author: Conlon, C. P. J.

text:
    Essex County Court of Common Pleas.
    JOSEPH PEZZINO, PETITIONER-APPELLANT, v. CHARMS COMPANY, RESPONDENT-APPELLEE.
    Decided November 20, 1946.
    Eor the petitioner-appellant, Bothbard, Harris & Oxfeld.

    For the respondent-appellee, Kalisch & Kalisch.

   Conlon, C. P. J.

The Bureau sustained respondent’s contention that no compensable injury was indicated and dismissed the petition. From that dismissal this appeal is taken.

The petitioner’s position is that since the Compensation Act (R. S. 34:15—12t; N. J. S. A. 34:15-12t) prescribes compensation for four weeks for the loss of a tooth, upon the proofs adduced in this case, he is entitled to a proportionate award for the loss of part of a tooth. On the other hand, the respondent contends that no disability resulted from the loss of part of the tooth and that for this reason petitioner is entitled to no compensation.

The amount of the award involved is negligible. Counsel for both parties indicate that they are primarily interested in the solution of the legal principle involved.

Where there is an impairment of any member of the body mentioned in the schedule in the statute above referred to, a proportionate award is warranted. The extent of the incapacity has relation to the proportion—not the propriety—of the award.

As was stated by Mr. Justice Heher in a comparable situation in Sutkowski v. Mutual Chemical Co., 115 N. J. L. 52; 178 Atl. Rep. 71, 72:

"This is a compensable disability, even though Sutkowski’s capacity to render the service at which he was engaged was not thereby impaired, or his earning power diminished. The test is not impairment of earning capacity; it is rather the “loss of physical function which detracts from the former efficiency of the body or its members in the ordinary pursuits of life.” Burbage v. Lee, 87 N. J. L. 36; 93 Atl. Rep. 859; DeZeng Standard Co. v. Pressy, 86 N. J. L. 469; 92 Atl. Rep. 278; affirmed, sub nom. Pressy v. DeZeng Standard Co., 88 N. J. L. 382; 96 Atl. Rep. 1102; Hercules Powder Co. v. Morris County Court of Common Pleas, 93 N. J. L. 93; 107 Atl. Rep. 433.”

The same justice, speaking for the Court of Errors and Appeals in Everhart v. Newark Cleaning and Dyeing Co., 119 N. J. L. 108; 194 Atl. Rep. 294, expresses the principle as follows:

"Although the compensation afforded by the statute is based upon and is measured by the workmen’s earnings, the test of liability is not the immediate impairment of earning power; it is rather the loss ensuing from personal injury which detracts from the ‘former efficiency’ of the workmen’s ffiody or its members in the ordinary pursuits of life.’ The benefits conferred by this particular provision have been classified by this court as in the nature of an indemnity for personal injury sustained, rather than for the mere loss of earning power.”

The loss of a part of a tooth is clearly a physical injury and it is unnecessary to discuss the effects of the repair work done by the dentist. The fact that an impairment of a natural function is repaired by artificial device is immaterial. Johannsen v. Union Iron Works, 97 N. J. L. 569; 117 Atl. Rep. 639.

I find that an injury resulting in the loss of a part of a tooth is compensable and that the Bureau erred in dismissing the petition. However, in the brief record before me there is not sufficient testimony to permit a rational determination as to the proportion of total disability which should be allowed.

This matter is, therefore, remanded to the Bureau for its determination as to the allowable percentage of disability.


source: Caselaw Access Project

author: Kalteissen, C. P. J.

license: Public Domain

text:
    Middlesex County Court of Common Pleas.
    RICHARD GREWE, PETITIONER-APPELLANT, v. AMERICAN COOPERAGE CO., RESPONDENT-APPELLEE.
    Decided November 20, 1946.
    For the petitioner-appellant, Fred Freeman (by Seymour B. Jacobs).

    For the respondent-appellee, George E. Meredith.

   Kalteissen, C. P. J.

This is an appeal from a decision rendered by the Workmen’s Compensation Bureau, wherein Bichard Grewe alleged that he suffered an injury which involved his heart as the -result of an accident that he says happened to him during the course of his employment, on July 20th, 1944.

The petitioner testified that he was employed by the respondent as a cooper, and that in the course of his employment, he was obliged to handle barrels; and that he pulled one toward him against his chest, which he said was the usual method of procedure, but that on this particular occasion, he pulled the barrel harder than usual, and that he was seized with a pain in the chest, following which he became ill. He further says that he had talked with a fellow worker, John Westrowiez, and told him about the accident after which he went home. This is denied by Hestrowicz, who says that the petitioner simply told him that he didn’t feel well, and that he was going home.

The petitioner further testified that he did not go to the first aid room, although on previous occasions he had been there for treatments of different kinds. There were several other fellow workers whom the petitioner called, none of whom had seen the petitioner experience any accident, but to whom the petitioner said he did not feel well, and that he was going home. However, he made no mention of his illness being connected with his work.

The petitioner further testified that he notified the superintendent of the accident. This was denied by the superintendent. The petitioner made an effort to describe the manner ,in.which the accident happened to the court, but his effort was evidently not at all convincing. The petitioner’s own physician, Dr. Poller, had no mention of an accident in the original notation that was produced. Furthermore, the petitioner paid all of his doctor bills before any demand was made on his employer to assist him. There is also a very serious question as. to whether the petitioner reported the accident within the statutory time.

The burdeü. is on the petitioner to prove that his condition was brought about as a result of an accident arising out of and in the' course of his employment. The petitioner must establish the occurrence of an accident within the meaning of the Workmen’s Compensation Act (N. J. S. A. 34:15-1, et seq.); by a preponderance of the testimony. There is complete absence of any testimony that the petitioner did anything out of his usual work. There is no competent proof of testimony that the petitioner suffered any exertion, physical strain or physical effort; the elements that would be necessary to make his case compensable. There is furthermore, a complete absence of corroboration in any of the important or unimportant aspects of his ease.

The court recognizes that the Workmen’s Compensation Act shall be liberally construed. However, the burden of proof necessary to establish the allegations set forth in the petition, rests upon the petitioner. He must prove that there was an accident, and that it arose out of and in the course of his employment. “Arising out of,” and “in the course of,” are used conjunctively, and in order to satisfy the statute, both elements must co-exist; their concurrence is the prerequisite of a right of action.

The court recognizes that the Workmen’s Compensation Act is for the benefit of the sick and failing as well as for the healthy and sturdy, however, proof and proper evidence must be produced that the petitioner suffered an accident that arose out of and in the course of his employment. There is not, in the court’s opinion, definite proof of accident, nor is there definite proof that his condition was the result of an accident.

The court has very carefully studied the transcript of the record, the exhibits, the oral arguments of counsel, and the briefs submitted by counsel for petitioner and respondent. While this court is not obliged to accept the finding of the Commissioner, it must base its finding on the testimony as submitted in the transcripts and exhibits, yet the court cannot help but be influenced by the Deputy Commissioner who heard the testimony, had the witnesses before him, observed their attitude and demeanor, and was therefore, better able to decide upon the truth of their testimony.

Independent of the finding of the learned Deputy Commissioner, it is the court’s opinion that the petitioner ha£ not sustained the necessary burden of proof. The court, therefore, affirms the finding of the Deputy Commissioner, and affirms the dismissal of the petition.

A determination in conformity with this opinion may be presented.


author: Evans, D. C. J.

text:
    District Court of the Second Judicial District of the County of Monmouth.
    MILLARD ROSENFELD AND PAULINE ROSENFELD, PLAINTIFFS, v. ELIZABETH BAZLEY, DEFENDANT.
    Decided October 21, 1946.
    Dor the plaintiff, Milton P. Oranmer.

    Dor.the defendant, Ira Katchen.

   Evans, D. C. J.

The judgment entered in this matter was for overcharges of rent. At the time of the trial the jurisdiction of the District Court in such actions had been established by various Supreme Court decisions. Beasley v. Gottlieb, 131 N. J. L. 117; 35 Atl. Rep. (2d) 49; Bendit v. H. L. R. Holding Co., 131 N. J. L. 91; 35 Atl. Rep. (2d) 53; Silberg v. Klarfield, 131 N. J. L. 92; 35 Atl. Rep. (2d) 221, and Wutkowski v. Paultis, 131 N. J. L. 441; 37 Atl. Rep. (2d) 29. The judgment was then docketed in the Common Pleas Court of Monmouth County. Subsequent thereto the Court of Errors and Appeals in Zuest v. Ingra and Zuest v. Farina, 134 N. J. L. 15; 45 Atl. Rep. (2d) 810, determined that such an action was not within the statutory jurisdiction of the District Court. Defendant now asks that the judgment in this cause be set aside and the proceedings dismissed, while the plaintiff asks that the matter be transferred to a proper tribunal.

The docketing of the judgment does not prohibit an application to this court to have the judgment set aside. See N. J. S. A. 2:32-198, and also Lacombe v. Laval, 81 N. J. L. 68; 79 Atl. Rep. 607.

