highways of this State * * The Director may complain but has not. The plaintiff may only do so if the Director has failed in a mandatory requirement or if the municipal action is clearly inconsistent.

The Manual provides:

“For emphasis the word NO or the numeral showing the time limit in hours or minutes may be in a reversed color arrangement in the upper left-hand corner of the sign, i. e., in white on a rectangular area of red or green.”

The Manual provisions are consistent with the entire over-all purpose of the statute. The public will not be misled in any way because the “2 HOUR LIMIT” has a green background with white letters as opposed to a white background with green letters. The time limitation, which is most important, will stand out more clearly. Is not this emphasis precisely that which will put the public on better notice or warning?

If one important purpose of the statute is to bring into sharp focus that which is prohibited and for what period, it would seem that an emphatic color inversion would be entirely consistent with notice to the public as a most attention-getting method.

The statute provides that the design of all traffic signs shall conform to the specifications adopted by the Director (N. J. S. A. 89 :4-183.9). The Director has adopted the Manual which permits color inversion. It is concluded therefore that the inversions as demonstrated are completely consistent with the overall purpose of the statute.

To the foregoing protests is added the “multiple messages” on one sign.

We cannot add language to clarify that which plaintiff contends was intended nor can we do the same for defendants. The conclusion to be reached must be based entirely on what the Legislature attempted to accomplish and how practical is the approach of the adversary positions.

The statute requires that prohibited or limited parking signs “shall be placed at the first and last point where the legal requirement is effective and at intervals not greater than 250 feet” (N. J. S. A. 39 :4-183.17 (c)). N. J. S. A. 39 :4- 183.13 makes provision for lateral distance from the pavement or roadway:

“Where a raised curb exists, traffic signs shall be set so that no part of the sign should be less than twelve inches back of the curb line. Where no curb exists, traffic signs shall be erected at the outside edge of the graded shoulder.”

If we assume one message to one sign area, then we must find a veritable forest of signs placed in straight line at each beginning and ending point and each 350 feet therein. This would mean that in the situation where ordinances provided for prohibitive, exclusionary and restrictive signs, three separate signs the same distance from the curb would stand in very close proximity.

It seems absurd to conclude, as plaintiff would wish us to do, that in a Fig. A situation the following signs would stand side by side or in single file and separately and distinctly provide in individual posts and signs:

1) NO PARKING 7-9:30 a.m. EXCEPT SATURDAYS & SUNDAYS;
3) NO STOPPING OR STANDING 4-6 p.m. EXCEPT SATURDAYS & SUNDAYS;
3) 1 HOUR LIMIT METERED PARKING 9:30 a.m.-4 p.m. MONDAY to FRIDAY;
4) 1 HOUR LIMIT 7 a.m. - 6 p.m. SATURDAYS ONLY.

If we adopt plaintiff’s contention we would then have four separate signs at the same level from the ground at the first and last point of the effective requirement and at each interval not greater than 350 feet.

The forest hidden in the multitude of trees would certainly be an adequate defense to the unfortunate operator of a vehicle who went from sign to sign to learn what was prohibited and what permitted.

We are not dealing here with high speed highways, speed limits, danger or caution messages. This case involves the exasperated driver moving slowly and desperately searching for a place to park. This driver has time to study the single sign with the multiple message at one stop or hesitation. It would be dangerous indeed to creep from sign to sign to sign to see what he can or cannot do.

The “Manual” makes it clear that more than one message may appear on a single sign. (Manual, p. 47).

If the City were to follow the Draconian principle and place a message or messages with letters so small that the readibility is so impaired as to fail to give adequate notice, a good defense to a summons for illegal parking might be made out. However, the multiple messages in and of themselves do not invalidate these signs. Other contentions advanced by plaintiff have been considered and they are without merit.

V. TRAFFIC SIGNALS

Plaintiff questions the manner in which the City of Newark proceeded in placing traffic signals throughout the City. By “traffic signals” reference here is only to the operation, installation and maintenance of the traffic lights at various intersections throughout the City.

Defendant, City of Newark, adopted a single ordinance which it believes fully complied with the legislative mandate. This ordinance did not establish the location of a single traffic signal in the City. It was an ordinance which delegated to the Bureau of Traffic and Signals the duty of determining without further formal municipal legislative action where such traffic lights controlling traffic movement should be placed.

The Legislature delegated to the City of Newark the power to regulate and control traffic within its borders. Such regulation is required to be within the precise formula as set forth in the statutory delegation. In Hackensack Water Co. v. Ruta, 3 N. J. 139 (1949), the Court said:

“The State has sovereign and absolute jurisdiction and control of the roads, streets and highways within its borders. Supervision and control of public highways is exercisable directly by the Legislature, and indirectly by the municipalities and other local governmental agencies to whom the power has been delegated. The local governing body has in this behalf only such powers as have been delegated by the State’s legislative body." [citing eases] (Emphasis added), (at p. 146)

An opinion of the Yew Jersey Attorney General applies these principles to the regulation of traffic in municipal streets. It was stated in Formal Opinion No. 5, N. J. Attorney General (1955) that:

“There is no inherent power vested in a municipality by which it may legally restrict the right of the public to the free use of streets and roads. Any right of the municipality to pass ordinances and resolutions regarding the flow of traffic over its streets and highways can arise only by legislative grant; * * *”

N. J. S. A. 39:4-197 under a general overall article “Powers of Municipalities, Counties and Highway Commissioner” reads:

