author: Jayne, C. C. J.

text:
    Burlington County Circuit Court.
    IN THE MATTER OF THE CONDEMNATION AND TAKING OF LANDS AND EVERY INTEREST THEREIN OF GEORGE JOSEPH LAW BY THE STATE OF NEW JERSEY BY AND THROUGH THE DEPARTMENT OF CONSERVATION AND DEVELOPMENT.
    Decided July 21, 1936.
    Bor the petitioner, Curry & Purnell.

    Bor the State of New Jersey, David T. Wilentz, attorney-general (Saclcetl M. Dickinson, assistant attorney-general).
   Jayne, C. C. J.

An examination of the record of this proceeding reveals that the State of New Jersey through the agency of the department of conservation and development sought to acquire by eminent domain certain lands owned by one George Joseph Law and situate in the county of Burlington in this state. The appropriate procedure was pursued and the designated commissioners ultimately made an award of compensation to the owner for the lands thus acquired and for the incidental damages. The owner has appealed from the award of the commissioners and now presents to this court a petition seeking the removal of the cause to the District Court of the United States for the District of New Jersey pursuant to the pertinent provisions of the federal statute. This application is resisted. ’It is therefore proper to inspect the record of the cause to ascertain and determine whether the cause, as exhibited by the record, is removable. McCarter v. American Newspaper Guild, 118 N. J. Eq. 102; 177 Atl. Rep. 835; George Weston, Ltd., v. New York Central Railroad Co., 115 N. J. L. 564; 181 Atl. Rep. 18.

Concisely stated, the primary reason specified in the petition for the removal of this cause is that the petitioner is a citizen and resident of the Commonwealth of Pennsylvania and it .is alleged that the department of conservation and development is a citizen of the State of Few Jersey and that the members of the board of conservation and development are likewise citizens of Few Jersey.

It will be at once observed that the initial petition in this condemnation proceeding was made by “the State of Few Jersey acting by and through the department of conservation and development.” While this court is not at liberty to embark upon any factual inquiry beyond the face of the record and the statements of fact embraced by the petition for removal must ordinarily be accepted as true, yet it will be noticed that a true copy of the original petition in the proceeding to condemn the lands has been attached to and made a part of the petition for the removal of this cause. Therefore the averment in the petition for removal to the effect that the initial petition to condemn the lands was filed by the certain named individuals who may then have been members of the board of conservation and development is positively refuted by the inspection of the original petition itself. Obviously this averment in the petition for removal is intended to be expressive of the contention of the petitioner. The contention that the individual members of the state board are parties to the condemnation proceeding is untenable. In the early case of Osborn v. Bank of United States, 9 Wheat. 738; 6 L. Ed. 204, it was held in construing the eleventh amendment to the federal constitution that in all eases where jurisdiction depended on the identity of the party, the real party was considered to be the party named in the record. In the more recent case, In re Ayers, 123 U. S. 443; 31 L. Ed. 216; 8 Sup. Ct. Rep. 164, it was determined that the amendment covers not only suits against a state by name, but those also against its officers, agents and representatives where the state, though not named as such, is nevertheless the only real party against which in fact the relief is asked and against which the judgment effectively operates. The eleventh amendment, of course, refers only to suits brought against a state but the same principle of construction has been applied to the federal statutes relating to the removal of causes from a state court to a federal jurisdiction. Missouri v. Hickman, 183 U. S. 53; 22 Sup. Ct. Rep. 18; 46 L. Ed. 78.

Here, however, the State of New Jersey is not only the nominal but the real party interested in the acquisition of the lands. The proceeding to acquire the lands was instituted under statutory authority. Pamph. L. 1905, p. 77; 2 Comp. Stat., p. 2606, § 2; Pamph. L. 1913, ch. 187, p. 340; Cum. Supp. Comp. Stat. 1911-1924, p. 1446, § 82-2; Pamph. L. 1915, p. 426; Cum. Supp. Comp. Stat. 1911-1924, p. 621, § ***42-1. The department of conservation and development is a state agency. Board of Tenement House Supervision v. Schlechter, 83 N. J. L. 88; 83 Atl. Rep. 783; Stephens v. Commissioners of Palisades Interstate Park, 93 N. J. L. 500; 108 Atl. Rep. 645; Manufacturers, &c., v. Board of Commerce and Navigation et al., 98 N. J. L. 638; 121 Atl. Rep. 337; affirmed, 101 N. J. L. 224; 127 Atl. Rep. 924; Kearny v. State Board of Taxes, &c., 103 N. J. L. 541; 138 Atl. Rep. 569; Nesbitt v. Board of Managers of New Jersey Agricultural Experiment Station, 10 N. J. Mis. R. 19; 157 Atl. Rep. 551; DeSantis v. Delaware, Lackawanna and Western Railroad Co., 11 N. J. Mis. R. 22; 165 Atl. Rep. 119.

At the argument some doubt was expressed as to whether a proceeding to condemn lands was a suit or action comprehended by the Federal Kemoval acts. If the other essential requisites, such as the diversity of citizenship and the amount in controversy, exist, a proceeding for the condemnation of land pending in a state court may undoubtedly be removed to the federal court. Mississippi, &c., River Boom Co. v. Patterson, 98 U. S. 403; 25 L. Ed. 206; Searl v. School District, 124 U. S. 197; 8 Sup. Ct. Rep. 460; 31 L. Ed. 415; Madisonville Traction Co. v. St. Bernard Min. Co., 196 U. S. 239; 25 Sup. Ct. Rep. 251; 49 L. Ed. 462; New York v. Sage, 239 U. S. 57; 36 Sup. Ct. Rep. 25; 60 L. Ed. 143. Whether under the procedure prescribed by our Eminent Domain act of 1900 (2 Comp. Stat., pp. 2182 et seq.) the proceeding assumes the character of a civil action from its inception or not until the appeal carries it to the Circuit Court, need not be here definitely determined. Where diversity of citizenship is assigned as the sole ground for the removal of such a cause, the time within which the petition for removal should be filed might occasion debate. But, see, In Pacific R. Removal Cases, 115 U. S. 1; 5 Sup. Ct. Rep. 1113; 29 L. Ed. 319; Upshur County v. Rich, 135 U. S. 467; 10 Sup. Ct. Rep. 651; 34 L. Ed. 196; Madisonville Traction Co. v. St. Bernard Min. Co., supra; New York v. Sage, supra; Minneapolis, &c., Railroad Co. v. Nestor, 50 Fed. Rep. 1; Kansas City v. Metropolitan Water Co., 164 Id. 728; Kaw Valley Drainage District v. Metropolitan Water Co., 186 Id. 315; In re Seattle, 237 Id. 100.

In resisting this application it was argued that the Eederal District Court could not assume jurisdiction of this cause by reason of the eleventh amendment to the federal constitution. This amendment relates to the commencement and prosecution of suits against the state. This petitioner did not institute the pending condemnation proceeding. It may be surmised from a reading of his petition that he prefers to have the proceeding discontinued and to retain his lands. This cause was commenced by the State of Eew Jersey. The present petitioner who was the owner of the lands enters the proceeding to assert his constitutional right to just compensation for his lands. Cohens v. Virginia, 6 Wheat. 262, 402.

The original jurisdiction of the District Courts is derived from article III, section II, clause I of the federal constitution (U. S. C. A., Constitution Part 2, pp. 284, 605) and from section 24 (1) of the judicial code enacted in pursuance of the constitutional power. The constitution provides that the judicial power shall extend, inter alia, to controversies between citizens of different states and the federal statute clothes the District Courts with jurisdiction of all suits of a civil nature, at common law or in equity, where the matter in controversy exceeds, exclusive of interests and costs, the sum or value of $3,000 and, inter alia, are between citizens of different states.

As previously indicated the State of New Jersey is the nominal and real party interested in the prosecution of the present condemnation proceeding to acquire the lands of the present petitioner. The proceeding is governed by our state statute. The parties interested in this issue are the State of New Jersey and the petitioner who is the owner of the lands. The proceeding or action is obviously not one between citizens of different states. A state cannot be considered a citizen of any state. Stone v. South Carolina, 117 U. S. 430; 6 Sup. Ct. Rep. 799; 29 L. Ed. 962; Upshur County v. Rich, supra; Postal Telegraph Cable Co. v. Alabama, 155 U. S. 482; 15 Sup. Ct. Rep. 192; 39 L. Ed. 231; Missouri, &c., Railroad Co. v. Hickman, supra; Arkansas v. Kansas, &c., Coal Co., 183 U. S. 185; 22 Sup. Ct. Rep. 47; 46 L. Ed. 144; Title Guarantee, &c., Co. v. Idaho, 240 U. S. 136; 36 Sup. Ct. Rep. 345; 60 L. Ed. 566; In re Silvies River, 199 Fed. Rep. 495; Chicago, R. I. and P. Railway Co. v. State of Nebroska, 251 Id. 279. It is therefore well settled that a suit between a state and a citizen of another state is not an action between citizens of different states and the present cause is therefore not removable upon the ground of the diversity of citizenship of the parties.

The petition for removal does embody certain general allegations that the petitioner has been denied just compensation and also that the rights of the petitioner, because of his residence in the State of Pennsylvania, would be injuriously affected by the local prejudice of jurors impaneled in Burlington county, New Jersey. It is elementary, however, that the petition for the removal of a cause must allege facts and not mere conclusions. No suit can be removed by a defendant from the state court as a suit arising under the constitution of the United States unless the fact that it so arises is made apparent. Metcalf v. Watertown, 128 U. S. 586, 589; Arkansas v. Kansas, &c., Coal Co., supra. This court is not obliged to surrender its jurisdiction unless the pleadings and the record disclose the essential factual prerequisites which entitle the petitioner to remove the cause and which consequently deprive this court of its jurisdiction. George Weston, Ltd., v. New York Central Railroad Co., supra.

