text:
    State Board of Tax Appeals.
    FARMERS RELIANCE INSURANCE COMPANY, PETITIONER, v. CITY OF TRENTON, RESPONDENT.
    Decided September 10, 1940.

      For the petitioner, Frank Transue and Jay B. Tomlinson.

    For the respondent, Louis Josephson.

   Quinn, President.

Petitioner, a domestic mutual fire insurance compa^ having its principal office in Trenton, was assessed by that taxing district in the sum of $30,000 on account of 1939 personal property taxes. An appeal b3r the company to the Mercer County Board of Taxation resulted in an affirmance of the assessment.

As of the assessing date for the 3rear 1939, October 1st, 1938, mutual fire insurance companies were subject to assessment under R. S. 54:4-18 (N. J. S. A. 54:4-18), providing for the taxation of the property of domestic corporations in the same manner as that of individuals. The special assessing formula for fire insurance companies theretofore in effect under Pamph. L. 1918, ch. 236, § 307 (R. S. 54:4-22; N. J. S. A. 54:4-22) was amended by Pamph. L. 1938, ch. 245, and, as amended, is applicable only to stock insurance companies. Cf. Cumberland Mutual Fire Insurance Co. v. City of Bridgeton (State Board), filed October 9th, 1939. Petitioner is therefore assessable in the full amount of its personalt]', including intangibles, less any deductions for debt or for exempt property, properly claimed by sworn statement, as required by statute, R. S. 54:4-14, 54:4-15 (N. J. S. A. 54-4.14, 15).

The personal property tax return filed by petitioner with the city of Trenton for the year in question shows total assets of $231,565.37, and claims for deductions and exemptions aggregating $236,252.14, which, if allowed, would obviate an}r taxable balance. The statement of assets conflicts, however, with the statement of assets contained within a condensed financial statement of the company annexed to the return, which shows gross assets of $319,758.32, including cash items not shown on the official return, amounting to $85,382.95.

Exemptions are sought by petitioner, as follows:

Cash on hand and on deposit . $85,382.95

TI. S. Government bonds . . 38,645.20

Municipal bonds...... .... 43,000.00

Bank stocks ....... . .... 5,080.00

Industrial, Railroad and Utility stocks . . 35,172.50

Insurance stocks ........... 105,400.00

The statute makes the following condition prerequisite to an allowance for exemptions, R. S. 54:4-15 (N. J. S. A. 54:4-15) :

“No allowance or deduction shall be made for personal property or securities claimed to be exempt from taxation, unless a sworn claim therefor shall be made, setting forth a detailed list o£ the securities and personal property claimed to be exempt, the dates when they were purchased, and that they were not purchased with intent to escape taxation.”

While this proviso is not applicable to petitioner’s unqualified right of absolute exemption with respect to the United States bonds, Public Service Corporation of New Jersey v. Newark (State Board), filed August 25th, 1936, and possibly, the bank stocks, R. S. 54:9-7 (N. J. S. A. 54:9-7), nevertheless compliance therewith is a strict and inescapable condition of the right to the other exemptions claimed.

The return filed in the instant case deviates from the statutory requirement in several respects. There is no detailed list of the securities claimed to be exempt. Taxable and exempt items are lumped together with no indication on the face of the return as to which are claimed to be exempt. There is no specification of the date of purchase of the securities, nor any statement that they were not purchased with intent to escape taxation.

The list of securities does not show which of the stocks are of domestic, and which of foreign corporations. This is a necessity, since, in the case of foreign corporate stocks, it must appear that taxes have actually been paid by such foreign corporations upon their property within twelve months prior to the assessing date, in order that the local exemption obtain. R. S. 54:4-3.2 (N. J. S. A. 54:4-3.2), as construed in-Trenton v. Standard Fire Insurance Co. (Supreme Court, 1909), 77 N. J. L. 757.

The claim for deduction for debts is similarity defective, both in form and substance, but we need not consider it at length, since the invalidation of several of petitioner’s claimed exempt items leaves it with a taxable balance in excess of the amount of the assessment by considerably more than the deductions for debts applied for.

The judgment of the Mercer County Board in affirming the assessment, is sustained.


source: Caselaw Access Project

author: Leyden, S. C. C.

license: Public Domain

text:
    DOVER BOILER WORKS, A CORPORATION OF THE STATE OF NEW JERSEY, PLAINTIFF, v. NEW JERSEY MANUFACTURERS CASUALTY INSURANCE COMPANY, A CORPORATION OF THE STATE OF NEW JERSEY, AND ROSE FERENZ, DEFENDANTS.
    Decided September 16, 1940.
    For the plaintiff, Edwards, Smith & Dawson.

    For the defendant New Jersey Manufacturers Casualty Insurance Company, Kellogg £ Chance.

   Leyden, S. C. C.

The plaintiff seeks a declaratory judgment that the defendant is bound by its indemnity policies to defend in the name and on behalf of the plaintiff a claim or suit brought against it by one Ferenz. The dispute concerns the applicability of the policies, the defendant haying disclaimed liability on the ground of non-coverage.

The defendant’s answer reserves and raises the objections (1) that the complaint is insufficient in law, and (2) that the relief sought is future, contingent and uncertain since no loss has as yet been sustained by the plaintiff. The plaintiff’s reply reserves the objection that the answer is insufficient in law. Each now seeks a determination in its favor under rule 40.

An examination of the policies in question tends to the conclusion that liability for indemnity upon the part of the defendant attaches under the first (Schedule A) where an accident arises out of an operation, the work of which is performed by the plaintiff’s employes at Dover, New Jersey, or elsewhere, and under the second (Schedule B) where the operation out of which the accident arises is carried on within the confines of the State of New Jersey.

The complaint sets forth in full the two contracts of insurance; the obligation of the defendant to defend actions whether groundless or not brought against the plaintiff to enforce liabilities covered by the policies; the payment of premiums and the performance of all terms and conditions on the plaintiff’s part to be performed; it further alleges that the plaintiff prepared specifications and drawings for a steel oil storage tank which "it was having constructed,” and while the tank was being tested, its manhole cover exploded causing fatal injuries to one Ferenz; that suit was commenced in behalf of the next of kin of Ferenz against the plaintiff in the United States District Court of the District of New Jersey charging that the wrongful death of Ferenz was caused by the negligence and carelessness of the plaintiff and demanding $25,000 as damages; it further recites the service of the summons and complaint in the action upon the plaintiff, its request of the defendant to defend in accordance with the terms of the policies and the refusal of the defendant to assume the defense or to afford the plaintiff protection under the policies upon the ground of non-coverage. What is really sought in this proceeding is not the interpretation of the contracts of insurance as written, but rather judicial advice on the question of whether the facts of the accident giving rise to the Ferenz suit as alleged, come within the coverage of the policies.

As appears from the allegations of the complaint, assuming-coverage by the policies, the unjustified refusal of the defendant to perform its obligation to defend is an invasion of the plaintiff’s rights under the policies. For this there is an adequate and complete remedy available to the plaintiff: namely, an action for breach of the contract. The damage resulting is readily ascertainable if and when a loss is sustained by the plaintiff in either the defense of the Ferenz action or the payment of the judgment entered therein, or both. Chodosh Brothers v. American, &c., Insurance Co., 119 N. J. L. 335; 196 Atl. Rep. 654. Unquestionably the Uniform Declaratory Judgments law, N. J. S. A. 2:26-66 et sep, provides for relief "from uncertainty and insecurity with respect to rights, status and other legal relations,” and the courts in their respective spheres are given the power to construe, at the instance of a party affected, a deed, will or written contract and to declare the rights, status or legal relations under statutes, municipal ordinances, contracts or franchises. The construction of a provision in a lease in McCrory Stores Corp. v. S. M. Braunstein, Inc., 102 N. J. L. 590; 134 Atl. Rep. 752; the declaration of the status of a member of a mutual aid society in Honetshy v. Russian Consolidated, &c., of America, 114 N. J. L. 240; 176 Atl. Rep. 670; and the determination of rights under a deed in Cadgene v. Cadgene, 17 N. J. Mis. R. 332; affirmed, 124 N. J. L. 566; 12 Atl. Rep. (2d) 635, are reported examples of the exercise of this power.

Tn the instant case, however, the plaintiff prays that the court "determine and adjudge the rights and obligations of the parties * * *” and. "enter a declaratory judgment to the effect that the said policies insure the plaintiff herein from legal liability arising out of the accident herein referred to.”