The Transfer of Causes Act provides: N. J. S. A. 2:26-60. Causes, with records and papers, transferable. No cause or matter pending in the court of chancery, supreme court, a ■circuit court, a court of common pleas, a district court, a court of oyer and terminer, a court of quarter sessions or a court of special sessions shall be dismissed solely on the ground that such court is without jurisdiction of the subject-matter, either in the original suit or on appeal, but the cause ■or matter shall be transferred, with the record thereof and all the papers filed in the cause, to the proper court for hearing and determination. The record shall, when necessary, include a transcript of all entries and proceedings in the ■cause.

Defendant contends that the situation here is analogous to that in Lunger v. Page, 16 N. J. Mis. R. 529; 2 Atl. Rep. (2d) 606, in which case a writ of attachment was issued in the District Court against a non-resident executor. There it was held that the proceedings were void from the beginning; and, the court having no jurisdiction, there was nothing to transfer.

Such is not the case here. When the suit was instituted, the jurisdiction in this court was an established fact. To permit the reversal of that law by the appellate court to ■create a status such as defendant urges was not, in this court’s •opinion, the intendment of the decision. It did not say that such a cause of action did not exist, but that the District Court was not the proper tribunal. Ia'' of the opinion that the circumstances here presented are typical of those for which the Transfer of Causes Act was created. Certainly the cause is still pending hero; otherwise, I would have nothing to decide; and there is a proper court for the determination of the issues on their merits.

The application to reopen will be granted, and the cause will be transferred to the Monmouth County Circuit Court.


author: Conklin, Commissioner.

text:
    Division of Tax Appeals.
    IN THE MATTER OF THE APPEAL OF CITY OF EAST ORANGE, v. CHURCH OF OUR LADY OF THE MOST BLESSED SACRAMENT, FOR THE YEAR 1944.
    Decided November 12, 1946.
    Por the petitioner, Walter G. Ellis.

    Por the respondent, Elmer F. Holtz.

   Conklin, Commissioner.

The City of East Orange seeks to restore an assessment for the year 1944 on certain property of the respondent. Originally, this property was assessed by the city as a “parsonage” nnder the provisions of R. S. 54:4-3.6; N. J. S. A. 54:4-3.6. On an appeal by the taxpayer to 'the Essex County Board it was held that the property should be fully exempt as the ifbuilding is substantially exclusively used for the religious and educational needs of the church in its religious and educational work.” The city offered proof of value of the building at $17,000, and asks the restoration of the assessment, less an exemption of $5,000' as a parsonage.

The building in question is located at 113 Elmwood Avenue, East Orange, contiguous to the church and school, and stands on the same land. The land is not assessed.

. The entire church property is located on the south side oi Elmwood Avenue, and occupies the block between Shepard Avenue and Madonna Place. On the northwest corner of the plot is located the parochial school, supervised by the priest of the parish. On the northeast corner is the church proper. To the south, or to the rear of the church, is the convent where the teaching nuns live, which convent is joined to the church building by a passageway. The building in question, referred to as the “rectory,” is located between the church building and the school, and is joined to the church by a passageway which appears to be part of one of the rooms of the building.

The property was carefully described by the pastor, who was the witness for the respondent church.

The building is three stories in height. The first floor contains six rooms, closets, a pubile toilet and a hallway. There is a dining room used by the priests, a kitchen, and an employees’ rest room. At the front of the building are two rooms used as business offices for the church and parochial school. At the front and on the church side is a large room, used as a Sunday school room for small children, for the performance of wedding ceremonies, and which by reason of the construction of the passage, is used to accommodate overflow crowds at the Sunday masses. The passageway to the church is part of one end of this room.

The second floor contains the pastor’s bedroom, two bedrooms for employees, a room used for storage of church material, and an office. This office is used by the pastor, and as a place of storage for church and school records. It is also used by the trustees as a meeting room.

On the third floor is a bedroom for the pastor’s assistant, another for visiting priests, and three other rooms. One is used by the Society of St. Vincent de Paul for its activities. Another is used for the storage of church property. There is also a room used as an office and meeting place of various groups attached to the church.

The church building was constructed without a cellar; therefore, it was necessary to find another means of storage space and space in the rectory was used. The parochial school expanded to an enrollment of 380 students, and as it became necessary to use tbe principal’s office as a classroom, he moved his office to the rectory. Of these facts there can be no dispute, as the assessor considered them in his valuation.

On page 42 of the transcript of testimony the assessor, Mr. Herbert L. Yan Derbeck, testified as follows: “Q. Did you make any allowance in the assessment for educational or school purposes ? A. Yes. That place would be assessed at at least $25,000 as a private home. Q. You have just testified before that the true value is $17,000? A. That’s right. T said as a private home it would be at least $25,000.”

The testimony offered on behalf of the petitioner city was not contradictory as to the use of the property. Original plans of 1927 were offered by the city, but they did not show the use of portions of the building as of the assessing date.

Eevised Statutes 54:4-3.6; N. J. S. A. 54:4-3.6, provides-in part:

“The following property shall be exempt from taxation-under this chapter: * * * ail buildings actually and exclusively used in the work of associations and corporations-organized exclusively for the moral and mental- improvement of men, women and children, or for religious, charitable or hospital purposes, or for one or more such purposes; * * * the building actually occupied as a parsonage by the officiating clergyman of any religious corporation of this state, to-an amount not exceeding five thousand dollars ($5,00&) # i’-t ??

The two pertinent sections of the statute in dispute are-quoted above. The first part exempts “all buildings actually and exclusively used * * *■ for religious purposes.” The second part, “the building actually occupied ás a parsonage.”'

There should be no difficulty in the application of these-provisions. The property in question must fall into one category or the other. Bouvier defines a parsonage as “the house-set apart for the minister’s residence. A portion of the land and tithes established by law for the maintenance of a minister.” According to the undisputed proof, this property was-more than actually occupied as a parsonage. It was actually and exclusively used for religious purposes.

This case is even stronger than City of Jersey City v. Beth-El Baptist Church, 18 N. J. Mis. R. 208; 12 Atl. Rep. (2d) 152, for here the pastor does not use the building for a family home, as do Protestant ministers.

We are mindful of the fact that these questions had been previously raised at a hearing by Commissioner Kreamer, reported in 21 N. J. Mis. R. 374; 34 Atl. Rep. (2d) 297. The opinion so reported would not be res adjudicada, as this Division would not be concluded by its determination for previous years, each annual assessment being a separate entity distinct from the assessments for other years. See Continental Purchasing Co. v. City of Newark, 18 N. J. Mis. R. 240; 12 Atl. Rep. (2d) 133. 1STor would a reading of the opinion by Commissioner Kreamer in the case reported in 21 N. J. Mis. R. 374; 34 Atl. Rep. (2d) 297, indicate the proofs to be the same as those in the instant case.

It does not appear to us that any principle of statutory construction should operate to deprive the respondent of tax exemption, obviously intended by the legislature in such a situation, by mere reason that a building serves in part as a parsonage. Jersey City v. Beth-El Baptist Church, supra.

The fact that the building is used as a parsonage (the residential use incident to the performance of the exempt activities) is not such a use as would defeat total exemption. Piscataway Township v. State Board of Tax Appeals, 131 N. J. L. 158; 35 Atl. Rep. (2d) 711; affirming 129 N. J. L. 261; 29 Atl. Rep. (2d) 389. -

Obviously the statute, R. S. 54:4-3.6; N. J. S. A. 54:4-3.6 covers two or more categories and so the educational use of the building has not been discussed.

Under the proofs, we feel that the respondent is entitled to all the benefits of R. S. 54:4-3.6; N. J. S. A. 54:4-3.6, and the action of the County Board of Taxation is affirmed.


text:
    District Court of the Second Judicial District of the County of Monmouth.
    MICHAEL L. CZAJOWSKI, PLAINTIFF, v. ARLINGTON REALTY COMPANY, A NEW JERSEY CORPORATION, AND CHARLES H. WALKER, DEFENDANTS.
    Decided October 15, 1946.
    Dor the plaintiff, Ira Katchen.

    Dor the defendant, Charles B. Walker.

   Evans, D. C. J.

Judgment was originally entered in this matter after jury trial on May 38th, 1945. Considerable proceedings were thereafter had in the form of application for new trial and appeal, all of which failed as far as the defendant is concerned and culminated in a levy being made upon a bank account of the defendant corporation. .Orders to show cause were argued; and finally the execution was returned satisfied by the constable.

Since that satisfaction the Court of Errors and Appeals of this state has determined in Zuest v. Ingra (Zuest v. Farina), 134 N. J. L. 15; 45 Atl. Rep. (2d) 810, that the District Courts of our state do not have jurisdiction in causes such as originally presented and determined here. Defendant now wants his money back.

