author: Labkecqüe, J. A. D.

text:
    C. LLOYD LAWLOR, AS EXECUTOR OF THE ESTATE OF EDITH LAWLOR, AND C. LLOYD LAWLOR, INDIVIDUALLY, PLAINTIFF-APPELLANT, v. CLOVERLEAF MEMORIAL PARK, INC., A CORPORATION, AND CLOVERLEAF MEMORIAL PARK ASSOCIATION, DEFENDANTS-RESPONDENTS, v. JOSEPH LEPREE AND THE RAHWAY HOSPITAL, THIRD-PARTY DEFENDANTS AND CROSS-APPELLANTS.
    Superior Court of New Jersey Appellate Division
    Argued May 26, 1969—
    Decided July 10, 1969.

      Before Judges Gaulkiit, Collester and Labrecque.

      Mr. Kenneth J. McGuire argued the cause for plaintiff-appellant (Messrs. Stein, Bliablias & Goldman, attorneys).

      Mr. Stephen J. Foley argued the cause for defendants-respondents Oloverleaf Memorial Park, Inc., a corporation, and Oloverleaf Memorial Park Association (Messrs. Campbell, Mangini, Foley, Lee & Murphy, attorneys).

      Mr. Thomas T. Chappell argued the cause for defendant-respondent and cross-appellant Joseph Lepree (Messrs. Lamb, Blake, Hutchinson & Dunne, attorneys; Mr. II. Curtis Meanor, on the brief).

      Mr. Daniel K. Van Dorn argued the cause for defendant-respondent and cross-appellant The Rahway Hospital (Messrs. Mead, Gleeson, Hansen & Vantages, attorneys).
   The opinion of the court was delivered by

Labkecqüe, J. A. D.

Plaintiff C. Lloyd Lawlor, individually and as executor of the estate of his deceased wife, Edith Lawlor, appeals from an order dated February 2, 1968 dismissing his suit as against defendant Oloverleaf Memorial Park Association and from an order dated June 7, 1968 dismissing his wife’s claim under the Survival Act, and his per quod claim, against Dr. Joseph Lepree (Lepree) and The Rahway Hospital (the hospital). Lepree and the hospital cross-appeal from an order denying summary judgment in their favor as to the count for decedent’s wrongful death.

On September 6, 1964 Mrs. Lawlor, while in the process of placing flowers on the grave of her mother in Oloverleaf Memorial Park, fell into a concealed hole and was injured. On February 16, 1965 she sought compensation for her injuries, and her husband sued per quod, in a suit against defendants Oloverleaf Memorial Park, Inc. (the corporation) and Oloverleaf Memorial Park Association (the Association).

On July 5, 1966 both defendants filed a third-party complaint against Lepree and the hospital charging negligence in the treatment of Mrs. Lawlor’s injuries and seeking indemnification or contribution. On December 23 of the same year Mrs. Lawlor died, allegedly as a result of her injuries and of an infectious disease contracted while she was hospitalized.

On January 26, 1968 the court granted defendants’ motion for summary judgment, finding that Cloverleaf Memorial Park, Inc. did not own the cemetery at the time of the accident, that Cloverleaf Memorial Park Association was a charitable institution within the intendment of N. J. S. 2A :53A—7 and that Mrs. Lawlor was a beneficiary of the charity and hence barred from recovery against it. At the same time the court granted leave to substitute the executor as plaintiff, to amend the complaint to include counts against Lepree and the hospital, directly, for negligence and malpractice, and a count for wrongful death against Cloverleaf, Lepree and the hospital. Following the filing of the amended complaint both Lepree and the hospital moved for summary judgment on the ground that the statute of limitations barred the counts against them. The trial judge, in an opinion reported, at 101 N. J. Super. 13é, dismissed the counts for Mrs. Lawlor’s injuries and Mr. Lawlor’s per quod damages as barred by the two-year statute of limitations but declined to strike the count for wrongful death. Leave to appeal had previously been granted as to the dismissal as to Cloverleaf. The additional appeals followed (also pursuant to leave granted) and all appeals were consolidated.

Three basic issues are presented by the present appeals, viz., (1) whether N. J. S. 2A :53A-7 et seq. conferred charitable immunity upon defendant Cloverleaf Memorial Park Association; (2) whether the two-year statute of limitations, N. J. S. 2A :14-2, barred plaintiff’s direct suit against defendants Lepree and the hospital for his wife’s personal injuries and her pain and suffering, and his expenses and loss of services prior to her demise, and (3) whether the omission of Mrs. Lawlor to institute suit against them for her personal injuries within two years of the time of her last treatment barred an action for her wrnogful death brought more than two years after her injuries but less than two years after her decease. We treat them in that order.

I

The doctrine 'which affords immunity from liability for negligence to charitable organizations was enunciated by our highest court in D'Amato v. Orange Memorial Hospital, 101 N. J. L. 61 (E. & A. 1925). Thereafter, from time to time, broad exceptions to the rule were carved out, Kolb v. Monmouth Memorial Hospital, 116 N. J. L. 118 (E. & A. 1936); Rose v. Raleigh Fitkin-Paul Morgan &c. Foundation, 136 N. J. L. 553 (E. & A. 1948); Lindroth v. Christ Hospital, 21 N. J. 588 (1956), culminating in the outright repeal of the doctrine in Collopy v. Newark Eye and Ear Infirmary, 27 N. J. 29 (1958).

Thereafter the Legislature enacted L. 1959, c. 90, now N. J. 8. 2A :53A-7, on which Cloverleaf’s claim to immunity is based. It provides:

“No nonprofit corporation, society or association organized exclusively for religious, charitable, educational or hospital purposes shall, except as it hereinafter set forth, be liable to respond in damages to any person who shall suffer damage from the negligence of any agent or servant of such corporation, society or association, where such person is a beneficiary, to whatever degree, of the works of such nonprofit corporation, society or association; provided, however, that such immunity from liability shall not extend to any person who shall suffer damage from the negligence of such corporation, society, or association or of its agents or servants where such person is one unconcerned in and unrelated to and outside of the benefactions of such corporation, society or association; but nothing herein contained shall be deemed to exempt the said agent or servant individually from their [sic] liability for any such negligence.”

Neither L. 1959, c. 90, which later became N. J. S. 2A: 53A-7 et seq., nor its predecessor, L. 1958, c. 131, were accompanied by any statement of purpose. Their effect was to reinstate the common law doctrine as it had been defined in our courts. Cf. Wiklund v. Presbyterian Church of Clifton, 90 N. J. Super. 335, 338 (Cty. Ct. 1966).

Defendant Oloverleaf Memorial Park Association was originally incorporated in 1927 as Boulevard Park Cernetery Association under the Rural Cemetery Act, Rev. 1877, p. 100, now R. 8. 8:1-1 et seq. It operates a memorial park type cemetery in Woodbridge Township, Middlesex County. It adopted its present name on October 18, 1933. On January 2, 1936 it purchased from Cloverleaf Memorial Park, Inc. the land which it has improved and developed, and now maintains and operates as a place for the burial of the dead.

The spiritual and material benefits afforded communities by cemetery associations have long been recognized. Terwilliger v. Graceland Memorial Park Ass’n, 35 N. J. 259 (1961) ; Attorney-General v. Linden Cemetery Ass’n, 90 N. J. Eq. 404 (Ch. 1919). Eor this reason it has been held in numerous eases that lands dedicated and utilized as a place of sepulture are devoted to a charitable use; that cemeteries organized under R. S. 8:1-1 et seq. are proper objects for charitable bequests and represent valid charitable trusts. Passaic National Bank &c., Co. v. East Ridgelawn Cemetery, 137 N. J. Eq. 603, 607 (E. & A. 1945); AbraMay Cemetery Sales Co. v. Degel Yehudo Cemetery Corp., 92 N. J. Super. 365 (Ch. Div. 1966); Di Cristofaro v. Laurel Grove Memorial Park, 43 N. J. Super. 244 (App. Div. 1957); Moore v. Fairview Mausoleum Co., 39 N. J. Super. 309 (App. Div. 1956); Atlas Fence Co. v. West Ridgelawn Cemetery, 110 N. J. Eq. 580 (E. & A. 1932); Wendell v. Hazel Wood Cemetery, 3 N. J. Super. 457 (Ch. Div. 1949).

Plaintiff, while conceding that the association is incorporated under the Rural Cemetery Act and that cemetery services have been held to be charitable, urges that the statute did not contemplate the immunization from liability of such associations and, alternatively, that Cloverleaf did not qualify as a nonprofit association “organized exclusively” for charitable purposes within the contemplation of N. J. S. 2A:53A-7.

(a)

Our attention is not called to any Hew Jersey case in which the charitable immunity doctrine has been specifically applied to the operation of a cemetery. In Spiegel v. Evergreen Cemetery Co., 117 N. J. L. 90, 97 (Sup. Ct. 1936), where a verdict against a cemetery was upheld, the court noted that “the question of the liability of the corporate administrator of a charitable use for the willful wrong of its servant in the discharge of duties assigned to him is not raised, and therefore need not be regarded.” However, in Long v. Rosedale Cemetery, 84 F. 135 (Cir. Ct. D. N. J. 1897) a complaint charging negligence on the part of a cemetery employee was sustained on demurrer as against the contention that defendant, organized under the predecessor to the present Eural Cemetery Act, was a charitable organization and hence not responsible for the wrongful acts of its servants. The court there noted:

“It is insisted that the defendant corporation is a charitable organization, and, as such, relieved from responsibility for the wrongful acts of its servants. The test which determines whether such an enterprise is charitable or otherwise is its purpose. If its purpose is to make profit, it is not a charitable enterprise. * * *. The court has not at hand any means by which this test may be applied, and is therefore unable to dismiss the plaintiff’s suit on that ground.” (at p. 136)

See also 14 Am. Jur. 2d, Cemeteries, § 8, p. 707 (1964); cf. Olson v. Riverview Cemetery Association of Portland, 220 Or. 220, 349 P. 2d 279 (Sup. Ct. 1960).