The factual circumstances apparent on the face of the record are insufficient to induce this court to surrender its jurisdiction over this pending cause.

The petition is accordingly denied.


source: Caselaw Access Project

author: Brown, C. C. J.

license: Public Domain

text:
    Hudson County Circuit Court.
    ISAAC CHODOSH, PLAINTIFF, v. SAMUEL SCHLESINGER, WINBER REALTY COMPANY, A CORPORATION OF NEW JERSEY, ABE BRAUER AND JACOB S. KAPLAN, DEFENDANTS.
    Decided June 23, 1936.
    Before Judge Brown and a jury.
    For the plaintiff, David M. Klausner.

    For the defendants Winber Eealty Company, Abe Brauer and Jacob S. Kaplan, Walter J. Freund and Ralph W. Emerson.

   Brown, C. C. J.

The court wiil deny the motion of the plaintiff for the reasons hereinafter stated. The reasons for the ruling will apply not only to the motion made by plaintiff’s counsel, but also to defendants’ motion. As the court understands the pleadings in this case there was a bill of foreclosure of a mortgage that is mentioned in this proceeding. This bill was filed in the Court of Chancery of this state and resulted in the foreclosure of a mortgage dated April 29th, 1926, made by one Schlesinger to the plaintiff in this cause. The mortgage expired by its own terms on April 29th, 1929. It was for the sum of $6,000. Extension agreements upon the expiration date of the mortgage were entered into by the subsequent owners. The property was purchased by the Winber Realty Company subject to the mortgages existing on the property and on the expiration of the term of the Schlesinger mortgage, or upon application of the Winber Realty Company, an extension agreement was made in which substantially the terms of the mortgage agreement were extended for a period of three years. That extension is in evidence and was not recorded. The extension agreement contained the signatures of the individual defendants Brauer and Kaplan. They signed the extension agreement and agreed therein to carry out the original terms of the bond and mortgage, consideration being the extension that was granted of three years. Upon the extension agreement expiring, another extension was entered into, on May 2d, 1932, which extension was not recorded. That extension agreement contained an agreement bjr the defendants in this cause to pay the amount due on the bond and mortgage and to perform the conditions thereof. The extension agreement was made upon either partial payment of principal being made at that time or a promise to pay—the court has forgotten which, and for the purposes of this motion it does not matter, as the court sees it, whether it was made without a partial payment or whether payment was promised to be made. As the court remembers and is impressed with the terms of the last extension, it was quite the same as the other, the purpose being to extend the term of paying the debt according to the terms of the bond and mortgage, in fact the last extension contained a provision that the terms of the bond and mortgage should be carried out in all particulars and nothing was waived or varied except the extension of time for the payment of principal. The property remained in that posture when default was made and the suit in foreclosure was brought. The foreclosure suit proceeded to a decree and to a sale thereunder by a fieri facias issued out of the Court of Chancery, directed to the sheriff of this county, in which the sheriff was directed to sell the mortgaged premises to satisfy the amount due and claimed on the bond and mortgage. At the time the sheriff received the fieri facias, there was a tenant in possession of a part of the premises by the name of Charles Werman. It appears that Werman entered into the premises in question under the terms of a lease dated the first day of May, 1927. This lease was acknowledged and was of such a nature that it could have been recorded if the holder thereof desired to have it recorded. Be that as it may, it was not recorded. The tenant remained in possession under the lease until the expiration thereof. Upon expiration of the lease he continued in possession. His possession has been continuous and open and notorious from the date of the expiration of the lease down to the present time. Counsel have agreed and it is a matter of record in this case that this tenant remained from the expiration of the written lease down to the present time as a tenant in the premises from year to year. In the foreclosure proceeding it is admitted that the original mortgagor Schlesinger and the other defendants in this case who signed the extension agreement were all made parties defendant to the foreclosure proceeding. Shortly before the sale took place, the solicitor for the plaintiff in this case, who was solicitor for the complainant in the foreclosure proceeding, wrote to the sheriff and advised and instructed him to sell the mortgaged premises subject to the tenancy of parties then in possession, which meant, of course, the tenancy of Werman. It appears that Werman was the only tenant actually in possession at that time. Be that as it may, he was in possession of a part of the premises. There were other conditions annexed to the instructions, namely, that the premises should be sold subject to the result of an accurate survey of any encroachment thereon and also subject to taxes and possible other liens. The plaintiff in the case brings his suit by virtue of a statute of this state known as the “Vail act,” which may be found in 3 Comp. Stat., p. 3421, as amended by Pamph. L. 1933, ch. 82, p. 172; N. J. Stat. Annual 1933, § 134-48, 2, which provides that:

“In all cases where a bond and mortgage has or may hereafter be given for the same debt, all proceedings to collect said debt shall be, first, to foreclose the said mortgage, and if at the sale of the said mortgaged premises under said foreclosure proceedings, the said premises should not sell for a sum sufficient to satisfy said debt, interest and costs, then and in such cases it should be lawful to proceed on the bond for the deficiency and that all suits on said bond shall be commenced within three months from the date of the sale of said mortgaged premises, and judgment shall be rendered and execution issue only for the balance of debt and costs of suit,” &c.

As the court understands the amendment is substantially the same as the original act with the exception of the feature of the three months period within which suit should be brought. So that, for the purposes of this suit, the three months period having been complied with, we can use as reference all of the authorities and the statute as it existed from the time it was originally enacted up to the present time. The defendants say on their motion and in their pleadings, and according to the testimony adduced, that this plaintiff should not be permitted to recover for the reason that he has not complied with the terms of the statutes last mentioned in that he has not exhausted the real property by foreclosure of all of the interests therein and further than that, he has not only failed in that connection by failing to make Werman a party defendant, but also because he‘has instructed the sheriff not to sell the premises 'in toto but subject to the conditions that have been heretofore enumerated. We are confronted with the question that is raised by the defendants as well as the points that are raised on the plaintiff’s motion for a direction. It has been said time and again and fully determined that a party in possession of premises cannot be deprived of his interest or right in the property unless and until he has his day in court. One of the outstanding cases, and it is outstanding because of the clarity with which the statement of law appears, is that of LaCombe v. Headley, which may be found in 91 N. J. Eq. 63; 108 Atl. Rep. 185. There it was said, in part: “The statute makes an unrecorded deed void only as against judgment creditors, bona fide purchasers and mortgagees who have no notice thereof, and it is entirely settled both in this state and elsewhere that possession of land, if open, notorious and unequivocal, constitutes notice of the right or claim or right under which the party in possession occupies it; and this notice is effective not only as to those who have actual knowledge of the occupation, but as to all the world.” The court finds that the decision of Vice-Chancellor Berry, in dealing with a question involving a leasehold interest or occupation of a tenant, in the case of Walgreen Co. v. Moore, 116 N. J. Eq. 348; 173 Atl. Rep. 587, is to the same effect wherein it is stated:

“The lease cannot be terminated by the lessor except by some act which amounts to an eviction. The filing of a bill to foreclose and the appointment of a rent receiver do not constitute an eviction. * * * Undoubtedly a lease may be terminated by foreclosure of a prior mortgage, but to accomplish that end, the lessee must be made a party defendant to the foreclosure proceeding, otherwise he is not bound by the decree.”

It will be noted in both of these cases that a consideration of section 58 of the Chancery act (1 Comp. Stat., p. 432) was not referred to, that in both eases they were general principles of law that were cited. It can be agreed, the court feels, from both cases, that if a lessee in possession, whether under a written lease or otherwise, is made a party defendant, that his right is extinguished and he has had his day in court. The “Conveyance act,” requiring the recording of deeds and other instruments, as well as section 58 of the Chancery act, have for their purpose evidently the protection of innocent purchasers. These provisions of the law are not idle and unsound legislation; they have been on the statute book for years and they have answered their purpose very well, the primary purpose being that in purchasing property a Iona fide purchaser has to look to the record to make sure that he is buying what the record discloses as well as the occupational condition of the property. Sometimes there are instruments that do not appear of record and cannot be recorded. Sometimes there are leases that are in writing that cannot be recorded because they are not acknowledged or there is no written lease and it seems to the court that in this case the

general principle of the law enunciated by Chief Justice Gummere in LaCombe v. Headley and by Vice-Chancellor Berry in the case of Walgreen v. Moore, supra, apply and that occupation of a premises is notice to the world, including the purchaser, that there is an outstanding right. The court feels, too, that the Vail act, known as chapter 82, Pamph. L. 1933, heretofore referred to, contemplates that there should be complete exhaustion of the property securities before a suit for deficiency is brought. The wisdom of the law has been passed upon both in cases and also in actual experience and it has been found to be a just law, as the court remembers, to require a person having mortgaged premises as security, to exhaust the security before stepping to the next security, namely, the bond or the principal debt as it is sometimes termed. Now, the question in this case is whether that exhaustion, whether that complete sale that is contemplated by the act, has been brought about. In order to determine that question reference should be made to cases involving parties to foreclosure proceedings. This court will follow the rulings of the Supreme Court and the Court of Errors and Appeals on those questions and will take cognizance of and follow as far as it is applicable in this case, the decision of Circuit Court Judge Jayne in the case of Guardian Life Insurance Co. v. Lowenthal, 13 N. J. Mis. R. 849; 181 Atl. Rep. 897. In the Guardian Life Insurance Co. case it appeared that a motion was made to strike out an answer and that one of the defenses set up to that motion was that the plaintiff, who was suing for a deficiency failed to include or prove or show upon his motion that he had brought in the occupying tenants or tenant. Whether there was a recordable lease involved does not appear in the case and Judge Jayne in deciding that case stated:

“It is apparent that the leases of the tenants of the mortgaged premises would not be terminated by the foreclosure • of the mortgage unless such tenants were made defendants in the foreclosure suit.”