Defendant cites many cases to support the right of this court to reopen its judgment but they are not in point, e. g.:

Greenbaum v. Higgins, 7 N. J. Mis. R. 1012; 147 Atl. Rep. 722, was an instance in which the court reopened the judgment because the defendant had not had notice of relisting, which action was based on the inherent power of a court to vacate its judgment, void for want of jurisdiction, because the parties were not in court. To a similar effect was the action taken by this court in Kenter Co., Inc., v. Errath, 21 N. J. Mis. R. 214; 32 Atl. Rep. (2d) 592.

Palansky v. Reich, 11 N. J. Mis. R. 106; 164 Atl. Rep. 701; affirmed, 111 N. J. L. 241; 168 Atl. Rep. 297, was not a granting of a new trial but a vacation of a judgment because of an apparent lack of jurisdiction on the face of the state of demand.

In Zicarelli v. General Finance Co., 14 N. J. Mis. R. 711; 186 Atl. Rep. 726, the judgment was set aside to prevent a palpable fraud. On the trial day defendant’s attorney showed plaintiff’s attorney a full release whereupon plaintiff’s attorney agreed to discontinue and defendant’s attorney left. Instead of doing what he promised, plaintiff’s attorney proceeded to prove case and secured judgment.

In Geithner v. Paechiana, 8 N. J. Mis. R. 384; 150 Atl. Rep. 240, it appears that the case was to be adjourned by agreement of attorneys; but, notwithstanding, the plaintiff’s attorney proceeded to take judgment in absence of defendant’s attorney. To prevent fraud upon opposing counsel and court, the judgment was reopened.

The Supreme Court in Gimbel Bros. v. Corcoran, 15 N. J. Mis. R. 538; 192 Atl. Rep. 715, vacated a judgment despite a previous denial of a rule to reopen. The vacation was upon the basis of its being a void judgment, the affidavit for entry of judgment not disclosing any proof against Mary Corcoran. The Supreme Court said “It is the duty of the court to annul an invalid judgment and the power to do so resides in its inherent jurisdiction and control over its judgments.”

Applicant cites Manowitz v. Kanov, 107 N. J. L. 523; 154 Atl. Rep. 326, as the law for the practice of an order to show cause being the proper method of canceling the judgment and execution.

The question here, however, is different. At the time of the trial the legality of the cause had been established by our Supreme Court, Beasley v. Gottlieb, 131 N. J. L. 117; 35 Atl. Rep. (2d) 49. By the time the Court of Errors and Appeals had in another case, Zuest v. Ingra, determined the lack of jurisdiction in the District Court, all the proceedings had been completed and the judgment satisfied. Query: Has this court the power to order the return of the monies P

It is the established practice of courts of law to exercise such control oyer their proceedings, judgments and process as to see that justice and equity are done with respect to the disposition of the proceeds of a' judgment. Johnston v. Browers, 69 N. J. L. 544; 55 Atl. Rep. 230. Many and varied are the controls exercised by our courts over its processes up to a point of payment and satisfaction, i. e., up to the point in which the processes have been completed and passed beyond the control of the court. In Ferris v. Mancine, 22 N. J. Mis. R. 145; 36 Atl. Rep. (2d) 759, the court concluded that “until the process was finally executed, that is, the money paid to the judgment creditor, control does exist in this court to summarily discharge the levy on the personal property. * * *”

The judgment having been paid and the execution having been returned satisfied the processes of this court were not any longer in operation; and, consequently, the monies had passed beyond the power of this court in this action.

This is supported by the court in Century Transit Co. v. Public Service, 117 N. J. Eq. 520, 524; 176 Atl. Rep. 719, “The court of law out of which the process of execution has issued possesses a summary jurisdiction to control its own process; that jurisdiction is of an equitable nature for the purpose of preventing its own judgments and processes from being the means of working injustice; and that jurisdiction of the law court exists until the process has been finally executed. After the process has been finally executed and the law court has thereby become unable to grant the relief sought, this court, may in proper circumstances, afford a remedy.”

Order dismissed.


author: Burling, C. C. J.

text:
    Atlantic County Circuit Court.
    REBECCA A. FAIR AND FREDERICK L. FAIR, PLAINTIFFS, v. ATLANTIC CITY HOSPITAL, A CORPORATION OF THE STATE OF NEW JERSEY, DEFENDANT.
    Decided December 20, 1946.
    For the plaintiffs, David B. Brone.

    For the defendant, Bolie, Miller & Bepetio (by Harry Miller).
   Burling, C. C. J.

This is a motion to strike the complaint. For the purpose of this motion, the defendant admits the truth of all facts well pleaded in the complaint and all inferences of fact which can be legitimately drawn therefrom. The sufficiency of the complaint, however, must be determined from the facts therein properly alleged from which a legal duty and the liability for the violation thereof are deduced.

From the complaint, it appears that the defendant is a charitable institution and that the plaintiff Bebeeca A. Fair was admitted to the defendant’s hospital for the purpose of receiving medical care and treatment and requested that she be placed in a private room in said hospital for treatment, medical and nursing attention commensurate with her needs, and alleges that the defendant failed to provide competent and efficient administrators, servants and agents to properly procure, inspect, provide, maintain and arrange suitable bedding, apparatus and equipment for the treatment of said plaintiff and for her comfort and convenience, and by reason of their incompetence and inefficiency which was known or should have been known to the defendant, placed faulty and improper equipment at the disposal of the plaintiff, namely a mattress too wide for the bed occupied by her and the arranging of a night cord for summoning a floor nurse in such a way that the cord could not be reached conveniently by the plaintiff, and as a result the plaintiff in using such faulty bedding, apparatus and equipment was caused to fall from the bed occupied by her and suffer the injuries therein set forth. She brings her action for resulting damages and the husband, Frederick L. Fair, sues per quod.

The objections to the complaint founded upon procedural defects subject to special demurrer are: 1—because the complaint is so framed as to embarrass and delay a fair trial, and 2—because the first count is duplicitos. They may' be well grounded. However, the plaintiffs in their brief, assert: “The matter sub judice, however, is founded and sounds in tort. Whether the duty imposed by law upon the defendant springs from contract, be it express or implied, is of no moment. The gravamen of the cause of action is the duty which the law imposes upon-the defendant,, the breach of which'results in a sanction enforcible by action.”

Accordingly immediate resort and disposition is made of the reason of the general demurrer, which reads as follows:

“3. Because neither of said counts discloses a good and sufficient legal cause of action.

“(a) In that the defendant is-a charitable organization and the plaintiff, Rebecca A. Fair at the time alleged in' the complaint was a beneficiary of the charity of the defendant.” The question of liability of a charitable institution to respond in damages for negligence of its servants has been many times before the courts. Conflict exists among the courts of the several states concerning such liability. The subject has been the cause of prolific judicial opinion. It is one upon which there has been and is not only a conflict of decisions among the courts, but also a remarkable diversity of opinion among the courts which agree in their ultimate decision as to the reason or ground for so deciding. Andrews v. Young Men’s Christian Association of Des Moines (Supreme Court, Iowa, 1939), 226 Iowa 374; 284 N. W. Rep. 186; President and Directors of Georgetown College v. Hughes (U. S. Cir. of Appeals, District of Columbia, 1942), 76 U. S. App. D. C. 123; 130 Fed. Rep. (2d) 810; Gregory v. Salem General Hospital (Supreme Court, Ore., 1944), 175 Ore. 464; 153 Pac. Rep. (2d) 837.

There are two rules: One is known as the “absolute or unqualified” immunity rule and the other is known as the "qualified” immunity rule. Yarious reasons are given by the courts in support of the respective rules applied by them. Among those reasons are “public policy” “trust fund theory,”, "waiver theory,” “respondeat 'superior theory.” The subject is discussed in 10 Fletcher’s Cyc. Corp. (Perm, ed.) and among others in the following cases: Roosen v. Peter Bent Brigham Hospital, 235 Mass. 66; 126 N. E. Rep. 392; Vermillon v. Women’s College of Due West (Supreme Court, S. C., 1916), 104 S. C. 197; 88 S. E. Rep. 649; Schumacher v. Evangelical Deaconess Society of Wisconsin, 218 Wis. 169; 260 N. W. Rep. 476.

For some time the courts of England and of the United States have been in a state of divergency as to the reason for the rule. 14 C. J. S., Charities 544 et seq., § 75. Fletcher in his work on Corporations (volume 10, permanent edition), paragraph 4923, page 574, says:

“Some courts, however, hold broadly that a patient in a hospital or other inmate of a charitable corporation cannot recover for the negligence of its employees or other servants on the ground that a charitable institution is not responsible to those who avail themselves of its benefits, for injury sustained through the negligence or torts of its managers, agents and servants, irrespective of its due care in the selection of such agents and servants, the immunity being predicated squarely on the ‘waiver’ or ‘assent theory’ or on the doctrine of public policy; this, of course, is equivalent to extending absolute, unqualified immunity to charitable corporations in so far as beneficiaries or inmates are concerned.”

And in paragraph 4927, at pages 589, et seq., in the same volume, the author states:

“Many of the courts base their judgments, exempting charitable corporations from liability for tort, upon the so-called doctrine of public policy and give as a reason that such institutions are inspired and supported by benevolence and devote their assets and energies to the relief of the destitute, sick and needy, and that they should be encouraged and held exempt from liability for tort, and that to do otherwise would operate to discourage the charitable inclined, dissipate the assets of such institutions in damage suits, and ultimately destroy them.”

