author: Backes, V. C.

text:
    Commercial Casualty Insurance Company et al., complainants, v. Southern Surety Company of Des Moines, Iowa, defendant.
    [Decided June 12th, 1931.]

      Messrs. McCarter & English, for the complainants.

      Messrs. Lum, Tamblyn & Colyer, for the defendant.
   Backes, V. C.

In February, 1924, the Southern Surety Company gave its bond to the county of Allegheny, Pennsylvania, for $1,100,000, insuring county funds on deposit with the Carnegie Trust Company during the four-year term of the then recently elected county treasurer. The Southern reinsured the risk with nineteen other companies for $1,000,000, retaining a liability of $100,000. The Commercial Casualty Company and the New Jersey Fidelity and Plate Glass Insurance Company were two of the reinsurers; each for $50,000. The trust company failed in April, 1925, and, upon paying the loss, the Southern brought suits at law against the Commercial and the Fidelity for the reinsurance. Thereupon this bill was filed to restrain the suits and to cancel the reinsurance agreements on the ground of fraud. A preliminary injunction issued. Commercial Casualty Insurance Co. v. Southern Surety Co., 100 N. J. Eq. 92; affirmed, 101 N. J. Eq. 738.

The Southern, previously, in 1920, had given a bond for $1,400,000, insuring the county funds on deposit with the trust company during the term of the then county treasurer which expired in January, 1924. That risk was also reinsured. When the trust company, in February, 1924, applied to the Southern for a new bond of $1,400,000, John A. Bell, its president, agreed in writing to indemnify the Southern against loss. The bond was written for $1,100,000 because the Southern was unable to obtain more than $1,000,000 reinsurance, and itself was unwilling to carry more than a retained liability of $100,000 and an additional $50,000 insurance of another county fund on deposit with the trust company. Mr. Swinggi, the manager of the Pittsburgh branch of the Southern, negotiated the bond and the reinsurance.

The allegations of fraud are, that Zwinggi represented to Mr. Short, manager of the depository bond department of the Commercial, that:

“(a) The defendant was about to execute a bond as surety for Carnegie Trust Company to the county of Allegheny, in the sum of $1,400,000 to secure the deposit of funds of that county in the said trust company;

“(b) The defendant would itself retain at its own risk a liability on the said bond of at least $150,000;

“(c) The said bond was an original bond and not the renewal of a prior bond;

“(d) The said Carnegie Trust Company was then a solvent and well-managed institution;

“(e) John A. Bell, the defendant’s indemnitor with respect to the said surety bond, was then worth at least $1,400,000;

“(f) The said John A. Bell was known by the said Zwinggi to be a man worth far in excess of $1,400,000 and not less than $10,000,000 or $11,000,000;

“(g) The fact of the solvency and good management of the Carnegie Trust Company and the wealth of the indemnitor, Bell, would lessen the risk of the proposed reinsurers.” That Short repeated the representations to the Fidelity at Zwinggi’s request, to induce it to participate in the reinsurance. The charges are, that the representations except (g) were untrue in fact, and all of those untrue in fact except “d” and “e” were untrue to the knowledge of Zwinggi, and were made with intent to induce the complainants to enter into the contracts of reinsurance; that they were material to the risk assumed by the complainants and were relied upon by them in entering into the contracts of reinsurance. At the hearing “a” and “b” were abandoned, and “g,” a corollary,, was not pressed.

This is the case as developed at the hearing: Zwinggi was in New York seeking reinsurance and accidentally met Mr. Campbell, the general agent of the Commercial at Pittsburgh, and told him of his errand. Campbell agreed to submit the proposition to his company, telephoned and then went to its main office in Newark and took Short back to the Waldorf where he had a dinner engagement with Zwinggi. He introduced them, but says he heard none of their conversation. Short says of the meeting:

“Mr. Zwinggi offered the financial statement of the bank,, represented the bank to me as a first-class institution, well-managed, and he also said that we had the indemnity of a man by the name of John A. Bell, who was reputed to be worth in the neighborhood, net worth, of eleven or twelve million dollars. He further stated that Mr. Bell was, as I recall, a coal baron and banker—man of considerable wealth in that locality.”

And being asked what else, he replied:

“Why, he just--he submitted the financial statement of the bank and financial statement of Bell, showing his worth and so forth, and told me that the bank was well-managed and financially sound and so forth.”

And on cross-examination he added:

“He [Zwinggi] said, ‘now, this is a large bond/ and, he says, ‘we have the indemnity of the president, Mr. John A. Bell/ he says, ‘Mr. Bell is a very wealthy man, a banker/' and something as I recall it, he said, ‘a coal baron here in Pennsylvania / and he also showed me the personal statement of Mir. Bell which showed, as I recall now, above all his liabilities, about a net worth of eleven or twelve million dollars.”

Asked if Zwinggi said anything about its being a renewal or original bond, he answered:

“It was a new bond, as I recall, sir, I am rather certain as to that, sir. It was a new bond covering county funds.”

This is substantially all of Short’s-testimony as to representations. It will be observed that Short does not say that Zwinggi represented that Bell “was then worth at least $1,400,000,” or that Bell “was known by the said Zwinggi to be a man worth far in excess of $1,400,000 and not less than $10,000,000 or $11,000,000,” as alleged in “e” and “f,” but that Bell was reputed to be worth ten or eleven million dollars. That he was so reputed is not controverted.

Zwinggi’s version is quite different. He says that before he set out from Pittsburgh to canvass the trade he made up numerous sets of credentials, consisting of the trust company’s application for a $1,400,000 bond and its financial statement; Bell’s indemnity agreement; the Jones Mercantile Agency report and E. G. Dun’s report on Bell, and a list of Bell’s directorships; that when he met Campbell he gave him an outline, told him of the old bond and the reason for the new one and furnished him with a set of credentials to take to his company, and that when he met Campbell and Short in the evening, Short simply announced that his company would take $50,000, and that he replied he thought it was a safe risk. Later, in the course of conversation, he says Short suggested the Pidelity as a prospect; that he gave him a set of the credentials for that concern upon Short agreeing to submit the matter and to solicit its co-operation. Zwinggi’s attitude is, that all his advances to the Commercial were made to its Pittsburgh general agent, Campbell, who, he says, was as familiar with the standing of the trust company and of Bell as he was, and that when Short met him in the evening and announced his company’s action, there was no call for any further representations and that he made none. Campbell does not deny that Zwinggi told him of the old bond and the reason for the new one; he says he cannot recall. He admits that he discussed the risk with Short over the telephone before going to Newark, but asserts he did not take a set of credentials with him; that he did not lay the matter before Short, though he went to Newark with that in mind, and that he did nothing more than to refer Short to Zwinggi. And Short says that he did not get a set of credentials from Campbell, and yet, a set, not otherwise accounted for, was produced at the hearing from the files of the Commercial. The most natural thing for Zwinggi to have done would have to give a set to Campbell as his “talking papers,” and for Campbell to have unfolded the proposal to Short, and for Short to have made inquiry of him concerning the trust company and Bell, he being from Pittsburgh. It would be singular if these most likely things did not happen. The three committeemen say, as Short says, that they did not consider the risk until the next morning after Short met Zwinggi. But the following sequential events, all well established, are persuasive that the committee approved the risk before Short went to meet Zwinggi, and in doing so, that they relied on their own records and the set of credentials given by Zwinggi to Campbell. A notation by the committee “O. K. for fifty thousand addl. 2-3 5-24” in the Commercial’s record bears witness that the reinsurance was approved Eriday, February 15th. Zwinggi left New York Friday night, February 15th, right after his meeting with Short, and he arrived home the next morning. Short telephoned the proposition to Mr. Yreeland of the Fidelity the morning of the 16th (Saturday), saying, according to Yreeland, “I was over and had lunch yesterday in New York with Mr. Zwinggi,” and that “Zwinggi had to get back to Pittsburgh last night,” and “to wire Zwinggi, if I wanted any reinsurance, to Pittsburgh.” On the morning of the 16th the Fidelity wired acceptance to Zwinggi at Pittsburgh. And there is this pertinent inquiry. If Short did not carry the news to Zwinggi on the evening of Friday, February 15th, when and how did he inform him that his company would take $50,000 reinsurance, for he did not again see Zwinggi, yet, twelve days later, and as a matter of course, his company executed the reinsurance.

