text:
    State Board of Tax Appeals.
    CITY OF NEW BRUNSWICK, PETITIONER, v. UPSILON CHAPTER OF DELTA PHI FRATERNITY OF RUTGERS UNIVERSITY, RESPONDENT. CITY OF NEW BRUNSWICK, PETITIONER, v. DELTA OF CHI PHI ASSOCIATION, RESPONDENT. CITY OF NEW BRUNSWICK, PETITIONER, v. ALPHA PSI CHAPTER HOUSE ASSOCIATION, RESPONDENT. CITY OF NEW BRUNSWICK, PETITIONER, v. ALPHA RHO ALUMNI ASSOCIATION, RESPONDENT. CITY OF NEW BRUNSWICK, PETITIONER, v. ALUMNI ASSOCIATION OF DELTA CHAPTER OF THE ZETA PSI FRATERNITY OF NORTH AMERICA, RESPONDENT. CITY OF NEW BRUNSWICK, PETITIONER, v. THE GAMMA UPSILON CHAPTER OF KAPPA SIGMA, RESPONDENT. CITY OF NEW BRUNSWICK, PETITIONER, v. NU BETA OF PHI GAMMA DELTA, RESPONDENT. CITY OF NEW BRUNSWICK, PETITIONER, v. RUTGERS ASSOCIATION OF BETA THETA PI, RESPONDENT.
    Decided March 5, 1940.

      Bor the city of New Brunswick, Paul W. Ewing (by William E. Danberry).

    Bor the Gamma Upsilon Chapter of Kappa Sigma and Delta of Chi Phi Association, John B. Molineux.

    Bor Upsilon Chapter of Delta Phi Braternity of Rutgers University, Henry G. Berg.

    Bor Rutgers Association of Beta Theta Pi, Boyce S. Thompson.

    Bor Alpha Rho Alumni Association and Alpha Psi Chapter House Association of Phi Kappa Alpha, A. Dudley Watson.

    Bor Alumni Association of Delta Chapter of the Zeta Psi Fraternity of North America, Newton H. Porter, Jr.

    For Nu Beta of Phi Gamma Delta, Harold Higgins.

   Quinn, President.

This is a motion by the city of New Brunswick for the reinstatement by the board, for hearing and disposition on the merits, of certain petitions of appeal duly filed by the city from judgments of the Middlesex County Board of Taxation, adjudging the real and personal property of the several respondents situated in said taxing district, and assessed by it for taxation for the year 1937, exempt therefrom for said year. These appeals were formally withdrawn by counsel for petitioner, in open court, with the approval of the board, and in the presence of counsel for respondents, on May 8th, 1939. The basis for the motions before us lies in the situation created by the following circumstances:

By the enactment of Pamph. L. 1936, ch. 46 (R. S. 54:4-3.26) the legislature provided for an exemption from taxation on behalf of, “all real and personal property used in the work and for the purposes of one or more fraternal organizations or lodges, or any association or society organized on the lodge plan, or affiliated associations, whether incorporated or unincorporated * * where the property was owned by the organization and no part of it was used for pecuniary profit. The several respondents herein, all of whom appear to be college fraternities affiliated with Rutgers University, conceiving their status and character to bring them within the category of exempted organizations under the act quoted, filed appeals with the Middlesex County Board of Taxation from* the 1931 assessments levied upon their property by the petitioner taxing district, with the successful result hereinabove referred to. The city, notwithstanding, carried the issue of exemption to this board, in order to protect its position while awaiting the result of litigation then pending before the courts in which the constitutionality of Pamph. L. 1936, ch. 46, had been drawn in issue. This question was ultimately determined in favor of the constitutionality of the legislation by the Court of Errors and Appeals in City of Camden v. Camden County Board of Taxation, 122 N. J. L. 381; 5 Atl. Rep. (2d) 688, decided April 21st, 1939, affirming the Supreme Court, 121 N. J. L. 262; 2 Atl. Rep. (2d) 40 (1938).

Entertaining no doubt that the respondent organizations were comprised within the scope of chapter 46, the taxing district appeared before this board on May 8th, 1939, as herein-above recited, and moved the withdrawal of its appeals from the county board judgment. Its action was in no sense inadvertent, or the result of mistake or misapprehension. Counsel for the city stated:

“I think that in all of these appeals taken by the city of Hew Brunswick we can dismiss the appeals, because it is our thought that our appeal depended upon whether or not the act exempting fraternal organizations was constitutional.”

It appearing to the board that counsel’s position was sound and that there was no prospect of prejudicing the interests of the taxing district through the effectuation of unwarranted exemptions from taxation, the withdrawal of the appeals was concurred in and allowed by the board.

Thereafter the Supreme Cout had before it on certiorari certain assessments made by the city of New Brunswick for the years 1937, 1938 and 1939 against the Phi Zeta Fraternity, and, while holding that the writ must be dismissed for failure of the petitioner to exhaust its remedies before the County and State Tax Appeals Boards before going to the Supreme Court to attack the legality of the levy, the opinion of the court indulged in the observation, by way of dictum, that there was no case for exemption in any event, in view of the pecuniary support presumably derived by the petitioner from dues and room rent paid by its members. Phi Zeta Fraternity v. City of New Brunswick (Supreme Court, 1939), 123 N. J. L. 237, 239; 8 Atl. Rep. (2d) 553.

On the basis of these statements, counsel for the city of New Brunswick now urges that he was laboring under a mistaken impression of the law when he moved the withdrawal of these appeals on May 8th, 1939, and that, in view of the newly revealed apparent attitude of the Supreme Court toward the claimed right of exemption of college fraternities under the 1936 statute, this board should disregard the withdrawals referred to and reinstate the appeals. We are constrained to hold, however, that, under the circumstances, we have no power to take the action thus requested of us.

We have heretofore recognized and applied the fundamental rule that, as a statutory tribunal, this board is strictly limited to the bounds of the jurisdiction prescribed by the legislation which constitutes it and defines its powers and duties. Washington Township v. Mercer County Board of Taxation (Supreme Court, 1914), 85 N. J. L. 547; 89 Atl. Rep. 1028; Mellor v. Kaighn (Court of Errors and Appeals, 1916), 89 N. J. L. 543; 99 Atl. Rep. 207. The board does not, for example, have the power to reopen a judgment entered after it has held a hearing and arrived at a determination. City of Newark v. Weyerhaeuser Timber Co. (State Board), filed March 22d, 1938. Against the background oí these elemental principles it becomes apparent that what the taxing district here requests is that we should undertake to deal officially with subject-matter that is no longer before us. When a party appellant before us withdraws his petition, there is no longer any person aggrieved before the board, nor any matter before it for determination. City of Bayonne v. Mutual Benefit and Investment Co. and Commonwealth Realty Co., State Board Tax Reports, 1912-1934, pp. 568, 569 (1932), citing Borough of Kenilworth v. Board of Equalization of Taxes (Supreme Court, 1909), 78 N. J. L. 302; 72 Atl. Rep. 966. It is, we conceive, as though no appeals had ever been filed in the first instance, so far as our present power to deal with the subject-matter of these applications is concerned. The statute prescribing its duties and powers gives the board no power to revest itself with jurisdiction over petitions of appeal withdrawn by the party, and therefore it can possess no such power. City of Newark v. Weyerhaeuser Timber Co., supra.

The foregoing is not to be taken as an expression of view that the board is without control over the exercise of the right of withdrawal by a party petitioner. We have recently declined to permit a taxing district to withdraw a petition of appeal from a county board judgment awarding an exemption from taxation where this board had, after hearing, found the organization in question not to be entitled to exemption for the preceding tax year. Workingmen’s Circle, Branch No. 90 v. Oily of Trenton (State Board), filed November 14th, 1939. "Under such circumstances we held it to be our duty to require proof of facts sufficient to persuade the independent judgment of the board as to the legality of the exemption.

In the instant case, however, as distinguished from the case last cited, we are confronted not with an application to withdraw an appeal, but to reinstate an appeal already withdrawn with our full concurrence. The first situation involved only an issue of discretion, the second, one of jurisdiction.

Petitioner questions the contention as to the divestiture of our jurisdiction upon the withdrawal of the appeals, upon the ground that no order of dismissal was signed or filed, nor was any decision entered of record. But under the informal practice of this board, the entry of a formal order for the purpose of concluding the proceedings was neither necessary nor customary. It was clearly intended and understood, not only by the board, but by counsel for all the parties, that the proceedings of May 8th, 1939, finally and definitely concluded these appeals.

We may further observe that even were the matters involved in these applications not jurisdictional, we should not regard the situation as one properly warranting the exercise of our discretion. It has been held that an attorney’s mistake of judgment as to the law or his ignorance of facts which he should have known is not a sufficient ground for vacating a judgment of dismissal entered upon his motion. Bacon v. Mitchell, 14 N. D. 454; 106 N. W. Rep. 129. The withdrawal of these appeals, furthermore, was deliberate and considered, and appeared, not only to counsel, but to the board, as the proper step under the then existing circumstances and in the state of the applicable legal authorities. The volume of litigation before the board is such that the revival of appeals once deliberately withdrawn without attendant mistake of fact or inadvertence, is not in the general interest.

Bor the foregoing reasons the motions are severally denied.


source: Caselaw Access Project

author: Wolber, C. C. J.

license: Public Domain

text:
    Passaic County Circuit Court.
    DELLA ANDERSON, MOTHER OF KENNETH JOSEPH, DECEASED, AND HARRY ANDERSON, STEPFATHER OF KENNETH JOSEPH, DECEASED, PLAINTIFFS, v. THE DELAWARE, LACKAWANNA AND WESTERN RAILROAD COMPANY, DEFENDANT.
    Decided March 4, 1940.
    For the plaintiffs, Ward & McGinnis.

    For the defendant, John A. Laird.

   Wolber, C. C. J.

This action is brought to recover damages for injuries resulting in death. Plaintiffs are the parents of decedent, who was killed by the alleged negligence of the defendant in the operation of its railroad. The action is prosecuted by the parents in compliance with the statutes of Pennsylvania creating the action for death. 12 Purdon’s Penn. Statutes, §§ 1601, 1602, et seq.

Plaintiffs are residents of Pennsylvania. Defendant is a corporation of Pennsylvania. The alleged cause of action arose in Pennsylvania. Service of process in the action was made upon the defendant in this state under the provisions of our statute, N. J. S. A. 2:26-44.