He makes reference to the case of Walgreen v. Moore, for this statement or proposition of law and also the case of Deal Park Co. v. Bannard, 2 N. J. Mis. R. 194, in which Mr. Justice Lloyd wrote the opinion for the Court of Errors and Appeals. This court being confronted with those two eases it might be said that they are authority to assert a defense for failure to exhaust the remedy in foreclosure, regardless of whether a lease is recordable, by not making a tenant a party to the foreclosure suit. The court does not find the Deal Park case is directly applicable to the case now under discussion, and the reason is that in the Bannard case, a lease was not involved, but rather an outstanding interest vested in an heir of a deceased mortgagor. There it was quite apparent that the interest of such a person was not extinguished by the proceedings as they were not made a party. They were not made a party by service of process and they were not made a party by virtue of any statute, particularly by virtue of section 58 of the Chancery act. So then, as far as that case is concerned on that particular point, it is not decisive of the propositions and the questions here presented. It is decisive, however, it seems to the court, of the particular item of law therein mentioned, that is to say, that the Foreclosure act or the Deficiency act as it is called, requires that all the interest and all the security in the property must be exhausted by the mortgagee before he brings a deficiency suit. Mr. Justice Lloyd, writing the opinion for the court, stated that it is the burden of the complainant to make all of the parties having an interest in the property parties to the original suit. How, in the case decided by Judge Jayne, known as the Guardian Life Insurance case, the court cannot ascertain from that case whether the leases were in writing, or whether they were acknowledged and capable of being recorded. The court does not feel that Judge Jayne in his decision disregarded section 58 of the Chancery act, supra. This court finds that a party may be made a party to a suit in at least three ways; by appearance in person and submitting to the jurisdiction of the court; by service of process and by operation of the statute. In the Chancery act, section 58, 1 Comp. Stat., p. 432, it is provided:

“In any suit for the foreclosure of a mortgage upon or which may relate to personal or real property in this state, all persons claiming an interest in or an encumbrance or lien upon such propertjr, by or through any conveyance, mortgage, assignment, lien or any instrument which, by any provision of law, could be recorded, registered, entered or filed in any public office in this state, and which shall not be so recorded, registered, entered or filed at the time of the filing of the bill in such suit, shall be bound by the proceedings in such suit, so far as the said property is concerned, in the same manner as if he had been made a party to and appeared in such suit, and the decree therein made against him as one of the defendants therein.”

The court finds that there is no difficulty in construing the plain meaning of this statute. It is just what the words indicate, that if a party has a conveyance; a mortgage, an assignment, or a lien or an instrument, which by any provision of law could be recorded and is not, the party holding it is deemed to have been made a party to the foreclosure proceeding just the same as though he appeared in the suit. That statute has been construed in a number of cases in this state. In Keiler v. Bunn, 84 N. J. Eq. 519; 94 Atl. Rep. 402, in which a lien was involved, it was held that the holder of an unrecorded lien at the time of the filing of a bill in the Court of Chancery is bound by the proceedings in a foreclosure suit the same as if they had been made a party by virtue of the provisions of section 58 of the Chancery act. A later case is that of the Excellent Building and Loan Association v. Gersken, 108 N. J. Eq. 411; 155 Atl. Rep. 385. That case involved a claim on a mortgage which was not prior to the mortgage which was being foreclosed but a junior lien to it and the mortgagee recorded his mortgage in a county other than the county where the property was situate. The court held that section 58 of the Chancery act barred by the foreclosure of the prior mortgage the interest of the holder of the second mortgage. To the same effect is the ease of Berwyn Estates v. Varlese, 106 N. J. Eq. 465; 150 Atl. Rep. 342, a Court of Errors and Appeals decision. In that case a mechanics’ lien was involved and the court held:

Wlien a foreclosure bill was filed prior to that of a materialman’s lien and where the lien was filed by virtue of the Mechanics’ Lien act, it was held that when a foreclosure. bill was filed so that a materialman who, by virtue of the Mechanics’ Lien act, then had an inchoate lien for materials furnished to the building and for work done on the building, which he had not advanced to the stage of a filed claim, is under section 58 of the Chancery act so bound by the foreclosure decree that he cannot make any further claim against the mortgaged property.

To the same effect is the ease of Buchanan and Smock Lumber Co. v. Brower, 95 N. J. Eq. 422; 123 Atl. Rep. 699. That ease involved the failure of a second mortgagee who held an unrecorded mortgage to be made a party defendant in the foreclosure and having his interest, his second mortgage extinguished by the foreclosure proceeding. The court held that a party holding an unrecorded mortgage that is capable of being recorded and who fails to record it before the foreclosure bill is filed is barred from claiming any right in the mortgaged premises by reason of his failure to record his mortgage and by reason of his failure to comply with the provisions of section 58 of the Chancery act. Vice-Chancellor Backes in the case of Fisovitz v. Cordosco Construction Co., 102 N. J. Eq. 354; 140 Atl. Rep. 573, makes copious reference to the right of a party having an interest in the property which is the subject of foreclosure to be made a party defendant and points out that rule 13 of the Court of Chancery is more liberal than the provisions of section 58 of the Chancery act. In Strong v. Smith, 68 N. J. Eq. 686; 60 Atl. Rep. 66, a case in the Court of Chancery in which one of the parties resisted the attempt of a purchaser under a foreclosure sale to obtain a writ of assistance to gain possession, claiming that he was not made a party to the suit and that he was a tenant before the foreclosure suit was brought, although his tenancy was subject, or at least his tenancy was created after the mortgage was recorded. The vice-chancellor who decided that case pointed out what interests are extinguished by the foreclosure suit, and he enumerates a number of them, and in that enumeration is involved the parties who come within the purview of section 58 of the Chancery act. • In that decision the wording of the statute was literally followed, in eliminating those who did not come within the statute and stating those that did come within the statute. Among those bound by the foreclosure decree were such as held a leasehold interest by virtue of an instrument in writing that was acknowledged and capable of being recorded but was not recorded before the bill of foreclosure was filed. The vice-chancellor held in effect that such parties were bound by the foreclosure proceeding even though they were not served with a summons. In the discussion of that case it was shown that if the purchaser at a foreclosure sale desired to remove a tenant who held under such a recordable lease that was not recorded and would not surrender, that his interest was extinguished by foreclosure proceedings and even though the application for a writ of assistance to remove him was a summary proceeding that the writ would go to the purchaser as a matter of right because the lessor clearly had no interest in the property. So that, where there is a lease that is in writing that can be recorded according to the provisions of the law and is not recorded by the tenant before the bill in foreclosure is filed, his right is foreclosed by section 58 of the Chancery act and his right is extinguished just as much as if process was served upon him. To give any other effect to such a leasehold interest would be to nullify section 58 of the Chancery act. How do the cited cases effect a tenant in possession with a lease that cannot be recorded or where there is no written lease ? The latter is the situation that we have here. The original lease of two years has spent itself. It is true that the tenant went into possession under that lease, but after its termination he remained there, not under the terms of that lease, but as a holdover tenant from year to year. His tenancy or the evidence thereof could not be recorded. There was no way for him to record his interest after the expiration of the original lease. Consequently, the court finds that section 58 of the Chancery act does not apply and that act not applying, we do not find in those proceedings or anywhere else, any determination or any suit or proceeding in which he was made a party by which his interest in the property might be extinguished. The court holds, therefore, that the interest of the tenant in this property that was subject to the plaintiff’s mortgage was not extinguished by the sale. If the court is in error about this, the defendant’s motion should be granted for another reason that it now appears all of the interest and equities in the property were not sold. This occurred by direction of the solicitor. It may be that the sheriff should have obeyed the writ issued out of the Court of Chancery to effect a complete sale. Be that as it may, it appears a complete sale was not effected and therefore the price obtained was not, possibly, the best price. In any event all the security was not extinguished by the sale. It is needless for the court to go into the economic proposition of whether the tenant’s occupancy increased or decreased the value of the property. There are many items that enter into a consideration of that proposition. Some purchasers for their own interest or their own use might wish to have premises free and clear of all tenants because of low rentals or because of a contemplated use. Then again, other purchasers might be desirous of having tenancies throughout the entire premises whore there are profitable rentals. The court does not think that a question of this kind should effect a decision on this motion. The motion of the defendant for a direction in their favor is granted. The plaintiff’s motion is denied.


author: Fielder, Y. C.

text:
    Robert W. Fraser, complainant, v. The Great Western Sugar Company et al., defendants.
    [Decided July 31st, 1935.]

      Mr. Louts J. Flail, Mr. Herbert R. Kaus (of the New York bar), and Mr. Hamlet J. Barry (of the Colorado bar), for the complainant.

      Mr. Albert Q. Wall, Mr. C. Tracy Voughi (of the New York bar), and Mr. Caldwell Martin (of the Colorada bar), for the defendants.
   Fielder, Y. C.

This is a suit by the holder of ten shares of preferred stock of the defendant Great Western Sugar Company (hereinafter called the Sugar Company) on behalf of himself and all other stockholders of said defendant who might join herein.

In November, 1933, said defendant had a surplus of' $30,000,000 and its officers and directors caused the organization of the Cache La Poudre Company (hereinafter called the New Company) and applied $9,000,000 of the Sugar Companys’ surplus to the purchase of the entire authorized capital stock of three hundred and sixty thousand shares of the New Company of the par value of $20 per share and thereupon immediately distributed such shares among the common stockholders of the Sugar Company pro rala according to their holdings. At that time the authorized capital of the Sugar Company was $30,000,000, one-half of which was represented by one hundred and fifty thousand shares of preferred stock of the par value of $100 each and the remaining $15,000,000 was represented by one million eight hundred thousand shares of common stock of no par value.