There is no uncertainty in the present legal relations of the parties. By its refusal to defend, the defendant has fixed its status and invaded the rights of the plaintiff, assuming, of course, coverage by the policies. The way of the plaintiff is clear. It must defend itself in the Ferenz action and if unsuccessful therein, pay any judgment recovered against it. It may then look to the defendant on the policies for reimbursement of the loss so sustained.

Mr. Justice Heher, in Empire Trust Co. v. Board of Commerce and Navigation, 124 N. J. L. 406; 11 Atl. Rep. (2d) 752, has pointed out that the “Declaratory Judgments act is designed to provide a remedy for the adjudication of justiciable rights, duties, status and other legal relations of the parties before rights have been invaded or wrongs committed, and its provisions are not ordinarily invocable where another adequate remedy is at hand.”

The complaint will be stricken. This makes it unnecessary to discuss the other objections and points raised.


text:
    New Jersey Department of Labor, Workmen’s Compensation Bureau.
    FRANK MARINO, PETITIONER, v. IDEAL PLATING AND AND POLISHING CO., INC., RESPONDENT.
    Decided August 9, 1940.
    For the petitioner, Perry E. Belfaito.

    For the respondent, George E. Meredith.

   * ❖ >:< ❖ ❖ #

At the time of the hearing it was stipulated and agreed between the parties hereto that this matter should be submitted to the court on the question of liability, i. e., as to whether or not the petitioner had met with an accident arising out of and in the course of his employment on September 8th, 1938, as alleged in the formal petition filed in this case.

The petitioner * * * testified that on September 8th, 1938, he liad wrenched his back while lifting a pan of metal washers * * * that he had been forced to stop work as a result of this occurrence and that later he was confined in Columbus Hospital, where an operation was performed upon his back.

During the course of the petitioner’s direct testimony and during cross-examination it was developed that the petitioner met with an accident on October 3d, 1936, while working for the same employer, in which accident he alleged he had injured his back while carrying a tray of metal washers. The petitioner admitted that, subsequent to this accident of 1936, he had returned to work but had received treatments more or less continuously through 1936, 1937 and part of 1938, same treatments being rendered as a result of continuous complaints of pain and disability in the back. The petitioner further testified that toward the end of said treatments he had been fitted with a back belt or brace upon the recommendation of Dr. Kessler. The petitioner alleged that his trouble had finally cleared up but that same had returned as a result of the accident in this case. The petitioner claimed that he had notified three people of the accident in this case, to wit, Mr. J. A. Casella, Mr. Fred Casella and a Miss Klein, all of these people being persons in authority at the petitioner’s place of employment.

The respondent called as its witnesses the three parties referred to immediately hereinbefore. All of these witnesses denied that the petitioner had, at any time, subsequent to the alleged accident in this case, made any report or mention of any accident as of September 8th,'19'38, until about the time that the formal petition in this case was filed. All of these witnesses testified that the petitioner had complained of trouble with his back since October, 1936, but at no time had he made any mention of any second accident or injury to his back.

The respondent also called as its witness Dr. "Victor Di Leo. This doctor testified that at the time of the petitioner’s admission to the Columbus Hospital, he was an interne in service at this hospital and that he had interviewed the petitioner and taken the admitting history. This doctor had with him the hospital records, same including the admitting history. From the testimony of this doctor it appeared that the petitioner, at the time of his admittal to the Columbus Hospital, on September 13th, 1938, with only four days intervening between the accident and said admittal, had made no mention of any trauma to his back as of September 8th, 1938, and that the petitioner had referred all of his trouble back to 1936.

After a careful consideration of any and all stipulations in this case, any and all exhibits offered into evidence, and all of the testimony produced by both parties, this court is clearly satisfied that the petitioner has failed to sustain the burden of proving that he suffered an accident arising out of and in the course of his employment on September 8th, 1938.

This court had ample opportunity to observe the attitude and demeanor of the petitioner in this case during the course of this trial. The petitioner appears to be above the average in intelligence and is obviously fully aware of what would be needed to establish his case. On the other hand, this court is satisfied that the petitioner’s testimony is worthy of little, if any, credit. From his testimony and from the testimony of the respondent’s witnesses this court is satisfied that the testimony of the petitioner cannot be believed. All of the parties that the petitioner alleged knew of his alleged accident flatly denied same. Even if this court were to somewhat question the testimony of these witnesses, the testimony of Dr. Di Leo, who obviously is absolutely disinterested in this case, would appear to this court to refute the allegations of the petitioner. This court cannot believe that this petitioner, had he suffered an accident on September 8th, 1938, as he alleges, would have failed to make mention of same upon his admittal to a hospital five days later for treatment to the injuries he allegedly sustained in said accident. It is unbelievable that this petitioner would have made mention of a condition arising in 1936 and have failed to mention an incident of five days before, which incident he would have this court believe caused his present difficulty.

By the preponderance of clear testimony, or, as more nearly approaches the situation in this ease, by the only clear testimony, this court finds that the petition must be dismissed.

It is, therefore, * * * ordered that the petition of the petitioner be and the same is hereby dismissed.

John C. Wegntck,

Deputy Commissioner.


author: Quinn, President.

text:
    State Board of Tax Appeals.
    CHEMICALS AND PHARMACEUTICALS, INC., PETITIONER, v. J. H. THAYER MARTIN, STATE TAX COMMISSIONER, RESPONDENT.
    Decided September 24, 1940.
    Por the petitioner, Jacob Burns.

    Por the respondent, David T. Wilentz, attorney-general (by John Solan).

   Quinn, President.

By investment of its capital funds, petitioner, a domestic corporation, owns all of the capital stock of Diatetic Research Laboratories, Inc., and Professional Laboratories, Inc., both of which are corporations engaged in manufacturing pursuits in this state. Petitioner itself engages in no form of manufacturing whatsoever. It nevertheless claims, for the year 1939, an exemption from the franchise tax upon capital stock to which domestic corporations are normally subject under R. S. 54:13-1; N. J. S. A. 54:13-1 ei &eq., upon the ground that it is a “manufacturing corporation at least fifty per cent, of whose capital stock issued and outstanding is invested in * * * manufacturing pursuits carried on within this state,” within section 54:13-7, granting exemption from the tax where the situation thus set out obtains.

The difficulty with the application, however, is that while the petitioner’s corporate wealth may be invested in manufactoring pursuits, nevertheless it is not itself, as is required by section 54:13-7, a “manufacturing corporation,” since it does not actually maintain a manufactory in this state, either directly, or through an agent at its cost. Atton Machine Co. v. Assessors (Supreme Court, 1907), 69 Atl. Rep. 451. The exemption is restricted to such corporations as are in fact manufacturing companies. Press Printing Co. v. Assessors (Supreme Court, 1888), 51 N. J. L. 75.

This conclusion is impelled by the provision of section 54:13-4 requiring an exemption claimant to report, inter alia, “the location of its manufacturing establishment.”

The assessment is affirmed.


text:
    State Board of Tax Appeals.
    VAN KEUREN & SON, PETITIONER, v. J. H. THAYER MARTIN, STATE TAX COMMISSIONER, RESPONDENT.
    Decided September 24, 1940.
    For the petitioner, Fred C. VanKeuren and P. L. Proctor.

    For the respondent, David T. Wileniz, attorney-general (by John Solan).

   Quinn, President.

Petitioner seeks a reduction of its corporation franchise tax for the year 1939 from the sum of $193.50 to $50, -upon the ground that its issued capital stock outstanding, upon which the tax is computed (R. S. 54:13-6; N. J. S. A. 54:13-6), was duly reduced by the company in 1934 from 193,500 shares to 50,000 shares. It appears, however, that no certificate of reduction was ever filed with the secretary of state, as is required by the General Corporation act. R. S. 14:11-2; N. J. S. A. 14:11-2. This is fatal to the present claim for credit on account of such reduction. Vulcan Wheels, Inc., v. State Tax Commissioner, New Jersey Tax Reports, 1912-1934, p. 691.

Assessment affirmed.


text:
    State Board of Tax Appeals.
    STANDARD OIL COMPANY OF NEW JERSEY, PETITIONER, v. CITY OF ATLANTIC CITY, RESPONDENT.
    Decided September 24, 1940.
    For the petitioner, William Spiialny.

