text:
    ALFRED DILLIONE, PLAINTIFF-APPELLANT, v. DEBORAH HOSPITAL, THE TRAVELERS INSURANCE COMPANY, AND HOSPITAL SERVICE PLAN OF NEW JERSEY, DEFENDANTS-RESPONDENTS.
    Superior Court of New Jersey Appellate Division
    Argued January 18, 1971
    Decided March 5, 1971.

      Before Judges Conkord, Kolovsky and Carton.

      Mr. John W. Devine argued the cause for appellant (Messrs. Pellettieri and Babstein, attorneys).

      Mr. George H. Kohweiler argued the cause for defendant Deborah Hospital (Messrs. Orlando & Orlando, attorneys).

      Mr. Martin P. Devlin, Jr. argued the cause for defendant The Travelers Insurance Company (Messrs. Lenox, Giordano, Devlin & Barlow, attorneys).
   The opinion of the court was delivered by

Conford, P. J. A. D.

Plaintiff had open-heart surgery and attendant hospitalization at the defendant Deborah Hospital in Browns Mills from October 9, 1967 to November 11, 1967. Through his employer he was covered for certain medical benefits on a group policy issued by defendant The Travelers Insurance Company. He was also a subscriber for “Blue-Cross” hospitalization benefits with the defendant Hospital Service Plan of New Jersey.

Plaintiff sued all three defendants on theories which, as to Travelers and Deborah, will be explained below. They, as well as Hospital Service, were granted summary judgment in the Law Division, but plaintiff appeals only as to the first two defendants mentioned.

Plaintiff’s action against Travelers is based upon the group policy aforementioned. The company at one time paid Deborah $2,523.60 for hospital services rendered plaintiff, but later demanded and received the money back from Deborah on the representation that its policy did not cover plaintiff’s treatment at that institution. The position of Travelers was that its policy excluded coverage for these services by reason of a provision therein reading:

“Exclusions * * *
4. In no event will the employee’s benefit be payable * * (d) for any confinements, treatments, services or supplies * * * for which the employee incurred no expense.”

It is Travelers’ contention that plaintiff “incurred no expense” in connection with his stay and treatment at the hospital as he paid nothing therefor and the hospital is asserting no claim against him in connection therewith. The trial court found this position to be well taken.

Plaintiff’s claim against Deborah is based on the assertion that it wrongfully returned to Travelers the $2,523.60 which that company had paid the hospital as aforesaid and also that the hospital has been “overpaid.”

The factual picture emerging from the pleadings, pretrial contentions, affidavits on the motions for judgment and data supplied this court on and after oral argument at our request leaves some factual uncertainty. We have concluded that this is at least in part, legally material to the question of the liability of Travelers and precludes sustaining summary judgment in favor of that defendant.

Before plaintiff was admitted to the hospital, Deborah’s administrator wrote to the medical director of the New Jersey Rehabilitation Commission on September 9, 1967 enclosing medical data on plaintiff’s case, stressing the importance of treating him “as soon as possible,” and requesting notification whether “this application is acceptable under the Rehabilitation Program.” As the Commission ultimately did make substantial payments to Deborah in relation to this case, it is inferable that the letter related to a request that the Commission agree to defray either in whole or in part the expense of plaintiff’s anticipated treatment as a “vocational rehabilitation service” pursuant to the Commission’s statutory authority under N. J. S. A. 34:16-27. We are informed that the Commission verbally assented to the application before the plaintiff entered the hospital. The precise extent of the obligation assumed, however, is not known to us (and is not reflected by the record). The Commission is not a party to this appeal.

When plaintiff entered the hospital he signed a writing reading as follows:

ASSIGNMENT OP INSURANCE BENEFITS: I hereby authorize payment directly to Deborah Hospital of the Hospital Benefits herein specified and otherwise payable to me but not to exceed the hospital’s regular charges for this period of hospitalization. I understand I am financially responsible to the hospital for charges not covered by this assignment.

There was apparently no specification of the particular “hospital benefits” on the writing, but no one contends that any proceeds payable under the Travelers’ policy were not intended to he included. Whether this was a standard form or a writing specifically prepared to cover this plaintiff’s relationship with the hospital is not known. There is no affidavit hy plaintiff in the record.

