source: Caselaw Access Project

author: Rosenberg, J. C. C.

license: Public Domain

text:
    ALBERT L. COHN, PLAINTIFF, v. DONAL L. FISHER, DEFENDANT.
    Superior Court of New Jersey Law Division
    Decided January 24, 1972.

      Mr. Daniel Crystal for plaintiff (Messrs. Cohn and Lifland, attorneys; Mr. Albert L. Cohn, on the brief).

      Mr. Donal L. Fisher pro se.

   Rosenberg, J. C. C.

(temporarily assigned). Plaintiff Albert L. Cohn (hereinafter Cohn) moves for summary judgment against defendant Donal L. Fisher (hereinafter Fisher). The controversy concerns an alleged breach of contract for the sale of Cohn’s boat by Fisher.

On Sunday, May 19, 1968, Fisher inquired of Cohn’s advertisement in the New York Times for the sale of his 30-foot auxiliary sloop. Upon learning the location of the sailboat, Fisher proceeded to the boatyard and inspected the sloop. Fisher then phoned Cohn and submitted an offer of $4,650, which Cohn accepted. Both agreed to meet the next day at Cohn’s office in Paterson. At the meeting on Monday, May 20, Fisher gave Cohn a check for $2,325 and affixed on same: “deposit on aux. sloop, D’Arc Wind, full amount $4,650.” Both parties agreed to meet on Saturday, May 25, when Fisher would pay the remaining half of the purchase price and Cohn would presumably transfer title.

A few days later Fisher informed Cohn that he would not close the deal on the weekend because a survey of the boat could not be conducted that soon. Cohn notified Fisher that he would hold him to his agreement to pay the full purchase price by Saturday. At this point relations between the parties broke down. Eisher stopped payment on the check he had given as a deposit and failed to close the deal on Saturday.

Cohn then re-advertised the boat and sold it for the highest offer of $3,000. In his suit for breach of contract Cohn is seeking damages of $1,679.50 representing the difference between the contract price with Fisher and the final sales price together with the costs incurred in reselling the boat.

A motion for summary judgment is designed to provide a prompt and inexpensive method of disposing of any cause which a discriminating search of the merits in the pleadings, depositions and admissions on file, together with the affidavits submitted on the motion, clearly shows not to present any genuine issue of material fact requiring disposition at a trial. Judson v. Peoples Bank & Trust Co. of Westfield, 17 N. J. 67, 74 (1954). The test for determining whether to grant or deny a motion for summary judgment under R. 4:46-2 was there set forth by Justice Brennan:

The standards of decision governing the grant or denial of a summary judgment emphasize that a party opposing a motion is not to be denied a trial unless the moving party sustains the burden of showing clearly the absence of a genuine issue of material fact. At the same time, the standards are to be applied with discriminating care so as not to defeat a summary judgment if the movant is justly entitled to one. [at 74]

Defendant contends in his answer that there was no breach of contract since the agreement of sale was conditional upon a survey inspection of the boat. However, in his depositions defendant candidly admits that neither at the time the offer to purchase was vprbally conveyed and accepted nor on the following day when he placed a deposit on the boat did he make the sale contingent upon a survey. This court holds that it may render a decision on the applicable law involved since the movant has clearly excluded any reasonable doubt as to the existence of any genuine issue of material fact. Dor, as noted by the court in Judson> supra,:

Nor is summary judgment to be denied if other papers pertinent to the motion show palpably the absence of any issue of material fact, although the allegations of the pleadings, standing alone, may raise such an issue. Summary judgment procedure pierces the allegations of tile pleadings to show that the facts are otherwise than as alleged. [at 75]

The essentials of a valid contract are: mutual assent, consideration, legality of object, capacity of the parties and formality of memorialization. In the present litigation dispute arises only to the elements of mutual assent and formality of memorialization.

N. J. 8. A. 12A:2-204(1) states that “A contract for sale of goods may be made in any manner sufficient to show-agreement, including conduct by both parties which recognizes the existence of such a contract.” Although defendant has admitted to the court that at no time did he condition his offer to purchase the boat upon a survey inspection, he still asserts that the survey was a condition precedent to the performance of the contract. Thus, the issue arises as to the nature of the bargain agreed upon by the parties. N. J. 8. A. 12A:1-201(3) defines “agreement” as meaning:

* ® * the bargain of the parties in fact as found in their language or by implication from other circumstances including course of dealing or usage of trade or course of performance as provided in this Act (32A:l-205 and 2-208). Whether an agreement has legal consequences is determined by the provisions of this Act, if applicable; otherwise by the law of contracts (12A :1-103).

Under the objective theory of mutual assent followed in all jurisdictions, a contracting party is bound by the apparent intention he outwardly manifests to the other contracting party. To the extent that his real, secret intention differs therefrom, it is entirely immaterial. See Looman Realty Corp. v. Broad St. Nat. Bank of Trenton, 74 N. J. Super. 71 (App. Div. 1962); Leitner v. Braen, 51 N. J. Super. 31 (App. Div 1958).

The express language of the contract, failing to manifest an intention to make the sale of the boat conditioned on a survey, and defendant failing to present evidence that the condition of a survey was implied under any section of the Uniform Commercial Code or in the general law of contracts, this court concludes that the agreement between the parties was exclusive of a condition precedent for a survey of the boat.

As to the element of formality of memorialization, N. J. S. A. 12A :2-201 requires that a contract for the sale of goods for the price of $500 or more, to be enforceable, must comply with the statute of frauds.

The applicable sections of N. J. S. A. 12A :2-201 (exclusive of those sections dealing with merchants) are:

(1) Except as otherwise provided in this section a contract for the sale of goods for the price of $500 or more is not enforceable by way of action or defense unless there is some writing sufficient to indicate that a contract for sale has been made between the parties and signed by the party against whom enforcement is sought or by his authorized agent or broker. A writing is not insufficient because it omits or incorrectly states a term agreed upon but the contract is not enforceable under this paragraph beyond the quantity of goods shown in "such writing.
(3) A contract which does not satisfy the requirements of subsection (1) but which is valid in other respects is enforceable
* sjc * * sjs* # ❖ ❖
(b) if the party against whom enforcement is sought admits in his pleading, testimony or otherwise in court that a contract for sale was made, but the contract is not enforceable under this provision beyond the quantity of goods admitted; or
(c) with respect to goods for which payment has been made and accepted or which have been received and accepted (12A:2-606).

Thus in the present case, there are three alternatives by which the contract could be held enforceable:

(1) under N. J. S. A. 12A:2-201(1) the check may con- ■ stitute a sufficient written memorandum;
(2) under N. J. S. A. 12A :2-201(3) (b) defendant’s testimony in depositions and his answers to demands for admission may constitute an admission of the contract, or
(3) under N. J. S. A. 12A :2-201(3) (c) payment and acceptance of the cheek may constitute partial performance.

The above issues, arising under the Uniform Commercial Code adopted by this State on January 1, 1963, are novel to the courts of New Jersey. Por such reason this court will determine the enforceability of the contract under each of the alternatives. Ample authority for resolving the issues is found in the notes provided by the framers of the Code and in the decisions of our sister states.

With regard to the question of whether the check satisfies the statute of frauds as a written memorandum, N. J. 8. A. 12A:2-201(1) requires (1) a writing indicating a contract for sale, (2) signed by the party to be charged, and (3) the quantity term must be expressly stated. The back of the check in question bore the legend “deposit on aux. sloop, D’Arc Wind, full amount $4,650.” Thus the check seems to prima facie satisfy the requirements in that: it is a writing which indicates a contract for sale by stating the subject matter of the sale (aux. sloop, D’Arc Wind), the price ($4,650), part of the purchase terms — 50% down (deposit of $2,325), and by inferentially identifying the seller (Albert Cohn, payee) and the purchaser (Donal Pisher, drawer); it is signed by the party against whom enforcement is sought (Donal Pisher); and it expressly states the quantity term (the D’Arc Wind). Thus the check, although not a sales contract, would comply with the requirements of the statute of frauds under N. J. 8. A. 12A :2-201 (1).

Such a result, however, would be in conflict with the case law of New Jersey. As noted in the New Jersey Study Comment to §12A:2-201, par. 3, under both the Uniform Sales Act and the Uniform Commercial Code a sales contract not in writing is not unenforceable if there is a memorandum of the agreement in writing signed by the party to be charged or his authorized agent. Although the Uniform Sales Act was silent as to the required terms for a satisfactory memorandum, the courts in New Jersey had restrietively interpreted “memorandum” to mean a writing containing the full terms of the contract. See Bauer v. Victory Catering Co., 101 N. J. L. 364, 370 (E. & A. 1925). N. J. S. A. 12A:2-201(1), in stating, with the exception of the quantity term, that “A writing is not insufficient because it omits or incorrectly states a term agreed upon * * *,” clearly changes the law in New Jersey as to tire requirements of the memorandum exception to the statute of frauds. As evidenced by the Uniform Commercial Code Comment to § 12A:2-201, par. 1, such a change was clearly intended:

The required writing need not contain all the material terms of the contract and such material terms as are stated need not be precisely stated. All that is required is that the writing afford a basis for believing that the offered oral evidence rests on a real transaction. * * * The price, time and place of payment or delivery, the general quality of the goods, or any particular warranties may all be omitted. :¡¡ * * * * *
Only three definite and invariable requirements as to the memorandum are made by this subsection. First, it must evidence a contract for the sale of goods; second, it must be ‘signed,’ a word which includes any authentication which identifies the party to be charged; and third, it must specify a quantity.