Undoubtedly, Zwinggi and Short talked shop when they met, but Short’s testimony that Zwinggi fraudulently misrepresented any feature of the risk, is far from satisfying. Reinsurance is routine business; it is co-operative and reciprocal among surety companies. Handled daily in large volume and somewhat promiscuously, three-quarters of it over the telephone and the rest personally, by wire or post, and accepted or refused with the facility and some of the stability of a stock exchange, the trained operator looks chiefly to his company’s “board sheet,” the financial record of the depository, for guidance (the Commercial had reports on over five thousand banks), and participates in the joint venture, if the facilities of his company—ten per cent, of capital and surplus—warrant taking the risk; or rejects it if the board sheet dictates that course. The integrity of the major insurer is, of course, a voucher, but the ultimate guide is his own record of the depository seeking insurance. As an instance: At the time of the reinsurance the Commercial had a small line on the trust company and in November following it wrote another $80,000 depository bond obtained by Campbell, its Pittsburgh agent, who knew the local situation as Zwinggi knew it, relying on its board sheet, made up in part by a report of the trust company and of Bell accompanying the application for the bond, identical with Zwinggi’s credentials. Whatever the shop talk was, it is obvious from Short’s own testimony that any representations by Zwinggi as to the solvency and good management of the trust company or as to Bell’s worth, were expositive of his credentials, were referable to them and were the expression of an honest opinion based upon them; and Short so understood, so did his committee. An opinion or belief which, if honestly made, and founded upon what appeared to be reasonable and certain ground, is not actionable. Cowley v. Smyth, 46 N. J. Law 380; Henn v. Metropolitan Life Insurance Co., 67 N. J. Law 310. Short’s testimony of representation extra the credentials, finds no support in the circumstances and its disingenuousness approaches invention. The evidence shows how, by subtle suggestion to a mind not unwilling, the charges of fraud were cultivated; how the credentials were the ground-work for representation imputed to Zwinggi; how Short’s impressions became convictions, and his testimony but a reflection of his state of mind, not of his memory. Short left the Commercial for Florida three years before the hearing. He had handled thousands of similar cases. When the law suits were started, the Newark attorney of the Commercial (not present counsel) telegraphed him and his reply indicates a meager and dubious recollection. Without consulting him the lawyer sent him an affidavit and he swore to it as prepared, that Zwinggi represented the trust company to be “solvent and in a sound financial condition” and that Bell was “a man of large financial means and worth considerably more than the penal sum of the bond” and that Zwinggi had concealed the fact that the bond was a renewal. That affidavit was for use in the law court on a motion for leave to file supplemental answers. The motion denied, and the attorney anxious to move this court, the affidavit to the bill was remodeled, a year after the first one, in which Short swears that Zwinggi represented that the trust company “was highly solvent, well-managed and in sound financial condition” and that Bell was “a man of large financial means and worth more than $1,400,000 and that his resources were as high as '$10,000,000 or $11,000,000;” and that Zwinggi stated that “the bond was an original bond.” (The italics marks the variation.) That the variations were not accidental is emphasized by the transformation of the charge of concealment into a positive representation that the bond was a new one. At the hearing Short failed to support the averments of representation as to Bell’s worth, but instead asserted, as already pointed out, that Zwinggi represented that Bell was reputed to be worth in the neighborhood of $11,000,000 or ■$12,000,000, and that that representation was predicated ui)on Bell’s statement which Zwinggi showed him. And he waivered when it came to testifying that Zwinggi represented the bond to be a new one; this testimony was haltingly given, with conflicting modifications and plainly with mental reservations. The charge of false representations is not sustained.

The bill further charges that the Southern (meaning Zwinggi) knew and wilfully, fraudulently and maliciously concealed from the complainants knowledge of the facts that r

(a) The said surety bond entered into by the complainants and Carnegie Trust Company was not an original bond, but was a renewal;

(b) Several of the reinsurers on the bond of which the said surety bond was a renewal had refused to participate in the reinsurance on the said surety bond, and demanded a release of their liability from the prior reinsurance;

(c) At least one of such reinsurers had theretofore stated to the defendant that Carnegie Trust Company was improperly and irregularly managed;

(d) The defendant did not intend to carry more than $100,000 liability at its own risk on the said surety bond;

(e) There had been an investigation conducted by the auditor-general of the Commonwealth of Pennsylvania, commonly called the Kephart investigation, which disclosed irregularities in the management of the Carnegie Trust .Company and which resulted in the indictment of Harmon M. Kephart, state treasurer of Pennsylvania, for making false reports of his accounts, and his conviction thereof upon a plea of nolo contendere, and also the payment under compulsion b)r Carnegie Trust Company in December, 1922, to the Commonwealth of Pennsylvania of $15,049.24, as interest on money of the commonwealth, of which Carnegie Trust Company wrongfully had the use of as a result of the irregularities between the said Bell and Kephart;

(f) The reason the said surety bond was reduced from $1,400,000 to $1,000,000 was because some of the proposed reinsurers refused to participate in reinsurance on account of irregularities in the management of Carnegie Trust Company.

The question is: Was there a fraudulent concealment?' Mere non-disclosure, unless coupled with bad faith, is not fraudulent concealment. When the trust company failed in April, 1925, it was then for the first time discovered that Bell had for years corruptly misused its funds, and he was-later imprisoned. Up until the failure, the trust company was locally regarded as a flourishing, well-managed and sound institution; its published statements showed a constant increase in deposits and profits; it regularly made quarterly and annual departmental reports of its condition and was periodically examined by the state authorities, whose vise confirmed public confidence. And more, it was not closed for insolvency, and insolvency was not discovered until after a chronic failure to keep up its daily cash reserve moved the state banking department to intervene. As to Bell: Until the crash came he was looked upon as one of the leading citizens of Pittsburgh, in money worth, character, business integrity and civic and religious activities; and at the time of the reinsurance his reputation was at its pinnacle. He was president of six banks and director in a dozen corporations; a churchman, president of the local maternity hospital and president of the county workhouse. The R. G. Dun Agency said of him: “He is mentioned as a millionaire several times over, reported to handle his financial and business affairs in a capable manner, regarded wth confidence and reported prompt in his settlements.” The Jones Mercantile Agency said of him: “He bears an excellent reputation,” and that he is considered “one of the wealthiest men of this section.” His credit with other bankers was unlimited, according to an official of the banking department. The disclosures of the Kephart investigation in 1922 seem not to have disturbed public faith in the trust company nor in Bell. Public confidence in them was as firm after as before. The pertinent disclosure was that from 1918 to 1921 checks of the treasurer of Allegheny county drawn on the trust company to the order of the state treasurer, Kephart, for taxes due the state were withheld from deposit and were exchanged by him with Bell for trust company checks on its account in the Colonial Trust Company of which Bell was also president. These checks were signed by Bell as president, were blank in amount and were filled out by the state treasurer and deposited at his convenience. Bell and Kephart gave the investigating committee artful explanations; and as Bell left the stand he was “vindicated” by the auditor-general (he and the attorney-general were the committee); the committee’s report was drawn with circumspection; the trust company paid interest on the money withheld and Kephart was convicted of bad bookkeeping and fined. The Philadelphia North American featured the investigation, but it was discounted as a political attack upon Bell and his power and glory remained undiminished. In the public mind and in financial and official circles, the trust company was not looked upon as involved; intercourse with other banks and the clearing house continued normal and its outward aspect was that of a healthy and safe institution. The state banking department was unsuspecting and made no special examination. The ■Southern knew in a general way of the juggling of state funds by Bell and the state treasurer, and so did Zwinggi and unquestionably so did the large and many financial interests which continued their confidence in him and the trust company; bonding companies continued to insure its deposits. The National Surety Company, the largest of its kind in the world, bonded the trust company for $150,000 as late as February 12th, 1925, and continued to bond Bell’s other banks and companies. And Campbell, the Commercial’s general agent in Pittsburgh, who must have known in the same general way that Zwinggi knew, of the Kephart disclosures and of the unblemished and uninterrupted high regard in which the trust company and Bell was held, had no misgivings, for he bonded the trust company with the Commercial after the notoriety; Bell’s misdeeds were three j^ears past and the Kephart investigation two, when Zwinggi was reminded of them, while canvassing for the reinsurance, by the president of one of the reinsurers on the old bond, who showed him a copy of a letter he had written in 1922, to the president of the Southern calling his attention to the Philadelphia newspaper publication of them. The informing president had no other information and no intimacy with the merits of the risk, but he had a lurking suspicion, was distrustful and refused to reinsure the new bond. Zwinggi, who knew the current public esteem of Bell and the trust company, thought him too sensitive and over-cautious. Hindsight proves he was not. But we are concerned with the trust company’s and Bell’s standing when the reinsurance was effected, fourteen months before their downfall, and as of then, with the assuring atmosphere of public confidence in the institution as a background, the absolute good faith of Zwinggi and his company cannot be reasonably challenged. Undertaking the major risk and retaining $100,000 of the liability stands as a guarantee. There was no motive or urge to conceal. The major risk was entirely voluntary; the old four-year $1,400,000 bond had expired and was discharged, and Zwinggi’s ultimate orders were to write the new one only, if he had others who would participate to reduce the load to his company’s capacity, $100,000 and not otherwise. He solicited thirty or more. Five of the old reinsurers declined reinsurance on the new bond; one, because its line on the trust company was full; two accepted and then withdrew, though the Pittsburgh general agent of one of them, who knew the local situation, thought the risk a good piece of business; to a fourth the risk did not appeal because of the large amount of demand deposits carried by the trust company, and the fifth was the company which refused because of the Kephart disclosures. One of the companies had been “hollering” to get off the old bond; evidently not because of the risk, but because of the amount it was carrying, for it became a reinsurer of the new bond, though for a much reduced sum. Zwinggi was indiscriminate; his sole purpose was to sell reinsurance in the open market to anyone who cared to buy. Beinsurance is bought and sold like any other commodity and the market varies daily. He as often succeeded as he was denied, and denied for reasons unrelated to the merits of the risk; each management had its own policies. Declinations had' a variety of reasons. During the previous four years many of the companies had suffered severe losses in bank failures in the west and declined for that reason; some were discontinuing, others were retrenching. Some refused because their lines were full and others just refused. A refusal was not a reflection. Not revealing was not concealing. And so the trade understood and the complainants understood. The disclosures of the Kephart investigation, which in the light of future events were of sinister significance, had faded away, and to have revived what had become innocuous would have seemed at the time of the reinsurance but hurtful gossip. Silence as to it and non-disclosure that reinsurance had in some instances been declined were not fraudulent concealments. Nor was the failure to broadcast the reason for writing the new bond for $1,100,000 instead of $1,100,0000 as first proposed. Sufficient reinsurance could not be obtained to warrant the latter figure, but there is no proof that the lack was due to a conscious material cause. The complainants knew of the change and remained and its curiosity was not sufficiently aroused to inquire.

