author: Kilkenny, J. A. D.

text:
    IN THE MATTER OF THE ESTATE OF FRANK G. THOMPSON, DECEASED, HELEN LAPP THOMPSON, PLAINTIFF-APPELLANT, v. NATIONAL NEWARK AND ESSEX BANK, AS EXECUTOR AND TRUSTEE OF THE ESTATE OF FRANK G. THOMPSON, DECEASED, DEFENDANT-RESPONDENT.
    Superior Court of New Jersey Appellate Division
    Argued January 20, 1969
    Decided February 4, 1969.

      Before Judges Coneokd, Kilkenny and Leonard.

      Mr. Philip J. Mylod argued the cause for appellant (Messrs. Mylod and Feinberg, attorneys).

      Mr. Geoffrey Gaulhin argued the cause for respondent (Mr. Samuel B. Kirschner, attorney; Messrs. Frohling & Gaulhin, of counsel).
   The opinion of the court was delivered by

Kilkenny, J. A. D.

This will construction case is before us for the second time. The paragraph in issue in the will provided a bequest in favor of testator’s widow of “an amount equal to fifty percent of my entire estate.”

On the prior occasion we were asked to decide whether calculation of the 50% was to be based upon the value of the estate as of June 13, 1960 when decedent died, or its increased value in 1966 when distribution was to be made. We decided that the amount was to be calculated according to the value “at the time of death and without regard to the appreciation in value between the date of death and the date of distribution.” In re Thompson, 90 N. J. Super. 350, 355 (App. Div. 1966). No appeal was taken from that determination.

In this second action brought on behalf of the widow, the County Court was asked to determine, with reference to the quoted clause first mentioned above, whether “entire estate” meant decedent’s gross estate, before payment of debts, funeral expenses and administration costs, or his net estate, after payment of those items. (The parties conceded that by virtue of another provision of the will taxes are not to be deducted before computing the widow’s share.) Judge' Yancey concluded that in calculating the amount of money due plaintiff widow under the particular paragraph, the “entire estate” for this purpose means “the net probate estate, valued at the time of death after payment of testator’s debts, funeral expenses and administration expenses.”

Plaintiff appeals, among other things, from the judgment so holding. We affirm the judgment essentially for the reasons expressed by Judge Yancey in his opinion. In further support of the interpretation of “estate” as meaning the “net,” rather than the “gross,” estate, see 5 N. J. Prac tice (Clapp, Wills and Administration) (3d ed. 1962), § 226, pp. 383-84; In re Wolosin’s Will, 41 Misc. 2d 582, 245 N. Y. S. 2d 923 (Surr. Ct. 1964); In re Seliger’s Estate, 27 Wis. 2d 323, 134 N. W. 2d 447, 452 (Wis. Sup. Ct. 1965). In the last-mentioned case the court found that a provision in decedent’s 'will giving to his widow one-third of his “entire estate” meant that the share was to be computed on the “net estate” after deduction of all liabilities and expenses.

Plaintiff next claims that she was entitled to interest on the legacy bequeathed to her, at least at 3% either from June 13, 1965, five years after her husband’s death, or from the date of her demand, May 17, 1966, following the rendition of our prior opinion.

As defendant properly points out in its brief, there arc two simple answers to this contention. First, plaintiff had received a total of $194,993.26 on or before August 25, 1964, well before the date on which the last of the five annual payments was due. As of November 17, 1967, the net probate estate, computed in the manner stated above by the trial court, amounted to $388,833.73. Plaintiff’s legacy of “an amount equal to fifty percent” of that net probate estate was the sum of $194,416.86. Obviously, therefore, plaintiff has in fact received $576.40 more than she was entitled to receive under paragraph “Fifteenth.” Since there was no balance of the legacy withheld from her upon the date it was due, she was not entitled to interest.

The second answer lies in the fact that plaintiff was entitled under the terms of the will to the entire net income of that portion of the estate which was set up in trust, and she received that entire net income. If she had received, or was entitled to receive interest, it would have represented a deduction from the net income, unless the trustee were surcharged therefore, and no just ground for doing so is made to appear. In effect, therefore, she has received in the form of income what she now claims she was entitled to receive in the form of interest. Clearly, she has not been aggrieved nor has she suffered any loss. Accordingly, the trial court properly denied her claim of interest.

Plaintiff widow’s final contention is that, under paragraph “Fifteenth” of her late husband’s will, she is entitled to reimbursement for hospital and medical bills paid by her for the care of her mother, as well as for the funeral expenses incurred by her upon her mother’s death. The hospital and medical bills amounted to $9087.93 and the burial expenses were $2315.42, thus making a total of $11,403.35. Her mother, Louisa Lapp, left little or no estate.

Paragraph “Fifteenth” gave the residuary estate to defendant bank as trustee, subject to the provisions set forth therein. The trustee was directed to pay the net income to testator’s wife, in monthly installments, during her life. Testator’s mother-in-law, Louisa Lapp, was to receive the net income during her lifetime, if she survived decedent’s wife. Since Louisa Lapp predeceased the widow, she never became entitled to the net income. But plaintiff relies upon this further provision:

“In addition to the payment of the net income from this trust, my Trustee may at any time and from time to time pay over to my wife, Helen Lapp Thompson, or my mother-in-law, Louisa Lapp, as the case may be, so much of the corpus of said trust as my Trustee, in its sole descretion, may deem advisable to maintain the standard of living to which they were accustomed during my lifetime or to satisfy emergency expenses that may be incurred by them by reason of illness or otherwise.” (Emphasis added)

Plaintiff relies upon In re Gatehouse’s Will, 127 N. Y. S. 2d 697 (Surr. Ct. 1953). The question there was whether the trustees, under a discretionary power to invade corpus, were required to pay to the executrix of the estate of testator’s widow the hospital and medical expenses of the widow’s last illness and her funeral bill. The court ruled that the hospital and medical expenses were payable out of the principal of the trust. But in that case the will expressly directed payment of “all necessary expenses for hospital or medical attention or other extraordinary expenses that may be necessary for the care and comfort of my wife.” However, the funeral expenses were disallowed because they were not authorized by the will and the widow had left an estate of her own more than sufficient for that purpose.

The instant case is readily distinguishable. Here, there was no direction to pay these expenses; the matter was left to the “sole discretion” of the trustee. Here, the widow was generously left a very substantial sum absolutely, both by the will and insurance proceeds, and the income from the residuary estate as long as she lived. There was no abuse or mistaken exorcise of discretion by the trustee in declining to reimburse the daughter for expenses incurred by her for the hospital and medical care of her mother, or for the later funeral expenses in providing an appropriate burial of her own mother. She had ample funds of her own to assume these filial responsibilities. See Sibson v. First Nat. Bank and Trust Co. of Paulsboro, 64 N. J. Super. 225 (App. Div. 1960).

The judgment under review is in all respects affirmed.


source: Caselaw Access Project

author: Pee Curiam.

license: Public Domain

text:
    ELMER GOULD, PLAINTIFF-APPELLANT, v. GERALD WINOKUR, DEFENDANT-RESPONDENT.
    Superior Court of New Jersey Appellate Division
    Argued December 19, 1968
    Decided February 5, 1969.

      Before Judges Coneobij, Kilkenny and Leon Ann.

      Mr. Seymour B. Jacobs argued the cause for appellant (Messrs, Baile, Jacobs, Goldberger & Mandell, attorneys).

      Mr. IT. Gurtis Meanor argued the cause for respondent (Messrs. Lamb, Blake, Hutchinson & Dunne, attorneys).
   The opinion of the court was delivered

Pee Curiam.

This medical-surgical malpractice case was tried before a jury. The claim of negligent performance of the surgery was involuntarily dismissed, on defendant’s motion, at the close of plaintiff’s case. The issues of whether plaintiff had given his “informed consent” to the operation and whether defendant failed to give proper pre-operative and post-operative care were submitted to the jury at the close of all the proofs. The jury returned a unanimous verdict in favor of defendant and against plaintiff of “No cause for action.” The jury also answered specific interrogatories consistent with that general verdict.

Plaintiff’s motion to set aside the verdict and grant a new trial was denied. Judge Pindar’s reasons for denying that motion are fully set forth in his opinion reported in 98 N. J. Super. 554 (Law Div. 1968).

Plaintiff appeals from the whole of the judgment in favor of defendant and from the order denying the motion for a new trial.

We affirm the judgment in defendant’s favor and the order denying a new trial substantially for the reasons expressed in Judge Pindar’s opinion: We add the following supplementary comments.

There is a lack of evidence in the record that the eighth nerve was severed or traumatized by reason of some negligent or wrongful act on the part of defendant. There was no proof of a departure by defendant from the accepted practice in performing the operation in question. With respect to the surgery in question, only defendant testified. He verified that he had followed the required protective standards. He did not anticipate any involvement of the seventh and eighth nerves as the result of this surgery. These latter nerves were covered with very fine cottonoid strips to protect them from any damage. This was standard and proper practice. If there was any permissible inference of a causal connection between defendant’s activity and any involvement of the seventh and eighth nerves, there is absent any reasonable basis for a conclusion that the manner of performance of the operation by defendant departed from accepted surgical standards or was otherwise below the level of reasonable care by a surgeon. To have submitted to the jury the issue of negligence in the performance of the surgery, without any better evidence than here advanced, would have allowed the jurors to embark on a sea of pure speculation. This was not the kind of a case where a jury, unaided by expert opinion, could have found negligence on defendant’s part.