Complainant’s bill alleges that the withdrawal of $9,000,000 from the Sugar Company’s surplus seriously impaired the ability of the company to assure future dividends to its preferred stockholders, greatly diminished the assets of the company in which all stockholders, preferred and common, are entitled to share on distribution or liquidation and impaired the company’s working capital. The complainant attacks the transaction as ultra vires the Sugar Company; as without consideration and as a fraud on that company’s stockholders. The defendants are the Sugar Company, the New Company and the directors of the Sugar Company and the bill prays that the New Company be dissolved and ordered to restore the $9,000,000 to the Sugar Company, or that the other defendants be ordered to restore that sum. No other stockholder has joined in complainant’s suit.

The Sugar Company’s surplus was accumulated prior to 1933 and had been held as protection against uncertain conditions in the sugar market, -falling prices and operating deficits. In 1933 it appeared that the company was again operating at a profit and its directors considered what disposition to make of its surplus. Probably, fear of federal legislation taxing corporate surplus had something to do with the directors’ decision that part of the surplus should be distributed and it is possible that the method adopted was for the purpose of avoiding taxes which might be imposed under the federal revenue laws had distribution to stockholders been made in cash. The plan adopted was first discussed by the president of the company informally with his directors and meeting with their approval, the New Company was incorporated. A meeting of the Sugar Company directors was held November 15th, 1933, at which formal consideration was given to the plan and it was the unanimous decision of the directors that $9,000,000 of the company’s surplus should be distributed among its common stockholders and that the method of distribution subsequently followed was most favorable for them. On the day of that meeting a notice was mailed to all Sugar Company stockholders, preferred and common, notifying them of the incorporation of the New Company and that the directors of the Sugar Company had authorized a plan of “reorganization” between the Sugar Company and the New Company whereby the New Company would take over $9,000,000 of the Sugar Company’s earned surplus as consideration for the entire three hundred and sixty thousand shares of stock of the New Company of the par value of $20 each; that such stock of the New Company would be distributed on or before December 15th, 1933, to the common stockholders of the Sugar Company; that the New Company would have a capital of $7,200,000 and a paid-in surplus of $1,800,000. The notice further stated the purposes for which the New Company was organized. Following the receipt of this notice by complainant, he addressed a letter under date of November 20th, 1933, to the directors of the Sugar Company protesting the proposed action as illegal on the ground that he, as a preferred stockholder, was entitled to share in a distribution of assets of the company and threatening that he might bring legal proceedings to preserve his rights. December 15th, 1933, the Sugar Company notified its common stockholders that the plan of “reorganization” had been consummated and with the notice it enclosed to each common stockholder his pro mia share of stock in the New Company. No common stockholder, save one holding twenty-five shares, refused to accept his stock. After complainant had sent his letter of November 20th, 1933, he did nothing further until he filed his bill herein April 10th, 1934.

Complainant charges that the transaction was not put through in good faith; that the directors failed to inform the stockholders of the true reason for the method adopted and characterized the transaction as a “reorganization” when in fact it was not and he insinuates that there was an undisclosed ulterior motive behind the plan. I can find nothing in the evidence to justify the claim that the plan was not proposed and carried out by the Sugar Company directors in absolute good faith, with an honest desire to further the interests of the company’s stockholders. In describing the plan, the word “reorganization” was used within the meaning of the Federal Tax act of 1932, which defines the term to mean (quoting from complainant’s brief), “a transfer by a corporation of all or part of its assets to another corporation, if immediately after the transfer, the transferor or its stockholders, or both, are in control of the corporation to which the assets are transferred” and which Tax act seems to provide that in the method here carried out, by the common stockholders of the Sugar Company receiving stock of the Hew Company no gain to those stockholders would be recognized. As I have said, it is possible that the plan was adopted to come within the provisions of the federal tax laws for the purpose of avoiding the payment of federal taxes and if legal within the provisions of the act, it was certainly for the benefit of the Sugar Company common stockholders. But no stockholder could have been misled by the use of the word “reorganization.” They knew that the Sugar Company was absolutely solvent and the plan outlined in the notice of Hovember 15th, 1933, showed them that no reorganization was contemplated within the commonly accepted meaning of the word. The Sugar Company lost nothing by the transaction because it retained none of the stock of the Hew Company and therefore it can suffer no loss by the operations of that company. It merely took $9,000,000 of its surplus and instead of giving it to its common stockholders in cash, it bought the stock of another corporation and distributed that stock to its common stockholders, which stock at the time of distribution, was worth $9,000,000.

Of the one hundred and fifty thousand shares of preferred stock of the Sugar Company, complainant holding ten shares is the only one objecting to the transaction and of the one million eight hundred thousand shares of common stock only one stockholder, holding twenty-five shares, objected. The annual meeting of stockholders was held May 9th, 1934, notice of which stated that one of the purposes of the meeting was to approve and ratify all acts of the directors since the last stockholders’ meeting and fifteen days prior to the meeting the company’s annual report referring to the transaction in question, was mailed to all stockholders and it is probable that all stockholders were aware of the fact that complainant had filed his bill of complaint about a month prior to the meeting, yet the only votes cast against such approval and ratification were those of complainant and of the holder of twenty-five shares of common stock.

The articles of incorporation of the Sugar Company provide that the holders of preferred stock shall receive from surplus or net profits, a dividend of seven per cent, annually and no more and that in case of liquidation or distribution of assets, the holders of preferred stock shall be paid the par value thereof before any payment shall be made the holders of common stock and after payment of an equal amount to the holders of common stock the remaining assets shall be distributed, one-half among preferred stockholders and one-half among common stockholders.

The decision of the United States circuit court of appeals for the eighth circuit, on appeal from the United States district court for the district of Colorado, reported in Fraser v. Great Western Sugar Co., 9 Fed. Rep. (2d) 810, was rendered in a suit brought by the present complainant against the present defendant Sugar Company. That suit arose out of complainant’s claim to participation as a preferred stockholder in earned surplus distributed by the Sugar Company as extra dividends to common stockholders. The present complainant there contended that such payment amounted to a distribution of assets in which preferred stockholders were entitled to participate under the provisions of the Sugar Company charter. The decision of the court was that the Sugar Company directors, in their sound discretion, had the right to distribute surplus or net profits to common stockholders; that preferred stockholders of that company were not entitled to receive out of surplus or net profits anything in excess of the regular preferred dividends, so long as the Sugar Company was a going concern; that the charter provision giving preferred stockholders an interest in the company’s assets over the par value of their stock in case of liquidation or distribution of corporate assets, refers to final dissolution and winding up of the corporation and does not apply to distribution of surplus among stockholders, while the company is a going concern.

The decisions of the courts of this state and of other courts settle beyond question that distribution of corporate surplus to stockholders is within the sound discretion of the directors as to time, manner and terms, subject only to such limitations as may be imposed by statutes or corporate charters. It is clear that had the directors of the Sugar Company, exercising sound judgment, decided to distribute $9,000,000 of surplus to the common stockholders in cash, no stockholder, common or preferred, would be heard to object and it is not perceived how the interests of complainant as a preferred stockholder, could be affected by the directors’ decision to distribute that amount of surplus by a method other than cash. The company was clearly a “going concern” with ample assets to secure its stockholders both common and preferred. Dividends had been paid on its preferred stock regularly since its incorporation in 1905 and the record shows that the payment of $9,000,000 for the Hew Company stock did not impair the company’s working capital, or its ability to pay future dividends on its preferred stock. The company’s financial statement issued in February, 1933, showed that it and its exclusively owned subsidiaries, had gross assets exceeding $76,000,000 and an earned surplus of approximately $30,000,000 as against its capital stock of $30,000,000. The following year, after distributing $9,000,000 surplus to common stockholders, it had a surplus of approximately $24,000,000. I consider that the decision in Fraser v. Great Western Sugar Co., supra, determines that so long as the Sugar Company continues to carry on business under its charter, it can be no concern of complainant as a preferred stockholder, how its directors in the exercise of sound judgment, determine to dispose of corporate surplus. Here the directors cannot successfully be charged with failure to exercise sound judgment when they decided to make distribution of surplus to common stockholders, and complainant has failed to sustain his claim that the reduction of the surplus by $9,000,000 in December, 1933, worked any injury to Ms rights as a preferred stockholder.

