author: Schwartz, J. C. C.

text:
    STATE OF NEW JERSEY, BY THE COMMISSIONER OF TRANSPORTATION, PLAINTIFF, v. PIA STAR REALTY CO., INC. ET AL., DEFENDANTS.
    Superior Court of New Jersey Law Division
    Decided December 20, 1971.

      Mr. Louis Krieger for plaintiff (Messrs. Lasser and Krieger, attorneys), special counsel for the New Jersey Department of Transportation (Mr. George F. Kugler, Jr., Attorney General of New Jersey).

      Mr. Walter Goldberg for defendants (Messrs. Goldberg and Carlin, attorneys).
   Schwartz, J. C. C.

(temporarily assigned). The State moves under authority of N. J. 8. A. 27:7-22 for judgment for the excess ($87,200) deposit by it over a jury award in condemnation, and for interest from January 17, 1969 to date of receipt by plaintiff of such excess. In effect, the proceeding is one to settle the form of the judgment. (B. 4:42-1), together with the “hearing” provided for in said statute.

The State on January 1, 1968, pursuant to the statute, deposited $191,600 upon the filing of its declaration of taking. On January 17, 1969 there was a re-appraisal and the State deposited an additional sum of $475,600, making the total deposit $667,200. The owner withdrew these deposits on January 2, 1968 and February 25, 1969, respectively. The jury verdict on October 7, 1971 was $580,000. It follows that the State was under-deposited from January 1, 1968 to January 17, 1969, and over-deposited from January 17, 1969 to date of verdict. Defendant’s admit their liability for $87,200.

The State admits its liability for interest on the difference between the deposit and verdict while under-deposited, but contends that should the court award defendants interest on the difference between the original deposit of $191,600 and the jury award of $580,000, for the period January 2, 1968 to January 17, 1969, the court should also do equity to plaintiff and award it interest on the difference between the total deposit of $667,200 and the jury award of $580,000 for the period commencing January 17, 1969 to the date of payment by defendant. It is further argued that the State shall rely in the main upon the general equity powers of the court, as set forth in State v. Nordstrom, 54 N. J. 50 (1969); State, by State Highway Comm’r v. Seaway, Inc., 46 N. J. 376 (1966), and N. J. Turnpike Authority v. Bayonne Barrel & Drum Corp., 110 N. J. Super. 506 (Law Div. 1970), advanced as illustrations of equitable treatment afforded the property owner, and the State concludes with the query, “Should not the State receive the same treatment?”

It is conceded that the statute makes no provision for such interest to the State, but it is urged that “neither does it set forth any prohibition” and “evenhanded and fair administration of justice” requires exercise of such equity power.

Interest and return of an excess deposit are dealt with by the statute as follows:

If the amount of the award as finally determined by the court shall exceed the amount so deposited, the person or persons to whom the award is payable shall be entitled to recover from the department the difference between the amount of the deposit and the amount of the award, with interest at the rate of 6% per annum thereon from the date of the making of the deposit. If the amount of the award shall be less than the amount so deposited, the Clerk of the Superior Court shall return the difference between the amount of the award and the deposit to the department unless the amount of the deposit or any part thereof shall have theretofore been distributed, in which event the court, upon application of the department and notice to all parties interested in the award and affording them an opportunity to be heard, shall enter judgment in favor of the department for such difference against, the party or parties liable for the return thereof. [L. 1966, c. 155, § 1; emphasis added]

The statute clearly entitles the owner to recover the amount of an under-deposit with interest at 6%. The concluding (emphasized) part of the act provides (as to over-deposit) only for the “difference” to he entered as a judgment, with no mention of interest.

In State, by State Highway Comm’r v. Seaway, Inc., supra, the court, in referring to N. J. Highway Authority v. Ellis, 24 N. J. 1, 7 (1957), said:

Ellis thus provides that the State is constitutionally required to make an award of interest where there is a lapse of time between the day of actual taking of the property and the date of payment for that taking. This requirement is not based on any equitable principles, nor upon the theory that the owner must be reimbursed for the income he might have obtained had he remained in possession of his property. Rather, the Constitution demands that the condemnee receive interest as a part of his right to just compensation, [at 381; emphasis added]

In directing that the condemnee “shall be entitled to recover” interest for the period that the State is under-deposited the statute conforms to the prior case law and embodies the constitutional requirement of the right to interest. The constitutional right does not include the rate or period to be used in computation. These matters depend upon specific statutory provision, or where there is none, then on general equity principles. N. J. Highway Authority v. Ellis, supra, at 7. Here the statute fixes the right as well as the rate and period of computation.

The owner is thus entitled to the statutory rate of interest as a matter of right. It is not a matter (as plaintiff argues), that “Should the Court award defendant interest * * * the Court should also do equity to plaintiff * * It is not equity but the statute which directs payment of this interest and, as pointed out, of constitutional dimension and its rationale is that interest to an owner in condemnation is not “interest eo nomine but a substitute or means of measuring the value of deprivation of the use of the property,” and “interest has also been held to be a measure of severance damage.” 3 Nichols, Eminent Domain (1965), § 8.63 at 160.

The State, being entitled to the excess deposit, “The court * * * shall enter judgment in favor of the department for such difference” (less offsetting credits to the owners). N. J. S. A. 27:7-22.

The remaining question is whether the State is entitled to interest on the excess $87,200 withdrawn by and to the use of the owners. I find no reported decision on this question in this State, nor any construing the act.

The State, conceding that the statute makes no provision for interest to it in these circumstances, argues that “neither does it set forth any prohibition.” There are provisions, however, which appear significant clues to the legislative thinking on this question and of some aid in the treatment of the issue. The State relies solely on fairness and equal treatment as the measuring rod in terms of “equity.” The statute in question provides that on the filing of the declaration and deposit of the estimated compensation, the State is entitled to exclusive possession, “it being the intent of this provision that the action to fix compensation * * * shall not delay the taking of possession * * *,” and, in addition, provides that the owners are entitled to the fund deposited forthwith, on application and order of the Superior Court, “provided that each person shall have filed * * * a consent in writing that, in the event the award in the action should be less than the amount deposited, the court, after * * * notice * * * and a hearing * * * may determine the liability, if any, for the return of such difference or any part thereof and enter judgment therefor.” (Emphasis added). It is under this authority that we are here engaged. It is at once noted that the “difference or any part thereof” may be ordered returned following a hearing. A greater amount is not specified. Interest would increase it. It is obvious that the State might be entitled to less than the excess of deposit over verdict, as in this case where it was under-deposited for a period, and it is plain that since the court “may determine the liability, if any," the owner’s claim could be set off against that of the State. Hence the statute limits the maximum return to the amount of the excess deposited.

While our statute does not specifically provide so, a deposit stops the running of interest. 3 Nichols, Eminent Domain (1965), § 8.63 at 160; National Doclcs, etc. Ry. Co. v. Penn. R. R., etc., Co, 54 N. J. Eq. 142 (Ch. 1895). Thus, the owner has the option of taking the deposit or leaving it to lie sterile. If he takes it and may be liable for in-* terest, he takes some risk.

There was no statement of purpose attached to the bill creating N. J. S. A. 27:7-22. The problems and confusion in this field, including interest, were noted by a Revision Commission, and the aspect presented here is but a new feature which the deposit formula of the act has generated.

The Eminent Domain Revision Commission created by L. 1962, c. 50 (B. 8. 1:16 — 9 et seq.) had the duty to study and prepare and reconcile the “overlapping, uncertain, confusing and redundant expressions and clarify and to fix and determine the bases of just compensation with as much uniformity as possible with respect to matters of basic policy.” It recognized interest as a subject of “uncertainty and lack of uniformity” (New Jersey, Eminent Domain Revision Commission Report (April 1965), art. IX, p. 39) in connection with an award. The report formulated and recommended the deposit procedure as the consideration for an immediate taking and right to possession, and this was adopted. The • 'Commission further recommended that if “the award be found insufficient, the condemnor shall pay the deficiency with interest.” (Emphasis added). This was adopted. However, the Commission also recommended that “should the amount withdrawn exceed the final award, the excess shall be repaid with interest.” (Art. Ill, p. 18). This was not adopted. The conclusion that the omission was deliberate is inescapable.

Assembly Bill 388, introduced February 3, 1969, also included provision for the repayment of the excess with interest at the rate of 6%. While the bill passed in the Assembly it did not in the Senate. Failure of passage further supports the conclusion.

The State refers to 3 Nichols, Eminent Domain (1965), § 26.61 at 391, stating, “Where the amount deposited and withdrawn by the condemnee is in excess of the award, the condemnor is entitled to repayment of the excess with interest thereon,” and citing Arkansas State Highway Commission v. Rich, 235 Ark. 858, 362 S. W. 2d 429, 431 (1962). The Supreme Court of Arkansas ruled that the State was entitled to interest on the difference between the jury award and the deposit because after the declaration of taking and deposit of $69,500 the landowners prevailed on their motion to increase the deposit to $544,000. The Commission immediately complied, and on the following day the landowners withdrew the entire sum. The ultimate verdict was $325,000. The court emphasized that where condemnor makes the deposit, as in City of Atlanta v. Lunsford, 105 Ga. App. 247, 124 S. E. 2d 493 (Ct. App. 1962), under a code procedure based on a “three assessor method,” and the money is withdrawn, it is to be distinguished from the situation before it where the owner sought the greater deposit, and it was not a situation similar to the one in Georgia where “the condemnor would be able to force the landowner to accept an involuntary loan.” The court said that the owners “took the initiative in the matter, demanding that the amount of the deposit be increased and adducing proof to sustain their claim,” and such does not bear any “resemblance to an involuntary loan.” In City of Atlanta v. Luns ford, supra, it was also pointed out (at 495) that while provision for payment of interest by the condemnee on the excess had not yet been tested as to constitutionality, “There is room, we think, for grave doubt that the provision will stand a constitutional test.”