The ease is before the court on motion by the defendant to dismiss the action upon the ground that this court in its discretion may decline jurisdiction of the matter because the parties reside in Pennsylvania, the cause of action arose in Pennsylvania, and under the circumstances existing as to the locus in quo, the matter should be heard in the courts of Pennsylvania. In support of this argument, the defendant asserts substantial reasons as follows:

“As appears from the face of the proceedings, the plaintiffs in this action are residents of Old Forge, in the State of Pennsylvania, while the defendant is a corporation of the State of Pennsylvania, and the accident, which is the foundation of the cause of action, occurred in the borough of Taylor in that state.

“The defendant, The Delaware, Lackawanna and Western Railroad Company, maintains its principal office in the State of Pennsylvania at the city of Scranton, which is within five miles of Old Forge and of the borough of Taylor, and service upon it may be readily effected at Scranton and elsewhere throughout the state.

“Practically all the witnesses on the side both of the plaintiff and of the defendant reside in the State of Pennsylvania and for the most part in or near the city of Scranton, and the obvious convenience of the parties would be best served by the trial of this cause of action before the courts of the State of Pennsylvania, and under the facts of this case, this court should exercise its discretion and refuse to take jurisdiction over this litigation for the reason that neither the State of Hew Jersey nor any of its citizens have any interest therein, and no good reason exists for burdening the taxpayers of this state with the expense of this litigation or in consuming the time of this court in the trial of the same, thereby necessarily delaying the trial of other actions properly brought in this court by citizens of this state. In the instant case, if a trial is to be had in this state, it will be necessary for the defendant to bring not only four or five outside witnesses to this state from the neighborhood of Scranton, Pennsylvania, but also to take away from their employment over an extended period of time and to temporarily replace members of the train crew involved in this accident, as well as surveyors, civil engineers and other expert witnesses, all to the defendant's great inconvenience, expense and damage.

“It further appears from the complaint that plaintiffs’ decedent was killed while crossing the right-of-way of the defendant company upon a certain pathway over which it is alleged ‘workmen or employes and pedestrians were at all times permitted, allowed and invited * * * to pass frequently over,’ and that the accident was due to the negligence of the servants of the defendant company; and that as is claimed, the defendant owed the plaintiff the duty of exercising care for his safety. It is obvious that these allegations may require a finding as to the law of Pennsylvania upon this subject, and as an added reason for referring this litigation to the forum in which the cause of action arose, your affiant alleges that á trial of this case in the State of Hew Jersey might require that a jury determine from the evidence of expert witnesses what the law of the State of Pennsylvania actually is on this subject, whereas a trial before the courts of Pennsylvania would require that these legal questions be determined by a court undoubtedly familiar with the Pennsylvania law applicable to the situation.”

The question is whether the law courts of this state may decline jurisdiction of a transitory cause of action in tort between non-residents (the defendant being considered such because it is a foreign corporation) which arose under the laws of a sister state, where this court has acquired jurisdiction of the person and subject-matter.

It is of course conceded that our courts have jurisdiction to entertain such actions. Hale v. Lawrence, 21 N. J. L. 714 (1848, Nevius, J.); Ackerson v. Erie Railway Co., 31 Id. 309 (Supreme Court, 1865, Beasley, C. J.); Metcufskie v. Philadelphia and Reading Railway Co. 97 Id. 100 (Supreme Court, 1921, Black, J.); 116 Atl. Rep. 170; Kopenhafer v. Pennsylvania Railroad, 106 N. J. L. 530 (1929, Hetfield, J.); 148 Atl. Rep. 629; Kryn et al. v. Kahn, 54 Id. 870 (New Jersey Supreme Court, 1903, Hendrickson, J.); Martin v. Lehigh Valley Railroad, 114 N. J. L. 243 (1934, Perskie, J.); 176 Atl. Rep. 665; Cf. Hill v. Nelson, 70 N. J. L. 376 (Supreme Court, 1904, Dixon, J.); 57 Atl. Rep. 411, involving a local action.

It is contended, however, for the reasons stated, that our courts have the power to consider the circumstances of each particular case and to exercise their discretion to decline jurisdiction in such actions if it appears improper to entertain the same. It is asserted that the facts in the instant case are such that require that discretion to be exercised against these plaintiffs and accordingly remit them to the courts of their domicile.

The doctrine invoked is something like the civil law plea of forum non conveniens. It has received extended treatment by the courts of this country. See extensive note following Gregonis v. Philadelphia and Reading Coal and Iron Co., 235 N. Y. 152; 139 N. E. Rep. 223; 32 A. L. R. 1 (resident v. foreign corporation for out-of-state tort), article, Blair, “The Doctrine of Forum Non Conveniens in Anglo-American Law” (1929) XXIX Col. L. Rev. 1, and articles by Foster, “Place of trial in Civil Actions,” 43 Harv. L. Rev. 1217, and “Place of Trial, Interstate Application of Intrastate Methods of Adjustment,” 44 Harv. L. Rev. 41. Briefly stated, its rationale is that the courts should not allow their time to be taken up with the burden and expense of trying actions which ought under the circumstances to be brought in the jurisdiction where the parties reside, where the cause arose and where the home courts of the litigants are open and provide an effectual remedy for the settlement of their grievances. Collard v. Beach, 87 N. Y. Supp. 884; 81 App. Div. 582. This principle is often embodied in statutes of some states. It has been of such long standing in other states as to be evidence of the public policy of those states. Universal Adjustment Co. v. Midland Bank, 281 Mass. 303; 184 N. E. Rep. 152; Jackson & Sons v. Lumbermen’s Mutual Casualty Insurance Co., 86 N. H. 341; 168 Atl. Rep. 895. It is applicable to actions in contract and tort, although the tendency is to apply it strictly in tort actions for personal injuries and moderately in commercial transactions. Wertheim v. Clerque, 65 N. Y. Supp. 750; 53 App. Div. 122; Davis v. Julius Kessler & Co., 194 N. Y. Supp. 9.

The doctrine of forum non conveniens has received recognition in some states and disapproval in others, as appears from the note in 32 A. L. R. 1. In New York particularly, its courts have long applied the doctrine because the statute Code Civ. Proc., sec. 1780, conferring jurisdiction upon its courts did not authorize actions between non-residents for personal torts of foreign creation. Robinson v. Ocean Steam Navigation Co., 112 N. Y. 315; 19 N. E. Rep. 625; 2 L. R. A. 636 (1889). The facts in that case are somewhat similar to those in the ease at bar. Since 1913, although foreign corporations may be sued in certain cases (section 47, General Corporation Law, Code Civ. Proc., sec. 1780, as amended), the New York Courts have continued to hold they may in their discretion decline jurisdiction in transitory actions involving personal injuries between non-residents when the cause of action arose in a sister state. The constitutionality of such denial was upheld by the Supreme Court of the United States in a matter involving foreign corporations in an action upon a foreign judgment which resulted from a claim for personal injuries obtained in Illinois. Anglo-American Provision Co. v. Davis Provision Co., 191 U. S. 373; 48 L. Ed. 225. The statute of 1913 was likewise applied by the New York Court of Appeals in the case dealing with an action for personal injuries under the Federal Employers Liability act in Murnan v. Wabash Railroad, 264 N. Y. 244; 158 N. E. Rep. 508; 54 A. L. R. 1522, and again sustained on the same facts by the United States Supreme Court in Douglas v. New York, New Haven and Hartford Railroad, 279 U. S. 377. In the latter case, Mr. Justice Holmes stated:

“Construed as it has been and we believe will be construed the statute applies to citizens of New York as well as to others and puts them on the same footing. There is no discrimination between citizens as such, and none between non-residents with regard to these foreign causes of action. A distinction of privileges according to residence may be based upon rational considerations and has been upheld by this court, emphasizing the difference between citizenship and residence, in LaTourette v. McMaster, 248 U. S. 465; 39 S. Ct. 160; 63 L. Ed. 362. Followed in Maxwell v. Bugbee, 250 U. S. 525, 539; 40 S. Ct. 2; 63 L. Ed. 1124. It is true that in Blake v. McClung, 172 U. S. 239, 247; 19 S. Ct. 165; 43 L. Ed. 432, ‘residents’ was taken to mean citizens in a Tennessee statute of a wholly different scope, but whatever else may be said of the argument in that opinion (compare page 262, 172 U. S. (19 S. Ct. 165)), it cannot prevail over the latter clecision in LaTourette v. McMaster, and the plain intimations of the New York cases to which we have referred. There are manifest reasons for preferring residents in access to often overcrowded courts, both in convenience and in the fact that broadly spaking it is they who pay for maintaining the courts concerned.”

See, also, Boright v. Chicago Railroad, 230 N. W. Rep. 457 (Minnesota, Stone, J., dissenting opinion).

In some states the rule is fixed by statute. In others, the legislature has not declared any policy, as a result of which the rule was declared that the power to decline jurisdiction would offend the United States Constitution, which prohibits discrimination against non-residents and violates the Fourteenth Amendment guaranteeing equal rights, privileges and immunities, and that the right to select the forum is a privilege guaranteed. This line of authorities is headed by Cafrede v. Gardner, 79 Mich. 332; 44 N. W. Rep. 623; 7 L. R. A. 511. To the same effect is Eingarten v. Illinois Steel Co., 94 Wis. 70; 68 N. W. Rep. 664; 34 L. R. A. 503; State, ex rel. Prall v. District Court, 126 Minn. 501; 148 N. W. Rep. 463; Ann. Cases 1915 D, 198. See contra, Robinson v. Ocean Steamship Navigation Co., supra.

In our state, the legislature has long provided for actions against foreign corporations. The present statute, N. J. S. A. 2:26-44, descends from Pamph. L. 1865, p. 467, and Pamph. L. 1896, ch. 185, § 88. At present it provides:

“Foreign corporations; personal or substituted service. Process in a personal suit or action commenced against a foreign corporation in any of the courts of this state shall be served forthwith after its delivery to the sheriff or other officer for service by serving a copy thereof either personally on, or by leaving the same at the usual place of abode in this state of any officer, director, agent, clerk or engineer of the corporation, resident of this state, or personally on any ticket or freight agent of the corporation in the county in which the venue of the action is laid, or by leaving the copy of the process at the office, depot or usual place of business within this state of the corporation.

“If there are none of the above-named persons resident within this state, and if there is no office, depot or place of business within this state, the process may be served on any motorman, conductor or servant of the corporation within this state and acting in the discharge of his duties.”