In holding that the cheek in the present litigation sufficiently satisfies the requirements of N. J. S. A. 12A:2-201 (1) to constitute a memorandum of the agreement, this court is not without judicial authority. In Herzog v. Tidaback, 67 N. J. Super. 14 (Ch. Div. 1961), the court took a half step in such a direction. There the court held that where a purchaser of real estate gave the seller’s agent a check which bore the notation that it was a deposit on specific premises in accordance with a listing agreement, and where the seller’s agent accepted, endorsed and cashed said check, the notation together with the endorsement of seller’s authorized agent would be sufficient to satisfy the requirements of the statute of frauds. Thus, in order for a check to satisfy the memorandum exception, Herzog required that an outside agreement be incorporated by reference. But this distinction is due to the fact that the sale in Herzog involved real estate rather than goods, as in the present ease. This distinction between a contract for the sale of land which requires that a cheek refer to a written agreement, and a contract for the sale of goods which does not require incorporation by reference on a check, has been clearly drawn. See 20 A. L. R. 363; 153 A. L. R. 1112. The decisions under the Uniform Commercial Code involving a contract for the sale of goods are to the effect that a check alone is sufficient to constitute a writing in compliance with the statute of frauds. See Mason v. Blayton, 119 Ga. App. 203, 166 S. E. 2d 601 (Ct. App. 1969) ; Torreggiani v. Coffee of Columbia, Inc. 49 Misc. 2d 785, 268 N. Y. S. 2d 649 (N. Y. City Civ. Ct. 1965).

Accordingly, this court concludes that by the adoption of the Uniform Commercial Code in New Jersey, the case law concerning the sufficiency of memorandum has been changed. It therefore appears to the satisfaction of this court that the chock in the case at bar satisfies the requirements of N. J. 8. A. 12A:2-201 (1) and thereby renders the contract enforceable under the statute of frauds.

Had the check not satisfied the requirements of N. J. 8. A. 12A :2-201(l), the check, together with defendant’s admission of a contract in his depositions and demands for admission, may satisfy N. J. 8. A. 12A :2 — 201 (3) (b). This subsection states, in effect, that where the requirements of 12A:2-201(1) have not been satisfied, an otherwise valid contract will be held enforceable if the party charged admits that a contract was made. Such a contract would be enforceable only with respect to the quantity of goods admitted.

The New Jersey Study Comment to § 12A:2-201, par. 7, points out that “The cases from other states are in disagreement on the question of giving effect to admissions in court for purposes of satisfying the statute of frauds.” See Padgham v. Wilson Music Co., 3 Wis. 2d 363, 88 N. W. 2d 679 (Sup. Ct. 1958); Zlotziver v. Zlotziver, 355 Pa. 299, 49 A. 2d 779 (Sup. Ct. 1946). The theory behind the dissention under § 2-201(3) (b) seems to be that “* * * the defendant should be privileged not to make the admission if it has the legal effect of depriving him of the defense of the Statute of Frauds.” Hawkland, Sales and Bulk Sales, 31 (1958).

This court is of the opinion that if a party admits an oral contract, he should be held bound to his bargain. The statute of frauds was not designed to protect a party who made an oral contract, but rather to aid a party who did not make a contract, though one is claimed to have been made orally with him. This court would therefore hold that the check, together with defendant’s admission of an oral contract, would constitute an enforceable contract under N. J. S. A. 12A :2-201 (3) (b).

Finally, under N. J. S. A. 12A: 201(3) (c) the check may constitute partial performance of the contract in that payment for goods was made and accepted, and, as such, the contract would be held enforceable under the statute of frauds. N. J. S. A. 12A:2-201(3) (c) provides that although the requirements of N. J. S. A. 12A:2-201(1) have not been met, an otherwise valid contract will be held enforceable with respect to goods (1) for which payment has been made and accepted, or (2) which have been received and accepted.

As noted in the New Jersey Study Comment to § 2-201, par. 8, this subsection partially changes New Jersey case law which held that either part payment or the actual receipt and acceptance of part of the goods satisfies the statute of frauds for the entire contract. See Field and Field v. Runk, 22 N. J. L. 525 (Sup. Ct. 1850); Leslie v. Casey, 59 N. J. L. 6 (Sup. Ct. 1896). Under the Code oral contracts would be held enforceable only to the extent that goods have been paid for or received. Thus, part pajonent or receipt and acceptance of part of the goods would satisfy the statute of frauds, not for the entire contract, but only for the quantity of goods which have been received and accepted or for which payment has been made and accepted.

In the present case, since the quantity term has been clearly indicated by the check itself, namely “aux. sloop, D’Arc Wind,” the check, by representing that payment had been made and accepted, would constitute partial performance and the contract would be held enforceable under N. J. 8. A. 12A:2-201(3) (c). That such a decision results in upholding the entire contract is due solely to the fact that the entire contract concerned only the sale of one boat.

The fact that defendant had stopped payment on the check is of no legal significance. As stated by Professor Corbin, “The requirements of the statute [of frauds] are satisfied even though the drawer of the check causes its dishonor by stopping payment; the oral contract is still enforceable and the holder can maintain suit against the drawer for the amount of the check.” Corbin on Contracts, § 495 (1950). The Uniform Commercial Code takes the same view in N. J. 8. A. 12A:3-802(1) (b) : “If the instrument is dishonored action may be maintained on either the instrument or the obligation.” Thus, a subsequent stop-payment order has no bearing on whether or not an enforceable contract came into being upon the delivery and acceptance of the check.

In sum, the case at bar has fully complied with the statute of frauds in that under each of the alternative subsections— N. J. S. A. 12A:2-201(1), (3) (b), and (3) (c) — the enforceability of the contract is upheld.

The time and place for performance of the contract is not in dispute: both parties agree that final payment was to be made on May 25, 1968 at the boat yard where plaintiff’s sloop was stored. N. J. 8. A. 12A:2-507(1) requires tender of delivery as a condition to seller’s right to payment according to the contract. It appears from the facts that plaintiff seller complied with N. J. 8. A. 12A:2-507(1) in tendering delivery, since he was ready, willing and able to close the deal. Defendant buyer’s failure to rightfully reject under N. J. S. A. 12A:2-601 and 2-602 or to accept under N. J. 8. A. 12A:2-606 constituted a breach of the contract.

Under N. J. 8. A. 12A:2-706 the seller may resell the goods and recover from the defaulting buyer the difference between the contract price and the resale price, together with incidental damages allowed by N. J. S. A. 12A:2-710, but less any expense saved in consequence of the buyer’s breach. The resale must be made in good faith and in a commercially reasonable manner with reasonable notification of the resale to the defaulting buj'or. “Incidental damages are additional expenses reasonably incurred by the aggrieved party by reason of the breach. They would include resale charges, storage charges, notice charges and the like.” New Jersey Study Comment to § 12A:2-710.

By letter of May 27, 1968 plaintiff notified defendant of his intention to resell the boat. Plaintiff then re-advertised the boat in the New York Times and accepted the highest offer of $3,000 in early June. This court holds such a sale to have been conducted in good faith and in a commercially reasonable manner which, together with the fact of notice to the defendant, satisfies the requirements of N. J. 8. A. 12A :2-706.

By reason of the foregoing, this court hereby grants plaintiff’s motion for summary judgment against defendant for breach of contract and awards damages in the amount of $1,679.50 representing resale damages under N. J. 8. A. 12A:2-706 of :$1,650 and incidental damages under N. J. 8. A. 12A :2-710 of $29.50.

Present order accordingly.


author: Joelson, J. S. C.

text:
    STATE OF NEW JERSEY, PLAINTIFF, v. GEORGE R. HARRISON AND EDWARD R. MAYS, DEFENDANTS.
    Superior Court of New Jersey Law Division
    Decided February 1, 1972.

      Mr. Martin Kayne for the plaintiff (Mr. Jo’seph F. Gourley, Passaic County Prosecutor, attorney).

      Mr. Herbert 8. Alterman and Mr. Harvey R. Browne for defendants.
   Joelson, J. S. C.

Defendants, who are under indictment for murder, have moved by way of pretrial discovery to inspect and copy all police reports “pertaining to this matter.” The State has resisted the application, contending that police records are immune from discovery.

R. 3:13 — 3 (e) provides as follows:

Except as heretofore specifically provided, this rule does not authorize discovery by a party of reports, memoranda or internal documents made by any other party, his attorneys or agents in connection with the investigation, prosecution or defense of the matter * * *.

The State contends that this provision effectively bars the discoverability of police reports concerning the homicide for which defendants have been indicted.

The comments to the 1971 edition of the Rules of Court do indicate (at 320) that a proposal was rejected which would have given the courts discretion to make discoverable all reports, memoranda and other internal documents of the State made in conjunction with its investigation or trial preparation. The commentary states that “this proposal was rejected apparently for the reason, expressed at the May 1967 Judicial Conference that such discovery would unduly prejudice the State and hamper its investigations.” It further points out that the Federal Rules of Criminal Procedure likewise maintain “the exemption of the State’s internal memoranda from defendant’s discovery.”