Plaintiff argues that the classification of cemeteries organized under the Eural Cemetery Act as charitable organizations entitled to immunity from suits for negligence is inconsistent with legislation separately exempting such cemeteries from taxation. They urge that if cemeteries came within the definition of charitable institutions, there was no need for their separate treatment. By Art. VIII, § I, par. 2 of the New Jersey Constitution (1947) the exemptions from taxation of real and personal property used exclusively for religious, educational, charitable or cemetery purposes may not be altered or repealed. This separate treatment of cemetery associations has been carried into R. S. 8:2-27, which exempts the cemetery lands and property of any cemetery association from all “taxes, rates or assessments.” The exemption dates back to the Revision of 1877, is found in 1 Comp. Stat. (1910), § 8, p. 375 and was carried over into the 1937 Revision. In addition, graveyards and burial grounds not exceeding ten acres in area are separately exempted from taxation by N. J. S. A. 54:4-3.9. In In re Kuebler (Fairview Cemetery Company v. Kingsley), 106 N. J. Super. 13 (App. Div. 1969), it was held that where the Legislature had failed to specifically provide in N. J. S. A. 54:3L-4 (d) that a devise to a nonprofit cemetery for cemetery purposes was exempt from inheritance taxes, it was not exempt as a gift to a “charitable” or “benevolent” organization.

The problem of construction inherent in tax exemption cases is to be distinguished from the one here involved. The fundamental approach of our tax statutes is that ordinarily all property shall bear its equal and just share of the burden of taxation. Town of Bloomfield v. Academy of Medicine of New Jersey, 47 N. J. 358, 363 (1966). Thus, statutes granting exemption from taxation are to be strictly construed, and doubts as to eligibility for exemption are to be resolved against the claimant. Board of National Missions v Neeld, 9 N. J. 349, 353 (1952). A claimed exemption from taxation “must find support in clear and unmistakable expressions of the legislative act.” Hopkins v. Neeld, 41 N. J. Super. 345, 351 (App. Div. 1956). Here, on the contrary, we are enjoined by the Legislature that N. J. S. 2A :53A-7 is “remedial legislation” and “shall be liberally construed” so as to afford immunity to the corporation, society or association described therein from liability as provided therein “in furtherance of the public policy” for their protection. N. J. S. 2A :53A-10. With that mandate in mind we hold that cemeteries organized under the Rural Cemetery Act that otherwise comply with the requirements for immunity are covered by N. J. S. 2A :53JL-7.

0>)

It xemains to be determined whether the status of the association was such as to justify the grant of summary judgment. While the issue of whether the Legislature intended to include cemetery associations in the category of the charitable associations referred to in N. J. S. 2A :53A-7 was one of law, the issue of whether a specific cemetery qualifies for charitable immunity is ordinarily one of fact to be resolved at trial. Summary judgment may be granted only when it palpably appears that there is no genuine issue of material fact. B. B. 4:58-3; Judson v. Peoples Bank & Trust Co. of Westfield,, 17 N. J. 67 (1954). Summary judgment is to be granted with caution, especially where the good faith and motives of the moving party are involved or where, as here, the opposing party must prove his claim from what he can draw from the moving party. Id., at p. 76.

Here the answer filed by the association (on April 7, 1965) had not set up charitable immunity as a defense. Hot until the pretrial did it ask for leave to amend to include it. Two years later it moved for summary judgment on the basis of the affidavit of Schwabacher, the treasurer of the corporation, and London, the president of the association. Schwabaeher’s affidavit did no more than establish that the association, rather than the corporation, held title to the property. London’s affidavit stated, in pertinent part, that the association was engaged in the operation of a cemetery pursuant to R. S. 8:1-1 et seg., which operation had been held to be a charitable trust under Frank v. Clover Leaf Park Cemetery Ass’n, 29 N. J. 193 (1959) and that it was tax exempt. There was nothing in either affidavit as to the specific nature of the activities being carried on by the association, or its management or financial affairs. In Frank our Supreme Court had found that until then (1959) the association had been operating a cemetery marker business for profit, and ordered it to desist.

Subsequent to the filing of the appeal we granted leave to plaintiff to take depositions, and in pursuance thereof the testimony of London, the association’s president, and Rohn, its accountant, was taken.

Plaintiff argues from the foregoing that the association was not “organized exclusively” for charitable purposes but, in actuality, represented an important phase of a profit-making enterprise. We need not decide the issue except to hold that summary judgment should not have been granted. The affidavits on which it was based were inadequate for that purpose, and the facts revealed by the depositions, to which reference will now be made, confirm our conviction.

The two tracts comprising 110-plus acres with which the association began operations had belonged, one-half each, to two groups of individuals, the Walker-London group and the Lustgarden group. London later became a principal stockholder, a director and an officer of Cloverleaf Memorial Park, Inc. and is currently a trustee and the president of Cloverleaf Memorial Park Association. Walker, since deceased, who was London’s associate, was a member of the firm of Morrissey & Walker, principally engaged in seashore real estate development. While our examination of the affidavits and depositions indicates some reticence in revealing details of the intercompany dealings which followed, it is conceded that on Fovember 15, 1933 the real estate owned by the two groups was turned over (via a corporation bearing the name of Super Home Development Co.) to Cloverleaf Memorial Park, Inc. (not organized under the Rural Cemetery Act) whose stockholders were members of the two groups, and whose president was Walker, and secretary, London. On January 2, 1936, again for an undisclosed sum, the corporation conveyed to the association, subject to two outstanding mortgages in the sum of $5,000 and $9,000, respectively. It is conceded that from that time on the sole asset of the corporation was whatever amount was due it from the sale of its lands to the association. How much, if anything, was thereafter paid on account of the purchase price is not clear from the record (B. S. 8:2-ll requires that at least one-half of the proceeds of the sales of lots be applied to the amount owing), but in 1954 the association purchased the entire capital stock of the corporation for $345,000 in 3% bonds, which sum is said to have represented the balance then due. Here one additional fact is to be noted — in “the early 1950’s” some 55 acres (about one-half) of the tract was sold by the association to Sommer Brothers for development purposes. Of the consideration of $60,000 “some of the monies were used for development in the park, and there was a distribution at the time to the owners of the park.” (Emphasis added.) Some 13 years after its stock had been purchased by the association (and two years after the present suit was instituted) the corporation was dissolved (February 2, 1967). At the time of the bringing of the present suit the amount claimed to be due the bondholders was $325,625, plus accrued interest of $19,538. (On September 10, 1965 $100,000 in unpaid interest was allegedly cancelled by the bondholders upon payment to them of $5,000 on account of principal.)

The association charged $450 for a two-grave plot, and of this 5% was paid into the cemetery’s perpetual care fund (the dedicated fund account). Some 245 plots were sold between 1964 and 1967, inclusive, leaving 5,561 plots unsold. The usual charges were made for internments. In addition, the association had engaged in the business of selling grave markers from the time it began business until 1959 when the practice was ended upon the rendition of the Supreme Court’s opinion in Frank v. Clover Leaf Park Cemetery Ass’n, supra.

Besides the salaries paid to the manager and his staff of maintenance and sales personnel, London’s annual salary from the association was fixed at $5,000. His son Donald London, as treasurer, and one other not named were to receive, together, an additional sum of $2,000 annually. The current trustees were London, his son Donald, his daughter Ruth Schwabacher, Mrs. Emma Walker, John Rogge and Mrs. John Rogge. Neither London nor his son had received the mentioned salaries for some years, but the unpaid amounts were carried by the association as an account payable. In its financial statement dated September 30, 1963, they amounted to $44,556, and as of September 30, 1966, to approximately $64,016. The bonds continued in the hands of the persons who had been the original owners of the land, or of members of their families.

Without expressing any opinion as to the merits, we are convinced from the foregoing that whether the nature of the association's operations was such as to afford it immunity from liability for its asserted negligence was an issue of fact to be resolved after a full trial. Cf. Long v. Rosedale Cemetery, supra, 84 F., at p. 136. If it is there determined that the association's cemetery lands have been managed for private profit under the guise of a charitable use, the association would not be immunized from liability. Cf. City of Clifton v. State Board of Tax Appeals, 133 N. J. L. 379 (E. & A. 1945); City of Clifton v. State Board of Tax Appeals, 136 N. J. L. 213 (E. & A. 1947); Geo. Washington, &c. v. Memorial &c., Co., 139 N. J. Eq. 280, 287-293 (Ch. 1947); Burke v. Gunther, 128 N. J. Eq. 565 (Ch. 1941).