“No municipality shall pass an ordinance or resolution on a matter covered by or which alters or in any way nullifies the provisions of this chapter or any supplement to this chapter; except that a municipality may pass ordinances or resolutions, or by ordinances or resolutions may authorize the adoption of regulations by the board, body or official having control of traffic in the public streets, regulating special conditions existent in the municipality on the subjects and within the limitations following:
(1) Ordinance.
a. Altering speed limitations as provided in section 39:4-98 of this Title;
b. Limiting use of streets to certain class of vehicles;
c. Designating 1-way streets;
d. Regulating the stopping or starting of street cars at special places such as railroad stations, public squares or in front of certain public buildings;
e. Regulating the passage or stopping of traffic at certain congested street corners or other designated points;
f. Regulating the parking of vehicles on streets and portions thereof including angle parking as provided in section 39:4r-135 of this Title ;
g. Regulating the parking of vehicles upon land owned or leased and maintained by the municipality, a parking authority or the board of education of a school district, including any lands devoted to the public parking of vehicles, the entrances thereto and exits therefrom;
h. Designating streets or roads upon which heavy commercial vehicles may be required to use low gear in descending steep declivities and providing for the use of such gear thereon;
i. Designating school zones and school crossings in the vicinity of school buildings which are not located on territory contiguous to a highway.
(2) Ordinance or resolution.
a. Designating through streets as provided in article 17 of this chapter (39:4 — 140 et seq.);
b. Designating and providing for the maintenance as ‘no passing’ zones of portions of highway where overtaking and passing or driving to the left of the roadway is deemed especially hazardous.
(3) Ordinance, resolution or regulation.
a. Designating stops, stations or stands for omnibuses and taxis;
b. Designating curb loading zones.”
(Emphasis added).

Although, occasionally “or” is determined to be read in the conjunctive, the principles of statutory construction absent a contrary legislative intent require that the word “or” should be considered to have been used disjunctively rather than conjunctively. Showell v. Horn, 65 N. J. Super. 374 (Law Div. 1961); see also Howard v. Harwood’s Restaurant Co., 25 N. J. 72 (1957).

It is apparent from a reading of the statute that to apply the conjunctive interpretation would result in a meaningless sentence. For example, “* * * a municipality may pass ordinances or resolutions, [and] by ordinances or resolutions may authorize the adoption of regulations by the board, body or official * * *”. This would make no sense at all. The disjunctive permits this part of the introductory sentence to be read in one of two ways: “* * * a municipality may pass ordinances or resolutions regulating special conditions existent in the municipality on the subjects and within the limitations following * * *” or in the alternative “* * * a municipality by ordinances or resolutions may authorize the adoption of regulations by the board, body or official having control of traffic in the public streets, regulating special conditions existent in the municipality on the subjects and within the limitations following * * *.”

Pursuant to this section, the City of Newark did pass an ordinance giving the Bureau of Traffic and Signals the authority to regulate the passage or stopping of traffic at certain congested street corners or other designated points by the nse of traffic signals. N. J. S. A. 39:4-120.1 reads:

“Official traffic control signals shall be placed only by the authority of a public body or official having jurisdiction as authorized by law and only for the purpose of regulating traffic.”

It is the conclusion of this court that the City of Newark did follow the statutory mandate of N. J. S. A. 39:4-197 in delegating the power to the Bureau of Traffic and Signals by ordinance.

It is admitted that prior to the placement or removal of any traffic signal, the Bureau of Traffic and Signals notified the Director of the Division of Motor Vehicles and received approval. Plaintiff argues that each and every time a signal is placed, removed, relocated or retimed, the City must follow the formalities required for the passage of an ordinance. The cost for advertising alone should permit an inference that the Legislature never intended this to be. Additionally, such conception would render meaningless and useless the Division of Motor Vehicles’ “Traffic Signal Application” form which has been utilized by Newark’s Bureau of Traffic and Signals in notifying the Director of the Division of Motor Vehicles of its traffic signal intentions. This form provides for initial approval for a one year period and after installation and inspection “final approval”. This the Director has power to do under N. J. S. A. 39 :4-120:

“The director may determine the character, type, location, placing and operation of all traffic control signal devices on the highways of this State.”

Attention is called to the distinction between the use of the word “shall” in N. J. S. A. 39:4 — 120.1 and “may” in N. J. S. A. 39 :4-120. It is concluded that even if there were a failure to get approval in each specific instance, complaint may only be made by the Director of Motor Vehicles as against the municipality since the word “may” is a word of permissive use or permissive adoption and the word “shall” is mandatory.

The question arises, however, as to whether the ordinance which gave the authority to the Bureau of Traffic and Signals was required to have been approved by the Director of the Division of Motor Vehicles prior to its effectiveness. N. J. S. A. 39 :4-202 provides:

“No resolution, ordinance or regulation passed, enacted or established under authority of this article, shall be effective until submitted to and approved by the director as provided in section 39:4-8 of this Title.”

N. J. S. A. 39:4-8 in relevant part reads as follows:

“No ordinance or resolution concerning, regulating or governing traffic or traffic conditions, adopted or enacted by any board or body having jurisdiction over highways, nor any such regulation promulgated by the State Highway Commissioner, shall be of any force or effect, unless the same is approved by the director or has been approved by the Commissioner of Motor Vehicles or the Traffic Commissioner according to law.”

The sections under consideration contrast sharply with N. J. S. A. 39:4-120, considered above. There the word “may” is used and the Director of Motor Vehicles is given broad discretionary powers with regard to specific traffic signals. It was concluded that the Director alone can complain of municipal failure in specific instances to comply with the section. In any event, the Director has, in fact, prescribed and adopted a Manual and specifications for a system of traffic control signals and plaintiff does not allege that the City of Newark with respect to any particular signal has departed from the Manual and specifications or has failed to receive approval upon filing of the Director’s application form.