As to the bond: It was not a renewal of the same obligation. The old obligation had been satisfied and liability was at an end a month and a half before, when the out-going county treasurer paid over to the incoming treasurer the balance in his hands as required by the bond. With the new bond began a new risk to insure the funds of a new county treasurer. There was a new resolution by the county designating the trust company as depository of its funds during the term of the new treasurer and a new application for a new bond seeking a new engagement. The insurance field had again to be canvassed for reinsurance; reinsurers knew that the requirement for depository insurance on the same fund was constant; that the major bond was periodic; that successive insurance had to be written; that sometimes it was written by the same and at other times by another surety company; that reinsurance had to be obtained and that it was promiscuously solicited. Here the major bondsman simply took on the risk a second time with the co-operation of the reinsurers. The bond was as original as if another company had taken on the risk for the new term. Zwinggi told Campbell of the first bond and the reason for the new one and it made not the slightest impression upon him. It was not through inadvertence or a desire to conceal that he did not mention it in the conversation with Short; he did not think of it as an incident calling for a statement and the practice of the trade sustains him. Faith in the sincerity of the complainants’ now vigorous protest, that had they known they would not have reinsured without inquiring and that they always inquire if it is new or original insurance, is shaken by what actually occurred in the present case. When Short telephoned to Vreeland of the Fidelity, offering the reinsurance, he made no mention, nor did Yreeland make inquiry, whether the bond was a new risk or a renewal. Ignoring at that time what is now so strenuously claimed as a prime factor, indicates that inquiry was not the practice and is significant that it was then regarded as of no concern or consequence. In fact, the whole trend of the evidence leaves the impression of immateriality of Zwinggi’s alleged representations or concealments until the disaster and that they then became progressively important as the efforts to evade a just responsibility .advanced.

The defense of concealment of the disclosures of the Kephart investigation was before the United States circuit court of appeals (Eighth Circuit) in General Reinsurance Co. v. Southern Surety Co., 27 Fed. Rep. (2d ed.) 265, in suits against four of the reinsurers on the present bond. Judge Booth’s opinion, concurred in by Judge Sanborn and Judge Davis, because of its pertinency, is quoted at length. He says:

“The second broad question, and the most important one, which arises under the assignments of error is, whether the surety company in obtaining the reinsurance contract from the Independence company was guilty of wrongful and fraudulent concealment of material facts.

“Generally speaking, the same principles of law as to false representations and concealments govern in reinsurance as in original insurance. 24 Am. & Eng. Encyc. L. 261; 33 C. J. § 728 p. 49; Sun Mutual Insurance Co. v. Ocean Insurance Co., 107 U. S. 485, 510; Phoenix Insurance Co. v. Erie Trans. Co., 117 U. S. 312, 323.

“The strictest good faith is required on the part of one ■seeking original insurance, and also on the part of one seeking reinsurance. The duty exists on the part of each to disclose liis knowledge of all material facts. 33 C. J. supra; 7 Michie’s Encyc. of U. S. Rep. 155, 156. The cases having' to do with original insurance are therefore of value in reinsurance cases.

“In the leading case of Daniels v. Hudson River Insurance Co., 12 Cush. (Mass.) 416, 425, the court said:

“ ‘The terms “misrepresentation” and “concealment” have-a known and definite meaning in the law of insurance; and it is that meaning and sense, in which we are to presume-the parties intended to use them in their contract of insurance, unless there is something to indicate a different intent, “Misrepresentation” is the statement of something as fact, which is untrue in fact, and which the assured states, knowing-it to be not true, with an intent to deceive the underwriter,, or which he states positively as true, without knowing it to-be true, and which has a tendency to mislead, such fact in-either case being material to the risk. “Concealment” isdesigned and intentional withholding of any fact material to the risk, which the assured in honesty and good faith,, ought to communicate to the underwriter; mere silence on the part of the assured, especially as to some matter of fact' which he does not consider it important for the underwriter to know, is not to be considered as such concealment.’

“In Johnson v. Insurance Co., 93 Wis. 223, 228; 67 N. W. Rep. 416, the court said:

“ ‘Where a policy is issued without any application by the assured, and without any question being put to him as to matters material to the risk, and it contains a clause that it shall be void if any fact material to the risk is concealed by the insured, it will not be invalidated by the fact that the-assured did not disclose such material facts, if he did not intentionally or fraudulently conceal them. Woods, Ins., 388; Van Kirk v. Insurance Co., 79 Wis. 627; 48 N. W.. Rep. 798; Alkan v. Insurance Co., 53 Wis. 136; 10 N. W. Rep. 91; Dunbar v. Insurance Co., 72 Wis. 500; 40 N. W. Rep. 386'.

“To the same effect see Clark v. Insurance Co., 40 N. H. 333; Continental Insurance Co. v. Ford, 140 Ky. 406; 131 S. W. Rep. 189; Connecticut Fire Insurance Co. v. Colorado, &c., Co., 50 Colo. 424; 116 Pac. Rep. 154.

“In 2 Cooley’s Briefs on Insurance 1206, the rale is .stated: ‘The duty thus imposed on the applicant for insurance to disclose facts relating to the risk is, of course, limited to the disclosure of facts known to him. He cannot be expected to disclose facts of which he is ignorant’—citing numerous cases.

“That the pivotal test is good faith is supported by the following cases: Union Mutual Life Insurance Co. v. Wilkinson, 13 Wall. 222, 230; Moulor v. American Life Insurance Co., 111 U. S. 335, 345; Stewart v. Wyoming Ranch Co., 128 U. S. 383, 388; Miller v. Maryland Casualty Co., 193 Fed. Rep. 343; Mutual Life Insurance Co. v. Hurni Packing Co., 260 Fed. Rep. 661 (C. C. A. 8). The same test is applied in actions for deceit. Fidelity and Deposit Co. v. Drovers’ State Bank, 15 Fed. Rep. (2d ed.) 366 (C. C. A. 8); Pittsburgh L. and T. Co. v. Northern Central Life Insurance Co., 148 Fed. Rep. 674.

“Applying the foregoing principles to the facts as outlined above, we are of the opinion that there was no substantial eivdence upon which to base a verdict of fraudulent concealment of material facts. It is, of course, conceded that if the trust company or Bell was insolvent at the time of the making of the contract of reinsurance in February, 1924, or if it were true that Bell had been guilty of mismanagement and misuse of the public funds and falsification of the books of the trust company in 1922, such facts and each of them would be material to the risk under the reinsurance contract. It must be further conceded that if such facts were known to the surety company and were concealed from the reinsuring company, a valid defense would exist in its favor. There was, however, no evidence that such facts or any of them were known to the surety company. The test is to be made as of the time of making the reinsurance contract.

“At that time the financial condition of the trust company as shown by its statement was sound. It was doing a large and lucrative business. Its reputation where it was doing business was good. Mr. Bell’s financial standing was thought, to be excellent. The mercantile reports on him were highly favorable. The only thing shown by the record which in any degree tends to offset all this is the knowledge by the surety company that some eighteen months prior there had been an investigation by state authorities touching certain alleged mismanagement of state funds by the state treasurer in company with Bell. This report had been investigated by the-surety company, and the result of the investigation was such that the matter was dismissed from further consideration,, and now in February, 1924, the surety company was about to become itself surety on a new bond of the trust company for $1,100,000. All of the facts when considered together,, we think fail to furnish any substantial evidence of fraudulent, concealment.

“But it is contended that when Mr. Tompkins, in February, 1924, told Mr. Zwinggi, the agent of the surety company, about the letter which he [Tompkins] had written Mr. Cobb-some eighteen months prior, relative to Mr. Bell and the state-treasurer, this constituted notice of facts sufficient to put the surety company upon inquiry, and it then became the duty of the surety company to make an investigation; and if such investigation had been made, the surety company would have-learned that both the trust company and Bell were insolvent; that the surety company thus became charged with knowledge of the insolvency of both the trust company and Bell; and being thus charged with that knowledge, it was guilty of fraudulent concealment in not disclosing it to the defendant..

“The argument does not appear to us to be sound. In the final analysis it bases one presumption upon another presumption. The first presumption is that if the surety company had investigated it would have obtained knowledge of the insolvency of the trust company and of Bell. The second presumption is that if the surety company failed to disclose such knowledge it would be guilty of fraudulent concealment. The second presumption, viz., of fraudulent concealment, is thus based upon the first presumption, of knowledge. But a presumption in order to be valid must be based upon facts, not upon another presumption. 9 Encyc. of Evid. 880; United Slates v. Ross, 92 U. S. 281; Manning v. Insurance Co., 100 U. S. 693, 698; United States v. Carr, 132 U. S. 644, 653; Looney v. Metropolitan Railroad Co., 200 U. S. 480, 488; Cunard Steamship Co. v. Kelley, 126 Fed. Rep. 610, 615; Uhlman v. Brewing Co., 53 Fed. Rep. 485; United States F. & G. Co. v. Bank, 145 Fed. Rep. 273, 279 (C. C. A. 8); Vernon v. United Slates, 146 Fed. Rep. 121 (C. C. A. 8); Missouri, K. & T. Railway v. Foreman, 174 Fed. Rep. 377, 383 (C. C. A. 8); Smith v. Pennsylvania Railroad Co., 239 Fed. Rep. 103; Ringrose v. Sloane, 266 Fed. Rep. 402; Atchison, T. & S. F. Railway Co. v. De Sedillo, 219 Fed. Rep. 686, 689 (C. C. A. 8); Wagner v. United Stales, 8 Fed. Rep. (2d ed.) 581, 586 (C. C. A. 8); In re Elias, 240 Fed. Rep. 448; Keen v. United States, 11 Fed. Rep. (2d ed.) 260 (C. C. A. 8); Niederluecke v. United Stales, 21 Fed. Rep. (2d ed.) 551 (C. C. A. 8).

“Furthermore, we clo not think that the statement of Tompkins to Zwinggi was sufficient to put the surety company upon inquiry. That statement did not relate to a present situation, but to Tompkins’ letter eighteen months old, about a prior situation; and that situation which he had called attention to eighteen months before, had been investigated at that time and dismissed from further consideration. There was nothing in the situation as it existed in February, 1924, that would incite the surety company to a new investigation.