We also have section 202 of the 1903 Practice act, relative to venue, now N. J. S. A. 2 :27-19, which reads as follows: “A transitory action shall, at the discretion of the court, be tried in the county in which the cause of action arose, or in which the plaintiff or defendant reside at the time of the commencement of the action, or, if the defendant is nonresident, in the county in which process was served upon him.” Recognition by our courts of causes of action arising under “Death Statutes” of sister states is of frequent occurrence and long standing. Lower v. Segal, 59 N. J. L. 66 (Supreme Court, 1896, Garrison, J.); 34 Atl. Rep. 945; Rankin v. Central Railroad, 77 N. J. L. 175 (Supreme Court, 1908, Bergen, J.) ; 71 Atl. Rep. 55. The very statute involved, which is the source of the present action, has been enforced in our state on many occasions. Lower v. Segal, supra; Norko v. Rau, 107 N. J. L. 479 (1930, Case, J.); Martin v. Lehigh Valley Railroad, 114 Id. 243 (1934, Perskie, J.); 154 AM. Rep. 766. These actions are sued here upon the basis that they are transitory and do not offend our public policy. Lower v. Segal, supra, following Wright v. Remington, 41 N. J. L. 48 (Supreme Court, 1879, Reed, J.).

For the rule in our state it will be helpful to examine the ease of Sielcken v. Sorenson, 111 N. J. Eq. 44 (Chancery, 1933, Backes, V. C.); 161 Atl. Rep. 47. In that case the bill was for a partnership accounting and alleged that Sielcken, Sorenson and Nielson formed the partnership of Crossman & Sielcken, commission merchants, New York, in 1913; Sielcken owned the capital assets; Sielcken was to have seventj'-five per cent, of the profits, Sorenson and Nielson each twelve and a half per cent. The firm dissolved September 30th, 1917; Sielcken died October 8th, 1917, in Germany. He was a resident of Germany and by his last will and testament gave his residuary estate, which included particularly with respect to the liquidation of the co-partner-his interest in the firm, to his widow, Clara Sielcken (now Schwarz), and appointed the Irving Trust Company of New York executor as to his property in the United States and ship. The will was admitted to probate in the Surrogate’s Court of New York county, and letters testamentary were issued to the trust company. In September, 1930, Nielson died, a resident of Bergen, county, this state, and by his last will and testament he appointed the Chase National Bank of New York executor. Letters testamentary were issued to the bank by the surrogate of the county upon admitting the will to probate. Ancillary letters were issued by the surrogate of New York county. In October, 1930, Sorenson assigned his interest in the firm of Crossman & Sielcken to the complainant, who alleges that there has never been a complete accounting of the firm’s affairs, and prays for an accounting.

The defendants Sorenson and Mrs. Schwarz answered. The Irving Trust Company, executor of Sielcken, was not in court; substituted service of process upon it was set aside. Sielcken v. Sorenson, 109 N. J. Eq. 397; 157 Atl. Rep. 561. The remaining defendant, Chase National Bank, executor of Nielson, by answer, in lieu of pleas, set up among other things: (c) New York is the proper and convenient forum for this action.

Vice-Chancellor Backes said that the principal stumbling block to a full and complete accounting of the partnership affairs in this state is the absence from our jurisdiction of the Irving Trust Company, executor of Sielcken, representing a three-quarters interest in the firm, and held that there can be no decree to bind it; the action is in personam. The court held that notwithstanding that the complainant may recover upon an accounting against the Nielsen estate, it was not called upon to exercise that jurisdiction where the forum of the complainant’s domicile and that of the responsible defendants is the more convenient for the trial of the cause, has the better facilities, and, because of its jurisdiction over all the parties, may do complete justice, which this court cannot do, in the circumstances. At page 47 the Vice-Chancellor said:

“While we fully recognize the complainant’s right to sue in our courts, and that if he has a sueable right his motives are immaterial, yet, the courts of his own state having full and complete jurisdiction of the subject-matter and of the parties and able to give him more adequate relief than he can hope to get here, we must deny him the use of our aid and require him to find his relief in his own domicile. The courts of his own state have spoken vigorously of intruding suitors wandering into their courts for justice when they can find it as well, if not better, in their own home town at their own doorsteps.” And relied upon the sentiments expressed in the following Yew York cases: DeWitt v. Buchanan, 54 Barb. 31 (1868); Ferguson v. Neilson, 11 N. Y. Supp. 524 (1890); Wertheim v. Clerque, 65 Id. 750 (1900); Hoes v. New York, New Haven and Hartford Railroad, 173 N. Y. 441 (1903); Collard v. Beach, 81 N. Y. Supp. 619 (1904).

In other words, he based his determination largely on the rule of the Yew York courts.

In 1043 Avenue St. John, Inc., v. Dillon, 62 N. J. L. J. 389 (Essex County Circuit Court), my learned colleague, Judge William A. Smith, considered a motion made by the plaintiffs to strike out the answer of the defendant. The action was instituted by summons issued out of the Circuit Court by two corporations of the State of Yew York which were not authorized by our laws to engage in business in this state. The defendant was a resident of the State of Yew York and it was sought to recover the principal sum on a bond executed by the defendant and delivered to one Keller, which bond had been assigned to the plaintiffs. The bond was made, executed and delivered in the State of Yew York, and was given to secure a mortgage by the plaintiff on certain property located in the State of Yew York. The defendant was not served with process. Service of a copy of the summons and complaint was acknowledged bjr an attorney of the defendant. The only reason urged for the litigation being in the Essex Circuit was that previously a suit had been started in Monmouth county in this state and service effected upon the defendant, and that in order to suit the convenience of the parties, that action was discontinued, and defendant’s attorney acknowledged service of a summons and complaint in the Essex Circuit. While conceding the right of the court to assume jurisdiction. Judge Smith assumed the right to exercise his discretion to refuse jurisdiction. He indicated, however, that if the service has been made in Essex county upon a defendant sojourning therein, his view might be wise, but that he saw no reason for accepting jurisdiction to suit the convenience of New York litigants, which was the sole ground upon which acceptance of jurisdiction was urged.

In Kantakevitch v. Delaware, Lackawanna and Western Railroad, 18 N. J. Mis. R. 77; 10 Atl. Rep. (2d) 651 (Hudson County Circuit Court, 1940), my learned colleague, Brown, C. C. J., recently had before him a motion of the defendant to quash the summons and set aside the complaint, or in the alternative refuse to entertain jurisdiction. The facts of the ease are substantially the same as the facts in the instant case. The plaintiff was a resident of Pennsylvania and in September, 1937, was injured while crossing the tracks of the defendant located in Pennsylvania, where the defendant corporation was also incorporated. The complaint charged that the plaintiff at the time was using a pathway which because of its general use by the public became a permissive crossing under the laws of Pennsylvania, requiring the defendant carrier in the operation of its trains over the crossing to sound a warning to persons using the pathway. Summons was served on the defendant in Hudson county under N. J. S. A. 2:26-44 providing for service of process on foreign corporations in this state, already adverted to in the instant case. In the supporting affidavit it is stated that:

(1) Practically all the witnesses in the case reside in Pennsylvania;
(2) Neither New Jersey nor any of its citizens have any interest in the case;
(3) That no good reason exists for burdening the taxpayers of New Jersey with the expense of the litigation and delaying the trial of causes of its own citizens;
(4) That the trial of the cause will make it necessary to bring four or five members of defendant’s train crew from Pennsylvania to New Jersey for an extended period of time thereby requiring replacements;
(5) That it would likewise be necessary to bring civil engineers together with experts on the law of Pennsylvania from that state at great cost and inconvenience;
(6) That a similar case tried in this state consumed two weeks’ of time and four other cases of a similar nature are now awaiting trial in onr courts, all of which will entail great expense to the taxpayers of our state.

Judge Brown also referred to N. J. S. A. 2already mentioned in this opinion, that a transitory action shall, at the discretion of the court, if defendant is a non-resident, be tried in the county in which process was served upon him.

Judge Brown held that according to the decisions and statutes cited, the motion to quash the summons and strike the complaint must be denied.

As to the other ground of the motion that the court should refuse to entertain jurisdiction, he said that it does not appear to have been considered in the decisions in this state. He concluded that there was in N. J. S. A. 2 :26-44 no word or reasonable inference from which can be drawn any declaration of a public policy, much less any restriction or limitation on the judicial discretion of the trial court, and found nothing in our statutes or decisions that impairs or limits the discretion of the trial court. He said (at p. 80):

“While the practice in our courts has been to deny motions and overrule demurrers in which it was sought to dismiss transitory actions of the kind now being considered there appears no practice ox policy established in Hew Jersey of denying the discretionary power of a trial court to refrain from exercising its discretion by refusing to proceed with the trial of such a case where to do so would be an injustice to any of the parties; particularly is this true where the remedy is more complete in the jurisdiction where the parties reside. Citing Sielcken v. Sorenson, supra; St. John, Inc., v. Dillon, supra. It is incontestably necessary to the effective performance of judicial functions that this discretionary power should be preserved and not denied.”

He held that where the ends of justice clearly indicate that if a controversy tried in this state would result in an unfair burden upon and disadvantage to citizens of this state or that the controversy may be more suitably tried and the remedy more complete in another forum, then the parties should be relegated to that forum; and that since it is difficult, if not impossible, to state any detailed and settled rule of procedure that could be applied in every case, it may be necessary to decide each case upon its own facts and circumstances. He determined that in the light of these considerations the facts presented to him on the motion did not convince the court that it should refrain from exercising its jurisdiction.

My own study of the questions involved in the case before me induces me to agree with Judge Brown that it is the law of our state that our courts have jurisdiction of transitory actions between non-residents for torts committed outside of Hew Jersey, but that the trial court has a discretion to decline such jurisdiction where it would result in an unfair burden to our own citizens because of the expense and congestion of trying foreign causes between non-residents, or cause an injustice to any of the parties. Since our residents bear the cost of the maintenance of our courts it cannot be said that there is any hostile discrimination in denying their use to nonresidents who can sue elsewhere.

In the instant cases, besides the urged inconvenience of witnesses and employes to travel from Pennsylvania to the place of trial in Hew Jersey, together with the necessity for experts on the applicable Pennsylvania law, the value of a jury view of the locus in quo in Pennsylvania and the expense to the county of Passaic for the trial of this and other similar cases, which factors were considered by Judge Brown and deemed insufficient to him for declining jurisdiction in the Kantakevich case, we have the additional fact that the statute of limitations has tolled this cause of action in the State of Pennsylvania and the plaintiffs would be remediless in their home courts, unless the offer of the defendant carrier by formal stipulation to waive it would receive recognition there. That there are at present two other similar cases, one a retrial, pending for trial in this county, does not alone move me to believe that we have at present an epidemic of “imported” cases which should induce me to decline jurisdiction in the instant case as a means of protecting our residents from any unjustifiable burden as a result of such controversies being permitted to go to trial here.