    For the respondent, Samuel Bacleer.

   Quinn, President.

Petitioner is the owner of certain land and buildings constituting an oil storage plant in the respondent taxing district, assessed for taxes for the year 1938 at land, $4,500; improvements, $108,650; total, $113,150. Its appeal to the Atlantic County Board of Taxation for a reduction in the assessment was dismissed. At the hearing herein the land appeal was withdrawn, so that the present issue is confined to the true value of the improvements. A subsidiary question raised is as to whether certain oil storage tanks on the premises, together with piping, constitute improvements, as contended by the city, or personalty, as maintained by petitioner.

An expert witness for the taxpayer testified to a sound value of $73,025 for the structures on the grounds, exclusive of the oil tanks and piping. 3STo testimony whatever was adduced by petitioner as to the true value of the tanks and piping, it resting on the contention that these did not constitute improvements as a matter of law. In view of the ordinary presumption of correctness attending assessments, the question of the status of the tanks becomes decisive of the appeal. If they are improvements the assessment must be affirmed, petitioner having offered no proof of their value, while testimony adduced on behalf of respondent is to the effect that all of the structures on the premises, including the tanks, had a true value of $195,102.

The tanks are described by a witness for the city as thirteen in number, constructed of steel set in concrete bases, and firmly affixed to the ground. The piping auxiliary to the tanks is likewise rigidly fixed upon or under the ground, and attached to the tanks. The tanks vary in size from fifteen by thirty feet to seventy by forty-two feet and constitute permanent units of petitioner’s plant, for the storage of fuel oils, gasoline and kerosene.

The question as to whether or not a structure constitutes an improvement of the ground, so as to partake of the status of realtjg depends upon the degree of permanence intended in its erection and use. Bates v. Harte, 26 South. 898, 899; Fagan & Osgood v. Boyle Ice Machinery Co., 65 Tex. 324, 332; Appeal of St. Andrew’s Church, 67 Pa. 512, 519; Orth v. West View Oil Co., 159 Id. 338; 28 Atl. Rep. 180, 181. Temporary structures are not improvements. Shenandoah Line Co. v. Governor, 115 Va. 865; 80 S. E. Rep. 753.

The statute cannot be deemed to contemplate that the taxation of improvements should be limited to erections comprised within the term “buildings,” since R. S. 54:4-26 provides that in assessing real estate, the assessors may, by rule of the State Tax Commissioner, be directed (as in fact they are), “to determine the true value of each parcel of real estate assessed by him without the building and improvements and to note the same on the list, and to determine and note separately the true value of every building and other structure on each parcel * *

It appears clear to us that the tanks here in question are “structures,” within the statute, that they are designed and used by the owner as permanent improvements of the freehold, and that for such reasons they were properly assessed by the respondent taxing district as improvements. Petitioner’s reliance upon such cases as Town of Harrison v. Public Service Gas Co., New Jersey Tax Reports, 1912-1934, p. 278, and Public Service Electric and Gas Co. v. City of Newark, New Jersey Tax Reports, 1934-1939, p. 36, is to no avail. Those decisions by this board held that gas retorts and oil tanks were part of the apparatus and equipment of a public utility, under Pamph. L. 1919, ch. 25, providing for gross receipts taxes to be paid by certain public utilities in lieu of any assessment of their personal property, and that therefore, such retorts and tanks were not subject to local assessment as real estate. That act expressly provided that apparatus and equipment was not to be deemed real estate, “notwithstanding any attachment thereof to lands or buildings.” It is obvious that decisions construing Pamph. L. 1919, ch. 25, are not truly analogous to the issue as to what comprises a “structure” under R. S. 54:4-26 (N. J. S. A. 54:4-26).

As to the piping on the premises, this is likewise taxable as realty. Pipe Line Co. v. Berry (Court of Errors and Appeals, 1890), 53 N. J. L. 212; West Virginia Transportation Co. v. Volcanic Oil, &c., Co., 5 W. Va. 382, 388; Cumberland Pipe Line Co. v. Lewis, 17 Fed. Rep. (2d) 167.

Por the foregoing reasons the assessment is affirmed, it not being shown that the true value of all the structures on petitioner’s property is less than the amount of the assessment.


text:
    State Board of Tax Appeals.
    J. & J. DISTRIBUTING COMPANY, PETITIONER, v. J. H. THAYER MARTIN, STATE TAX COMMISSIONER, RESPONDENT.
    Decided September 24, 1940.
    For the petitioner, Frazer, Stoffer & Jacobs (by David Stofer).

    For the respondent, David T. Wileniz, attorney-general (by William H. Osborne, Jr.).

   Quinn, President.

This is an appeal by petitioner, holder of a plenary export wholesaler’s license under the Alcoholic Beverage act, from the assessment by the Beverage Division of the State Tax Department of a deficiency liquor sales tax in the amount of $2,286.63 for the period from March 1st, 1937, to January 31st, 1939. Of the amount stated, petitioner takes exception to the assessment of $1,474.76, as unwarranted. Under the statute, R. S. 54:43-1; N. J. S. A. 54:43-1 et seq., as amended by Pamph. L. 1938, ch. 319, a tax is provided for at varied rates upon the sale or delivery, within the state, of alcoholic beverages intended ultimately for consumption. Sales of liquor intended for ultimate consumption out of the state are excluded from the operation of the tax. R. S. 54:43-2; N. J. S. A. 54:43-2. Donations of liquor by way of samples or otherwise are taxable as sales. Title 54:41-2.

Taxpayers are required to report to the State Tax Commissioner, on or before the fifteenth of each month, upon forms prescribed by him, and under oath, the amounts of alcoholic beverages manufactured, distributed, transported, stored, warehoused, withdrawn from storage, imported, purchased and sold during the preceding month, and to pay the amount of the tax due, upon the filing of the report. Title 54:45-1.

The form of report devised by the Beverage Division of the State Tax Department for use by licensees of the category of petitioner, provides for a control sheet and supporting schedules designed to calculate the amount of taxable dispositions of liquors by what is commonly known as the inventory method, and such reports were filed by the petitioner herein during the deficiency period here in question as well as prior thereto. Tinder that method, the taxpayer first reported his inventory of liquors on hand on the first of the month, and added thereto his gross purchases and the amount of returns accepted during the month. From the total thus derived was deducted the amount of exemptions and inventory as of the close of the month, the remainder necessarily constituting the amount of taxable sales or dispositions. While schedule “D,” attached to the control sheet, calls for a detailed listing of sales for the month, by accounts of individual retailers, it was testified on behalf of petitioner that until September 1st, 1938, it was granted special permission, because of the large volume of its retail business, to enter a bulk figure for sales on schedule “D,” as derived by the calculation based upon inventories, aforementioned. The director in charge of the Beverage Division testified, however, that the permission to enter a bulk figure for sales was based upon the assumed condition that the figure would be derived from a totaling of the taxpayer’s sales invoices, and not from the result obtained through calculation by inventory. Subsequent to September 1st, 1938, sales were concededly reported, the department consenting, directly from invoices, but differences from the tax liability shown by the inventory method were adjusted and the taxes actually paid, under approval of the department, in accordance with the latter. For purposes of this appeal, however, the issue of fact as to the requirements of the department prior to September 1st, 1938, is not of controlling importance. Whether or not the form in which sales were reported was in strict adherence to the special permission granted by the department, the fundamental inquiry herein is as to whether the total of petitioner’s taxable dispositions of alcoholic beverages during the period in question, in terms of tax dollars, exceeded the amount for which petitioner actually paid taxes during said period, and iE so, by how much. We are not concerned with the enforcement of the punitive measures provided for violation of the provisions of the act respecting reports (R. S. 54:47-3; N. J. S. A. 54:47-3), but only with the determination of the actual liability of petitioner for unpaid taxes. R. S. 54:46-1 ; N. J. S. A. 54:46-1. In determining the issue thus presented, we must be guided by the presumption that the assessment levied is correct, but only in the sense that it was incumbent upon the petitioner to come forward with proof persuasive of the incorrectness of the assessment. New Jersey Bell Telephone Co. v. Camden (Supreme Court, 1939), 122 N. J. L. 270, 275; 4 Atl. Rep. (2d) 705.