Complainant seeks to void a transaction which was not against public policy or prohibited by law and which, as I find, was entered into in good faith by the directors of the Sugar Company and wherein that company received full consideration for its part of the transaction and suffered no loss whatever. If it be assumed that the transaction was ultra vires the Sugar Company, it would not be set aside at the instance of that company and since this is a derivative action, complainant’s right to urge ultra vires is no greater than that of the Sugar Company. After the stock of the Hew Company had been wholly distributed among the common stockholders of the Sugar Company, it was extensively traded in with the result that many of the shares have been sold and transferred to third parties. When complainant filed his bill, six hundred and one of the original recipients of stock had transferred thirty-one thousand seven hundred and twelve of the shares received by them; three hundred and twenty-seven stockholders had transferred eight thousand two hundred and one shares not acquired by distribution, but acquired by transfer from prior holders; one hundred and twenty-nine stockholders had acquired twenty-three thousand five hundred shares in addition to those received by distribution. When this cause came on for hearing, about eight months later, one thousand and fifteen stockholders had transferred fifty-five thousand three hundred and sixty-six shares received as distribution; four hundred and forty-four stockholders held eighteen thousand nine hundred and seventeen shares not received as distribution, but acquired by transfer from prior holders; one hundred and sixty-five stockholders had acquired thirty-six thousand four hundred and forty-nine shares in addition to those received by distribution. It is not now possible to restore the status quo ante. It might be possible to direct the Hew Company to return $9,000,000 to the Sugar Company but if that be done the stock of the New Company should be ordered returned to it. Perhaps a decree to that effect could operate on those stockholders of the Sugar Company who acquired and still hold the New Company stock distributed to them by the Sugar Company, but such decree to be effective should also require the Sugar Company to buy the New Company stock now in the hands of third parties and the expense thereof undoubtedly would be great to the Sugar Company and its stockholders, including complainant, would suffer by such a decree. Rural Homestead Co. v. Wildes, 54 N. J. Eq. 668; 35 Atl. Rep. 896; Camden Safe Deposit and Trust Co. v. Citizens Ice and Cold Storage Co., 69 N. J. Eq. 718; 61 Atl. Rep. 529; Perkins v. Trinity Realty Co., 69 N. J. Eq. 723; 61 Atl. Rep. 167; affirmed, 71 N. J. Eq. 304; Whitehead v. American Lamp and Brass Co., 70 N. J. Eq. 581; 62 Atl. Rep. 554; Earle v. American Sugar Refining Co., 74 N. J. Eq. 751; 71 Atl. Rep. 391; United States Industrial Alcohol Co. v. Distilling Company of America, 89 N. J. Eq. 177; Dintenfass v. Willat Film Corp., 108 N. J. Eq. 195; 154 Atl. Rep. 546; Downs v. Jersey Central Power and Light Co., 115 N. J. Eq. 348; 171 Atl. Rep. 306; affirmed, 117 N. J. Eq. 138; Camden and Atlantic Railroad Co. v. May’s Landing and Egg Harbor City Railroad Co., 48 N. J. Law 530; Chapman v. Iron Clad Rheostat Co., 62 N. J. Law 497; 41 Atl. Rep. 690; First National Bank of Ocean City v. Zelley, 106 N. J. Law 510; 150 Atl. Rep. 413; Farmers’ and Merchants’ National Bank of Bridgeton v. Del-Bay Farms, 131 Atl. Rep. 679.

I think complainant is guilty of laches in bringing his suit. The notice of November 15th, 1933, was duly received by him and it informed him in sufficient detail of what the Sugar Company proposed to do. He then had the same objection to the plan which he sets up in his bill of complaint, as appears by his letter of November 20th, 1933, but he did nothing to prevent the effectiveness of the plan until he filed his bill April 10th, 1934, and in the meantime the rights of many third persons who had acquired stock in the New Company had vested. His failure to act promptly to oppose an act which he believed the Sugar Company was without authority to perform, also bars his claim to relief. Rabe v. Dunlap, 51 N. J. Eq. 40; 25 Atl. Rep. 959; Beling v. American Tobacco Co., 72 N. J. Eq. 32; 65 Atl. Rep. 725; Dana v. American Tobacco Co., 72 N. J. Eq. 44; affirmed, 73 N. J. Eq. 736; 69 Atl. Rep. 223; Windhurst v. Central Leather Co., 101 N. J. Eq. 543; 149 Atl. Rep. 36; affirmed, 107 N. J. Eq. 528; Breslin v. Fries-Breslim, Co., 70 N. J. Law 274; 58 Atl. Rep. 313; In re Passaic Consolidated Water Co., 8 N. J. Mis. R. 506; 151 Atl. Rep. 215.

The bill of complaint will be dismissed, with costs.


author: Ackekson, C. 0. J.

text:
    CATHERINE E. BUCKLEY, ADMINISTRATRIX OF THE ESTATE OF MICHAEL F. BUCKLEY, DECEASED, PLAINTIFF, v. HOWARD SAVINGS INSTITUTION, A CORPORATION OF NEW JERSEY, DEFENDANT.
    Decided October 26, 1935.
    For the plaintiff, Lewis G. Hcmsen.

    For the defendant, Pitney, Hardin & Slcinner.

   Ackekson, C. 0. J.

This matter is submitted to the court for decision without a jury upon an agreed state of facts. The action is brought by Catherine E. Buckley, administratrix of the estate of Michael F. Buckley, deceased, to recover from the defendant, Howard Savings Institution, a balance of $3,023.59 alleged to be due upon the deposit account of the said Michael F. Buckley at the time of his decease on July 14th, 1928.

The stipulated facts disclose that Michael F. Buckley opened an account with the Securities Savings Bank of Newark on June 1st, 1925, with a deposit of $1,000. Thereafter there were summary transactions involving deposits and withdrawals, the last of which was a withdrawal on July 7th, 1928. The decedent died on July 14th, 1928, and the account remained inactive and the deposit book remained in the custody of the said bank and of its successor, the present defendant, for safe keeping until the account was closed out as hereinafter set forth.

On January 1st, 1930, the said Securities Savings Bank of Newark was merged into and with the defendant and on May 19th, 1932, an instrument purporting to be the last will and testament of said Michael E. Buckley, dated June 25th, 1928, and naming one G. Charles Moore as executor was admitted to probate by the surrogate of Essex county, New Jersey, and letters testamentary thereon were issued to a person purporting to be and known as G. Charles Moore. On June 3d, 1932, this person appeared at the defendant bank and requested, as executor of the last will and testament of Michael E. Buckley, the withdrawal of the balance of the aforesaid account amounting to $3,023.59. He presented a certificate of the surrogate of Essex county setting forth the authority of said G. Charles Moore as executor aforesaid to administer the said estate and also presented a waiver of the transfer inheritance tax bureau of the New Jersey state tax department on the aforesaid account, which aforesaid certificate and waiver were in proper form and issued by the proper authorities. It is also stipulated that “said person also presented satisfactory evidence of his identity” and the defendant had no reason to believe that there was any irregularity in his appointment as executor of the aforesaid will. The defendant accordingly paid over the aforesaid balance and delivered the canceled deposit book to him in good faith and without knowledge of any reason why the same should not be done.

It is farther stipulated that it now appears that the aforesaid will was a forgery; that G. Charles Moore was the assumed name of the person “who forged said will and fraudulently induced the surrogate of Essex county to admit said wili to probate and issue letter testamentary thereon to him.”

On June 22d, 1933, plaintiff was appointed administratrix of the estate of said Michael E. Buckley by the surrogate of Union county, New Jersey, and on October 25th, 1933, demanded payment of, the aforesaid account which was refused by the defendant on the ground that payment thereon had already been duly made.

It appears from an excerpt from the by-laws of the defendant that “on the death of any depositor, the amount standing to his credit shall be payable to his legal representatives,” &c. It is also to be noted from the stipulated facts that the aforesaid probate of the alleged will of Michael E. Buckley, deceased, and the letters testamentary granted thereon to G. Charles Moore, “still remain of record and undisturbed.”

While the defendant’s answer denies that the Michael E. Buckley, whose estate the present plaintiff represents, is the person who opened the savings account referred to in the complaint, nevertheless the stipulated facts admit it and that question is no longer an issue. The sole question for solution, as presented by the answer and stipulated facts, is whether the defendant, in paying the balance of the deposit in question to the person to whom letters testamentary upon the forged will of Michael E. Buckley, deceased, were actually granted by the surrogate of Essex county, which letters have not been revoked, is thereby discharged of its obligation, so as to bar a subsequent action therefor by an administratrix of the estate of said deceased, subsequently appointed by the surrogate of another county.

It is to be noted that the defendant paid the deposit to the person to whom letters testamentary were actually granted by the surrogate of Essex county, such person having produced “satisfactory evidence of his identity” as such. It is not claimed that payment was made to a person other than the one to whom such letters were granted.

The claim of the present plaintiff must, therefore, necessarily resolve itself into a collateral attack upon the decree of the surrogate of Essex county admitting the forged will to probate and issuing letters testamentary thereon. The courts of this state have given uniform recognition to the view that the proceedings of the surrogate, admitting a will to probate are those of a regularly established court in which the surrogate exercises judicial functions and that such proceedings can only be reviewed by appeal. In re Whitehead’s Estate, 85 N. J. Eq. 114 (at p. 118). The granting of probate and administration is a proceeding in rem, in the strict sense of that term. It constitutes the person to whom granted, the administrator, whether rightfully or wrongfully granted and it cannot be inquired into collaterally. Quidort’s Administrator v. Pergeaux, 18 Id. 472 (at p. 477).

So universal and well settled in its application is this principle, that it has been decided that payments of money to an executor upon the probate of a forged will is a discharge to the debtor of the decedent, notwithstanding the probate be afterwards declared void and administration be granted to the intestate’s next of kin, for if the executor had brought an action against the debtor, the latter could not have controverted the title of the executor so long as the probate was unrepealed, and the debtor was not obliged to wait for a suit when no defense could be made against him. Allen v. Dundas, 3 T. R. 125; Peeble’s Case, 15 Serg. & R. 42; Ryno's Executor v. Ryno’s Administrator (Court of Errors and Appeals), 27 N. J. Eq. 522 (at p. 524); Vincent v. Vincent, 70 N. J. Eq. 272; 62 Atl. Rep. 700.

As was said in the case of Plume v. Howard Savings Institution, 46 N. J. L. 211 (at p. 230) :

“That a conclusive efficacy should be given to letters of administration by whatever tribunal issued, so far as merely collateral impeachment is concerned, is a plain dictate of sound public policy, for few things can be more oppressive than to require the debtors of a person who chooses so to absent himself as to give rise to a judicial conclusion that he is dead, to bear the burden of paying the debts they owe to such absentee, to his representative duly appointed according to legal forms, and at the same time to assume the risk of such payment being afterwards declared to be invalid, on the ground that such absentee is still alive.”