The case of first impression upon the subject of charitable exemption from tort liability relating to a hospital in New Jersey is D’Amato v. Orange Memorial Hospital (Court of Errors and Appeals, 1925), 101 N. J. L. 61, 65; 127 Atl. Rep. 340, 341. It was held: '

“In our opinion public policy requires that a charitable institution maintaining a hospital be held not liable for injuries resulting to patients through the negligence or carelessness of its physicians and nurses, even if the injured person were a pay patient—payment for board, medical services and nursing in such case going to the general fund to maintain the charity.”

The court assigned no specific theory in support thereof but- it is to be taken to mean that it would be contrary to the interests of society that funds dedicated to a charitable use be permitted to be diverted or diminished by the payment of judgments resulting from the torts of the servants or agents of those administering the charity.

Mor has the next following decision done so. Boeckel v. Orange Memorial Hospital (Supreme Court, 1932), 108 N. J. L. 453; 158 Atl. Rep. 832; affirmed in (Court of Errors and Appeals, 1933), 110 N. J. L. 509; 166 Atl. Rep. 146.

But such a position is borne out in Simmons v. Wiley M. E. Church (Court of Errors and Appeals, 1933), 112 N. J. L. 129 (at p. 132); 170 Atl. Rep. 237, 238, where it is defined as follows:

“How, it is quite within reason to declare the public policy forbids a charitable institution being held constantly to the danger of damages for untoward results in some of the continuous ministrations to the direct beneficiaries of its charitable contributions; but such a rule is not invoked with equal justice, nor indeed by virtue of any public requirement, in the case of tortious injuries to those outside of its benefits, neither seeking nor receiving the same. It may well be sound public policy to avoid a diversion of trust funds from the direct object of their charitable donor by forbidding their application to damages for the negligence of the charity’s servants where the injured party participates in the charity’s bounty, but no charitable organization, no matter how lofty in character the motive or purpose, should be permitted with impunity to set up and operate machinery and thereby injure by negligence those unconcerned in and unrelated to that which the donor brought into being or supports in operation.”

And in Kolb v. Monmouth Memorial Hospital (Court of Errors and Appeals, 1935), 116 N. J. L. 118 (at p. 119); 182 Atl. Rep. 822, 823, the policy is summarized and defined as follows:

“In our state we have adopted and followed what we believe to be the majority view, i. e., the public policy theory. Thus we deny the right of recovery on the part of: those who have a valid claim against a charitable institution, based on actionable negligence, but who are either the recipients of the benefactions, or the beneficiaries of the charitable institution sought to be held liable; but we permit the right of recovery against charitable institutions, for their actionable negligence, on the part of Those unconcerned in and unrelated to that which the donor brought into being and supports in its operation.’ Simmons v. Wiley Methodist Episcopal Church, 112 N. J. L. 129; 170 Atl. Rep. 237.”

Thus, the unqualified immunity rule was broken through so as to permit recovery by a third party. But the exemption from suit of a beneficiary is a positive and absolute rule in New Jersey.

Since the public policy has been fixed by judicial pronouncement, the rule must be respected and followed until the legislature or the appellate court decrees otherwise. Hammond v. County of Monmouth (Supreme Court, 1936), 117 N. J. L. 11 (at p. 12); 186 Atl. Rep. 452; Kobylarz v. Mercer (Court of Errors and Appeals, 1942), 130 N. J. L. 44 (at p. 47); 31 Atl. Rep. (2d) 208; Gregory v. Salem General Hospital, 175 Ore. 464; 153 Pac. Rep. (2d) 837 (at p. 845).

Despite this determined public policy by the highest court of New Jersey, the present proposition is advanced by the plaintiff and this court is asked to whittle away from that policy by the proposition that the alleged actionable negligence is administrative.

There is no merit in the plaintiff’s contention. There cannot be any logical distinction between the tort feasors when all act under the charitable corporation. The corporation acts through its servants or agents—whether they be directors, trustees, officers, doctors, nurses or a hospital orderly. The distinction is not one of logic but one of policy.

In Roosen v. Peter Bent Brigham Hospital (ante), the court held that there was no distinction between the liability of the charity for the negligence of its subordinate servants and that of its managers and said:

“If a hospital is to be held responsible for negligent treatment of patients, there seems to us to be no sound ground for a distinction between the negligence of the managers of the hospital and the negligence of subordinate servants as a basis of liability. A sound ground for distinction between exoneration from liability for the negligence of managers and that of subordinate agents seems equally wanting. Since it is settled that there is no liability for negligence of the latter, it must follow that there is none for that of the former.”

In Ettlinger v. Trustees of Randolph-Macon College (U. S. Circuit Court of Appeals, 4th Circuit, 1929), 31 Fed. Rep. (2d) 869, an action was brought by a student of the defendant to recover damages for personal injuries sustained by him when the buildings of the defendant were destroyed by fire. The plaintiff attempted to distinguish the cases holding the charitable institutions’immune from liability due to the negligence of its agents or servants to a beneficiary, on the ground that his injuries were caused not through the negligence of a minor employee, but through the negligence of the manager of the corporation itself in failing to maintain its buildings in a safe condition. The court, in refusing to accept this distinction and holding that the plaintiff was not entitled to recover, said:

“We do not think, however, that this is a valid distinction. If there had been negligence in the respects claimed, it would have been the negligence of those who were carrying on the charitable work in which the corporation was engaged; and we see no more reason for diverting the funds of the charity on account of their negligence than there would be if the negligence had been that of any minor employee. The exemption arises not from anything relating to the grade of agent or employee, but from the principle that the funds of a charity ought not be diverted from the purpose for which they have been given, to pay damages to a beneficiary on account of the wrongs or negligence of those who administer the charity.”

In Stearn v. Association of Bar, 154 Misc. 71; 276 N. Y. S. 390, the plaintiff was injured by a fall when she stumbled over the marble sill of a doorway on the Bar Association premises when she was on such premises as a beneficiary. The court held that the Bar Association was not responsible on the theory that the negligence of the defendant was due to the acts of the administrative officers, and at p. 394 of 276 N. Y. S., said:

“The public policy which forms the basis of rule should be as broad as the situations it is intended to cover. It is designed to protect charity from claims of litigation. As between the dispenser of public benevolence and unfortunate victim of negligence, the law has determined to protect the former at the expense of the latter. As a matter of public policy, no distinction based upon logic or expediency can be made between administrative and non-administrative acts. A public policy, so explicitly enunciated, must be permitted to function in a vital manner to carry out the ends for which it was designed.”

The complaint does not set forth a cause of action. The motion to strike the complaint is granted. Appropriate rule may be presented.


author: Keeameb, Commissionee.

text:
    Division of Tax Appeals.
    TOWNSHIP OF LANDIS, PETITIONER, v. BOROUGH OF VINELAND, RESPONDENT.
    Decided November 26, 1946.
    For the petitioner, Solve Tuso and Milstead & McElroy (by Albert McElroy).

    For the respondent, Philip Lipman and William Shepp.

   Keeameb, Commissionee.

This is an appeal from a judgment of the Cumberland County Board of Taxation canceling an assessment for the year 1943 in the sum of $350,000 levied by Landis Township, petitioner herein, against certain personal property owned by the respondent, Borough of Yineland. The assessment, as originally made, incorrectly named the Yineland Electric Company, as owner, but the respondent has waived any objection to this formal defect, and the erroneous designation is not an issue herein.

The facts have been stipulated by the parties. The Borough of Yineland is the owner and operator of an electric power plant within its own municipal limits and serves consumers residing therein. The distribution system extends into Landis Township which adjoins the Borough of Yineland. The particular property which is the subject-matter of the assessment consists of poles, lines and other electrical equipment maintained by Vineland and located wholly within the corporate limits of Landis Township. This equipment is maintained by Vineland for the sole purpose of distributing electrical energy to consumers who reside in Landis, for which a service charge is made by Vineland.

The sole issue for determination is whether Landis Township may subject the within property to a local ad valorem tax, or whether for any reason it should be exempted or excluded from local taxation.

R. S. 54:4-1; N. J. S. A. 54:4-1 of the G-eneral Tax Act provides:

“All property, real and personal, within the jurisdiction of this state not expressly exempted from taxation or expressly excluded from the operation of this chapter shall be subject to taxation annually under this chapter at its true value, and shall be valued by the assessors of the respective taxing districts. Property omitted by the assessors may be assessed as hereinafter provided. All property shall be assessed to the owner thereof with reference to the amount owned on October first in each year, and the person so assessed for personal property shall be personally liable for the taxes thereon.”

In the case of Trustees v. Trenton, 30 N. J. Eq. 667, it was held that the general language of statutes prescribing what property shall be taxable, such as the above section, cannot be construed to include the property of any political subdivision of the state. The rule was laid down that such property is not taxable “unless there is a clear expression of intent to include it.”