“It is further contended that a showing of fraudulent concealment was not necessary to constitute a defense, but that it was sufficient to show a mere non-disclosure of material facts which might have been known by the surety company. The reply to this contention is two-fold; first, the answer of defendant setting up its defense expressly charges that the surety company, was at the time in ‘possession of the facts,’ and ‘fraudulently and intentionally concealed said facts from the defendant, well knowing that if such facts had been disclosed the defendant would have declined to reinsure any part of said risk, and intending thereby to deceive the defendant and induce it to participate in said risk.’ This plainly was a defense of fraudulent concealment; and not of mere non-disclosure. Secondly, we think that it was indispensible to a 'valid defense to show either intentional concealment of known material facts, or bad faith in refusing to ascertain such facts.

“It is true that many of the older cases, especially those relating to marine insurance, support the doctrine contended for by plaintiff in error. But we think the more modern doctrine, especially as related to classes of insurance other than marine, makes good faith on the part of the insured a determining factor, except in those cases where specific questions have been asked and answered. An exhaustive discussion of the change from the old rule in marine insurance to the modern rule in other classes of insurance, together with the reasons underlying the change, will be found in an opinion by present Chief-Justice Taft, then circuit judge, in the case of Pennsylvania Mutual, c., Insurance Co. v. Mechanics, &c., Co., 72, Fed. Rep. 413, a life insurance case. He sums up his discussion in the following words:

“ ‘* * * we think the modern tendency, even of Massachusetts decisions, is to require that a non-disclosure of a fact not inquired about shall be fraudulent, before vitiating the policy; and, as already stated, this view is founded on the better reason. The subject is by no means as clear, upon the authorities, as could be wished, and the text writers find much difficulty in reconciling the cases.’

“In Elliott on Insurance the author states as follows (page 81):

“ ‘While the decisions are not uniform, there is high authority for the view that under modern conditions the concealment of a material fact through inadvertence or mistake and without fraudulent intent, will not invalidate a contract of insurance. This tendency also appears by the enactment of statutes providing that false representations shall not invalidate the contract unless they increase the risk or are fraudulently made.’

“See, also, Northwestern Steamship Co. v. Maritime Insur ance Co., 161 Fed. Rep. 166, 178; Keatley v. Grand Fraternity, 198 Fed. Rep. 264; El Dia Insurance Co. v. Sinclair, 228 Fed. Rep. 833, 839, 840; National Bank of Ashville v. Fdelity and Casually Company of New York, 89 Fed. Rep. 819; Collins v. Iowa Manufacturers’ Insurance Co., 184 Iowa 747; 169 N. W. Rep. 199; Hall v. Peoples Mutual Fire Insurance Co., 6 Gray (Mass.) 185; Brunswick-Balke-Collender Co. v. Northern Assurance Co., 142 Mich. 29; 105 N. W. Rep. 76; Boggs & Leather v. American Insurance Co., 30 Mo. 63.

“It would serve no useful purpose, even If time and space would permit, for us to review the large number of cases cited by plaintiff in error. Leaving out of consideration marine insurance cases, it is sufficient to say that in our judgment the best considered cases fall into one of the following classes: 1. Where insured, having actual knowledge of material facts, has intentionally failed to disclose them truthfully. 2. Where insured, though not having actual knowledge of material facts, yet has intentionally, and in bath faith, refused to become acquainted with the facts. In the instant case we think there was no substantial evidence showing either intentional concealment of known material facts or bad faith in refusing to ascertain such facts.”

The prayer of the bill is denied.

The Southern counter-claims for the reinsurance. The answer is that it is not entitled to recover because it defaulted in a condition upon which the reinsurance was written, that: “The amount of liability retained by the reinsured [defendant] at its own risk on principal [trust company] while their agreement remains in force shall in no event be less than one hundred and fifty thousand dollars ($150,000).”

The first specification of the defense is that the Southern carried a risk of only $100,000 during a part of the year 1924, from August 20th to January, 1925. The Southern retained a $100,000 liability on the $1,100,000 bond and at the time was liable on a bond for $125,000 to the Allegheny County .Home for a trust company deposit, upon which its net liability was $75,000; it had reinsured for $50,000. That bond was written August 20th, 1920, and the condition reads':

“Whereas, the above bounden Carnegie Trust Company has been chosen depository for the said Allegheny County Home, of which Joseph G. Armstrong is treasurer, and by reason thereof will receive into its hands divers sums of money, goods and chattels and other things the property of the said Allegheny County Home.
“Now, the condition of this obligation is such, that if .the said Carnegie Trust Company, its successors or assigns, at the expiration of the period for which it has been designated as depository, or at any time during such period upon request to it made shall make and give unto such auditor or auditors as shall be appointed by the said Allegenhy County Home, a just and true account of all such said sum or sums of money, goods, chattels and other things that have come into its hands, charge or possession as depository of the said Allegheny County Home aforesaid and shall and do, pay and deliver over to its successors or any other person or corporation, duly authorized to receive the same, all such balances or sums of money, goods and chattels and other things which shall appear to be in its hands and due from it to the said Allegheny County Home or Joseph H. Armstrong, its treasurer, without any fraud or further delay, then this obligation is to be void, otherwise it is to remain in full force and virtue.”

At the annual meetings of the home held in Januaiy of 1921, 1922, 1923 and 1924, the trust company was by resolution redesignated as depository, but no new bond was written and there were no written renewals of the one that had been. The Southern, however, annually charged the annual premiums against its Pittsburgh branch and paid to its reinsurers their annual premiums. This carried the premium charges on the bond and the premium payments to the reinsurers to August 20th, 1925. The parties to the bond treated the yearly designations as extensions of the period mentioned in the bond, and the bond as a continuing obligation so long as the trust company should be designated; so did the reinsurers on the bond and the Southern accounting card records the term of the bond as indefinite. These facts testify, as one voice, to the binding force of the bond and the Southern was estopped by its course of conduct from denying liability. It is upon the following circumstances that an hiatus in the liability is based: In January, 1925, at the request of the Southern and by resoluton of the home, the $125,000 bond was exchanged for one of $75,000 and the Southern rebated the unearned premium on the old bond to its Pittsburgh branch and charged it with the premium on the new one and accordingly readjusted the premium with its reinsurers. Due to an error of an employe in the Pittsburgh branch, who advised the home office that the old bond was canceled as of August 20th, 1924, and the new one written as of that date, the entire premium for the year, August, 1924, to August, 1925, on the $125,000 bond was rebated and the readjustment with the reinsurer was made on that basis, but upon discovery, the error was corrected and the adjustment was made as of January, 1925. That is all there is to that. The fact that the trust company paid the Pittsburgh branch the annual premiums irregularly is irrelevant to the claim of non-continuity of the risk. The last payment was in December, 1923, which carried the premium to August 20th, 1924, and the earned premium on the old bond, and that on the new one stood as a charge upon the books of the Pittsburgh branch when the trust company failed in April, 1925. It was a credit extended by the branch, to which it stood charged by the home office, and was as potent against the Southern as if the premium had, in fact, been paid to the branch. A further contention of an hiatus is that the Southern’s’liability on the $125,000 bond came to an end with the expiration of the last of the four yearly terms of Joseph 0. Armstrong, mentioned in the: bond as treasurer of the home, and upon the election of John B. Poster as his successor, in January, 1924, and that from then until the giving of the $75,000 bond in January, 1925, the Southern’s promised liability of $150,000 “risk on principal” was blit $100,000. This is not tenable. The term of the $125,000 bond was not coincident with the term of Armstrong and its continuity was not contingent upon the personnel of the treasurer, for when Poster was elected the trust company was again designated, and at that time its liability on the bond was current. The risk continued from designation to designation, irrespective of the term of the treasurer.

The other specification of defense is that the $75,000 bond was not a risk for that sum because it contained this provision:

“Fourth. The surety shall not be liable for a greater proportion of the amount on deposit at the time of default hereunder, after deducting therefrom the value of all collateral delivered by the principal to or for the use of the obligee to secure such deposit, than the amount of this bond bears to the aggregate amount of all valid and enforceable bonds, indemnity and collateral (other than collateral delivered by the principal as aforesaid) held by the obligee at the time of such default and liable therefor.”

The provision, is part of the printed form of the bond. It was not known by the Southern that the Home had demanded of the trust company additional security for an extraordinary deposit of $300,000, the proceeds of the sale of bonds, and that $300,000 of Carnegie Coal Company bonds were temporarily furnished until a surety bond could be substituted. The Home held the bonds when the trust company failed; what thejr were worth, if anything, does not appear in the proofs. The circuit court of appeals in the General Reinsurance Company Case, supra, disposed of this defense, which is adopted, in these few words:

* * The contention of the plaintiff in error that risk of loss under the $75,000 bond was reduced below the requisite amount by reason of the two provisions above mentioned in the bond is, we think, without merit. The amount of deposits which the obligee in the bond might make with the trust company was not subject to the control of the surety company; so that it was quite possible for the obligee to make at any time deposits with the trust company in such an amount that there would be liability under the $75,000 bond to the full amount, notwithstanding the collateral and the other bond. It was the taking of the risk of such liability, and not the certainty that such liability would exist, that constituted the performance of its contract by the surety company. The provision of the reinsurance contract relative to the retention by the surety company of risk of loss did not increase or diminish the risk of loss of the reinsuring companies. That provision was in reality simply to furnish evidence of good faith.”

The Southern is entitled to recover on its counter-claim.


source: Caselaw Access Project

author: Pee Curiam.

license: Public Domain

text:
    HENRY PASS, PLAINTIFF, v. MERCHANTS TRADE SECURITIES CORPORATION AND COMMERCIAL CREDIT CORPORATION, DEFENDANTS.
    Submitted October term, 1930
    Decided June 24, 1931.
    Before Gummere, Chief Justice, and Justices Trenciiard and Lloyd.
    For the rule, Green S Green.

    Contra, I. Faerber Goldenhorn.

   Pee Curiam.