Inasmuch as the decree of the surrogate admitting the alleged will of Michael F. Buckley, deceased, to probate and the issuance of letters testamentary thereon still stand in full force and effect, it follows, upon the authority above stated, that the plaintiff is not entitled to recover in this action and I, therefore, find in favor of the defendant and against the plaintiff a verdict of no cause of action.


author: Case, J.

text:
    GOERKE KIRCH HOLDING COMPANY, A CORPORATION, PROSECUTOR IN CERTIORARI, v. UNION COUNTY CIRCUIT COURT, FRANK L. CLEARY, JUDGE OF THE SAID CIRCUIT COURT, AND GOERKE KIRCH COMPANY, A CORPORATION, DEFENDANT IN CERTIORARI.
    Decided February 26, 1934.
    For the prosecutor, Abe J. David.

    For the defendant Goerke Kirch Company, Jacob L. Newman.

    See Court of Errors and Appeals decision in case of Goerke Kirch, Holding Co. v. Goerke Kirch, Co., 116 N. J. L. 427.
   Argued before and decided by

Case, J.

The nub of the argument is whether three members of the Elizabeth real estate board in determining the fair market annual rental value of the store premises occupied by the Goerke Kirch Company in Elizabeth acted as appraisers or as arbitrators. If as appraisers, the prosecutor prevails. If as arbitrators, a further question is presented.

The Union County Circuit Court, on the motion of Goerke Kirch Company, held that the proceeding was an arbitration, that the committee were in fact a hoard of arbitrators, and that as arbitrators they were guilty of gross misconduct. An order was entered vacating the award. Later, on petition of the Goerke Kirch Company, the same court, acting under the statute entitled “An act concerning arbitration and awards” approved March 21st, 1923 (Pamph. L. 1923, ch. 134), ordered that three arbitrators be appointed to determine the fair market annual rental of the premises and that they proceed to a hearing in accordance with the statute. Both of these orders are now under review. The prosecutor concedes that if the committee of the Elizabeth real estate board were indeed arbitrators, the order vacating the award was properly made.

Eor the reasons given by Judge Cleary in his opinion T, too, find that the proceeding before the committee of the Elizabeth real estate board was an arbitration and that the committee acted as a board of arbitrators. This results in the finding that the order vacating the award was properly made.

The remaining question is whether the Circuit Court was justified in making an order directing the parties to proceed to a new arbitration under the 1923 statute. That order was granted on petition of the Goerke Kirch Company and against the opposition of the Goerke Kirch Holding Company. The order does not appoint arbitrators. It directs the Goerke Kirch Holding Company to proceed to an arbitration and directs that three arbitrators be appointed in compliance with the agreement between the parties made January 29th, 1932, and that the arbitrators so to be appointed proceed to a hearing and thereafter file their report. The justification for that order is not apparent either in the agreement of January 29th, 1932, or the supplementary agreement of February 1st. 1932, or in the cited statute.

The prosecutor was not in default under its agreement to arbitrate. It neither failed, neglected or refused to perform. It joined in a submission, appeared and put in its proof. It could do no more. The parties in submitting, on February 18th, 1932, to arbitration fixed March 1st, 1932, as the time for the completion of the appraisal. Both parties, without objection, appeared at, and participated in, numerous hearings conducted by the arbitrators subsequent to that date. By their respective counsel they appeared and made oral summation argument on May 16th, 1932, and thereafter submitted briefs. The award was made on May 25th, 1932. I consider that the parties had by their acts impliedly extended the time for the making of the award until then. The situation was therefore that the arbitrators were appointed and, having been appointed, qualified and thereafter acted and rendered their findings within the time granted by the parties. Consequently, none of the conditions named within the January 29th, 1932, agreement, upon which application might be made to a court for the appointment of a committee of arbitrators, existed. The provision at the end of section 9 of the statute “where an award is vacated and the time within which the agreement required the award to be made has not expired, the court may, in its discretion, direct a rehearing by the arbitrators” clearly does not apply because the time for the making of the award had expired long before April 24th, 1933, when the order under review was signed. It seems that the parties were thereupon in position to pursue whatever original remedies they had, as was done in Burroughs v. Thorne, 5 N. J. L. 777. The respondent cites no authority for the making of the order except the provisions in the contract between the parties and the excerpt from section 9 of the statute which I have quoted.

For the reasons given I think that neither the contract nor the statute support the order. It will therefore be set aside.

The determination is without costs.


author: Perskie, J.

text:
    CAMDEN FORGE COMPANY, A CORPORATION OF THE STATE OF NEW JERSEY, PROSECUTOR, v. COUNTY PARK COMMISSION OF CAMDEN COUNTY AND CHARLES F. WISE, CLERK OF THE COUNTY OF CAMDEN, RESPONDENTS.
    Submitted May term, 1936
    Decided July 25, 1936.

      Before Brogan, Chief Justice, and Justices Case and Perskie.
    Por the prosecutor, George D. Bothermel.

    Por the respondents, William B. Knight and Henry M. Evans.

   The opinion of the court was delivered by

Perskie, J.

The writ of certiorari in this cause brings up for review the condemnation proceedings instituted by respondent county park commission of Camden county against prosecutor. The facts are not controverted. Respondent is the creature of statute which was adopted by a popular vote. Pamph. L. 1926, ch. 331; Cum. Supp. Comp. Stat. 1925-1930, pp. 1468, 1481, §§ 165-212 et, seq. (An act to establish public parks in certain counties in this state and to regulate same), and the several amendments thereto and supplements thereof. Pursuant to authority vested in respondent of acquiring and developing lands for public parks and open spaces, it did, by formal resolution, on September 1st, 1927, resolve, as a matter of policy: (1) To develop “Cooper River Yalley from Camden to Haddonfield or beyond.” (2) To establish a park in the vicinity of Gloucester City. (3) To establish a park in the lower part of Camden.

We are told that the last two projects have been completed. And in order to complete the first project, it is necessary to acquire the land sought to be condemned in this proceeding (16.968 acres) in addition to three other parcels the total area of which is 19.33 acres.

We learn that respondent has acquired either by dedication, purchase or condemnation all of the north bank of Cooper river consisting of some twenty-nine parcels of about 218.36 acres tying between Camden and Haddonfield (Delaware township being in the intervening territory); that the lands owned by prosecutor and sought to be condemned are along the north bank of the Cooper river about midway between Camden and Haddonfield, and that the lands along the river bank cannot be made continuous unless respondent acquires the lands which are the subject-matter of this litigation and a tract of 3.9 acres adjoining the Camden Forge Company’s lands; that no assessment for benefits accruing from the improvement is contemplated against prosecutor, that when the lands are acquired respondent proposes to extend a fifty-foot park drive through the property running from Camden to Haddonfield; that there still remains a fifteen-foot strip between the northerly edge of said proposed park drive and remaining lands of prosecutor; that prosecutor refused to accept respondent’s offer of $6,000 for its premises.

Prosecutor answers in several ways none of which we think is meritorious.

First: Prosecutor argues that no tona fide offer was made for its property. That argument is made to rest upon the theory that the offer was for a purchase in fee-simple while the prayer in the petition of condemnation was for a title less than a fee-simple. It is, of course, the settled law that a fee-simple cannot be acquired by condemnation. Frelinghuysen v. State Highway Commission, 107 N. J. L. 218; 152 Atl. Rep. 79; affirmed, 108 N. J. L. 403; 158 Atl. Rep. 465. But that is beside the point. Under section 2, chapter 331, Pamph. L. 1926, p. 738; Cum. Supp. Comp. Stat. 1925-1930, p. 1410, § 165-213 sub. 2, the commission is given power, among other things, “to take in fee and otherwise, by purchase, gift, devise or eminent domain lands and right in lands for public park and open spaces within said county.” And under section 4 of the same act it is provided that if the commission or its agents cannot agree with the owner “as to the price and terms of the purchase thereof,” then procedure in condemnation as outlined must be followed. If a purchase of the land is consummated no resort is had to condemnation. But when, as here, the latter procedure is followed, the title sought to be acquired to the lands as set forth in the instant petition must be less than a fee-simple. Frelinghuysen v. State Highway Commission, supra. Clearly the two methods are not in conflict. Nothing is made to appear from which the bona fides of the offer to purchase can be successfully challenged.

Second: Prosecutor next contends the petition filed in the condemnation proceedings is defective and invalid in that the exact estate to be gained is not set forth and no use to which the land is to be put is mentioned.

Pamph. L. 1926, ch. 331, § 4; Cum. Supp. Comp. Stat. 1925-1930, p. 1471, § 165-215, sub. 4, requires that a description in writing of the lands shall be presented with the petition. See National Docks Railway Co. v. United New Jersey Railroad Co., 52 N. J. Eq. 366; 28 Atl. Rep. 673; affirmed, 52 N. J. Eq. 552; 30 Atl. Rep. 581. A detailed description, by metes and bounds, of the lands to be acquired is attached to the petition. In addition thereto there is stated the total acreage, 16.93 more or less; the topographical character of the land, high land 10.612 acres, more or less, marsh land 6.351 acres, more or less. There is also attached a blueprint of the plan of the proposed land to be taken. The purpose of the taking is clearly shown. Eespondent’s petition sets forth in detail the necessary prerequisites to invoke its statutory right of condemnation.

Third: Prosecutor next contends that the statute under which these proceedings are instituted (Pamph. L. 1926, ch. 331, as amended and supplemented; Cum. Supp. Comp. Stat. 1925-1930, pp. 1468 et seq., §§ 165-212 et seq.) and particularly the power therein conferred upon the commission to condemn lands either for park purposes or for roadway purposes is unconstitutional and void.