Since the decision in that case, however, our Tax Act has been amended to include an exemption provision which now appears in R. S. 54:4-3.3; N. J. S. A. 54:4-3.3, the first sentence of which reads as follows:

“The property of the United States and, except as otherwise provided by article 1 of this chapter (Sec. 54:4-1, et seq.), the property of the state of Hew Jersey; and the property of the respective counties, school districts and taxing districts, when located therein and used for public purposes, or for the preservation or exhibit of historical data, records or property shall be exempt from taxation under this chapter, but this exemption shall not include real property-bought in for debts or on foreclosure of mortgages given to secure loans out of public funds or out of rsoney in court, which property shall be taxed unless devoted to public uses.”

The petitioner urges that the foregoing, speKdfieally exempting municipal property “when located therein and used for public purposes,” when read together with R. S. 54:4-1; N. J. S. A. 54:4-1, evinces a legislative intent to tax all other property of a municipality not so exempted. It is within this latter category that petitioner claims the subject property must fall.

The same contention was considered in the case of Jersey City v. Blum (Court of Errors and Appeals), 101 N. J. L. 93; 127 Atl. Rep. 214, wherein property of Jersey City was assessed for taxation by surrounding municipalities wherein the property was located. The act under which that property was assessed was section 203 of the Tax Act of 1918, which is practically identical with R. S. 54:4-3.3; N. J. S. A. 54:4-3.3, above quoted. It read:

“* * * the following property shall be exempt from taxation under this act, namely * * * property of the respective counties, school districts and taxing districts, when located therein and used for public purposes.”

The assessment obviously was made on the theory that the property not coming within the exemption since not located in Jersey City was subject to taxation. The foregoing section was held unconstitutional as being a “classification of the property of taxing districts solely by reference to its location” and thus was not a genera-l law, citing Essex County Park Commission v. West Orange, 77 N. J. L. 575; 73 Atl. Rep. 511. It was thus held that the property'was not subject to taxation, the court stating:

“Considering that we should accept the decision in the West Orange case as finally determining that the scheme of classification of the property of taxing districts for the purpose of taxation contained in section 203 of the Revision of 1918 is unconstitutional, the alternative proposition of counsel for the appellants remains to be considered, namely, whether the effect of the condemnation of this provision is to bring the whole of the property of the various taxing districts of the state within the operation of section 202 of the statute; in other words, to subject it to taxation in the same manner and to the same extent that the property of individuals is taxed. We consider that the proposition is legally unsound. It is entirely settled that courts will not construe the general language of statutes prescribing the property which shall be taxable as applying to the property of the state or its political subdivisions. Trustees of Public Schools v. Trenton, 30 N. J. Eq. 667, and cases cited. Such property, although the statute contains no express provision exempting it, is, by implication, excluded from its operation, unless the act contains a clear expression of a legislative purpose that it shall be included. Newark v. Verona, 59 N. J. L. 94; 34 Atl. Rep. 1060. It is, of course, clear that the provisions of the Eevision of 1918, now under consideration, contain nothing expressive of an intent on the part of the legislature that all of the property of the various taxing. districts of the state should be included in the mass of property subjected to taxation under the provision of section 202 [N. J. S. A. 54:4-1] $ $ * »

The petitioner relies on the case of The Essex County Park Commission v. State Board of Tax Appeals (Supreme Court), 129 N. J. L. 336; 29 Atl. Rep. (2d) 739, as authority for the view that the phrase “when located therein” contained in R. S. 54:4-3.3; N. J. S. A. 54:4-3.3, above quoted is neither a necessary nor essential part of the section and may be ex-scinded therefrom and that the statute, with that phrase deleted, is constitutional and that thus the test for exemption is public use alone. The court in this case held:

“* * * It is our view that the clause in the section (‘when located therein’) which was struck down in the Blum and West Orange cases was neither an essential nor a necessary part of th§ section. Without it the classification for exemption based on use is consistent, meritorious as a matter of fair and just distinction and, in our judgment, valid. * *

The petitioner further urges in reliance upon the foregoing case, that the subject property is not “in public use” and therefore subject to taxation.

The effect of this Essex County Park Commission decision is that the phrase “when located therein” may be eliminated, and the statute remain operative, with exemption depending upon public use. We conceive this to be incompatible with the rationale of the Court of Errors and Appeals decision in Jersey City v. Blum, supra. We view that decision as holding that the entire exemption provision involved in that case was unconstitutional and not merely that the phrase “when located therein” should be removed.

The case of Township of Teaneck v. State Board of Tax Appeals, 110 N. J. L. 28; 164 Atl. Rep. 895, a Supreme Court opinion affirmed by the Court of Errors and Appeals in 111 N. J. L. 242; 168 Atl. Rep. 449, for the reasons expressed below, is foremost among the many cases citing the Blum ease as further authority for the view that the exemption provision involved therein was held unconstitutional in toto. In that case Teaneck attempted to tax a parcel of land belonging to Bergen County situate in Teaneck. The land was vacant and not used for any purpose. The court held the land not taxable, stating:

“The Tax Act of 1918 (Pamph. L., p. 847) provides by section 202 [N. J. S. A. 54:4-1], that ‘all property, real and personal, * * * not expressly exempted by this act or excluded from its operation, shall be subject to taxation annually under this act at its true value, * *

“By section 203 [N. J. S. A. 54:4-3.3], several times amended, certain exemptions are declared. The amendment in force on October 1st, 1928, was that of 1927 (Pamph. L., p. 790), which exempts ‘property of the respective counties * * * when located therein and used for public purposes He He $ ?

“But for the decision of the Court of Errors and Appeals, touching these very sections, in Jersey City v. Blum, 101 N. J. L. 93, 96; 127 Atl. Rep. 214, it might well be argued that the broad language of section 202, particularly when read with section 203 as quoted, evinced an intent to subject all municipal property to taxation unless exempted. But the court read, them otherwise, holding that under the case of Essex County Park Commission v. West Orange, 77 Id. 575, the exemption clause quoted from section 203 was unconstitutional as creating an improper classification dependent on location: and that with that exemption clause struck out of the stataute, the language of section 202 must be construed as not intended to cover property of the state or its political subdivisions; citing Trustees v. Trenton, 30 N. J. Eq. 667.

“We deem that the present case is controlled by the decision in Jersey City v. Blum: for while part of the property dealt with in that case was held taxable under a statute of 1910 not here applicable, the remainder was held exempt under the construction placed by the court on section 202. It is true that that remainder lay outside of Jersey City: but to say that the unconstitutionality of the clause in section 203 is to be invoked in favor of ‘outside’ property and not as regards ‘inside’ property is to raise in another way precisely the distinction that was condemned in the decision.

“Following the ruling in Jersey City v. Blum, the question whether the lands now under discussion aré or are not used for public purposes becomes irrelevant and academic.”

It becomes immediately apparent from a reading of the foregoing opinion that the entire exemption provision involved in the Blum case was considered as unconstitutional as otherwise the question of public use would of a certainty not be considered “irrelevant and academic.”

We are constrained to follow the holdings in the Blum and Teaneck cases on an issue of constitutionality, since they represent the latest pronouncements of the court of highest authority in this jurisdiction.

• Apart from the question of exemption under R. S. 54:4-3.3; N. J. S. A. 54:4-3.3, there is yet another aspect of the case to be considered. We refer to R. S. 54:31-45, et seq.; N. J. S. A. 54:31-45, et seq., providing'for taxation based upon gross- receipts, which may be found in the -Tax Act under Part 5 thereof entitled “Taxation of certain-public utilities.”

R. S. 54:31-45; N. J. S. A. 54:31-45; reads as follows:

“The purpose of this Act is to provide a complete scheme and method for the taxation of street railway, traction, gas and electric light, heat and power corporations using or occupying the public streets, highways, roads or other public places, to exempt from taxation other than imposed by this Act the franchises, stock and certain property of such corporations and for the taxation of the property of such corporations not so exempted from taxation; * *

R. S. 54:31-47; N. J. S. A. 54:31-47, reads:

“Street railway, traction, gas and electric light, heat and power corporations using or occupying public streets, highways, roads or other public places, and their property and franchises, shall be subject to taxation only as in this act provided. Any such corporation shall not be subject to any other taxes upon its property, franchises, stock or gross receipts, and the shares of stock of any such corporation shall not be taxed in the hands of shareholders.”

In Salem and Pennsgrove Traction Co. v. State Board, 97 N. J. L. 386; 117 Atl. Rep. 401; affirmed, 98 N. J. L. 570; 119 Atl. Rep. 926, the court, in holding the gross receipts statute constitutional, said:

“* * * p|. -¡;s ^thin the province of the legislature to exempt certain classes of corporations from personal property taxation, and treat them as a separate class by themselves, and, as long as those of that class are taxed according to uniform rules, no exception can bo taken to that method. Public utilities, by reason of the peculiar nature of their business, form a separate and distinct class in themselves, and, as such, can be used as a proper classification for the purpose of taxation without violating the constitution.”