Limiting myself strictly to the facts herein, I am of the opinion that the motion to dismiss upon the specified grounds should be denied, without costs.


author: Masucci, D. C. J.

text:
    Second Judicial District Court, Essex County.
    JOHN GUGLUIZZA, TRADING AS SANITARY FISH MARKET, PLAINTIFF, v. EMBASSY COUNTRY CLUB, INC., A CORPORATION OF NEW JERSEY, DEFENDANT.
    Decided February 26, 1940.
    For the plaintiff, George Anderson and George N. Foster.

    For the defendant, Harold H. Fisher.

   Masucci, D. C. J.

In the above matter, the question has been raised as to the proper lees to be charged to a litigant demanding a trial by jury, where limited to six men and, incidentally, the question has arisen as to the amount to be paid to the summoned jurors and from what fund said fees are to be paid.

R. S. 1937, 22:2-44, which regulates the fees to be paid to the clerk, has the following provision on the amount to be paid to the clerk by the demanding litigant: “Venire facias, jury of six, four dollars.” Aside from the clarity of the provision itself, the case of Shine v. District Court, 82 N. J. L. 147; 81 Atl. Rep. 499, disposed of a similar question by holding that such provision is controlling even though the amount to be paid by the clerk for summoning and for fees to said jurors for attendance and trial, is in excess of the amount required to be paid to the clerk by the demanding litigant, for trial by jury.

The clerk is, therefore, directed to summon a jury upon the payment of a jury fee of four dollars ($4).

The incidental question of the amount to be paid to the jurors for their attendance and service is governed by B. 8. 1937, 22:2-46, which provides that from the fees mentioned in R. S. 22:2-44, the clerk shall pay to the jurors the following fees:

“For all eases tried, each seventy-five cents. For all cases summoned and attending, but cause not tried, each twenty-five cents.”

It is thought that the above section is modified by Pamph. L. 1939, ch. 183, p. 537, § 1, the pertinent provisions of which are as follows:

“When a jury of twelve is required, fifteen jurors shall be summoned, which said fifteen jurors shall be paid the fees FIXED BY LAW whether or not actually called for service and when a jury of six is required, eight jurors shall be summoned, without regard to sex.”

Although apparently said latter act attempted to modify the provisions of R. S. 22:2-46, so that all jurors summoned, in a case where twelve jurors were required, would be paid an equal amount whether or not actually called for service, it does not in fact do so. It does not purport to be an amendment of said R. S. 22:2-46. It refers thereto as the law under which said fees are to be paid; it does not specify under which of two classifications, provided by R. S. 22:2-46, said fees are to be paid and, with particular reference to a six-man jury, it does not even attempt to change the existing provisions of R. S. 22:2-46, above mentioned.

The practice has been, I am informed, to pay seventy-five cents to each juror actually called, attending and serving in the trial of the case in which they were summoned and, the sum of twenty-five cents to each juror called and attending court, but not serving in the trial of the case in which they were summoned.

A strict and proper construction of the provisions of R. S. 22:2-44 requires the payment of seventy-five cents to each of the fifteen jurors summoned and attending court, if the case, in which they were summoned, is tried and, if not tried, each of said fifteen jurors is entitled to twenty-five cents. It may be that the legislature intended to correct the practice and more expressively provide that all fifteen jurors summoned, should be paid seventy-five cents each, even though at least three of them were not actually called for service in the trial of the case in which they were summoned. However, whatever the legislative intention, it did not, in fact, amend or modify R. S. 22:2-46 by the provisions of the 1939 act, above mentioned.

The clerk is, therefore directed to pay all jurors the sum of seventy-five cents whether said jurors are actually called for service or not, if the jurors are summoned and attend court and the case, in which they are summoned, is tried.

With reference to the fund from which the clerk is to pay the jurors’ fees, R. S. 22 :2-46, directs that the same are to be paid from the fees received by said clerk under R. S. 22:2-44 of said act. It does not restrict the payment thereof to the jury fees, collected by the clerk, either in the particular case or otherwise.

The clerk is, therefore, authorized and directed to pay said jury fees from all fees received by him under the provisions of R. S. 22:2-44 of said act.


text:
    GLENN H. HARTMAN AND MARGARET F. HARTMAN, HIS WIFE, PLAINTIFFS, v. SMYTH SALES, INC., DEFENDANT.
    Decided February 24, 1939.
    For the plaintiffs, Ward & McGinnis.

    For the defendant, Farhas & Samuels.

   Wolber, C. C. J.

This action was tried before me without a jury, the same having been waived by stipúlation of the parties.

The plaintiffs allege that on September 10th, 1935, they entered into a written contract with the defendant corporation, whereby defendant was to install one Arco Petro Boiler Burner Unit and a 275 oil tank with'all piping and wiring for complete installation. Under the terms of the contract defendant expressly warranted that the said oil burner would give forth sufficient radiation to supply sufficient heat at a temperature of seventy-two degrees when outside temperature registered zero.

Plaintiffs contend that defendant breached its warranty in this respect in that the oil burner referred to in the contract failed and has continued to fail to supply sufficient radiation to keep the room temperature at seventy-two degrees, and ask damages against the defendant for $690.

In the second count of their complaint jfiaintiffs repeat the allegations of the first count, and after contending that defendant has breached its warranty, ask that the contract be rescinded and the purchase price of $690 be returned to them.

At the trial the first count was abandoned by the plaintiffs.

Defendant in its answer denied these allegations.

I find that the Arco Petro Boiler Burner Unit failed and has continued to fail to supply sufficient radiation to keep plaintiff’s house at 99 Lyall road, Allwood, New Jersey, at a temperature of seventy-two degrees when outside temperature reaches zero; that on February 10th, 1936, plaintiffs, by letter from their attorneys to the defendant, requested defendant to remove the boiler and make some arrangement for the return of the purchase price, because repeated tests had shown that the warranty contained in the written contract between the parties could not be obtained ; that on February 15th, 1936, defendant corporation wrote plaintiff’s attorneys in reply to their letter of February 10th, 1936, that the job will produce seventy-two degrees at zero weather; that it was properly sized and properly installed, and defendant had asked the American Badiator Company and Petroleum Heat and Power Company to make a survey and render reports to it, a copy of which they would forward to plaintiffs’ attorneys. In this letter defendant declined to accede to plaintiffs’ request to remove the equipment and refund the purchase price.

On February 25th, 1936, by a letter from defendant to plaintiffs’ attorneys, a copy of a letter written to defendant by the American Badiator Company was enclosed, and defendant came to the definite conclusion that what Mrs. Hartman objected to was draft, and that defendant was going to install a twenty-foot radiator close to the front door to offset any draft, as suggested by the American Badiator Company engineer.

Mr. McKeown, a witness offered by the defendant, testified that some time after February 10th, 1936, the system received some service as a result of calls from Mr. Hartman. The witness did not fix the time of the call other than in the year 1936, but Mr. Hartman testified that while a representative of defendant often spoke of remedying the condition, nothing definite was offered to him.

This case is controlled by the provisions of the Uniform Sales act, and particularly section 69 thereof, R. S. 46:30-75:

“Remedies for breach of warranty.
“(1) Where there is a breach of warranty by the seller, the buyer may, at his election: * * *
“(d) Rescind the contract to sell or the sale and refuse to receive the goods, or, if the goods have already been received, return them or offer to return them to the seller and recover the price or any part thereof which has been paid. * * *
“(3) Where the goods have been delivered to the bwer he cannot rescind the sale if he knew of the breach of warranty when he accepted the goods, or if he fails to notify the seller within a reasonable time of the election to rescind, or if he fails to return or to offer to return the goods to the seller in substantially as good condition as they were in at the time the property was transferred to the buyer. But if deterioration or injury of the goods is due to the breach of warranty, such deterioration or injury shall not prevent the buyer from returning or offering to return the goods to the seller and rescinding the sale.
“(4) Where the buyer is entitled to rescind the sale and elects to do so, the buyer shall cease to be liable for the price upon returning or offering to return the goods. If the price or any part thereof has already been paid, the seller shall be liable to repay so much thereof as has been paid, concurrently with the return of the goods, or immediately after an offer to return the goods in exchange for repayment of the price.
“(5) Where the buyer is entitled to rescind the sale and elects to do so, if the seller refuses to accept an offer of the buyer to return the goods, the buyer shall thereafter be deemed to hold the goods as bailee for the seller, but subject to a lien to secure the repayment of any portion of the price which has been paid, and with the remedies for the enforcement of such lien allowed to an unpaid seller by section 46:30-59 of this title.”

This case does not present the question of the failure on the part of the buyer within a reasonable time after discovery of the fact which entitles him to a rescission to notify the other party of his intention to do so, but presents the situation whether the buyer has waived his election to rescind by the continued use of the property for a considerable period of time thereafter.

In support of defendant’s contention that under the testimony it should have a verdict in its favor, the following Hew Jersey cases have been submitted to the court:

Gerli & Co. v. Mistletoe Silk Mills, 83 N. J. L. 7; 84 Atl. Rep. 1065 (Supreme Court, 1912, Gummere, C. J.). That was a case where the buyer under the facts delayed too long in notifying the seller of its intention to rescind the contract for a breach of warranty.

So, too, in Hirsch v. Verschuur, 93 N. J. L. 277; 108 Atl. Rep. 181 (Supreme Court, 1919, Swayze, J.), where the buyer wore the coat and after so doing made two payments on account of the purchase price, one two weeks and one a month after receiving the coat. There was no finding that the goods were in substantially the same condition when the offer to return was made as they were when the property was transferred to the buyer.

Vapor Vac. Heat. Co. v. Kaltenbach & Stephens, 94 N. J. L. 450; 111 Atl. Rep. 171 (1920, Swayze, J.), was a case of my own law firm, but that case turned on the evidence as to the continued possession and use of the apparatus which, under section 48 of the Sale of Goods act (R. S. 46:30-54), might amount to an acceptance. There was no question of rescission involved in that case.

Otis Elevator Co. v. Headley, 81 N. J. L. 173; 80 Atl. Rep. 109 (Supreme Court, 1911, Gummere, C. J.), was a suit by the manufacturer against the owner for final payment of the purchase price. The refusal of the defendants to make the final payment was based upon the alleged fact that the elevator did not make the speed contracted for. They made no effort to rescind the contract, but, on the contrary, continuously used the elevator for over two years.

Woodward v. Emmons, 61 N. J. L. 281; 39 Atl. Rep. 703 (1897, Vredenburgh, J.), was a case of a suit on a note, as if the original vendors were plaintiffs, arising from the sale of three pulverizing machines (intended to grind to fineness stone and other hard materials), and the buyers sought to set up a total failure of consideration because of an alleged false warranty made in the sale of the machines. The case was barren of any offer byr the vendees either to return or redeliver the machines, or to surrender or abandon possession of them to the vendors. The court held that this failure, together with the continued use for purposes of profit or convenience for almost a year, should be construed to be an election on the part of the vendees to accept and retain the machines and rely upon their warranty.