Plaintiff complains that the trial court should not have granted defendant’s motion for an involuntary dismissal at the end of plaintiff’s case. He argues that the court should have waited to see whether defendant’s own case might have supplied the deficiencies in plaintiff’s proofs. Plaintiff took the deposition of defendant before trial and read portions of it in presenting his own ease. A motion to dismiss at the end of plaintiff’s case is proper procedure. B. B. 4:42-2(&). There is no absolute obligation on the part of the trial judge to withhold action on that motion in the hope that plaintiff’s deficiencies in his proofs will be supplied by evidence adduced on behalf of defendant. The matter is committed to the discretion of the trial judge. We find no mistake in the exercise of that discretion in this case. That phase of the case having been closed out by the involuntary dismissal, the court properly denied further inquiry into it thereafter.

So, too, any reservation by plaintiff to cross-examine defendant when lie would testily in his own defense as to the performance of the surgery fell with the involuntary dismissal of the claim of negligent performance of the surgery. The dismissal annihilated any need on defendant’s part to testify thereto. Moreover, plaintiff had called defendant as his own witness and had fully examined him as to the surgery. His comprehensive inquiry had not been circumscribed in any way.

Plaintiff claims error in the court’s refusing to strike certain comments made by defendant’s attorney in summation to the effect that plaintiff may have gotten something in his eye some time about May of 1964. He argues that there was no basis of fact for such a remark and the jury should have been instructed to disregard it. In refusing to strike the remark, the trial judge referred to it as “fair comment.” The trial court’s rationale was that since the eye was exposed it “could” accommodate a foreign substance. Plaintiff maintains that this allowed the jury unduly to speculate as to some post-surgical trauma.

We have read the record and find no reversible error as to this particular incident. Plaintiff claimed defendant was negligent in post-operative care, especially with respect to care and treatment of the left eye. Defendant had examined plaintiff on April 38 and no problem with the eye was noted. It was not until June 4, 1964 when any problem with the eye could have been brought to defendant’s attention. That was the date of plaintiff’s next visit to defendant. At that time, conjunctivitis was noted in defendant’s records and that condition was being then treated by Dr. Giannasio, an ophthalmogist. Plaintiff had stated in answers to interrogatories that his eye had not begun to bother him until approximately the end of May 1964. Defendant’s position, therefore, was that the eye problem did not arise until long after plaintiff’s hospitalization had ended; and when the problem arose, it was taken care of by an eye specialist.

Against this background, defendant’s attorney, in summation, commented: “Now, did he get a foreign body in it?” Plaintiff’s attorney objected. Defendant’s counsel then “withdrew the comment” and asked the jury, “to infer as to how he got it.” After further colloquy, the trial judge ruled that what counsel said was “fair comment.” The reference was to the withdrawal of the original comment and allowing the jury to draw its own inference. Thus, it was left to the jury to decide whether there was a failure of due postoperative care on the part of defendant. Plaintiff, as a result of 1959 surgery, had an “anaesthetic” eye, lacking sensation or feeling. He washed it out daily to make sure that there was no foreign body in the eye. Under all the circumstances, reversible error was not committed as to this phase of the ease.

We conclude that prejudicial error was not committed as to any of the other points argued by plaintiff. The charge of negligent performance of the surgery was not made out by plaintiff’s proofs. The dismissal of this claim by the trial judge was proper. The verdict of the jury was not contrary to the weight of the evidence. The motion for a new trial was correctly denied for the reasons assigned by Judge Pindar.

The judgment in favor of defendant is affirmed.


author: Kolovsky, J. A. D.

text:
    FRANK MARTIN, PLAINTIFF-RESPONDENT, v. PERTH AMBOY GENERAL HOSPITAL, A CORPORATION OF THE STATE OF NEW JERSEY, E. VIRGINIA DZURINA AND SOKOL KANGSOBHIA, DEFENDANTS-APPELLANTS AND CROSS-RESPONDENTS, AND RALPH LEV, M.D., DEFENDANT-APPELLANT.
    Superior Court of New Jersey Appellate Division
    Argued January 13, 1969
    Decided February 5, 1969.

      Before Judges Goldmann, IColovsky and Cantón.

      Mr. Raymond M. Tierney, Jr. argued the cause for appellant Ealph Lev (Messrs. Shanley & Fisher, attorneys; Mr. John F. Lynch, Jr. and Mr. A. Dennis Terrell, on the brief).

      Mr. Oscar F. Laurie argued the cause for appellants and cross-respondents Perth Amboy General Hospital, E. Virginia Dzurina and Sokol Kangsobhia (Messrs. Lieb and Teich, attorneys; Mr. Aaron Dines, of counsel).

      Mr. Alfred A. Levinson argued the cause for respondent (Messrs. Jacob, Alfred and Richard Levinson, attorneys).
   The opinion of the court was delivered by

Kolovsky, J. A. D.

On December 15, 1964, at the Perth Amboy General Hospital (hospital), Dr. Lev, a cardiovascular surgeon, operated on plaintiff Prank Martin to remove an obstruction in his abdominal aorta. Following plaintiff’s discharge from the hospital on December 28, 1964 he visited Dr. Lev on two occasions and was told that the increasing pain in his abdomen about which he complained was to be expected and would pass away. On February 12, 1965, an X-ray taken by the internist who had referred plaintiff to Dr. Lev disclosed that there was a foreign substance in plaintiff’s abdomen. The internist so advised Dr. Lev who had plaintiff readmitted to the hospital. On February 13 Lev opened plaintiff’s abdomen and removed therefrom a laparotomy pad — a surgical sponge — which had been left therein during the course of the first operation.

In this action for damages resulting from the laparotomy pad being left in his abdomen, plaintiff charged Dr. Lev, the hospital and three of its nurses with negligence. The jury returned a verdict of $36,000 against Dr. Lev, the hospital and two of its nurses, defendants Dzurina and Kangsobhia. It found no cause for action as against a third nurse, Mrs. Quau. Separate motions for new trial by Dr. Lev and by the other defendants were denied.

Thereafter, on application of the hospital and the two nurses for apportionment of the $36,000 judgment among defendants, the court ordered Dr. Lev to pay 50%, or $18,000, and the hospital and the two nurses as a group to pay the remaining 50%, with the hospital to pay no more than $10,000, the statutory limit of its liability. N. J. 8. 2A :B3A-8.

Dr. Lev appeals from both the judgment in plaintiff’s favor and the order of apportionment. The hospital and the two nurses appeal from the judgment and the denial of their motion for a new trial, contending that the $36,000 verdict is excessive. The remainder of their brief embodies their argument in support of the judgment against Dr. Lev and the order for apportionment.

Much of the pertinent evidence is uncontradicted.

Plaintiff entered the hospital on December 4, 1964 for evaluation of his peripheral vascular disease by Dr. Lev, a cardiovascular specialist and the only such specialist associated with the hospital. An angiogram taken at Lev’s direction disclosed that there was an obstruction in the abdominal aorta, the blood vessel which supplies blood to the arteries of the leg. Lev recommended an operation to remove the obstruction and restore the normal blood flow.

Dr. Lev performed the operation from about 2 to 7 p.h. on December 15, assisted by two other doctors as well as by a “scrub” (sterile) nurse and a circulating nurse. When the operation began the scrub nurse was Miss Adamowitz; defendant Kangsobhia was the circulating nurse. At about 3 :30 P.M., when the nurses’ shift ended, as Dr. Lev knew it would, defendant Quan was substituted as the scrub nurse and defendant Dzurina as the circulating nurse and they continued on duty until the patient was removed from the operating room.

The surgical sponges used during the operation were supplied by the hospital. They were brought into the operating room in a sterilized laparotomy pack containing four laparotomy pads, 20 Raytex sponges and 15 tampons. The Raytex sponges, 4" x 8" in size, and the tampons were used for wiping or dabbing during the operation.

The laparotomy pads, described in the testimony as 8-inch square with a 4 or 5-ineh attached string at the end of which was a metal ring 1 to 2 inches in diameter, were used primarily for the purpose of pushing aside intestines and other organs in the operative field and to separate one area within the operative field from another. Embedded between the folds of the laparotomy pad was a strip of radiopaque 'material which would show on an X-ray if the pad were left in the abdomen. (Although not material to the issues before us, we note that the testimonial description of the laparotomy pads differs from the measurements of the sample laparotomy pad marked into evidence as Exhibit DIi-1 which has been furnished to us. That exhibit is a gauze pad measuring approximately 13*4"x~13j/2" with an attached 6)4-ineh string at the end of which is a heavy metal ring 1% inches in diameter.)

It is conceded that when the laparotomy pads were brought into the operating room, the metal rings were attached thereto and that at some time before they were used the rings were removed, this at the direction of Dr. Lev.

Before the operation began, the laparotomy pads and other sponges were placed in separate receptacles and counted by the two nurses with the count being recorded on a sponge count sheet. A second count was made at the change of shift when the new scrub nurse and circulating nurse came on duty. A third count was made at the completion of the operation. Por some unexplained reason, the count as reported indicated that no sponge or pad was missing.

Dr. Lev testified that before ordering the final sponge count when the operation was completed and before he closed the wound, he made a visual and manual inspection of the abdomen to determine if a foreign substance had been left there. He made no further examination and did no further probing of the operative area for sponges after the count had been reported to him as correct.