The Supreme Court in Jersey Central Power and Light Co. v. City of Asbury Park, 128 N. J. L. 141; 24 Atl. Rep. (2d) 526; affirmed, 129 N. J. L. 253; 29 Atl. Rep. (2d) 139, in referring to the gross receipts statute said:

“What has been done here does not constitute an exemption in the true, unqualified sense, but rather the substitution of a gross receipts tax for the local direct tax.”

See, also, Jersey Central Power and Light Co. v. City of Asbury Park (State Board of Tax Appeals), 21 N. J. Mis. R. 372: 32 Atl. Rep. (2d) 182.

Thus it may be seen, by express provision of the gross receipts statute and the cases construing it, that all corporations within the classification of public utilities operating street railway, traction, gas and electric light, heat and power plants are excluded from the imposition of loca ad valorem taxes.

It is significant that title 40 of the Eevised Statutes, although not a tax act, contains a legislative pronouncement that municipalities supplying electricity, gas, or steam to adjoining municipalities or inhabitants thereof, are to be treated in the same fashion as are other public utility corporations. This title deals with municipalities generally, and the following pertinent sections thereof appear under chapter 62 entitled “Public Utilities Municipality Owned.”

R. S. 40:62—23; N. J. S. A. 40:62—23, provides:

“No municipality shall enter into any contract or supply any electricity, gas, steam or other product to any adjoining municipality or the inhabitants thereof, or to any county, unless such municipality, in supplying electricity, gas, steam or other product beyond its corporate limits, complies with all laws, regulations or orders applicable to private corporations, owning or operating any electric, gas, steam or other plant, or distributing or supplying electricity, gas, steam or other product, and unless such municipality pays taxes, including franchise licenses or taxes, the same as would be paid if such plant or equipment were owned by a private corporation, and unless the board of public utility commissioners shall, after notice and hearing, determine and certify that such adjoining municipality or such county is not adequately and properly served by an existing company.”

R. S. 40:62—24; N. J. S. A. 40:62—24, provides:

“Every municipality in supplying electricity, gas, steam or other product beyond its corporate limits is hereby declared to be a public utility. The board of public ■ utility commissioners shall have the same supervision and regulation of, and jurisdiction and control over such municipality in respect to its acts in supplying electricity, gas, steam or other product beyond its corporate limits, and of and over the property, property rights, equipment, facilities and franchises used in supplying electricity, gas, steam or other product beyond its corporate limits as over other public utilities. Every such municipality shall be subject as to its service, accounts, property rights, equipment, franchises, extensions, reports, rates, issuance of bonds or other indebtedness maturing in more than one year from the date thereof, to the jurisdiction of the board of public utility commissioners to the same extent as other public utilities.”

Under these sections a municipality operating the public utilities named therein may not make distribution in an adjoining municipality unless it pays the same taxes which a private corporation operating those public utilities is required to pay. It is apparent that a private public utility corporation under these circumstances, owning the subject property, could have been taxed only under the gross receipts statute.

Por the reasons stated, we are of the opinion that the personal property involved herein is not subject to the tax levied by the petitioner. The judgment of the Cumberland County Board of Taxation canceling the assessment is affirmed, and the appeal filed herein dismissed.


author: Kreamee, Commissioner.

text:
    Division of Tax Appeals.
    IN THE MATTER OF THE APPEAL OF CITY OF JERSEY CITY, v. MARITIME PETROLEUM CORPORATION, FOR THE YEAR 1943.
    Decided November 12, 1946.

      Por the petitioner, Charles A. Rooney (by Arthur Mullen and Marcel E. Wagner).
    Por the respondent, Milton, McNulty & Augelli (by John Milton, Jr.).

   Kreamee, Commissioner.

The City of Jersey City levied a personal property assessment in the amount of $175,000 against products known as No. 2 fuel oil and kerosene owned by Maritime Petroleum Corp., a corporation of the State of New York, taxpayer herein. These products were located in tanks owned by Tankport Terminals, Inc., situate within the taxing district of the city. An appeal was taken by the taxpayer to the Hudson County Board of Taxation, which Board set aside and canceled the assessment. The city now appeals from the County Board judgment and seeks to have the assessment restored.

Maritime resists the appeal on two grounds:

(1) That such fuel as is to be found on the premises of Tankport is there only temporarily stored, being intended for transportation and disposal by and to customers of Maritime, so that no taxable situs in Jersey City attaches thereto as being in interstate commerce and within the protection of the commerce clause of the federal constitution, article 1, section 8, clause 3; and (2) that the fuel admittedly owned by Maritime was stored in tanks of the Tankport Terminals, Inc., a corporation of New Jersey, engaged in the business bf storage and warehousing petroleum products and by reason of such storage was thereby exempt from taxation under provisions of R. S. 54:4-3.20; N. J. S. A. 54:4-3.20: “all personal property stored in a warehouse of any person, co-partnership, or corporation engaged in the business of storing goods for hire shall be exempt from taxation.”

Maritime Petroleum Corp. is in the business of buying and selling fuel oil and kerosene and its principal suppliers are the Standard Oil Company of New Jersey, and the Shell Oil Company. The location’of the actual source of supply is referred to in the testimony as the “gulf.” During the months of June, July and August of any year, Maritime lines up its customers and enters into contracts for the furnishing of its fuel products to them. These contracts are actually entered into at a time when Maritime has as yet not received title to any oil from its suppliers. The amount of fuel contracted to be sold by Maritime is the factor governing the quantity purchased by it. The suppliers then ship the product by tanker from the gulf to the storage point at Tankport where the same is pumped into the tanks leased by Maritime and title to the fuel is then transferred to Maritime. The tankers in which the fuel is shipped are not owned by Maritime, nor does that company maintain any employees where the fuel is stored. The evidence discloses that the fuel remains in storage for an indeterminate period, where it is mingled with other fuel owned by other companies. The fuel is not processed while it remains at Tankport. '

The ultimate destination of the fuel is completely dependent upon the customers of Maritime. If the particular customer has inland storage, the product moves by truck, or if the customer has water storage, it is removed by barge. But in both eases the product is taken in facilities and equipment either owned or hired by the customers of Maritime.

We are driven to the conclusion that the subject products, after being unloaded and mingled with the products of others, and remaining at Tankport for an indeterminate period, depending upon the will of the customers of Maritime, cannot be considered as being in interstate commerce. The ease at bar comes squarely within the purview of a very recent pronouneement upon the subject by our Court of Errors and Appeals. We refer to Independent Warehouse v. Scheele, 134 N. J. L. 133; 45 Atl. Rep. (2d) 703.

In that ease the Erie Railroad, at the direction of its shippers, stored coal at storage warehouse facilities in New Jersey, maintained through a separate corporation wholly owned or controlled by Erie. The coal was mixed with the product of other companies and remained at the storage point known as “Coalberg” for an indefinite period subject to the will of the owner, who would decide when and where it was to be shipped. It was urged in support of the argument that the coal in storage was in interstate commerce, that the warehouse facilities were employed solely to provide regular in-transit service to shippers for interstate shipment of coal. The court said:

“Thus the continuity of the carriage in interstate commerce is broken when the carried commodity is unloaded and stored at Coalberg for an indefinite period, subject to the owner’s disposal, and thereby the coal becomes intermingled with the general mass of property having a situs within the state, and subject to the state’s dominion and liable to taxation as such; and. the stored coal retains that character and status until it is again shipped in interstate commerce. It does not become the subject of carriage in interstate commerce by reason of its conveyance by rail from Coalberg to other points of New Jersey. * * *

“Property actually in transit in interstate commerce is exempt from local taxation. But if property be stored Tor an indefinite time during such transit, at least for other than natural causes or lack of facilities for immediate transportation, it may be lawfully assessed by the local authorities.’ Kelley v. Rhoads, 188 U. S. 1; 23 S. Ct. 259, 261; 47 L. Ed. 359. * * *

“Actual transit is the determinant. Here, movement in interstate commerce had ceased when the storage for an indefinite period began, and the coal then came within the dominion and protection of the state. As in the case of Susquehanna Coal Co. v. South Amboy, 76 N. J. L. 412; 69 Atl. Rep. 454; affirmed, 77 N. J. L. 796; 72 Atl. Rep. 361, there was something more than an incidental interruption of the continuity of the transportation through the state. On a bill in equity to restrain the collection of taxes levied in that case, the federal Supreme Court expounded the principle that, even though the delay in interstate transportation was but temporary, if it was availed of for ‘a business purpose and advantage/ the commodity during that particular period ‘secured the protection of the state/ and it was therefore subject to local taxation. Susquehanna, Coal Co. v. City of South Amboy, 228 U. S. 665: 33 S. Ct. 712, 714; 57 L. Ed. 1015.