In State Through Dept, of Highways v. Busch, 220 So. 2d 513, 515 (La. App. 1969), the sole question, as here, was whether the condemnee should pay interest on the difference between the amount deposited and withdrawn and the ultimate verdict. The applicable statute provided that “If the compensation finally awarded is less than the amount so deposited, the court shall enter judgment in favor of the plaintiff and against the proper parties for the amount of the excess.” The Louisiana court, too, considered the question “res nova” and said that “If we were to adopt the ‘sauce for the goose sauce for the gander’ approach, urged by plaintiff we would have to allow interest from that date. However the cooks in the legislative kitchen have, in our judgment, refused to apply an evenhanded approach to this problem.” The court held that the Legislature by clear implication intended interest only to the property owner and not the State.

Whether our appellate courts will place such interpretation on our statute is still an open question. It is my view that here the matter rests on equitable criteria and is not foreclosed by the statute. In any case, Busch does not support the State’s claim.

3 Nichols, Eminent Domain (1965), § 8.63[4], at 189, also considers:

Interest when there is an appeal.
It has been held that when an owner collects the award after an appeal has been taken, and he is awarded a less amount on the appeal, the condemnor is entitled to recover interest upon the difference, but in this, too, the practice is not uniform. Certainly, the owner in such case is not entitled to interest for the period of the delay occasioned by such appeal. If the owner is awarded a larger sum he is entitled to interest on the increased sum. It has been held, however, in such case that he is entitled to interest only on the amount of the increase.

and notes the following cases:

In Watson v. Milwaukee M. & N. R. Co., 57 Wis. 332, 15 N. W. 468 (Sup. Ct. 1833), the owner withdrew a deposit following the commissioner’s award. The condemnor appealed and the verdict was for a reduced amount. The court ordered return of the difference with interest thereon. The owners appealed, and as to interest the Supreme Court merely said that “Having had the use of the money of the company, to which they were not entitled, it would seem to he clearly equitable to charge appellants with interest on the same for the time they so used it.” [at 476; emphasis added]. The wot! equitable is the only clue to the court’s reasoning. And in Spies v. Chicago & M. Elec. R. Co., 148 Wis. 35, 133 N. W. 1110 (Sup. Ct. 1912), the commissioner’s award was appealed and resulted in lower amount. The owners had withdrawn the deposit before verdict. The court, following verdict, ordered the excess returned with interest and costs. The owners on appeal therefrom contended that since the condemnor did not appeal the commissioner’s award there was no right to a return of the difference, with no mention whatever of the specific item of interest. The court rejected the owners’ argument and affirmed the judgment of the trial court, again with no mention of interest.

In the more recent eases, such as Davidson v. County of Harris, 454 S. W. 2d 830 (Tex. Civ. App. 1970), the owners appealed a jury award which was less than that of the commissioner. The judgment following jury award ordered appellant to pay the excess withdrawn, with interest at the rate of 6% from date of deposit. On appeal it was held that interest is limited from the date of the judgment and not the date of deposit. The court said that the condemnor is given the option of depositing and taking the property or delaying the taking until judgment becomes final. It said a property owner has no similar right of election but must abide by the election of the condemnor. (Our statute likewise provides that the condemnor may file a declaration upon institution of condemnation. It, too, is not mandatory).

In St. Louis, K. & N. W. R. Co. v. Knapp, Stout and Co. Company, 160 Mo. 396, 61 S W. 300 (Sup. Ct. 1901), a jury verdict of $21,500 followed a deposit of $44,000 as per the commissioner’s report; the owners appealed and the condemnor cross-appealed from the refusal to allow interest on the excess. It was held that

Interest in this State is allowed by statute. No statute allows interest under circumstances like those presented here. The land of defendant was seized in invitum. The law required the money to be put up for its protection while its land was put in possession of plaintiff. Extraordinary power was conferred on plaintiff, and, while it has been compelled to lie out of the use of its money pending the settlement of the amount it should pay, it is simply the price which the statute requires, and no default is traceable to defendant. There never was a time when it was in default until the final judgment was rendered requiring it to refund, and then plaintiff appealed. We are clear that plaintiff is not entitled to interest as claimed '* * * [at 305; emphasis added]

In noting “no default traceable to defendant” in the last-mentioned opinion, I conclude that equity was a consideration.

In the matter of N. Y. El. R. Co., 44 Hunter 117, 8 N. Y. St. Rep. 431 (Sup. Ct. 1887) it was held interest is not recoverable by the condemnor

These references do not support the equal treatment or equitable thesis. The act and its history leave no doubt that interest on such excess was not favored as a matter of right. The more likely supposition is that the Legislature preferred that the matter rest in the courts on an ad hoc basis since many variables are foreseeable. The Legislature must have recognized the matters known by those familiar with the subject, and the Commission report underscores this. The owner’s position is a finality; it is concluded — the value is frozen as of a fixed date. Opportunity for appreciation of the investment is ended. This burden to him is a corresponding benefit to the State, State v. Nordstrom, 54 N. J. 50, 54 (1969); and fixed interest could compound the burden.

Here it was four years from date of declaration to verdict. No fault is laid to the owner, nor does the record disclose any default on his part with the exception of two matters to be discussed hereafter. Possibility of income during this period was foreclosed. Must the condemnee let the money lie sterile to avoid the risk of paying interest? In the real property market during this period appreciation of the investment was fairly certain, and it is common knowledge that 6% interest (payable on an under-deposit not available in lieu of some portion of the property) is not a fair yardstick to measure return on investment in land.

Interest is an exaction for past-due obligations and in essence is in the nature of a penalty. Burlington Cty. v. Martin, 128 N. J. L. 203 (Sup. Ct. 1942), affd 129 N. J. L. 92 (E. & A. 1942). Interest, where allowed, is in contemplation of law — damages for the illegal detention of a legitimate claim or indebtedness. Fidelity Mutual Life Ins. Co. v. Wilkes-Barre and Hazelton R. Co., 98 N. J. L. 507 (E. & A. 1913).

In Consolidated Police, etc., Pension Fund Comm’n v. Passaic, 23 N. J. 645 (1957), the city challenged the validity of legislation consolidating all pension funds and placing the administration thereof in a state commission. The city refused to transfer funds, held by it under the prior plan, until the constitutionality of the state commission plan was adjudicated. The question was whether interest was required to be paid by the city during this period of litigation. The court traced the history of interest from the Mosaic law and later ecclesiastical law; stated it was not a common law inheritance, and said it was rejected by the courts on the philosophy, from the time of Aristotle, that money was inherently nonproductive and but a medium of exchange (at 652). The court further stated (at 654) that sometime later, regulation of interest in England became essentially a statutory process, and “in this country interest is generally of statutory origin.” While

“Interest is allowed either as damages for the wrongful retention of money or personal property, or in accord with a contract for its payment. * * * The law imposes a duty to pay interest from the time payment of principal is due, or from the time of its wrongful detention. Such payment is in its essence damages for failure to pay the principal at the time agreed upon. But the law neither imposes nor implies an obligation to pay interest from the moment of the creation of a debt, or of a deposit. Such a payment is in its essence a consideration for the use of money. That obligation must arise from special agreement of the parties.” [at 653-654; citations omitted]

The Court held that the state commission was not entitled to interest from the city and said:

Thus, we are not met with a statutory provision for interest, nor with a contract for interest, R. S. 31:1-1, N. J. S. A., as amended by L. 1953, o. 150, and there was not at the time a Commission regulation or known usage or practice for the payment of interest on such assessments; and considerations of equity and fairness counsel against the allowance of interest in such circumstances, more especially since the delay in payments had reference to the period of transition and the resolution of constitutional issues raised in good faith, [at 655; emphasis added]

The above quotation is apt here. Do not “considerations of equity and fairness counsel against the allowance of interest in such circumstances” in this case?

However, the tendency of the courts has been to break away from hard and fast rules and to charge and allow interest in accordance with principles of equity in order to accomplish justice in each particular case. [Jardine Estates, Inc. v. Donna Brook Corp., 42 N. J. Super. 332 at 340-341. (App. Div. 1956)].

In Brown v. Home Dev. Co., 129 N. J. Eq. 172 (Ch. 1941), it is said:

“Unless a case can be found which is a conclusive authority establishing a precedent, the safest way for a court of law or equity is to decide all questions pertaining to interest according to the plainest and simplest considerations of justice and fair dealing.” [at 177; citations omitted]

The State raises two other specific faults to be laid to the owner, said to favor its claim. The State once more re-appraised, sometime prior to July 30, 1970, for a total of $479,500. This followed discovery of its error in calculating the value of 33 acres instead of 25 acres actually in contemplation. The maps delineated the area being taken without noting the specific acreage. On July 30, 1970 a letter was written to counsel for the owner demanding return of the amount over-estimated and withdrawn. The letter merely stated a new estimate, with no mention of lessor acreage. It is agreed that the owner refused to comply but did suggest that plaintiff’s counsel should apply to the court for relief. This was never done. The record shows a taking of 33+ acres up to March 26, 1971, when an amended complaint was filed describing the taking as 25+ acres (this was the second amended complaint). These facts are uncontroverted. Plaintiff contends that intransigent refusal to return the over-deposit on this new appraisal requires that interest be paid on the $87,200. I cannot subscribe to this.

If the difference of $186,700 (the over-deposit said to result from the error in acreage) had been returned on the demand, the State would now be responsible for interest on the difference between $186,700 and $87,200. The verdict does not support the re-appraisal on March 3, 1970, and the owner’s experts valued the taking of 25+ acres greatly in excess of the verdict. There is no showing that such value was not made in good faith.

The amount withdrawn is to be reckoned against the verdict now, and not the State’s third re-appraisal. The owners were not, as it turns out, wrongfully holding the State’s money. The withdrawal to the extent of $87,200 only is due from the date of this judgment.

In addition, the State alleged in a letter to me that the owner’s “dilatory tactics caused the long delay” herein. This falls short of proof, even though this is but a summary proceeding. Moreover, a fair appraisal of the record of appraisals and re-appraisals, as noted here, must place some fault on plaintiff for the delay. I cannot speculate in fixing some portion of the period of time involved here as delay caused by one or the other of the parties, even if I credit the State’s allegation of “dilatory tactics.”