The court’s charge permitted the jury to find Dr. Lev liable on either or both of two bases: (1) that he himself was negligent or (2) that the nurses were negligent in counting the sponges, the jury being told that the nurses "were, during the course of the surgery, as if they were [the doctor’s] servants assisting in the performance of the operation even though the3r were actualty employed by the defendant hospital [and were] at the same time * * * also acting as the servants of the defendant hospital”.

Lev argues the court erred in both aspects of the submission to the jury, contending that there was no evidence of his own negligence and no warrant in law for holding him liable for 'the negligence of the nurses.

We find no merit in the claims that there was no evidence to support a jury finding that Lev himself was negligent and that the court erred in permitting the doctrine of res ipsa loquitur to be applied against him.

Poreign object malpractice cases form a unique class, presenting considerations different from those involved in other kinds of medical malpractice actions. Cf. Fernandi v. Strully, 35 N. J. 434, 441 (1961). As noted in Louisell and Williams, Trial of Medical Malpractice Cases, ¶ 4.04, p. 116:

‘'The most distinct and homogeneous group of malpractice cases are those resulting from inadvertent inclusions of foreign substances, gauze sponges, surgical needles, instruments, tubes, and the like, in patients’ bodies at the close of surgery. For neither physician nor layman is it difficult to accept the fact that foreign bodies should not lie left in the patient, and seldom today is there an honest controversy as to whether leaving them constitutes negligence. Defense oí these claims is instead apt to be based on the statute of limitations or denial that defendant was the responsible person or that the inclusion actually caused damage.”

it cannot be gainsaid that among the duties owed by an operating surgeon to his patient is the “duty of removing all foreign substances from the surgical wound before closing it,” and that “a surgeon undertaking to perform an operation requiring the placing of sponges in the incision does not complete his undertaking until the sponges are properly removed.” 41 Am. Jur., Physicians and Surgeons, §§ 96, 97, p. 213.

Some jurisdictions — for example the State of Washington — hold “that a surgeon [is] negligent as a matter of law in introducing a sponge and inadvertently leaving it in the plaintiffs body on closing the incision.” Conrad v. Lakewood General Hospital, 67 Wash. 2d 934, 410 P. 2d 785, 10 A. L. R. 3d 1, 5 (Sup. Ct. 1966); McCormick v. Jones, 152 Wash. 508, 278 P. 181, 65 A. L. R. 1019 (Sup. Ct. 1929); see also, 41 Am. Jur., Physicians and Surgeons, § 97, p. 213; Louisell and Williams, Trial of Medical Malpractice Cases, ¶ 14.06, pp. 441-442. It should be noted that no question of emergency or other extenuating circumstance was involved in any of the cases cited. Cf. Harrison v. Wilkerson, 56 Tenn App. 188, 405 S. W. 2d 649, 651 (Tenn. Ct. App. 1966).

Other jurisdictions have held that it is for the surgeon to acquit himself of negligence when it is shown that a foreign substance has been left in the wound. See, e. g. Davis v. Kerr, 239 Pa. 351, 86 A. 1007, 46 L. R. A., N. S., 611 (Sup. Ct. 1913).

But our highest court has spoken otherwise. Niebel v. Winslow, 88 N. J. L. 191 (E. & A. 1915); Stawicki v. Kelley, 113 N. J. L. 551 (Sup. Ct. 1934), aff'd 115 N. J. L. 190 (E. & A. 1935). It is therefore not for us, as an intermediate appellate court, to evaluate the logic or desirability of the rules adopted by the cited jurisdictions, or to hold that the duty owed by a surgeon to a patient to remove all foreign objects should properly be held to be a nondelegable duty. See as to nondelegable duties generally, Prosser on Torts (3d ed.), § 70, p. 483; 2 Harper & James, The Law of Torts, § 26.11, p 1406; Mayer v. Fairlawn Jewish Center, 38 N. J. 549, 555 (1962), and cases cited therein.

Under our cases, proof that a foreign substance has been left in the wound after the incision has been closed is prima facie proof that the operating surgeon has been negligent — the res ipsa loquitor doctrine applies, Sanzari v. Rosenfeld, 34 N. J. 128, 140 (1961) — but the ultimate burden of persuasion that the surgeon has been negligent remains with plaintiff. Niebel v. Winslow, supra.

In Niebel v. Winslow the trial court had told the jury in the course of its charge that:

“If you find that the gauze was left in the abdomen of the plaintiff, and the incision sewed up, or allowed to heal up over it, the burden of proof is on the defendant to show that it was not left there by any carelessness or negligence of his.”

In holding that the charge was error, the Court of Errors and Appeals said:

“Neither the single fact nor the group of facts stated in this [request to charge] shifted to the defendant the burden of proof which, notwithstanding such facts, remained with the plaintiff. The facts recited in the request were a part of the plaintiff’s case, in that they were steps in the establishment of the negligence of the defendant, the burden of proving which was upon the plaintiff; the effect, therefore, of the request was that the jury was told that if the plaintiff had established these steps in its proof of the defendant’s negligence, the burden of exculpating himself from the complete charge of negligence was shifted to the defendant. This was the precise error for which this court recently reversed the judgment in the case of Hughes v. Atlantic City [& S.] Railroad Co., 85 N. J. L. 212, * * *.
The practically injurious nature of the [charge] will at once be apparent when it is remembered that in the present case the operation, although performed by the defendant, a private practitioner, was performed by him in a hospital where he was assisted by trained resident nurses, presumably in the employ of the hospital and familiar with their duties.
While the testimony is meager as to the precise nature of these duties, it is inferable from the evidence and from the terms ‘operator’ and ‘assistants’ that it was the duty of the latter, at or just before the close of the operation, to count the sponges in use, which at that critical stage the operator himself could not do without jeopardy to his patient.” (88 N. J. L., at pp. 192, 193, 194).

In Stawicki v. Kelley, supra, the court rejected, as have the majority of other jurisdictions, the defendant-surgeon’s contention that since the hospital nurses who kept count of the sponges and reported the count correct

“were not in defendant’s employ or furnished by him * * * he was entitled to rely on their report of the count without being required to make any extended examination of the internal conditions, or being responsible for an erroneous count.”

The court also noted that defendant argued further

“that any possible duty of independent examination resting on him was shown to have been adequately performed; and hence that there was nothing in the evidence to justify a jury in finding negligence, and that the court should not have submitted the case to them,”

and concluded

“we consider in this ease that notwithstanding the nurses’ count, some duty remained with the defendant to examine independently to make sure that no foreign body remained in the abdominal cavity, and that the existence and non-discovery of so considerable a body as the pad above described, particularly in view of the testimony of plaintiffs’ expert witness as to the usual practice of making some independent examination by the surgeon and the extent thereof, presented a case for submission to the jury. The fact that defendant was operating with nurses not in his employ, nor, so far as appears, of his own selection, seems to give emphasis to this view. We conclude therefore that the judgment should be affirmed.” (113 N. J. L., at pp. 552, 553)

Here there was plenary evidence to support a jury finding that Lev himself was negligent. The application of the res ipsa loquitur doctrine permitted the jury to so infer under the circumstances of this case. Cf. Sanzari v. Rosenfeld, supra, 34 N. J., at p. 141; Bornstein v. Metropolitan Bottling Co., 26 N. J. 263 (1958). In addition, there was evidence of specific negligent acts and omissions by Lev.

The jury could justifiably conclude, on the basis of the opinion testimony given by plaintiff’s expert, Dr. Graubard, and from Lev’s own description of what he did, that Lev was negligent in failing to discover by examination and observation the presence of this large laparotomy pad.

The jury was not compelled to give credence to the testimony of Lev and his expert that the sole reason for a heavy 1%-ineh metal ring connected to the pad by a six-inch string is to furnish a radiopaque material that would make the pad visible if it were left in the abdomen and an X-ray then taken. All concede that the piece of radiopaque material in the pad itself already serves that function. The jury could find significant the inability of Lev’s expert to offer any reason why the ring is made as large as it is if its only function is what he said it was.

The jury could properly find more persuasive the testimony of Dr. Graubard, Mrs. Boniewski, the hospital’s experienced operating room supervisor, and the other nurses that the pad is furnished with the attached ring so that the ring may be left hanging outside the abdomen, after the laparotomy pad is inserted therein, to act as a marker or an indicator that the pad is in the abdomen. Unlike wiping sponges which are disposed of as soon as used and are not left in the abdomen, laparotomy pads are inserted in the abdomen and remain there for substantial periods of time.

Eurther, the jury did not have to accept the word of Lev and his expert that use of the laparotomy pads without the rings attached conformed to the applicable standard of care. The jury could properly conclude, not only from the testimony of Dr. Graubard but also from the testimony of Mrs. Boniewski, that it was negligent to order, as Lev did, that the rings be removed from all the laparotomy pads; or, that if for some reason it was necessary to remove a ring from one or more of the pads, it was negligent to insert such a pad in the abdomen without first taking other special precautions to insure that it would be removed before the incision was closed. While Dr. Graubard conceded that on occasion a surgeon might find it necessary to remove the ring from a laparotomy pad — an occasion which he said was not necessary where, as here, the pad was inserted in the upper abdomen — he said that if a ring were removed special warning should be given to the assistants and nurses to insure that special care was taken that the pad was later removed from the abdomen.