“The case of Lehigh and Wilkesbarre Coal Co. v. Borough of Junction, 75 N. J. L. 68; 66 Atl. Rep. 923; affirmed, Id., 75 N. J. L. 922; 68 Atl. Rep. 806; 15 L. R. A. (N. S.), 514, is to the same effect. It does not matter that there the goods were owned by the carrier. That does not serve to vary the application of the principle. The determinative question is whether there was a cessation of interstate commerce when the goods were placed in storage at Coalberg for an indefinite period of time; and it must be resolved in the affirmative. To borrow the language of Mr. Justice McKenna in the case of General Oil Co. v. Crain, 209 U. S. 211; 28 S. Ct. 475, 482; 52 L. Ed. 754, the coal ‘required storage there—the maintenance of the means of storage; of putting it in and taking it from storage. See, also, State, Detmold and Cox, Pros., v. Engle, 34 N. J. L. 425; State, Lehigh & W. Coal Co., Pros., v. Carrigan, 39 N. J. L. 35.’

In a similar case the Supreme Court of Delaware in State v. Crane Hook Oil Storage Co., 2 Terry 194; 18 Atl. Rep. (2d) 427, 429, said:

“The regulatory power of Congress does not attach until the transit begins, and conversely, the power ceases when the movement reaches the point where the parties originally intended that it should finally end. The crucial question to be settled in determining whether personal property moving in interstate commerce is subject to local taxation is that of ita continuity of transit, Carlson Petroleum Co. v. Vial, 379 U. S. 95; 49 S. Ct. 292; 73 L. Ed. 626; and if property is detained for an indefinite time during transit, at least for other than natural causes or lack of facilities for immediate transportation, it is not during that time the subject of interstate commerce but is subject to the operation of state laws. Susquehanna Coal Co. v. South Amboy, 228 U. S. 665; 33 S. Ct. 712; 57 L. Ed. 1015.”

See, also, Socony Vacuum Oil Co. v. Borough of Edgewater, 23 N. J. Mis. R. 199; 42 Atl. Rep. (2d) 775.

As exemptions under the General Tax Act are allowed only upon compliance with the statute, the burden of proof that the statute has been complied with rests upon the party claiming the exemptions.

“No allowance * * * shall be made for personal property * * * claimed to be exempt from taxation, unless a sworn claim therefore shall be made * * ” R. S. 54:4-15; N. J. S. A. 54:4-15.

It was held in Hardin v. Morgan, 70 N. J. L. 484; 57 Atl. Rep. 155; affirmed, 71 N. J. L. 342; 61 Atl. Rep. 1118, that:

“The right to exemption is a matter of grace, which the statute confers upon a compliance with its requirements. It is essential, to secure the exemption, that it shall be applied for within the time and in the manner pointed out by the statute; otherwise the exemption is lost * * *. Exemption from taxation is a favor, and the statutes under which it is allowed must be strictly complied with. Compliance is a condition precedent to the right of exemption.”

The respondent has failed to carry the burden of showing the filing of a sworn statement. In fact, the testimony reveals an' admission by the respondent that such statement was not filed. Under these circumstances, no exemption can be allowed. Frigidaire Corp. v. City of Newark (State Board, filed February 23d, 1937); Ballmill Lumber and Sales Corp. v. City of Newark (State Board, filed May 29th, 1939).; Continental Purchasing Co., Inc., v. City of Newark, 18 N. J. Mis. R. 204; 12 Atl. Rep. (2d) 133.

Upon the question of valuation we are of the opinion that a valuation of $85,504.24 should be placed upon the personalty in accordance with the proof submitted by the' taxpayer. As stated, this valuation was based upon an average quantity of fuel belonging to the taxpayer over the twelve month period of operation. The figures were taken from the books of the company from month-end inventories.

Provision for valuation predicated upon an estimated average of the personalty assessed is contained in the statute (R. S. 54:4-11; N. J. S. A. 54:4-11), which reads:

“Personal property consisting of stocks in trade and materials used in manufacture in this state, which shall include raw materials, fuel, goods in process of manufacture and completed products, shall be estimated at the average of such personalty located in the taxing district during the year preceding the date as of which the assessment is made, or the average for such portion of the year that the property may be in the possession of the person assessed.”

It will be seen that no method of averaging is found in the statute but it has been held in General Motors Corp. v. State Board, 125 N. J. L. 574; 16 Atl. Rep. (2d) 632, that “month end inventories ascertained from the taxpayer’s books and records furnish a fair basis of arriving at an average.”

The judgment of the Hudson County Board of Taxation, cancelling the assessment, will be reversed, and the assessment restored to the extent of $85,504.24.


author: Burling, S. 0. C.

text:
    BENNETT F. TOUSLEY, PLAINTIFF, v. ATLANTIC CITY AMBASSADOR HOTEL CORPORATION, A CORPORATION, DEFENDANT.
    Decided January 3, 1947.
   Burling, S. 0. C.

This is a motion to strike the complaint. Bor the purpose of this motion, the defendant admits the truth of all facts well pleaded in the complaint and all inferences of fact which can be legitimately drawn therefrom.

This action is upon an integrated contract. The contract is between the defendant, the owner and operator of a hotel in Atlantic City known as the Ambassador Hotel, and the plaintiff to engage his services as managing director thereof. Paragraphs 3 and 4 of the complaint allege:

“3. On or about the thirty-first day of December, 1945, plaintiff and defendant entered into an agreement wherein and whereby defendant engaged and employed the plaintiff to act as Managing Director of the Ambassador Hotel in Atlantic City, New Jersey, and take active charge of the management and operation of said hotel and to devote all of his time and efficient and conscientious efforts to the management and operation of said hotel and the promotion of its business, which agreement was to extend for a period of three years from November 1st, 1945, to October 31st, 1948, and for which services as Managing Director the plaintiff was to receive, and defendant agreed to pay the plaintiff, the sum of $15,000, per annum in equal monthly installments of $1,250 at the end of each calendar month. That together and in addition to, the fixed salary hereinabove mentioned, plaintiff was to receive, and defendant agreed to pay to plaintiff, 3% of the net earnings of the Ambassador Hotel for the twelve months period ending on December 31st of each year during the term of said contract. A copy of said agreement is attached hereto, made a part hereof as though fully herein set forth and marked Exhibit eA.’

“4. That in accordance with the terms and the provisions of said contract, plaintiff entered upon the performance of his duties as Managing Director of the Ambassador Hotel and performed all and singular the terms and conditions required of him as Managing Director of the Ambassador Hotel and performed all and singular the terms and conditions required of him under said agreement and continued in the performance of said duties until on or about the twenty-sixth day of April, 1946, at which time defendant without any just cause or reason, and in violation of the terms and conditions of the agreement hereinabove mentioned, discharged the plaintiff from his said position as Managing Director of the Ambassador Hotel and refused to pay him the sums of money becoming due and owing to him under the terms and conditions of said contract hereinabove mentioned thereby breaching said agreement.”

In disposing of this motion, the objection to paragraph 7 of the complaint will be first dealt with. Paragraph 7 reads as follows:

“7. As a further result of the action of the defendant in dismissing the plaintiff from its employ before the expiration of said agreement, plaintiff has suffered and sustained injury and damage to his reputation as a Managing Director among the owners of hotels throughout the country as a result of which he has been unable to obtain employment as such Managing Director by reason of his dismissal by the defendant and the unlawful termination of his employment under the terms of said agreement, which damage directly and naturally resulted in the ordinary course of events from the action of the defendant in dismissing the plaintiff from' its employ before the expiration of said agreement for which plaintiff will claim special damages.”

By the brief of the defendant it is asserted reasons 3, 4, 6, 6 are directed thereto. They read as follows:

“3. Paragraph 7 purports to plead a claim for damages which is not' actionable and which is frivolous.

“4. The complaint does not allege sufficient 'facts upon which to predicate a cause of action for the damages which the plaintiff claims he is entitled to.

“5. The plaintiff seeks damages which are not justified and to which the plaintiff is not entitled under and pursuant to the allegations of the complaint.

“6. The plaintiff seeks damages which are not justified and to which the plaintiff is not entitled under and pursuant to the allegations of the complaint since the contract annexed to the complaint in paragraph YII limits the recovery for the termination of plaintiff's employment to a specified sum or sums.”

The rule for damages upon breach of a contract has been stated in Marcus & Co., Inc., v. K. L. G. Baking Co., Inc. (Court of Errors and Appeals, 1939), 122 N. J. L. 202 (at p. 208) ; 3 Atl. Rep. (2d) 627 (at p. 631), as follows:

“The general rule for the admeasurement of damages consequent upon a breach of contract is the loss directly and naturally ensuing from the breach in the ordinary course of events. The party guilty of the breach is liable only for the losses reasonably foreseeable, at the time of the making of the contract, as the probable result of the breach. To borrow the language of Alderson, B., in the leading English case of Hadley v. Baxendale, 9 Exch. 341, the damages recoverable for a breach of contract are limited to such as may ‘reasonably be supposed to have been in tbe contemplation of both parties at the time they made the contract as the probable result of the breach of it.’ ”

And at p. 211 of 122 N. J. L.; at p. 632 of 3 Atl. Rep. (2d) :

“Whether it be regarded as founded in tbe common consent of tlie parties, or as pMasi-contractual in nature, it is an obligation imposed by law on the guilty party to answer in damages for the reasonably foreseeable consequences of his breach. He is not justly chargeable with a greater liability than was contemplated by the parties; for, in a case such as this, it is his undoubted right, by express provision, to alter the standard for the admeasurement of damages in the event of a broach, i. eto stipulate for an enlargement or curtailment of the liability thus imposed, or even for liquidated damages, regardless of the loss actually suffered.”