Since the limitation refers to reports, memoranda or internal documents of a party and its agents, it might be questioned whether it should apply to those of a local police department. However, if this distinction were to be adopted, records of State Police who investigated a matter would be protected from inspection, but those of local police would not be protected. In view of the purpose of the limitation as hereinabove expressed, the intent of its authors does not appear to be of such narrow application. Furthermore, in the literature on the subject such a distinction does not emerge. Although law review authors are dismayed by the general exclusion, they do not argue that it is not applicable to local police. 74 Harv. L. Rev. 1051 et seq. (1961); Tray-nor, “Ground Lost and Found in Criminal Discovery,” 39 N. Y. U. L. Rev. 243 (1964)

It is the opinion of the court that in view of R. 3 :13-3 (e), it lacks the authority to require that all police records relating to the investigation of a case be opened to the attorney for a defendant after the indictment. However, this does not dispose of the matter because the court must still deal with the question as to whether defense counsel should be given the right to inspect and copy the reports of police personnel who will be witnesses at the trial.

Defendants have requested and the court has ordered, pursuant to its discretionary power under R. 3:13-3(c) (1), that the State disclose to the defense “the names and addresses of any persons whom the prosecuting attorney knows to have relevant evidence or information, and to indicate which of those persons he may use as witnesses.” Furthermore, defendants have requested and the court has ordered, pursuant to R. 3:13-3(e) (2), that the State “permit the defendant to inspect and copy or photograph any relevant records of statements, signed or unsigned, by such persons * *

The court is of the opinion that it must regard as significant the words, “Except as otherwise provided,” at the very commencement of R. 3 :13-3 (e). These words indicate that the bar against inspection of police reports is not absolute, but must yield to other provisions of R. 3 :13-3. R. 3:13~3(c) (1) specifically provides that the court may in its discretion order the State to disclose the names and addresses of witnesses, and B. 3 :13-3(c) (2) then provides that a defendant may be permitted to inspect and copy “any relevant records of statements, signed or unsigned, by such persons * * In this case the court has signed an order of discovery under those two subsections. Since defendant now has the right to know the identity of the witnesses, including police witnesses, it should also have the right to inspect or copy the reports of such witnesses.

Central to the discussion of this problem are State v. Hunt, 25 N. J. 514 (1958), and State v. Farmer, 48 N. J. 145 (1966). In the former it was held that “where it appears that a State’s witness has made prior notes or statements relating to the subject matter of the direct testimony which he has given, the defense is entitled to inspect and use on cross-examination the prior notes or statements if they are or can be made available.” The State’s attorney at oral argument emphasized the fact that the Hunt case involved only the question of production of statements or notes of a witness during the trial rather than before the trial. However, it is the opinion of this court that if the report of a police witness can be seen by defense counsel during the trial, there is no good reason why it cannot be seen by him prior to trial.

Trial judges know from experience that defense counsel who are not supplied with such a report until the witness has taken the stand must either skim through it hurriedly under the pressure of the clock or be given a recess of some time, thereby slowing down the trial and causing a prolonged wait by the jury. If a defense counsel is entitled to see the report of a witness, he should be able to see it under circumstances which permit him to use it with care and deliberation. When the prosecuting attorney was pressed by the court at the oral argument as to why a defense counsel who is entitled to see a report during trial should not be entitled to see it before trial, he replied that “there are defense attorneys who can build a case around * * * so-called weaknesses in a police report.” To this it can be replied that the very purpose of discovery is to enable defense counsel to uncover such weaknesses as may exist.

In State v. Farmer, supra, we find a clear indication that the opportunity afforded defense counsel to inspect a witness’ report during trial should be extended to his right to pretrial discovery. In approving the action of a trial judge who declared a mistrial because the jury heard testimony of a police witness whose report had not been made available to the defense under the customary discovery order, the Supreme Court said (at 176) : “If the court had not construed the discovery order as requiring delivery of the police reports to defendant and the trial had proceeded to conviction, undoubtedly a reversal would have ensued on appeal.” It does appear from the factual context of that case, however, that the opinion limited itself to the reports of witnesses only.

This court is not unmindful of the public interest in protecting the confidentiality of sources of information of the police, and although it will order the State to make available to the defense the statements or reports of police witnesses, it will carefully consider any requests which the State may make to delete information that might legitimately be deemed to be of a confidential nature.

In summary, the court will not order the entire police file on the matter to be made available to defense counsel, believing this would be a violation of R. 3:13-3(e). Furthermore, even if it were not such a violation, the court believes it can exercise reasonable discretion under R. 3:13-3(b) and (c), which subsections are entitled “Materials Discoverable by Defendant in the Court’s Discretion.” However, the court will order that the State permit defense counsel to inspect, copy or photograph the reports or statements of all witnesses, including police personnel.


author: Yanoff, P. J. D. C.

text:
    YOUNG TRAVELERS DAY CAMPS, INC., A CORPORATION OF THE STATE OF NEW YORK, PLAINTIFF, v. MICHAEL FELSEN, DEFENDANT.
    District Court Essex County
    Decided February 3, 1972.

      Messrs. Diamond & Pitman, attorneys for plaintiff.

      Messrs. Schenck, Price, Smith & King, attorneys for defendant.
   Yanoff, P. J. D. C.

This issue arises on a motion for a new trial after a trial before me which resulted in a judgment for plaintiff in the sum of $513.93 on the main suit, and a judgment for plaintiff, also, on the counterclaim.

The principal question raised is one of law, dealing with the effect of a contract provision authorizing termination upon five days written notice. It is uncontradicted that such notice was not given by plaintiff. Defendant’s contention is that the notice provision makes it the exclusive method for terminating the contract, and therefore plaintiff had no right to terminate the contract. There is. no case in Yew Jersey on the subject and analysis of decisions outside this jurisdiction reveals a conflict of authority.

Although I rendered an oral opinion analyzing the facts in the matter, reference to the factual context is necessary for a proper understanding of the problem.

On January 29, 1970 plaintiff Young Travelers and defendant Eelsen entered into a “franchise agreement.” The agreement is an elaborate instrument which licenses Eelsen in the establishment of children’s summer day camps, according to a system developed and promoted by Young Travelers.

The contract was drawn by Young Travelers. It contains elaborate provisions regulating licensee’s conduct. Among other things, it requires licensee to make an initial cash payment, giving him a choice of various methods. In this case licensee chose Schedule E which required him to pay $1,000 : $250 on execution of contract; $250 on start of training to be supplied by Young Travelers; and $500 on the first $3,000 of sales, plus varying percentages of net profits. This payment was to be made by depositing the fund in a joint checking account, to be drawn upon by the joint signatures of licensor and licensee.

The contract provides:

Beginning witli the date of this agreement or March first, whichever is later, and continuing until June 30 of each year, the licensee shall use his best efforts in the time before and/or after the time spent in his usual occupation to solicit business for the ■ forthcoming summer’s operation and to perform all other preparations necessary to the beginning of the summer’s operations. * * *

The Contract contains two specific methods of termination: one, for failure to pay licensor a minimum amount of profit, in which case licensor has the right to terminate by written notice; the other, the provision involved here:

XXIII. RIGHTS AND OBLIGATIONS OF THE PARTIES ON TERMINATION

(a) If the Licensee shall become in default under any finance or security agreement, deed of trust or lease covering the Franchise and any tangible or intangible property used in the conduct and operation thereof, or shall be adjudicated a bankrupt, or shall make an assignment for the benefit of creditors, or if a receiver shall be appointed to take charge of the Licensee’s affairs, or if the Licensee shall default in the performance of any covenant or agreement made hereunder, as to standards of operation, failure to obtain consent of the Licensor where required hereunder, payments of amounts due hereunder or otherwise, and such default shall not be remedied to the Licensor’s satisfaction within five (5) days after notice of such default, then the Licensor may thereupon terminate this Agreement and all rights hereunder of the Licensee, but such termination shall not affect the obligations of the Licensee to take action or to abstain from taking action after termination hereof, in accordance with this Agreement.

Young Travelers5 complaints about Eelsen fall into three categories:

Eirst, that he failed to make the payments required by Schedule E of the contract. Payment of $250 on signing is admitted, but Young Travelers denies that the second payment of $250 due at commencement of training was ever made. Training commenced in Eebruary. Eelsen concedes that the second payment and the opening of the joint account did not occur until March or April 1970. Eelsen says that he had oral permission to delay the second payment and the opening of the joint account. My decision does not rest on this point, and the issue of credibility need not be resolved.

Second, that Eelsen failed to use his best efforts to further the purposes of the contract. The evidence as to this is clear. Eelsen was obligated, in order to make the contract profitable for both parties, to enroll campers for the summer season. In all, Eelsen procured 19 contracts. Of these, 5 were executed in March, 12 in April, none in May, and 2 in June.

Eelsen’s attitude to the contract is of importance. Approximately April 20 he met with his attorney, Barry Mandelbaum, to discuss means for getting out of the contract because he wanted to take a position in another field. As the result Mandelbaum wrote Young Travelers a letter dated April 29, 1970 in which he said that he wished to discuss with Young Travelers “the contract and its termination.55 The evidence indicates also that even prior to this Eelsen had communicated to a representative of Young Travelers his desire to get out of the contract in order to take another position.