That this may result in compensation beyond the constitutional requirement does not render it vulnerable on the issue here since our Supreme Court recently, in Jersey City Redevelopment Agency v. Kugler, 58 N. J. 374 (1971), said:

The provision of the Constitution for the payment of just compensation is primarily a restriction on the power of the Legislature for the benefit of the property owner. As we have said, it is not a specific measuring rule and there is a margin of discretion for courts and the Legislature in devising rules to insure such compensation. And it seems to be well recognized that while the lawmakers cannot adopt a measure which will detract from that compensation, they may prescribe a rule of damages more favorable to the landowner than that which would satisfy the minimum requirement of the Constitution. Daniels v. State Road Department, 170 So. 2d 846 (Fla. Ct. 1964) ; State v. Reid, 204 Ind. 631, 185 N. E. 449, 451 (1933) ; 3 Nichols, supra, § 8.9, p. 255; 27 Am. Jur. 2d, supra, § 266, p. 53. The judicial power is a limitation upon the authority of the Legislature to fix a measure of damages detrimental to the owner’s right to just compensation as constitutionally guaranteed. See State ex rel. Milchem Inc. v. Third Judicial Dist. Ct., 84 Nev. 541, 445 P. 2d 148, 152 (1968) ; Keystone Associates v. Moerdler, 19 N. Y. 2d 78, 278 N. Y. S. 2d 185, 224 N. E. 2d 700, 703-704 (1966) ; 3 Nichols, supra, § 8.9, p. 255. [at 384]

Accordingly, judgment is to be entered in favor of defendant and against plaintiff in the amount of $580,000, and in favor of the plaintiff against defendant in the amount of $62,925 ($87,200 less $24,275 representing interest due defendant whilé the State was under-deposited). An additional credit shall be given plaintiff for interest at 6% on $87,200 for a period of two weeks caused by an adjournment of this motion granted to defendant.


source: Caselaw Access Project

author: Consodine, J. C. C.

license: Public Domain

text:
    S., PLAINTIFF, v. A., DEFENDANT.
    Superior Court of New Jersey Chancery Division
    Decided January 5, 1972.

      Mr. Bruce B. Bandies for plaintiff.

      Mr. Monroe Ackerman for defendant (Messrs. Rudd, Ackerman, Breitkopf and Leibowiiz, attorneys).
   Consodine, J. C. C.

(temporarily assigned). Roberts v. Roberts, 106 N. J. Super 108 (Gh. Div. 1969), held that this court, under its general equity jurisdiction, had the power to enjoin a husband from entering the marital home owned as tenants by the entirety where the conduct of that spouse constituted physical extreme cruelty.

We are now asked to plough a new furrow and extend that principle to a situation where the mental and alcoholic disabilities of the mother combined with unannounced absences and unannounced returns of irregular durations from and to the marital home, are without any doubt detrimental to the best interests of the children.

This court in the exercise of its inherent parens patriae jurisdiction is charged with the protection of the interests of children in matrimonial litigation. 4 Pomeroy’s Equity Jurisprudence, (1941 ed), § 1304; Sheehan v. Sheehan, 51 N. J. Super. 276 (App. Div. 1958).

Nothing would be more protective and in the best interest of these children than a stable home where their roots are. The doctrine of Roberts v. Roberts should certainly be amplified on the facts before me.

There is no authority in this State for exclusion of one spouse from a tenancy by the entirety except the Roberts case. Burger v. Burger, 6 N. J. Super. 52 (App. Div. 1949), involved rented quarters. But see Keller v. Keller, 158 N. W. 2d 694 (N. Dak. Sup. Ct. 1968), where the court held it had the power to order one spouse to vacate the family home in the best interest of the chldren.

I direct custody to defendant with reasonable visitation to plaintiff, exclude plaintiff from the marital home, and grant pendente lite support to plaintiff.


author: Ruggiero, J. C. C.

text:
    STEPHEN HORESTA, PLAINTIFF, v. ABBEY HORESTA, DEFENDANT.
    Superior Court of New Jersey Chancery Division
    Decided December 15, 1971.

      Mr. Albert L. Cohn for plaintiff (Messrs. Cohn c§ Liflani,, Bsqs. attorneys).

      Mr. Vincent B. Hull for defendant (Messrs. Hull & Hull, Bsqs. attorneys).
   Ruggiero, J. C. C.

(temporarily assigned). This matter is before me . on motion by plaintiff husband, Stephen Horesta, against defendant wife, Abbey Horesta, for summary judgment on the following issues: (a) Conversion of a judgment of divorce from bed and board, granted the wife on July 24, 1959, into an absolute divorce, pursuant to N. J. 8. A. 2A:34-3; (b) termination of weekly support and maintenance provided her under the judgment of divorce from bed and board granted her on July 24, 1959, and (c) restraint of her continued use of plaintiff’s surname.

The material facts are not in dispute. Plaintiff and defendant were married on April 6, 1940. A judgment of divorce from bed and board on the ground of desertion was entered in favor of the wife in this court (Docket M-359357E) on July 24, 1959. The judgment provided that plaintiff pay her a fixed sum weekly for her support and maintenance, which he continues to pay. Both parties have continued their residences in the State of New Jersey; they have not reconciled and have continued to live separate and apart since the entry of the judgment of divorce from bed and board on July 24, 1959.

The new Divorce Act, L. 1971, cc. 212 and 217- N. J. S. A. 2A:34-3, provides that “the granting of a bed and board divorce shall in no way prejudice either party from thereafter applying to the court for a conversion of said divorce to a divorce from the bonds of matrimony, which application shall le granted as a matter of right.” (Emphasis supplied)

I conclude as follows:

1. Application for conversion of a divorce from bed and board to an absolute divorce under N, J. S. A. 2A :34-3 by way of motion for summary judgment is procedurally correct.

2. N. J. S. A. 2A:34^-2 provides that “Divorce from the bond of matrimony may bo adjudged for the following causes heretofore or hereafter arising. * * *” (Emphasis supplied)

N. J. S. A. 2A :34-3 is silent as to retroactivity and therefore does not, without interpretation of legislative intent, respond to whether a judgment of divorce from bed and board, entered prior to September 13, 1971, the effective date of the new Divorce Act, L. 1971, cc. 212 and 217, can be converted into a judgment of absolute divorce.

3. The provision for conversion of a divorce from bed and board pursuant to N. J. 8. A. 2A:34^3 may be applied retrospectively to a judgment of divorce from bed and board granted prior to September 13, 1971, consistent with legislative intent. The legislature, by the September 13, 1971 amendment to the Divorce Act, provided the means to terminate all dead marriages and to that end did liberalize the existing grounds for divorce and added new grounds.

The existence of a judgment of divorce from bed and board is strong evidence that the marriage is dead, and any subsequent application for an absolute divorce removes any doubt of its reconcilability.

There is no legal impediment to the application of the conversion feature of N. J. 8. A. 2A:3'4-3 retroactively to pre-September 13, 1971 divorces from bed and board.

The New York courts have treated with the issue of retrospectivity, in connection with § 170 of the New York Divorce Reform Law, McKinney’s Consol. Laws, c. 14 (L. 1966, c. 254, effective September 1, 1967), which provides for the granting of a judgment of divorce in cases where couples have lived apart for two years after either of the parties was granted a separation judgment or decree or after the execution of a written separation agreement. The act does not state whether § 170 applies to separation judgments, decrees or agreements granted or executed prior to the effective date of the statute.

The leading New York case is Gleason v. Gleason, 26 N. Y. 2d 28, 308 N. Y. S. 2d 347, 256 N. E. 2d 513 (Ct. App. 1970). Plaintiff husband, by complaint for divorce filed in 1968, alleged that he and his wife lived apart since a separation decree was granted her in 1954. Defendant wife moved to dismiss the complaint for failure to state a cause of action, contending that § 170 of the Divorce Reform Act of 1966 could not be applied retroactively. The court concluded that the provision of that act allowing for divorce of husband and wife who had lived apart for a period of two years after the granting of a separation judgment or decree, is to be applied retroactively and encompasses pre-1966 decrees, notwithstanding whether the innocent or guilty party seeks to convert separation into final divorce, and, as so applied, offends against neither due process, equal protection nor any constitutional provision.

4. A judgment of absolute divorce granted upon application to convert a judgment of divorce from bed and board pursuant to N. J. S. A. 2A :34-3 must be granted on the same grounds as the prior divorce and in favor of the same party to whom the prior divorce was granted, and without regard to which of the parties has applied for the conversion, except if the ground for the bed and board divorce is separation (no fault) under N. J. S. A. 2A :34-2, subsec. (d), in which case it would not matter.

The conversion to absolute divorce under N. J. S. A. 2A:34-3 results from the operation of statute and judicial notice of the prior divorce proceedings. An applicant for conversion of a divorce from bed and board against whom such a divorce has been granted provides no statutory basis upon which an absolute divorce can be granted to him.

The fault concept in divorce cases has not been abandoned in New Jersey. As long as fault causes exist, the offended party in a divorce from bed and board for a fault cause is entitled to preserve the status of an offended party, and particularly so since N. J. S. A. 2A:34-23 provides that

* *■ * in all actions for divorce other than those where judgment is granted solely on the ground of separation the court may consider also the proofs made in establishing such grounds in determining an amount of alimony or maintenance that is fit, reasonable and just. !! * *

The statute applies to original divorce judgments providing for alimony or maintenance and to subsequent orders modifying judgments or subsequent orders for alimony or maintenance.

Plaintiff’s motion for summary judgment seeking conversion of the judgment of divorce from bed and board entered on July 24, 1959 is granted pursuant to N. J. 8. A. 2A:34^-3. The judgment of absolute divorce is granted defendant for the same cause (desertion) upon which the prior judgment of divorce from bed and board was granted her in an action between the parties in this court bearing Docket M~3593-57E. The judgment shall provide for the continuanee of the order made in the prior judgment for defendant’s support and maintenance.

Plaintiff’s motion for summary judgment to terminate payment of the weekly support and maintenance to defendant in accordance with the prior judgment is challenged, presents material factual issues and is not subject to adjudication summarily under B. 4:46-2. Motion denied.

Plaintiff’s motion for summary judgment restraining defendant from continued use of husband’s surname is before me in the form of an unsupported demand. The granting of such restraint is discretionary under N. J. B. A. 2A :34-21. Motion denied.