While the operative fact toward which the proofs must be directed is the total of taxable sales, for comparison with the undisputed amount of taxes paid, it becomes obvious that any attempt to prove the amounts of actual sales by direct reference to^ individual sales invoices, would be futile in the case of a company which, as in the case of petitioner, makes 6,2,000 sales annually to 3,000 customers. Petitioner’s accountant and executive partner have, however, prepared and attested to the accuracy of a schedule introduced in evidence as Rxhibit P-7, which purports to arrive at the total of taxable sales for the period in question, as an.entirety. This was accomplished by commencing with an inventory taken by the department itself, as of February 1st, 1937, adding the gallon age evidenced by petitioner’s invoices of merchandise purchased thereafter, and until January 31st, 1939, and subtracting from that total the amount of another inventory taken by the department as of the date last mentioned. After deduction of exemptions on account of sales to other wholesalers in the state, and sales out of the state, there was indicated an apparent total tax liability, for the period in question, of $695,990.48, as against which a total of $695,967.18 in taxes was actually paid, leaving a balance due of $23.30. This balance is corrected by the concession of an erroneous credit to the extent of $480 in its schedule “A” for November, 1938 (claimed by petitioner on account of sales and returns to other licensees within the state), of an additional liability of $278.57 resulting from errors in purchases reported, and of credits due petitioner of $36 on account of errors in schedule “A” for the months of April, 1937, and April, 1938. The net total due the state for the period is thus computed at $745.87, as compared with the assessment of $2,286.63.

It does not appear that any of the several components in the foregoing calculation are disputed by the respondent. The starting and closing inventories are those made by itself. The purchase invoices were checked by it and concurred in, except for the errors conceded by petitioner. The exemption items are readily subject to check by the department, and have not been excepted to by it, other than as conceded by petitioner. The method of proof adopted by petitioner has the merit of comprehensiveness, in its totaling of all credits and debits for the entire period, thereby tending to eliminate the vice of charging it for deficiencies, without crediting it for excesses in tax payments, for isolated months during the period. We regard the showing made by petitioner as prima facie sufficient to support its petition, and we direct our attention therefore, to the proof adduced by respondent in support of the assessment.

Eespondent called as its principal witness one of its field investigators, who testified that he prepared a summary of an investigation of the records and books of the petitioner for the period in question, which was introduced into evidence as Exhibit R-6. The report lists figures designated as debits and credits pertaining to specific months, some of which are described as having been agreed upon, and others as disputed, by petitioner. In addition schedules are attached, apparently in support of the summary, although no connection is made to appear between them, either on the face of the exhibit, or in the proof. The items are in no case specifically identified as pertaining to errors in sales, purchases, exemptions, or otherwise. The only clue as to the makeup of specific items was afforded upon cross-examination of this witness, where interrogation by the board disclosed that a debit charge in the sum of $417.03 for the month of October, 1937, was based primarily upon certain unchecked daily sales total sheets, referred to as “work sheets,” made up by petitioner's clerks for its own purposes. It was further developed that additional assessments on account of sales were made for other months during the period, where the work sheets indicated sales in excess of those reported by petitioner. It does not appear from schedule K-6, however, or in the respondent’s proofs, whether the credits assigned to petitioner included eases in which the work sheets showed less sales for particular months than reported by petitioner. "VVe must assume not, however, in view of the positive proofs made by petitioner, not rebutted by respondent, that for the year 1937 the tax calculated upon the gallonage shown on the work sheets is less by $894.73 than that shown upon the tax reports filed, and actually paid, whereas for the period of January 1st, 1938, to August 31st, 1938, the work sheet tax is less by $76.95 than that paid.

Under the proofs it is difficult to escape the conclusion, contended for on behalf of petitioner, that the department has used the work sheets where they revealed deficiencies for particular months, but disregarded them where they would have indicated excess payments for other months. The work sheets are shown, furthermore, not to be reliable for any purpose, representing unchecked tallies dependent upon the accuracy of separate calculations and transpositions in the case of each of many thousands of invoices, by three clerks. Their use by the department, without cheeking for accuracy against sales invoices, which were always available for such purpose, was, under the circumstances of this case, not conducive to an accurate determination of petitioner’s tax liability. The enforcement of the deficiency assessed against petitioner in this case wonld he unjust and oppressive. See Farmer’s Loan and Trust Co. v. Minnesota (1930), 280 U. S. 205, 212.

Upon the whole case, we find that the assessment is erroneous, except to the extent of $745.87, and an order may be entered reducing same to that sum.

Judgment accordingly.


text:
    New Jersey Department of Labor, Workmen’s Compensation Bureau.
    JOSEPH NATALE, PETITIONER, v. NILS BRUHN, TRADING AS KUNGSHOLM RESTAURANT, RESPONDENT.
    Decided August 9, 1940.
    For the petitioner, Michael Breitlcopf.

    For the respondent, William A. Davenport.

   * * >1:

I have duly considered the testimony adduced before me in conjunction with the briefs filed by the petitioner and the respondent and on the facts submitted, I come to the following conclusions:

The petitioner was in the employ of the respondent in the capacity of a waiter and on November 24th, 1939, worked for the respondent to an unusually late hour which necessitated arrangements being made by the respondent to transport the petitioner from the restaurant, the last bus having left approximately at eleven-thirty p. m. There is a dispute on the facts as to whether or not the arrangements were to transport the petitioner to a point from which he could get public conveyance to his home or whether he was to be transported to his home. The testimony clearly indicates that at approximately twelve-thirty p. m. the petitioner left the respondent’s restaurant in the company of Alfred Zimmermann, the chef, and a bus boy and waiter. The first stop was at the Pennsylvania Eailroad station in Newark where one of the employes was discharged for the purpose of taking a train to his destination in New York. The second stop was some place on Market street in Newark where the second employe left the party to make connections for his home in Nutley. It would appear, therefore, from the action of these emploj'es that the arrangement made by the respondent was not, in fact, to take the various employes to their homes but strongly bears out the respondent’s contention that he was to take them to a point from which they could make train or bus connections to their destination. I find therefore, as a fact, that the arrangement made between the respondent and the petitioner was to convey the petitioner from the respondent’s restaurant to a convenient destination from which he could make use of available transportation to his home.

It would further appear from the geographical situation that before making the first stop at the Pennsylvania Eailroad station in Newark, the petitioner accompanied the driver a considerable distance beyond a point which would be a direct route to the petitioner’s home. If the arrangement between the parties was to take the petitioner to his home, this destination could bo readily reached a considerable time prior to reaching the Pennsylvania Railroad station. T feel that this is proof stronger in favor of the respondent’s contention and is indicative of the true facts surrounding the situation. The petitioner was not, in my opinion, to be transported direct to his home but onl.y to a point where available conveyance could be boarded.

Giving the petitioner the fullest benefit of his contention that he was to be transported to his home, I find as a fact that when he accompanied the witness Zimmermann into a tavern on Market street in Newark where they partook of beer and purchased cigarettes and thereafter, accompanying the witness Zimmermann to the Canton Eestaurant on Mulberry street in Newark where they were joined by a third party in accordance with pre-arrangements made by the witness Zimmermann, the petitioner so abandoned and deviated from the true intention existing between the parties relative to transportation that he was in fact on his own affair and not entitled to the protection of the Workmen’s Compensation act. I see no logic in leaving a restaurant (petitioner’s place of employment) and then driving to another restaurant for supper. The respondent could hardly be expected to protect his employes to this extent.

I further find that at the time of the alleged accident the operator of the vehicle in which the petitioner was a passenger had no knowledge of the location of the petitioner’s home and was being directed to this point by the petitioner. Keferring to a map of the city of Newark in conjunction with the testimony of the petitioner and his witness, it appears that the automobile was being operated in a southerly direction along McCarter Highway near the intersection of Parkhurst street. Although the petitioner and his witness testified that they were on their way home to the petitioner’s dwelling at the time of the accident, it is apparent from a view of the map, that the direction in which they were traveling and the route they had chosen does not conform with the fact that they were on their way to the petitioner’s home, which is west and north of the point where the accident occurred.

Conforming my determination, therefore, with the proofs before me and my conclusions drawn therefrom, it is on this 9th day of August, 1940, ordered that the claim petition herein filed be dismissed for the reasons above stated.