(c)

In the event that it be factually determined that the activities of the association were such as to immunize it from liability to a “beneficiary” of its “works,” we are satisfied that Mrs. Lawlor was such a beneficiary rather than a person “unconcerned in and unrelated to and outside of its benefactions.” In Boeckel v. Orange Memorial Hospital, 108 N. J. L. 453 (Sup. Ct. 1932), affirmed 110 N. J. L. 509 (E. & A. 1933), the court had occasion to pass upon a contention similar to that here made by appellant. There the plaintiff was a mother who had been injured while upon hospital premises for the purpose of visiting her sick child. In rejecting the contention the court held:

“Plaintiff entered the premises voluntarily and for her own purposes. To the extent that her need went — that need being a mother’s wish to be with her sick child and to speed the latter’s recovery by the inspiration of a home presence — she was a recipient of the same benevolence, a beneficiary of the same charitable foundation, as was the patient. * * * The opportunity afforded for her attendance was part of the charitable service the defendant was rendering to suffering humanity.” (108 N. J. L., at p. 456)

While the decision in Boeckel was based upon the common law immunity doctrine, N. J. S. 2A:53A-7 el seq. did not modify or alter the preexisting immunity granted to charitable and religious institutions. Cf. Anasiewicz v. Sacred Heart Church, 74 N. J. Super. 532, 535-536 (App. Div. 1962), certification denied 38 N. J. 305 (1962). In the latter case it was held that whether the injured person was the beneficiary of the work of a charitable institution was not to be determined from showing that the claimant personally received a benefit from the works of the charity. Bather, the ratio decidendi was whether the institution pleading the immunity, at the time in question was engaged in the performance of the charitable objectives it was organized to advance.’5 In Anasiewicz plaintiffs, who though Boman Catholics were not members of defendant Sacred Heart Church, were held to be beneficiaries while attending a church wedding service there. See also Bianchi v. South Park Presbyterian Church, 123 N. J. L. 325 (E. & A. 1939) (plaintiff a nonmember of a church society injured while attending Girl Scout meeting in church house); compare Book v. Aguth Achim Anchai of Freehold, N. J., 101 N. J. Super. 559 (App. Div. 1968) (plaintiff, a Catholic, injured while at bingo conducted by Jewish synagogue).

Here it appears clear to us that Mrs. Lawlor was a beneficiary of the cemetery’s ^works.55 It was operated and maintained not only for the reception of bodies for burial but to afford an opportunity for relatives and friends of those buried there to pay their respects and to experience spiritual solace while visiting the last resting place of those dear to them. If Mrs. Lawlor was not a beneficiary, it is difficult to conceive who •—■ except those already interred there — could qualify as such.

II

Plaintiff next challenges the granting of summary judgment in favor of Lepree and the hospital as to the counts of the amended complaint seeking damages for his wife’s conscious pain and suffering, and his claim for loss of services and medical expenses in connection with her care. While we are not in entire accord with the trial judge’s reasons for the challenged action, we agree with the result.

As noted, the accident occurred on September 6, 1964; Mrs. Lawlor entered the Rahway Hospital on that day and remained under the care of Dr. Lepree until October 17, 1964; the third-party suit was filed against the hospital and Lepree on July 5, 1966; Mrs. Lawlor died on December 23, 1966, and plaintiff’s motion, dated January 26, 1968, to be permitted to file a complaint against them was granted on Eebruary 5, 1968.

Plaintiff urges that defendants’ motion should have been •denied on the authority of De Sisto v. City of Linden, 80 N. J. Buyer. 398 (Law Div. 1963). In that case an amendment to the complaint was allowed, after the two-year statute •of limitations had run, to bring in as an additional defendant one who had been made a third-party defendant within the two year period, the court holding that:

“* * * a new claim based on the same occurrences and the same ■wrong against an existing party may be asserted when that party has become a party and has been alerted to the claim before the running of the statute.” (at p. 406)

In ruling that the two-year limitation prescribed by N. J. S. 2A :14-2 compelled the granting of the motion, the trial judge declined to follow De Sisto v. City of Linden. That was before the coming down of Greco v. Valley Fair Enterprises, etc., 105 N. J. Super. 582 (App. Div. 1969). There, plaintiffs were permitted, after expiration of the two-year limitation, to add as a defendant in their suit one who had been made a defendant in a third-party complaint charging that he negligently participated in bringing about the condition which had caused plaintiffs injury. We there held:

“* * * a third-party defendant who was joined as such prior to expiration of the limitation period may, on plaintiffs motion to amend, be made a direct defendant after the expiration of that period provided the amended complaint is based upon the same occurrence and the same wrong referred to in the pending third-party complaint against him.”

Compare Taylor v. Loyal Order of the Moose, 90 N. J. Super. 1 (Law Div. 1965), where the third-party complaint had not been filed until after expiration of the two-year period.

However, we find that the facts in the present case did not justify denial of defendant’s motion for summary judgment on the basis of either Greco or De Sisto. In both the cause of action asserted against the old and the new defendant was the same, i.e., responsibility, jointly or severally, for the condition which had brought about plaintiff’s injury. It was a now claim based on the same occurrences and the same wrong as had been substantially charged in both the original and third-party complaints.

Here, plaintiff was not seeking to add a now party alleged to have been equally responsible with Cloverleaf for the condition which brought about liis wife’s injury. Instead, he sought to inject a new cause of action based upon acts of negligence and malpractice which took place at some time (between September 6 and October 17) after the occurrence of the initial injury. Such a canse of action, different in character and arising out of circumstances other than those set forth in the original pleading, De Sisto v. City of Linden, supra, 80 N. J. Super., at p. 406, could not be added after the expiration of two years from the time it accrued. At the latest, the time began to run on October 17, 1964, the date of Mrs. Lawlor’s discharge from hospital treatment. Cf. Rosenau v. New Brunswick, 51 N. J. 130 (1968). Thus, the action could not be maintained after October 17, 1966. Rex v. Hutner, 26 N. J. 489 (1958).

The trial judge also determined that by reason of the dissimiliarity between the negligence asserted against Cloverleaf and the negligence and malpractice asserted against the hospital and Dr. Lepree, the latter had been erroneously joined as third-party defendants. While unnecessary to determination of the issues here, we call attention to the fact that B. B. 4:1L-1 permits the bringing in, by defendant as third-party plaintiff, of one “who is or may be liable to him for all or part of the plaintiff’s claim against him.” Here, the third-party complaint contained three counts, two of which sought indemmification rather than contribution. As to these, at least, the third-party defendants were properly joined. Of course, we express no opinion as to the merits of the claims for indemnification.

Ill

Defendants Lepree and the hospital challenge the denial of their motion for summary judgment dimissing plaintiff’s action under the Wrongful Death Act, N. J. S. 2A:31-1 et seq., urging that since decedent did not bring an action against them within the two-year period of limitation prescribed for injuries to the person, no right of action for her wrongful death could be asserted thereafter.

N. J. S. 2A:31-1 provides as follows:

“When the death of a person is caused by a wrongful act, neglect or default, such as would, if death had not ensued, have entitled the person injured to maintain an action for damages resulting from the injury, the person who would have been liable in damages for the injury if death had not ensued shall be liable in an action for damages, notwithstanding the death of the person injured * *

The statute authorizes the bringing of an action by decedent’s executor and requires that the action be commenced within two years of decedent’s death, N. J. S. 2A:31-2 and 3. It has been held that the statute created a new cause of action, for the exclusive benefit of the dependent next-of-kin of the deceased, to whom the amount recovered is to be paid over, free and clear of decedent’s debts. Soden v. Trenton & Mercer County Traction Corp., 101 N. J. L. 393, 398 (E. & A. 1925).

Our Death Act is patterned after Lord Campbell’s Act (1846). In Coulter v. New Jersey Pulverizing Co., 11 N. J. Misc. 5, 163 A. 661 (Sup. Ct. 1932), the court, following Williams v. Mersey Docks and Harbour Board, 1 K. B. D. 804, 808 (1905), held that the omission of a decedent to institute suit for his injuries within the two-year period fixed by the statute of limitations precluded the subsequent bringing of an action for his wrongful death. It held:

“In the present cases, the decedents’ actions were lost by lapse of time. Since the decedents had no cause of action, their representatives had none. Had the decedents satisfied their claims, the representatives could not have asserted a nonexisting cause of action. The statute of limitations is as much of a bar as a release.” (11 N. J. Misc., at p. 7)

In Knabe v. Hudson Bus Transportation Co., 111 N. J. L. 333 (E. & A. 1933), the court, concurring in the reasoning of Coulter, held that since any right of action which decedent had possessed during his lifetime had been barred by limitation before his death, the Death Act did not create a right of action for his wrongful death in his personal representative. Knabe was followed in Biglioli v. Durotest Corp., 44 N. J. Super. 93 (App. Div. 1957), affirmed 26 N. J. 33 (1958). See also Altzheimer v. Central Railroad Co., 75 N. J. L. 424 (Sup. Ct. 1907); Redick v. Rohm and Haas Co., 97 N. J. Super. 58 (Law Div. 1967).

The trial judge denied summary judgment on the authority of Kotkin v. Caprio, 65 N. J. Super. 453 (App. Div. 1961), certification denied 34 N. J. 470 (1961), and plaintiff urges that this was proper. We disagree. In Kotlcin the accident occurred on May 2, 1957, decedent died June 13, 1957, and the complaint seeking damages for her death was filed on May 29, 1959. To the extent here pertinent, all that we held in that case was that where the injured person died as a result of the accident but while she still had a cause of action for her injuries, a new and separate cause of action for her death arose, with its own statute of limitations. Since decedent in that case could still have maintained her action when she died five weeks after the accident, it was of no moment that her executor had failed to sue thereafter for her pain and suffering but permitted the statute which applied to that cause of action to expire. So long as she died while still qualified to sue, her administrator, ad prosequendum or executor had two years within which to bring an action for her death.

We recognize that there is a diversity of opinion and that all jurisdictions do not follow the construction of the Death Act which has been adopted by our courts. 2 Harper and James, Torts, § 24.7, pp. 1296-1297 (1956). In a number of states whose wrongful death act is patterned after Lord Campbell’s Act, recovery has been permitted even though decedent had lost his right to sue. See Hoover v. Chesapeake and Ohio R. Co., 46 W. Va. 268, 33 S. E. 224 (Sup. Ct. 1899); DeHart v. Ohio Fuel Gas Co., 84 Ohio App. 62, 85 N. E. 2d 586 (Ct. App. 1948); Annotation, 167 A. L. R. 894, 901-903 (1947). However, until the cited pronouncements of our courts are overruled by our highest court, we consider ourselves bound by them.