This is defendant Commercial Credit Corporation’s rule for a new trial in an action where the plaintiff Pass recovered a judgment for the value of an automobile which it was claimed had been unlawfully taken possession of by the defendant under an attachment against the Quality Motor Car Company.

Three grounds, substantially, are urged for making the rule absolute: (1) That the court should have controlled the case by nonsuit or direction of-a verdict for the defendant; (2) that the verdict was against the weight of the evidence; and (3) that the damages are excessive.

The case made by the plaintiff was that the car, a Stanley Steamer, had been purchased from the Quality Motor Company and a few months later was taken to the service station of that company for repairs; that while in the service station it was taken out by the defendant under the attachment proceedings and sold.

The first two reasons are based on the contention that there was not sufficient evidence that the plaintiff’s car was the one taken out of the service station or that the persons who took it were the agents of the defendant.

The car was clearly identified by the plaintiff as the one he had purchased and we entertain no doubt that the defendant was directly involved in the steps taken to obtain the possession of the car and its subsequent sale. Our conclusion, therefore, is that the court properly refused to withdraw the case from the jury, and that the verdict was not against the weight of the evidence.

Nor do we deem the damages excessive. The car had been purchased seven months before the seizure for $3,515; the jury’s award was $2,500, and there was credible evidence to support the finding.

The rule for new trial is discharged.


author: Pee Ctteiam.

text:
    MAX MILLER, RESPONDENT, v. PETER RICHIERI AND LOUISE RICHIERI, DEFENDANTS; JOSEPH WHITE, APPELLANT.
    Argued May term, 1931
    Decided June 24, 1931.
    Before Justices Campbell, Lloyd and Bodine.

      For the appellant, Bernard 8. White.

    For the respondent, Gyrus W. Lunn.

   Pee Ctteiam.

This is an appeal by the defendant White from a judgment against him in the First District Court of Hudson county. The action was to recover one-half of a commission claimed to have been earned upon an exchange of properties and was brought against the owners of one of the properties and Joseph White, a real estate broker. The basis of the claim was that the plaintiff and White were both instrumental in effecting the exchange of the properties and that they had agreed between themselves that the commission of $500 should be divided. The money was paid to White by the owners but Miller did not get his share. He then brought this action and obtained judgment against White.

The grounds of appeal appearing in the state of the case are tjiat the judgment was erroneous (1) because there was no legal evidence to support it; (2) that the court erred in admitting secondary evidence of a contract without proper foundation being laid therefor; (3) in refusing to strike out this secondary evidence; (4) because the judge refused to grant a nonsuit. These grounds are elaborated in the specification of the determinations in the court below with which the appellant is dissatisfied, but they are all substantially covered by the grounds of appeal.

It seems that the plaintiff Miller and the defendant White had been engaged by the other defendants, the Eichieris, to effect an exchange of the property belonging to the Eichieris. This resulted in the making of a contract between Eichieris and one Bournique. Peter Eichieri, one of the defendants, was called by the plaintiff and was asked i£ the contract provided for the sale of his property in Hackensack. Objection was made but overruled. Without passing upon the propriety of this question, in view of a demand having been made for the production of the contract by the defendant’s attorney, it is sufficient to say that the information had been elicited without objection by questions propounded both before and after the question here involved. Miller on the stand was asked these questions:

“Q. When you first spoke to Mr. Richieri at Mr. Accardi’s office, was anything said by Mr. Richieri to you about the payment of commissions on the sale of this property?”

“Q. What conversation took place then in the presence of Richieri, Joseph White and Alexander White concerning anjr commissions ?”

Objection was made but no ground therefor stated. A mere objection without stating a ground therefor brings nothing to the mind of the trial judge and the ruling thereon cannot be made a ground of appeal. Semhin v. Hollander, 82 N. J. L. 485.

Einally this-question was asked:

“Q. What did you read in the contract concerning the payment of commissions?”

Objection was made that it must be shown that the witness knew the contents of the contract to which the court replied that it presumed that would be shown later. We find no error here. The court’s remark can hardly be deemed a ruling. Even if regarded otherwise appellant is not injured. Plaintiff was suing his fellow broker for commissions which had been paid and for which the latter had failed to account in accordance with their agreement. To this issue the contract for the exchange was irrelevant. The Riehieris, who alone could complain, were exonerated in the judgment as rendered and are not appealing.

Motion for nonsuit was apparently based on the ground that there was no sufficient proof that Joseph White had received the commission. This contention is not borne out in fact. Plaintiff testified that White admitted that he had received the commission. The nonsuit was, therefore, properly refused.

The judgment is affirmed, with costs.


author: Per Curiam.

text:
    RALPH FANTAUZZO AND SADDLE RIVER TOWNSHIP BUILDING AND LOAN ASSOCIATION, PLAINTIFFS, v. PHOENIX ASSURANCE COMPANY OF LONDON, AMERICAN EAGLE FIRE INSURANCE COMPANY, AND FEDERAL INSURANCE COMPANY, DEFENDANTS.
    Argued October term, 1930
    Decided June 24, 1931.
    Before Gummere, Chief Justice, and Justices Trenchard and Lloyd.
    For the rule, Joseph T. Lieblich.

    Contra, Arthur T. Vanderbilt.

   Per Curiam.

The action in this ease was a joint one in which Fantauzzo sought to recover on two policies against the Phoenix Insurance Company and on another policy against the Federal Insurance Company for loss sustained by fire damage to a building, and on still another policy against the American Eagle Insurance Company for like damage to household goods. The Saddle River Township Building Association sued as mortgagee on all of the policies covering the building. The case was tried as one before a judge and jury and resulted in a verdict being rendered in the following form:

“2. Federal policy void because the plaintiff acquired under false representations.

“a. Saddle River Building and Loan was entitled to full recovery with interest at the legal rate on two Phoenix policies.

“b. Plaintiff entitled to remainder of amount of the two Phoenix policies after the Saddle River claim has been deducted.

“3. Plaintiff entitled to $1,000 with legal rate of interest on American Eagle policy.”

Plaintiffs and defendants then presented to the Circuit Court judge posteas for signature. That presented by the defendants was signed by the judge and is in the following form:

“The jury returned the following verdict:

“1. The sum of $1,132.43 in favor of the plaintiff Ralph Eantauzzo, against defendant Phoenix Assurance Company of London.

“2. The sum of $1,253.57 in favor of plaintiff Saddle River Township Building and Loan Association against Phoenix Assurance Company of London.

“3. The sum of $1,194 in favor of plaintiff Ralph Eantauzzo against defendant American Eagle Eire Insurance Company.

“4. In favor of defendant Eederal Insurance Company and against plaintiffs.”

The postea as presented by the plaintiffs would award to Eantauzzo $1,679.27 against the Phoenix company on both policies and $1,421.46 for the building association, and otherwise, was in accordance with the postea as signed.

The verdict was rendered June 11th, 1930. No application was made to the trial judge for a rule for new trial within the six days required by the rules of the court. The postea was signed on July 1st, 1930, and on July 11th the trial judge allowed a rule to show cause before this court “why the postea as signed should not be reformed, reeasted, and/or restated, altered or amended to comply and conform with the intent and verdict as rendered by the jury * * * and that judgment be entered in conformity therewith * * * and in the alternative why the verdict as entered should not be set aside,” reserving exceptions.

Insofar as the rule is in the alternative praying a new trial it is without force, not having been applied for to the Circuit judge within six days after the rendition of the verdict as required by the rules of this court. Insofar as it seeks a modification or restatement of the postea, no reasons for such modification are set forth in the state of the case as required by our rules. If the reasons urged in the brief of the plaintiffs, and which it is claimed were actually filed (but after the thirty days allowed by rule of court), are examined and considered, they disclose a claim not that the postea should be annulled or set aside, but in substance that it should be modified by substituting the amounts set forth in the postea as presented by the plaintiffs.

The verdict in the respects here involved is so informal that its sufficiency to sustain any judgment for money damages is more than doubtful, and our examination leads us to the conclusion that we could not properly make use of it, even if reasons in support of the rule had been filed in time and printed in the case, to enlarge the awards.

The rule is discharged.


author: Pee Cueiam.

text:
    FRANK HOLDSWORTH AND UNIVERSAL SECURITY COMPANY, RELATORS, v. FRANK HAGUE, WILLIAM B. QUINN, JOHN BEGGANS, MICHAEL I. FAGAN AND ARTHUR T. POTTERTON, COMMISSIONERS OF JERSEY CITY, ET AL., RESPONDENTS.
    Argued October term, 1930
    Decided June 24, 1931.
    Before Gummeke, Chibe Justice, and Justices Tbenchabd and Lloyd.

      Eor the relators, Richard Doherty.

    For the respondents, Thomas J. Brogan.

   Pee Cueiam.

This case is before ns on the return to an alternative writ of mandamus to compel the issuance of a permit by the respondents to the relators for the erection of a building on Sip avenue in Jersey City.

The proposed structure is a building in similitude of a dining car, erected, however, on permanent foundations.

It is admitted that the application for the permit is in due form, and that no present legal objection exists to the construction 'of such a building, but it is urged that the respondents are engaged in making a survey of the city with the view to the adoption of a zoning ordinance which might prohibit the construction of the proposed building; that such an ordinance has been proposed and that upon it numerous hearings have been held, and that in this situation the respondents should be given the necessary time to adopt a satisfactory ordinance.

The application for the permit was made in August of 1929. The alternative writ was issued in June, 1930, and came on for hearing before this court at the October term of 1930, and no ordinance had yet been adopted.

The relators are entitled to a peremptory writ of mandamus. While it is true that in Butvinik v. Jersey City, 142 Atl. Rep. 759, and other cases it was held that municipalities were entitled to a reasonable time after the adoption of the zoning amendment to the constitution in 1927 and the passage of the Zoning act of 1928 (chapter 274) in which to act, we think the reasonable time thus accorded has expired. It is not within the contemplation of the cases cited that property owners should be held up indefinitely in the lawful use of their property, and at the same time be obliged to pay taxes thereon to the city while the latter contemplates the passage of an ordinance that may by possibility affect such property.