Beuret v. Stahl, 129 N. E. Rep. 407 (App. Ct., Indiana, 1921, Remy, C. J.), is a case which, in my opinion, comes closer to the instant case than any of the other cases cited. In that case the seller entered into a written contract with the buyers by the terms of which he sold to buyers and agreed to install in their dwelling house a warm air furnace. On April 24th, 1917, the buyers made a case payment of $80 and executed their note for a like sum due February 1st, 1918. The contract contained the following guarantee:

“We guarantee that the furnace will warm all rooms to which complete run of pipes has been made by us to a temperature of seventy degrees Fahrenheit in zero weather, the owner to furnish a suitable chimney flue, proper fuel and to obey our directions. * * *
“In case the furnace fails to heat house as per guarantee above, and we are unable to correct the fault, we will remove the furnace and refund the money paid.”

The furnace, when tested, did not meet the requirements of the warranty and the seller was notified by the buyers of the failure of the furnace to meet these requirements. The seller made some alterations but did not, and could not, correct the defect. The buyers thereupon notified the seller that in accordance with the terms of the contract, he could remove the furnace. He did not, nor would he refund the cash payment of $80. The furnace remained in the house and was used by the buyers until the date of the trial. The seller commenced suit on the note and the buyers filed an answer in denial and a counter-claim upon the contract of warranty demanding judgment for the amount of the cash installment of the purchase price paid.

The court held that by reason of the terms of the warranty in the contract, the buyers were not required to return, or offer to return, the furnace. The court further said that the fact that the furnace in controversy was built into and was a part of buyers’ house and its continued use by buyers was a circumstance which it was proper for the trial court to consider on the issue as to whether or not the furnace had been accepted by the buyers, but under the facts in the case, is not conclusive evidence of acceptance. The buyers were not required to forego the use of the furnace which, though defective, was at the time a part of the dwelling. See, also, Schwartz v. Church of the Holy Cross (Miss.), 62 N. W. Rep. 266 (church altar).

It is true that as defendant’s counsel avers, the cases of Beuret v. Stahl, supra, and Schwartz v. Church of the Holy Cross, supra, are abstracted under the annotation of “b. Incidental, temporary, or occasional use” to the ease of Brandenburg v. Samuel Stores (Iowa Sup. Ct., 1931), in 77 A. L. R. (at pp. 1176, 1177).

The Hew Jersey case of Hirsch v. Verschuur, 93 N. J. L. 277; 108 Atl. Rep. 181, is also mentioned in the same annotation, and in annotation III, “Waiver or abandonment of attempted rescission, or offer to rescind, by use thereafter,” page 1178 of 77 A. L. R., will be found the case of Libby v. Haley (Maine, 1898), 39 Atl. Rep. 1004, holding that the question whether the buyer oí a horse had waived the right of rescission by use of the animal after tender thereof to the seller, and his refusal to accept it, was for the jury.

Under this annotation the following rule is stated:

“After an attempted rescission by the buyer of chattels, which the seller has not accepted, the buyer, if he intends to rely upon it, must adhere thereto and act consistently therewith, and if he thereafter continues to use the properv as his own, he may be held to have waived or abandoned the rescission, and may be precluded from rescinding or asserting a claim that he has rescinded; in other words, the use of chattels sold, by the purchaser, after the seller has refused the latter’s tender of them in a rescission of the contract, will defeat file attempted rescission, if the property was used for the personal benefit of the purchaser, and not merely in compliance with his duty as bailee of the seller.”

This doctrine was applied, or at least recognized as applicable, in the case of Dodsworth v. Hercules Iron Works (1895), 66 Fed. Rep. 483, where the purchaser of an ice machine continued to use it in the ordinary course of its business for more than two years after notifjdng the seller that it would not accept the machine; in Buckstaff v. Russell & Co. (1897), 79 Id. 64, where the purchasers of machinery continued to use it for more than three years after notifying the seller of their election to rescind, and at the end of this period sold all of the machinery and appropriated the proceeds to their own use; in Southern Gypsum Co. v. United Paperboard Co. (1926), 11 Fed. Rep. (2d) 58, where the purchaser of materials promptly rejected them, but during the four months following delivery continued to use them and consumed a part thereof; in Stillwell, B. & S. V. Co. v. Biloxi Canning Co. (1901), 78 Miss. 779, where the purchaser of a refrigerating machine notified the seller that it was not in accordance with the contract, and that after a certain date the purchaser would hold it as security for what had been paid upon it, but after such date proceeded to use it for three weeks until it was seized under process issued in a suit for the purchase price; in Gordon Dryer Co. v. Staier Chemical Co. (1921), 191 N. 7. Supp. 201, where the purchaser of a drying machine complained to the seller that the machine was not working properly, and after the latter had made several unsuccessful attempts to correct the defects, notified him to take it out, but thereafter continued to use it for about two months until it ceased to operate its entire plant; and in Maples v. Douglass (1920), 205 Ala. 94, where it was held that there is no presumption that the purchaser has so acted as to waive or abandon an attempted rescission by use thereafter, and the burden of allegation and proof with respect to waiver of rescission is upon the party who would take advantage thereof.

In view of my conclusion that the defendant failed to make good on its warranty of the heating system, and plaintiffs’ prompt rescission of the contract, I am impressed with what is said in the case of Hayes v. Nashville, 80 Fed. Rep. 641 (at p. 645), namely:

“A technical rescission of the contract has the legal effect of entitling each of the parties to be restored to the condition in which he was before the contract was made, so far as that is possible, and that no rights accrue to either by force of the terms of the contract.”

Mr. Justice Swayze, in discussing the rule of law that goods must be returned, in the case of Roberts v. James (1912), 83 N. J. L. 492; 85 Atl. Rep. 244, said:

“The rule, like other rules of justice must be so applied in the practical administration of justice as shall best subserve, in each particular case, the undoing of wrong, and the vindication of the right.”

I do not think, under the facts of this case, that the plaintiffs and their infant child would have had to remain through the winter in a house without heat, or the plaintiffs to go to considerable expense by ripping out the whole heating plant and removing it from their building in order to install another plant because the plant agreed to be installed by the defendant failed to meet their guarantee. If the heating plant, by the continued failure of the defendant to remove it from plaintiffs’ premises, has deteriorated, it is due to their own failure in not accepting plaintiffs’ offer to return the same when they elected to rescind the contract.

Under the circumstances, I think it is only reasonable to conclude that the buyers’ retention of the heating plant has been as bailee for the seller. There will therefore be a verdict in favor of the plaintiffs and against the defendant corporation for $690, together with interest and costs.


text:
    New Jersey Department of Labor, Workmen’s Compensation Bureau.
    JAMES AIELLO, PETITIONER, v. BOROUGH OF VERONA AND HARTFORD ACCIDENT AND INDEMNITY CO., RESPONDENT.
    Decided March 18, 1940.
    Por the petitioner, David Roskein.

    Por the respondent, Reginald V. Spell (by John V. Fiore).

   ❖ # # * i]i * #

Prom the testimony adduced at the trial of this cause, and the stipulations of counsel, I hereby find and determine as follows:

That the petitioner, James Aiello, was, on July 5th, 1938, in the employ of the respondent as a police officer, whose duties, among other things, required the operation of a motorcycle which was owned and furnished him by the respondent. On the day in question, about one-thirty p. M. he was operating the said motorcycle in the course of his duties on Bloomfield avenue, in the borough of Verona, when he was summoned by Director Prank Duffy of the rescue squad to follow him to the firehouse of the borough of Verona where the said squad maintained and stored its truck or ambulance. He thereupon proceeded to accompany the said squad which was responding to an emergency call, and in so doing, and while operating his motorcycle, was involved in an accident with an automobile as a result of which he was thrown from his vehicle through the glass ■window of the said automobile with which he collided. The petitioner was rendered unconscious and removed in that state to the Mountainside Hospital, where he remained for approximately sixteen days. Thereafter, he was removed to his home and underwent a course of treatment by the physicians of the respondent for the injuries sustained. Included in the treatment, as aforesaid, he was admitted to the Hewark Eye and Ear Infirmary, where he was operated upon in an endeavor to regenerate the facial nerves which had been severed in the accident. Thereafter, the petitioner continued under the treatment of the respondent’s physicians for a considerable period of time. It appears without controversy that the period of temporary disability extended from August 2d, 1938, to January 1st, 1939, inclusive, or a period of twenty-one and six-sevenths weeks, for which the petitioner is entitled to and has been paid temporary compensation, at the rate of $14.10 per week, petitioner having received full wages from July oth, 1938, to August 2d, 1938.

The respondent contends that the accident did not arise out of and in the course of the petitioner’s employment, inasmuch as he was assigned by the chief of police to do special traffic duty or detail under the supervision of the borough mayor and since the mayor did not give him any specific orders to accompany the rescue squad responding to an emergency call on the day in question, he was therefore without the scope of his employment when the accident occurred.

The testimony adduced shows that the rescue squad, although it was a private corporation, was maintained entirely by firemen employed by the borough of Yerona and whose function and duty it was to answer all calls of citizens and inhabitants in cases of human emergency and the rendition of succor or aid to the sick or injured. It is significant that the borough made an annual appropriation to help defer the expenses and maintenance of the rescue squad and its work, and moreover, provided free garage facilities for the ambulance or truck of the squad in the borough firehouse. Moreover, the members of the police department, as appears from Exhibit P-1, had been ordered by the chief of police to call the rescue squad on all accidents where there is personal injuries, “as soon as it is reasonably possible to call the rescue squad.” There is no question or doubt that the duties of, and the services rendered by the rescue squad, were so closely interwoven with the safety and welfare of the public, that its activities could only be classified as part of the municipal function of the borough as distinguished from the activity of a private independent corporation.

The rules and.regulations which govern the conduct of the petitioner, as well as all other members of the police force of the respondent borough, provide, inter alia:

“3: Members of the force should understand that these Rules and Regulations are not intended to cover every case which may arise in the discharge of their duty. Something necessarily must he left to the intelligence and discretion of the individual." (Italics supplied.)