Since Mrs. Lawlor did not institute suit for her own injuries within two years after her cause of action accrued against appellants, and since the amended complaint against them did not relate back to the time of filing the original complaint against Cloverleaf, her executor had no cause of action against appellants for her death.

By reason of the foregoing the summary judgment in favor of defendant Cloverleaf Memorial Park Association is reversed, the summary judgment in favor of defendants Joseph Lepree and the Eahway Hospital is affirmed, and the denial of summary judgment as to the aforementioned defendants is reversed.

Eeversed and remanded for further proceedings in accordance with this opinion. No costs.

        It. 4 :9-3, to be effective September 8, 19G9, provides as follows: “Whenever the claim or defense asserted in the amended pleading arose out of the conduct, transaction or occurrence set forth or attempted to be set forth in the original pleading, the amendment relates hack to the date of the original pleading; but the court, in addition to its power to allow amendments may, upon terms, permit the statement of a new or different claim or defense in the pleading. An amendment changing the party against whom a claim is asserted relates back if the foregoing provision is satisfied and, within the period provided by law for commencing the action against him, the party to be brought in by amendment (1) has received such notice of the institution of the action that he will not be prejudiced in maintaining his defense on the merits, and (2) knew or should have known that, but for a mistake concerning the identity of the proper party, the action would have been brought against him.”


source: Caselaw Access Project

author: Foley, J. A. D.

license: Public Domain

text:
    AMERICAN LEGION TRI-COUNTY MEMORIAL HOSPITAL, A CORPORATION, PLAINTIFF-RESPONDENT, v. ST. PAUL FIRE AND MARINE INSURANCE COMPANY, A CORPORATION, DEFENDANT-APPELLANT.
    Superior Court of Now Jersey Appellate Division
    Argued May 12, 1969—
    Decided July 15, 1969.

      Before Judges Sullivah, Foley and Lewis.

      Mr. Marvin Sachs argued the cause for appellant (Messrs. Feuersfein & Sachs, attorneys; Mr. Allan Maiflin, on the brief).

      Mr. Henry M. Grosman argued the cause for respondent (Messrs. Grosman and Grosman, attorneys; Mr. Marc B. Grosman, on the brief).
   The opinion of the court was delivered by

Foley, J. A. D.

Defendant appeals from a judgment in plaintiff’s favor in the amount of $6,535 plus interest.

This is an action on a “Comprehensive Hospital Liability Policy” issued by defendant to plaintiff in September 1963; it remained in full force and effect during all of the critical dates mentioned herein. The claim is for recovery of counsel fees and costs of defending against a suit by members of plaintiff’s medical staff. The liability aspect of the ease was submitted to the trial court on stipulated facts. The trial court in a letter opinion found liability. In a subsequent proceeding on the issue of damages plaintiff was awarded the amount aforesaid.

The case arose from a dispute between the hospital and certain members of its medical staff Their complaint was in two counts. The first count sought an injunction against the trustees’ interference with the doctors’ use of the hospital facilities; the second count sought compensatory and punitive damages. On October 22, 1963 a meeting took place between, the hospital’s board of trustees and the dissident doctors. At that time the doctors made known their intention to attempt to oust the board of trustees and stated that counsel had been retained for that purpose. On the same day the board of trustees met in private and voted to suspend the doctors. The advisability of retaining an attorney was discussed and two of the trustees were authorized to engage counsel in the event of litigation with the doctors. A suspension notice was posted in the hospital on October 23, 1963. On October 25 the administrator of the hospital was served with a complaint in a suit by the doctors after he had refused the request of their attorney that the suspension notice be removed.

On the day the complaint was served, Woodrufi English, Esq., of the firm of McCarter & English, was retained to represent the hospital and its board of trustees in defense of the pending action. The board confirmed the retention on November 2, 1963; the summons and complaint had already been turned over to English.

On November 6, 1963 the hospital notified defendant St. Paul of the doctors’ suit and requested that it provide a defense in accordance with the insurance policy. Thereafter St. Paul agreed to defend the second count only. The entire action was eventually settled by a consent final judgment without the payment of any damages.

Subsequently the hospital brought the present action against St. Paul seeking reimbursement for counsel fees and costs incurred by it in defense of the doctors’ suit, maintaining that the carrier was obligated to defend the entire law suit and that as a result of its failure to do so the hospital was compelled to defend at its own cost and expense.

The central, and we think determinative, question presented is whether the cause of action alleged in the doctors’ complaint was within the coverage granted by the policy. The insuring clause of the policy provided that the insuror was obligated:

“To pay all loss by reason of the liability imposed by law or contract upon the Insured * * * for damages (including counterclaims in suits brought by the Insured to collect foes or other charges) on account of injury, sickness or disease, including death at any time resulting therefrom, including damages allowed for loss of services and expenses suffered by any person or persons.
As respects insurance afforded by this Policy the Company shall (a) defend in his name and behalf any suit against the Insured alleging such damages, even if such suit is groundless, false or fraudulent.” (Emphasis added.)

St. Paul contends that the policy unambiguously insures only against damages arising out of malpractice or negligence in connection with the functions of the hospital and its staff; that the action brought against the hospital clearly did not involve a malpractice or negligence situation and therefore did not fall within the coverage provided. The hospital, on the other hand, argues that the hospital’s liability for damages on account of wrongful suspension was covered since the generic term “injury” as distinguished from “bodily injury” was employed in the insuring clause.

The principles of construction of an insurance policy are well established. When the terms of a policy are clear and unambiguous the court must enforce the contract as it finds it, e.g., Linden Motor Freight Co., Inc. v. Travelers Ins. Co., 40 N. J. 511, 525 (1963); James v. Federal Insurance Co., 5 N. J. 21, 24 (1950); Kook v. American Sur. Co. of N. Y., 88 N. J. Super. 43, 52 (App. Div. 1965). If, however, the controlling language will support two meanings, the interpretation sustaining coverage must be applied. Mazzilli v. Acc. & Cas. Ins. Co. of Winterthur, 35 N. J. 1, 7 (1961); Ohio Cas. Ins. Co. v. Flanagin, 44 N. J. 504, 513-514 (1965). In evaluating the claim of an insured, consideration should be given as to whether alternative or more precise language, if used, would have put the matter beyond reasonable question. Mazzilli, at p. 7; Kook, at p. 51.

Applying these principles to the policy before us, we are flrmly of the belief that both the insured and the insurer understood and intended that the area of coverage staked out embraced only indemnity of the hospital for liability imposed by reason of negligence in performing its functions and malpractice, and did not comprehend any responsibility of the insurer to he answerable to the hospital for the manifold claims or actions which might be brought against it, resulting from hospital activity entirely foreign to the area we described.

All the language of the policy is directed toward “bodily” injuries which might occur as a result of hospital action or inaction. While in this case the word “bodily” does not appear in the policy, the word “injury” is combined with the words “sickness,” “death,” and “suffered.” The context in which “injury” appears is so obvious that the word “bodily” would add nothing, and the absence of it in our judgment did not render the insuring clause ambiguous.

Another portion of the policy also indicates the nature of the risk covered. Under “Notice of Occurrence, Claim or Suit” the insured must give written notice containing particulars “sufficient to identify the Insured and also reasonably obtainable information respecting the time, place and circumstances of the occurrence, the names and addresses of the injured and of available witnesses.”

In these circumstances we conclude that since the cause of action pleaded in the doctors’ complaint was not a risk insured against, St. Paul was not obliged to defend. See Danek v. Hommer, 28 N. J. Super. 68, 76—77 (App. Div. 1953), affirmed 15 N. J. 573 (1954).

The trial court did not pass directly upon the issue of whether the claim on which the doctors’ suit was brought was a risk within the coverage of the policy. Rather, it held that the carrier having agreed to defend the damages count, was obligated to reimburse the hospital for expenses incurred in defense of the count by which an injunction was sought. While our courts have held that prejudice to the insured is not essential for a finding of estoppel to deny coverage, see O’Dowd v. U. S. Fidelity & Guaranty Co., 117 N. J. L. 444, 451-452 (E. & A. 1937); Goldmann v. Lumber Mutual Cas. Ins. Co. of N. Y., 30 N. J. Super. 281, 286 (Cty. Ct. 1954), the most recent pronouncement of our Supreme Court and the cases following are to the opposite effect.

In Merchants Indemnity Corp. v. Eggleston, 37 N. J. 114 (1962) the Court stated:

“Where the policy does not cover the loss, it seems inaccurate to speak of a ‘waiver’ since there is nothing to waive. Rather, the relevant thought is ‘estoppel,’ and undoubtedly prejudice is an essential ingredient. * * * Most courts, however, find prejudice is inevitable when the insured is denied the right to maintain complete control of the defense of the damage action.” (at p. 129)

Accord, Sneed v. Concord Ins. Co., 98 N. J. Super. 306 (App. Div. 1967); Goldberg v. Commercial Union Ins. Co. of N. Y., 78 N. J. Super. 183, 192 (App. Div. 1963); Capece v. Allstate Ins. Co., 86 N. J. Super. 462, 477 (Law Div. 1965).

The situation which arises most frequently is that in which the insurance company either investigates and/or defends the suit against the insured; after judgment is taken against the insured, the insurance company disclaims coverage. In this situation the courts either assume prejudice or they find it express^; the theory is that it is futile to attempt to prove or disprove that the insured himself could have better investigated, negotiated or defended. Williams v. Bituminous Casualty Corp., 51 N. J. 146 (1968), relied upon by the trial court, is not to the contrary:

“A carrier’s contractual right to defend presupposes that if the defense fails, the carrier will pay. Merchants Indemnity Corp. v. Eggleston, 37 N. J. 114, 127 (1962). Hence it is settled that a carrier is estopped to deny coverage of an action it undertakes to defend.” (51 N. J., at p. 149)

The present case is in numerous ways distinguishable from what might be termed the standard estoppel to deny coverage situation. Firstly, the defense of the hospital cannot be said to have been unsuccessful; no monetary judgment was entered. Secondly, the insurance company did not have exclusive control of the defense; the hospital’s retained counsel apparently carried the burden. Thirdly, it is quite clear that the hospital did not desire to, nor did it, rely upon St. Paul for a defense; two weeks before notifying the insurance company it retained counsel with experience in the area of hospital administration.