John C. Wegnee,

Deputy Commissioner.


text:
    New Jersey Department of Labor, Workmen’s Compensation Bureau.
    FRANK KROV, PETITIONER, v. CENTAUR CONSTRUCTION CO., LUMBER MUTUAL CASUALTY INSURANCE CO., RESPONDENT.
    Decided August 15, 1940.
    For the petitioner, John T. Glennon (David Boslcein, of counsel).
    For the respondent, Bryan Btricher (James J. Sheffington, of counsel).
   *******

From the stipulations of counsel and the testimony adduced, I find and determine as follows:

That the petitioner was a carpenter employed by the respondent Centaur Construction Co. and was so engaged on work incident to the elimination of a grade crossing in Elizabeth, New Jersey.

During the latter part of August, 1938, the exact date of which is unknown to the petitioner, nor is the same essential (Elio v. Singer Manufacturing Co., 10 N. J. Mis. R. 606; 160 Atl. Rep. 325: Schafer v. Bernard, 18 N. J. Mis. R. 119; 11 AM. Rep. (2d) 605), he was standing on a scaffold taking down certain wooden forms when he was struck in the left eye by one of the strips of wood. Attached to the said strip of wood was a nail and whether it was the nail or a splinter which struck the petitioner is uncertain, but caused a laceration producing considerable bleeding. The petitioner felt faint and the eyelid became swollen and black and blue (eccymatic). He left the scaffold, proceeded to a water faucet where he washed his eye with water and returned to work. During lunch hour, his eye swelled to the extent that he was unable to see out of it, and the eyelids were almost completely closed. On arriving home, that evening, he bathed the eye with a warm water boric acid solution and applied home remedies. He returned the next morning and continued to work for approximately two weeks. During that time, the swelling subsided, but the vision in the injured eye did not return to normal. He has been and still is unable to see with that member following the accident and there is no dispute that the petitioner is industrially blind in the left eye.

The petitioner affirmatively testified that he had no trouble with his vision prior to the accident; that as a carpenter he was required to and did, prior to the accident, draw and read plans and specifications and that his loss of vision in his left eye dates from the time of the accident.

There was produced on behalf of the petitioner, several lay witnesses to corroborate his testimony. One of them, Paul J. Hamilton, a fellow carpenter on this particular job when the petitioner was hurt, testified that although he did not witness the accident, he heard another worker call out “Krov was hurt.” He ran over to the petitioner who bad already descended from the scaffold, looked at his eye and noticed that it was “cut in the corner and bruised because it had commenced to turn purple,” and that the bruise on the top of the lid and between the eye lashes and eyebrow, “was bleeding.” He told the petitioner to get medical attention and saw Krov walk off in the direction of the office. When the petitioner returned to work thereafter, this witness observed that the eye was “badly discolored and the cut hadn’t healed.” Moreover, Hamilton had known Frank Krov for fifteen years prior to the date of the accident and he had observed the petitioner on numerous occasions reading blue prints and plans and doing carpenter work without any apparent difficulty, and had a reputation of being one of the “best carpenters.”

jji Hi ❖ # ÍÍÍ # sfc

There also testified on behalf of the petitioner, his foreman, Yictor Cavanaugh, who admitted that he was informed of the accident shortly after it occurred by a fellow employe. Moreover, he went over to the petitioner and saw his eye bleeding.

The testimony is clear and decisive that during the latter part of August, 1938, the petitioner met with an accident which arose out of and in the course of his employment in the manner testified to by him, the details of which were corroborated by several fellow employes. That the respondent had due notice and knowledge of said accident has also been affirmatively established from the testimony of the foreman, Yictor Cavanaugh, who was the petitioner’s superior to whom the accident was reported by a fellow employe and who spoke to the petitioner, examined his eye, and saw that it was bleeding. Whether the respondent received notice of the accident from the petitioner directly, or from someone on the petitioner’s behalf, such as a fellow employe, is immaterial. Nor does the fact that the vice-president’s or timekeeper’s books fail to disclose a report of an accident, avail the respondent in any respect. This, particularly in view of the testimony of the witnesses above referred to.

I find that the respondent had sufficient notice of the accident within the requirement of the statute. General Cable Corp. v. Levins. 124 N. J. L. 223; 11 Atl. Rep. (2d) 61.

Dr. William Boozan. an eye specialist of twenty-nine years experience in Union county, appeared on behalf of the petitioner. He testified that his examination disclosed that Krov’s left eye showed a hemianopsia, or half-side blindness, with no response to light and that the fields of vision had been either destroyed or injured on the outer or temporal side. He found a beginning strophy and a temporal side blindness. It was the doctor’s opinion that the blow which the petitioner received at the time of the accident was the competent producing cause of the condition. It was also his opinion that the petitioner was industrially blind in the left eye. It is significant that this expert found no diseased condition in the eye to account for the condition, nor did he find a chronic vascular disease in either eye.

Dr. Samuel Hirschberg, also offered as an expert for the petitioner, testified that it was his opinion that the loss of vision in the left eye was due to the injury in question.

The respondent produced Dr. IT. Zvaifler, who examined the petitioner on its behalf. It was his opinion that the petitioner was totally blind in the left eye, but that the same was due to a chronic vascular disease affecting the maculae, which disease he believed to be arteriosclerosis. This doctor failed to make any tests or pathological research to determine the nature and extent, if any, of the arteriosclerosis alleged to be present, nor did he make a general physical examination to corroborate his findings. Murowishy v. Pyrene Manufacturing Co., 17 N. J. Mis. R. 390; 9 Atl. Rep. (2d) 683.

If the employer seeks to avoid liability for a cause for which it is not responsible, the burden of proof is on the emploj'er to show such cause. Atchinson v. Colgate, 3 N. J. Mis. R. 451; 128 Atl. Rep. 598; affirmed, 102 N. J. L. 425; 131 Atl. Rep. 921; Sverepa v. Manhattan Rubber, 18 N. J. Mis. R. 248; 12 Atl. Rep. (2d) 861. The evidence adduced by the respondent in this, does not, in my opinion, sustain its contention.

The petitioner having lost no time from his work, is not entitled to compensation for temporary disability.

I find that the petitioner has sustained a permanent disability which I fix at 100 per cent, loss of usefulness of his left eye.

Stephen J. Lobenz,

Deputy Commissioner.


text:
    New Jersey Department of Labor, Workmen’s Compensation Bureau.
    ROCCO FIERRO, PETITIONER, v. PUBLIC SERVICE COORDINATED TRANSPORT, RESPONDENT.
    Decided September 16, 1940.
    Por the petitioner, Charles Becker.

    Por the respondent, William J. Yosseler.

   * ÍJÍ Sfc * % * ^

Prom the evidence adduced, it appears that the petitioner was regularly employed by the respondent as a carpenter and general handyman in its garage and bus station, at South Pourteenth street, Newark, New Jersey; that he received wages at the rate of $31.68 per week; that on November 19th, 1932, he met with an accident, arising out of and in the course of his employment, consisting of the following: while engaged in repairing a portion of the respondent’s garage floor, it became necessary for the petitioner to go to a storeroom in the rear of said garage for a piece of timber to be used in leveling off the fresh cement, and as he was stooping over to pick up a piece which he believed suitable for that purpose, a milk bottle, containing a pungent yellowish liquid, was accidently knocked off from an upper shelf by a fellow workman, the neck of the bottle striking petitioner across the upper back and the contents thereof spilling over his back; that the fellow worker responsible for the mishap, rendered assistanee to petitioner by wiping the liquid from his back by means of a rag; that the petitioner experienced a burning sensation over the area of his back where the liquid had spilled; that he notified his foreman of the occurrence; and that upon taking a bath promptly upon his arrival home from work, a reddened and tender area was observed in the upper portion of his back. The evidence further reveals that from then on the condition followed a rapidly retrogressive course; that in spite of diligent application of home remedies, the affected area grew larger in size with an increase in the severity of symptoms, making it necessary for him to cease work on December 2d, 1932; that Dr. Charles Eich, who treated him from December 3d, 1932, to December 16th, 1932, found evidence of cellulitis in the upper back which condition failed to respond to treatment; that thenceforth petitioner was treated by various doctors and was confined at different hospitals over long periods of time without result; and that the condition has now spread throughout his entire body, affecting every inch of skin and requiring confinement at the United States Veterans’ Hospital, New York City, where he has been a patient since August 6th, 1934, and where he received constant treatment consisting of ointments and vase-line swabbings over the skin surface of his body from his head to his feet.