It is evident that the petitioner, in responding to the call of the rescue squad to answer an emergency, was engaged in the performance of a public act which was required of this police officer as part of the duties for which he was engaged. By the very rules and regulations of the police department he was clothed with the authority to use his intelligence and discretion in determining what his course of conduct should be in such an emergency. It is evident that the petitioner, in accompanying the rescue squad on an emergency call, was engaged in the performance of a duty which was required of this police officer. Here, an emergency was found to exist where human life or safety was at stake, and notwithstanding the assignment of the petitioner to traffic duty, it cannot reasonably be said that he was thereby prohibited from performing any of the other acts or functions required of a police officer in the ordinary course of his duties. To suggest that before responding to such an emergency, he would be required to obtain the mayor’s permission so to do, is untenable. Assuming that while in the performance of his duties on the traffic detail, he witnessed robbery or other breach of the law and thereupon gave pursuit to the offenders, and in so doing was injured, it could not be seriously urged that this police officer had deviated from his course of duty simply because he failed to obtain the mayor’s consent to pursue and apprehend a criminal. The position taken by the respondent in this regard is untenable and clearly contrary to the commonly accepted conception of the scope of police duties. I therefore find and determine that the petitioner, in responding to and accompanying the emergency call upon which the rescue squad was engaged, did not deviate from the scope of his employment and that the accident which he suffered on July 5th, 1938, arose out of and in the course of his employment with the respondent.

* * * * * * *

From a consideration of the medical testimony adduced and by my observations of the petitioner in court and on the stand, T find and determine that the petitioner has suffered a disability which I fix at twenty-five per cent, of partial permanent total disability. * * *

The reasonable cost of hospitalization, medical and surgical services furnished to the petitioner, are properly chargeable to the respondent. * * *

It is therefore * * * ordered that judgment be and same is hereby entered in favor of the petitioner, James Aiello, and against the respondents, borough of Verona and the Hartford Accident and Indemnity Co. * * *

John C. Wegner,

Deputy Commissioner.


author: Quinn, President.

text:
    State Board of Tax Appeals.
    FIREMEN’S INSURANCE COMPANY, PETITIONER, v. CITY OF NEWARK, RESPONDENT.
    Decided March 19, 1940.
    For the petitioner, Lum, Tamblyn & Fairlie (by John M. Leavens).

    For the respondent, James F. X. O’Brien (by Raymond Schroeder).

   Quinn, President.

Petitioner, a stock insurance company, its principal office being in the city of Newark, was assessed for the year 1938 by that taxing district, upon the amount of its capital stock paid in and accumulated surplus, in the sum of $4,977,726: It is agreed that such an assessment is subject to the provisions of Pamph. L. 1918, ch. 236, § 307 (since amended by Pamph. L. 1938, ch. 245 (R. S. 54:4-22)). An appeal praying reduction of this assessment was dismissed by the Essex County Board of Taxation.

The parties by oral stipulation agreed upon the amounts of all the gross assets, the fixed debts and liabilities and with respect to the items of property entitled to exemption from taxation. Included in these latter items are the shares of stock of the New Jersey Investment Company, a New Jersey corporation, wholly owned by petitioner.

It is settled that the formula of valuation applicable under section 307 consists of the deduction from the gross assets of the stock insurance company (a) debts and liabilities; (b) assessed real estate; (c) assets which are exempt or nontaxable under the tax statutes, and finally, the assessment of the remainder if any. Fidelity Trust Co. v. Board (Supreme Court, 1908), 77 N. J. L. 128; 71 Atl. Rep. 61.

The sole issue in the case sub judice is whether the full value of the shares of stock of the Hew Jersey Investment Company aforementioned is subject to exemption under Pamph. L. 1918, ch. 236, § 203 (R. S. 54:4-3.8), exempting from taxation shares of stock in Hew Jersey corporations, the capital or property of which is made taxable to and against such corporation. The parties agree that Hew Jersey Investment Company shares have a value of $21,902,336.18, of which $19,979,615.34 represents the value of stocks of affiliate companies, and $1,854,665.64, the excess of all other assets of the company over its liabilities. Ho reason is assigned by the city upon this appeal, and we conceive of none, why petitioner is not entitled to the deduction of the full value of the Hew Jersey Investment Company shares, howsoever comprised. The deduction will be allowed in full and the assessment reduced to the sum of $3,311,025.19.


text:
    State Board of Tax Appeals.
    CITY OF NEWARK, PETITIONER, v. EXCESS INSURANCE COMPANY, RESPONDENT.
    Decided March 19, 1940.

      For the petitioner, James F. X. O’Brien (by Raymond Schroeder).

    For the respondent, Bum, Tamblyn & Fairlie (by John M. Leavens.

   Quinn, President.

The Essex County Board of Taxation canceled an assessment of $1,700,000 levied by the petitioner taxing district against respondent for the year 1938, on its capital stock paid in and accumulated surplus, under Pamph. L. 1918, oh. 236, § 307. An assessment under the statute cited, must, by its express provision, be levied by “the taxing district where its office is situate.” On the assessing date for the year in question, October 1, 1937, the proof adduced showed that the petitioner had no office whatever in Newark, but only a registered office in Jersey City. Newark therefore had no statutory jurisdiction to make the assessment it here seeks to restore to its tax lists, for the year 1938.

The judgment of the Essex County Board of Taxation is affirmed.


text:
    State Board of Tax Appeals.
    CITY OF NEWARK, PETITIONER, v. NEW JERSEY INVESTMENT COMPANY, RESPONDENT.
    Decided March 19, 1940.

      Eor the petitioner, James F. X. O’Brien (by Raymond Schroeder).

    For the respondent, Lum, Tamblyn & Fairlie (by Ernest 0. Lum).

   Quinn, President.

The petitioner taxing district levied assessments for personal property taxes against the respondent corporation in the sum of $1,000,000 for each of the years 1937 and 1938. The Essex County .Board of Taxation, on appeal, canceled both assessments. The sole issue raised upon this appeal is as to whether or not the chief office of the taxpayer, a New Jersey corporation, was or was not in the city of Newark for each of the years in question, the corporation being subject to taxation upon its intangible personalty in the taxing district where such office was located, under Pamph. L. 1918, ch. 236, § 305 (R. S. 54:4-18).

The testimony taken at the hearing discloses the following: In September, 1936, the respondent company removed its statutory office to the town of Harrison from Park Place, Newark, where it had been located for some time theretofore, the Newark office being also the chief office of the Firemen’s Insurance Company, owner of all of its capital stock. At the same time there were removed to the Harrison office all of the respondent’s records, papers, ledger, stock book, minute books, and check book, and all of its securities have been deposited in a bank vault in Harrison. All of these papers, books and securities have been maintained in said taxing district since, and the respondent has been there assessed for personal property taxes for the 3Tars here in question, which it has paid.

The respondent is purely a holding company for its parent corporation, the Firemen’s Insurance Compaq, aforementioned, and its operations consist almost exclusively of the keeping of records of securities and the payment of dividends thereon. The detailed bookkeeping in connection therewith is done at the Harrison office by employes of the Firemen’s Insurance Company, who attend at Harrison about three times per week for that purpose. Supervision of the accounts is by Mr. W. J. Schmidt, comptroller of Firemen’s, and secretary of the respondent, operating from Firemen’s office in Newark.

There is one part time employe of respondent always in attendance at the Harrison office and the regular board meetings of the company, approximate^ once a month, take place there. Checks of the company are drawn and signed at the Harrison office. There is no direct evidence before us as to the existence, in a formal sense, of any office for the respondent’s business in the petitioner taxing district upon the assessing dates for either of the years in question. There is only the circumstance that its chief executive officers, who were likewise officers of the Firemen’s Insurance Compaq, had their regular personal offices in the Newark headquarters of the parent corporation.

Under the circumstances outlined, we must apply the designation of “chief office” to the Harrison office, that being the only existing office for the handling of the peculiar business of the respondent, as a holding company. The “chief office,” for tax purposes, is the office of “paramount importance,” or the “leading” office, where a domestic corporation has more than one office in the state. Herdman Motor Co. v. State Board (Supreme Court, 1937), 119 N. J. L. 164; 194 Atl. Rep. 870. The determination is one of fact in each ease. As a holding company, respondent’s chief functions were the keeping of the securities owned by it, and the main-taming of proper records thereof. These functions were undoubtedly chiefly performed in Harrison, if, indeed, they can be said to have been performed elsewhere, under the evidence, to any extent at all.

Counsel for the petitioner devoted considerable attention at the hearing to the motivation for the removal of respondent’s office from Newark to Harrison in 1936. While the evidence before us does no more than give rise to surmise, short of proof, of a purpose in respondent to avoid taxation by the petitioner taxing district, we may observe that even were such purpose fully established, it could not be regarded as material to the issues before us. The exercise by respondent of its legal right to establish and maintain its chief office (under the evidence, its only office) wheresoever it chose, where complete and without reservation, and in good faith, although for the purpose of avoiding taxation in another taxing district, must be accorded full force and effect. See Hoboken v. State Board of Taxes and Assessment (Supreme Court, 1930), 107 N. J. L. 35; 151 Atl. Rep. 364; affirmed (Court of Errors and Appeals, 1931), 108 N. J. L. 195; 156 Atl. Rep. 377; Hoboken v. The Hoboken Dock Co. (State Board), filed September 12th, 1939.

The judgments of the Essex County Board for each of the years 1937 and 1938 are affirmed.


text:
    State Board of Tax Appeals.
    THE NATIONAL COMMERCIAL TITLE AND MORTGAGE GUARANTY COMPANY, PETITIONER, v. CITY OF NEWARK, RESPONDENT.
    Decided March 19, 1940.
    For the petitioner, Lindabury, Steelman, ZinJc & Lafferty.

      For the respondent, James F. X. O’Brien (by Vincent J. Casale).

   Quinn, President.

Petitioner was subject to taxation for the year 1937 upon its capital stock paid in and accumulated surplus, under the provisions of Pamph. L. 1918, ch. 236, § 307 (R. S. 54:4-22), since superseded by Pamph. L. 1938, ch. 245. The statute then read as follows:

“Every fire insurance company and every stock insurance company other than life insurance, shall be assessed in the taxing district where its office is situate, upon the full amount of its capital stock paid in and accumulated surplus. The real estate belonging to every such corporation shall be taxed in the taxing district where situated, and the amount of assessment upon the real estate shall be deducted from the amount of any assessment made upon the capital stock and accumulated surplus. No franchise tax shall be imposed upon any such fire insurance company or other stock insurance company included in this section.”