On the other hand, the Legislature in N. J. S. A. 39 :4-202 and N. J. S. A. 39 :4-8 has used the word “shall” and the statute leaves no room for maneuver. The conclusion reached therefore is that the plaintiff herein can question the failure of the municipality to perform that which the statute explicitly requires. It is admitted that the ordinance of the City of Newark empowering the Bureau of Traffic and Signals has never been submitted to and approved by the Director. This is contrary to the mandatory provisions of N. J. S. A. 39 :4-202 and N. J. S. A. 39 :4-8 and therefore the ordinance is ineffective. The ordinance is one delegating municipal power under N. J. S. A. 39 :4-197. As such, the ordinance is one “passed, enacted or established under authority of [Article 21 of Chapter 4 of Title 39]” and pursuant to N. J. S. A. 39:4-202 it must have the Director’s approval before it is effective. N. J. S. A. 39 :4-8 is of similar import. It is acknowledged that the Bureau of Traffic and Signals placed the traffic control signals. Since the Bureau was empowered by an ordinance which had to be approved by the Director in accordance with N. J. S. A. 39 :4-202 and N. J. 8. A. 39 :4r-8, the Bureau without such prior approval cannot at present legally be considered “a public body or official having jurisdiction as authorized by law” (IV. J. 8. A. 39:^U120.1). Therefore the Bureau’s activity with regard to traffic signals, notwithstanding Director approval in specific instances on the forms supplied, was without authority.

It is incumbent upon the City to submit and secure the approval of the Director for the ordinance delegating power for traffic signals to the Bureau of Traffic and Signals to be effective.

In the interim, while awaiting approval, it is suggested that the City consider taking emergency action by resolution pursuant to N. J. S. A. 39 :4-197.3 as to the existing traffic control signals.

Plaintiff has asked for affirmative relief in the event the action of the City is found to have been ultra vires. Plaintiff is directed to move promptly upon notice for an early hearing as to the extent of such affirmative relief including in such motion the settlement of a form of order in conformity with this opinion.


author: Per Curiam. Bottek, J. S. C.

text:
    FRANCES MAGRINE AND ALFRED MAGRINE, PLAINTIFFS-APPELLANTS, v. DAVID SPECTOR, d/b/a PRECISION BUR COMPANY AND E. P. KEANE, INDIV. AND t/a KEANE DENTAL SUPPLY, DEFENDANTS. VINCENT KRASNICA, DEFENDANT-RESPONDENT, THIRD-PARTY PLAINTIFF, v. DAVID SPECTOR, d/b/a PRECISION BUR COMPANY AND E. P. KEANE, INDIV. AND t/a KEANE DENTAL SUPPLY, THIRD-PARTY DEFENDANTS.
    Superior Court of New Jersey Appellate Division
    Argued December 18, 1967
    Decided April 2, 1968.

      Before Judges Kilkenny, Carton and Botter.

      Mr. Leivis M. Holland argued the cause for appellants (Messrs. Warren, Chasan, Leyner & Holland, attorneys).

      Mr. Geoffrey Gaulkin argued the cause for respondent (Messrs. Beggans and Keale, attorneys).
   Per Curiam.

Plaintiff-patient Prances Magrine brought action against defendant-dentist to recover for personal injuries sustained when a latently defective hypodermic needle broke or separated while it was being injected into her gum by defendant. Plaintiff Alfred Mhgrine sought to recover derivative damages.

The pertinent facts are set forth in Judge Lynch’s opinion, reported sub. nom. Magrine v. Krasnica, 94 N. J. Super. 228 (Cty. Ct. 1967).

The stipulation of facts upon which the case was submitted included the following: Plaintiff makes no assertion or claim that defendant failed to do what a reasonably prudent person would have done under the circumstances or that defendant did what a reasonably prudent person would not have done. Plaintiff relies upon strict liability, breach of warranty and breach of contract to recover.

Judge Lynch, in an opinion in which he carefully reviewed the recent developments of the doctrine of strict liability and analyzed various policy decisions involved, concluded that judgment should be entered for defendant. Plaintiffs appeal.

The sole issue presented here is whether a dentist is strictly liable to a patient injured by a defective instrument used in the course of treatment. In our opinion, the imposition of liability on the defendant-dentist cannot be justified on the basis of any of the accepted policies which- underlie the doctrine of strict liability as it Is presently understood. Nor are we persuaded that that doctrine should be extended under the circumstances of this case so as to render the defendant-dentist liable without fault for a defect in a needle which he merely purchased and used.

The judgment appealed from is therefore affirmed.

Bottek, J. S. C.

(temporarily assigned) dissenting: The case comes up on a stipulation of facts. 94 N. J. Super., at pp. 229-230. Plaintiff, Prances Magrine, was injured by a hypodermic needle which defendant, a dentist, had injected into her gum. In the course of the injection the needle broke. Defendant believes “there must have been some sort of a defect in the needle.” At oral argument we were told that an operation was required to extract the broken portion of the needle. Plaintiff does not charge defendant with negligence, but asserts strict liability in tort, relying on Henningsen v. Bloomfield Motors, Inc., 32 N. J. 358 (1960); Santor v. A & M Karagheusian, Inc., 44 N. J. 52 (1965); Cintrone v. Hertz Truck Leasing & Rental Service, 45 N. J. 434 (1965) and Schipper v. Levitt & Sons, Inc., 44 N. J. 70 (1965).

The trial court denied recovery. Strict liability was refused because the dentist was engaged in a profession, not a large-scale business; he was not a manufacturer or supplier ,of the needle, but a user of it; he could not discover a latent defect in the needle; and precedent in this state has not yet applied the doctrine beyond manufacturers (Henningsen and Santor, supra), retailers (Henningsen, supra), suppliers such as rental companies (Cintrone, supra) and mass producers of homes (Schipper, supra). The majority of this court affirms.

I disagree with the views of my colleagues. As between an innocent patient and a dentist who causes injury by using a defective instrument the law should require the loss to be borne by the dentist, even if he is not-negligent.