What we have here is a situation in which the hospital wanted its own counsel and not that of St. Paul. If St. Paul was not obligated to defend under the terms of the policy, its partial participation in the defense changed nothing. This is not a case in which we do not know what would have happened had St. Paul not become involved; McCarter & English was also handling the defense, and conceivably, the same settlement would have been worked out even if St. Paul had disclaimed coverage from the very beginning.

Upon the undisputed facts of this case we hold that the insurer’s partial intervention in this case did not prejudice the hospital and therefore that the carrier was not estopped from denying coverage when the present action was instituted.

Accordingly, we reverse, and remand for the entry of judgment in favor of the defendant.


author: Oollesteb, J. A. D.

text:
    EDWARD P. GALLAGHER, TRADING AS THE PUB, AND ANN GUNSIOROWSKI, PLAINTIFFS-RESPONDENTS, v. CITY OF BAYONNE, A MUNICIPAL CORPORATION, AND HUGH E. GREENAN, DIRECTOR OF PUBLIC SAFETY OF THE CITY OF BAYONNE, DEFENDANTS-APPELLANTS.
    Superior Court of New Jersey Appellate Division
    Argued March 6, 1969—
    Decided July 18, 1969.
    Before Judges Gaulicxn, Oqllestkb and Labkecque.

      Mr. James P. Dugan argued the cause for appellants.

      Mr. Patrick D. Conaghan argued the cause for respondents (Messrs. Bussell & Conaghan, attorneys).

      Mr. Stephen Slcillman, Deputy Attorney General, filed a brief amicus curiae for Division of Alcoholic Beverage Control (Mr. Arthur J. Sills, Attorney General of New Jersey, attorney).
   The opinion of the court was delivered by

Oollesteb, J. A. D.

This is an appeal by defendants City of Bayonne and its Director of Public Safety from a judgment of the Chancery Division declaring invalid a section of the alcoholic beverage control ordinance of that city which prohibited tavern owners from allowing women to stand or sit at a public bar or to be served alcoholic beverages unless seated at a table in the licensed premises. The State Division of Alcoholic Beverage Control (Division) has filed a brief with the court as amicus curiae.

The declaratory judgment action was brought by plaintiffs Edward P. Gallagher, a tavern owner, and Ann Gunsiorowski, a taxpayer of Bayonne. They claimed that the ordinance was invalid because it was not reasonably related to the police power and contravened the provisions of Art. I. par. 5 of the 1947 New Jersey Constitution. The case was heard on cross-motions for summary judgment. The Chancery Division jndge, in an opinion reported at 102 N. J. Super. 77 (1968), held that the controversial section of the ordinance was invalid because it was unreasonable and violated the provisions against discrimination contained in the 1947 New Jersey Constitution and the Law against Discrimination (N. J. S. A. 18:25-4, now N. J. S. A. 10:5-4).

Defendants contend that the city can lawfully prohibit women from being served or congregating at a bar in premises licensed to sell alcoholic beverages. They allege that the court erred in not following the law set forth in Eskridge v. Division of Alcoholic Beverage Control, 30 N. J. Super. 472 (App. Div. 1954) where this court, in obiter dictum, said that an ordinance which forbids the serving of liquor to women except when seated at tables did not violate the constitutional rights of either the licensee or the women. They claim that the court mistakenly concluded that One Eleven Wines and Liquors, Inc. v. Division of Alcoholic Beverage Control, 50 N. J. 329 (1967), when read together with N. J. Const. Art. I, par. 5, Art. X, par. 4, and N. J. S. A. 10:5-4, constituted a clear prohibition against discrimination in this area of civil rights based on sex. They say that the court misinterpreted the opinion in One Eleven Wines and Liquors, Inc. and that it did not overrule Eskridge. They further argue that the anti-diserimination statute is not applicable and that the ordinance is a reasonable regulation since it does not bar women from taverns but merely prohibits them from commingling at a bar where liquor is served.

The Division, as amicus curiae, takes no position with regard to the validity of the ordinance. However, it does not agree with the conclusions of law reached by the trial court. It alleges that (1) it is reasonable under some circumstances to adopt ordinances or regulations dealing with alcoholic beverage control which provide for differences in treatment based on sex, and (2) neither the State Constitution nor the Law Against Discrimination prohibits differentiation on the basis of sex in such legislation.

We find it unnecessary to pass on the arguments concerning the constitutionality of the ordinance or the relevance of the anti-discrimination statute to the issue confronting us because of our conclusion that the ordinance is invalid as an unreasonable exercise of the police power.

In One Eleven Wines and Liquors the Supreme Court held that the Division of Alcoholic Beverage Control was not justified in suspending or revoking licenses of tavern owners because apparent homosexuals were permitted to congregate in the licensed premises. In so holding the court said:

“When in the 1930’s the Department of Alcoholic Beverage Control first took its severe position, it acted on the assumption that the mere congregation of apparent homosexuals had to he outlawed to achieve effective control. It of course had no experience to support the assumption but it took the prohibitory course as the safer one for the then fledgling system. At the time, the interests of the patrons in question were given little consideration and were in any event overwhelmed by the then highly felt transitional need for sweeping restraint. Now, in the 1960’s, the transitional need as such is long past and it is entirely appropriate that full sweep be given to current understandings and concepts. Under them it seems clear that, so long as the division can deal effectively with the matter through lesser regulations which do not impair the rights of well behaved apparent homosexuals to patronize and meet in licensed premises, it should do so. Such narrower course would be consonant with the settled and just principle that restrictions adopted in the exercise of police powers must be reasonable and not go beyond the public need. (Citations omitted.)
It must be borne in mind that the division has produced nothing to support any need for continuance of its fiat prohibition. Nor has it produced anything to indicate that it could not readily prepare and enforce a fair and sensible regulation which, while permitting apparent homosexuals to assemble in and patronize licensed establishments, prohibits overtly indecent conduct and public displays of sexual desires manifestly offensive to currently acceptable standards of propriety. Such a regulation might well he adopted forthwith to the end that future proceedings would rightly be based on specific charges of improper conduct at the licensed premises rather than, as here, upon general charges of mere congregation which we deem to be unreasonable and legally unsupportable.” (50 N. J., at pp. 341-342)

We believe that the rationale of One Eleven Wines and Liquors applies to the instant ease. While during the early years of alcoholic beverage control legislation it may have been deemed prudent to limit the rights of women who patronized taverns, that time has long since passed. Today it is not uncommon for women to be served at bars in the most reputable of taverns. We were informed at oral argument that all but a small minority of the municipalities in this State permit women to be served at the bar. In these enlightened days of the 1960’s the fact that women congregate and are served at bars cannot be said to be a threat to the health, safety and welfare of the public.

The record in this case presents no facts indicating any necessity for such a regulation in the City of Bayonne. As the court said in One Eleven Wines and Liquors, it is a settled and just principle that restrictions adopted in the exorcise of police powers must be reasonable and not go beyond the public need. (At p. 341). We hold that the restrictions imposed in the Bayonne ordinance are unreasonable and therefore invalid.

The judgment of the Chancery Division is affirmed.


author: Labkeoque, J. A. D.

text:
    JAMES A. BELLO, PETITIONER-RESPONDENT, v. COMMISSIONER OF THE DEPARTMENT OF LABOR AND INDUSTRY, AS TRUSTEE OF THE TWO PER CENT FUND, RESPONDENT-APPELLANT.
    Superior Court of New Jersey Appellate Division
    Argued March 24, 1969—
    Decided July 22, 1969.

      Before Judges Gaulkin, Collesteb and Labbecque.

      Mr. Stephen Skillman, Deputy Attorney General, argued the cause for appellant (Mr. Arthur J. Sills, Attorney Genera] of Few Jersey, attorney).

      Mr. Seymour B. Jacobs argued the cause for respondent (Messrs. Balk, Jacobs, Goldberger & Mandell, attorneys).
   The opinion of the court was delivered by

Labkeoque, J. A. D.

The Commissioner of the Department of Labor and Industry (Commissioner), as trustee of the Two Per Cent Eund, also known as the Second Injury Eund (Eund), appeals from a judgment of the Essex County Court denying the Eund credit, in its computation of the benefits due petitioner James A. Bello, for monies received in settlement of his third-party claim.

In July 1959 Bello filed a petition in the Division of Workmen’s Compensation against his employer, Goodyear Tire and Rubber Company, claiming compensation benefits for disability sustained by reason of his having contracted an occupational disease and developed systemic poisoning due to the inhalation and ingestion of harmful dusts and gases. On October 24, 1961 a stipulation was entered providing for payment by Goodyear of a sum equal to 25% of partial permanent disability, or 137}4 weeks at $35 per week, totalling $4,812.50 for petitioner’s work connected injuries.

Thereafter petitioner obtained a third-party recovery (by way of a settlement) against Pubiic Service Coordinated Transport in the sum of $30,000. Following this the petition in the Division of Workmen’s Compensation was amended to include a claim for benefits under the One Per Cent (now Two Per Cent) Fund. N. J. S. A. 34:15-95.1. The judge of compensation found that petitioner had suffered a toxic encephalopathy as the result of inhaling harmful fumes and gases while on the job, by reason of which he was permanently disabled to the extent of 75% total. The permanent disability was found to be neurological and neuropsychiatric in nature. Tie further found that petitioner, prior to his employment with respondent, had been disabled to the extent of 25% of total permanent by reason of a number of noncompensable preexisting pathological conditions, including a respiratory condition in the nature of a chronic bronchitis and cardiovascular disability in the nature of arteriosclerotic heart disease with coronary insufficiency. Petitioner was found to be totally and permanently disabled as a result of the combination of the two and was awarded $13,500 for his 75% work connected disability, on account of which his employer was held to be entitled to a credit on the basis of petitioner’s third-party recovery.