In reply to Mandelbaum’s letter Erederick J. Damski, a lawyer for Young Travelers, under date of May 6, 1970 wrote Mandelbaum directing Eelsen to discontinue the use of Young Travelers5 trade name and to return all property of Young Travelers. At the termination of the letter, the writer stated : “Kindly communicate with me regarding the means by which we can effectuate the termination of the franchise agreement.55 Whether this letter constituted an attempt to terminate the contract is not important, because after it conversations ensued between Mandelbaum and Damski which apparently effected a partial reconciliation. Thus, under date of May 14, 1970 Mandelbaum wrote Damski that Felsen wished to continue with the contract and was making every effort to comply with its requirements. This letter concluded by stating: “I believe the parties can resolve any outstanding differences between them, and I hope you will advise jrour client to comply and perform the contract.” The reconciliation was of sufficient potency so that Eelsen continued to attend training sessions and conferences held under the auspices of Young Travelers until almost the end of June.

Among the meetings he attended was one on June 25, at which there was an acrimonious exchange between Young Travelers’ representative and Eelsen, as the result of which Eelsen left before the end of the meeting.

Young Travelers’ third major complaint about Eelsen is that he failed to deliver to it the camper contracts which he procured. Eelsen admits that it was not until the very end of June that they were delivered. Young Travelers takes the position that the delivery of the contracts to it was vital for its preparation for the ensuing summer season. Eelsen disputes this; however, I have no doubt that Young Travelers had to know how many and the location of the campers it had to make provision for in order to prepare for the forthcoming season well in advance of the season’s commencement on July 1. Eelsen said that he had the contracts with prospective campers with him on June 25. However, he did not deliver them. The following day Eelsen met with Young Travelers’ representative and delivered the camper contracts to him.

None of the camper contracts was performed, and Young Travelers returned to the parents who had signed them all the money which they had paid.

It is crystal clear that despite the parties reconciliation in the middle of May, and Eelsen’s attornej^’s statement that Eelsen intended to perform the contract, that Eelsen did virtually nothing during May to implement the contract. He says that he made unsuccessful attempts to obtain camper contracts, but the fact is that not a single contract was signed during that month. It is difficult to believe that if he had been able to sign 12 contracts during the month of April, he was not able to procure a single contract during the month of May. Additionally, his conduct in failing to turn over the contracts to Young Travelers, while not expressly in violation of a contract term, was certainly a violation of its spirit. I can draw no conclusion other than that Young Travelers was entitled to know how many campers it had to plan for during the camping season.

The situation is somewhat complicated by the fact that under date of July 14 the president of Young Travelers wrote Eelsen’s attorney a letter stating:

It is our position that you effectively abandoned your obligations under your franchise agreement with us on or before May 6th, 1970.
In order that there be no further misunderstanding, please be advised that your agreement with us has been terminated May 11th, 1970.

The most that can be made of it, however, is that the date of termination may have been erroneously set too soon. Certainly by the end of May there existed a material breach of contract on the part of Eelsen, which, unless barred by a contract provision, entitled Young Travelers to terminate the agreement. Young Travelers’ ignorance of the breach would not prevent it from relying upon it. Restatement, Contracts (1932), § 278 at 410. Erom the inception of the contract Eelsen indicated an unwillingness to abide by its terms. While the monetary payment is not crucial, the fact is that it was not made on time, a circumstance which undoubtedly colored subsequent relations between the parties. The fact is also that at the end of April Eelsen manifested a strong desire to get out of the contract. The fact that he Changed his mind after realizing that he could not do so with impunity undoubtedly did not effect the suspicion in Young Travelers’ mind that he did not intend to perform. This was confirmed by two circumstances: first, his failure to deliver copies of contracts signed with campers, and second, the fact that he wrote not a single contract during the month of May. The best that can be said for Eelsen’s position is that he nominally protested his willingness to perform the contract but in fact did nothing to implement it after he had first inquired as to how he could get out of the contract.

A material breach of contract on the part of one party entitles the other party to terminate it. In Ross Systems v. Linden Dari-Delite, 35 N. J. 329 (1969), the court said:

If the breach is material, i. e., goes to the essence of the contract, the non-breaching party may treat the contract as terminated and refuse to render continued performance [at 341]

Accord. 2 Restatement, Contracts (1932) § 399 at 274-276. Cf. Giumarra v. Harrington Heights, 33 N. J. Super. 178, 191 (App. Div. 1954), aff’d 18 N. J. 548 (1955).

Failure to procure campers in May and to deliver contracts, in fact procured, until the inception of the camp season, deprived Young Travelers of the essence of this contract.

Eelsen’s answer is that material breach or no, the law is that where a contract contains a provision such as that quoted, the only method of terminating is by the notice required under such provisions. There is no case on this subject in New Jersey, and the law outside the State is in dispute. The majority view is that where such a provision is included in the contract, it constitutes the exclusive means of terminating the contract. Carleno Coal Sales, Inc., v. Ramsay Coal Co., 129 Colo. 393, 270 P.2d 755 (Sup. Ct. 1954); Northwest Water Corp. v. City of Westminster, 164 Colo. 61, 432 P.2d 757 (Sup. Ct. 1967); Johnson v. Kahrs, 199 Ga. 365, 34 S. E. 2d 503 (Sup. Ct. 1945); Tomsheck v. Doran, 126 Mont. 598, 256 P.2d 538 (Sup. Ct. 1953). This view is espoused in 6 Gorlin, Contracts (1962 ed.), § 1266 at 64. The minority view is set forth in Foster-Porter Enterprises, Inc., v. DeMare, 198 Md. 20, 81 A.2d 325 (Ct. App. 1951), and is the view set forth in 6 Williston, Contracts (3d ed. 1962), § 842, n. 1, at 165, which is supported by the holding in Lyon v. Pollard, 87 U. S. (20 Wall.) 403, 22 L. Ed. 361 (1874). Arrayed against each other are the two leading authorities on contract law. The majority view takes the position that unless notice is given in conformity with the contract, the contract continues regardless of the extent of breach and the only remedy of the party against whom the breach has been committed is a suit for damages. The minority view is set forth in Foster-Porter Enterprises in considered dictum as follows:

Unless a contract provision for termination for breach is in terms exclusive, Bartol v. Gottlieb-Bauernschmidt-Straus Brewing Company, 129 Md. 32, 98 A. 286, it is a cumulative remedy and does not bar the ordinary remedy of termination for “a breach which is material, or which goes to the root of the matter or essence of the contract”. Williston, § 842; cf. Keystone Engineering Company v. Sutter, 196 Md., 620, 78 A. 2d 191, 195. Section 10 is similar to usual default provisions in bond mortgages and other instruments under which securities are issued. Such default provisions ordinarily are cumulative, not exclusive, Chicago Danville & Vincennes R. Co. v. Fosdick, 106 U. S. 47, 68, 1 S. Ct. 10, 27 L. Ed. 47, and when in terms exclusive, are strictly construed. Guaranty Trust and Safe Deposit Company v. Green Cove Springs & Melrose Railroad Co., 139 U. S. 137, 141-142, 11 S. Ct. 512, 35 L. Ed. 116. If plaintiff had committed a material breach of his contract, Eoster-I’ortor could have terminated the contract without regard to the provisions of section 10. Under section 10 the contract could be terminated for a breach of obligation which did not amount to a material breach, [at 333]

If there were a New Jersey case on this subject, I would, or course, be obligated to follow it. As it is, I have a measure of freedom, with deference to the authority arrayed on each side. First reference, of course, must be made to the terms of the contract itself. Corn Exchange, etc., Phila. v. Taubel, 113 N. J. L. 605 (E. & A. 1934). As to whether the provision is the exclusive method of termination or not, the contract is neutral; it says nothing at all on the subject. Felsen argues that since the contract was prepared by Young Travelers, it must be construed against it in the event of ambiguity. As to the general soundness of this proposition, there can be no doubt. But what Felsen seeks here is not a simple construction of language, but the insertion into the contract of a provision which just does not appear there. It seems to me that the appropriate language is that of Judge Foley in Tomaiuoli v. United States Fidelity and Guaranty Co., 75 N. J. Super. 192 (App. Div. 1962), where he said:

Liberality in the construction of an agreement against the drafter when ambiguity appears, or when strict construction would contravene public policy, is a salutory principle. But it should not be used as excuse to read into a private agreement that which is not there, and that which people dealing fairly with one another could not have intended. So employed, it debases the law [at 207]

In the words of Justice Heher in Casriel v. King, 2 N. J. 45 (1945) :

The polestar of construction is the intention of the parties to the contract as disclosed by the language used, taken as an entirety; and in the quest for , the intention, the situation of the parties, the attendant circumstances, and the objects they were thereby striving to attain are to be regarded, [at 50]

Continuing, he said:

In short, we are to consider what was written in the light of the circumstances under which it was written, and give to the language a rational meaning consistent with express general purpose [at 51]

The construction for which Felsen contends is that, regardless of the extent of his breach, Young Travelers may not terminate unless it complies with the formality of a five-day written notice of termination. Indeed, his position is that because Young Travelers did not give such notice, it in turn committed a breach of contract and that he is entitled to damages. In my view, acceptance of such a position and the majority view would constitute a mechanical adherence to a rule of law without consideration of basic underlying rules of contract construction. Ace Stone, Inc., v. Wayne Tp., 47 N. J. 431 (1966), is a case which makes it clear that such an approach is not the correct one. The contract in that case, for the construction of a sewer line project, contained a “no-damage” clause. Nevertheless, plaintiff sued the municipality, alleging that it had committed a broach of contract by not acquiring all the necessary rights of way. Summary judgment in favor of defendant was reversed. The court said:

It appears to us that the just course now is to remand the proceeding to the Law Division to enable the parties to introduce such oral and documentary evidence as may be available and relevant in aid of interpretation. After all of the evidence is in, determination may fairly be made as to whether the language used in the contract by the parties, when considered in the full light of their relations and objectives, and the attendant circumstances, contemplated that the extension of time clause and the related clauses would preclude the plaintiff from asserting a claim for damages under the particular circumstances presented, [at 440]

It thus became a question of fact as to whether the contract contemplated that damages would be barred in the specific situation involved. In Lyon v. Pollard, supra, plaintiff was hired by defendant to manage his hotel. The contract of employment provided that either party could terminate on 30 days’ notice. Plaintiff brought an action for damages, alleging that her employment had been terminated without the requisite notice. The trial court refused to allow evidence that plaintiff was using opiates and was unfit to perform the contract. On appeal, the court stated:

If she rendered herself, or otherwise became, incapable of performing these duties, that of itself authorized defendant to rescind or terminate the contract ® * ®. The coniract on her part implied some capability of performing the duties she had assumed, of rendering some service. If she could render none defendant was not bound to continue it even for the thirty days which the termination of it by notice required. [87 U. S. (20 Wall.) at 400]

Here, too, it was a fact question as to whether a contract provision for termination by notice prevented a party from terminating for material breach. Similarly, there is here a fact question as to whether the notice provision prevented a party from terminating under circumstances such as this.

Mandelbaum’s letter of April 29, 1970 was as close to an anticipatory repudiation of the contract as possible, without crossing the line. See Restatement, Contracts (1932), § 318 at 475. Felsen’s conduct thereafter constituted a material breach. For practical purposes he did nothing from May 1 to June 1 to further the purposes of the contract, and after June 1 he did almost nothing. To make matters worse, he failed to deliver to Young Travelers even those contracts which he had obtained, thereby preventing Young Travelers from making appropriate preparation for the forthcoming camping season. The breach was not merely material, it was irreparable; the campers which had not been obtained by the beginning of July could not be supplied thereafter.

Taking into account the general tenor of the contract, the surrounding circumstances and the object which the contract was intended to serve, it is apparent that the notice provision was for the benefit of both parties. It benefited Young Travelers by giving it the power to terminate for matters which may not have been material breaches, although in the main the specific events of default recited in paragraph XXIII would constitute material breaches. From Felsen’s point of view, the major value of the provision was that it gave him a right to cure a default. Clearly, however, it was not intended to be the exclusive remedy as to matters which could not be rectified. It can hardly be said that if Felsen had, in fact, completely repudiated, instead of coming close to the line, as he did at the end of April, that Young Travelers could have been expected to continue with the contract and obtain its remedy only in damages, unless it went through the formality of serving a five-day notice. Felsen’s conduct beginning May 1, so far as its detrimental effects on the purposes of the contract was concerned, was the equivalent of a repudiation. What he had failed to do could no longer be supplied. It was this conduct which entitled Young Travelers to terminate the contract, not its communication of May 6, nor its communication of July 14. That Young Travelers, under the erroneous impression that it had somehow to preserve the fiction of a five-day notice, took the position that the contract had terminated five days after its letter of May 6, does not prevent the fact that a material and irremediable breach had occurred after May 1 which made it utterly impossible for Young Travelers to perform the contract, from controlling the situation.

The motion for a new trial will be denied.

      Since December 21, 1971, cancellation of a franchise agreement would be governed in some cases by N. J. S. A. 5-6 :10-1 et seq. This is not one of the cases to which the statute would apply since gross sales did not exceed $36,000 for the 12 months next preceding the institution of suit as required by section 4 of the statute.


author: Per Curiam.

text:
    NANCY FORNAROTTO, ADMINISTRATRIX AD PROSEQUENDUM OF THE ESTATE OF NICHOLAS FORNAROTTO FOR NICHOLAS FORNAROTTO, JR. AND AGNES FORNAROTTO, INFANTS, BY THEIR MOTHER AND GUARDIAN AD LITEM, AND NANCY FORNAROTTO, INDIVIDUALLY, PLAINTIFFS, v. CLARA MAASS MEMORIAL HOSPITAL AND VALENTINE ELECTRIC COMPANY, INC., DEFENDANTS. CLARA MAASS MEMORIAL HOSPITAL, THIRD PARTY PLAINTIFF-APPELLANT, v. FRANK BRISCOE COMPANY, INC., THIRD PARTY DEFENDANT-RESPONDENT.
    Superior Court of New Jersey Appellate Division
    Argued January 17, 1972
    Decided February 15, 1972.

      Before Judges Conford, Matthews and Eritz.

      Mr. Kenneth J. Fost argued the cause for third party plaintiff-appellant (Messrs. Stevens & Mathias, attorneys).

      Mr. Jeffrey U. Fisch argued the cause for third-party defendant-respondent (Messrs. Levy, Schlesinger & Breitman, attorneys).
   Per Curiam.

Our disposition of the several issues argued is as follows.

Eirst, the parties at oral argument have agreed that the third-party claim, although pursued in the name of the hospital, is really for the benefit of Hartford Insurance Company, general insurer of the hospital, which defended the death action for the hospital and incurred the costs and expenses now in contention. We accept this fact for purposes of the determination herein, and reject the hospital’s argument that the trial court should not have considered the incidence of insurance.

We hold that the true meaning of the indemnification clause here involved is that Briscoe, the indemnitor, is liable thereon for the costs and expenses here involved if, in fact, there was causal connection between any act or omission by Briscoe or any of its subcontractors (including by decedent or any other employee of any such) in the execution of the work and the occurrence of the fatal event on account of which the main action was brought. This is without qualification as to negligence vet non attending any such action or omission and without regard to the allegations in the death action. The ultimate burden of persuasion on that fact issue is on the third-party claimant. But cf. NOPCO Chemical Div. v. Blaw-Knox Co., 59 N. J. 274 (1971).

The foregoing fact issue will have to be tried on the remand.

We regard it as of no moment in relation to the issue of Briscoe’s liability on the indemnification clause that the costs and expenses of defending the death action were assumed by the hospital’s general insurer rather than borne directly by the hospital. The trial judge’s determination in favor of Briscoe on the basis of that fact was erroneous. We deem the collateral source rule to be applicable in this regard. See Dudar v. Milef Realty Corporation, 258 N. Y. 415, 180 N. E. 102, 105 (Ct. App. 1932). Looked at another way, the present real party in interest, the hospital’s general insurer, is entitled to be subrogated to the hospital’s rights under the indemnification clause. This is the well-nigh universal rule. See Boiler Engineer & Sup. Co. v. General Controls, Inc., 443 Pa. 44, 277 A. 2d 812 (Sup. Ct. 1971), and the many authorities there cited in accord. No New Jersey decision to the contrary has been pointed out to us, and we are in agreement with the Pennsylvania court. Presumably, the potentiality of recovery on subrogated claims enters into the insurers’ fixing of premium rate structures.

We do not pass upon Briscoe’s additional argument that before calling in its own general liability insurer the hospital was obliged to have had recourse to the defense of the accident claim available through the separate liability policy Briscoe allegedly supplied the hospital under the contract. There is insufficient relevant factual data before us at this juncture to determine this issue — certainly in terms of entry of a summary judgment. We remit it to the trial court for determination on the remand. Consideration might well be given at that time, among other things, to whether Briscoe should not have called the hospital’s attention to the stated recourse when it refused defense of the death claim on the hospital’s call.

Iteversed and remanded for a new trial.


text:
    STATE OF NEW JERSEY, PLAINTIFF-RESPONDENT, v. JESUS NEGRON, DEFENDANT-APPELLANT.
    Superior Court of New Jersey Appellate Division
    Argued January 17, 1972
    Decided February 15, 1972.

      Before Judges Coneoed, Matthews and Fbitz.

      Mr. Arthur Penn, First Assistant Deputy Public Defender, argued the cause for appellant {Mr. Stanley C. Van Ness, Public Defender, attorney).

      Mr. John L. Schantz, Assistant Prosecutor, argued the cause for respondent {Mr. John S. Kuhlthau, Middlesex County Prosecutor, attorney).
   Per Curiam.

Defendant was indicted for taking away a female under 18 from the custody of her parents with intent to carnally abuse her and “use her for immoral purposes,” and he was convicted. The statute involved is N. J. 8. A. 2A :86-3, which reads, so far as pertinent:

Any person who conveys or takes away an unmarried female, under the age of 18 years, with or without her consent, from the possession, custody or governance and against the will of her father, mother, guardian or other person having her lawful custody, with intent to marry or carnally abuse her, or to use her for immoral purposes, * * *' is guilty of a misdemeanor.

The trial court charged the jury as to the meaning of “for immoral purposes” as follows:

‘Immorality, members of the jury, is not necessarily confined to matters sexual in nature. In considering this issue, that is, whether the defendant intended to use Maria for immoral purposes, I instruct you that the word “immoral” is defined as anything inconsistent with rectitude, purity or good morals. Synonymous words are corrupt, indecent, depraved, dissident.
‘The word “purpose” means the object, effect or result aimed at, intended or attained.
‘Therefore, an immoral purpose is one which is violative of conscience or moral law or inconsistent with purity, or rectitude or good morals.’