It is ordered that plaintiff pay defendant’s attorney a counsel fee of $280, inclusive of costs.

An order for judgment will he entered accordingly.


author: Conford, P. J. A. D.

text:
    THE STATE OF NEW JERSEY, PLAINTIFF-RESPONDENT, v. LONNY MC DAVITT, DEFENDANT-APPELLANT.
    Superior Court of New Jersey Appellate Division
    Argued December 20, 1971
    Decided January 11, 1972.

      Before Judges Cootobd, Matthews and Eeitz.

      Mr. Joseph D. Haggerty argued the cause for appellant (Mr. Frank Metro, attorney).

      Mr. Leonard N. Arnold, Assistant Prosecutor, argued the cause for respondent (Mr. Michael B. Imbriano, Somerset County Prosecutor, attorney).
   The opinion of the court was delivered by

Conford, P. J. A. D.

In this prosecution for breaking and entering, defendant would have had a substantial chance of winning an acquittal on the other proofs adduced had the court not permitted the State to introduce, over defendant’s objection, an expert’s testimony that a polygraph test showed him to have been lying when he professed innocence of the charge while undergoing the test.

We appreciate the fact that defendant invited his predicament by first succeeding, over justified objection by the State, in getting before the jury the fact that he offered to take a polygraph test when first arrested; also, the fact that he stipulated during the trial to submit to such a test and have the results thereof submitted at the trial. Nevertheless, the adjudicated inadmissibility of such tests because of unproven reliability and the “horrendous capacity for prejudice” of even a reference to a defendant’s attitude toward taking one, State v. Driver, 38 N. J. 255, 261, 262 (1962), satisfy us that error occurred in the admission of the test results despite the prior acquiescence of plaintiff, later recanted. Moreover, the trial judge should have refused to allow defendant’s own prior testimony that he had offered to take the test. See also State v. Parsons, 83 N. J. Super. 430, 437 (App. Div. 1964), referring to “the strong judicial hostility in this State to evidence of lie-detector tests, results thereof, or inferences from attitudes of persons toward taking them.” Cf. State v. Arnwine, 67 N. J. Super. 483 (App. Div. 1961).

In our judgment a cogent way to emphasize to bar and trial bench that the policy of the courts of this State is to eliminate any reference to such tests of any nature whatsoever during a trial, at least until reliability thereof is firmly established, is to reverse this conviction on grounds of plain error. Substantial justice in the particular case also conduces to that conclusion. It may be noted, moreover, that the method by which this particular test was administered and the nature of the expert’s testimony concerning it left much to be desired; as did the judge’s charge attributing to the test an absolute tendency to indicate defendant was lying at the time he underwent the test.

Reversed.


author: Kilkenny, P. J. A. D.

text:
    OLGA MUNTZ, ADMINISTRATRIX AD PROSEQUENDUM OF THE ESTATE OF ORVELL MUNTZ, AND OLGA MUNTZ, GENERAL ADMINISTRATRIX OF THE ESTATE OF ORVELL MUNTZ, AND OLGA MUNTZ, INDIVIDUALLY, PLAINTIFFS-RESPONDENTS, v. MANUCHEHR SMAILY, M.D., DEFENDANT-APPELLANT.
    Superior Court of New Jersey Appellate Division
    Argued December 14, 1971
    Decided January 18, 1972.

      Before Judges Kilkenny, Labeecque and Lane.

      Mr. Leonard Bosenstein argued the cause for appellant (Messrs. Feuerstein, Sachs & Maitlin, attorneys).

      Mr. J erry M. Finn argued the cause for respondents (Messrs. Goldberger, Siegal and Finn, attorneys; Mr. Sheldon A. Siegel, on the brief).
   The opinion of the court was delivered by

Kilkenny, P. J. A. D.

In this medical malpractice action plaintiff obtained an order on January 12, 1971 allowing her to effect service of the summons and complaint upon the defendant doctor now living in Teheran, Iran, his native land, by serving, by way of substituted service, the Central National Company of Omaha, an insurance carrier covering the defendant’s employer, in accordance with B. 4 :4-4(c) and 4:4-5 (a). The order further provided that plaintiff shall mail to defendant to his last known address a copy of the complaint by registered mail and, by separate mailing, a copy of the complaint by regular mail together with a copy of the order.

On leave granted, defendant and the insurance company appeal from the order allowing such substituted service. They contend that service upon defendant’s insurance company should not afford in personam, jurisdiction where defendant is a bona fide resident of Iran. Plaintiff, who sues in her individual and representative capacities, as administratrix ad prosequendum and general administratrix, maintains that service on defendant and on the insurance carrier by mail .affords valid in personam jurisdiction.

Plaintiff in this action is the widow of Orvell Muntz. On May 11, 1967 Muntz attempted suicide by stabbing himself in the abdomen. He was thereafter rushed to the Newark City Hospital where surgery was eventually performed upon him. Following surgery he was placed in a surgery ward located on the 9th floor in a bed near a window, with postoperative tubes still inserted in his body. It is claimed that despite the fact that the hospital had a psychiatric ward and means of restraint and observation, none of these procedures and caution was taken with respect to Mr. Muntz. The tubes were removed on May 15, 1967 and, on that very day, decedent committed suicide by leaping out of the 9th-floor window.

Plaintiff earlier instituted a separate suit against Newark City Hospital, the City of Newark and Dr. Morton Kurland. The jury absolved Dr. Kurland from liability when it was revealed that it was Dr. Manuchehr Smaily (defendant in the instant action) who had made the decision placing decedent in the surgical ward. The verdict made no mention of the City of Newark for the obvious reason that the case had been tried on the theory that the hospital was an agency of the city. The verdict found the Newark City Hospital negligent. Damages were fixed at $35,000. Judgment was reduced to $10,000 in accordance with the stipulation in the pretrial order, pursuant to N. J. S. A. 2A:53A-8. We affirmed in that reduced amount. Muntz v. Newark City Hospital, 115 N. J. Super. 273 (1971).

It appears that defendant had left for his native land shortly after decedent’s suicide. He took a post there as a surgeon, at Pour-Sina Hospital, Resht, Province of GilanIran. It was only at the trial in July 1970 that plaintiff allegedly learned that he had been employed in the Newark City Hospital and was the one who had made the decision to place the decedent in the 9th-floor ward.

R. 4:A-4 deals, among others, with conventional service-of process in in personam actions. R. 4:4-4(e) also provides; for service by delivery and mail (registered, certified or regular) in this State and for substituted sendee outside the State. Also, R. 4:4-4(i) provides:

* * If service cannot lie made by any of the modes provided by this rule, any defendant may be served as provided by court order, consistent with clue process of law.

This subdivision of the rule has been utilized to effect service upon an absent motorist in an automobile accident case by service upon his insurance carrier. Feuchtbaum v. Constantino, 59 N. J. 167 (1971); Ledbetter v. Schnur, 107 N. J,. Super. 479 (Law Div. 1969); Young v. Bunny Bazaar, Inc., 107 N. J. Super. 320 (Law Div. 1969). This same issue has been decided similarly in other jurisdictions. See Dobkin v. Chapman, 21 N. Y. 2d 490, 289 N. Y. S. 2d 161, 236 N. E. 2d 451 (Ct. App. 1968).

In Feuchtbaum the court permitted such service “even, though it [was] far from certain that the defendant [would]] in fact receive notice of the action.” 59 N. J. at 177. The interests and need of the plaintiff were balanced against those of defendant. It was noted that plaintiff’s interest im the insurance policy (N. J. S. A. 17:28-2), the injustice of denying relief, and public policy were of much concern, as well as “fairness to the defendant.” Thus, it was stated:

The carrier thus has a representative role, which, though it does not include an express agency to accept service of process, is nonetheless relevant when process cannot otherwise be served upon the insured. Realistically there is more of a chance that defendant wilB learn of the suit by such service than through available alternatives., for the carrier is likely to have an interest in finding him. Id. at 178.

The court relied upon Mullane v. Central Hanover Bank and Trust Co., 339 U. S. 306, 70 S. Ct. 652, 94 L. Ed. 865 (1950), in regard to a “due process” argument. There it had been noted (at 314-315) that “due process” requires merely a method “reasonably calculated” to notify the adverse party of the proceeding. In the instant case, it is extremely likely that defendant will be notified of the action if he has not been so notified already.

The situation in the automobile cases is analogous to that in the instant case. Certainly, there is a greater frequency of “absent motorist” cases than there is of “absent surgeons.” However, the public policy should be equally as strong in favor of remedying malpractice as it is in automobile negligence. Defendant has had more than minimal contacts with this State to afford jurisdiction. See Fidelity Deposit Co. v. Abagnale, 97 N. J. Super. 132 (Law Div. 1967). Plaintiff was justifiably permitted to serve defendant through service upon his insurance carrier and by mail, as provided in the order.

The order under review is affirmed.


author: Labrecque, J. A. D.

text:
    STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, PLAINTIFF-RESPONDENT, v. ZURICH AMERICAN INSURANCE COMPANY, DEFENDANT-RESPONDENT, AND DESKIN T. KNOLL AND DOROTHY N. KNOLL, DEFENDANTS-APPELLANTS, AND STEVEN JOHNS AND JOSEPH W. JOHNS, DEFENDANTS-APPELLANTS, AND A. RODMAN KAY, A MINOR, BY HIS FATHER AND GUARDIAN AD LITEM, ALBERT KAY AND ALBERT KAY, INDIVIDUALLY, DEFENDANTS-APPELLANTS.
    Superior Court of New Jersey Appellate Division
    Argued October 13, 1971
    Decided January 21, 1972.

      Before Judges Kilkenny, Labbecqtje and Lane.

      Mr. Joseph H. Kenney argued the cause for defendants-appellants Steven Johns and Joseph W. Johns (Messrs. Archer, Greiner, Hunter & Bead, attorneys; Mr. Charles Lee Harp, Jr., on the brief).