An affidavit by Deborah’s administrator states that its charge for plaintiff’s hospitalization (apparently not inclusive of physicians’ charges) was $2,767 ■— its “standard charge” for such services. Bills for that amount were rendered both to Hospital Service and to Travelers. Hospital Service paid the hospital $660, the limit of its subscription liability, on November 27, 1967. Travelers paid it $2,523.60 on December 8, 1967. In January 1968 Travelers informed Deborah that its payment had been made in error because the policy “did not provide coverage” in the matter. On September 13, 1968 Travelers wrote the hospital stating that effective July 1, 1968 it would “consider for reimbursement, under our policy coverages, the charges made by Deborah Hospital for medical and surgical treatment provided such charges are not made because of the existence of insurance coverage * * * We have advised our offices of the recognition of your hospital. * * On September 20, 1968 Deborah returned to Travelers the $2,523.60 aforesaid and the amount of two other “erroneous payments” theretofore made to it by Travelers in other cases.

Deborah’s statement of factual and legal contentions filed in the cause states that its total “hospital charges” were $2,767 and its total “doctors’ charges” were $2,575. It received from the Rehabilitation Commission a total of $4,085, but how this was intended to be applied as between hospital and doctors’ charges is not specified. The hospital asserts that, crediting plaintiff’s account for all moneys received from Hospital Service and the Rehabilitation Commission, a balance is due it on account of hospital and doctors’ charges of $597. It asserts no claim therefor against plaintiff, but avers that if any recovery is allowed plaintiff against it in this action it should be allowed a set-off of that sum.

The central issue argued below and on this appeal is whether Travelers is liable to plaintiff for the amount of the hospital charges. That depends on the construction of the policy exclusion: “services” etc., “for which the employee incurred no expense.” We need not cite the many cases which hold that an insurance policy must be read to afford the insured that coverage which the average purchaser would fairly expect from an ordinary reading of the language of the contract. Moreover, exclusionary clauses are strictly construed against the insurer if doubtful or ambiguous in meaning. See Hunt v. Hospital Service Plan of N. J., 33 N. J. 98, 102 (1960).

The general rule is that the insured will not be barred from recovery on a policy providing for payment of hospital or medical services, etc. for which he has “incurred expense,” or similar language, by mere reason of the availability of collateral means of discharging his liability therefor so as to have relieved him of the need to pay the charges personally. American Indemnity Co. v. Olesijuk, 353 S. W. 2d 71 (Tex. Ct. Civ. App. 1961); Graham v. Reserve Life Ins. Co., 274 N. C. 115, 161 S. E. 2d 485 (Sup. Ct. 1968); Globe Life Ins. Co. of Alabama v. Howard, 41 Ala. App. 621, 147 So. 2d 853 (App. Ct. 1962). Cf. Kopp v. Home Mutual Ins. Co., 6 Wis. 2d 53, 94 N. W. 2d 224 (Sup. Ct. 1959); Rubin v. Empire Mutual Ins. Company, 25 N. Y. 2d 426, 306 N. Y. S. 2d 914 (Ct. App. 1969); Feit v. St. Paul Fire & Marine Ins. Co., 209 Cal. App. 2d Supp. 825, 27 Cal. Rptr. 870 (Super. Ct. 1962).

Where, however, the holder of a policy covering “expense incurred” for hospital charges received free care at a United States Veterans Hospital for which by federal law the hospital could make no charge against him, the holding was that since the plaintiff was entitled to free treatment he had incurred no expense and was therefore not entitled to recover on the policy. Drearr v. Connecticut General Life Ins. Co., 119 So. 2d 149 (La. Ct. App. 1960). In accord: United States v. St. Paul Mercury Indemnity Co., 238 F. 2d 594 (8 Cir. 1956) ("expenses actually incurred by the insured”). Distinguish American Indemnity Co. v. Olesijuk, supra, where the insured was in naval service and received treatment for injuries sustained in an accident in a civilian hospital, with the Navy paying the bill pursuant to its legal obligation to the serviceman. There recovery was allowed under the policy, the court reasoning that the insured was subject to an implied contract to pay the hospital for the services when he entered the institution and that the payment therefor by another did not militate against the insurer’s liability on the policy.

Further developing the distinction between cases where the insured has a primary obligation to pay the hospital and those where he does not is Protective Industrial Ins. Co. of Alabama v. Gray, 40 Ala. App. 578, 118 So. 2d 289 (App. Ct. 1960). The policy there confined coverage to "actual hospital expense.” The insured was treated at a hospital under an arrangement with the State Rehabilitation Department whereby a portion of the bill would be paid by the Department and the remainder treated by the hospital "as a charity item.” The Department made the arrangements for the hospitalization, and the hospital records showed a billing on the case only to “State Rehab.” The court held against liability on the policy because the insured had never incurred any obligation whatever on the hospital transaction.