Finally, we note that a recent annotation, “Malpractice — Foreign Objects,” 10 A. L. R. 3d 9 (1966), points out that:

“Three of the most common methods of preventing operating room objects from being left in a surgical wound are (1) sponge or instrument counts, (2) attachments on laparotomy pads and on drains and tubings, and (3) X-rays taken at the time of the operation, sometimes made more effective by the use of radiopaque threads in sponges and pads. X-rays are also one of the post-operative methods of detecting foreign objects left in an operative wound.” (at p. 16).
“A laparotomy pad usually has a loop of tape at one corner for the attachment of a metal ring about 1% inches in diameter. The metal ring attached to the loop remains outside the edges of the wound during the operation, enabling the surgeon to tell at a glance the number of pads in the wound and to locate each one easily by picking up the ring.
In several eases [see e. g. Funk v. Bonham, 204 Ind. 170, 183 N. E. 312, 317 (Sup. Ct. 1932) ; Ault v. Hall, 119 Ohio St. 422, 164 N. E. 518, 519, 60 A. L. R. 128 (Sup Ct. 1928) ; McLennan v. Holder, 1 Cal. App. 2d 305, 36 P. 2d 448 (Ct. of App. 1934)] it has been held that the use of laparotomy pads without metal rings or other objects attached thereto is evidence of negligence in a suit for injuries sustained as a result of such a pad having been left in an operative wound.” (at p. 31).

The issue presented with respect to the court’s charge as to the liability of the doctor for the acts or omissions of the nurses involves the “borrowed servant” doctrine. See generally, Devone v. Newark Tidewater Terminal, Inc., 14 N. J. Super. 401 (App. Div. 1951); Younkers v. Ocean County, 130 N. J. L. 607, 608 (E. & A. 1943); Larocca v. American Chain and Cable Co., 13 N. J. 1, 6 (1953); 2 Harper & James, The Law of Torts (1956), § 26.11, p. 1398, fn. 14.

The doctrine recognizes, in the words of Restatement, Agency (2d), § 227 that:

“A servant directed or permitted by his master to perform services for another may become the servant of such other in performing the services. He may become the other’s servant as to some acts and not as to others,”

comment (a) to that section adding,

“Since the question of liability is always raised because of some specific act done, the important question is not whether or not he remains the servant of the general employer as to matters generally, but whether or not, as to the act in question, he is acting in the business of and under the direction of one or the other.”

Louisell and Williams, Trial of Medical Malpractice Cases, § 16.05, pooints out that:

“The borrowed servant doctrine appears often in malpractice cases chiefly because of the relationship between hospital employees and staff physicians. Seldom in other areas of potential application of respondeat superior is the issue of ‘control’ as crucial or as difficult to resolve as it is in many of the physician-hospital relationships. Although hospital employees primarily are servants of the hospital and not of the physician, the familiar rule of agency law that a servant may serve two masters simultaneously, and at times only momentarily, comes into play when internes, nurses, or other hospital personnel assist a physician as he treats a patient. * * * A holding that the requisite control existed often has been predicated on the physician’s presence at the time the negligent act occurred and the fact that he had a genuine opportunity to alter the course of events.
* * * $ * * * * Whether a surgeon is vicariously responsible under the borrowed servant doctrine for a particular act of a nurse, may be a difficult question. Sometimes it is one of fact for the jury.”

See, also, Annotation, “Liability of operating surgeon for negligence of nurse assisting him,” 12 A. L. R. 3d 1017 (1967).

I11 the ease before us, the trial court, after explaining the doctrine of respondeat superior to the jury said:

“Additionally, in this case we have the defendant doctor, who was the principal in charge of the surgery, and consequently he had the authority and the responsibility to direct and supervise the actions and behavior of Ihe nurses assisting in the performance of the operation while he was in the operating room. They were, during the course of the surgery, as if they were servants, assisting in the performance of the operation even though they were actually employed by the defendant hospital. At the time the nurses were also acting as the servants of the defendant hospital.”

Lev contends that the charge adopts the “captain of the ship” doctrine, see McConnell v. Williams, 361 Pa. 355, 65 A. 2d 243, 246 (Sup. Ct. 1949) ; McKinney v. Tromly, 386 S. W. 2d 564, 12 A. L. R. 3d 1011 (Tex. Civ App. 1965); Annotation. 12 A. L. R. 3d, at p. 1021, and that the doctrine is not the law of this State. However, the correctness of a charge must be determined not in the abstract but against the backdrop of the evidence in the case.

Had Dr. Lev not ordered the nurses to remove the rings from the laparotomy pads furnished by the hospital, we would agree with him that the charge given by the trial court is contrary to what is implicit in the New Jersey courts’ opinions in Niebel v. Winslow and Slawicki v. Kelley, discussed supra. What the courts said in those cases would be meaningless and would not support the results reached if the rule were that the nurses who made the sponge counts were to be deemed the doctor’s servants. Both eases recognize that normally a nurse making a sponge count in an operating room acts only as the agent of her general employer, the hospital, even though she is subject to the directions of the surgeon, and that only the hospital and not the doctor is liable for the nurse’s negligence in making the count. That conclusion is consistent with the general rule that a borrowed servant does not become the servant of the temporary employer merely because he received instructions from the latter as to the work to be performed. Viggiano v. William C. Reppenhagen, Inc., 55 N. J. Super. 114, 119 (App. Div. 1959).

But Lev’s conduct with relation to the nurses and the laparotomy pads went far beyond the situation contemplated by the general rule. One of the essential reasons of the hospital for having the rings attached to the laparotomy pads which it furnished was to avoid errors in the counts to be made by its nurses. Lev ordered the nurses to remove the rings and they did so. By exercising control of the nurses to the extent of directing them to remove the rings and thus eliminating the safeguards provided by the hospital to insure a proper count by its employees (particularly since he knew that there would be a change in the shift of nurses during the operation), Lev became, in our view, the nurses’ “temporary or special employer” insofar as their duties involved the laparotomy pads used in the operation. As such, he was equally liable with their general employer for their subsequent negligence in counting the pads. See Restatement, Agency 2d, § 227, comment (d); see also Devone v. Newark Tidewater Terminal, Inc., supra, concurring opinion 14 N. J. Super., at p. 415. There was therefore no error in the court’s charge.

All the defendants attack the verdict of $36,000 as excessive. We have reviewed the evidence as to the injury, pain and suffering sustained by plaintiff because the laparotomy pad was left in his abdomen. Evaluation of the credibility and weight to be given plaintiff’s testimony and that of his physician was for the jury. In view of the limited scope of our review on an appeal from an order denying a new trial, Kulbacki v. Sobchinsky, 38 N. J. 435, 446 (1962), we find no basis for reversing the trial court’s determination that the jury’s admeasurement of damages should not be disturbed. Cf. Wytupeck v. City of Camden, 25 N. J. 450, 466 (1957).

Lev’s final contention is that the trial court’s order of apportionment was in error in requiring him to pay 50% of the judgment, or $18,000. We find no error prejudicial to Lev in the equitable determination made by the trial judge in its application of the provisions of the Joint Tortfeasors Contribution Law, N. J. S. 2A:53A-1 et seq., and tills whether the jury’s verdict was based on a finding that Lev himself was negligent in addition to finding him liable because the nurses were negligent.

Lev does not contend that it would be inequitable to require Mm to pay ono-half of the judgment if he himself were negligent. We are satisfied that it is also not inequitable to require him, as one of the two employers of the nurses, to paj’ the same proportion thereof if his liability was based solely on the negligence of the nurses. It is immaterial that by reason of the charitable immunity statute, N. J. S. 2A :53A-8, the liability of the other employer, the hospital, is limited to $10,000, so that the nurses are obligated to pay the balance thereof.

Whether Lev, if he were free from fault, might bo entitled to indemnification from the nurses is likewise irrelevant to the question of contribution involved in the order of apportionment. His belated attempt during the trial to add “indemnification” as one of the issues to be tried was properly denied.

The judgment for plaintiff and the order of apportionment are affirmed.


author: Per Curiam:.

text:
    VIRGINIA BERGEN AND JERRALD BERGEN, HER HUSBAND, PLAINTIFFS-APPELLANTS, v. RUFUS W. MILLER, M.D. DEFENDANT-RESPONDENT.
    Superior Court of New Jersey Appellate Division
    Argued January 27, 1969
    Decided February 5, 1969.

      Before Judges Coneord, Kilkenny and Leonard.

      Mr. John IP. Devine argued the cause for appellants (Messrs. PelleDieri and Babsiein, attorneys).

      Mr. Bernard A. Campbell, Jr., argued the cause for respondent (Messrs. McLaughlin, Dawes & Abboits, attorneys).
   The opinion of the court was delivered

Per Curiam:.

Plaintiff Virginia Bergen filed a malpractice action against defendant doctor in the Law Division, claiming that he was negligent in diagnosing and treating her right index finger which was injured on April 30, 1965, when a metal rivet became imbedded in it in the course of her employment at the General Motors Ternstedt Division. Plaintiff's husband joined in the suit for his damages per quod.

The trial court granted defendant’s motion for a summary judgment on the ground that defendant was a fellow-employee of the injured plaintiff and by reason thereof immune from suit at law under N. J. S. A. 34:15-8. Plaintiffs appeal from the summary judgment in favor of defendant.