The issue posed is as old as jurisprudence: when an innocent person is injured through the inadvertent conduct of another, who should bear the loss? The answer has varied with the epoch and environment. Prom ancient times until the 19th century the answer given generally was in favor of strict liability. Thereafter, with some exceptions, the basic rule has been to deny recovery against a defendant who is free of negligence. In the 20th century no liability without fault has been the basic premise, but it has been replaced through legislation by strict liability for industrial accidents (workmen’s compensation) and for other specific activities such as ground damage by airplanes (N. J. S. A. 6:2-7) and dog bites (R. S. 4:19-16). In addition, the courts have restored strict liability in a broad area where a defective product or device has caused injury.

We may ask ourselves what objectives did the law seek in fashioning these rules of liability? In primitive cultures vengeance against the offending thing or person, not compensation, was a primary objective. Holmes, The Common Law, p. 34 (1881). If á man fell from a tree and died the tree was delivered to his relatives or was chopped to pieces. Id., pp. 11, 19, 24. Liability was visited upon the offending source, animate or inanimate, as well as persons connected with it, as if evil inhered in the instrument of harm. Wigmore, “Responsibility for Tortious Acts: Its History,” 7 Harv. L. Rev. 315, 319 (1891) (hereinafter referred to as “Wigmore-I”). The reason may have been revenge or superstition or fear of an instrument of evil. It may have seemed just that “the damage which we have inflicted on others must be made good.” Ehrenzweig, Negligence Without Fault, pp. 13-14 (1951).

This sweeping rule caught all harm-doers; but the difference between intentional and accidental harm was recognized at an early age in criminal law for the purpose of punishment and in civil wrongs for the purpose of mitigating damages. If a man’s ox was killed by an ox whose owner was ignorant of its propensity “to push in time past,” then “They shall sell the live ox, and divide the money of it; and the dead ox also they shall divide.” Exodus 21:35, 36. This is one solution where both parties are blameless: have them share the loss. This approach has some parallel to workmen’s compensation laws of the 1900’s and to various suggestions made since the 1920’s to compensate victims of motor vehicle accidents by a strict liability plan.

In the 19th century fault — the failure to act as an ordinary prudent man — became the central condition of liability for unintentional harm. Brown v. Kendall, 6 Cush. 292 (Mass. Sup. Jud. Ct. 1850). The purpose that was championed was the right of individuals and corporations to act freely and unburdened unless harm is done through their negligence. Some areas of strict liability continued at common law, but the spirit of laissez faire and the momentum of the industrial revolution prevailed. “We must have factories, machinery, dams, canals and railroads,” the court said in Losee v. Buchanan, 51 N. Y. 476, 484-485 (Ct. App. 1873), denying recovery without proof of negligence for damage to property caused by an exploding boiler. “By becoming a member of civilized society,” the court said, “natural rights” must be surrendered, but a benefit is gained through the surrender by others of the same rights. “I hold my property subject to the risk that it may be unavoidably or accidentally injured by those who live near me; and as I move about upon the public highways and in all places where other persons may lawfully be, I take the risk of being accidentally injured in my person by them without fault on their part.” In 1881 Holmes shared these views; however, he also suggested that deterrence of harmful behavior was a product of the rule that makes fault a condition of liability. Holmes, op. cit. supra, pp. 95-96.

In those days the problem was considered “on the assumption that plaintiff and defendant were alone involved and that what happened between them was the real issue — that tort liability was paid for out of the defendant’s own pocketbook.” 2 Harper & James, op. cit. supra, p. 762. The irony is that the fault rule, which was partly inspired by the desire to protect the growth of industry, was undone by the results of that very growth, namely, an increase in the harmful capacity of mechanized facilities, the inevitability of accidents in their use and the consequent toll of human life and losses. The expansion of the economy, the broadening' of distribution of goods, and services and the new pervasiveness of liability insurance are all part of the environment for the tort law of the 20th century. In this environment new views have taken shape about the objectives of the law. "What has become dominant in our time is the need to compensate victims of normal conditions of daily life. “There is a tendency to revive the idea of liability without fault not only in the frame of wide responsibility for agencies employed, but in placing upon an enterprise the burden of repairing injuries, without fault of him who conducts it, which are an incident to the undertaking. * * * There is a strong and growing tendency, where there is no blame on either side, to ask in view of the exigencies of social justice, who can best bear the loss.” Pound, The Spirit of the Common Law, pp. 188-189 (1921).

Assuring compensation for victims of accidents is a matter of public policy which legislatures have promoted in various ways. Very recently the courts have come to serve this purpose by expanding liability without proof of negligence in the area of “product liability.” This result followed naturally the change in economic and social organization. So long as direct sales brought goods from a manufacturer to a consumer the law had little difficulty in affording relief in contract or in tort. When the process of manufacturing and distribution became extended and diversified, determining liability seemed more complicated. In contract the requirement of privity insulated the obligor on the belief that business transactions would become treacherous if liability were extended to persons beyond the immediate parties; and in tort, arising from contractual relations, the same fear of creating uncertain burdens was used to limit the scope of the duty of care to the immediate parties in the transaction. Winterbottom, v. Wright, 10 M. & W. 109, 152 Eng. Rep. 402 (Ex. 1842), denying recovery to a coachman for injuries due to the collapse of a coach which defendant had a contractual duty to keep in good repair; see generally Kessler, “Products Liability,” 76 Yale L. J. 887 (1967). Before MacPherson v. Buick Motor Co., 217 N. Y. 382, 111 N. E. 1050 (Ct. App. 1916), absent privity, a manufacturer was not liable to an ultimate consumer even though his injury was caused by negligence in the manufacture of the product.