There is no New Jersey case in point. Applying what we regard as the rational distinction distilled from the cited authorities, it appears to us that plaintiff in the instant ease can be said to have incurred the expense for which Travelers insured him if there existed between himself and Deborah at the time he entered the hospital an understanding that he was primarily liable to Deborah for all or part of the services to be rendered and would pay for them should the expense ultimately not be met by some other source, whether the Rehabilitation Commission or insurance proceeds. The mere fact that, despite such an understanding, if it existed, it was contemplated or expected that other sources would be available to defray the bill in whole or in part would not dissipate Travelers’ liability for so much of the expense as plaintiff was primarily liable for. If, on the other hand, Deborah’s understanding with plaintiff, or with the Rehabilitation Commission on plaintiff’s behalf as a donee-beneficiary, was that plaintiff was under no circumstances to be liable to Deborah, the latter being content to resort solely to such rehabilitation or insurance moneys, if any, as might be available, plaintiff would have incurred no expense and Travelers would not be liable.

The foregoing criteria cannot be applied on the incomplete evidence afforded by this record, whether or not it is amplified by the information elicited by us subsequent to the argument. Plenary proofs are necessary. The insurance company will assume the burden of proof at the trial, since it is invoking an exclusionary clause of its policy.

Travelers’ alternative defense of plaintiff’s assignment to the hospital will not stand. The assignment was a security device and the hospital makes no claim on it against anyone. Plaintiff, as the insured, is therefore the party entitled to recover on the policy if Travelers is liable at all.

As to plaintiff’s claim against Deborah, we find no legal basis for a cause of action. Obviously, if plaintiff is found to have been without a cause of action against Travelers on the policy, there would be no just basis for any complaint by him that Deborah returned to Travelers money which the latter did not owe to plaintiff and was under no legal liability to apply to the hospital bill on his behalf. But even if Travelers was liable on the policy the fact remains that plaintiff had assigned the proceeds thereof to Deborah (to the extent of the hospital charges, which are not asserted to have been less than the Travelers’ payment). Plaintiff would thus clearly have had no claim against Deborah if it had retained the funds pursuant to that assignment and applied them to the charges. In the light of that consideration we cannot see how an equitable claim against Deborah emerges in favor of plaintiff by reason of the circumstance that, instead of retaining the money assigned to it, it chose to refund it for whatever reason to the insurance company.

In any case, it would clearly be inequitable to permit plaintiff to have double recovery against both the hospital and the- insurance company for the same insurance proceeds.

Finally, we see no merit in the claim by plaintiff that the hospital has been “overpaid,” at least insofar as any cause of action against it by plaintiff is concerned.

We conclude that the judgment should be affirmed insofar as it was awarded to defendant Deborah but reversed insofar as entered in favor of defendant Travelers. Eemanded for trial as against Travelers.


source: Caselaw Access Project

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

license: Public Domain

text:
    STATE OF NEW JERSEY, PLAINTIFF-RESPONDENT, v. AUGUST A. FARFALLA, a/k/a. AUGIE A. FARFALLA, DEFENDANT-APPELLANT.
    Superior Court of New Jersey Appellate Division
    Argued March 1, 1971
    Decided March 8, 1971.

      Before Judges Goldman, Leonakd and Eeitz.

      Mr. Ernest 8. Glickman argued the cause for appellant.

      Mr. Andrew J. Smithson, Assistant Prosecutor, argued the cause for respondent (Hr. Bruce M. Schragger, MereeT County Prosecutor, attorney).
   The opinion of the court was delivered by

Goldmann, P. J. A. D.

Three indictments, respectively charging defendant with working for a lottery business (N. J. S. A. 2A:121-3), bookmaking (N. J. S. A. 2A:112-3), and possession of lottery slips (N. J. S. A. 2A:121-3), were consolidated for trial and resulted in jury verdicts of guilty on all three charges. The court sentenced him to State Prison terms of 2-3 years on each charge, to be served concurrently, and additionally imposed a $500 fine on each charge, defendant to stand committed until the fine was paid. He appeals.