N. J. S. A. 34:15-8, as amended by L. 1961, c. 2, provides inter alia:

“If an injury or death is compensable under this article a person shall not be liable to anyone at common law or otherwise on account of such injury or death for any act or omission occurring while such person was in the same employ as the person injured or killed, except for intentional wrong.”

The issue involved in this appeal is whether defendant doctor was a person “in the same employ as the person injured”' wtihin the meaning of this statutory provision.

Defendant doctor was employed by General Motors, the same employer of the injured plaintiff, as the medical director of the General Motors dispensary at the Ternstedt Division in Ewing Township, New Jersey. His duties there were to treat employees of General Motors who were injured on the job and to perform certain medical examinations of General Motors’ employees. At the time of the accident Dr. Miller received a salary from General Motors which constituted, and continues to constitute, substantially all of- his income. The doctor spent, and spends, eight hours a day or more, on a five-day week or more, basis at this dispensary in the discharge of his duties. He maintains staff privileges at Mercer Hospital and as part of his duties often attends injured employees of General Motors at that hospital. On the basis of these facts, we agree with the finding of the trial court that defendant doctor was in the same employ as the injured plaintiff. Ho claim is made that his treatment of the injured plaintiff was an intentional wrong within the exception of N. J. S. A. 34:15-8.

Plaintiffs argue that the unique status of a physician dictates that he not be considered to be “in the same employ” as an industrial worker. We see no valid reason for making any such distinction. The Legislature did not do so. The broad language of the statute applies to all employees. We discussed the rationale which prompted the adoption of N. J. S. A. 34:15-8 in Miller v. Muscarelle, 67 N. J. Super. 305, 321 (App. Div. 1961), certification denied 36 N. J. 140 (1961). Simply stated, its purpose was to make the injured workman’s remedy exclusive under the Workmen’s Compensation Act both as to the employer and the fellow-employee, except where the fellow-employee was guilty of some intentional wrong. There was no intent in the adoption of the statute to classify fellow-employees. Therefore, the immunity applies to a fellow-employee even if he is in a supervisory capacity or uniquely talented as in the case of the plant physician.

General Motors, the common employer of the injured plaintiff and defendant doctor, has paid under the Workmen’s Compensation Act for the entire result of plaintiff’s injury, not only for that caused by the piece of metal entering her right index finger but also the consequences thereof resulting from the alleged negligence of her fellow employee in treating the finger.

The summary judgment in favor of defendant is affirmed.


author: Laívio, J. S. O.

text:
    BALMORAL ARMS, A CORPORATION OF THE STATE OF NEW JERSEY, PLAINTIFF, v. MYRON RUTKIN, SYLVIA ROSENBERG, LILLIAN BRILL KURTIN, HOWARD STRAUS AND IRVING WERNER, PARTNERS, TRADING AS BALMORAL ARMS, 365 PARK AVENUE CORP. A CORPORATION OF THE STATE OF NEW JERSEY, HARRY BROWN, PAUL ROSENBERG, BURTON L. EICHLER, HARRIS R. SILVER, BERNARD D. BARNETT AND EDWARD ELMAN, DEFENDANTS.
    Superior Court of New Jersey Chancery Division
    Decided January 24, 1969.

      Mr. Sidney Hertz for plaintiff (Messrs. Stout & O’Hagan, attorneys).

      Mr. Burton L. Eichler for defendants Myron Rutkin, Sylvia Rosenberg, Lillian Brill Kurtin, Howard Straus and Irving Werner, Partners, t/a Balmoral Arms, 365 Park Avenue Corp., Harry Brown, Paul Rosenberg, Burton L. Eichler and Harris B. Silver (Messrs. Eichler, Rosenberg & Silver, attorneys).

      Mr. Robert 8. Peder for defendants Bernard D. Barnett and Edward Elman.
   Laívio, J. S. O.

This action was instituted to foreclose a second mortgage on apartment property located in the Borough of Matawan, County of Monmouth. The matter is before the court on final hearing.

The mortgage in the amount of $112,500 was executed October 30, 1967 by defendant 365 Park Avenue Corp. to plaintiff as security for a note of the same date. Thereafter the property was conveyed by 365 Park Avenue Corp. to defendant’s Myron Rutkin, Sylvia Rosenberg, Lillian Brill Kurtin, Howard Straus and Irving Werner, partners trading as Balmoral Arms (mortgagor). Defendants Harry Brown, Paul Rosenberg, Burton L. Eichler and Harris R. Silver are joined as holders of a third mortgage. Defendants Bernard D. Barnett and Edward Elman are joined as assignees of the mortgage sought to be foreclosed, they having refused to join as plaintiffs. The assignment of the mortgage was made as collateral security for the payment to Barnett and Elman by plaintiff of a note in the amount of $56,250.

Under the terms of the mortgage, interest was to be paid at the rate of 6% monthly for the first five years and at the rate of % monthly during the balance of the mortgage. There was no provision for amortization during the term of the mortgage, the entire principal sum becoming due June 1, 1977. The mortgage contained an acceleration clause for a 15-day default in the payment of interest.

Under date of March 1, 1968, the date of the assignment of the mortgage to Barnett and Elman, plaintiff’s attorney wrote to the attorney for the mortgagor as follows:

“Please be advised that Balmoral Arms has this day assigned the above mortgage which is recorded in Book 2680 Page 651 in the amount of $112,500.00 to Mr. Bernard D. Barnett and Edward Elman.
The March 1st interest payment of $562.50 should be sent to Balmoral Arms c/o Allan Steinman, 275 Garfield Avenue, Oakhurst, N. J. Interest payment due April 1, 1968 and thereafter should be forwarded in favor of the above named parties, c/o Elman and Ornstein, 295 Madison Avenue, New York, N. Y. 10017.”

Prior to March 1, 1968 all payments of interest had been made by regular mail. Plaintiff’s president testified that the interest payment due March 1, 1968 was not received. By letter dated March 22, 1968 plaintiff’s attorney advised the mortgagor’s attorney that plaintiff exercised its option to accelerate the mortgage and demanded payment of the principal amount due plus accrued interest.

On March 4, 1968 the managing agent of the mortgagor, whose office was in Newark, drew cheek No. 1013 to the order of plaintiff and mailed it regular mail to the address specified in the March 1, 1968 letter. 275 Garfield Avenue, Oakhurst, New Jersey, is the home of plaintiff’s president. That check was never presented for payment nor was the envelope, which had a return address, returned to the sender. Upon receipt of the March 22, 1968 letter a replacement check (check No. 1033) was drawn to plaintiff’s order and promptly sent. On March 29 that check was returned by the attorney for plaintiff with a statement that this action was being instituted. During the month of March there were more than sufficient funds in the mortgagor’s account for the payment of check No. 1013. The good faith of the mortgagor is evidenced by the prompt sending of the replacement check.

It is admitted that there are two payments of interest due to plaintiff, the first payment being the one due March 1. The April payment was made by the mortgagor to Barnett and Elman. In May, however, plaintiff made the payment to Barnett and Elman, as a result of which the May check sent by the mortgagor was returned. All subsequent payments were made to Barnett and Elman by the mortgagor.

In view of the fact that the mortgage was assigned as collateral security for a loan of less than the amount of the mortgage, plaintiff has standing to institute this action in its own name. Lettieri v. Mistretta, 102 N. J. Eq. 1, 3 (Ch. 1927) ; 20 N. J. Practice (Ackerson and Fulop, Skills and Methods), § 2023, pp. 402-403 (1960). The provision in the mortgage granting to the mortgagee the option to accelerate the maturity of the debt upon a default in the payment of interest is a legitimate contractual stipulation. Gilbert v. Pennington Trap Rock Co., 135 N. J. Eq. 587, 591 (Ch. 1944).

The plaintiff alleges a default because of the nonreceipt of the check mailed for the March 1 interest payment, relying upon Weisberger v. J. G. Corporation, 107 N. J. Eq. 61 (E. & A. 1930). In that case it was held:

“The mailing of a check by a debtor for the amount of his indebtedness to the payee is not, in the absence of an expressed or implied agreement to that effect, a payment or discharge of the debt; and the mere fact that a creditor accepts a check forwarded him by mail, in one instance, does not indicate that he desires all future payments to be made in that manner.” (at pp. 63-63)

The court finds from the course of dealing between the parties that plaintiff assented to the payments being sent by mail. All payments before March 1 were sent by mail without objection. The letter of March 1 clearly indicates plaintiff’s assent to the sending of the payments by mail. The mortgagor was instructed in that letter that the March mortgage payment “should be sent” to plaintiff in Oakhurst, New Jersey. The addition of the zip code to the address for future payments could be for no purpose other than mailing. See 70 C. J. S. Payment § 7 (1951).

Plaintiff argues that even assuming the check was received, receipt of the check by itself would not be payment. It is true that under common law a check received for the payment of a debt is not in fact payment unless the check is paid, “except in cases where it is positively agreed to be received as payment.” State v. United States Steel Corp., 12 N. J. 38, 45 (1953). Although there was no agreement to receive a check in and of itself as payment unless the check was paid, the mortgagee did agree to receive payments of interest by check through the mail. The receipt of such a check would suspend the obligation pro tanto until the presentment of the check. N. J. S. 12A :3-802(1) (b). Here the mortgagor drew the check on March 4, 1968 and deposited it that day in the United States mail. This was in accordance with plaintiff’s implied consent. There was no negligence, inadvertence or other conduct on the part of the mortgagor that led to the failure of plaintiff to receive the check. By reason of the fact that plaintiff consented to the payment of the interest by mail, the risk of loss in the event of nondelivery fell upon plaintiff and not the mortgagor. 40 Am. Jur., Payment, § 36, p. 737. Under the facts of this case the failure of plaintiff to receive the March 1 payment through the mail does not result in the loss of the mortgagor’s rights through nonpayment and will not sustain this action.