While there appears to be no question but that Hierro met with an accident on November 19th, 1932, within the meaning and purview of the Workmen’s Compensation act, his right to compensation is challenged by the respondent upon the ground that his condition—a skin lesion involving his entire body—is not the result of the said accident but due to natural causes.

The sole issue, therefore, narrows itself down to a single question of causal relation, namely: Is the petitioner’s condition ascribable to the accident or to natural causes independent of the same ?

A review of the voluminous medical testimony of the various physicians appearing for the respective parties discloses a definite contrariety of opinion both as to diagnosis as well as to causal relation. The medical experts, appearing on behalf of the petitioner expressed the opinion that Fierro was suffering from a dermatitis exfoliativa, a skin disorder which resulted from the accident; while those appearing on behalf of the respondent expressed the opinion that he suffered from pemphigus, a disease of the skin of unknown origin and wholly unrelated to the accident. However, all the experts without exception estimated the petitioner’s present disability as equivalent to 100 per cent, of total, and that the prognosis was poor.

In a situation such as this where the opinions of the several medical experts of the respective parties are so hopelessly conflicting and irreconcilable, it becomes necessary for me, in order to arrive at a decision, to accept the view which seems to be the more credible, logical and weighty. In my considered judgment, I feel that the greater weight of the medical testimony with respect to causal relation preponderates in favor of the petitioner.

Furthermore, an analysis of the testimony, both lay and medical, leads mo to the inescapable conclusion that there is in this case an unbroken chain of events revealing a reasonably accurate history of cause and effect with a complete bridging of symptoms dating from the date of the accident right up to the present time. Before the accident, Fierro, according to his testimony and that of members of his family and of associates, was a steady worker in the best of health without any skin eruptions or blemishes on any part of his body. Following the accident he suffered an irritation of his back consisting of a small reddened and inflamed area, causing a burning sensation; that the condition grew progressively worse until his entire body has been affected with the lesion.

The rule governing the present case is as follows: The criteria of a compensable injury are: First, was the employment of the claimant one of the contributing causes without which the accident would not have happened; and second, was the accident one of the contributing causes without which the injury would not have been sustained. Tn testing the evidence, probability and not certainty is the touchstone. See Furferi v. Pennsylvania Railroad Co. 117 N. J. L. 508; 189 Atl. Rep. 126; also, Kucynski v. Humphrey, 118 N. J. L. 321; 192 Atl. Rep. 371.

Tested in the light of this rule, and after carefully considering the evidence of the entire case I find and determine as follows:

Hi H* H* H¿ H? H* H*

That on November 19th, 1932, the petitioner suffered an injury to his back as a result of an accident arising out of and in the course of his employment.

That the respondent, through its foreman, had actual knowledge of the said accident and resulting injury on the very day of the occurrence.

That as a result of the accident, the petitioner suffered an injury to his back consisting of a skin lesion which eventually spread to and involved his entire bodj'’, causing a temporary disability from December 3d, 1932, the day on which petitioner was compelled to cease work because of the injury, until August 6th, 1934, the day he entered the. United States Veterans’ Hospital and at which time the permanent nature of his condition and disability became fixed.

That as a result of the injury and condition which followed, the petitioner suffers a permanent disability equivalent to 100 per cent, of total.

H< ^ Hi Hi Hi ' Hi

It is, therefore * * * adjudged, determined and ordered, that judgment final be entered in favor of the petitioner and against the responsent; * * *.

Hi Hi Hi Hi Hi Hi ❖

And it is further ordered, that upon the expiration of the 400 week period petitioner shall have the right to make further application for extended compensation payments in accordance with the provisions of R. S. 1937, 34:15-12(b). N. J. S. A. 34:15-12(b).

John J. Stahl, Deputy Commissioner.


author: Ackerson, S. 0. C.

text:
    DORIS N. MILLER; STEPHEN K. SULLIVAN AND CATHERINE D. SULLIVAN, HIS WIFE; MARTHA W. RUNTON; LAWRENCE HELGESEN AND DELIA HELGESEN, HIS WIFE; HUDSON CITIES HOLDING COMPANY, A CORPORATION OF NEW JERSEY; SARAH DUFFY, ADMINISTRATRIX OF THE ESTATE OF CATHERINE BOOTH; EDITH VAN GELDER; DOROTHEA ROBINSON AND WILLIAM ROBINSON, HER HUSBAND; LENA GOLDBERGER AND CHARLES S. GOLDBERGER, HER HUSBAND; RACHELE MAROTTA; INDIVIDUALLY AND SEPARATELY, PLAINTIFFS, v. THE PORT OF NEW YORK AUTHORITY, A BODY CORPORATE AND POLITIC ; UNDERPINNING AND FOUNDATION COMPANY, A CORPORATION; GEORGE M. BREWSTER AND SON, INC., A CORPORATION; JOSEPH L. SIGRETTO AND SONS, INC., A CORPORATION; MASON & HANGER CO., INC., A CORPORATION; L. P. O’CONNOR, INC., A CORPORATION, DEFENDANTS.
    Decided November 20, 1939.
    For the plaintiffs, Stephen K. Sullivan, Jr.

    For the defendant The Port of New York Authority, Russell E. Watson (C. Thomas Scheilino, of counsel).
    For the defendant Underpinning & Foundation Company, James J. Carroll.

      For the defendant Mason & Hanger Company, Inc., Vanderbach & Vanderbach.

    For the defendants George M. Brewster and Son, Inc., Joseph L. Sigretto and Sons, Inc., and L. P. O’Connor, Inc., Carey & Lane.

   Ackerson, S. 0. C.

The fourteen plaintiffs (husband and wives being joined in several instances), represent ten different ownership interest in ten separate and distinct pieces of real property adjacent to the Midtown Tunnel in Hudson county, also known as the Lincoln Tunnel. These owners have brought this action against the Port of Hew York Authority (hereinafter called the “Authority”), under whose power said tunnel was constructed, as well as against several contractors who were instrumental in its construction under agreements with the Authority.

The complaint, consisting of three counts, is based upon two theories. The first count is against the Authority alone upon the theory that in proceeding with the construction of the tunnel this defendant took plaintiffs’ said properties in whole or part, or the diminution of their values, contrary to our State Constitution without paying just compensation therefor. In effect the charge is a taking of private property for a public use without just compensation, since it is not alleged that said defendant was not authorized to build the tunnel or take the properties for that purpose.

The second and third counts are against all of the defendants (including the Authority), and are rested upon the theory of negligence with respect to blasting operations in connection with the construction of the tunnel.

It is to be noted, however, that two of the plaintiffs, Stephen K. and Catherine D. Sullivan, ask no recovery against the Authority, although seeking it against the other defendants.

The Authority now moves to set aside the service of the summons and complaint as to it, primarily upon the basic ground that it acted in the premises as the alter ego of the States of Hew Jersey and Hew York and is, therefore, clothed with the sovereign immunity of each of said states from suits in their own courts; that such immunity has not been waived nor has consent been authorized or given to a suit such as this, and that this defendant in such capacity is not liable for torts arising out of the performance of its functions.

It is, of course, fundamental that sovereign states cannot, without their consent, be sued in their own courts, where no provision to the contrary exists in their constitutions or by special enactment. American Dock, &c., Co. v. Trustees of Public Schools, 32 N. J. Eq. 428; affirmed, 35 Id. 181 (at p. 252); Curtis & Hill Gravel and Sand Co. v. State Highway Commissioners, 91 Id. 421; 111 Atl. Rep. 16; De Santis et ux. v. Delaware, Lackawanna, and Western Railroad Co., 11 N. J. Mis. R. 22, 25-26; 165 Atl. Rep. 119; Lodor v. Baker, 39 N. J. L. 49; State v. Kirby, 5 Id. 982; Locke v. State, 140 N. Y. 480; 25 R. C. L. 412, § 49; 42 A. L. R. 1465.

It becomes necessary, therefore, in determining the problems thus presented, to decide in the first place whether the Authority is a direct state agency, i. e., the alter ego of the state, or whether it is a private or quatsi-public corporation, such as a railroad, telegraph, telephone, canal or bridge company, endowed with the state’s prerogative of eminent domain, but not clothed with the state’s immunity from suit.