(a) It is urged that under section 7 of this act (Cum. Supp. Comp. Stat. 1925-1930, p. 1473, § 165-218, sub. 7) h would be possible for the commission to take private lands for the purpose of a roadway or boulevard and in the condemnation proceedings instituted to acquire this land, make the property owner pay an assessment rather than pay him compensation. This, points out the prosecutor, may well result since section 7 of this act gives the commission authority to determine whether by laying this boulevard or roadway any benefits are conferred upon the property owners, and if so, to assess such owners to the extent of the benefits conferred. This, it is claimed, would be a deprivation of private property for public use without just compensation, and, therefore, in contravention of both the United States and the New Jersey constitutions. Be that as it may, it is a sufficient answer to that argument to mark the fact that the- instant proceeding is under section 4 of chapter 331, Pamph. L. 1926, and not under section 7 thereof, supra. The petition, however, specifically alleges that no assessment of benefits is contemplated. Obviously it follows then that the prosecutor is not affected by section 7 which provides for an assessment or by sections 8, 10 and 12 (Cum. Supp. Comp. Stat. 1925-1930, pp. 1473, 1475, §§ 165-218, 219, 221, 223) which provide respectively for a reduction of the amount of benefits conferred from the condemnation price; for the collection of assessments; and for the method of collecting assessments. None of prosecutor’s constitutional rights is impaired.

Fourth: Prosecutor’s final contention is that the preliminary proceedings of the respondent do not comply with the requirements of the statute. Particular reference is made to section 3 (Cum. supp. Comp. stat. 1925-1930, p. 1470, § 165-214) which requires the commission to take the following steps: (1) determine upon the location and quantity of land to be included in any park or place; (2) cause a survey thereof to be made and a map showing the lands to be embraced therein which map must be kept at the office of the commission; (3) the boundary lines for such park or place are required to be recorded in a book to be kept by the board; (4) before laying out and opening any roadway, parkway or boulevard, they must cause a survey to be made and a map to be filed showing the termini of the said roadway, parkway, &c., including the names of the owners of the lands and the streets or roads included.

The resolution of the commission under date of January 2d, 1936, which resolution is, by stipulation, a part of the record, clearly sets forth the location and quantity of land to be acquired. It also discloses that a survey and a map have been made and adopted. We are of the opinion that the statutory procedure has been adequately and fully observed. See Taylor-White Extracting Co. v. State Highway Commission, 5 N. J. Mis. R. 255; 136 Atl. Rep. 183; affirmed, 105 N. J. L. 498; 144 Atl. Rep. 921, wherein it was held at page 258 of 5 N. J. Mis. R.:

“We find no legal reason for disturbing these proceedings. The land is being taken for the public benefit and taken in accordance with the statute. * * * ‘Ho one citizen should be permitted to reject these proceedings for any technical reason which does not interfere with his substantial rights.’ ” The writ of certiorari is discharged, with costs.


author: Pee Oueiam.

text:
    NANUET LOGGING COMPANY, PROSECUTOR, v. GERALD HANSON, RESPONDENT.
    Submitted May term, 1936
    Decided July 28, 1936.
    Before Bkogan, Chief Justice, and Justices Case and Pebskie.
    Por the prosecutor, Cohn <& Kohlreiter (Peter Cohn, of counsel).

      Por the respondent, Irving Zacharewitz (Feder & Rinzler, of counsel).
   Pee Oueiam.

This writ of certiorari brings up for review an order denying motion to quash a writ of attachment. The attachment issued out of the District Court of the city of Clifton in Passaic county. The writ of attachment was obtained by the creditor on the presentation of an affidavit saying that the Manuet Logging Company, Incorporated, a corporation of the State of New York (prosecutor herein) is not, to the knowledge or belief of the deponent, resident in the State of New Jersey at the present time and that “the said Manuet Logging Company, Incorporated, owes to deponent the sum of $500, as nearly as this deponent can specify.” This affidavit would be clearly faulty and insufficient to support the issuance of an attachment under the Practice act (3 Comp. Stat., p. 4077; Jaudel v. Schoelzke, 95 N. J. L. 171; 112 Atl. Rep. 328) but it seems to conform to the statutory requirement in such cases, outlined for the District Courts of this state (2 Comp. Stat., p. 1977, § 69), which provides, “if any creditor * * * shall make oath * * * either that he verily believes that his debtor absconds from his creditors, and is not to his knowledge or belief, resident in this state at the time, or that the person against whose estate an attachment is about to be issued is not, to the knowledge or belief of said creditor, resident in this state at the time, and that he owes to said creditor a certain sum of money, specifying as nearly as he can the amount of the debt or balance, the clerk of any District Court of this state shall, and he is hereby required to issue out of said District Court an attachment, &c.”

The writ was issued by the clerk and moneys of the debtor attached. The debtor caused a special appearance to be entered for the purpose of moving to quash the writ on the ground that the proceedings were irregular, illegal and void. Notice of motion to that effect was served upon the attaching creditor. Notices were posted (section 70, Pamph. L. 1898, p. 583; 2 Comp. Stat., p. 1977) advertising the fact that an attachment had been issued against the Manuet Logging Company and bond was tiled which accomplished the release of the money from the lien of the attachment (section 71, Pamph. L. 1898, p. 583; 2 Comp. Stat., p. 1978). The court denied the motion to quash.

The prosecutor advances two reasons why the motion to quash should have prevailed. (1) The affidavit filed as the basis for the writ of attachment is legally insufficient, and (2) that the creditor failed to strictly follow the provisions of sections 69 and 70 of the District Court act, supra, and therefore the attachment should have been vacated.

As to the first, that the affidavit was legally insufficient, it is argued that the language of section 69 does not comprehend the issuance of a writ of attachment against a corporation. It is also argued that the statement that the corporation is not, to deponent’s knowledge, resident in this state at this time, is insufficient, and reliance is placed upon the case of Brand v. Auto Service Co., 75 N. J. L. 230; 67 Atl. Rep. 19. The court in that case had before it the Attachment act of 1901 (Pamph. L., p. 158; 1 Comp. Stat., p. 136, § 4) and the point at issue there was a construction of section 4 of that statute, which limits and defines the class of corporations against which the writ may issue to be “corporations not created or recognized as corporations of this state by the laws of this state.” But that is not the situation here. The attachment was issued under and by virtue of the provisions of the District Court act concerning attachments. It is a separate and distinct mode of procedure regarding attachments issuing out of District Courts and must be tested by whether there is a compliance with the letter and the spirit of the provisions of the District Court act.

In arriving at the meaning of the language used by the legislature, we must consider the provisions of any other part of the statute which would tend to clarify or make certain legislative intent. And so, under the heading “Parties” of the District Court act (Pamph. L. 1898, p. 567; 2 Comp. Stat., pp. 1965, 1966), we find the following: (Section 43) :

“Whenever, in describing or referring to any person, party, matter or thing, any word importing the singular number or masculine gender is used in this act, the same shall be understood to include and shall apply to several persons and parties as well as one person or party, and females as well as males, and bodies corporate as well as individuals, and several matters and things as well as one matter or thing, unless it be otherwise provided, or there be something in the subject or context repugnant to such construction; and the word ‘plaintiff’ wherever used in this act, shall be taken to include ‘plaintiffs’ or ‘person or persons instituting proceedings,’ or ‘corporation’ or ‘corporations;’ the word ‘defendant’ shall be taken to include ‘defendants,’ or ‘person or persons proceeded against,’ or ‘corporation’ or ‘corporations.’ Pamph. L. 1898, p. 567.”

We think that it was the legislative intent, manifested by the section quoted, to include corporations. In defense of its position, the prosecutor argues that corporations were not intended to be included among the class of debtors against whom attachment should issue, relying upon section ?8 of the statute. Pamph. L. 1898, p. 587; 2 Comp. Stat., p. 1980. That section, as we construe it, merely provides that wherever in an action on contract, capias to respond might issue, in all such cases a writ of attachment may likewise issue out of the District Court.

It will be noted that the writ may issue in those cases whether the defendant be resident of this state or not (section ?8, supra). Our view is that this is merely an added class of cases where resort may be had to attachment as well as to capias ad respondendum.

It is next argued by the prosecutor under his second point, that the affidavit, which was the basis for the writ, described the corporation as a non-resident while the advertisement described the debtor corporation as an absconding debtor. This variance will not vitiate the writ. A reading of the section will make it manifest that the purpose of the advertisement was “in order that any person having a greater demand against such debtor than is cognizable before said District Court may have an opportunity to take out an attachment for the recovery of same.” It is our view that whether the debtor was described as non-resident or absconding was immaterial. Certainly it didn’t affect the foundation, i. e., the affidavit, upon which the writ was issued. We find no merit whatever in this point.

The judgment of the District Court will be affirmed, and the writ of certiorari dismissed, with costs.


author: Brogan, Chief Justice.

text:
    THE STATE OF NEW JERSEY, DEFENDANT IN ERROR, v. ERNEST ELLISON, PLAINTIFF IN ERROR.
    Submitted May term, 1936
    Decided July 28, 1936.
    Before Brogan, Chief Justice, and Justices Case and Persiste.
    Por the defendant in error, William A. Wachenf eld; prosecutor of the pleas; Felix Forlenza, assistant prosecutor of the pleas, and C. William Caruso, legal assistant prosecutor.
    Por the plaintiff in error, Sandmeyer & Meisner.

   Brogan, Chief Justice.

The plaintiff in error, Ellison, was, together with Anthony Y. Washkewich, convicted of conspiracy to cheat and defraud Anna Eodanis of her money on deposit in the Howard Savings Institution in Newark, New Jersey. This writ of error is sued out only on behalf of Ellison.

The first ground upon which we are asked to reverse this judgment is that the trial court erred in refusing to direct an acquittal of Ellison on the ground that the state failed to prove the charge of conspiracy as laid in the indictment; that there was failure to prove any criminal intent; that the indictment charged an offense which was outlawed by the statute of limitations. It is also argued that the verdict was against the weight of the evidence.

Washkewieh, at the time of the acts complained of, was a member of the bar of this state. Ellison was a detective and did investigating work from time to time for Washkewieh.