An almost identical situation was before the court in Console v. Torchinsky, 97 Conn. 353, 116 A. 613 (Sup. Ct. Err. 1922). There it was held that the risk of the nonreceipt of a check mailed in payment of interest on a mortgage fell upon the mortgagee and not upon the mortgagor. Cf. De-Groot v. McCotter, 19 N. J. Eq. 531 (E. & A. 1868) ; 2 Pomeroy, Equity Jurisprudence (5th Ed. 1941), § 439, p. 219; Annotation, 70 A. L. R. 993 (1931).

In view of the holding above, it is not necessary to deal with the counterclaim fded by defendants Barnett and Elman.

Upon payment to plaintiff within ten days of the March and May payments of interest in the amount of $562.50 each, the complaint will be dismissed.


author: Lane, J. S. C.

text:
    BOROUGH OF NEW SHREWSBURY, A MUNICIPAL CORPORATION OF THE STATE OF NEW JERSEY, PLAINTIFF, v. BLOCK 105, LOT 11, ASSESSED TO COLUMBUS SPELLMAN ESTATE; BLOCK 105, LOT 24, ASSESSED TO RANDALL PHIPPS; BLOCK 105, LOT 25, ASSESSED TO RANDALL PHIPPS; BLOCK 106C, LOT 7, ASSESSED TO SAMUEL TANZYMORE; BLOCK 139, LOT 14-14, 17, ASSESSED TO JOSEPH A. FRUCI; BLOCK 140, LOT 3-23, ASSESSED TO MARY SUNDRA; BLOCK 142, LOTS 1-169, 198-382, 439-605, 624, 625, 662-665, 674-689, 694-703, 706-802, 811-819, 825-827, 831-838, 841-854, 859-1060, ASSESSED TO HERBERT HARVEY, DEFENDANTS.
    Superior Court of New Jersey Chancery Division
    Decided January 24, 1969.

      Mr. Martin M. Barger for plaintiff (Messrs. Reussille, Cornwell, Mausner & Carolenuto, attorneys).

      Mr. Herbert Harvey pro se.

      Mr. Stephen J. Moses for defendant, Dorothy De Hamidian.
   Lane, J. S. C.

In this in rem tax foreclosure action defendant Herbert Harvey, claiming to be a mortgagee of the properties included in Schedule 7, has moved for a dismissal of the action as to that schedule on the ground that payment of some part of the taxes assessed against the property had been made within four calendar years next preceding the commencement of the action. Defendant Dorothy De Hamidian joins in the motion to dismiss. She seeks, however, to reserve to herself the right to move on the same ground at a later time to dismiss the complaint as to her. In view of the fact that matters outside the pleadings have been relied upon, the motion will be treated as a motion for summary judgment.

The plaintiff seeks to foreclose a certificate of tax sale held November 5, 1964. The complaint was filed June 4, 1968 alleging that no part of any general land tax levied or assessed against the land had been paid for four calendar years next preceding the date of the filing of the complaint, and that no part of the general land tax levied and assessed against the land for the year 1968 had been paid.

It is admitted by plaintiff that it received payments in the years 1964, 1965 and 1966 of taxes due prior to June 30, 1963. Such payments were made pursuant to an order dated May 10, 1963 in a prior foreclosure suit bearing Doclcet No. E-3433-60 involving the same property. That order provided that the premises in question could be redeemed by the payment to the borough by the record owner or his agent of $6,500 “agreed upon by the parties as the sum due and owing to the Borough to June 30, 1963 * *

The order further provided that the payments were to be made:

$1,700 on or before June 1, 1963
$1,600 on or before May 1, 1964
$1,600 on or before May 1, 1965
$1,600 on or before. May 1, 1966

No other tax payments were received. No part of the taxes assessed fox the second half of 1963, 1964, 1965, 1966, 1967 and 1968 have been paid.

Initially, Harvey objects to the consideration by the court of an affidavit submitted by plaintiff incorporating the fact that the payments made as above set forth were made as a result of a prior order of this court for taxes that accrued before June 30, 1963. The basis for his objection is that the certificate of tax sale involved in this action states, “Sale is subject only to municipal liens accruing after December 31, 1963,” and that evidence should not be received to rebut the statutory presumption that such was an accurate statement.

R. S. 54:5-52 provides:

“The certificate of sale shall be presumptive evidence in all courts in all proceedings by and against the purchaser, his representatives, heirs, and assigns, of the truth of the statements therein, of the title of the purchaser to the land therein described, and the regularity and validity ox ail proceedings had in reference to the sale. After two years from the record of the certificate of sale, no evidence shall be admitted in any court to rebut the presumption, unless the holder thereof shall have procured it by fraud, or had previous knowledge that it was fraudulently made or procured.”

It has been held that the only purpose of that statute is to aid in the enforcement and collection of unpaid taxes and assessments validly made. Hudson County Park Commission v. Jacobson, 132 N. J. L. 287, 288 (Sup. Ct. 1944). To allow Harvey to rely upon that statute and cause this court to disregard its own record would result in complete injustice. Vice-Chancellor Jayne, in Gilbert v. Pennington Trap Rock Co., 135 N. J. Eq. 587 (Ch. 1944), pointed out the nature of equity jurisprudence:

“Equity jurisprudence in reality is a philosophy which can never be obliterated or abolished in any land or country where good faith, honest and fair dealing constitute a desirable standard of human conduct. The principles of equity are and should be sufficiently flexible to enable courts to determine from all the circumstances of each particular case whether or not the advantage sought by the litigant is unconscionable. In searching for the needle, one must not ignore the haystack in which it is imbedded.” (at p. 596)

The situation here is similar to that which confronts the court where an attempt is made to use the statute of frauds as an instrument of fraud. See Willig v. Friedberg, 108 N. J. Eq. 17, 21 (E. & A. 1931). Harvey was a defendant in the prior action. The entry of the order of May 10, 1963 under which the payments were made was consented to by the attorneys representing Harvey in that action. The court will consider the affidavit concerning the payments made in 1964, 1965 and 1966.

The substance of Harvey’s motion requires an interpretation of N. J. 8. A. 54:5-104.34, which provides:

“No action may be instituted under this act on any tax sale certificate unless:
a. More than two years have expired from the date of the tax sale out of which any such certificate arose, and
b. Por the four calendar years next preceding the commencement of the action, no part of any general land taxes levied and assessed against the land covered by such certificate has been paid.”

Paragraph (b) is ambiguous. It can either be read to mean that no part of any general land taxes levied and assessed against the property for the four calendar years next preceding the commencement of the action must not have been paid; or that during the four calendar years next preceding the commencement of the action no part of any general land taxes levied and assessed against the land at any time must not have been paid.

N. J. S. A. 54:5-104.34 originally provided in paragraph (b) as follows:

“b. No part of any general land taxes levied and assessed for the four calendar years next preceding the date of the petition against the land covered by such certificate has been paid.”

There was no ambiguity in that provision. It is clear that in the original paragraph (b) the operative fact was not payment within the fonr-year period but rather payment of taxes levied and assessed within the four-year period.

The amendment was contained in L. 1953, c. 51, § 59. The question before the court is whether the amendment was intended to make a substantive change in the statute. A reading of chapter 51 clearly shows that the purpose of this legislation was to make only procedural changes in Title 54 of the Revised Statutes to conform to the new court system and to rules promulgated by the Supreme Court. For example, all references to the Court of Chancery were deleted; all references to “decree” were changed to “judgment”; those portions of the original statute that had been super-ceded by the rules of the Supreme Court were deleted. It was, in short, a technical revision of the existing law.

Eevisions are not construed to alter existing law unless there is a clear indication of such desired effect by the Legislature. In re Borough of Glen Rock, 25 N. J. 241, 249 (1957); Bass v. Allen Home Improvement Co., 8 N. J. 219, 224 (1951); Kessler v. Zink, 136 N. J. L. 479, 482 (E. & A. 1947).

A mere change of phraseology does not overcome the presumption that there is no intention to change the existing law. Town of Hammonton v. Civil Service Commission, 82 N. J. Super. 64, 73 (App. Div. 1964). Here, there is no indication of any intention by the Legislature to make a substantive change of the law.

N. J. S. A. 54:5-104.34(6) is interpreted to mean that no action may be instituted under the In Rem Tax Foreclosure Act on any tax sale certificate if part of any general land taxes levied and assessed against the land for the four calendar years next preceding the commencement of the action covered by the certificate has been paid. The awkwardness of the wording of the prior sentence shows one of the reasons lor the rephrasing in L. 1953, c. 51, § 59. Another reason was obviously to structure the paragraph similarly to paragraph (a), that is, to start the paragraph with the time limitation.

The payment within four years of the commencement of the action of taxes levied and assessed for a period more than four years before the commencement of the action does not bar the action.

The conclusion of the court is reinforced by N. J. S. A. 54:5-104.31 which provides that the act is to be liberally construed as remedial legislation to encourage the barring of rights of redemption. See Lakewood Tp. v. Block 251, Parcel 34, 48 N. J. Super. 581, 586 (App. Div. 1958).