On the issue 'of whether the Fund was also entitled to credit out of the third-party recovery, the judge of compensation, in an advisory report to the Commissioner, held that it was and recommended that the benefits allowed Bello from the fund be restricted to $13.33 per week until such time as the balance of the third-party award was expended, and thereafter be increased to the full rate of $40 per week. When, despite Bello’s exceptions, these recommendations were adopted by the Commissioner, petitioner appealed to the Comity Court where the Commissioner’s action was reversed. The present appeal followed.

The issue is one of novel impression. Decisions of our sister states are at variance. See Cole v. Morris, 409 S. W. 2d 668 (Mo. Sup. Ct. 1966) (holding Missouri’s Second Injury Eund entitled to be subrogated to the workman’s right to recover in the third-party action). Compare Orth v. Shiely Petter Crushed Stone Company, 253 Minn. 142, 91 N. W. 2d 463 (Sup. Ct. 1958) (denying subrogation to special compensation fund in the absence of specific statutory authorization) .

N. J. S. A. 34:15-40 preserves the right of an employee to sue a third-party tortfeasor, notwithstanding that the injuries for which he seeks recovery are also compensable. It provides, however, that:

“ (a) The obligation of the employer or bis insurance carrier under this statute to make compensation payments shall continue under the payment, if any, by such third person or his insurance carrier is made.
(b) If the sum recovered by the employee or his dependents from the third person or his insurance carrier is equivalent to or greater than the liability of the employer or his insurance carrier under this statute, the employer or his insurance carrier shall be released from such liability and shall be entitled to be reimbursed, as hereinafter provided, for the medical expenses incurred and compensation payments theretofore paid to the injured employee or his dependents less employee’s expenses of suit and attorney’s fee as hereinafter defined.
(c) If the sum recovered by the employee or his dependents as aforesaid is less than the liability of the employer or his insurance carrier under this statute, the employer or his insurance carrier shall be liable for the difference, plus the employee’s expenses of suit and attorney’s fee as hereinafter defined, and shall be entitled to be reimbursed, as hereinafter provided for so much of the medical expenses incurred and compensation payments theretofore paid to the injured employee or his dependents as exceeds the amount of such difference plus such employee’s expenses of suit and attorney’s fee.”

In the event that the employee fails to bring a third-party action within one year of the accident, his employer or its insurance carrier may do so under certain conditions. L. 1931, c. 279, now N. J. 8. A. 34:15-40 (f).

Benefits under the One Per Cent Fund were first made available by L. 1923, c. 81. At the time of the occurrence of Bello’s work-connected disability the statute as amended, N. J. 8. A. 34:15-95, provided for payment of benefits out of the Fund to “persons totally disabled, as a result of experiencing a subsequent permanent injury under conditions entitling such persons to compensation therefor, when such persons had previously been permanently and partially disabled from some other canse-; * * It provided, however, that no person would be eligible for benefits:

“(a) If the disability resulting from the injury caused by his last compensable accident in itself and irrespective of any previous condition or disability constitutes total and permanent disability within the meaning of this Title.
(b) If permanent total disability results from the aggravation, activation or acceleration, by the last compensable injury, of a preexisting noncompensable disease or condition.
(c) If the disease or condition existing prior to the last compensable accident is not aggravated or accelerated but is in itself progressive and by reason of such progression subsequent to the last compensable accident renders him totally disabled within the meaning of this Title.
(d) If a person who is rendered permanently partially disabled by the last compensable injury subsequently becomes permanently totally disabled by reason of progressive physical deterioration or pre-existing condition or disease.”

It further provided that nothing in the foregoing provisions was to be construed to deny benefits to any person who had been previously disabled by reason of total loss of, or total and permanent loss of use of, a hand or arm or foot or leg or eye, when the total disability was due to the total loss of, or total and permanent loss of use of, two or more of said major members of the body, or to any person who in successive accidents had suffered compensable injuries, each of which, severally, caused permanent partial disability, but which in conjunction resulted in permanent total disability.

In holding that the Ennd was not entitled to credit on account of Bello’s third-party recovery, the judge of the County Court adopted a strict construction of N. J. S. A. 34:15-40. See Standard Surety & Casualty Co. v. Murphy, 129 N. J. Eq. 284, 288 (E. & A. 1941). Appellant urges that this was error and that the statute is to be liberally construed to further the purposes of its enactment. Henry Steers, Inc. v. Turner, &c., Co., 104 N. J. L. 189, 195 (E. & A. 1927). We are satisfied that whatever may be the “rule” of construction, it is subordinate to the goal of effectuating the legislative plan, as it may be gathered from the enactment when read in the full light of its history, purpose and context. State v. Gill, 47 N. J. 441, 444 (1966). It is not the words of the law but the internal sense of it that makes the law. Caputo v. Best Foods, Inc., 17 N. J. 259, 264 (1955). The motive which led to its enactment is one of the most certain means of establishing the true meaning of the words used. Ibid.

Here the legislative purpose appears quite clear. Prior to the enactment of the statute permitting reimbursement, an employee sustaining a work-connected disability by reason of a third party’s negligence could recover and retain both workmen’s compensation benefits from his employer and damages from the culpable third party. Newark Paving Co. v. Klotz, 85 N. J. L. 432 (Sup. Ct. 1914), affirmed o. b. 86 N. J. L. 690 (E. & A. 1914). In Newark Paving Co. it was held (at p. 434) that the right to compensation and the right to recover against a tortfeasor were of so different a character that the employer had no right of subrogation to the employee’s claim against the tortfeasor. The statute was intended to correct this or, as was said in New Amsterdam Casualty Co. v. Popovich, 18 N. J. 218, 226 (1955), “to meet a mischief where an injured employee could retain both the compensation payments and full damages from his common law right of action against a third party.” By it the Legislature intended to set up a comprehensive plan for regulating the rights and responsibilities of the parties, preserving the right of the employee to maintain his common law action against third parties (where the damages recoverable could well exceed the compensation benefits payable) and, at the same time, to provide for reimbursement to the employer or its insurance carrier out of any recovery from the one whose negligence was responsible for the injury. United States Casualty Co. v. Hercules Powder Co., 4 N. J. 157, 165 (1950). In this way the party at fault was required to satisfy its common law obligation to the injured person, the employer was reimbursed for the payments by way of compensation made by him, and the employee was permitted to retain any excess based upon the greater damages recoverable in a common law action.

We are convinced that it was the legislative intention, in enacting N. J. S. A. 34:15-40, that payments by way of benefits under the Workmen’s Compensation Act be subject to credit or reimbursement in the event of a recovery by the employee against a third-party tortfeasor. We are likewise convinced that the omission of any express provision for credit or reimbursement in favor of the Fund would not preclude such action, provided plaintiff could recover in the third-party suit for the disability for which the Fund was found liable to payment.

Prior to the enactment of N. J. S. A. 34:15-95 New Jersey adhered to the sole responsibility rule whereby an employer was held liable for payment for all disability flowing from an employee’s work-connected accident, even though the disability would not have been nearly so great had the workman been whole and well, or had he not been previously handicapped by some physical impairment. Belth v. Anthony Ferrante & Son, Inc., 47 N. J. 38, 45-47 (1966). This was because the employer was required to accept an employee as he was, the benefits of the Workmen’s Compensation Act not being restricted to those who were free from previous impairment. Thus, in Combination Rubber Mfg. Co. v. Obser, 95 N. J. L. 43 (Sup. Ct. 1920), a typical case, an employee who had previously lost an eye and later became involved in a work-connected accident causing the loss of the other eye was held entitled to compensation benefits from his employer for total and permanent disability.

It goes without saying that a result such as that in the foregoing case tended to discourage the hiring of employable workers suffering from some form of partial disability. It was in furtherance of the policy of the State to promote the employment of such workers that Hew Jersejr, in line with a majority of the states, set up the One Per Cent Eund. See, as to the history and object of the Eund, Justice Burling’s dissenting opinion in Ratsch v. Holderman, 31 N. J. 458, 468-471 (1960).

The original One Per Cent Eund statute, L. 1923, c. 81, was entitled, in pertinent part, “An Act to provide for the collection, * * *, of funds from which io complete compensation payments to persons totally disabled as the result of two separate accidents, * * *” (emphasis added.) The intention behind it was (1) to encourage the hiring of the handicapped, (2) to relieve the employer of the unfair burden of paying for what he did not cause, and (3) to assure full compensation to the injured employee. Richardson v. Essex National Trunk, &c., Co., Inc., 119 N. J. L. 47 (E. & A. 1937); Balash v. Harper, 3 N. J. 437 (1950). As was said in the latter case:

“The intent of the statute is to insure the employee full compensation where a compensable disability succeeds but has no causative connection with the results of a prior disability, the combination of the two leaving the employee permanently and totally disabled. The intention is to relieve the employer of the undue burden of a prior disability, with which or its results, the disability arising in his employ has no causative connection.” (at p. 442; emphasis added)

Its effect was to shift from the employer’s insurance carrier to the Eund (to which all workmen’s compensation carriers and self-insureds contributed) the burden of paying for that portion of the employee’s total disability which represented the prior accident or condition. The payments to be made -thereunder were denominated “compensation payments” and were required to be made “in accordance with the provisions of paragraph (b) of section 34:15-12 of this Title” (N. J. S. A. 34:15-12). This was the “schedule of payments” for permanent total disability, prescribed by the Compensation Act. As in the case of other workmen’s compensation benefits, applications for benefits from the Fund were required to be made by verified petition within two years of the last payment of compensation by the employer or his carrier, N. J. S. A. 34:15-95.1; the matter was to be heard by a deputy commissioner of workmen’s compensatio (now a judge of compensation) prior to action by the Commissioner of Labor on the former’s advisory opinion, and the appeal from the Commissioner of Labor’s decision was to the County Court pursuant to N. J. S. A. 34:15-66 (governing workmen’s compensation appeals). Payments from the Fund were to be made at the rate fixed in the schedule of compensation payments, and were not to begin until the last payment of compensation by the employer. Ar. J. S. A. 34:15-95.