With changes in production and marketing methods the courts looked for techniques to extend liability in favor of the ultimate consumer. The courts came to realize that the public interest required protection against defects in products which consumers must buy or use and against which they are helpless to protect themselves. Prosser, “The Assault Upon the Citadel (Strict Liability to the Consumer),” 69 Yale L. J. 1099, 1122 (1960) (hereinafter referred to as “The Assault”). Bepresentations of quality, express or implied, were held to run in favor of the consumer. The courts used various devices to overcome lack of privity, such as implied agency, third-party beneficiary and the like. Id. at p. 1124. Intricacies in the law of sales involving privity, warranties and disclaimer rights forced the courts to turn to the law of torts for a solution. Kessler, supra, 76 Yale L. J. at p. 895.

Through the Henningsen, Santor, Cintrone, and Schipper cases, supra, our Supreme Court has expressed the principles on which the doctrine of strict liability in tort is based. “The demands of social justice,” the court said in Henningsen, supra, 32 N. J., at p. 384, require a rule of law that holds manufacturers and dealers liable for a defect in an automobile which causes injury to a consumer who, “has neither the opportunity nor the capacity to inspect or to determine the fitness of an automobile for use * * *.” In Santor, supra, 44 N. J., at pp. 65-66 the court pointed out that the obligation is “an enterprise liability” that does not depend upon “the intricacies of the law of sales” and that this “strict liability in tort is not conditioned upon advertising to promote sales.” Cintrone, supra, makes it clear that there is no reason to restrict the rule to sales transactions. The obligation is implied in law, “as an incident of a transaction because one party to the relationship is in a better position than the other to know and control the condition of the chattel * * * and to distribute the losses which may occur because of a dangerous condition the chattel possesses.” (Emphasis added). 45 N. J., at p. 446.

The trial court agreed with defendant’s contention that strict liability should not apply to one who is not a manufacturer or large-scale supplier of goods but who merely uses instruments acquired from others. Obviously we cannot determine the rule of liability on'the basis of the size or resources of one of b the parties. Strict liability applies to all manufacturers, big and small, and in most states where the doctrine prevails it applies to retailers as well,’ big and small. In Henningsen, supra, the court held the dealer-retailer to strict liability. See also Prosser, “The Fall,”: supra, at p. 815. Moreover, in 'this situation the dentist is not a “consumer” of the hypodermic needle. The patient must be viewed as the “ultimate consumer.” The dentist purchased the needle for use on his patients; it is they who are exposed to the risk of the instrument.

’ The injured patient should have the option of suing the dentist directly. It is the dentist with whom plaintiff has dealt and in whose hands and confidence the patient has put herself. It may be more difficult to sue a manufacturer or supplier located in a distant state or a foreign country. The dentist chose the instrument. The dentist is in a better position to know and prove the identity of the manufacturer or distributor. If he cannot, the patient should not be denied recovery on that account. The dentist should also know the quality of the instrument and the reliability of his source of supply. This rule may encourage greater caution in purchasing equipment and examining for defects.

'If an alleged manufacturer were sued 'other issues may arise. Here the needle - was' used eight times in a three week period. The dentist, not the patient, knows' its history. The1 manufacturer may deny the existence of a latent defect and may assert that .the instrument was. used .or cared for negligently. The parties best suited to litigate' this issue ¡are the dentist and' the supplier. Prosser, “The Pall,” supr$', at p. 816. Often the real dispute will be .between the insurance company for the dentist dnd the insurance company for the manufacturer, particularly where the source is in doubt or negligence in úse is asserted.

The benefit that a patient receives in damages is not offset by an unfair burden placed on the dentist. The dentist does have a claim over against the supplier and manufacturer, of the defective needle. He should know who they are in most cases. If strict liability would create higher insurance costs these costs may be mitigated through the claim over. Even without the claim over the loss may be distributed through fees for dental services or by insurance, the cost of which may he reflected in such fees.

Shifting the loss from A to B may not produce a net gain for society as a whole, but distribution of the loss does. Grad, “Recent Developments in Automobile Accident Compensation,” 50 Colum. L. Rev. 300, 326-327 (1950); Cintrone, supra, 45 N. J., at p. 446; Prosser, “The Assault,” supra, at p. 1120. Liability insurance is recognized as a means of distributing losses among the group involved in risk-producing activity. Prosser, “The Assault,” supra, at p. 1120; see also concurring opinion of Justice Traynor in Escola v. Coca Cola Bottling Co., 24 Cal. 2d 453, 462, 150 P. 2d 436, 441 (Sup. Ct. 1944). But the trial judge agreed with Dean Prosser’s view that insurance cannot and should not be used “to determine whether the group shall bear them (losses) in the first instance — and whether, for example, consumers shall he compelled to accept substantial price increases on everything they buy in order to compensate others for their misfortunes.” Prosser, “The Assault,” supra,

at p. 1121. The argument is unrealistic and unpersuasive. Prof. James has replied that, “Today practically everybody worth suing is insured.” James, “An Evaluation of the Fault Concept,” 32 Term. L. Rev. 394, 397 (1965). Conard, supra, at pp. 45-50, note 54, shows that 98.8% of all payments for motor vehicle injury claims are received from insured sources. It is pointless to say that those who purchase goods should not be compelled to pay an item of cost for insurance to protect others. The protection is for the whole group. No one knows which consumer will he injured. The cost paid by each consumer assures his own satisfaction of a judgment if he gets one. The fact is that through the cost of goods and services consumers today do pay indirectly for insurance covering losses caused by the negligent activities of their suppliers. If this is just, granting consumer protection against defective products cannot be unjust.