      Mr. Edgar E. Moss, II, argued the cause for plaintiff-respondent State Earm Mutual Automobile Insurance Company
      (Messrs. Moss &■ Powell, attorneys; Mr. William R. Powers, Jr., on the brief)

      Mr. Raymond W. Uliase argued the cause for defendants-appellants Deskin T. Knoll and Dorothy N. Knoll and A. Rodman Kay, a minor, and Albert Kay (Messrs. Uliase & Uliase, attorneys for defendants Knoll, and Messrs. Toll Friedman & Pinslcy, attorneys for defendants Kay).

      Mr. Michael Patrick King argued the cause for defendant-respondent Zurich American Insurance Company (Messrs. Kisselman, Devine, Deighan & Montano, attorneys).

      Messrs. Gasby & Garrigle filed a statement in lieu of brief on behalf of the New Jersey Unsatsified Claim and Judgment Fund Board.
   The opinion of the court was delivered by

Labrecque, J. A. D.

Plaintiff State Farm Mutual Automobile Insurance Company (State Farm) instituted suit for a declaratory judgment that it did not cover defendant Steven Johns as an additional insured in connection with an accident which occurred on March 16, 1969 when an automobile owned by its insured, Thomas Busby, III, and driven by Steven, was in a collision with one being operated by defendant Deskin T. Knoll. Defendant Zurich American Insurance Company (Zurich) counterclaimed and cross-claimed seeking an adjudication that a policy of insurance issued by it to Joseph W. Johns (Steven’s father) did not cover the accident in question. Defendants Deskin T. Knoll and Dorothy N. Knoll, Steven Johns and Joseph W. Johns, A. Rodman Kay, a minor, and Albert Kay appeal from a judgment holding that neither the State Farm nor the Zurich policy covered the accident.

The present action arose out of the operation by Steven of a 1956 Thunderbird (a classic) owned by Busby. The essential facts are not in dispute and, as found by the trial court, are as follows:

The sequence of events leading up to the collision began on the morning of March 16, 1969 when Johns arrived at the home of Thomas Busby. Johns and Busby were at the time fairly close friends. They attended the same school, had at least one class together, were members of the same football team and visited each other frequently. On the morning in question, they were working together on a 1956 Ford Thunderbird owned by Busby and registered in his name.
At the trial, Busby testified that sometime during the time they were working on the car, Johns got into the car and backed down some 20 yards of the driveway. Apparently, Busby said nothing to Johns at the time about the use of the car, but merely stood mute while this event occurred. Interestingly enough, Johns had no recollection at all of the event.
Busby stated that he had never specifically given Johns permission to operate the car. Johns’ testimony was to the same effect. Busby added that lie would never have given Johns permission to operate the car. Johns’ testimony was to the same effect. Busby added that he would have never given Johns permission to operate the vehicle on public streets because he knew that Johns had no license. The drive-way where Johns had operated the vehicle that day was more or less a farm road some one-quarter of a mile long.
Sometime after one o’clock that afternoon, Busby and Johns left the Busby property in the Busby car. Busby was driving Johns home. They decided to stop at a Seven-Eleven grocery store along the way to get a soda.
Sometime before they reached the Seven-Eleven, they passed a car driven by one Kodman Kay which was traveling in the opposite direction. Kay in his deposition stated that he recognized Johns and Busby and turned around and followed them into the Seven-Eleven parking lot. He stated that he knew both of them from school. Johns testified that Kay was a friend of his only and did not know Busby. Both cars pulled into the parking lot and parked towards the right-hand side away from the normal parking area directly in front of the store.
Kay owned a 1968 Pontiac Firebird. Busby asked Kay for permission to take the car for a ride. Kay agreed. They did not discuss how long Busby could use the car or how far he should drive. Busby pulled away in the Firebird and left the keys to the Thunderbird in the ignition.
Kay’s deposition and Johns testimony conflict as to which one of them went into the Seven-Eleven and got a soda. One of them did. Eventually, they sat down in Busby’s car — Johns behind the steering wheel and Kay on the passenger side. Without discussion between the two about whether or not either of them had permission to use the car, Johns started the car and drove out of the parking lot. Johns testified that at the time he believed that Busby would have no objection to him using the car.
The road taken by Busby was circular. It started at the Seven-Eleven, went through a development and eventually wound up at the store. Johns took the same route except that he started in the opposite direction. He stated that he planned to meet somewhere in the middle of the circle. Before he had a chance to meet Busby he collided with a car driven by one Deskin T. Knoll.
In the meantime, Busby returned to the Seven-Eleven and noticed his car was missing. He did nothing other than wait until he was informed that the car was involved in an accident.

At the time of the accident Bnsby, the owner of the car, was the named insured under a policy issued by State Earm. The policy recited that, with respect to an owned automobile, the word “insured” included:

(4) Any other person while using the owned automobile, provided the operation and the actual use of such automobile are with the permission of the named insured or such spouse and are within the scope of such permission * * *. (Emphasis added.)

At the same time Joseph W. Johns, the father of Steven, was the named insured under a policy issued by Zurich under which, with respect to a nonowned automobile, there was included as an insured:

(2) Any relative, but only with respect to a private passenger automobile or trailer, provided his actual operation or (if he is not operating) the actual use thereof is with the permission, or reasonably believed to be with the permission, of the owner and is within the scope of such permission * * *. [Emphasis added]

Mr. Johns and Steven contended that Steven was an insured under the omnibus clause of the policy issued by Zurich because his operation of Busby’s vehicle was “reasonably believed” by Steven to be with Busby’s permission. They also urged that Steven was an omnibus insured under State Earm’s policy because at the time of the accident his operation was with Busby’s implied permission. This contention was joined in by the Knolls and Kays. The trial court equated the clause “reasonably believed to be with the permission, of the owner” contained in the Zurich policy with that affording coverage where the operation was with the “implied consent” of the insured, as contained in the State Farm policy. It found that the operation of the Busby vehicle by Steven was without the consent, express or implied, of Busby and concluded that Steven was not covered under either policy.

I

The State Farm Policy

While the State Farm policy restricts coverage to one operating with “permission,” N. J. S. A. 39 :6-46 (a) requires that automobile liability policies shall “insure the insured named therein and any other person using or responsible for the use of any such motor vehicle with the express or implied consent of the insured, against loss from the liability imposed upon the insured or other person by law * * (Emphasis added.) It follows that liability under the policy would attach regardless of whether the consent to the use of the vehicle was express or implied, Selected Risks Insurance Co. v. Zullo, 48 N. J. 362, 373 (1966), and regardless of whether the permittee went beyond the scope of the original permission he received to use the vehicle, Odolecki v. Hartford Accident & Indemnity Co., 55 N. J. 542, 550 (1970); Matits v. Nationwide Mutual Ins. Co., 33 N. J. 488, 496-497 (1960).

Permission to operate a vehicle may be implied by usage or the common practice of parties. Penza v. Century Indemnity Co., 119 N. J. L. 446, 449 (E. & A. 1937). It may be implied from a course of conduct in which the parties have mutually acquiesced. Standard Accident Insurance Company v. Gore, 99 N. H. 277, 109 A. 2d 566 (Sup. Ct. 1954); Snyder v. Carlson, 135 Pa. Super. 390, 5 A. 2d 588, 589 (Super. Ct. 1939); Tomasetti v. Maryland Gas. Co., 117 Conn. 505, 169 A. 54 (Sup. Ct. Err. 1933). It is more readily implied where the owner and the operator are relatives or close friends. Toney v. Henney, 166 F. Supp. 85, 90 (N. D. Ohio 1958) ; Lumbermens Mutual Casualty Co. v. Poths, 104 Ill. App. 2d 80, 243 N. E. 2d 40, 46 (App. Ct. 1968). The existence of implied permission does not depend upon affirmative acts alone but may be inferred where there is a mutual acquiescence or a lack of objection under the circumstances. Lumbermens Mutual Casualty Co. v. Poths, supra, 243 N. E. 2d at 46. Where the parties are relatives or friends, the fact that the keys to the car have been entrusted to the operator or left in a place easily accessible to him has been held to be a significant factor in determining whether there was implied permission to use the car. Casey v. Fortune, 78 Cal. App. 2d 922, 179 P. 2d 99 (D. Ct. App. 1947); Lumbermens Mutual Casualty Co. v. Poths, supra. The fact that the driver had no license would not necessarily preclude a finding of implied permission.

The issue of whether there was implied permission to operate the Busby car was for the trial court. Its factual findings are adequately supported by the proofs. State v. Johnson, 42 N: J. 146, 161-162 (1964).

Here there was no previous course of conduct between Busby and Steven from which permission could be implied. He had never operated the car prior to the day in question. While he had moved the ear a short distance in the Busby driveway that morning, even then he had not been given permission to do so but relied on Busby’s silence. Busby testified, without contradiction, that he had never previously permitted anyone to drive his car. Neither Steven nor young Kay were in the Thunderbird when Busby left it with the key in the ignition to take a ride in Kay’s car. The trial court correctly determined that a case of implied permission had not been made out. Cf. Fireman’s Fund Insurance Co. v. Brandi, 217 F. Supp. 893 (D. N. H. 1962); Main v. Cameron, 13 Wis. 2d 15, 108 N. W. 2d 142 (Sup. Ct. 1961).

II

The Zurich Policy

As noted above, the Zurich policy covered Steven as a relative of his father if his actual operation of the nonowned vehicle (here the Busby car) was with the permission or reasonably believed to be with the permission of the owner. What we have already said with regard to State Farm’s coverage applies with equal force to the contention that Steven was operating with Busby’s implied permission within the provisions of the Zurich policy.

However, it is contended that the trial court misconstrued the meaning of the additional clause “reasonably believed to be with the permission of the owner” in the Zurich policy, and that its ruling that it should “probably” be accorded the same effect as the clause providing for coverage where operation was with the owner’s implied permission was error. It is urged, in effect, that even in the absence of implied permission Steven was entitled to coverage under this clause.

The clause in question appears to be comparatively new in the industry and applies only to coverage for nonowned automobiles. No party to this appeal has cited a ease in which it has been directly construed and we have found none. It is argued that the court should have held that there was coverage if it found that Steven believed he had Busby’s consent to drive the Thunderbird, and this belief was reasonable on his part. Zurich urges that the clause should be interpreted to mean what a reasonable man would have concluded under all of the facts and circumstances.