From the foregoing we are convinced that, rather than conferring new or separate benefits upon the employee, the One Per Cent Fund Act merely shifted the burden of paying part of the compensation benefits consequent upon the disability suffered by the employee, from the employer’s carrier to a fond derived from all carriers. It follows that payments of benefits by the Fund are payments of compensation within the intendment of N. J. 8. A. 34:15-40.

The omission to specifically spell out, in N. J. S. A. 34:15-40, the Fund’s right to credit or reimbursement does not negate the conclusion we have reached. Cf. Caputo v. Best Foods, Inc., 39 N. J. 371 (1963); New Amsterdam Casualty Co. v. Popovich, supra. When considered against the background of the purposes of the act, we see nothing in reason or logic to support the conclusion that by the creation of the Fund the Legislature intended to lessen the obligation of negligent third parties to make reimbursement to those charged with responsibility for the payment of workmen’s compensation. As noted, prior to 1923 the employer was required to shoulder the entire burden of an employee’s dsiability, Combination Rubber Mfg. Co. v. Obser, supra, and was entitled to be reimbursed out of any third-party recovery for compensation already paid and to receive credit on account of all compensation thereafter to become due. Following passage of the One Per Cent Fund Act in that year, the Legislature could well have provided (and remains free to do so) that that portion of an employee’s total disability for which the Fund was thereafter to be liable was to be excluded from the reimbursement provision of the act. From its omission to do so we are satisfied that continued reimbursement for such of the employee’s total disabilitjr as was recoverable in the third-party action, was intended. Further, there was no need to expressly provide in the act that the Fund could also institute suit against the tljird party in case the injured workman failed to do so. Since payments from the Fund did not begin until payments of compensation due from the employer were completed, the authorization to the employer or its carrier to institute suit was sufficient for the protection of all parties entitled to share in any recovery against a third party.

The rule is well settled that one who has paid or become liable to pay compensation to an injured employee is entitled to credit or reimbursement only as to such items as the employee may be entitled to recover against the third party whose negligence occasioned his injuries. O’Brien v. New Jersey State Highway Dept., 11 N. J. Super. 548, 551 (App. Div. 1951). See also Houlihan v. Raymond, 49 N. J. Super. 85 (Law Div. 1958); Schmidt v. Revolvator Co., 46 N. J. Super. 232 (Cty. Ct. 1957); Roberts v. All American Engineering Co., 104 N. J. Super. 1 (App. Div. 1968).

At the oral argument we directed the parties to submit supplemental memoranda as to whether plaintiff would have been entitled to recover in the third-party action for the disabilities for which he had been held entitled to payment of benefits from the Fund. Both have filed supplemental briefs. In the conceded absence of any means of determining the nature and extent of the disabilities for which Bello obtained a settlement of $30,000 from the third-party defendant, we are left to consideration of the measure of damages applicable to such an action.

Disability for workmen’s compensation is measured by its effect on the efficiency of the workman’s body in the ordinary pursuits of life, Walsh v. Roller, 46 N. J. Super. 206 (App. Div. 1957); Stepnowski v. Specific Pharmaceuticals, Inc., 18 N. J. Super. 495, 499 (App. Div. 1952). As regards the physiological effect of a tortious injury, it is the general rule in common law actions for negligence that if an accident, when imposed upon a plaintiff suffering from a previous condition or illness or injury, produces a causally resultant condition worse than it would have been had plaintiff been in perfect health before the accident, plaintiff may, nevertheless, recover for his total condition consequent upon the accident. Dalton v. Gesser, 72 N. J. Super. 100, 111 (App. Div. 1962); Green v. Buck Brothers Co., 98 N. J. Super. 187, 192 (App. Div. 1967), affirmed o. b. 51 N. J. 6 (1967). A wrongful act may be the legal cause of plaintiff’s resultant disability, even though other causes (such as a preexisting condition) may have joined in producing the final result, provided defendant’s negligent conduct was a substantial factor in bringing about the total disability. Dalton v. Gesser, supra, at p 112; Restatement, Torts 2d, § 454, p. 492, comment (b) (1966).

In Dalton plaintiff had allegedly suffered, among other injuries, a cerebral concussion which, superimposed upon a prior brain injury, had resulted in headaches and other symptoms. Here the facts are distinguishable in that Bello suffered from an encephalopathy (a degenerative brain disease) which, so far as the record reveals, was entirely separate and disconnected from his prior respiratory and cardiovascular condition. As to a similar fact pattern, we noted in Dalton:

“* * * differentiation must be made of cases where the question is whether a prior accident or condition has produced a condition or disability separable from that causally resulting from the tortious act involved in the current suit, in which event defendant may properly seek limitation of his liability to that part of plaintiff’s disability caused by his own negligence and ask to be relieved of liability for the residual effects of a prior injury or condition. Prosser, Torts (2d ed. 1955), sec. 45, p. 224 ; 2 Harper & James, Torts, see. 20.3, pp. 1127, 1128 (1956). It is in regard to a situation of this type that the court said in Paxton v. Misiuk, supra (34 N. J., at p. 460), that:
‘A plaintiff may be cross-examined as to prior injuries to show that his present physical condition did not result solely from defendant’s negligent act, but was caused, wholly or partially, by an earlier accident or pre-existing condition.’ ” (at p. 114)

and further:

“ * * Clearly, the principle referred to must not be confused with a defendant’s liability for the entirety of an inseparable specific disability, like the plaintiff’s headaches in the present case, which, within the proofs and formulation of the issues below, must be deemed to have been due in entirety either to the prior condition alone (in which event plaintiff may not recover), to the current accident alone, or to the concurrent effect of both the prior condition and the current accident (in either of which cases the plaintiff may recover).” (at pp. 114-115)

Here we are satisfied that Bello could not have recovered in the third-party action for his respiratory and cardiovascular condition. The award of benefits from the Eund was predicated upon a finding that prior to the compensable accident which was the basis for the third-party suit petitioner suffered from “a separate and definitive partial permanent disability.” Vogel v. Red Star Express Lines, 73 N. J. Super. 534, 540 (App. Div. 1962), affirmed 40 N. J. 44 (1963). This disability, amounting to 25% of total, would have been present regardless of the accident. Absent such a separate, fixed and measurable disability preexisting the compensable accident, there could have been no recovery from the Eund in the first place. Ibid., 73 N. J. Super., at pp. 543-544. Here the allegedly negligent third party could have been held liable for physical disability caused by any condition which proximately resulted from its negligence (including any aggravated effects due to Bello’s preexisting condition) together with any increased disability referable to the preexisting condition resulting from the impact of the accident upon it. Here there is no claim made as to the latter and it goes without saying that had there been any “aggravation, activation or acceleration” of Bello’s prior condition there could have been no award against the Fund for wdiich reimbursement could have been sought. N. J. 8. A. 34:15—95(b).

The Commissioner argues that since Bello’s resultant total loss of earning capacity was occasioned, in part at least, by his preexisting condition, this would permit a recovery for such disability. Not so. While recovery for loss of wages, as distinguished from recovery for physiological disability, may encompass plaintiff’s unemployability by reason of the combination of his accidental injuries and his prior disabilities, such a recovery would be based, not upon his preexisting disability, but upon the fact that the accident was the proximate cause of the reduction or destruction of plaintiff’s ability (as restricted by his prior disability) to earn a living. Thus, to a man with one arm the accidental loss of the remaining arm has more serious economic consequences than would have otherwise been the case, but defendant is not in actuality being called upon to pay for the arm which may have been lost many years before. This no more amounts to a recovery for preexisting physiological disability than would the omission to return a verdict for loss of income in a case involving a plaintiff-executive whose earnings were not affected by his admitted disability, indicate that there was no such disability.

The Commissioner also urges that to deny reimbursement here is to permit a double recovery on Bello’s part. What we have already said as to the measure of Bello’s damages in the third-party action is equally applicable to this argument. In addition, the benefits payable under the One Per Cent Fund partake of the same nature as those payable in the case of work-connected disabilities, and the same reasons which impelled our courts to deny subrogation to employers in cases involving compensation benefits for work-connected disabilities (see Newark Paving Co. v. Klotz, supra) are applicable to benefits payable through the One Per Cent Eund.

Since damages for the fixed and measurable disability from which Bello had been suffering prior to his work-connected accident were not recoverable in his third-party action, the Eund was not entitled to credit or reimbursement out of the amount received in settlement.

Eor the foregoing reasons, the judgment of the County Court is affirmed. No costs.


author: Carton, J. A. D.

text:
    PATRICK H. HALEY, ET AL., PLAINTIFFS-APPELLANTS, v. BOARD OF REVIEW, DIVISION OF EMPLOYMENT SECURITY, DEPARTMENT OF LABOR AND INDUSTRY, STATE OF NEW JERSEY, AND ARMSTRONG CORK CO., DEFENDANTS-RESPONDENTS.
    Superior Court of New Jersey Appellate Division
    Argued May 19, 1969.—
    Decided July 24, 1969.

      Before Judges Goldmann, Kolovsky and Carton.