The total compensation awarded for accidental loss by reason of tort liability and workmen’s compensation is $3,178,000,000 annually. Conard, supra, at p. 45. These losses would be devastating without loss distribution. Corporations (such as some public utilities) which are large enough to insure themselves distribute the loss to the public through the price of goods and services. Business men, professionals and individuals, who have sufficient assets to protect, are likely to carry insurance under existing law. It must be remembered that even with strict liability the exposure to liability for negligence continues as before. The extension of strict liability for defective goods and utensils merely expands the concept of tort liability. It has been called “negligence without fault.” See note 8 above. Those who do not carry insurance and are judgment proof will probably be unaffected by this rule of law.

Insurance plays another role in the formulation of a desirable rule. It interferes with the achievement of the objectives sought by the fault principle. An injuror was to pay damages because he was negligent. With insurance, however, the negligent man pays no damages, although he pays for his insurance. The loss is shared by all who insure with the same company, or by its stockholders or by those who are participants in the activity. It was also believed that the threat of liability for negligence would encourage prudent conduct. The existence of insurance diminishes this threat. Moreover, the strict liability rule does not discourage prudence but may actually encourage examination for defects which are not obvious. See Booth Steamship Co. v. Meier & Oelhaf Co., infra. Workmen’s compensation laws have spurred safety consciousness by employers whose insurance Tates depend upon loss experience. 2 Harper & James, op. cit. supra, § 13.5, pp. 771-777. Insurance companies themselves have applied some of their resources to safety goals. Ibid. In any case, the threat of liability for fault continues where strict liability applies. Lastly, the fear that lawful activities and growing industry would be unduly burdened by liahility without fault is minimized by the loss-spreading effect of insurance.

-Occasionally we are told that it violates a natural sense of justice .to require a defendant. to pay damages when he is; pot at fault. Spangenberg, editorial, Trial, vol. 3 no. 6 (1967), answering current proposals for completely abolishing fault as a basis for liability in motor vehicle accident cases. See note 4 above. In my view our sense of justice is better served by the principle that holds a dentist accountable for. injuries caused by a defective instrument which he has selected and used. The risk of harm to which ah innocent patient is expqsed by a defective instrument far exceeds the risk or burden which the dentist is asked to bear. The point may be made by reference to the automobile. Rollins, in “A Proposal to Extend the Compensation Principle to Accidents in the Streets,” 4 Mass. L. Q. 392, 294 (1919) observed that in an impact between an automobile and a pedestrian the automobile can injure the pedestrian but the pedestrian cannot injure the automobile. The chances, he said, were all one way; and it is the automobile that gets the pleasure or profit but suffers none of the disadvantages. In such a case, he asks, who would say that it is unjust to have the motorist indemnify the pedestrian where both are blameless. It seems more unjust to leave the. loss with the victim of an accident caused by a defective instrumentality which has the potential for harm. It does.not offend our sense of justice to place the loss on the one responsible for the instrument. The law has done this very thing throughout its history. Justice requires only that we apply the rule in appropriate cases. A retailer who sells a can of beans containing a latent defect is no more culpable than a dentist who uses an instrument with a latent defect. The patient probably places more reliance upon the dentist than he does on the retailer. Yet in the case of a sale the legislature has expressed the public policy of our state to compensate the victim by holding the seller to a warranty of fitness for use despite his blamelessness. R. S. 46:30-21 (Uniform Sales Act), superseded by N. J. S. A. 12A:2-314(1) (Uniform Commercial Code); Griffin v. James Butler Grocery Co. 108 N. J. L. 92 (E. & A. 1931). It is not unjust to hold a dentist to the same responsibility.

Most of the cases of strict liability involve a manufacturer, distributor, retailer or lessor of goods. There are some cases which involve a defective commodity used or furnished by one rendering a service. Originally, serving food in a restaxxrant was considered a service, not a sale (Nisky v. Childs Co., 103 N. J. L. 464 (E. & A. 1927)), except by those who found it necessary to find a sale in order to allow recovery on an implied warranty basis. Sofman v. Denham Food Service, Inc., 37 N. J. 304 (1962); Farnsworth, “Implied Warranties of Quality in Non-Sales Cases,” 57 Colum. L. Rev. 653, 660-662 (1957). The blood transfusion cases are in a similar category, since blood is furnished as part of medical or hospital service. Belief has been denied in a number of such cases. Perlmutter v. Beth David Hospital, 308 N. Y. 100; 123 N. E. 2d 792 (Ct. App. 1954); Jackson v. Muhlenberg Hospital, 96 N. J. Super. 314 (Law Div. 1967). Farnsworth, supra, 57 Colum. L. Rev. at p. 672 recommends that strict liability should apply to blood transfusion cases. He points out that the recipient’s reliance upon the supplier is great, the supplier is better able to bear the loss and distribute the risk, and the inability to detect or prevent contamination would not have prevented recovery in implied warranty if there had been a sale.

In Cintrone, supra, 45 N. J., at p. 454, the court relied upon Booth Steamship Co. v. Meier & Oelhaf Co., 262 F. 2d 310 (2 Cir. 1958). There, defendant contracted to overhaul the engine of a vessel. In the course of the work a wire strap was used to suspend a heavy object. A workman was injured when the strap parted because of a defect xvhich could xxot have been detected by visual examination in the exercise of ordinary care. There was a dispute as to who supplied or had the duty of supplying the wire strap. The court held that if the defendant contractor supplied the wire strap which failed to serve the purpose for which it was used then the contractor was liable for the resultant personal injury.