The peremptory writ is awarded.


text:
    ANDREW BRENGEL, MARY BAKER AND ELIZABETH BRENGEL, RELATORS, v. THE MAYOR AND ALDERMEN OF JERSEY CITY, BOARD OF COMMISSIONERS OF JERSEY CITY AND EDWARD J. SPOERER, SUPERINTENDENT OF DEPARTMENT OF BUILDINGS OF JERSEY CITY, RESPONDENTS.
    Submitted October term, 1930
    Decided June 24, 1931.
    Before G-ummebe, Chief Justice, and Justices Tbenohabd and Lloyd.
    Por the relators, Ziegener & Brenner (Robert II. Brenner, of counsel).
    For the respondents, Thomas J. Brogan and Charles IIershenstein.

   Pee Cueiam.

The questions involved in this case are the same as those considered and passed upon in Holdsworth v. Hague et ah (No. 56 of the present term), and for the reasons there expressed a peremptory writ of mandamus is awarded.


text:
    GEORGE SIMNLER, BY HIS NEXT FRIEND, AUGUST SIMNLER, AND AUGUST SIMNLER, INDIVIDUALLY, PLAINTIFFS, v. LYNN F. WOOLMAN, DEFENDANT.
    Submitted October term, 1930
    Decided June 24, 1931.
    Before Gummere, Chief Justice, and Justices Trenchard and Lloyd.
    For the rule, William Herda Smith.

      Conlra, Charles Stoclcdell Cray.

   Per Curiam.

The action in this case was brought to recover damages for injuries to the plaintiff, George Simnler, arising out of a collision between a bicycle ridden by him and an automobile owned and operated by the defendant. There was a verdict of $2,000 for the injured plaintiff and $1,500 for his father, August Simnler. Defendant has a rule for new trial.

The principal grounds urged for making the rule absolute are that the verdicts are contrary to the weight of the evidence and that they are excessive in amount.

Our examination of the evidence leads us to the conclusion that neither of these grounds is sufficient to justify a disturbance of the verdicts. The injured plaintiff’s proofs were that he, having proceeded westward along the northerly side of Vernon Terrace in East Orange, was in the act of turning to the right (north) on William street when defendant’s car proceeding south turned out from behind another car and collided with the bicycle which the plaintiff was riding. These proofs further tended to show that in making the turn the bicycle was continuously near the right-hand curb of Vernon Terrace while in that highway and that in turning it remained near the easterly side of William street and that the defendant’s car, in attempting to pass the car immediately in front of it, was on defendant’s left-hand side of William street which brought his car into direct line with the bicycle of the plaintiff. These proofs the jury could fairly accept, and the verdicts were therefore not against the weight of the evidence on liability.

As to the injuries sustained, the evidence disclosed that the boy plaintiff was rendered unconscious and taken to a hospital where he remained three weeks; his injuries consisted of a concussion of the brain, a swelling around the neck which distorted the shape of his face, a fracture of the right collar bone, a fracture of the large bone o£ the arm between the shoulder and elbow and a resultant limitation of the motion of the arm. He was employed as an errand boy at $14 a week and was kept out of work by reason of the accident for several months, returning finally at reduced wages. It cannot be said under such proofs that the verdict of $2,000 in favor of George Simnler was excessive.

As to the award to the father, there was proof of bills incurred of over $500. This, together with the loss of wages, present and prospective, fairly justified the award in favor of the father.

Other reasons advanced for making the rule absolute concern alleged error in the court’s rulings on evidence. These rulings were on questions submitted to the doctor regarding X-ray plates of the boy’s injuries, questions directed to the physician intended to elicit information as to whether a limitation of motion which he found to exist was due to the injuries sustained in the accident here involved or those due to a former accident, whether a condition of vertigo could be attributable to the injuries, and as to the reasonableness of a hospital bill. To some of these questions objection was not made until after the answers had been given; to others the objections were made in general terms without any reasons being advanced therefor. Even though we pass these defects and consider the merits of the contentions, we find no error in the court’s rulings on the questions involved.

The rule for new trial will be discharged.


text:
    JOHN H. EGGENS AND ANNA N. EGGENS, PLAINTIFFS, v. YELLOW CAB, INCORPORATED, A NEW JERSEY CORPORATION, AND DANIEL NEW, DEFENDANTS.
    Submitted October term, 1930
    Decided June 24, 1931.
    Before Gummere, Chief Justice, and Justices Trenci-iard and Lloyd.
    For the rule, Turner & Staller and John A. Matthews.

    Contra, Francis A. Gordon.

   Per Curiam.

A collision occurred between an automobile of the defendant New and a cab of the Yellow Cab Company at the corner of Magie and Elmore avenues in Elizabeth, as a result of which collision the New ear ran up on the sidewalk striking and injuring the plaintiff Anna N. Eggens, who at the time was waiting to cross the street. The action is to recover for these injuries.

A verdict was rendered against both defendants in favor of Mrs. Eggens in the snm of $12,500, and in favor of her husband in the snm of $2,500 for the loss sustained by him. Both defendants have rules for new trial, New contending that the verdicts are excessive in amount, and as to him that they are against the weight of the evidence as to liability; the cab company contending that the verdicts are excessive and as to it that they are against the weight of the evidence as to liability.

We think the verdicts were properly awarded against both defendants. The evidence would justify the conclusion that the collision was due to the failure of each to observe due care on approaching the intersection. The clay was rainy and the streets wet; the New car was going south on Elmore avenue and the taxicab proceeding west on Magie avenue. The situation called for the exercise of caution on the part of each driver, and the evidence fairly discloses a failure to observe such care on the part of both. The verdicts will not be disturbed on the weight of the evidence.

The verdict in favor of Mrs. Eggens we think is grossly excessive. Her observable injuries consisted largely of bruises, but it was contended that an old arthritic condition had become materially aggravated because of the injuries received. Making all due allowance for all the proven injuries we think the damages awarded are excessive in so far as they exceed the snm of $7,000, and if she will remit all of the award beyond that amount, the rules as to her will be discharged; otherwise they will be made absolute as to damages only.

The award of $2,500 to the husband is not so clearly excessive as to justify a new trial. The rules in that case will he discharged.


text:
    CITY Of NEWARK, IN THE COUNTY Of ESSEX, AND JOHN HOWE, CITY TREASURER Of THE CITY Of NEWARK, RELATORS, v. PUBLIC SERVICE CO-ORDINATED TRANSPORT, A CORPORATION, RESPONDENT.
    Submitted January term, 1931
    Decided June 29, 1931.
    Before Justices Case, Daly and Donges.
    Eor the relators, Franlc A. Boettner (Spaulding Frazer and Louis A. Fast, on the brief).
    Eor the respondent, William H. Speer.

   Pee Cueiam.

On the petition of the relators an alternative writ of mandamus issued to compel the payment to the city treasurer of the city of Newark certain moneys deducted by the respondent for the transportation of police officers and municipal and county detectives, as authorized by chapter 324 of the Laws of 1929 (a supplement to the “Act concerning public utilities”), from the five per centum of the respondent’s gross receipts payable under the act entitled “An act concerning auto buses, commonly called jitneys, and their operation in cities,” approved March 17th, 1916, and the acts supplemental thereto and amendatory thereof. There was a demurrer and a joinder thereon. The single point presented for onr consideration is the contention of the relators that chapter 324 of the Laws of 1929, under which respondent claims its right to the deduction, is unconstitutional.

The first argument advanced is that the legislation is unconstitutional because its object is not expressed in its title. We consider that this point is answered by the decision of the Court of Errors and Appeals in State v. Sutton, 87 N. J. L. 192. The court there had under review an earlier form (Pamph. L. 1912, ch. 159) of the precise statute now before us. The 1912 act provided that each street railway company or corporation referred to in the Public Utilities act should “grant free transportation of uniformed public officers while engaged in the performance of their public duties, or police officers of whatever grade or rank acting as detectives, county detectives or detectives attached to or connected with the office of the prosecutor of the pleas in any county in this state while engaged in the performance of their public duties, whose duties require police duty to be performed without uniform.” The 1929 act is in essence the same except that the word “free” is struck out and there is added a provision that for such transportation an amount equal to the lawful fare shall be considered a credit on account of any franchise tax, or charges in the nature thereof, payable or apportioned by law or ordinance to any municipality wherein such transportation takes place. The title to the 1912 statute was precisely the same as the title to the 1929 statute, to wit: “A supplement to an act entitled cAn act concerning public utilities; to create a board of public utility commissioners and to prescribe its duties and powers/ approved April 21st, 1911.” The Court of Errors and Appeals in the Sutton case sustained the 1912 legislation upon the ground that it was a constitutional exercise by the legislature of its police power, inasmuch as the result of the statute was to induce the presence of police upon street railway ears and the police protection thus procured was within the object expressed in the language of the statute; and this, too, even if compliance ■with the statute meant the exacting of tribute from the carrying companies. The 1912 statute placed the expense of the transportation of the police officers upon the carrying companies; we are assuming, since that is the relators’ contention, that the 1929 legislation places it upon the municipality-That is a distinction that we conceive to be without a difference with respect to the completeness of the title. So far as the relation between the title and. body of the legislation is concerned, we consider that the 1929 legislation stands on the same footing as that of the 1912 legislation. Since the latter has been declared constitutional in toio and since-the greater includes the less, we must assume that the constitutional requirements are met in its title as well as in the other features of the statute. We conclude that the legislation under review is sound against this attack.