The contract was for three years from November 1st, 1945. It provided a plan upon notice, for prior termination beginning November 1st, 1946. No provision was made for termination prior thereto. As alleged in the complaint, the defendant discharged the plaintiff without just cause or reason on April 26th, 1.916, and refused to pay him further.

There seems to be no express decisions in New Jersey upon the subject of damages to reputation resulting from breach of contract. However in a tort case of Spiegel v. Evergreen Cemetery Co. (Supreme Court, 1936), 117 N. J. L. 90 (at p. 95); 186 Atl. Rep. 585 (at p. 588), Mr. Justice Heher, speaking for the Supreme Court, said:

“It is to be remarked, in passing, that the common law did not permit damages for mental distress consequent upon a mere breach of contract. This doctrine, too, is subject to exceptions; and it may well be that, on principle, it is inapplicable where the subject-matter of the contract is such as to make it certain or reasonably probable that the parties had in contemplation, at the time of the making of the contract, a pecuniary satisfaction for the anguish and distress of mind ensuing from a breach of its terms. But this ease does not present that question, and we need not consider it.” There are no allegations of tortious behavior in the complaint.

The difficulties with allowance of recovery of damages of this nature in a contract case are alluded to in Mastoras v. Chicago, M. & St. P. Railway Co. (1914, D. C. W. D. Wash. N. D.), 217 Fed. Rep. 153 (at p. 155), and Westwater et al. v. Rector, &c., of Grace Church (1903), 140 Cal. 339; 73 Pac. Rep. 1055 (at p. 1056) :

“And so of the reputation and feelings. What the reputation was, what it is now, how much and in what way it has been impaired by defendant, or has it been impaired by other persons or other causes, or by failure of the powers and ability of plaintiff, leads us into questions too abstruse and complicated for the human mind. Certainly, such damages are not clearly ascertainable.”

Also refer to 39 C. J. 112.

The decision of this motion calls for an interpretation of the contract and it appears to be a question for the court. Edge v. Boardwalk Securities Corp. (Court of Errors and Appeals, 1935), 115 N. J. L. 286, 290; 179 Atl. Rep. 270.

A review of the contract makes it certain or reasonably probable that the parties did not have in contemplation at the time of the making of the contract any pecuniary satisfaction for damage to reputation.

It is not the function of the court to write a contract. Wyckoff v. Monmouth County (Court of Errors and Appeals, 1941), 127 N. J. L. 268, 271; 21 Atl. Rep. (2d) 791; McBride v. Maryland Casualty Co. (Court of Errors and Appeals, 1942), 128 N. J. L. 64 (at p. 68); 23 Atl. Rep. (2d) 596; 138 A. L. R. 932.

The motion to strike paragraph 7 from the complaint is granted as it does not set forth a claim for damages which is actionable and is frivolous.

This action also disposes of reasons 8 and 11, which are as follows:

“8. The complaint is duplicitous in that it undertakes to plead more than one cause of action, and pleads separate grounds for damages, in one count.”

“11. The complaint is so framed as to embarrass or delay a fair trial.”

Other objections to the sufficiency of the complaint are not meritorious or are to be dealt with at the trial. The motion as,based upon the remaining reasons is denied.

Demand for particulars of the damage will provide the certainty contemplated by reason 10. In the settlement of issues, from the complaint, the damages resulting from the alleged breach of the contract lend themselves into the following categories:

The complaint pleads a discharge and has the effect to terminate as of the earliest time if notice had been given. 39 C. J. 111; Bitlerman v. Gluck, 256 App. Div. 336; 9 N. Y. S. (2d) 1007 (at p. 1008).

Por salary to November 1st, 1946, at $15,000 per year.

Under section vii of the contract—$24,000 liquidated amount as of November 1st, 1946.

Profit participation to November 1st, 1946, as defined by the contract.

Yalue of lodging to November 1st, 1946.


author: Labrecqtje, Commissioner.

text:
    Division of Tax Appeals.
    IN THE MATTER OF THE APPEAL OF TEXTILE RESEARCH INSTITUTE, INC., PETITIONER, v. TOWNSHIP OF PRINCETON, RESPONDENT, FOR THE YEAR 1945.
    Decided December 17, 1946.
    For the petitioner, Brady & Daly (by Robert R. Daly),

    For the respondent, Louis Gerber.

   Labrecqtje, Commissioner.

The petitioner is the owner of premises located on East Nassau Street, in the Township of Princeton, comprising land and certain buildings thereon which were assessed for the year 1945 at land—$3,000 and improvements—$19,000,. making a total of $23,000.

Conceiving that it was a corporation entitled to exemption under and by virtue of chapter 243 of the laws of 1941, R. S. 54:4-3.6, the petitioner filed its appeal to the Mercer County Beard of Taxation, which board dismissed the appeal and' affirmed the assessment. The present appeal challenges the action of the County Board and prays that the judgment of the County Board be reversed and the assessment canceled.

We are constrained to dismiss the appeal and to affirm the judgment of the County Board for the reason that the evidence is plenary that the petitioner does not come within the class of taxpayers entitled to exemption under the provisions of the statute cited. While chapter 243 of the laws of 1941 provides for the exemption of:

“all buildings actually used for colleges, schools, academies or seminaries;” also;

“all buildings actually and exclusively used in the work of associations and corporations organized exclusively for the moral and mental improvement of men, women and children;” also;

“all buildings owned or held by an association or corporation created for the purpose of holding the title to such buildings as are actually and exclusively used in the work of two or more associations or corporations organized exclusively for the moral and mental improvement of men, women and children.”

It further provides that:

“The foregoing exemptions shall apply only where the association, corporation or institution claiming the exemption owns the property in question and is incorporated or organized under the laws of this state and authorized to carry out the purposes on account of which the exemption is claimed.”

It is undisputed that the petitioner corporation is not incorporated or organized under the laws of this state. Originally incorporated under the Membership Corporation Law of the State of Hew York, the corporation, in 1941, changed its name to the present title of Textile Research, Inc. So far as the record before us indicates, it has never been incorporated under the laws of Hew Jersey. Such being the case, the petitioner’s claim for exemption does not come within the terms of the statute and must fall. Board of Trustees of Blair Academy v. State Board, 6 N. J. Mis. R. 498; affirmed, 106 N. J. L. 556, and New Providence v. Lions Club, 19 N. J. Mis. R. 103.

The-petitioner has likewise failed to sustain the burden of proving that it comes within the remaining terms of the statutory exemption. Statutes granting exemptions are universally construed against those claiming thereunder, and the burden of proof of justifying the exemption is upon the claimant. City of Trenton v. State Board of Tax Appeals, 127 N. J. L. 105; affirmed, 128 Id. 320. The petitioner has failed to sustain this burden.

Petitioner urges that the premises under appeal come under the classification of “all buildings actually used for colleges, schools, academies or seminaries.” A review of the evidence fails to sustain this claim. The building in question, according to the undisputed testimony, is used as a laboratory. It is controlled solely by the appellant. Neither Princeton University nor any other college or university has any jurisdiction over it. The situation is in nowise -changed by the fact that there are instructors in the laboratory and that the “fellows,” as the petitioner calls them, are enrolled and subsidized by the petitioner in the Graduate School at Princeton. This claim fails to meet the tests enunciated by the Supreme Court in Dwight School v. State Board of Tax Appeals, 114 N. J. L. 594.

It is next claimed by the petitioner that the subject premises come within the classification of buildings “actually and exclusively used for the moral and mental improvement of men, women and children.” This claim likewise fails. The petitioner is not organized exclusively for the moral and mental improvement of men, women and children. On the contrary, the testimony and the written exhibits indicate that it is organized for the benefit of the textile industry, to furnish research facilities for and at the expense of the industry. Reference to the certificate of incorporation indicates the principal purpose of the corporation to be “to promote, cultivate, facilitate and perform research for the benefit of the textile industries and their allied branches, in the public interest.” Obviously, the words “in the public interest” add nothing to what has been said before.

Reference to the testimony of petitioner’s' only witness, Daly, further confirms this. He states:

“The endowment and the funds currently provided to the institute are by industry, and it is the hope of industry by their contributions that such research can be accomplished as to benefit the textile industry in the United States.”

The conclusion is inescapable that the premises in question are devoted principally and primarily to textile research for the benefit of the textile industry, and that the institute is not organized exclusively for the mental and moral improvement of men, women and children.

Dor the reasons stated, the appeal should be dismissed and the action of the Mercer County Board of Taxation affirmed. Judgment accordingly.