In pursuance of the act, the city of Newark levied against petitioner an assessment in the sum of $200,000 for the year 1937, which was sustained on appeal by the Essex County Board of Taxation. Petitioner had filed with the city its personal property tax return for 1937, and bases its position in the present proceedings upon the facts therein set out, as follows:

City of Newark, New Jersey
Personal Property Tax Beturn for 1937 Taxes
THE NATIONAL COMMERCIAL TITLE AND MORTGAGE GUARANTY COMPANY
24 Commerce St., Newark, N. J.
Capital ............$2,968,796.00
Surplus ... . 2,339,802.25
Undivided Profits....... 283,693.78 $5,592,292.03
Less:
.Mortgages.........$4,611,923.06
Investments in Bonds .... 74,826.49
Investments in Stocks . . . 667,029.59 5,353,779.14
Adjusted Capital Stock and Surplus. . $238,512.89
Less:
Assessed values on Beal Estate Owned. . . . 4,640,510.00
Amount Subject to Tax None

In advance of a detailed consideration of petitioner’s financial structure, it should be noted that under the doctrine of Fidelity Trust Co. v. Board of Equalization of Taxes of New Jersey (Supreme Court, 1908), 77 N. J. L. 128; 71 Atl. Rep. 61, petitioner is entitled to the deduction from its capital stock and surplus, not only of the assessed value of its real estate as specifically provided under section 54:4-22, but also to the deduction of any non-taxable or exempt property which has entered into the determination of such capital stock and surplus. That determination, it is held in the case cited, is to be arrived at by the deduction of debts and liabilities of the company from the true value of its gross assets. See, also, Fidelity Union Title and Mortgage Guaranty Co. v. City of Newark (State Board), opinion filed December 8th, 1936.

An application of the rule stated to the financial statement of petitioner, as hereinbelow set out, must be made in the light of the unique status occupied by a mortgage guaranty company with tespect to property which it administers and manages, but in which it may have no beneficial interest or only partial equity. Under its charter, petitioner may and does carry on the business of investing in real estate bonds and mortgages, some of which it sells outright to private investors, with an accompanying guarantee by it of payment of the principal and interest, and others of which are sold in parts or fractional interests represented by participation certificates issued to the purchasers, with similar guarantees of payment. Some of the latter mortgages are fully sold, while in others the company may retain a participating interest. Yet other mortgages remain completely unsold by the company. See Kelly v. Middlesex Title Guarantee and Trust Co. (Chancery, 1934), 116 N. J. Eq. 228; 172 Atl. Rep. 487. Petitioner services those mortgages in return for a fraction of the interest payable thereunder and, in the event of default, takes possession under, or forecloses the mortgage, and thereafter complies with its guarantee in favor of the particular investor affected. Pending the termination of the contractual relationship between the company and the investor, the former is merely trustee of the property, whether iii the form of mortgage or real estate, and whether the mortgage is a "guaranteed mortgage,” i. e., sold outright with accompanying guarantee, or whether subdivided in participations among several investors. Kelly v. Middlesex Title Guarantee and Trust Co., 116 N. J. Eq. 228 (at pp. 230, 231); 172 Atl. Rep. 228.

On January 10th, 1934, petitioner entered upon a plan of operation pursuant to regulations promulgated by the Commissioner of Banking and Insurance, which had the effect and purpose of extending the time for payment of principal and interest of guaranteed mortgages and interests therein. This plan was in effect on the assessing date herein and is the "plan” referred to in the financial statement of the company, annexed to its petition of appeal, and which is as follows:

ASSETS
(1) First Mortgage Loans Sold Guaranteed (Subject to Plan) ...... $1,003,014.34
435,936.45 (2) Seal Estate
(3) Accounts Eeceivable—Advances for payment of Taxes, Ins., &c...... 61,191.14 $1,500,141.93
(4) First Mortgage Loans Sold Guaranteed (not subject to Plan) $374,245.49
(5) Eeal Estate...... 47,088.95
(6) Accounts Eeceivable—Advanees for payment of Taxes, Ins., &c..... 902.51 422,236.95
(7) First Mortgage Loans Deposited with Trustees to Secure Group Certificates Sold Guaranteed $11,790,435.42 (Subject to Plan)
(8) Real Estate .......... 4,554,231.87
(9) Accounts Receivable—Advances for payment of Taxes, Ins., &c....... 220,085.02
(10) Cash Collateral...... 130,390.34
16,695,142.65
(11) First Mortgage' Loans Deposited with Trustees to Secure Partieip a t i o n Certificates Sold Guaranteed (Subject to Plan) ....... $341,975.00
(12) Real Estate ......... 748,251.05
(13) Accounts Receivable-Advances for payment of Taxes, Ins., &c....... 3,975.85
(14) Cash Collateral ....... 3,391.64
1,097,594.54
(15) First Mortgage Loans Deposited with Trustees to Secure Part. Ctfs. Sold Guaranteed (Mot subject to Plan) $559,219.45
(16) Real Estate........ 15,432.92
(17) Accounts Receivable . 258.11
(18) Cash Collateral ....... ......
574,910.48
(19) First Mortgage Loans Pledged with Reconstruction Finance Corporation to Secure Loan of $299,018.77 $783,602.44
(20) Real Estate .......... 111,252.02
(21) Accounts Receivable .. . 10,110.21
$904,964.67
(a. First Mortgage Loans Owned by Company .................... 985,321.82
(b. Real Estate Owned by Company (at Cost) ..................... 581,584.78
(e. Junior Participations in Mortgages
Withdrawn .......... 502,730.14
(d. Second Mortgages Acquired through
H.O.L.C. Refinancing....... 51,050.61
(e. Cash on Hand and in Banks . . 207,237.61
(f. Investments in Stocks (At Cost) . 170,266.81
(g. Investments in Bonds (At Cost) . 14,751.49
(h. Investments: in Home Owners Loan (22) Corp. Bonds (At Cost) .... 60,075.00
(i. Investments in Scrip (At Cost) . . . ......
(j. Investments in Lawyers Title Guaranty Co. of H. J. (At Cost) . . . 621,346.04
(k. First Mortgage Certificates in Company issues owned by Company . 251,150.00
(1. Interest Receivable Matured and Accrued ................. 1,911,477.81
(m. Accounts Receivable ......... 209,197.65
(n. Hotes Receivable ........... 352,150.27
(o. Interests in Tax Sale Certificates Purchased with Borrowed Funds Pledged ............ 121,792.15
(p. Title Plant................ 3.00
Total Assets ........$27,235,104.40
LIABILITIES
A. Guaranteed First Mortgages Issued and Outstanding (Subject to Plan) . . $1,294,619.06
B. Guaranteed First Mortgages Issued and Outstanding (Hot Subject to Plan) . 396,478.37
C. First Mortgages Hot Guaranteed . . . 47,113.44
D. Guaranteed First Mortgage Participation Certificates Issued and Outstanding—■ Group Series (Subject to Plan) ..... 15,305,414.27
E. Guaranteed First Mortgage Participation Certificates Issued and Outstanding— Participation Series (Subject to Plan) 692,941.69
F. Guaranteed First Mortgage Participation Certificates Issued and Outstanding— Participation Series (Not Subject to Plan) ........................ 507,366.18
G. Notes Payable—Reconstruction Finance Corporation .................... 331,973.93
H. Funds Borrowed to Purchase Certificates of Tax Sales (Collateralized by Interest in Tax Sale Certificates) ....... 121,814.40
I. Mortgages Payable................. 27,900.00
J. Accounts Payable .................. 75,132.31
K. Interest Payable—Matured and Accrued. . 2,189,131.09
L. Reserve for Depreciation on Real Estate. . 224,596.15
M. Reserve for Contingencies and Doubtful Accounts ........................ 442,293.79
Total Liabilities .............$21,656,774.68
Capital Stock Issued and Outstanding ................ $2,968,796.00
Surplus .................. 2,339,802.25
Undivided Profits .......... 269,731.47
5,578,329.72
Total Liabilities, Capital and Surplus. . $27,235,104.40

The numbers and letters preceding the line items are supplied by us for ready identification.

Proceeding to apply to the information afforded by this statement the formula of the Fidelity Trust Co. case, supra, we determine first the interest or equity of petitioner in the guaranteed mortgages or mortgage interests. Items 1, 4, 7, 11 and 15 total $14,068,889.70. Items 2, 5, 8, 12 and 16 represent the book value of real estate converted from guaranteed mortgages by reason of defaults. They aggregate $5,800,941.24. The total of mortgages and real estate appertaining to guaranteed mortgages is therefore $19,869,830.94. The face liability of petitioner upon guarantees of mortgages, represented by items A, B, D, E and F is $18,196,819.57. Deducting this figure from that next preceding leaves an equity of $1,673,011.37 in petitioner in the property allocable to guaranteed mortgages and mortgage interests. Petitioner’s gross assets may then be reflected in this wise:

As above derived ..............$1,673,011.37
Assets and items due or held on account of guaranteed mortgage interests, items 3, 6, 9, 10, 13, 14, 17, 18 ..... . 420,195.61
Assets owned by company, items 19, 20, 21, 22, 6,945,077.85
Gross Assets Total .........$9,038,284.83

In determining which of the items set up by petitioner as liabilities on the liability side of its statement are properly deductible from the gross assets for the determination of its capita] stock and accumulated surplus, regard must be had for the rule laid down in Trenton v. Standard Fire Insurance Co. (Court of Errors and Appeals, 1909), 77 N. J. L. 757; 13 Atl. Rep. 606, to the effect that only fixed and certain liabilities, not contingent ones, are so deductible. “Fixed,” means certain and definite as to both obligation and amount as of the assessing date. Commercial Casualty Insurance Co. v. State Board (Supreme Court, 1937), 119 N. J. L. 94; 194 Atl. Rep. 390. Deserves consisting of assets actually existing and employed by the company in its operations are not deductible. Newark Fire Insurance Co. v. State Board, (Supreme Court, 1937), 118 N. J. L. 525; 193 Atl. Rep. 912; Universal Insurance Co. v. State Board of Tax Appeals (Supreme Court, 1937), 118 N. J. L. 538; 193 Atl. Rep. 915. These considerations rule out items L and M as not properly deductible liabilities. The fixed and certain liabilities of the company are items G, H, I, J and K, aggregating $2,745,951.13. Properly calculated, therefore, petitioner’s capital stock and accumulated surplus is:

Gross Assets .................$9,038,284.83
Liabilities ..................... 2,745,951.73
Capital and surplus............_ . $6,292,333.10

We have now to determine what exempt or non-taxable assets have entered into the capital and surplus and deduct them therefrom. Unquestionably items 19, and subitems (a), (c), (d), (f), (g), (h), (j) and (b) under item 22 are so deductible. They total $3,340,294.35. Petitioner should likewise be allowed a deduction for that part of its interest in the sum of $1,673,011.37, shown above to represent its equity in properties allocable to its guarantees, which consists of non-taxable mortgages. There being no proof in the record which would indicate how much of said $1,673,011.37 consists of mortgages, or what part thereof represents real estate, we assume, for purposes of this opinion, that the ratio of mortgages to real estate in said equity of $1,673,011.37 is the same as the proportion that the total of guaranteed mortgages bears to the total of real estate allocable to such mortgages. By computation this ratio is approximately seventy-five per cent, in mortgages to twenty-five per cent, of real estate, or $1,254,758.52 of deductible mortgages and $418,252.34 of real estate. The situation presented herein as to mortgages is to be distinguished from that with which we were recently confronted in Franklin Mortgage and, Title Guaranty Co. v. Newark (State Board, 1940), 18 N. J. Mis. R. 34, where the question involved, under the same statute as is now before us, was as to the deductibility of mortgages absolutely owned by the taxpayer company, but pledged as collateral security for the payment of bonds issued by the company. We held the bonds deductible as debts, and the mortgages as exempt assets.