The motion for summary judgment is denied. The disposition of the motion made by Harvey will apply equally to the defendant Dorothy De Hamidian. Parenthetically, the court notes that Dorothy De Hamidian has in the past been associated with Harvey in his tax foreclosure matters.


author: Mountain, J. S. C.

text:
    ST. PAUL FIRE AND MARINE INSURANCE COMPANY, A MINNESOTA CORPORATION AUTHORIZED TO TRANSACT BUSINESS IN NEW JERSEY, PLAINTIFF, v. NEW JERSEY BANK AND TRUST COMPANY, A BANKING CORPORATION OF THE STATE OF NEW JERSEY DEFENDANT AND THIRD-PARTY PLAINTIFF, v. CHARLES W. ACKERMAN, INC., A NEW JERSEY CORPORATION; ASSOCIATED ENGINEERS INC., A NEW JERSEY CORPORATION, CHARLES W. ACKERMAN AND CAROLYN P. ACKERMAN, THIRD-PARTY DEFENDANTS.
    Superior Court of New Jersey Law Division
    Decided January 31, 1969.

      Mr. Bernard L. Belslcy for plaintiff, St. Paul Eire and Marine Insurance Company (Messrs. Cole, Berman é Garth, attorneys).

      Mr. Allan A. Maid for defendant New Jersey Bank and Trust Company (Messrs. Corbin & Maid, attorneys).

      Mr. Sheldon Schachber for third-party defendants (Messrs. Kleinberg, Moroney, Masterson & Schachier, attorneys).
   Mountain, J. S. C.

This is a third-party action seeking indemnification under a contract of guaranty. The third-party plaintiff, New Jersey Bank and Trust Company (bank), lent money to Charles W. Ackerman, Inc. and to its affiliate, Associated Engineers, Inc. The loans were made to supply funds for certain subcontracting work to be clone in connection with a construction project in New York. They were secured by the assignment to the bank of monies to be earned by one or both of the borrowing corporations for work done on the construction project. Additionally, further security was forthcoming in the form of the individual guaranties of the third-party defendants, Charles W. Ackerman and Carolyn P. Ackerman. The principal debtor, in accordance with the loan agreement, deposited the proceeds received from the construction work with the bank. Eventually the borrowing corporations became insolvent and were unable to meet their obligations either to the Bank or to their materialmen. The bank thereupon applied to the indebtedness owing to it a part of the funds which had been received from the construction project.

In the first-party action plaintiff, as subrogee, having paid the materialmen, recovered from the bank the monies which the bank had applied to the debt. This recovery was had in accordance with the New York Lien Law, McKinney’s Consol. Laws, c. 33, § 70 et seq. which provides, in relevant part, that a subcontractor’s obligations to its materialmen on a particular project must be satisfied before the proceeds from such project may be applied to obligations owing other creditors, unless the latter, or the subcontractor itself, has filed a notice of lending as provided in the statute. The bank failed to file such a notice, and as a result the court determined that its application of funds to the payment of its own debt was improper and must yield to the claim of plaintiff, which had been subrogated to the rights of the material-men. The bank is now seeking to make itself whole by recovery against the guarantors.

One of the several defenses raised by the guarantors is that had the bank filed a notice of lending as required by the New York Lien Law, it would have been entitled to apply the proceeds from the construction project in the manner it did, and the obligation it is now seeking to satisfy against the sureties would not exist. In other words, the guarantors urge that failure of the creditor to protect the security it had received from the principal debtor, by filing the notice of lending in the manner prescribed by the New York statute, brings the guarantors within the favor of the well recognized rule of the law of suretyship that where a creditor releases or negligently fails to protect security put in his possession or under his control by the principal debtor, the obligation of the surety will be extinguished to the extent of the value of the security so released or left unprotected. In my opinion this position is well taken.

The rule that the release of security by the creditor will be held to exonerate the surety to the extent of the value of the security so released is clearly recognized in this State. Van Hoesen v. Gelfen, 103 N. J. Eq. 234, 238 (Ch. 1928) affirmed 110 N. J. Eq. 69 (E. & A. 1931). Although no New Jersey case appears to have passed upon the precise question as to whether a failure on the part of the creditor to protect security by appropiate filing, recording, the giving of notification or the like affords the surety the same relief, the great weight of authority elsewhere supports this position. Sullivan v. State, 59 Ark. 47, 26 S. W. 194 (Sup. Ct. 1894) — failure to file mortgage; Mulvihill v. First National Bank, 80 Colo. 72, 249 P. 504 (Sup. Ct. 1926) — failure to record pledge of stock on books of corporation; Redlon v. Heath, 59 Kan. 255, 52 P. 862 (Sup. Ct. 1898) — failure to record mortgage; Rose v. Homsey, 347 Mass. 259, 197 N. E. 2d 603 (Sup. Jud. Ct. 1964) — failure to record mortgage (dictum); Nebraska State Bank v. May, 117 Neb. 262, 220 N. W. 276 (Sup. Ct. 1928) failure to file chattel mortgage; Bennett v. Taylor, 43 Tex. Civ. App. 30, 93 S. W. 704 (Civ. App. 1906) — failure to file cattle mortgage; First National Bank v. Kittle, 69 W. Va. 171, 71 S. E. 109, 37 L. R. A. N. S. 699 (Sup. Ct. 1911) — failure to notify account debtor of assignment of accounts receivable. In each case the failure of the creditor to protect the security in the manner indicated resulted in a decision releasing the surety to the extent of the value of the security so lost. This application of the general rule, as indeed the rule itself, stems from the desire of the courts to protect the surety’s right of subrogation to the extent that this can be done without unfairly affecting the rights of the creditor.

It should also be noticed that courts have been most ready to invoke the rule where the necessary recording or filing is available to the creditor but not to the surety.

“In situations where the creditor alone can take the action necessary for preservation of the security, he will be required to do so. Where he neglects to record a mortgage or transfer, or gives no notice to the obligor on a chose in action of its assignment, the surety will be discharged to the extent of his loss.” 10 Williston on Contracts (3rd ed.), 749-50.

Under the New York Lien Law, § 73(3), the bank had the right to file a notice of lending. It would appear that third-party defendants had no right to do so.

The bank argues that even if the court finds that ordinarily a creditor has a duty to protect security in the manner outlined above, such duty should not be imposed here because it was waived by the express terms of the contract of guaranty. In relevant part the contract entered into by the parties reads as follows:

“Guarantor consents that, without notice to or further assent by Guarantor * * * any collateral * * * may from time to time, in whole or in part, be exchanged, sold or surrendered by Bank, as it may deem advisable * * * all without impairing, affecting or releasing the liability of the Guarantor hereunder.”

This language includes no exculpatory provision exonerating the bank from the legally implied consequences of its failure to file. Furthermore, a contract of suretyship is, at least in general, strictly construed in favor of the surety. Boorstein v. Miller, 124 N. J. Eq. 526, 530 (Ch. 1938). Lastly, this contract of guaranty is in the form of a lengthy document in fine print, obviously prepared by the bank’s attorneys. Such an instrument, like a policy of insurance, documents used in consumer credit sales and certain other forms of agreement in common use, will be most strictly construed against the party which has prepared and offered the particular instrument for execution.

In view of what has been determined, it becomes unnecessary to consider the .other arguments presented by third-party defendants. There will be judgment in their favor on the third-party complaint, but without costs.


text:
    ECONOMY ENTERPRISES, INC., A CORPORATION OF THE STATE OF NEW JERSEY, SIDNEY GELLMAN AND BENJAMIN HOCHBERG, PLAINTIFFS-RESPONDENTS, v. TOWNSHIP COMMITTEE OF THE TOWNSHIP OF MANALAPAN, IN THE COUNTY OF MONMOUTH, STATE OF NEW JERSEY, AND THOMAS E. HIGGINS, TOWNSHIP CLERK OF THE TOWNSHIP OF MANALAPAN, IN THE COUNTY OF MONMOUTH, STATE OF NEW JERSEY, DEFENDANTS-APPELLANTS.
    Superior Court of New Jersey Appellate Division
    Argued December 2, 1968
    Decided February 7, 1969.

      Before Judges Confokd, Kilkenny and Leonakd.

      Mr. Marvin E. Schaefer argued the cause for appellants.

      Mr. Stewarí M. Huit argued the cause for respondents (Messrs. Hutt & Berlcow, attorneys).
   The opinion of the court was delivered by

Kilkenny, J. A. D.

Defendant governing body of the Township of Manalapan (hereinafter, township committee) appeals from that portion only of a final judgment of the Law Division, which states:

“Article VII ‘Improvements,’ Section 16 ‘Performance Guarantees,’ Subparagraph (a), Subsection 2 of the Manalapan Township Subdivision Ordinance be and is hereby declared void and illegal and for nothing holden.”

I

The township committee correctly points out that this portion of the judgment goes beyond the scope of the relief demanded. The entire subsection of the ordinance was declared void and illegal, although many of its requirements are sanctioned by law, admittedly valid and were not challenged by plaintiffs. Only the provisions requiring the owner or developer of a subdivision to make a deposit to secure payment of inspection fees and the obligation to pay such fees were challenged by plaintiff developers.