      Mr. Vincent J. Pancari argued the cause for appellants (Messrs. Halpin and Bailey, attorneys).

      Mr. Edward A. Kaplan argued the cause for respondents.
   The opinion of the court was delivered by

Carton, J. A. D.

Claimants appeal from a decision of the Board of Review holding them disqualified for unemployment benefits because of a labor dispute due to a work stoppage at the Armstrong Cork Company plant at Mill-ville.

Pertinent portions of the “labor dispute” disqualification provisions of the Unemployment Compensation Act (N. J. S. A. 43:21-5) provide:

“An individual shall be disqualified for benefits:
(d) If it is found that his unemployment is due to a stoppage of work which exists because of a labor dispute at the factory, establishment or other premises at which he is or was last employed. No disqualification under this subsection shall apply if it is shown that:
(1) He is not participating in or financing or directly interested in the labor dispute which caused the stoppage of work; and
(2) He does not belong to a grade or class of workers of which, immediately before the commencement of the stoppage, there were members employed at the premises at which the stoppage occurs, any of whom are participating in or financing or directly interested in the dispute * *

The Board of Review, as had the Appeals Tribunal, held that although claimants had satisfied the conditions of sub-paragraph (1), they had not done so as to subparagraph (2). The Board found that claimants neither participated in the labor dispute which caused the work stoppage, nor financed it, nor were directly interested in it. Nevertheless, it concluded that since claimants were employees of a plant “with a continuous and coordinate manufacturing process” in which “each function is dependent upon the completion of the preceding one,” they belonged to the same grade or class as the striking employees and were therefore likewise barred from receiving unemployment compensation.

The issue posed is whether that determination justifies the invocation of the statutory disqualification.

There is no dispute as to the facts. Armstrong’s Millville plant is what is commonly referred to as a “flow glass container plant,” where food and beverage glass containers are manufactured. The plant operates on a 3-shift, 24-hour, 7-day basis. The manufacturing process is a “continuous” one, with each function being dependent upon the completion of the preceding one. When one part of the manufacturing process is stopped the entire operation must necessarily be suspended.

On February 1, 1968 there were employed at the plant about 1235 employees working on an hourly basis. Of these some 95 were mold makers and machinists, members of Locals 7 and 97, American Flint Glass Workers Union (iVFGWU). The 80 claimants were members of these locals. Some 900 employees were production and maintenance workers, members of Local 257 of the Glass Lottie Blowers Association (GBBA), and 100 were warehousemen, shippers and yard truck drivers, who were members of Teamsters Local 676.

The mold makers make new molds for the forming department. These molds are used in the automatic bottle machines to make various shapes and forms of bottles, depending upon the type of mold. The mold makers also make repairs to molds in the machines. The jobs of making new molds and repairs are intermingled according to which of the mold makers are available at the time. There is no differentiation as to who works on new work and who works on repairs.

The machinists, members of local 97 AEGWU, maintain all machines that produce the bottles, and also the feeders that feed the glass. The machines run 24 hours a day and require constant maintenance and repair work because of constant breaking of parts, all being air operated.

Claimants became unemployed on February 1, 1968 when the Armstrong plant was forced to close down due to a strike of the production and maintenance workers, members of Local 257 GBBA. The strike was part of an industry-wide strike by members of the production and maintenance workers unions initially affecting some 64 glass container plants operated by 22 glass manufacturing companies east of the Rocky Mountains.

The plant remained closed until March 23, 1968. During the strike the nonstriking claimants attempted to cross the picket lines but were prevented from doing so. Their union shop committee made unsuccessful efforts to negotiate an agreement with the production and maintenance union officers to get through the picket lines. They also endeavored to induce the employer to make a separate plant agreement with the striking union (GBBA) rather than to continue to negotiate on a multi-employer, multi-union basis.

The narrow question presented is whether claimants belonged to a “grade or class” of workers, any of whom participated in, financed or was directly interested in the labor dispute. As already noted, the Board predicated its determination that they fell into the same category as the striking production and maintenance union employees solely for the reason that they were employed in a “continuous flow plant.”

We do not agree that the statutory term “grade or class of workers” may properly be defined solely in relation to the continuity of the manufacturing process in which the workers are engaged or gauged solely by the similarity of their duties to others employed in that process. The statute does not in terms mandate, and we perceive nothing in it which suggests, a legislative intention to deny such nonstriking workers the benefits which the statute confers simply because of the adventitious circumstance that they were employed in a “continuous flow” manufacturing process. The disqualification should not be expanded beyond its literal phrasing. See Amico v. Board of Review, 49 N. J. 159, 168 (1967).

As Chief Justice Weintraub observed in Amico (at page 167), the statute “is obscure as to the basis of this vicarious disqualification” and the proviso in question “turns the labor-dispute disqualification upon whether the employee belongs ‘to a grade or class’ of workers any of whom is participating in or financing or directly interested in the dispute. But the statute does not say what is meant by ‘grade or class.’ ”

The word “grade” has been interpreted to refer generally to the type of work being performed, skills or expertness, or to such skills in relative position, rank or standing to those of other employees engaged in common employment. See Members of Iron Workers Union of Provo v. Industrial Commission, 104 Utah 242, 139 P. 2d 208 (1943). Employees have been said to come within a “grade or class” when they individually and collectively engage themselves formally or informally for a common purpose to obtain by concerted action a common objective. See Copen v. Hix, 130 W. Va. 343, 43 S. E. 2d 382 (1947). And see annotation relating to unemployment benefits due to labor disputes, 28 A. L. R. 2d 287, 340-343 (1953), which collects the cases where these and similar phrases have been interpreted.

But we deem it unnecessary to define the precise meaning of the words “grade or class” apart from or without regard to the statute in which they appear. There is language in the statute which sheds light on their intended meaning.

We are of the view that the phrase “grade or class” may not be considered in isolation, but must be read together with the language which immediately follows it in order to arrive at a correct interpretation of its intent and purpose. That language modifies the words “grade or class” and qualifies and affects their scope and content to accord with the general purpose of the disqualification provisions of the statute.

The general theory of the disqualification provisions would appear to be to withhold rewarding those whose activities assist in bringing about their own unemployment or who benefit from such activities. See Soricelli v. Board of Review, 46 N. J. Super. 299 (App. Div. 1957). The aim of the specific proviso under consideration seems designed to implement that policy by denying benefits to the members of any group which as a group might be said to join in, promote or obtain some advantage through the interdicted activities of any of its members.

There are many groups to which a worker may belong which have no necessary connection with the activities enjoined by the statute. To hold such a worker is automatically deprived of benefits by reason of his membership in that group would be to penalize non-striking workers on a broad, vicarious basis which would further no discernible legislative purpose. Indeed, to apply such an automatic disqualification might well encourage workers to participate actively in labor disputes to which they might otherwise have assumed a merely passive role.

Only when a worker’s own interest is advanced by reason of membership in a group, one or more of whom engages in the activities of the nature described in the statute, should he be deprived of unemployment benefits. A number of classifications of this kind can be envisioned as possibly entailing a disqualification on this basis. Membership in a union may provide a basis for extending disqualification to all its members because some of them belong to the same “grade or class” as the strikers. Other examples appear in the cases referred to in the annotation in 28 A. L. R. 2d, at 287 et seq.

Thus, it is necessary to look to the nature and character of the group involved to ascertain whether the objectionable activities of any members require the taint of vicarious disqualification, to be extended to its entire membership. We detect nothing in the nature or character of claimants’ common employment with the 900 production and maintenance workers in the “continuous manufacturing process” or in the “continuous flow” plant operation at the Armstrong plant which requires that such disqualification be invoked against them.

The authorities relied upon by the Board in support of its ruling are consistent with this conclusion. In Amico the claimants worked within an integrated continuous flow production line and were members of the same union as the 15 welders who struck their common employer and caused a work stoppage. Since the claimants refused to participate in the strike or honor picket lines, the court found that the requirements of N. J. S. A. 43:21-5(d) (1) had been satisfied and proceeded to determine whether they should be considered members of the same “grade or class” under N. J. S. A. 43:21—5(d) (2). The court decided that despite claimants’ refusal to participate in the strike they were not entitled to receive compensation because all members of a class are denied recovery if any of them advances the labor dispute. Being members of the same collective bargaining unit as the strikers, they were members of the “same class” as those who were responsible for the strike.

In Gerber v. Board of Review, 20 N. J. 561 (1956), six watchmen sought compensation benefits for unemployment resulting from a strike called by their own union, which was bargaining in their behalf because they had ratified their union’s action by striking. The court denied recovery because the union was their collective bargaining agent, thereby making them directly interested in the outcome of the labor dispute. Likewise, in Basso v. News Syndicate Co., 90 N. J. Super. 150 (App. Div. 1966), the court denied recovery because claimants were members of a guild which aided and promoted the strike of their fellow employees’ printers union, including honoring their picket lines and adopting that union’s directives to its rank-and-file printers.

In Burgoon v. Board of Review, 100 N. J. Super. 569 (App. Div 1967), the court was concerned with a continuous flow production situation at the same Armstrong plant here involved. In that case a teamster union walk-out occurred and was supported by Local 257 of GBBA but not by Local 7 of that union. Nevertheless, the court ruled that GBBA Local 7 members were ineligible for compensation because they were members of the same, class as GBBA Local 257 since both were represented by the same international union, paid membership dues to it, maintained a common strike fund with the international, and were beneficiaries of its accomplishments.

In all these cases unemployment compensation was denied because claimants either directly participated in the work stoppage or were members of the same class as those causing the strike. However, as the Board found, the claimants here did nothing to advance the GBBA strike and, indeed, attempted to terminate it. Moreover, they had no union affiliations with the GBBA and consequently were not members of that “grade or class.” No common objectives or tangible joint benefits existed.

Reversed.