The evidence on the State’s case could have left the jury with a reasonable doubt whether defendant had taken the girl with an intent to carnally abuse her. However, the proofs were that he did keep her out overnight and spend the night in bed with her. The jury could well have found that the defendant took her with the intent of keeping her (a 15-year-old girl) out overnight or spending the night in bed with her, and that either such intent was contrary to “purity, rectitude or good morals.”

We agree with defendant’s contention that in the context of a criminal statute the crime, as defined by the judge in respect of “immoral purposes,” was too vague to apprise the public adequately of the conduct intended to be proscribed. The range of types of conduct which some substantial segment of the public might deem inconsistent with “purity, rectitude or good morals,” but some other might not, is so vast and variegated that the statutory language, as construed by the trial judge, leaves too speculative the test for ascertaining the line separating guilty from innocent acts to meet constitutional requirements. Ricks v. District of Columbia, 134 U. S. App. D. C. 201, 414 F. 2d 1097, 1101 (D. C. Cir. 1968); State v. Musser, 118 Utah 537, 223 P. 2d 193 (1950), and State v. Vallery, 212 La. 1095, 34 So. 329 (Sup. Ct. 1948), are all in point.

However, we find the statute constitutional on the reasonable interpretation of the language, “for immoral purposes,” as meaning, by employment of the doctrine ejusdem generis, “for immoral purposes of a sexual character.” The other illegal purposes specified by the statute are carnal abuse and marriage. Both connote use of the female, taken away from the parents, of a sexual nature. It is therefore reasonable to suppose the Legislature intended, by the omnibus phrase, “or to use her for immoral purposes,” to punish the taking away, etc., with the intent of use of the female for immoral purposes of a sexual character or nature. See United States v. Bitty, 208 U. S. 393, 28 S. Ct. 396, 52 L. Ed. 543 (1907); Cleveland v. United States, 329 U. S. 14, 67 S. Ct. 13, 91 L. Ed. 12 (1946); United States v. Baker, 136 F. Supp. 546 (S. D. N. Y. 1955). Where an interpretation of a statute is reasonably entertainable which will save it from invalidity it should be resorted to.

Since the court incorrectly defined the crime charged there must be a reversal of the conviction.

For purposes of the retrial, the court should not instruct the jury, as it did here, that defendant did in fact convey and take away the girl, within the meaning of the statute, but should leave that conclusion of fact for determination by the jury.

Reversed and remanded for a new trial.


text:
    JEREMIAH JONES, APPELLANT, v. DEPARTMENT OF CIVIL SERVICE STATE OF NEW JERSEY; COUNTY OF OCEAN, NEW JERSEY, RESPONDENT.
    Superior Court of New Jersey Appellate Division
    Submitted February 8, 1972
    Decided February 22, 1972.

      Before Judges Lewis, Halpern and Lora.

      Mr. Victor B. Bullen, staff attorney of Ocean County Legal Services, Inc., attorney for appellant (Mr. Denis J. Corbett, staff attorney, on the brief).

      Mr. George F. Kugler, Jr., Attorney General of New Jersey, attorney for respondent (Mr. David 8. Litwin, of counsel and on the brief).
   Per Curiam.

Appellant Jeremiah Jones has been a classified civil service employee as a sheriff’s officer in Ocean County since February 23, 1967. By letter dated December 29, 1970 Joseph F. Weber, Personnel Director for Ocean County, notified appellant “that effective December 29, 1970 you are considered to have resigned your position by absenting yourself from duty without notice for the period December 18, 1970 to December 28, 1970 inclusive. You are advised that such resignation is treated as a resignation not in good standing.” The letter did not notify appellant that he had 20 daj's within which to appeal to the Civil Service Commission from Weber’s determination.

By letter dated January 5, 1971 (within the 20-day period) appellant’s attorney wrote to Weber objecting to his determination because Weber was fully aware of appellant’s previous accident and illness. He requested an answer to his letter but none was ever received from Weber. On February 1, 1971 appellant filed an appeal from Weber’s determination with the Civil Service Commission and requested a hearing. By letter dated March 29, 1971 the Commission denied the request for a hearing since it was not received within 20 days, as required by the Civil Service rules.

Without reaching the constitutional issues raised by appellant with respect to the different hearing procedures and notices given classified employees discharged for cause and those discharged because they are deemed to have resigned due to five consecutive days’ absence from work, we have concluded that basic fundamental fairness and due process, under the facts existing in this case, entitles appellant to a hearing on Weber’s determination. See Groppi v. Leslie, 404 U. S. 496, 92 S. Ct. 582, 30 L. Ed. 2d 632 (1972); Tibbs v. Bd. of Ed., Franklin Tp., 114 N. J. Super. 287 (App. Div. 1971), aff’d substantially for the reasons expressed by Judge Kolovsky, 59 N. J. 506 (1971); Juzek v. Hackensack Water Co., 48 N. J. 302, 314-315 (1966). The underlying philosophy of the Civil Service Act, N. J. S. A. 11:1 — 1 et seq., is to advance the welfare of the public and to protect permanent employees in the classified service by preventing their removal except for cause after due notice and hearing. Mason v. Civil Service Commission, 51 N. J. 115 (1968).

Reversed and remanded to the Civil Service Commission for a hearing on the merits. Jurisdiction is not retained.


author: O’Dea, J. S. C.

text:
    HELGA H. SANDERS, PLAINTIFF, v. NATHAN SANDERS, DEFENDANT-COUNTERCLAIMANT.
    Superior Court of New Jersey Chancery Division
    Decided February 10, 1972.

      Messrs. Ferro, Lamb & Kern, attorneys for plaintiff. Mr. Albert F. Ferro, of counsel.

      Messrs. Lucianna & Sandow, attorneys for defendantcounterclaimant {Mr. Sidney A. Sandow, of counsel).
   O’Dea, J. S. C.

(temporarily assigned). This is a supplemental hearing for determination of disposition of the matrimonial residence known as 159 Shepis Avenue, Saddle Brook, New Jersey, following a final hearing and final judgment of absolute divorce on the counterclaim of defendant husband against his plaintiff wife on the ground of her desertion.

The parties were married August 1, 1956, one month after she had come to this country with her daughter by a prior marriage. One month after the marriage he purchased the marital abode at the above address with his savings of $8,000 and a purchase money mortgage. Title was taken in both names as tenants by the entirety and she joined in the purchase money bond and mortgage. She made no contribution or advance to the transaction at the time of acquisition or since. He has since made all payments for taxes, mortgage amortization, interest and insurance. She served the premises in the role of housekeeper and the usual chores of that occupation.

No children were born of the marriage but he brought her daughter to this country and supported both her and his wife until the marriage of the daughter and desertion by the wife.

She refused to live with him as husband and wife approximately five or six years after their marriage and thereafter refused to have sexual relations with him or provide any of her wifely duties until May 1969, when she left the matrimonial residence and has ever since refused to return.

She is presentí)1" 47 years of age and planning remarriage. He is 67 years of age, a retired merchant seaman on social security earnings under $1,600 pursuant to the federal Social Security Law. His eyesight is affected by the onset of blindness which will require cataract operations, and he is suffering other disabilities of the ageing process. In summary of their physical condition, living and earning abilities, she is young enough to make a better way for herself and he is incapacitated by age and limited in what he can do to provide for himself in his terminal years.

In the marriage process he invested all his reserves and earnings to provide a home for himself and his wife and her then dependent daughter. She deserted him and abandoned the marital home he provided and maintained for them by stripping himself of financial reserves to provide for himself independently of her in his old age.

She now asserts a claim to one-half the marital abode by operation of the old law converting a tenancy by the entirety to a tenancy in common on termination of the marriage by decree of divorce, Buttlar v. Butllar, 67 N. J. Eq. 136 (Ch. 1904), with the right to partition and sale to liquidate her undivided one-half interest therein. Ross v. Ross, 35 N. J. Super. 242 (Ch. Div. 1955); N. J. S. A. 2A:56-1.

We find that taking into consideration all the facts and circumstances of this case — the equities of the parties, the course of conduct of the parties on acquisition, support and maintenance of the marital abode over the years, the age, health and infirmities of the parties, her abandonment of the marital abode and the marital status (and indeed the marriage, which was the only reason for her enjoying an interest in the title to the premises) — such rigorous relief as sought and provided under the old law of distribution of marital property upon divorce would, in this case, be inequitable, unjust and unconscionable. It would cause an old man who has dutifully in good faith provided a home for himself and his wife, his family, to lose his home to a much younger woman who has fled the marital abode, abandoned the marriage and now seeks to liquidate her legal interest at his expense. At his age and with his infirmities and limited income, he would be unable to refinance his home to protect his interest on partition sale, or to purchase her interest or another home. Such an action under the circumstances of this case violates the whole concept of tenancy by the entirety as a protection of the parties to a marriage as security to both spouses during coverture of marital assets that were the work product of their marital economic life and the additional security to the surviving spouse upon the termination of their union by death of the other.