The record discloses that one Anna Eodanis, in the year 1915, had an account in a savings bank in Newark, which bank later was taken over by the Howard Savings Institution. In 1918, this woman, having lost her mind, was confined in the Essex County Hospital for the Insane. Nothing was done about the account and the bank, in accordance with the statute concerning bank accounts that have long been idle and unclaimed, advertised this and other accounts as dormant.

It so happened that Washkewieh knew a person by the name of Anna Eodanis (not the person who owned this bank account) and he caused her whereabouts to be investigated by one Wassell, an employe of his office. The Anna Eodanis that Washkewieh knew had married a man named Moritz and both she and Moritz had died some time since, leaving two children. The mother of the deceased Anna Moritz, nee Eodanis, executed a renunciation of her right to administer the supposed estate of her deceased daughter and also signed a request that Wassell be appointed to administer the estate. Joseph, a brother of Anna (Eodanis) Moritz, having heard about this bank account and believing it to be the property of his deceased sister, made an investigation of the matter at the bank and learned that the account did not belong to his sister, Anna, but to another person of the same name. The ■record in the bank disclosed that the depositor, Anna Rodanis, was a native of Russia while Joseph knew that his sister, Anna (Rodanis) Moritz, was born in the city of Newark. This fact he reported to Washkewich and told him to discontinue his effort to collect the moneys in this dormant account.

Wassell left the employ of Washkewich but in his place Ellison, on petition to the surrogate of Essex county, had himself appointed guardian of the two infant sons of the deceased Anna (Rodanis) Moritz. Subsequently letters of administration were issued to him. He had the fund of $660 transferred to his account as administrator and disbursed the same, receiving $25 for his services as administrator, turning the balance over to the two children of Anna (Rodanis) Moritz, from whom Washkewich obtained one-half of the fund for his services.

It is argued that there was no proof of conspiracy on the part of Ellison and that there was no overt act in furtherance of this conspiracy, nor any proof of guilty knowledge, and that the court should have directed an acquittal.

The rule on matters of this kind is elementary. If there is any proof whatever that would support a finding of guilty the matter is for the jury and a motion to direct an acquittal should be denied.

In support of the position that the state did not show guilty knowledge of, and participation in, this conspiracy by the plaintiff in error, it is argued that the testimony of Was-sell was to the effect that he had never seen Ellison in the office of Washkewich.

The weakness of this argument is palpable. Wassell says, in the first place, that he, himself, only came to the office of Washkewich at intervals and, secondly, because there is little persuasion in this kind of negative testimony under these circumstances. It wasn’t necessary for the state to prove that the conspiracy had been conceived and agreed upon in Washkewich’s office. It may have been planned any place. It isn’t requisite that a corrupt agreement be proved by direct evidence. Conspiracy may be proved by circumstance and by subsequent overt act which admits of a legitimate conclusion that the person on trial was in fact a party to a conspiracy. This, however, is a matter for a jury to determine and in this case the matter was left to the jury. Was any unlawful act done by this plaintiff in error which made it a question for the jury as to whether he was an actor in the conspiracy? We think there was.

The case discloses that one of the exhibits offered by the state was signed by Ellison. This exhibit, dated February 19th, 1932, was an application made by him to the Howard Savings Institution for a new deposit book in place of one which he said was lost, destroyed, stolen or mislaid on or about the same date. It further states that he advertised the loss of the book in the press. An affidavit signed by Ellison was part of this application wherein he stated that he was the administrator of the estate of Anna Rodanis; that as such administrator he was the owner of a certain passbook, giving the number. He further swears that on or about February 19th, 1932, he lost the passbook in a manner unknown to him; that he searched for the same in every place where he thought it might be found; that he had been unable to find the same and had no idea as to its whereabouts, nor what had become of it; that he had not sold or pledged it in any way or parted with his right or interest in the book, and that he was still the unqualified owner of it and that the affidavit was made for the purpose of inducing the Howard Savings Institution to issue a new book in its place and stead, which was done.

How this affidavit was false in fact. He had never owned the book; and never had it in his custody and, consequently, had never lost it. This statement was sworn to on May 2d, 1932. It also appears he made a statement, dated March 20th, 1934, to County Detective Meyer. Therein he says that he recalls that he made the affidavit of May 2d, 1932, and says that it was handed to him by Washkewich; that he signed it without realizing that it was an affidavit.

Ellison did not take the stand to testify. The inference is that he could neither truthfully deny nor explain the sitúation. State v. Boccadoro, 105 N. J. L. 352; 144 Atl. Rep. 612.

We are of the opinion that at the end of the state’s case a motion for an acquittal was properly denied. We also conclude that the verdict was not contrary to the weight of the evidence.

It is next argued that the court committed reversible error in its charge to the jury. The language complained of is as follows: “Hot is it necessary to prove the conspiracy by direct evidence. It may be inferred from the circumstances, in fact, from the nature of the case.” Plaintiff in error desires to take these few words which we have underscored and isolate them from the rest of the charge to make out error. If that were the rule to be applied to matters of this kind perhaps error could be made out, but if the entire charge is read, particularly the paragraph preceding the challenged words and the paragraph thereafter, it is clear that the court did not intend to convey to the jury that from the nature of the charge an inference of conspiracy might be reached. Direct evidence is impossible in many cases of conspiracy. Circumstantial evidence has been held by this court and by the Court of Errors and Appeals competent to prove conspiracy. In State v. Armstrong, 88 N. J. L. 280, 283; 95 Atl. Rep. 997, we find this language, “but proof of a conspiracy is not limited to direct evidence thereof; it may be shown by circumstantial evidence because from the very nature of the offense such a corrupt bargain cannot, in most cases, be shown in any other way. State v. Thompson, 69 Conn. 720; 38 Atl. Rep. 868.”

We do not consider that there is any merit in this point.

The next ground for reversal is that the charge in the indictment is barred by the statute of limitations. The indictment was presented on April 25th, 1934. As has been pointed out above, the false affidavit was taken on May 2d, 1932, which is within the two-year period. If any overt act is committed within two years the statute runs from the time of such overt act.

The judgment of the court below will be affirmed.


author: Pee Cubiam.

text:
    MICHAEL LOPRETE ET AL., PROSECUTORS, v. CITY OF EAST ORANGE ET AL., DEFENDANTS.
    Argued July 6, 1936
    Decided August 1, 1936.
    Before Justices Lloyd and Donges.
    For the prosecutors, Samuel I. Kessler.

    For the defendants, Abraham M. Merman and Walter C. Ellis.

   Pee Cubiam.

On June 30th, 1936, a rule to show cause why a certiorari should not issue was allowed in this matter. Depositions have been taken and briefs submitted. This case involves a contract for the collection of ashes, garbage and refuse in the city of Bast Orange. The present contract expires and the new contract herein involved is to begin on August 1st, next.

On April 13th, 1936, the city council of respondent city adopted a resolution approving specifications, advertising, a form of questionnaire and a form of financial statement of persons invited to bid on the proposed work. Advertisements were duly made. Loprete Asphalt Company, of which the prosecutor Loprete is president, obtained the forms and on or about May 9th, 1936, returned the same to the city. On May 28th, the city council adopted a resolution, approved by the mayor on June 1st, 1936, setting forth that the answers of the Loprete Company, and two other prospective bidders, were unsatisfactory. Loprete Company was so notified on May 28th, and was not afforded opportunity to bid. On June 8th, bids were received from other persons and respondents, trading as C. Egan & Sons, being found to be the lowest bidders, were awarded the contract. This action was approved by the mayor on June 19th, and a formal contract entered into on June 29th. This rule was obtained on June 30th.

The first question presented is whether prosecutors have exercised that reasonable diligence required in cases of this kind. We think that they have not done so.

It is clear that Loprete knew on May 28th that his company would not be furnished with the specifications and bidding forms. It appears that he voiced protest, but took no action to compel the municipal authorities to afford him such opportunity. He waited until the bids were received on June 8th, and still took no action. On June 19th the awarding of the contract to the Egans was approved by the mayor, and still no action by prosecutors. Apparently not until prosecutor Loprete had persuaded himself that he might make a bid with reasonable assurance of success, in view of the knowledge of the bids submitted, was he moved to take judicial proceedings. In a situation like the present, we think he waited too long. What was said in Gunne v. Borough of Glen Ridge, 11 N. J. Mis. R. 3; 163 Atl. Rep. 554, is applicable in this case. There is no question of bona fides in this proceeding. In the Gunne case, the court said :

“As against the right of the prosecutors to relief, the respondents say that in addition to what they claim to be the reasonable character of the requirements, the prosecutors were guilty of laches; and we concur in this view. There is no attack on the bona fides of the proceeding. There were a number of bidders who qualified, and the contract was awarded to the lowest bidder after proper advertisement. There is no attack on the good faith of the engineer or of the borough counsel in the preparation of the questionnaire. Under the circumstances it was incumbent on the prosecutors to act with extreme diligence if either as disappointed applicants for the specifications or as taxpayers they desired to test the validity, either of the award that was made, or of the refusal of the specifications. For eleven days the borough and the contractor were in ignorance of any attack on the award or the contract, the performance of which had to be begun with adequate equipment and working force within three weeks, during which time preparations by the successful bidder were in progress.

“Laches is, of course, a relative matter. What might be reasonable delay in one case might be quite unreasonable in another. This court held, in Bullwinkel v. East Orange, 4 N. J. Mis. R. 593; 133 Atl. Rep. 744, that an attack on the award of a garbage contract should be made with the utmost promptitude, and if practicable, at the very outset. Under the circumstances here present we think the delay was so unreasonable as to constitute legal laches justifying dismissal of the writ. Such will be the order.”

The rule to show cause is discharged, with costs.