The first attack directed at the convictions is that the material seized from defendant at his place of business when the police entered and searched the premises pursuant to a search warrant, should not have been admitted in evidence because the State failed to present sufficient proof of chain of possession. There was no mistaken exercise of discretion on the part of the trial judge in overruling the defense objection to the State’s introduction of the exhibits in evidence. He correctly relied on State v. Brown, 99 N. J. Super. 22 (1968), certif. den. 51 N. J. 468 (1968), where we said:

* * ■? whether the requested chain of possession has been sufficiently established to justify admission of the exhibit is a matter committed to the discretion of the trial judge, and his determination will not be overturned in the absence of a clearly mistaken exercise thereof. * * * While the proper foundation for the admission of such real evidence requires a showing of an uninterrupted chain of possession, it is not necessary for the party introducing such evidence to negate every possibility of substitution or changing condition between the event and the time of trial, especially where, as here, the custodian has been an arm of the State. The question is one of reasonable probability that the evidence has not been changed in important respects, * * * or is in substantially the same condition as when the crime was committed, * * *. [at 27—28; citations omitted]

See also, State v. Johnson, 90 N. J. Super. 105, 113 (App. Div. 1965), aff’d 46 N. J. 289 (1966). In ruling on defendant’s objection, the trial judge detailed his reasons at some length. We agree with those reasons, which led to the conclusion that no tampering with the evidence had occurred and that the chain of possession had been established.

Advanced as plain error (former rule R. R. 1:5-1 (a), now R. 2:10-2), is the claim that the trial judge erred when he instructed the jury to exclude from its deliberations certain testimony that had previously been stricken from the record. Judicial discretion was properly exercised; there was no error. The admonition was given emphatically, and properly so because, considering the nature of the stricken testimony (by a detective regarding telephone calls received at defendant’s shop while the police were there) and its probable impact on the jury, a strong and detailed instruction to disregard that testimony was appropriate and necessary. At the close of the charge defense counsel affirmatively stated that he had no objection.

Einally, defendant contends that the sentence was manifestly excessive and not authorized by statute. This claim is directed to the imposition of a $500 fine on each charge, with the direction that defendant was to stand committed until the fines were paid. The argument made is that N. J. S. A. 2A :85-7 provides for a maximum sentence of three years for a crime of the type charged; that N. J. S. A. 2A:166-16 states that where, as part of a sentence of imprisonment, the court orders that the prisoner stand committed until the fine and costs are paid, the prisoner shall xeceive credit against the amount of the fine and costs at the rate of $5 for each day of confinement, and that the total fines of $1,500 would mean that defendant would have to remain in prison for not only three years but 300 days additional if unable to pay the fines. Defendant’s contention that he has in effect been sentenced to a maximum of four years’ imprisonment is misdirected.

N. J. S. A. 2A:85-7, to which defendant refers, does not merely provide that a person found guilty of a misdemeanor may be imprisoned for not exceeding three years; the language is that he "shall be punished by a fine of not more than $1,000 or by imprisonment for not more than 3 years, or both.”

N. J. S. A. 2A:166—16, last amended by L. 1963, c. 142, § 2 (the amendment merely increased the $3 rate to $5) states:

Whenever it shall appear that a person is confined in a State penal or correctional institution by reason of default in the payment of fines and costs of prosecution and wherein the committing court, as part of the sentence of imprisonment, ordered that the prisoner stand committed until such fine and costs are paid, such prisoner shall be given credit against the amount of such fines and costs at the rate of $5.00 for each day of confinement. When the prisoner shall have been confined for a sufficient number of days to establish credits equal to the total aggregate amount of such fines and costs, and is not held by reason of any other sentence or commitment, he shall be discharged from imprisonment by the chief executive officer of the State penal or correctional institution wherein he is so confined.

As the statute has been construed — see, for example, State v. Lavelle, 54 N. J. 315 (1969) — if the fine has not been paid by the time defendant has served at least the minimum or been paroled by the State Parole Board, he must continue in prison until he has "worked off” the fine at the rate of $5 for each day of confinement. In concurring in the Lavelle holding, Chief Justice Weintraub spoke of the fine as a proper “plus” penalty.

The United States Supreme Court only recently addressed itself to an aspect of this question in Williams v. Illinois, 399 U. S. 235, 90 S. Ct. 2018, 26 L. Ed. 2d 586 (June 29, 1970), vacating the judgment appealed from and remanding the matter to the Illinois Supreme Court for further proceedings. Williams was given the maximum sentence for petty theft under Illinois law of one year’s imprisonment and a $500 fine, plus $5 in court costs. The judgment, as permitted by statute, provided that if, when the one-year sentence expired, he did not pay the monetary obligations, he had to remain in jail to work them off at the rate of $5 a day. While in jail Williams, alleging indigency, unsuccessfully petitioned the sentencing judge to vacate that portion of the order confining him to jail after the sentence expired, because of nonpayment of the fine and costs. The Illinois Supreme Court (41 Ill. 2d 511, 244 N. E. 2d 197 (1969)) rejected appellant’s claim that the state statutory provision constituted discriminatory treatment of those unable to pay a fine and court costs. It affirmed the lower court’s dismissal of appellant’s petition, holding that "there is no denial of equal protection of the law when an indigent defendant is imprisoned to satisfy payment of the fine.” The United States Supreme Court held that although a state has considerable latitude in fixing the punishment for state crimes and may impose alternative sanctions, it may not under the Equal Protection Clause subject a certain class of convicted defendants to a period of imprisonment beyond the statutory maximum, solely by reason of their indigency.