The construction, maintenance and operation of highways, bridges and tunnels is one of the primary governmental functions of the states. Atkin v. Kansas, 191 U. S. 207, 221, 222; Dodge County Commissioners v. Chandler, 96 Id. 205; Sherman v. United States, 282 Id. 25, 29. A state may create an agency for the purpose of carrying out a state duty or function. Curtis and Hill Gravel and Sand Co. v. State Highway Commissioners, supra; approved by the Court of Errors and Appeals in Strobel Steel Construction Co. v. State Highway Commissioners, 120 N. J. L. 298; 198 Atl. Rep. 774: Stale Highway Commissioners v. Elizabeth, 102 N. J. Eq. 221, 227- 140 Atl. Rep. 335; affirmed, 103 N. J. Eq. 376; 143 Atl. Rep. 916; New Jersey Interstate Bridge and Tunnel Commission v. Jersey City, 93 N. J. Eq. 550; 118 Atl. Rep. 264; Gaynor v. Marhon, 268 N. Y. 417. A suit against such a state agency cannot be maintained if the effect of such action is a suit against the state—unless, of course, the state has consented. Strobel Steel Construction Co. v. State Highway Commissioners, supra.

The history of the creation of the Authority with a statement of the several legislative enactments in furtherance of the objects thereof, and of the powers conferred by these enactments and by the compact of April 30th, 1921, between New York and New Jersey, will be found in Gerhardt v. Helvering, 304 U. S. 405, from which it appears that the Authority is a bi-state corporation, created by compact between the two states, which directed the Authority to recommend a comprehensive plan for improving the port of New York and facilitating its use, by the construction and operation of bridges, tunnels, terminals and other facilities. Pursuant to further legislation of the two states, the Authority has constructed interstate tunnels and bridges financed in large part by funds advanced by the two states and by the Authority’s issuance and sale of its bonds. It collects tolls for the use of such facilities, but it has no stock or stockholders and is owned by no private persons or corporations. Its projects are operated in behalf of the two states and in the interest of the public and none of its profits enure to the benefit of private persons. Its property and the bonds and other securities issued by it are exempt by statute from state taxation. The statutes relating to its projects declare that they are all for the benefit of the people of the two states, for the increase of their commerce and prosperity, and for the improvement of their health and living conditions, and that the Authority shall be regarded as performing a governmental function with reference to said projects and shall be required to pay no taxes or assessments upon any property acquired by it for the purposes of its creation. Furthermore by statute (chapter 5, Pamph. L. 1931 (N. J. S. A. 32:1-141 to 32:1-143); chapter 48, Pamph. L., N. Y. 1931), the Authority’s surplus revenues are subject to disposition by the states. It is to be noted also that the treaty of 1921 which created the Authority does not provide that it shall be subject to suit.

If the construction of the Lincoln Tunnel had been intrusted to one of the conventional administrative agencies of the state, such as the State Highway Commission, there is no doubt ihat the state itself would be regarded as the operative agency. Curtis & Hill Gravel and Sand Co. v. State Highway Commissioners, supra; State Highway Commissioners v. Elizabeth, supra; New Jersey Interstate Bridge and Tunnel Commission v. Jersey City, supra; Stephens v. Commissioners of Palisades Interstate Park, supra; Sherman v. United States, supra; The Onteora, 298 Fed. Rep. 533; Highway Commission of Wyoming v. Utah Construction Co., 278 U. S. 194; People, ex rel. Bridge Authority v. Davis, 277 N. Y. 292, 299. It is equally clear that if the state had done so its mantle of immunity would cover such agency, for in the case of a state instrumentality as distinguished from that of a public subdivision of a state, the question whether the particular functions exercised are governmental or proprietary is an irrelevant one. For when the question of immunity of a state, considered as a sovereign, arises, the nature of the particular activity cannot be inquired into. Ex parte State of New York, No. 1, 256 U. S. 490; Ex parte State of New York, No. 2, 256 Id. 503; Murray v. Wilson Distilling Co., 213 Id. 151; The Onteora, supra.

Since, had the undertaking been carried on by one state or the other, either directly, or through an established state agency, the immunity of sovereignty could be invoked, the result must be the same where both states jointly undertake the work by means of a distinct entity acting in behalf of both sovereign states. Plainly the development of the port of Hew York could not have been adequately dealt with excepting through the co-ordinated efforts of Hew Jersey, Hew York, and the United States. Of necessity a body external to the two sovereign states had to be created—in no other way could the two act in complete concert—and it is unimportant whether it is denominated a corporation or an authority or a commission. People, ex rel. Bridge Authority v. Davis, supra; New Jersey Interstate Bridge and Tunnel Commission v. Jersey City, supra (at p. 552). In the latter case, involving the construction of the Holland Tunnel by a similar state agency, with which the Authority is now merged, the court said, concerning the status of such agency:

“This great work of constructing tunnels under the Hudson river is the work of the state itself, for the state, wherever it prosecutes any great governmental purpose, either in its own name or by and in the name of its appropriate agent, is the actor in carrying the particular purpose into execution # * * »

But it may be claimed that the case of Gerhardl v. Helvering, supra, establishes the point that the Authority is not an agency of the state. But that case relates to the position of the state within the framework of the federal system and has no application to the point we are considering. The question there was not whether the activities of the States of Hew Jersey and Hew York, through their Port Authority, were of a governmental or proprietary nature; but whether in the entirely different sphere of federal taxation, the salaries of employes of the Authority were exempt from the federal income tax. A negative answer was given on the ground that an income tax on the employes ‘does not curtail any of those functions (of the states) which have been thought hitherto to be essential to their continued existence as states.” 304 U. S. 405, 520. Prom the point of view of the state, it is for the state itself, within constitutional limits, to decide what functions to undertake. The distinction is succinctly stated in Allen v. Regents, 304 U. S. 439, where the court said that “when a state embarks in a business which would normally be taxable, the fact that in so doing it is exercising a governmental power does not render the activity immune from federal taxation.”

Since the Authority is undoubtedly a direct state agency, exercising an essential governmental function, and is, therefore, an alter ego of the state, it follows that the present action is, in effect, a suit against the state itself which would, as we have seen, be clothed with sovereign immunity, unless a waiver or consent can be found in our State Constitution or in some special enactment.

The compact of 1921 between the states, which created the Authority, signifies no intention to permit the agency to be sued, and the research of counsel and the court has failed to disclose any authority upon which a consent to be sued, or a waiver of immunity from suit, could be based, unless arising from the limitation upon the right of eminent domain contained in section 16 of article I of our State Constitution, and R. S. 32:1-132; 32:1-135 (N. J. S. A. 32:1-132; 32:1-135), enacted to carry the aforesaid constitutional provision for compensation into effect in so fax as the activities of the Authority are concerned. This constitutional provision is as follows:

“Private property shall not be taken for public use without just compensation, but land may be taken for public highways as heretofore until the legislature shall direct compensation to be made.”

Subsequent legislation pertaining to highways generally, as well as the above mentioned legislation applying specifically to the Authority, have, of course, extended the constitutional provision to highways, bridges and tunnels.

R. S. 32:1-132 (N. J. S. A. 32:1-132), supra, provides that if the Authority “shall find it necessary or convenient to acquire any real property as herein defined in this state” for the objects of its creation, and “is unable to agree” with the property owner for such acquisition, it may “acquire such property * * * by condemnation or the exercise of the right of eminent domain;” and by R. S. 32:1-135 (N. J. S. A. 32:1-135), the term “real property” as used in this act is defined “to include lands, * * * and also claims for damage to real estate.”

The aforesaid constitutional provision and legislation, however, do not apply to damage to real estate due purely to negligence in the construction of a project for public use. The law, in estimating compensation for lands taken, wisely limits the issue to damages arising from the taking, and such damages as are necessarily incident to the use of the lands for the proposed purpose of the taking, leaving injuries resulting from negligence in construction or use in the same status as at common law. Delaware, Lackawanna and Western Railroad Co. v. Salmon, 39 N. J. L. 299 (at p. 313) ; Van Schoick v. Delaware and Raritan Canal Co., 20 Id. 249 (at p. 254); 20 C. J. 778, § 233. Nor does the phrase “claims for1 damages to real estate,” appearing at the end of section 135, R. S. 32:1 (N. J. S. A. 32:1-135), above quoted, apply to damages arising out of such negligence. It only enlarges the scope of the Eminent Domain act in this instance to include, besides damages for the lands taken, also damages necessarily incident to the use thereof for the purpose taken, including such consequential damages to other real estate as might result from the closing of streets, obstructions to view and limitations of light and air by the public úse of the lands taken, which could not theretofore be included in condemnation proceedings. Element v. Delaware River Joint, &c., Commission, 119 N. J. L. 600; 197 Atl. Rep. 896; Van Schoick v. The Delaware and Raritan Canal Co., supra (at pp. 253, et seq.).