The rule is well settled that if the controlling language of a policy would support two meanings, one favorable to the insured and the other favorable to the insurer, the interpretation sustaining coverage will be applied. Butler v. Bonner & Barnewall, Inc., 56 N. J. 567, 576 (1970); Chicago Ins. Co. v. Security Ins. Co. of Hartford, 111 N. J. Super. 391, 394-395 (App. Div. 1970). Where the policy provision is one of inclusion a broad and liberal view is to be taken of coverage. Mazzilli v. Acc. & Cos. Co. of Winterthur, 35 N. J. 1, 8 (1961). In construing the words “reasonably believed” courts are not to lose sight of the public policy reflected by State Farm Mut. Auto. Ins. Co. v. Travelers Ins. Co., 57 N. J. 174, 178-180 (1970); Odolecki v. Hartford Accident & Indemnity Co., supra, 55 N. J. at 546; Selected Risks Insurance Co. v. Zullo, supra, 48 N. J. at 368.

We construe the clause in question as constituting the operator of a nonowned automobile an insured under the terms of his policy where he believes that his operation thereof is with the permission of the owner and such belief on his part is found to be reasonable. At first glance, in view of the construction which has been placed upon omnibus clauses by our own courts, this may appear to be a distinction without a difference. However, in certain states which do not adhere to our rule regarding “initial permission” the clause would play a significant part in determining the extent of coverage.

The facts in Carlsson v. Pennsylvania General Insurance Co., 314 Pa. Super. 479, 357 A. 3d 861 (Super. Ct. 1969), aff’d 438 Pa. 553, 365 A. 3d 530 (Sup. Ct. 1970), strongly resemble those before us. There the driver had been permitted by the son of the owner to operate the father’s car while it was in Meadville, Pennsylvania, notwithstanding that the son had been forbidden to take the car to Meadville in the first place. At that time the driver was a member of the household of his own father, who was covered by a policy issued by Pennsylvania General Insurance Co. The policy contained a provision, with respect to nonowned automobiles, that any relative driving a passenger automobile was covered, provided the actual use thereof was with the permission of the owner. In holding that his father’s policy covered Carlsson the court held:

We find, therefore that the insurance company in referring to the consent of the “'owner” in lion-owned automobile coverage included therein the consent of the possessor of the automobile, so long as the borrower reasonably believes that the possessor is the owner or has the jtermission of the owner to lend the automobile to third persons.
This is not to say that a person may rely on his own insurance when he knowingly borrows an automobile without the permission of the owner. In such circumstances the driver should receive no greater coverage than would a thief. When, however, am, individual has borrowed an automobile in the reasonable belief that he has the consent of the actual owner, he should be fully covered by his own policy, [at 866 emphasis added]

In an accompanying footnote the court pointed out that insurers now regularly provide coverage “provided it is with the permission or reasonably believed to be with the permission of the owner.”

We are satisfied, however, that Steven suffered no prejudice by reason of the trial court’s equating of the clause in question with implied permission. Here his only dealings were with the admitted owner of the vehicle. He could have had no ground reasonably to believe that he had permission to operate the car on the highway. Cf. Truelove v. Nationwide Mutual Ins. Co., 5 N. C. App. 272, 168 8. N. 2d 59, 61 (Ct. App. 1969). He had never previously driven it on the highway and had neither requested nor obtained permission to do so. He knew that he was under age and had neither a license nor a permit to drive. Such operation of a motor vehicle by him would have amounted to a violation of law by both Busby and himself. N. J. S. A. 39:3-10, 29 and 39.

The judgment of the Law Division is accordingly affirmed. No costs.

      While the cited clause, appeared in the policy involved in Selected Risks Insurance Co. v. Zullo, supra, the court there was not called upon to interpret it.


author: Leahy, J. C. C.

text:
    STATE OF NEW JERSEY, PLAINTIFF, v. LEONARD E. HATCH, DEFENDANT.
    Somerset County Court Law Division
    Decided January 14, 1972.

      Mr. Leonard N. Arnold, Assistant Prosecutor for plaintiff: (Mr. Michael B. Imbriani, Prosecutor, Somerset County, attorney).

      Mr. Bonald V. Bockoff, Assistant Deputy Public Defender, for defendant (Mr. Stanley G. Van Ness, Public Defender of New Jersey, attorney).
   Leahy, J. C. C.

Defendant Leonard E. Hatch, a resident of Erving, Massachusetts, was convicted by a jury of two high misdemeanors: possessing a rifle and possessing a shotgun in an automobile without a New Jersey firearms purchaser identification card, in violation of N. J. 8. A. 2A:151-41.

At the close of the State’s case defense counsel moved for a judgment of acquittal. The court reserved on the motion. Defense counsel renewed the motion at the end of the case and the court again reserved, declaring that the motion would be treated as a motion for judgment of acquittal made after the jury is discharged, pursuant to the provisions of B. 3 :18-2. This court now decides defendant’s motion for judgment of acquittal notwithstanding the verdict of guilty.

On March 2, 1971, defendant, driving an automobile with Massachusetts registration, was stopped by police officers on New Jersey State Highway Route 22 because of a motor vehicle violation for which he was subsequently convicted in the Bound Brook Municipal Court. One of the officers saw the butts of what appeared to be two firearms under a large quantity of clothing piled in the rear seat of the automobile. Investigation revealed that an operable riñe and shotgun were in fact on the back seat under defendant's clothing. Cartridges for the firearms were also found in the automobile.

Defendant told the officer that he had a valid Massachusetts hunting license and was a member of a gun club in that State. He said that he was traveling from Massachusetts to Pennsylvania in the hopes of finding employment in the heavy construction field and had his guns with him because he intended to engage in hunting during his stay in that state. The officer asked for a New Jersey firearms identification card and when the same was not forthcoming placed defendant under arrest for carrying a firearm in a motor vehicle without the requisite permit.

Defendant was kept in jail from March 2 until March 24, 1971. On June 28, 1971 an indictment was handed down in three counts charging the possession of the rifle, the possession of the shotgun and possession of a dangerous knife in the automobile. The jury found defendant not guilty of possession of a dangerous knife in an automobile.

During the trial defendant’s Massachusetts firearms identification card was introduced in evidence. Massachusetts law requires that firearms carried in an automobile shall be under the direct control of the person, Massachusetts General Laws C. 140, § 131C. “So long as a licensed firearm, whether it be used for hunting or any other proper purpose, is under direct control of licensee when carried in a vehicle, no law is violated.” Op. Mass. Atty. Gen., March 4, 1964, p. 233.

No evidence was offered during the trial that defendant’s conduct or mode of possession would have violated the law of his place of domicile in any way.

The key issue to be decided in this case is whether conduct on the part of a citizen domiciled in a state other than New Jersey which would be perfectly legal conduct in the state of his domicile can result in a conviction of a high misdemeanor in the State of New Jersey when it is performed while the citizen is merely traveling through this state.

The problem presented can better be understood if one considers the reverse possibility of a New Jersey domiciliary, bearing a valid New Jersey identification card, driving through Massachusetts to a hunting vacation in Maine, with his firearms locked in the trunk of his car as required by New Jersey law, N. J. S. A. 2A:151 — 42, being involved in an accident which springs his trunk open. Should he be validly convicted for not having his firearms “under his direct control” as required by Massachusetts law?

The issue is relatively novel because, in this court’s opinion, it is rare indeed that such a technical violation of our statutes results in an arrest, followed by a decision on the part of a prosecutor to press for an indictment, followed by the presentation of an indictment by a grand jury and a conviction by a trial jury. Normally the discretion imposed upon a prosecutor by virtue of the responsibility of his office, State v. Reed, 34 N. J. 554 (1961), would be exercised before the matter reached a grand or petit jury. However, such is not the situation here and the responsibility falls upon this court to determine the issue presented.

Before proceeding to cite law on this subject, the court notes that there is absolutely no evidence introduced or offered in this case upon which it might be inferred that defendant was guilty of anything more than the act of traveling through New Jersey in a manner which would have been permissible under the laws of his place of domicile, but which is not permitted under the law of New Jersey. The only act of which defendant can be accused is of traveling through New Jersey with firearms inside his automobile at a time that he did not possess a New Jersey firearms identification permit. No evidence was offered of any attempt or indication of intent to use the weapons in this State. There was no evidence of defendant’s involvement with any other human being in this State. There was no evidence of any purpose for possessing the firearms or intent to use them which might be violative of our statutes. There was no evidence that defendant was a member of, or was connected with, any group or organization of individuals that might intend to violate the law. There was no evidence of any other criminal acts on the part of defendant. There was no evidence that defendant was aware that New Jersey law prohibited the possession of a firearm inside an automobile.

Defendant was acting in the manner prescribed by the law of Massachusetts while traveling from his home for a legitimate purpose to Pennsylvania through New Jersey, and that conduct resulted in his conviction of a high misdemeanor.

Our Supreme Court has not ruled on the point at issue in this case. However, Neeld v. Giroux, 24 N. J. 224 (1957), deals with a similar and somewhat analogous situation. Defendant in that case was stopped on a New Jersey highway with 154 cases of cigarettes which did not bear tax stamps required by the New Jersey Cigarette Tax Act and without having in his possession invoices indicating the consignee of the shipment. The Supreme Court unanimously held that the purpose of the New Jersey statute was to prevent the illegal smuggling of cigarettes into this State. It then interpreted the statute in the light of the right of citizens of the United States to move in interstate commerce. Acknowledging that a state may protect its local interests by reasonable measures which do not unduly interfere with interstate commerce, the court found that the statute applied only if there was an intent or purpose to divert the untaxed cigarettes into New Jersey. It found the requirement of an intention to sell, use or possess for sale or use in New Jersey. It found a legislative intent to strike at smuggling into the State of New Jersey. Of special note, considering the fact that the offense of which ■ defendant Hatch was convicted is a high misdemeanor, is the emphasis which our Supreme Court placed on “the heavy consequences of a violation” of the Cigarette Tax Act. The court expressly stated, “We should not easily assume that the Legislature intended to deal so severely with a failure to carry documents where there [was] no purpose to divert the cargo into local commerce.” Id, at 229. The court reversed.