The second point is that the 1929 act is unconstitutional as violative of article 4, section 7, paragraph 12, of the state constitution; in other words, that the effect of the act is to-levy upon a municipality an arbitrary and undefined contribution for the benefit of counties and other municipalities. Again we assume the accuracy of relators’ assertion that the-method of compensation to the utility provided by the statute is a levy against the municipality. It is to be borne in mind that the essence of the legislation has been held to be the-furnishing of police protection. As was said in the Sutton case: “The transportation of the officer is a subordinate incident to the police regulation, and of the power of the legislature to enact such a regulation there would seem to be-neither room for doubt nor ground for denial.” It is difficult to distinguish, in point of constitutionality, between a statute-that provides police protection within a municipality at the expense of a utility and one that provides police protection within a municipality at the expense of the municipality; that is to say, it is difficult to understand how the former could be constitutional, and the latter, under the argument advanced by the relators, unconstitutional. A municipality is under the obligation to provide, or, at any rate, is well within its constitutional and statutory authority in providing, police protection within its boundaries. The relators raise the objection that the police officers carried, under the 1929 .statute, at the expense of the municipality include police •officers of other municipalities and of county governments; but so did the 1912 statute which has been sustained not only in the Supreme Court and in the Court of Errors and Appeals, but also in the United States Supreme Court. And if the carrying of such officials affords police protection to the municipality what is the impropriety, constitutional or otherwise, in the payment therefore from municipal funds? We fail to distinguish how the shifting of the expense of furnishing the police transportation from the utility to the municipality changes the constitutional aspect.

The third point is that the statute is unconstitutional as violative of article 1, sections 19 and 20, of the state constitution, by which provisions the municipality is prohibited from giving any money or property, or from loaning its money or credit to or in aid of any corporation and from appropriating any money to or for the use of any corporation. The municipality is not called upon to give money or property, or to loan its money or credit, or to appropriate any money to or for the use of any corporation. It is merely paying a cost item •of police protection within its municipal lines. The amount withheld by the utility for the carrying of a police officer is precisely the same as it charges every passenger on its vehicles, .and this rate has been fixed by the board of public utility commissioners. A full quid pro quo, as determined by an ■arm of the legislature, is given. The city in paying for fares ■of police officers actually transported no more contributes or gives funds to the utility than it gives money to the contractor, whether corporate or individual, who paves a street or builds a bridge. Indeed, the funds devoted to this purpose are not funds raised by the city of Newark as a part ■of its municipal taxes. It is a fund collected by the state and disbursed amongst the municipalities of the state in such fashion as the legislature has determined. Viewed in that light, the disbursement is not by the city. It is by the legislature and for a cause, namely, police protection, and in the exercise of a power of the legislature, of which, as has been well said, there seems “to be neither room for doubt nor ground for denial.”

The peremptory writ is denied.


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    ANNA KRATZSCH AND RUDOLPH KRATZSCH, PLAINTIFFS-PROSECUTORS, v. JOSEPH GRADITOR, DEFENDANT-RESPONDENT.
    Submitted January term, 1931
    Decided June 29, 1931.
    Before Justices Case,. Daly and Donges.
    Por the rule, Sidney Alexander.

    Contra, Harley, Cox & Walburg.

   Per Curiam.

Rudolph Kratzsch, owner of an automobile, and his wife>. Anna Kratzsch, a passenger therein who suffered personal injuries, sued the defendant, owner and driver of an automobile truck, for damages arising out of a collision between the two vehicles at the intersection of Lexington avenue and Portland avenue in the city of Clifton. The defendant filed a counter-claim. The jury rendered a verdict of no cause of action in favor of the defendant in the plaintiffs’ case and a judgment in favor of the defendant and against the plaintiff Eudolph Kratzsch, in the sum of $75 on the counterclaim. Plaintiffs argue four points on their brief.

The first is that the charge to the jury was improper in that the trial court submitted to the jury, as largely controlling the outcome of the controversy, a question, namely, the insufficiency of lights, not within the issues presented by the pleadings and litigated by the parties. The question of variance was not, however, set up in the reasons and therefore is not properly before us.

The second point is that the court improperly commented on evidence which was not actually adduced in the case and, in connection with the above-mentioned charge, confused and misled the jury. The reference is to that portion of the court’s charge which commented on the evidence as to the lights on the Kratzsch car and quoted a portion of the Motor Yehicle act relating to lighting devices. Sufficient to say that the evidence was in the record and that the excerpt from the statute was correctly read. We find no abuse by the court of its privilege of comment.

The third point is that the verdict rendered by the jury was contrary to the weight of the evidence. We find otherwise.

Finally, it is said that the court charged the jury improperly with regard to the right of recovery of the plaintiff Anna Kratzsch. Inasmuch as the charge was in the precise words of this court as expressed in Jacobson v. Bentley Morrison Corporation, 103 N. J. L. 16, we are constrained to say that we find no error therein.

The rule is discharged, with costs.


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    MARGARET MURPHY, PLAINTIFF, v. ALFRED ZIMMERMAN, DEFENDANT. MARY MURPHY, PLAINTIFF, v. ALFRED ZIMMERMAN, DEFENDANT.
    Submitted January term, 1931
    Decided June 29, 1931.
    Before Justices Case, Daly and Donges.
    Eor the rule, Romulus P. Rimo.

      Conim, Andrew M. Celia.

   Per Curiam.

This is on plaintiff’s rule to show cause why a new trial should not be granted. Various grounds are listed in the rule but the alleged misconduct of a juror is the only reason now presented. Verdict had been for the defendant in both cases, tried together.

The contention on the rule is that the defendant before trial was seen talking near the probation officer’s room in the court house with a man who was later drawn on the panel to try the case, that while the attorney for the plaintiffs was summing up this juror was seen to grin and wink at the defendant, and that the juror went down in the same elevator with the defendant after the trial. It is significant that the matter was not, in any of its phases, called to the attention of the court until after the verdict.

All of these allegations are denied. We are not satisfied that the alleged incidents actually occurred, but even on the assumption that they did happen we find no reason for a new trial. The alleged acts of misconduct were known to the plaintiffs, according to the testimony advanced by the latter, contemporaneously with the occurrences. The first incident could have been met by a challenge when the juror was drawn. The second incident should have been followed by timely complaint lodged with the court. It was not for the plaintiffs to sit by and gamble with their knowledge against the verdict. The third incident was after the rendition of the verdict and seems quite pointless. But in any event no improper communication, partisan influence, purposeful meeting, ulterior motive or consequent effect is shown or even intimated.

The rule will be discharged, with costs.


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    WILLIAM JELLY, PLAINTIFF, v. ERIE RAILROAD COMPANY, A CORPORATION, DEFENDANT.
    Submitted January term, 1931
    Decided June 29, 1931.
    Before Justices Case, Daly and Donges.
    For the defendant, Collins & Corbin {Edward A. Murhley, of counsel).
   Per Curiam.

This action was originally instituted January 20th, 1917. The case was twice tried and each verdict was set aside by the Supreme Court. It was last noticed for trial on August 20th, 1924. The case has not, however, been moved for trial and no step in the cause has been taken since the last-mentioned date. Motion for a judgment of non pros, is now made. The motion is granted.


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    CLARK J. DEAL AND ELSIE M. DEAL, PLAINTIFFS-RESPONDENTS, v. GARBER ICE CREAM COMPANY, A CORPORATION, DEFENDANT-PROSECUTOR.
    Submitted January term, 1931
    Decided June 29, 1931.
    Before Justices Case, Daly and Donges.
    For the rule, John H. Pur sel.

    Contra, Smith & Smith.

   Per Curiam.

This is an action for damages arising out of an accident caused by the act of the defendant’s truck in running into a line of cars that was standing still awaiting the traffic signal to proceed. Mrs. Elsie M. Deal, in a ear belonging to her husband, Clark J. Deal, was injured by the impact. Defendant admits liability. The' verdict was for $5,000 for the injured woman, Mrs. Deal, and $500 to the husband, Clark J. Deal, for expense in repairing-the automobile, for doctors’ bills and for loss of consortium.

The rule goes only to the alleged excessive damages awarded Elsie M. Deal. Whether the damages are excessive depends upon whether a diseased condition of Mrs. Deal’s fallopian tubes is attributable to the accident; and this is a matter that must be determined by expert medical testimony. There were three medical witnesses; Dr. Lyons, the attending physician, Dr. fiance who has specialized in genito-urinary work, these two being called by the plaintiff, and Dr. Correll, head surgeon of the Easton Hospital, called by the defense. Dr. Lyons attributes the condition to the accident, though he adds that he is not a specialist in that line and that he had in fact advised his patient to go to a specialist. Dr. •Correll states positively that there is no relation between the disease and the trauma. Dr. Hance is very guarded, and we are unable to find in his testimony anything more specific than that in his opinion the injury did not of itself cause the trouble, but that if there had been an existing infection the accident would lower the resistance. The indications are that there was no existing infection as no previous trouble •of that kind is testified to; in fact, its existence is denied.

We are not satisfied that the testimony is sufficient to justify a verdict founded upon a causal relation between the injury and the disease. It is obvious that the verdict was founded in part upon the hypothesis. To that extent the verdict is excessive and therefore there should be a new trial.

The rule will be made absolute.


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    CHARLES ANASTASIO, PETITIONER, v. RICHARDS GASTON, INCORPORATED, RESPONDENT.
    Submitted January term, 1931
    Decided June 29, 1931.
    .Before Justices Case, Daly and Donges.

      Eor the petitioner, Salvador Diana (Winfield S. Angleman, on the brief).
    Eor the respondent, Coult, Satz & Tomlinson (Joseph Coult and Gerald T. Foley, on the brief).
   Per Curiam.

Anastasio was injured December 11th, 1928, and was given an award under the Workmen’s Compensation act. The-award included temporary disability for thirty-seven and a fraction weeks and also for four hundred weeks’ total permanent disability at $11 per week. More than a year after the-accident petitioner died.

We shall retain the designation of parties as in the original, proceeding in the Workmen’s Compensation Bureau, namely,, the employe as petitioner and the employer as respondent.