Under the new Divorce Act, L: 1971, c.c. 212 and 217, N. J. 8. A. 2A :34r-l et seq., adopted June 14, 1971 and effective since September 13, 1971, the law of marriage, divorce and distribution of marital property has been reformed and modernized. The inequities of the rigors of the old law and concepts of marriage have been eliminated. In particular, and applicable in this case, N. J. 8. A. 2A :34-23 provides:

In all actions where a judgment of divorce, or divorce from bed and board is entered the court may make such award or awards to the parties, in addition to alimony and maintenance, to effectuate an equitable distribution of the property, both real and personal which was legally and beneficially acquired by them or either of them during marriage. [Emphasis added]

While we find no reported cases in New Jersey construing or interpreting the full meaning or guiding the administration of this five-month old provision, we have had the advantage of published articles, Tischler “Distribution of Property Upon Divorce? 94 N. J. L. J. 1109., lectures (N. J. Judicial Seminar, September 1971), and decisions of the courts of other states with similar statutory provisions for distribution of marital property on divorce.

In Wisconsin a similar statute provides, “and the court may finally divide and distribute the estate both real and personal, of the husband and so much of the estate of the wife as shall have been derived from the husband * * In Hartman v. Hartman, 253 Wis. 389, 34 N. W. 2d 137 (Sup. Ct. 1948), the court held in construing this statute:

The theory of our divorce statutes is to provide for an equitable division of the property of the parties, including such property of the wife as shall have been derived either mediately or immediately from the husband. The property may be the property of the wife and yet be derived from the husband so as to bring it within the operation of the statute. The estate which may be derived from the husband clearly includes property the title to which is in the wife.

In Swanson v. Swanson, 243 Minn. 516, 68 N. W. 2d 418 (Sup. Ct. 1955), the court construed the Minnesota statute providing for “just and equitable * * * disposition of the property acquired by the parties during coverture * * * taking into consideration all the facts and circumstances of the ease,” to permit the court to award the marital homestead to plaintiff though it had been acquired by defendant during coverture and he paid the entire consideration therefore. The court held:

In view of plaintiff’s physical condition and limited earning capacity, and all the other facts and circumstances presented in this case we can find no abuse of discretion in the trial court’s award of the homestead to the plaintiff free and clear of all claims of defendant.

We therefore find, under the circumstances of this case, that it would be inequitable, unjust and unconscionable to distribute or award any interest in the marital abode to the wife where it was acquired and maintained solely and exclusively from the earnings and life savings of the husband for the home and security of his wife and himself, his family, where she the younger and abler of the married parties abandoned the home, the marriage and her aging partner, disabled and incapacitated in the aging process, retired on the limited income of Social Security to maintain himself alone and without her aid, comfort and companionship in his old age.

We therefore effectuate an equitable distribution of the property, the marital abode, bj7 divesting Helga H. Sanders of all right, title and interest, claim or claims in and to the premises known as 159 Shepis Avenue, Saddle Brook Township, and vesting title in fee simple therein in Nathan Sanders, free and clear of any and all claims of Helga H. Sanders.

Upon entry and filing of the judgment provided herein, defendant Nathan Sanders shall execute and deliver to plaintiff Helga H. Sanders an indemnity agreement to indemnify and save her harmless from any liability under the purchase money bond and mortgage which she executed on the original acquisition of title.


author: Consodine, J. C. C.

text:
    STEPHEN J. PAINTER, PLAINTIFF, v. JOAN PAINTER, DEFENDANT.
    Superior Court of New Jersey Chancery Division
    Decided February 16, 1972.

      Mr. Monroe Ackerman for plaintiff {Messrs. Rudd, Ackerman, Breitkopf & Leibowitz, attorneys).

      Mr. William F. Tompkins for defendant {Messrs. Bum, Biunno & Tompkins, attorneys).
   Consodine, J. C. C.

(temporarily assigned). There remains the question of equitable distribution of property legally and beneficially acquired by them or either of them during the marriage. N. J. 8. A. 2A:34-23.

Plaintiff’s total assets are approximately $230,509, in stocks and cash, in a half-interest in the tenancy by the entirety, and in furnishings and fixtures of the home. Of this, $142,937.50 was owned prior to marriage, inherited or came by way of gift. The one-half interest in the tenancy by the entirety is valued at $21,750 and the one-half interest in the furnishings and fixtures of the home at $5,000.

Defendant’s total assets are approximately $99,709 in stocks and cash. Of this, $35,000 was owned prior to the marriage or came by way of gift. Of the balance, her interest in the realty is $21,750, in the furnishings and fixtures of the home $5,000, and in jewelry $1,510, the appraisal value.

The personal factors relevant to this particular case that must be considered are: (1) the marriage is now nearly 19 years in duration; (2) the parties lived together 14 of these years; (3) the three children are 16, 14 and 9 years of age; (4) they will continue to live with defendant; (5) defendant is recovering from a recent operation for cancer, and (6) her prognosis must be deemed guarded.

Our statutory provision concerning distribution of property is desolate of factors to be considered by a court. In this regard it is not unlike the statutes of other jurisdictions and not dissimilar to the amendment of 1923 to our Divorce Law which made extreme cruelty (in those two words) a ground for divorce, without definition except as our courts thereafter might define. See Capozzoli v. Capozzoli, 1 N. J. 540 (1949); Stutz v. Stutz, 139 N. J. Eq. 385 (E. & A. 1947).

Our evaluation of determinative factors for consideration, like those of the courts of sister states with like statutes, must be pragmatic and realistic.

We are fortunate to have the benefit of opinions of others.

Guideline criteria over the broad spectrum of litigation in this area include: (1) respective age, background and earning ability of the parties; (2) duration of the marriage; (3) the standard of living of the parties during the marriage; (4) what money or property each brought into the marriage; (5) the present income of the parties; (6) the property acquired during the marriage by either or both parties; (7) the source of acquisition; (8) the current value and income producing capacity of the property; (9) the debts and liabilities of the parties to the marriage; (10) the present mental and physical health of the parties; (11) the probability of continuing present employment at present earnings or better in the future; (12) effect of distribution of assets on the ability to pay alimony and support, and (13) gifts from one spouse to the other during marriage.

Generally see Messer v. Messer, 184 N. W. 2d 801 (Minn. Sup. Ct. 1971); Fischer v. Fischer, 139 N. W. 2d 845 (N. Dak. Sup. Ct. 1966); MacDonald v. MacDonald, 120 Utah 573, 236 P. 2d 1066 (Sup. Ct. 1951); Tisehler, “Distribution of Property upon Divorce,” 94 N. J. L. J 1109 (1971). See also, Carson v. Carson, 50 Haw. 182, 436 P. 2d 7 (Hawaii (Sup. Ct. 1967) (prospects of re-marriage for wife and loss of self confidence of wife).

Our Legislature in the statutory provision used the verb “acquired” in relation to the distribution of the marital assets. The common meaning of the word is “attained by the individual by his own efforts.” Webster’s Third New International Dictionary, 1965.

The definition would certainly exclude: (1) property secured by gift, bequest, devise or descent; (2) property acquired in exchange for property secured prior to the marriage or in exchange for property secured by gift, bequest, devise or descent; (3) property acquired by a spouse after a decree of legal separation; (4) property excluded by valid agreement of tire parties, and (5) the increase in value of property acquired prior to the marriage or by gift, bequest, devise or descent. See proposed Uniform Marriage and Divorce Act of National Conference on Uniform State Laws; Tisehler, Op. Cit.

As to the guidelines, the admonition of Krohn v. Krohn, 284 Minn. 95, 169 N. W. 389 (Minn. Sup. Ct. 1969), that each case must be considered in the light of its own particular facts, with little to be gained bjr attempting to arrive at a result on a basis of comparison of property distributions in other cases, is pertinent.

In the instant case the application of the exclusions would eliminate from plaintiffs available assets those owned prior to marriage and those received by way of inheritance and by gift — and from defendant’s available assets property owned prior to marriage and those received by gift.

With the entry of final judgment of divorce the tenancy by the entirety becomes a tenancy in common. Mueller v. Mueller, 95 N. J. Super. 244 (App. Div. 1967); Eberle v. Somonek, 24 N. J. Super. 366 (Ch. Div. 1953). Each party will be entitled to one-half of the agreed appraisal value of $43,500. There are no liens on the realty.

Thus, equitable distribution of property legally and beneficially acquired by the parties or either of them during the marriage would be, in dollar figures, $87,561 of plaintiff’s and $64,709 of defendant’s.

With the children of the marriage remaining in defendant’s custody, the furnishings and fixtures of their residence should go to her, with the exception of personal belongings, and not be considered as an available asset to either party.

Her jewelry, so far as I can ascertain, came from her own purchases and as gifts from her husband in better times. I would not, in this case because the value is small, include it in her available assets for distribution.

The net result of these findings is to reduce plaintiff’s $87,571 of available assets to $82,571, and defendant’s to $58,199.

Plaintiff has bound himself to be liable for the medical and hospital bills of defendant.

Testimony disclosed that over the five years of separation plaintiff has invaded capital in voluntary and generous support and maintenance of defendant and the children by a considerable yearly sum, - in 1971 it was $9,800.

On the facts before me I will award equitable distribution to defendant of twenty per cent (20%) of the difference between plaintiff’s and defendant’s available assets -$4,874.