Neeld v. Giroux is a recognition of the principle that a legitimate interest of the State of New Jersey must be threatened before a New Jersey statute can be interpreted to restrict the free flow of goods and persons through this State.

The United States Supreme Court in the case of Lambert v. People of State of California, 355 U. S. 225, 78 S. Ct. 240, 2 L. Ed. 2d 228 (1957), ruled that a statute requiring a felon to register with the local police was unconstitutional as applied against a defendant who had no knowledge of the requirement and where there was no showing made of the probability of such knowledge. Conceding that “ignorance of the law will not excuse,” the majority drew a distinction between conduct that is wholly passive on the one hand and, on the other hand, conduct which amounts to the commission of an act or the failure to act under the circumstances that should alert the doer to the consequences of his deed. It held that due process places some limits on the exercise of the powers of local government in exercising their police powers.

The court especially cited the fact that defendant, on first becoming aware of the duty to register, was given no opportunity to comply with the law and avoid its penalty but was merely given the opportunity to suffer the consequences, i. e., conviction of a crime. It stated,

* * We believe that actual knowledge of the duty to register or proof of the probability of such knowledge and subsequent failure to comply are necessary before a conviction under the ordinance can stand. As Holmes wrote in The Common Law, ‘A law which punished conduct which would not be blameworthy in the average member of the community would be too severe for that community to bear.’ * * « Where a person did not know of the duty to register and where there was no proof of the probability of such knowledge, he may not be convicted consistently with due process. Where it otherwise, the evil would be as great as it is when the law is written in print too fine to read or in a language foreign to the community. [78 S. Ot. at 243, 244]

The analogy to the case at hand is clear. A resident of Massachusetts cannot be expected to know, or to ascertain for purposes of driving through the State of New Jersey, the requirements of our firearms statute which differ from those of his state of domicile. To interpret the New Jersey statute to apply to him without some notice to him or to the traveling public and without any further indicia of misconduct on his part would be an onerous burden on due process and would be an improper interpretation of the New Jersey statute.

The law of 'New Jersey has long and consistently recognized the necessity of notice before individuals can be held to account for commission of statutorily created offenses. State v. Hudson County News Co., 35 N. J. 284 (1961); State v. Joas, 34 N. J. 179 (1961); State v. Klapprott, 127 N. J. L. 395 (Sup. Ct. 1941). These cases all contain language emphasizing the need to inform individuals of the nature of the proscribed conduct before the penalty for violation thereof will attach. Though these cases deal primarily with the requirement that the language of a penal statute should be clear and unambiguous so that individuals will have proper notice of the requirements of the law, the same principle of requiring reasonable notice before criminality can be charged applied in this case.

The legal maxim that everyone is presumed to know the law is a broad generalization of a necessary doctrine. Everyone can reasonably be required to know the law of his domicile, and it is not unreasonable to require that everyone refrain from misconduct which could properly be described as malum in se. However, to impose the penalty of conviction for a high misdemeanor, the equivalent of a felony in the other jurisdictions of this nation, for conduct malum prohibitum in a jurisdiction in which one is not domiciled, without any prior notice or opportunity to rectify or correct the situation, is violative of due process of law and principles of fundamental fairness.

That this is so and has been recognized as so in the State of New Jersey can be seen from the opinion of the Attorney General, F. O. 1961, No. 20, which holds as follows:

Statute which exempts, from the statute which prohibits the carrying of concealed weapons on the person or in a vehicle, “Persons having a hunter’s license in going to or from places of hunting,” exempts, while traveling through New Jersey, New Jersey or out-of-state residents having a valid hunter’s license from another state which permits the use of pistols or revolvers in hunting, provided the following requirements are met: the person with a concealed weapon must (1) have a valid hunting license in his possession from the state of his destination, (2) there must be a pistol season open in that state at the time or reasonably close in point of time, (3) he must be traveling the most expeditious route to or from the foreign state, and (4) he must be going to the foreign state with intent to hunt, or if he is returning then in fact have hunted. [Emphasis supplied]

If it is recognized that the concealed weapon section of N. J. S. A. 2A:151-41 does not apply to out-of-state citizens traveling through New Jersey, it should clearly be recognized that the possession in an automobile of a hunting weapon without a New Jersey firearms identification permit should not constitute an offense for an out-of-state driver in the absence of something more by way of misconduct.

The statute could not have been intended by the Legislature of New Jersey to apply to one in the position of the defendant Hatch, and his motion for judgment of acquittal is granted.


author: Per Curiam. Kolovsky, J. A. D.

text:
    HERBERT HARVEY, PLAINTIFF-APPELLANT, v. ORLAND PROPERTIES, INC., A NEW JERSEY CORPORATION, DEFENDANT, AND FREDA SOLOMON, DEFENDANT-APPELLANT, AND PAT ROMANELLI AND SARA ROMANELLI, DEFENDANTS-RESPONDENTS.
    Superior Court of New Jersey Appellate Division
    Argued November 9, 1971
    Supplemental Briefs Filed December 13, 1971 and December 22, 1971
    Decided January 19, 1972.

      Before Judges Lewis, Kolovsky and Halpeen.

      Mrs. Sylvia B. Pressler argued the cause for appellants Herbert Harvey and Ereda Solomon.

      Mr. Walter J. Fessler argued the cause for respondents (Messrs. Lum, Biunno & Tompkins, attorneys; Mr. James C. Orr, on original brief).
   Per Curiam.

The judgment is affirmed essentially for the reasons expressed by Judge Lane.

We supplement Judge Lane’s conclusions and affirm for two additional reasons. (1) Under the circumstances existing in this case, the final decree of foreclosure through which respondents derived their title is not open to collateral attack by appellants. Andes v. Boyajian, 12 N. J. Super. 344, 348 (Oh. 1951) and cases cited therein. (2) With full knowledge of the alleged deficiency in the final decree of foreclosure filed in 1963, appellants waited approximately five years before seeking relief. Such unexplained and unexcused delay in enforcing an alleged known right has resulted in prejudice to respondents who, in good faith and for value, purchased the property in question. Appellants are now estopped from obtaining relief. See Clark v. Judge, 84 N. J. Super. 35, 53 (Ch. 1964), aff’d 44 N. J. 550 (1965).

Affirmed.

Kolovsky, J. A. D.

(concurring) :

I do not agree that the decision in Bron v. Weintraub, 42 N. J. 87 (1964), judgment on mandate affirmed 45 N. J. 1 (1965), applies to the facts in this case.

However, I agree that we should affirm because (1) plaintiffs attempt to attack in his, mortgage foreclosure action the validity of the prior tax foreclosure judgment is a collateral attack not permitted by the cases; (2) even if plaintiff’s belated challenge of the sufficiency of the inquiry had been by way of a direct application in the tax foreclosure proceeding, the record in this case would call for a rejection of the challenge; and (3) the record supports the trial court’s finding that defendant-appellant Solomon had “failed to sustain the burden of proof that any part of the lands are not within the territorial limits of the Township of Millstone.”


author: Pee Curiam.

text:
    DIANNE POLK, COMPLAINANT-RESPONDENT, v. CHERRY HILL APARTMENTS, INC., A NEW JERSEY CORPORATION ; JOSEPH RATNER; MARIAN RATNER; SIDNEY ROTHSTEIN AND MARY BRUNO, RESPONDENTS-APPELLANTS.
    Superior Court of New Jersey Appellate Division
    Argued October 26, 1971
    Decided January 21, 1972.

      Before Judges Coneorb, Matthews and Fritz.

      Mr. Richard J. Donohue argued the cause for appellants (Messrs. Gross, Demetrakis & Donohue, attorneys).

      Mr. Harvey S. Grossman, Deputy Attorney General, argued the cause for respondent (Mr. Stephen Skillman, Assistant Attorney General, of counsel; Mr. David H. BenAsher, Deputy Attorney General, on the brief; Mr. George F. Kugler, Jr., Attorney General of New Jersey, attorney).
   Pee Curiam.

We find that the complainant here had standing, see Crescent Park Tenants Ass’n v. Realty Equities Corp., 58 N. J. 98 (1971), that the findings and determination of the Director of the Division of Civil Bights are adequately supported by credible evidence in the record, and that with one exception noted below the order of January 12, 1971, as modified by the supplemental order of October 15, 1971, is lawful and reasonable.

Paragraph 8A2 of the order provides that a list of vacancies shall be furnished regularly to an organization called Project Free. It appears from the record below, not without substantial significance, that the only apparent purpose of Project Free is to “test” discriminatory renting practices. It has a paid executive director. Volunteers are enlisted and trained in an effort to present apparently good faith but entirely hypothetical rental applications to landlords in such a way that “the only reason the landlord would have to discriminate [i. e., refuse to rent] would be because of race.” Uo suggestion appears that the organization serves as an information outlet or clearing house for those who really seek to rent. We agree with defendants that, such testing being the sole function of Project Eree, the only purpose to be served by the direction of this paragraph of the order is enforcement. Thus viewed, the action amounts to an unauthorized enlistment of a partisan, nonaccountable body in enforcement entrusted by the Legislature to the Division, and as such, implicitly at least, an illegal further delegation of an already delegated power. This paragraph constitutes an improper exercise of the Director’s power, and accordingly the order shall be modified by its excision.

Modified, and; as modified, affirmed.


author: Per Curiam. Lane, J. A. D.

text:
    STATE OF NEW JERSEY BY THE COMMISSIONER OF TRANSPORTATION, PLAINTIFF-APPELLANT, v. WILLETT HOLDING COMPANY, A CORPORATION OF THE STATE OF NEW JERSEY, DEFENDANT-RESPONDENT.
    Superior Court of New Jersey Appellate Division
    Argued January 11, 1972
    Decided January 25, 1972.

      Before Judges Labeecque, Laíte and Loea.

      Mr. Richard L. Rudin, Deputy Attorney General, argued the cause for appellant {Mr. George F. Kugler, Jr., Attorney General of New Jersey, attorney; Mr. Stephen Skillman, Assistant Attorney General, of counsel).

      Mr. J. Mortimer Rubensiein argued the cause for respond-dent.
   Per Curiam.

The only point raised by plaintiff is that “The costs incurred by the condemnee in obtaining certain finance commitments attributable to its development activities and business venture are noncompensable in a condemnation proceeding.” In the context of the facts adduced, we find it to be without merit.