The determination and rule for judgment by the deputy commissioner, after hearing, was made October 28th, 1929,. docketed as a judgment in Union County Common Pleas-December 11th, 1929, and further docketed in the Supreme. Court June 21st, 1930. The state of case as it comes to us includes the original petition and answers, the determination, the docket entry in the Supreme Court, the rule and depositions taken thereunder, but not the evidence taken before the-deputy commissioner. It is provided by the statute found in Cum. Supp. Comp. Stat., **236-41 that such a judgment, may be docketed in the Supreme Court and thence-forward operate as a judgment recovered in that court. Doubtless the-present procedure is intended to be based thereon; but difficulties arise for which counsel offer no suggestion.

Bespondent contends that the petitioner died of chronic endocarditis and that this ailment resulted from the injury which arose out of and in the course of the employment.. We are asked to amend the judgment into one for death, rather than permanent disability, and, inasmuch as an amount equivalent to such an award has been paid, to have-the judgment canceled. Erie Railroad Co. v. Callaway, 91 N. J. L. 32, is cited as authority for amending a workmen’s compensation judgment. Aside from the fact that that case was on cerliorari to review the legality of an order made by the Essex County Common Pleas, and therefore not at all a precedent for the present proceeding, we are met with a vigorous denial, from the executrix of the petitioner, that the death was due to a condition arising out of the accident. Each side presents its supporting depositions and on the strength thereof the respondent asks us for action that is practically the opening up of an award of the deputy commissioner and changing the entire purport thereof without having before us the testimony upon which that award was made, and without the deputy commissioner having had before him the proofs upon which, as is now alleged, his award should be determined erroneous. We find little in the statute to suggest that the Supreme Court is to be made an original fact-finding body in workmen’s compensation cases.

Counsel for the petitioner designates the present rule an illegal attempt at rehearing; and counsel for the respondent advance no argument in support of their procedure. Without determining that question we dispose of the case in the manner following:

We consider that the proofs do not in sufficient degree sustain respondent’s contention that the petitioner died as a result of the accident upon which the award was made.

The rule will be discharged, with costs.


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    HARRY J. DALY, PLAINTIFF-APPELLANT, v. MARGARET SCHENK AND WALTER W. WHITE, DEFENDANTS-RESPONDENTS.
    Submitted January term, 1931
    Decided June 29, 1931.
    Before Justices Case, Daly and Donges.
    Eor the plaintiff-appellant, J eróme G. Eisenberg and Philip M. Lazar.

    Eor the defendants-respondents, Euchin & Euchin.

   Per Curiam.

The action was on behalf of plaintiff as landlord for rent, against which was a counter-claim by the defendant Schenk to recover an excess amount of $225 paid at the time the original lease was made as well as to recover a part of the rent paid for the month of March, 1930. Both plaintiff and defendant Schenk are assignees of the original parties to the lease, the former being the assignee of the original lessor and the latter, Mrs. Schenk, being the assignee of the lessee. White is a guarantor of the rent. There was a fire on March 17th, 1930, and Mrs. Schenk then moved out, giving notice to plaintiff that she had vacated the premises on account of the fire. On April 28th, 1930, she was advised by the plaintiff that the repairs occasioned by the fire were complete and the house would be ready for occupancy on May 1st, 1930, but she refused to retake possession or to pay rent. The action is for $225 rent for the month of May under the lease. The premises were in the State of New York and the contract was made to be performed there. The parties agree that the law of that jurisdiction applies. Judgment by the court sitting without a jury was for the defendant on the main cause and also on the counter-claim in the sum of $326.50, which apparently was $225 for the original deposit and $101.50 refund for such part of the March rent as was unearned at the time of the fire.

The fifth paragraph of the lease provided that “if the said premises or any part thereof shall * * * be slightly damaged by fire, the premises shall be promptly repaired by the landlord and an abatement will be made for the rent corresponding with the time during which and to the extent to-which said premises may have been untenantable, but if the-building or buildings should be so damaged that the landlord shall decide to rebuild, the term of this lease shall cease and the aggregate rent be paid up to the time of the fire.”

The New York statute (Laws of 1909, chapter 52, section 227 of the Eeal Property law) provides that “where any building, which is leased or occupied, is destroyed or so injured by the elements or any other cause, as to be untenantable and unfit for occupancy, and no express agreement, to the contrary has been made in writing, the lessee or occupant may, if the destruction or injury occurred without his-fault or neglect, quit and surrender possession of the leasehold premises, and of the land so leased and occupied; and he is not liable to pay to the lessor or owner rent foir the time subsequent to the surrender.”

The fire was not due to any fault or neglect of the tenant.. The plaintiff insists that the provisions of the fifth paragraph of the lease are an express agreement to the contrary of the provisions of the statute. The court in settling the facts used the words: The “fire * * * was so extensive as to-render the premises untenantable and unfit for occupancy,” and in its findings determined that “as a result of said fire the dwelling house was untenantable from March 17th to May 1st, 1930.” In the opinion the language is that the house was “wholly untenantable.”

The court below held, in construing the fifth paragraph of the lease, that there was provision pertinent to slight damage and also to total destruction but that there was no provision applicable to the intermediate condition which existed in the case at bar. We agree with that view and find that the lease does not expressly provide the contrary of the statute in respect to the conditions that existed. This leads to an affirmance of so much of the judgment below as relates to the main cause.

However, the appellant contends, and it seems to us with reason, that the deposit of $225 should not be allowed under the counter-claim against him. All that the record discloses is that the lease required a payment of $225 on the first day of September, 1928, and $225 on the first day of each month thereafter during the term of the lease. The term of the lease did not begin until October 1st, 1928. There seems to have been an excess month’s rental paid to the original lessor, but there does not appear to have been any excess payment of that character turned over to or paid to the present plaintiff. As the finding of the court is “that $225 was deposited with the lessor as security for the payment of rent at the time of the execution of the lease,” we think that, under the New York cases, if there is a claim at all it is personal against the original lessor. Messer v. Smith 125 Misc. 845; 211 N. Y. Supp. 494.

We affirm as to the main case and modify the judgment for the defendant on the counter-claim by the reduction thereof in the sum of $225. The order will be for the entry of such a judgment. Costs are allowed the appellant on this appeal against defendant Schenk.


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    MICHAEL LEVATO ET UX. ET AL., PLAINTTFFS-PROSECUTORS, v. JOSEPH HANDLEY, DEFENDANT-RESPONDENT.
    Submitted January term, 1931
    Decided June 29, 1931.
    Before Justices Case, Daly and Doxges.
    For the plaintiifs-proseeutors, King & Vogt.

    For the defendant-respondent, Charles W. Weeks.

   Per Curiam.

The action was tried in the Morris Circuit April, 1930, and a verdict was rendered in favor of the defendant. The plaintiffs obtained a rule to show cause why a new trial should not be granted. No reasons were filed, no state of the case was served and no application for extension of time was requested at either the June or the October term of the Supreme Court. At the January term, 1931, defendant moved that the rule be discharged upon the ground that three terms of court had been permitted to go by without prosecution thereof or without application for additional time. It was represented to the court on the argument that Levato had not been able to secure the necessary funds until during the week preceding the argument. We are not impressed by the industry of his efforts; in addition to which it is to be said that Levato is only one of the plaintiffs; beside whom there are his wife, Rose Levato, Tillie Petrone and Anthony Petrone, Irene Giordano and Joseph Giordano, on behalf of whom no excuse or justification whatsoever is made.

We think the rule should he discharged. That will be the order.


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    NETTIE RULLIS, BY NEXT FRIEND, RALPH RULLIS, AND RALPH RULLIS, PLAINTIFFS-RESPONDENTS, v. PUBLIC SERVICE ELECTRIC AND GAS COMPANY, A CORPORATION, DEFENDANT-APPELLNT.
    Submitted January term, 1931
    Decided June 29, 1931.
    Before Justices Case, Daly and Donges.
    Eor the plaintiffs-respondents, Kalisch & Kalisch (Isidor Kalisch, on the brief L
    Eor the defendant-appellant, Henry H. Fryling (James 0. Boyd, on the brief).
   Pee Cueiam.

This is an appeal by the defendant from the judgment of $4,500 damages for Nettie Rullis and $1,200 for Ralph Rullis growing out of an accident whereby an automobile of the defendant hit and injured the minor plaintiff as she was crossing Orange street, Newark, New Jersey. Defendant’s car had been proceeding north on Broad street and had just made the swing from Broad street around into Orange street.

The argument of the appellant is that the court erred in denying the motion for nonsuit and also in denying motion for direction of verdict in favor of the defendant. The questions argued are the negligence of defendant’s driver and the contributory negligence of the infant plaintiff.

There was evidence from which it could be found that the child, twelve and one-half years of age, before leaving the curb had taken an observation in each direction; that she saw no traffic coming and left the curb at a distance of about three feet in front of a truck parked there; that having reached the outside line of the truck she again looked in each direction, whereupon she walked four feet to the nearest trolley rail and thence across the two rails to the middle of the street, there being two sets of tracks; that she then paused, looked and saw the defendant’s automobile at a distance of ten or fifteen feet coming down upon her, endeavored to step back but was hit and injured; that the car without its horn being sounded had come around the corner at a rate of twenty or twenty-five miles per hour and proceeded squarely down the middle of the street.

We believe that the evidence was such as to make the case one for the jury. We find that the court was justified in refusing both the motion for nonsuit. and the motion for direction of verdict. The evidence would justify the jury in believing that the car was coming down the middle of the street, and that the child had walked approximately ten feet from the outside line of trucks parked at the curb to where she was hit. It was properly left to the jury to determine whether defendant’s employe had turned the corner at such speed, or, regardless of the actual miles per hour, with such indifference to the rights of others on the highway, that he did not observe, or observing did not heed, a pedestrian crossing the street under such circumstances. Nor can we say, as a matter of law, that under the proof the child was guilty of contributory negligence.

Judgment below will be affirmed.