Since, therefore, at common law, the state, or a direct state agency charged with public duties in performing an essential governmental function for and by direct mandate of the state, could not be field liable for negligence in the performance thereof because of sovereign immunity, and the states of New Jersey and New York have not waived such immunity, or consented to be sued (Stephens v. Commissioners of Palisades Interstate Park, supra, and The Onteora, supra), it follows that the second and third counts of the complaint herein, which are based upon the theory of negligence, cannot be maintained against the Authority. This identical question was before the courts of New York State in three recent suits to recover from the Authority damages alleged to have resulted from negligence in blasting and other operations in the construction of said tunnel, and it was uniformly held that the Authority could not be sued therefor on the ground above stated. Pink, Superintendent, v. The Port of New York Authority et al., N. Y. L. J., February 3d, 1938, Vol. 99, No. 28; Voorhis et al., Trustees, &c., v. Cornell Contracting Co. et al., 10 N. Y. Supp. (2d) 378; N. Y. L. J., December 17th, 1938, Vol. 100, No. 140; Le Beau Piping Corp. v. The City of New York et al., N. Y. L. J., December 21st, 1938, Vol. 100, No. 143. Of course the same rule would not apply to gmsi-public corporations, such as railroad and canal companies, which may possess the right of eminent domain under another section of the Constitution (Pamph. L., p. 8, § 7, art. 4), but are not endowed with sovereign immunity from suit. See Lackawanna and Western Railroad Co. v. Salmon, supra.

But the plaintiff insists that the first count of their complaint, which is against the Authority alone, is rested upon a firmer foundation. It alleges “that in proceeding with the construction of the tunnel, and work connected therewith, the said defendant, either in all or part, destroyed or demolished the value of the plaintiffs’ properties” (being real estate located as listed in Schedule A), “depriving them and each of them of the use of their properties and taking said properties or the diminution of said properties’ values contrary to the Constitution of the State of New Jersey without paving the said plaintiffs their just compensation therefor,” and that “on account of the method and manner of the defendant’s unlawful proceeding hereinbefore set forth, damages in the amounts hereinafter set forth are claimed and demanded by the plaintiffs.”

In the first place it is important to notice that this last allegation: “On account of the method and manner of the defendants’ unlawful proceeding hereinbefore set forth, damages * * * are claimed and demanded,” can refer only to the preceding charge that this defendant “either in all or part, destroyed or demolished the value of plaintiffs’ properties, * * *, contrary to the Constitution of the State of New Jersey without paying the said plaintiffs their just compensation therefor.”

Inasmuch, however, as this defendant, as we have seen, is authorized by law to acquire, or even damage, real estate, if necessary or convenient for the construction of the tunnel in question (R. S. 32:1-132 and 32:1-135; N. J. S. A. 32:1-132, 32:1-135, supra), and it is not alleged that the tunnel itself was being illegally constructed, or that there was anything illegal in the “method and manner” of taking plaintiffs’ properties, “in proceeding with the construction of the tunnel,” other than failure to pay therefor, it necessarily follows that the “unlawful proceeding” upon which this count is based can refer only to the failure to pay plaintiffs “their just compensation therefor.”

But there is nothing in the compact between the states creating the Authority, or in the statutes governing its operations, which requires the actual payment of compensation before, the talcing, acquiring or damaging of private property required for its public purposes. On the contrary the statutes in question recognize the right to take possession of the property or rights sought to be condemned, previously to the actual payment of the damages. Nor is there anything unconstitutional in such a course of proceedings. There is a marked distinction between the procedure prescribed by the constitution of this state for taking the property of the citizen by the state, or a direct agency of the state for public use, and that provided when, for such use, it is taken by a private corporation. The former case is provided for in section 16, article I, its language being, “private property shall not be taken for public use, without just compensation;” and the latter is regulated by Pamph. L., p. 8, § 7, art. 4, in these words, viz.: “Individuals or private corporations shall not be authorized to take private property for public use, without just compensation first made to the owners.” It is only where the right of eminent domain is exercised in favor of an individual or a private corporation that compensation must precede the taking. Where the state is concerned there may be instances where the exigencies are such that it would effect great inconvenience to delay until the judicial proceedings taken to fix the compensation are determined. In view of this, and the fact that, when the state or a municipality is the party condemning, there is supposed to be ample security for the payment of the award, actual payment is not a condition precedent to the taking. It is sufficient if provision is made by law by which the party can obtain compensation, and that an impartial tribunal is provided for assessing it. Wheeler v. Essex Pub. Road Board, 39 N. J. L. 291 (at p. 297); Loweree v. City of Newark, 38 Id. 151 (at p. 154) ; Butler v. Sewer Commissioners, 39 Id. 668 (at p. 671). Such provision is made in the act authorizing the construction of the Lincoln Tunnel, R. S. 32:1-132, where condemnation is provided for under and pursuant to the provisions of the act entitled “An act to regulate the ascertainment and payment of compensation for property condemned or taken for public use” (Revision of 1900), R. S. 20:1-1 to 35, inclusive, except as other provision is made by the terms of the act providing for the construction of said tunnel.

Where, as in the case sub judice, the statute provides a definite and complete remedy for obtaining compensation, this remedy is exclusive, in order that there may be no unnecessary limitation upon sovereignty. 20 C. J. 1152, § 517; Van Schoick v. The Delaware and Raritan Canal Co., supra (at p. 255); Goodavage v. State Highway Commission, 96 N. J. Eq. 424, 427; 125 Atl. Rep. 919. And it makes no difference in this respect that the statute provides for the initiation of condemnation proceedings; by the condemnor only, if the owner is free to coerce payment by mandamus. As was said in the case of Butler v. Sewer Commissioners, supra (at p. 671), referring to the remedy of the property owner:

“We have seen that the legislature is obliged to indicate a tribunal for the establishment of the amount of compensation. * * * That it must be a remedy to which the party can resort of his own motion, or compel the movement of the municipality by mandamus. People v. Heyden, 6 Hill 361; Cooley Const. Lim. 56.”

It is the duty of the Authority, under the aforesaid statute, as the agency acting for the state, to initiate condemnation proceedings in order that proper compensation may be fixed and paid to the plaintiffs, if in fact their properties have been taken, destroyed or damaged for public purposes, but this duty is a ministerial one for the performance of which mandamus is the appropriate remedy, and so it has been uniformly held in this state. Haycock v. Jannarone, 99 N. J. L. 183; Goodavage v. State Highway Commission, supra; State Highway Commission v. Elizabeth, supra; Element v. Delaware River Joint, &c., Commission, 119 Id. 600; 197 Atl. Rep. 896: affirmed, 123 N. J. L. 197; 8 Atl. Rep. (2d) 563; Butler v. Sewer Commissioners, supra (at p. 671); Wheeler v. Essex Road Board, supra (at p. 298); Klaus v. Jersey City, 69 N. J. L. 127; 54 Atl. Rep. 220; Budd v. Railroad and Trans. Co., 14 N. J. L. 467; 20 N. J. 1159. In such mandamus proceedings the question whether any such lands or properties have been taken, destroyed or damaged for public use within the intendment of the constitution and statutes, and distinguished from mere negligence in the course of construction, can be settled by a jury on a proper issue framed. Haycock v. Jannarone, supra; Finger v. Doane, 98 N. J. L. 635.

It may be noticed, although not involved here under the pleading sub judice, that in Goodavage v. State Highway Commission, supra, it was held, that although the defendant, State Highway Commission, had taken possession of the complainant’s -property without endeavoring to agree with him as to just compensation therefor, which was a statutory condition precedent to the right of entry and occupancy, nevertheless, the complainant’s remedy was by mandamus, to require defendant to take proper proceedings to condemn, and not by injunction.

It follows from what has been said that The Port of Hew York Authority cannot be sued in this court for the alleged causes of action set forth in the complaint, for the reason hereinbefore stated, and its motion to set aside the service of the summons and complaint as to it is, therefore, granted, and a form of order may be submitted in accordance with the conclusion thus reached.