The parcel taken consisted of 20 acres out of a 50-acre tract owned by defendant. It was difficult of access and both parties argued that its highest and best use was as a site for a nursing home. At the time of the taking it was being developed for that purpose and the nursing home itself had been partially completed.

The owner was entitled to recover a sum equal to the value of the parcel taken and the damage to the 30 acres remaining in the tract. On the issue of the value of the parcel taken, the parties stipulated that the reproduction value of the partially completed nursing home, as of the time of the taking, was $314,634. Hendricks, defendant’s expert, testified that, without giving consideration to the value of the partially completed nursing home or the financial commitments on the basis of which it was being constructed, the value of the parcel taken and the damage to the remainder amounted to $336,300. In his opinion the full value would be more than the sum of $336,300 and the stipulated $314,634 because of the existence of the mortgage financing arrangements. There was testimony that these financial commitments were assignable. It was therefore proper to permit the jury to consider this factor in arriving at its lump sum award.

Hendricks testified that the mortgage financing arrangements increased the value, as given by him, “by at least the cost of this mortgage financing” (emphasis added) and opined that a prudent willing buyer in a transaction of this type would pay “dollar for dollar” the cost of the mortgage commitments and financing fees. Proof was adduced that the cost of obtaining the mortgage commitments had been $48,883.50 but this figure was later reduced to $43,450 by the court.

Plaintiff challenges the receipt of testimony as to the cost to the owner of such financing and its consideration by the jury. We fail to see how it was thereby prejudiced. Clark, plaintiff’s expert, while taking the position that they were not compensable, conceded that the financing arrangements made the property more attractive to a buyer in 1967 and that in 1970 it would have made a “tremendous difference.” Had Hendricks testified that in his opinion the land value was $379,750 ($336,300 plus $43,450), it concededly would have been a proper item for consideration by the jury. His testimony that his figure for the bare land, $336,300, was enhanced by at least the cost of financing ($43,450), and that a willing buyer would pay a willing seller “dollar for dollar” the cost of financing, was no less so.

We are convinced that, considering the charge as a whole and in the light of the unique factual pattern before the court, the jury was correctly instructed as to the manner in which it was to consider this portion of the testimony. We are not prepared to assume that the jury disregarded the court’s charge.

As to the cross-appeal, we are in accord that interest should have been allowed for the period from July 1, 1970 to July 31, 1970. The judgment should be modified accordingly to provide for additional interest of $547.50.

The judgment, as modified, is affirmed.

Lane, J. A. D.

(dissenting). The State appeals from a condemnation award. The parties stipulated that the highest and best use of the land was for a nursing home on the lands. Before the taking the property owner had obtained construction and permanent mortgage commitments. There was testimony that the commitments were assignable and that the existence of the commitments would increase the value of the land. The trial court allowed the jury to consider the sum of $43,452 which represented part of the property owner’s costs in obtaining the commitments.

I agree that the jury could consider whether the existence of the mortgage commitments enhanced the value of the land and by what amoimt if there was proper evidence of the amount of such enhancement. The issue, however, is whether it was reversible error to allow the jury to consider the costs to the property owner of obtaining the commitments.

The objective of a condemnation award is to indemnify the owner for the loss of the property taken. Generally, the fair market value of the property taken is the basis for such an award. This value is measured by a price which would be agreed upon voluntarily between a hypothetical owner willing to sell and a hypothetical buyer willing to purchase at the date of the taking. Although this concept is somewhat indefinite, it has been held that with some flexibility it would best serve to attain the goal in condemnation proceedings of justice and indemnity in each particular case. State v. Gallant, 43 N. J. 583, 587 (1964); State Highway Com’r, State by, v. Burnett, 34 N. J. 280, 288 (1957); Trenton v. Lenzner, 16 N. J. 465, 476 (1954), cert. den. 348 U. S. 973, 75 S. Ct. 534, 99 L. Ed. 757 (1955). A determination of just compensation should reflect “[a]weighing of all of the factors which customarily enter into * * * purchase and sale negotiations.” Id. at 479.

It was not denied by the State’s expert that the value of the commitments would be an incentive to a willing buyer. However, here such value was not shown. Instead, the jury was instructed to consider the cost to the property owner of obtaining the commitments. While it is the property owner’s loss, not the taker’s gain, which is the basis for the measurement of compensation, not all losses suffered by an owner are compensable. United States ex rel. for Use of Tennessee Valley Authority v. Powelson, 319 U. S. 266, 281, 63 S. Ct. 1047, 87 L. Ed. 1390 (1943). Damages or costs of a speculative, uncertain nature are not compensable. Housing Authority, Clementon v. Myers, 115 N. J. Super. 467, 475, 476 (App. Div. 1971).

Excluded from a determination of just compensation are damages or costs incidental to the taking, such as loss to or destruction of goodwill, loss of profits or inability to relocate. The noncompensability of these losses has been justified on the grounds that their value is too speculative, remote and uncertain to accurately measure. Such losses depend upon various factors not attributable to the land. Although undoubtedly they would be considered in a sale, they furnish no reliable criterion for the determination of fair market value. United States v. General Motors Corp., 333 U. S. 373, 379, 65 S. Ct. 357, 89 L. Ed. 311 (1945); State v. Gallant, supra, 43 N. J. at 587; Port of New York Authority v. Howell, 59 N. J. Super. 343, 349 (Law Div. 1960), aff’d 68 N. J. Super. 559 (App. Div.), certif. den. 36 N. J. 144 (1961). Trees, shrubs, topsoil, underlying stone, sand and gravel are considered component parts of the land but are not compensable separate and apart from the land itself. Separate valuations are collateral and contingent. Ringwood Co. v. North Jersey District Water Supply Comm’n, 105 N. J. L. 165, 169 (E. & A. 1928); Manda, Inc. v. Delaware, L. & W. R. Co., 89 N. J. L. 327, 329 (E. & A. 1916); Port of New York Authority v. Howell, supra, 59 N. J. Super, at 348; Ross v. Commissioners of Palisades Interstate Park, 90 N. J. L. 461, 467 (Sup. Ct. 1917).

Generally, it has been held that costs of moving industrial equipment are not compensable. State v. Gallant, supra, 42 N. J. at 587; American Salvage Company v. Housing Authority, Newark, 14 N. J. 271, 280 (1954); Port of New York Authority v. Howell, supra, 59 N. J. Super, at 349. See 27 Am. Jur. 2d, Eminent Domain, § 293, at 102 (1966); 29A C. J. S. Eminent Domain § 164 at 713 (1965). But see Housing Authority, Clementon v. Myers, supra,, 115 N. J. Super. 467. As an exception to the general rule, costs of reproduction are permitted only where there are no comparable sales available. State Highway Com’r, State by, v. Burnett, supra, 24 N. J. at 292.

The costs incurred by the property owner in obtaining the mortgage commitments were collateral and incidental to the taking of the land. They were highly speculative, depending upon the person making the application, the state of the money market at the time the application was made, the avaiiabilty of funds to the lending institutions and the judgment of the lending institutions as to the project planned The $43,452 represented commitment fees paid to the lending institutions and placement fees paid to the mortgage broker. It is speculative that a willing purchaser at the time of the taking would have sought financing through a broker or would have had to pay commitment fees. In allowing the jury to consider these costs as proof of the value of the mortgage commitments to a willing buyer at the time of the taking, the trial court allowed it to speculate on the possibility at the time of the taking it would have cost a willing buyer an equal amount to obtain the commitments and that, therefore, such willing buyer would pay that much more for the land. Such costs cannot be said to accurately reflect an increase in the market value of the land. City of Chicago v. Provus, 415 Ill. 618, 114 N. E. 2d 793, 795 (Sup. Ct. 1953).

If the testimony as to the costs of the commitments is properly admissible in this case, logically testimony as to the costs of site improvements installed in a subdivision prior to the taking wojuld be admissible. How far would such a principle extend? Could a property owner offer testimony of attorneys’ fees incurred in clearing title to the property? Where a portion or all of a subdivision is taken, could the property owner offer testimony as to the architectural and engineering fees incurred? I submit that a veritable Pandoras box will be opened by allowing testimony of such costs.

The admission into evidence of the $43,452 costs to the property owner and the charge allowing the jury to consider that figure were reversible errors.

I would reverse the judgment and remand the case for a new trial.


author: Per Curiam.

text:
    HENRY J. HURDY, PLAINTIFF-RESPONDENT, v. MICHAEL A. RUSSO, JR., MICHAEL A. RUSSO, SR., AND FLORENCE RUSSO, HIS WIFE, DEFENDANTS-APPELLANTS.
    Superior Court of New Jersey Appellate Division
    Argued January 10, 1972
    Decided January 25, 1972.

      Before Judges Coulester, Mintz and Lynch.

      Mr. William B. Kaufman argued the cause for appellants (Messrs. Kaufman and Kaufman, attorneys; Mr. Meyer L. Rosenthal on the brief).

      Mr. Hyman Stern argued the cause for respondent.
   Per Curiam.

Plaintiff holds bonds which were secured by second mortgages on realty; defendants are obligors on the bonds (defendant Michael A. Russo, Jr. having been the actual mortgagor). After foreclosure of the first mortgage and purchase of the property by the first mortgagee at the' sheriff’s sale, plaintiff brought suit on his bonds and was granted a summary judgment below. Defendants appeal, contending that they should have been allowed (under N. J. S. A. 2A:50-3) to prove the fair market value of the-property originally covered by the mortgages, and to deduct said value from the balance due plaintiff.

We find defendants’ argument to be without merit. N. /„ S. A. 2A:50-8. under which this ease properly arises, does not contain the deduction provisions for market value contained in A. J. 8. A. 2A:50 — 3. Where, as here, plaintiff’s security is extinguished by the foreclosure of a prior mortgage, he cannot look to the collateral for satisfaction of his debt, simply because there is none. Summary judgment was properly granted. Court Investment Co. v. Spatola, 136 N. J. L. 519 (E. & A. 1947); Hillside National Bank v. Silverman, 116 N. J. Eq. 463 (Ch. 1934).

Affirmed.