Although the court spoke in terms of a bailment or lease of the contractor’s equipment, the facts indicate that the strap was used as part of the job being performed by the contractor. If the contractor furnished the strap he probably did not do so as a separate lease or bailment of his equipment, but rather to facilitate the work he had undertaken to perform. In this respect he is like the dentist in the case at hand. The court said:

“Although he is unable to prevent defects arising in the course of manufacture, his expert knowledge of the characteristics of the equipment in use should enable him to detect them more readily than the user. It is therefore not less reasonable as an incident of his contract to charge him with the duty of making tests, the omission of which would not constitute negligence, than it is to charge the manufacturer or retailer with a similar responsibility. We think that this is particularly true when the chattel is supplied, as it presumably was here, in the partial fulfillment of a general undertaking to make repairs. In such circumstances the hirer defers to the special qualifications of the contractor in both the selection and use of the equipment. Relying on the supplier’s control of the work and with confidence in the supplier’s expert knowledge and competence, he makes at most only a routine inspection of the equipment employed. To say that the supplier warrants the equipment merely confirms the customary reliance which flows from such a relationship and which affords an appropriate remedy.
“Applying general principles to the facts of this case, we find that the defect which caused the plaintiff’s injury was not detectable by the ordinary visual inspection which the vessel’s officers on the scene may be expected to make. Such latent defects in wire as are undetectable on visual inspection may result from improper manufacture or from fatigue resulting from use over a period of time. They may perhaps be discovered by subjecting the equipment to appropriate tests with safety factors in excess of the contemplated undertaking. Furthermore, it is the supplier and not the shipowner who knows the actual history of prior use of the equipment. He alone is in the position to establish such retirement schedules or periodic retests as will best prevent the development of visually undetectable flaws.” 262 F. 2d at p. 31-1.

See also Butter v. Northwestern Hospital of Minneapolis, 202 Minn. 282, 278 N. W. 37 (Sup. Ct. 1938) and Aced v. Hobbs-Sesack Plumbing Co., 55 Cal. 2d 573, 12 Cal. Rptr. 257, 360 P. 2d 897 (Sup. Ct. 1961). Both cases hold that an implied warranty of suitability arises in non-sales cases, in one instance where a hospital furnished a defective metal clip for use by a special nurse in treating a patient who was hospitalized, and in another instance where economic loss resulted from the installation of defective heating tubes under a contract for labor and materials.

In Prance liability would attach in a case of this kind. Under Art. 1384 of the Civil Code an individual is liable for damage caused by the act of things in his charge, and this is interpreted to apply absolute liability for accidental injury due to a defect in the thing, such as a fracture of a metal part. Esmein, “Liability in French Law for Damages Caused by Motor Vehicle Accidents,” 2 Am. J. Comp. L. 156, 158 (1953); Conard, supra, at p. 467. In England there are several cases in which recovery has been allowed for defective material furnished as part of service contracts. In G. H. Myers & Co. v. Brent Cross Service Co., (1934) 1 K. B. 46, 150 L. T. R. 96 (1933) the court held that if an automobile repairman selects the supplier of a connecting rod he is liable for damage caused by a defect in the rod which he installed in a motor. In Watson v. Buckley, (1940) 1 All E. R. 174 (K. B. 1939) plaintiff was allowed recovery against Mrs. Buckley, a hairdresser, for dermatitis resulting from a defective hair dye. The court held that there was an implied warranty from Mrs. Buckley that the dye was ñt for use on plaintiff’s hair, although she is not held to have warranted that the dye would work well or produce a given shade of color. In Dodd v. Wilson (1946) 2 All E. R. 691 (K. B.) a veterinary surgeon was held liable for injury caused by defective serum which defendant had purchased and injected into plaintiff’s cattle. The court held that it was an implied “condition” in the contract between the parties that defendant would furnish a substance reasonably fit for the required purpose. The court reasoned that if the serum had been sold to plaintiff .'and plaintiff had used:.it himself recovery would have been allowed under the Sale of Goods Act. Accordingly, the court saw no reason why the same obligation should not apply when the materials were furnished as part of a service.

Prof. Earnsworth suggests that courts should abandon the search for the qualities of a sale in a. transaction and should apply strict liability in non-sales cases by analogous reasoning. Farnsworth, supra, 57 Colum. L. Rev. at p. 667. It is clear that he would recommend strict liability in the case at hand just as he declared in 1957 that it would soon be applied to the sale of housing (analogizing the mass producer of housing to the mass producer of goods) and to lessors of automobiles and other devices. 57 Colum. L. Rev. at p. 660.

Defendant’s brief states that there is a ‘fiack of scholarly comment” supporting the cause of action. It is true that few writers have focused on the specific area of service transactions as distinguished from sales, leases and bailments. However, I know of no academic comment opposing the application of strict liability to this type of case. As noted above, Prof. Earnsworth favors strict liability here. Significantly, however, most current scholarly comment urges the total abolition of the negligence-fault principle in accidental injury cases. See authorities cited in notes 4, 5., 8 and 12 above. The scholars, therefore, go far beyond the needs of this case.

The law of torts should seek to compensate the injured, to encourage safety practices and to distribute losses justly. 2 Harper & James, op. cit. supra, pp. 742-743; Calabresi, “Fault, Accidents and the Wonderful World of Blum and Kalven,” 75 Yale L. J. 216, 238 (1965). These objectives may 'be taken to express the needs of justice. Tn my view these objectives are advanced by granting plaintiff an award in this case. Dentistry as an enterprise should pay its own way. Denying compensation is .to require an injured person who hears the loss alone to subsidize the risk-creating activities by which others profit.

Eor the foregoing reasons strict liability in tort should apply to a dentist who injures his patient by a latently defective instrument.

       Prof. Ehrenzweig states that the principles of natural law have equally supported a theory of fault liability as well as absolute liability for harm done by the actor.

       Misadventure and self-defense were grounds for mercy or pardon in a criminal case. Wigmore, “Responsibility for Tortious Acts: Its History-III,” 7 Harv. L. Rev. 441, 442-446 (1894); Wigmore-I, supra, 322-325. Exile to a city of refuge, but not death, was decreed for one who “killeth his neighbour ignorantly, whom he hated not in time pastand this rule clearly included accidental killing. Deuteronomy 19:4, 5: Numbers 35:15-25. Lack of knowledge of prior harmful proclivities excused an owner for a death caused by his ox. Exodus 21:28-30.