We have finally to determine what, if anything, should be deducted on account of the statutory direction to allow a deduction of “the amount of assessment,” of real estate “belonging” to the company. The only figure pertaining to assessed valuations of real estate to be found in the record taken at the hearing is that of $4,640,510, which includes all of the realty assessed in the name of the company, whether owned by, or “belonging to” the company, or not. The petitioner administers millions of dollars of realty assessed in its name, but actually held by it in trust on behalf of guaranteed mortgage or certificate holders. Such properties do not “belong” to petitioner, and their value does not enter into its capital and surplus. This becomes obvious under the facts of the particular ease when it is considered that the book value of the realty in question is $6,493,778.04 and that petitioner’s estimate of its capital stock and surplus is only $5,353,779.14, which figure is presumably the result of computations in which not only realty, but also mortgages and other property are taken into account.

On the record, therefore, there is no evidence before us to indicate the assessed value of the real estate truly owned by petitioner. Were an estimate permissible, the approximate assessed value of such realty might be determined by applying the ratio of the total of book value of petitioner’s own realty, $1,111,089.14 (being the aggregate of items 20 and 22b and an estimate of the amount of real estate comprising the company’s equity in the guaranteed mortgages and realty allocable thereto; see supra), to the total book value of all real estate shown on the statement, or $6,493,778.04, which ratio is roughly seventeen per cent, against the $4,640,510, or total of assessed real estate. The resulting deduction would be $788,886.70.

Allowing the widest latitude of surmise in reading the record, there would result this condensed statement of taxable balance against petitioner, as follows:

Capital and Surplus as computed above . ... $6,292,333.10
Deductions
Admittedly non-taxable and exempt assets . $3,340,294.35
Estimated additional interest in exempt mortgages . . . 1,254,758.52
Estimated interest in assessed real estate ....... 788,886.70
--- 5,383,939.57
$908,393.53

This balance being greater than the assessment appealed from, the judgment of the Essex County Board affirming the assessment in the sum of $200,000, should be affirmed.

Judgment accordingly.


author: Hartshorne, C. P. J.

text:
    Essex County Court of Common Pleas.
    IN THE MATTER OF THE APPLICATION OF MICHAEL GLENNON, FOR BENEFITS FROM THE ONE PER CENT. FUND, PAMPH. L. 1938, CH. 198, PP. 474-476 (R. S. 34:15-95 AND 34:15-95.1).
    Decided March 25, 1940.
    For the petitioner-appellant, George F. Corrigan and George C. Litwack.

    For the Commissioner of Labor, respondent-appellee, William J. Egan, assistant attorney-general (by Stephen J. Lorenz).

   Hartshorne, C. P. J.

This is another of the numerous applications for benefits under the so-called one per cent, fund. The difficulty in this class of cases is apparently due to a misunderstanding of the legislative intent as exhibited in the present and preceding acts. Pamph. L. 1938, ch. 198; R. S. 1937, 34:15-94, 95, 95.1; Pamph. L. 1936, ch. 55; Pamph. L. 1933, ch. 456; Pamph. L. 1931, ch. 108; Pamph. L. 1923, ch. 81. This intent is (1) to insure to the employe full compensation, where a compensable disability succeeds, but has no causative connection with, the results of a prior disability, the combination of the two leaving the employe permanently and totally disabled. Its purpose is (2) to relieve the employer of the undue burden of a prior disability, with which, or its results, the disability arising in his employ had no causative connection, but which burden the previous broad provisions of the Workmen’s Compensation act were found to impose upon him. Combination Rubber Manufacturing Co. v. Obser, 95 N. J. L. 43; 96 Id. 544; 115 Atl. Rep. 138; Richardson v. Essex National Trunk and Bag Co., Inc., 119 N. J. L. 47; 194 Atl. Rep. 622.

The test as to the applicability of the one per cent, fund is thus seen to be (a) that an employe has become totally and permanently disabled when a compensable disability is superimposed upon a prior disability, whether compensable or not, and (b) that the prior disability is one for whose results the subsequent disability has not been a competent producing cause, as by aggravation. Voessler v. Palm, &c., Co., 120 N. J. L. 553; 1 Atl. Rep. (2d) 32; 122 N. J. L. 434; 5 Atl. Rep. (2d) 753; Gorman v. Miner-Edgar Chemical Corp., 16 N.J. Mis. R. 170; 198 Atl. Rep. 404; Toohey v. Gorman, 123 N. J. L. 235; 8 Atl. Rep. (2d) 574. If the facts meet these conditions, the one per cent, fund is responsible to the extent of this prior, concurrently existing, but independent, disability. If not, either the employer, responsible for the subsequent disability, is responsible for the results of the prior disability, of which the subsequent disability has been the competent and producing cause, or no one is, as where the end result is due merely to advancing age. Ruffin v. Albright, 121 N. J. L. 424; 3 Atl. Rep. (2d) 135; Rother v. Merchants Refrigerating Co., 122 N. J. L. 347; 6 Atl. Rep. (2d) 404.

The facts in the present case, to be construed in the light of the above principles, are as follows:

Glennon was a watchman, well on in his sixties. Unknown to him, and without interfering in anywise with his work, he had to some extent arteriosclerosis and arthritis, a common condition in one of his age. He met with an accident in 1932 while in the employ of the International Engineering Company. On compensation proceedings against his employer for this accident, to which the one per cent, fund was in nowise a party, a settlement was arrived at after hearing and the taking of testimony, in which he was found to be disabled 100 per cent., 66-2/3 per cent, of permanent total being chargeable to the employer due to the compensable accident. Some years later, in 1939, he first instituted proceedings against the one per cent. fund. Both the employe and his doctor, the same one who testified in the proceedings against his employer, concur in the fact that he had no actual disability prior to the accident, his arterial and arthritic condition being then latent. All agree that he is now totally disabled, and it would seem probable that this condition existed at least at the time of the employer’s hearing above.

Applying the above principles, it is the employer, not the one per cent, fund, which is responsible for the lighting up or aggravating of this pre-existing, latent, arterial and arthritic condition. And this responsibility would apply not only to the results apparent originally, but to their subsequent increase, under section 21-Í1 of the statute.

Of course, if there is a mere aggravation of a previous patent condition, the latter being subject to admeasurement, the responsibility is only to the extent of the aggravation, as distinguished from responsibility for the full results where a latent condition is made' patent. But petitioner’s doctor, while in one breath using the term “aggravation,” calls it a mere “guess,” and thereafter speaks definitely of the prior condition as having been latent.

The practical difficulty here seems to be that, as is usual in the case of settlements, both sides conceded something, the petitioner having conceded, contrary to what now appears to be the fact, the lack of connection between the previous latent condition and the subsequent accident. Of course, the settlement order, entered without the participation of the one per cent, fund, is not res adjudicóla, as to it, the remedy of the employe, if any, lying in further proceedings against the employer.

The denial of petitioner’s application herein is accordingly affirmed, and a determination may be entered accordingly.


text:
    Essex County Court of Common Pleas.
    ROBERT E. KING, PETITIONER, v. WESTERN ELECTRIC COMPANY, RESPONDENT. ANNA ROSE KING, PETITIONER, v. WESTERN ELECTRIC COMPANY, RESPONDENT.
    Decided March 29, 1940.
    For the petitioner, Congleton & McLaughlin (Richard J. Congleton).
    For the respondent, Edwin J. O’Brien (Shelton Pitney, of counsel).
   Hartshorne, C. P. J.

This is an application under the statute for the allowance of counsel fees in both the above cases, for proceedings taken therein before the Supreme Court and the Court of Errors and Appeals. R. S. II, 54:15-67. “These unusual provisions for the lower court to allow counsel fees for work done in the upper courts, can apply only within the statutory limits. These limits are 'where the judgment of the Court of Common Pleas is reviewed’ ” in compensation eases on certiorari in the upper courts. Fischman v. Joseph Fish Hat Co. (Essex Common Pleas, May 16th, 1939, unreported); affirmed (New Jersey Supreme Court, February 25th, 1940, unreported).

Since, in the Anna King case, the Common Pleas was in nowise involved, the above statute is inapplicable, and no counsel lees are allowable here, as counsel for the employe admits.

As to the Kobert King case, the certiorari proceedings covered both the record in the bureau and that at the Pleas. Before the bureau, the points involved were whether the employe’s petition was filed within time, whether a previous order made the matter res judicata, and whether a compromise agreement was finally dispositive. In the Pleas, on the other hand, the decision was simply that the Pleas lacked jurisdiction, since the appeal was from a preliminary order, not from a final decision on the merits.

That the certiorari proceedings were considered by all concerned to be a review of the action of the bureau in passing upon the above grounds, and not a review of “the judgment of the Court of Common Pleas” that it had no jurisdiction, is evident. Por the opinion of the Supreme Court, on certiorari, whose judgment was in the Court of Errors and Appeals “affirmed for the reasons expressed in the opinion delivered by Mr. Justice Heher in the Supreme Court,” deals solely and entirely with the above grounds of the bureau’s action, and not at all with the sole question decided bjr the Common Pleas, as to its lack of jurisdiction, as above. King v. Western Electric Co., 122 N. J. L. 422; 5 Atl. Rep. (2d) 490; 124 N. J. L. 129; 11 Atl. Rep. (2d) 32. The mere fact that the return to the writ of certiorari was made solely by the Pleas, and that the remittitur was to the Pleas, does not indicate the contrary. This was solely procedural, and necessary, due to the fact that the record of the entire matter, both before the bureau and the Pleas, lay before the Court of Common Pleas, both at the time the writs were taken out, and at the time the decisions thereon were rendered.

It thus follows that essentially it was the action of the bureau which was reviewed on certiorari, and not “the judgment of the Court of Common Pleas.” In other words, the writ was one taken out under the inherent common law power of the Supreme Court, and not one to which the unusual statutory fee provision is applicable.

Accordingly, petitioner’s counsel’s application for fees should be made as at common law, and the petition here will be denied.