Among its many parts, article VII, section 16(a) (2) requires that, prior to the submission of the final plat to the planning board, the developer or owner, after obtaining from the township engineer an estimate of the cost of all improvements required for final approval, together with an estimate of any damage to any existing accepted street abutting the proposed subdivision, shall tender to the “governing body” a performance guarantee conditioned upon the completion of the required improvements and for the repair of any damage caused by the owner or developer to existing streets. The performance guarantee must be a cash deposit or cash plus a performance bond, issued by an authorized bonding or surety company. The bond must be approved as to form by the township attorney.

These provisions are sanctioned by the Municipal Planning Act (1953), N. J. 8. A. 40:55-1.1 et seq.} and particularly by N. J. 8. A. 40:55-1.20, 1.21 and 1.22. Plaintiffs do not question their validity, nor do they dispute the required fee of $50 to cover the inspection and approval of the performance guarantee by the township attorney.

The only part of article VII, section 16(a)(2) of the township subdivision ordinance whose validity was questioned by plaintiffs is that which obligates the owner or developer to tender to the governing body, in addition to the performunce guarantee, “a fee in cash or a certified check amounting to five per cent (5%) of said estimated cost (of completion of the required improvements and damage) to cover cost of supervision and inspection.” There are further provisions that, if the 5% deposit exceeds the amount of money expended by the municipality for the services of the municipal engineer in connection with the project, the excess will be refunded to the developer or owner. On the other hand, if the expenditures exceed the 5% deposit, the developer or owner shall pay the municipality the difference required to cover said expenditures.

These provisions as to the municipal engineer’s supervision and inspection fees in overseeing, before final approval of a subdivision plat, the completion of required improvements and the repair of damage caused by the owner or developer, were, as noted above, the only elements in the subject ordinance provision which were litigated, heard and determined by ihe Law Division.

The trial court’s oral decision at the close of the hearing, as to this count of the complaint, based its finding of invalidity solely on the ground that the municipality had no right to charge a 5% fee and then put it “in trust for the engineer,” thereby “acting as a collection agency for the engineer.” It deemed this “not proper.” It found the lack of an appropriation in the budget for this purpose a further bar. Finally, the trial court ruled that “the five percent fee far exceeds the cost that would be incurred by the municipality in paying the engineer a reasonable fee for the services contemplated.”

In the recitals in the forepart of the judgment, the trial court noted, as to this phase of the case, only that the challenged section is illegal “in that the engineering charge provided for is excessive.”

There was error, therefore, in striking down as void and illegal the entire subsection (article VII, section 16(a) (2)), when only part of it was deemed invalid, if that portion is severable from the remainder. The township committee aptly notes that the township subdivision ordinance contained a severabilty clause. Article XI, section 1 provides:

“If any article, section, subsection, sentence, clause or phrase of this Ordinance is for any reason held to be unconstitutional or invalid, such decision shall not affect the remaining portions of this Ordinance.”

Therefore, even assuming the required 5% deposit and the provision for payment of the engineer’s fees by the owner or developer were properly deemed to be invalid, the judgment should have been limited to those factors only. There was no valid basis for annihilating the entire subsection by judicial decree. The provisions as to the inspection fees are readily severable from the rest of the subsection.

Thus, modification of the judgment, at least, becomes necessary.

II

The next point made by the township committee is that charging a developer a fee to cover the cost of inspecting improvements required before final approval of a subdivision plat is authorized and not contrary to law. Reliance is placed upon N. J. S. A. 40:48-2 which provides:

“Any municipality may make, amend, repeal and enforce such other ordinances, regulations, rules and by-laws not contrary to tbe laws of this state or of the United States, as it may deem necessary and proper for the good government, order and protection of persons and property, and for the preservation of the public health, safety and welfare of the municipality and its inhabitants, and as may he necessary to carry into effect the powers and duties conferred and imposed by this subtitle, or hy any law.” (Emphasis ours)

Plaintiffs maintain that the Municipal Planning Act (1953), N. J. 8. A. 40:55-1.1 et seq., does not authorize the inspection fees. N. J. 8. A. 40:55-1.14 authorizes the fixing of “filing fees” and no mention is made of any other fees. They also contend that N. J. 8. A. 40:48-2 is not applicable, because the Municipal Planning Act controls and is exclusive. Prom this they argue that the ordinance provisions as to inspection fees are ultra vires.

We are satisfied that the township had the power under N. J. 8. A. 40:48-2 to provide by ordinance for the payment by a land developer of reasonable inspection fees to carry into effect the powers and duties conferred and imposed by the Municipal Planning Act. We feel, too, that a municipality has the implied authority under the Planning Act to require a developer to pay fees broadly correlative with the expenses entailed by it in seeing to the fulfillment of the conditions authorized and imposed prior to final approval oí a subdivision, plat. The express authority under N. J. S. A. 40 :55~1.14 to fix “filing fees” does not negate municipal power to charge reasonable inspection fees, made necessary by the imposition of conditions precedent to final approval. The power to require improvements to be made and damages to public streets to be repaired implies the power to inspect the improvements and repairs to insure satisfaction of the requirements according to the established standards. And the statutory power to exact a bond to guarantee performance of the requirements of the planning board for improvements reasonably may be implemented by inspections of the work done on behalf of the municipality +0 ascertain whether there is a cause of action on the bond. Cf. Legion Manor, Inc. v. Municipal Council of Wayne Tp., 49 N. J. 420 (1967).

We see no valid reason why the reasonable costs of inspection cannot be recaptured by the governing body in the form of reasonable, uniform fees payable by those whose projects cause the expenditures to be incurred, rather than upon the community as a whole in the form of taxation. The power of imposition of such inspection fees is fairly inferable from the land-subdivision regulative process encompassed by the Planning Act. General municipal powers under N. J. 8. A. 40 :48-2 reinforce the conclusion that the power in question is fairly within the legislative delegation. See Fred v. Mayor, etc., Old Tappan, 10 N. J. 515 (1952) ; Kligman v. Lautman, 98 N. J. Super. 344, 356 (App. Div. 1967). Moreover, the Municipal Planning Act and its provisions are to be construed “most favorably to the municipality.” The statute expressly so provides. N. J. 8. A. 40:55-1.3 also adds: “* * * its intention being to give all municipalities the fullest and most complete powers possible concerning the subject matter hereof.” See Levin v. Livingston Tp., 35 N. J. 500 (1961).

In Daniels v. Borough of Point Pleasant, 23 N. J. 357 (1957), it was said:

“Inherent in the power to regulate and control is the power to charge license fees primarily designed to defray the costs of such control. They must not, of course, exceed the bounds of reason considered in connection with the service and the cost of the service granted.” (at p. 361)

That language is similarly appropriate in the instant case, substituting only “inspection fees” for “license fees.”

Nevertheless, we are constrained to find that portion of the ordinance which directs the manner in which the developer shall compensate the municipality for the expense of inspection to be void as against public policjc As practically interpreted by the municipality, the governing body divorces itself from any function in relation to the process of so-called reimbursement except to the extent that it acts as a dry trustee of the moneys paid into a special account by the developer and funnels such funds out directly to the engineer who did the inspection in relation to the particular development. Actually, the municipality pays the engineer nothing, so that it is really not “reimbursed” for any expense. In effect, the developer pays the engineer directly, and it pays whatever the engineer chooses to charge for his services, uncontrolled by any specific standard fixed by the ordinance.

Under the foregoing arrangement the developer is completely at the mercy of the engineer. The latter is under no restraint save his conscience as to how much to charge the developer. The governing body has no economic incentive to curtail the charges since they do not come out of the municipal treasury. The developer may be loath to take issue with the charges as he may have future problems with the engineer and may not wish to court the possibility of antagonizing him by objecting to the amount of his charge.

Moreover, such an arrangement subjects the engineer to the temptation to overcharge an unfriendly developer or undercharge a friendly one. We, of course, do not imply any such motives to the particular engineer here involved. But the criterion of contravention of public policy in a given case is not the lack of integrity of the particular persons involved but the inherent capacity of the questioned arrangement to tempt toward improper conduct. Cf. Jones v. MacDonald, 33 N. J. 132, 135 (1960).

It is entirely feasible for the municipality to amend its ordinance so as both to eliminate the objectionable practice now followed and yet achieve the object of recovering from developers as a class sums at least roughly correlative with the reasonable cost of administration of the inspection function. This could be done by instituting a scheme of fees on a fixed or mathematically determinable basis wherein the subjective judgment of the engineer as to the value of his services would play no part at all in the determination of the fee. It is not our province to specify any particular plan which would be valid. The many types of licensing ordinance extant illustrate the possibilities. While it may well be that the fees will not in each case exactly reflect the municipal cost of administering the ordinance as to any particular developer, they may be fixed in such manner as, over the long run, to recover in the aggregate approximately the total cost of administration of the ordinance in the respect here involved. Cf. Daniels v. Borough of Point Pleasant, 23 N. J. 357, 361 (1957). Compare the practices in fixing fees for filing a subdivision application under N. J. S. A. 40:55-1.14, mentioned above.

Concomitant with the change in fee-fixing suggested above there would follow the desirable, if not mandatory, result of depositing fees in the municipal treasury in the manner of miscellaneous income generally, and payment of the engineer on a budgeted basis, so that he would not be pocketing directly as compensation the fees paid by the developers. Cf. Espinos v. Monroe Tp., 81 N. J. Super. 283 (App. Div. 1963).

The judgment is modified so as to invalidate only the ordinance provisions for payment of inspection fees. As modified, the judgment is affirmed. No costs.