       Wigmore-I, supra, 324; Winfield, “The Myth of Absolute Liability,” 42 Law Q. Rev. 37, 41-42 (1926); Isaacs, “Fault and Liability,” 31 Harv. L. Rev. 954, 966-969 (1918); 2 Harper & James, The Law of Torts, p. 749, n. 15, saying that it was not until the 19th century that lack of negligence succeeded as a defense to an action in trespass. See Bruch v. Carter, 32 N. J. L. 554, 562 (E. & A. 1867).

       Marx, “Compulsory Compensation Insurance,” 25 Colum. L. Rev. 164, 179 (1925) ; Columbia University Council for Research in the Social Sciences, Report by the Committee to Study Compensation for Automobile Accidents 138 (1932) ; Ehrenzweig, “Full Aid” Insurance for the Traffic Victim — A Voluntary Compensation Plan (1954), also published in revised form, 43 Calif. L. Rev. 1 (1955); Keeton & O’Connell, Basic Protection for the Traffic Victim, p. 7 (1965). The Warsaw Convention applies a presumption of negligence with a limitation of damages for injuries to person and property occurring during an international flight. 2 Harper & James, op. cit. supra, pp. 850-851.

       Strict liability applied in blasting cases and other ultra-hazardous activities and in the application of respondeat superior, where the employer is liable for the negligence of an employee who acts within the scope of employment without any negligence on the employer’s part in hiring or supervising the employee. 2 Harper & James, op. cit. supra, p. 812; Restatement, Torts, secs. 519, 520, pp. 41-47 (1938); James, “An Evaluation of the Fault Concept,” 32 Tenn. L. Rev. 394, 396 (1965).

       In World War II 313,000 soldiers were killed, but 386,000 people were killed in accidents during the same period. 2 Harper & James, op. cit. supra, p. 729, n. 1. In 1966 113,000 people were killed and 50,851,000 were injured in accidents of all kinds; of these, 53,000 were killed and 3,712.000 were injured in motor vehicle accidents alone. National Safety Council, Accident Facts, p. 2-3 (1967). Total payments for personal injury tort claims and workmen’s compensation exceeds three billion dollars per year. Conard, Morgan, Pratt, Voltz & Bombaugh, Automobile Accident Costs and Payments— Studies in the Economics of Injury Reparation, p. 45 (1964), (hereinafter referred to as “Canard”).

       The Motor Vehicle Security-Responsibility Law (N. J. S. A. 39:6-23 et seq.) coerces insurance coverage on a broad scale. New York, Massachusetts and North Carolina have compulsory automobile insurance laws, and all states except Massachusetts have security-responsibility laws. Keeton & O’Connell, op. cit. supra, pp. 76, 106. In New Jersey a statute requiring compulsory automobile insurance was recommended in 1926 but was not adopted. Report of the Commission to Investigate the Subject of Compulsory Automobile Insurance, Assembly Joint Resolution No. 1 (1924). Within certain limits of coverage, the Unsatisfied Claim and Judgment Fund Law closes the gap left by the uninsured motorist, the stolen vehicle, the hit and run, unidentified driver, and other eases. N. J. S. A. 39:6-61 et seq. Workmen’s compensation laws afford compensation for injuries and losses in the course of employment. The Temporary Disability Benefits Law protects against wage loss through non-occupational accident or illness. N. J. S. A. 43 :21-25 et seq.

       “A new law of enterprise liability is in tbe making.” Ehrenzweig, Negligence Without Fault, p. 2 (1951).

       In support of this conclusion the trial court (94 N. J. Super. at 236) quoted a portion of a paragraph from Prosser, “The Fall of the Citadel (Strict Liability to the Consumer),” 50 Minn. L. Rev. 791, 814 (1966). The remainder of that paragraph is as follows:
      “The housewife who sells a jar of jam to her neighbor, or the man who trades in a used car on the purchase of a new one, will obviously stand on a very different footing so far as the justifiable reliance of third persons is concerned. It is also very probable that the rule will not apply to sales outside of the usual course of business, such as execution sales, or the bulk sale of an entire stock of goods for what they will bring after bankruptcy or a fire.”
      Clearly, Prosser was merely distinguishing types of sales in which a purchaser is not in “justifiable reliance” upon the seller. Dean Prosser was not addressing himself to the issue of applying strict liability to the user of a defective instrument as distingushed from suppliers of goods.

       Similarly, in 1881, Holmes said it was no more justifiable for a man to indemnify a neighbor against injury from his faultless acts than it would be to require’ him to insure Ms neighbor against lightning. Holmes, op. cit. supra, p. 96. . Holmes derided the idea that the state might insure its citizens against accidents and distribute the burden amongst all citizens as well as provide “a pension for paralytics, and state aid for those who suffered in person or estate from tempest or wild beasts.” But the state has come to do these very things in the form of medicare, disaster aid and unsatisfied judgment funds.

       The trial court said that the defendant may not be covered by his malpractice insurance because implied warranty claims require coverage for contract liability. The dentist’s insurance policy is not before the court and I do not intend to decide that issue. The rare contractual warranty of a professional to effect a cure or to provide a certain result is different from the obligation which is termed strict liability in tort. See Santor, supra, 44 N. J., at 64, 66; Rosenau v. City of New Brunswick and Gamon Meter Co., 51 N. J. 130, 140-142 (1968); McCormack v. Hankscraft Company, Inc., 278 Minn. 322, 154 N. W. 2d 488, 499-501 (Sup. Ct. 1967).

       See: Grad, “Recent Developments in Automobile Accident Compensation,” 50 Colum. L. Rev. 300, 326-327 (1950).