Submit judgment.


author: Dalton, J. S. C.

text:
    ARLENE JOYCE FAUL AS GUARDIAN AD LITEM OF CHARLES D. HANSON, AN INFANT, PLAINTIFF, v. WILLIE DENNIS ET AL., DEFENDANTS.
    Superior Court of New Jersey Law Division
    Decided January 28, 1972.

      Mr. Kalman H. Geist for plaintiff Arlene Joyce Paul, as guardian ad litem of Charles D. Hanson, an infant (Mr. Morris Noviclc, attorney).

      Mr. Edward P. Shea for defendant Charleen Hanson (Mr. Henry O. Ilabieh, attorney; Bobert J. Casulli).

      Mr. Thomas J. Osborne, Jr., for defendants Willie Dennis and Theodore Zubatkin (Messrs. Vaccaro & Osborne, attorneys) .
   Dalton, J. S. C.

This motion presents the dual questions of whether the doctrine of parental immunity is applicable to automobile cases occurring prior to the abrogation of the doctrine in France v. A. P. A. Transport Corp., 56 N. J. 500 (1970), and, if so, whether defendant is precluded from asserting the immunity for the first time at trial.

The motor vehicle accident out of which this negligence action arises occurred on June 6, 1970 in Oarlstadt, New Jersey. Infant plaintiff Charles Hanson was a passenger in an automobile owned and operated by his mother, defendant Charleen Hanson, which vehicle was struck in the rear by a vehicle owned by defendant Theodore Zubatkin and operated by defendant Willie Dennis.

Suit was commenced on behalf of infant plaintiff on August 26, 1970, and an answer was filed on behalf of defendant mother on October 9, 1970. Crossclaims for contribution have been demanded by defendant Hanson against defendants Dennis and Zubatkin, and by defendants Dennis and Zubatkin against defendant Hanson.

A suit brought by other passengers in defendant Hanson’s vehicle was consolidated with infant plaintiff’s suit for trial, but is unrelated to this motion. At no time did defendant Hanson raise the issue of parental immunity until the time of the trial of liability, when a motion was made by counsel for a dismissal of the suit of infant plaintiff against his parent. Decision on the motion was reserved and the case was tried and submitted to a jury, which rendered a special verdict finding both defendants negligent in the operation of their respective vehicles.

Whether the abrogation of the doctrine of parental immunity is to be of prospective application only and not applicable to automobile accidents occurring prior to July 10, 1970, the date France, supra, was decided, has not been decided by an appellate court. However, in a case involving this issue, Judge Meanor thoroughly considered the problems emanating from a retrospective application and held that the new rights created by France are prospective only. Schwartz v. U. S. Rubber Corp., 112 N. J. Super. 595 (Cty. Ct. 1971). Subsequent to Schwartz the Supreme Court gave prospective effect to Immer v. Risko, 56 N. J. 482 (1970), which abrogated the doctrine of interspousal immunity. Darrow v. Hanover Tp., 58 N. J. 410 (1971).

Although not specifically holding that France be applied prospectively, the court, obiier dicta, generally commented lipón the reasons underlying the prospective application of major changes in immunity doctrines, pointing out that the potential for stale claims and the justifiable reliance upon immunity doctrines by defendants and their insurers requires prospectivity. Obviously, these considerations are just as applicable to the effect of the abrogation of parental immunity as to interspousal immunity. Indicative of the thrust of Barrow is that, in support of prospectivity, the court cited decisions of courts in other jurisdictions involving the abrogation of both parental and interspousal immunity. Barrow, at 419.

In view of the hazards of a retrospective application of France, discussed in these cases, and the clear approach to the issue bjr the court in Barrow, this court concludes that the doctrine of parental immunity applies to the case at bar.

Having decided that parental immunity is applicable to the operative facts of the case at bar, it must be determined if defendant Hanson may now avail herself of the rule. Plaintiff argues that under the rules of pleading the failure to introduce the issue until the time of trial constitutes a waiver of the defense, stressing that nowhere in the answer is the issue raised, even though crossclaims for contribution were served upon the defendant.

Plaintiff’s counsel accurately asserts that R. 4:5-4 mandates that an affirmative defense be set forth in a responsive pleading, and that this requirement has only been relaxed when its enforcement would do grave injustice to public policy. Douglas v. Harris, 35 N. J. 270 (1961); Jackson v. Hankinson, 94 N. J. Super. 505 (App. Div. 1967), aff’d 51 N. J. 230 (1968). However, plaintiff’s contentions that (1) parental immunity is an affirmative defense, (2) the instant case is devoid of anything detrimental to public policy and consequently B. 4:5-4 must be implemented, and (3) since the immunity doctrine has been abrogated, public policy would be best served by allowing the action to continue, are without merit. As indicated above, there are significant policy reasons for giving prospective effect to the abrogation of the doctrine, which are equally as compelling to permit an untimely raising of the issue at trial, but the essential defect in plaintiff’s argument is the assumption that parental immunity is an affirmative defense.

Although the comment to B: 4:5-4 describes parental immunity as a customary affirmative defense, Pressler, Annotation to New Jersey Court Buies 426 (1971), another reliable source does not include it as such. Schnitzer and Wildstein, N. J. Buies Service, A IV — 156 to 158 (Supp. 1961). A case which is somewhat analogous to the issue and upon which plaintiff places much reliance is Jaclcson, supra, which held that the qualified immunity of a municipality is an affirmative defense. However, plaintiff has not attempted to compare the issue in the case at bar with the fact that the Appellate Division stated that the underlying objective of the requirement to affirmatively plead municipal immunity is to avoid surprise. Jaclcson, 94 N. J. Super, at 514. Furthermore, there is a significant difference between municipal immunity, which demands an inquiry into the facts to ascertain the nature of the municipal activity, and the conspicuousness of parental immunity. An affirmative defense generally involves the introduction of new matter which is not shown by the plaintiff’s own proof or pleading. 71 C. J. S. Pleading § 163 (1951); Blade’s Law Dictionary (4th ed. 1968), 82. Commentary on the source rule of B. 4:5-4 states, “The only characteristic common to the enumerated affirmative defenses is that the omission to plead them specifically might occasion surprise.” Schnitzer and Wildstein, supra, at A IV-154.

Clearly, surprise is fundamental to the requirement to plead certain defenses affirmatively, and it is difficult to imagine a situation where a party could claim surprise to the defense of parental immunity. Infant plaintiff has made no such claim. This court is of the opinion that parental immunity is not included among the kinds of defenses or avoidances which must be pleaded affirmatively pursuant to B. 4:5-4.

Next, plaintiff argues that parental immunity cannot be raised at trial since it was not presented properly. Admittedly, R. 4:6-2 calls for the pleading of “Every defense, legal or equitable, in law or fact, to a claim for relief in any complaint * * *,” with specified exceptions which may be raised by motion, and R. 4:6-3 requires that such motions be heard before trial. However, as desirable as precise conformity with the rules may be, failure to do so does not automatically establish a waiver of all defenses. As defendant’s counsel points out, R. 4:6 — 7 expressly permits the raising at trial of a defense which goes to the sustainability of the action. Thus, the nature of the parental immunity doctrine must be considered to determine whether it is the type of defense which is waived if not raised in the pleadings or by motion, or if it is preservable until trial.

Substantial support exists for the view that the parental immunity doctrine constitutes a bar to bringing to fruition an otherwise viable cause of action, rather than being an absence of a cause of action. 19 A. L. R. 2d 423, 426 (1951). However, there is no need for an extensive analysis of the question since the language of the former Court of Errors and Appeals in the decision which adopted and sustained the parental immunity doctrine until its downfall in France, supra, favors the approach that there is a lack of a cause of action. In Reingold v. Reingold, 115 N. J. L. 532, 534 (E. & A. 1935), while considering whether a child should have a cause of action against her parents for injuries sustained during her minority after reaching 21, the court held that the common law “gives no such right of action” and stated further that

The right of action, if any, is determined as of the day of the accident. It either did or did not exist as of that day. And if not, the majority and emancipation of the child could not, and did not, create a non-existent cause of action, [at 537]

Obviously, the court found that parental immunity involved a lack of a cause of action rather than a mere bar to asserting a claim. The doctrine was binding on this court until France, which as discussed above, is prospective in effect. There is no logical basis to find that the nature of the immunity is something other than that established in Reingold merely because the doctrine has been abrogated.

It is the opinion of this court that the infant plaintiff lacked “a claim upon which relief can be granted,” R. 4:6-2(e), and under R. 4:6-7 defendant Hanson is permitted to raise the issue for the first time at trial.

In regard to the crossclaims for contribution by defendants Dennis and Zubatkin, cases which have construed the Joint Tortfeasors Contribution Act, N. J. S. A. 2A:53A-1 et seq., have held that contribution is derivative. Kennedy v. Camp, 14 N. J. 390 (1954) (interspousal immunity) ; Chosney v. Konkus, 64 N. J. Super 328 (Cty. Ct. 1960) (intra-family immunity). Therefore, since the infant plaintiff lacks a cause of action due to the immunity of the parent, no claim for contribution may be made against defendant Hanson by the other defendants who are liable for the infant’s injuries.

Motion granted. The verdict against defendant parent in favor of infant plaintiff is set aside. Judgment notwithstanding the verdict is hereby entered in favor of defendant, Hanson. The erosselaim for contribution filed by co-defendants Dennis and Zubatkin against defendant Charleen Hanson is hereby dismissed.