Several factors differentiate the case before us, as it now stands, from Williams. In the first place, defendant was sentenced on September 12, 1969. He has never served a day, being out on bail. If we affirm, he still has the 2-3 year term, or whatever lesser part thereof he may have to serve if earlier paroled.

Secondly, there is not the slightest suggestion offered that he is indigent. In this connection, we note that he was engaged in a not unrewarding although unlawful enterprise, apparently of more than minor magnitude, and he is represented by retained counsel. Thus, the question of a violation of the Equal Protection Clause does not manifest itself — at least presently.

It should also be noted, in passing, that should defendant be early paroled, the Parole Board could, in its discretion, provide that the fine be paid off in installments or otherwise during the parole period. It is authorized to do so under the rules and regulations adopted for the State Parole Board by the Department of Institutions and Agencies, presently known as Regulation 11:70-60, not yet codified as part of the New Jersey Administrative Code.

Alternatively, defendant alleges that his sentence is manifestly excessive, even though within statutory limits. We view the sentence as reasonable in the circumstances.

Affirmed.

[On the date this appeal was argued the United States Supreme Court decided Tate v. Short, 400 U. S. —, 91 S. Ct. 668, 28 L. Ed. 2d 130 which we find factually and legally distinguishable.]


author: Per Curiam.

text:
    STATE OF NEW JERSEY, PLAINTIFF-RESPONDENT, v. WILBUR JORDAN, DEFENDANT-APPELLANT. STATE OF NEW JERSEY, PLAINTIFF-RESPONDENT, v. FREDERICK E. WALLACE, DEFENDANT-APPELLANT.
    Superior Court of New Jersey Appellate Division
    Argued October 14, 1970
    Decided March 11, 1971.

      Before Judges Lewis, Matthews and Mintz.

      Mr. Marie E. Feinman, designated counsel, argued the cause fox appellant Jordan (Mr. Stanley C. Tan Ness, Public Defender, attorney).

      Mr. Donald O. Targan, assigned counsel, argued the cause for appellant Wallace.

      Mr. Arthur T. Guerrera, Assistant Prosecutor, argued the cause for respondent (Mr. Robert N. McAllister, Jr., Atlantic County Prosecutor, attorney; Mr. Ernest M. Curtis, Assistant Prosecutor, of counsel and on the brief).
   Per Curiam.

Defendants were each convicted, after a joint trial, of armed robbery. Both appealed, and although the appeals were not consolidated, we treat the questions raised in both appeals in this opinion, which shall be filed as the opinion of the court in each case.

The facts adduced at trial disclosed that Wallace and Jordan entered the Brass Bail Bar in Atlantic City approximately ten minutes before the robbery occurred. They wandered around for a few minutes and then each ordered a beer. The bartender, Patten, who testified at the trial, poured and served the beers and engaged the two “in quite a conversation.” Thereafter, Wallace approached Patten who was in front of the cash register, showed him the butt end of what he believed to be a gun, and said, “I want the money and I am not kidding.” Patten placed all the money in the cash register on the bar and Wallace and Jordan took all they could and ran out the door. Patten then grabbed a telephone which was the property of a taxicab company and asked the dispatcher to send the police. Policemen arrived in less than five minutes and set out in search of the two robbers as soon as Patten had given them “fast” descriptions. Within five to ten minutes the police returned to the bar with Wallace who was identified by Patten who said, “that is the man.”

At the request of the police, Patten went to Atlantic City police headquarters after he finished work at 8 A.M., where he again identified Wallace as one of the robbers. At this identification, Wallace was not in the lineup but was brought into a room where a police clerk was taking Patten’s statement; as defendant was brought near the clerk’s desk, Patten volunteered the identification. Patten also identified certain items of clothing as belonging to defendant Wallace. Patten, in testifying about his identification of Wallace, stated it was not based upon the fact that the police officers brought Wallace to the bar, but rather because he “had much time to observe Mr. Wallace and know what he looked like.” Patten described Wallace as wearing a very thin-pointed, well-shaped beard, a cast on his right arm, a three-quarter length black leather or simulated leather coat, dress slacks, a hat, a sweater, and shined shoes.

Sergeant Callender of the Atlantic City police testified that when he received the radio dispatch describing the robbers, he began searching the area and when he entered the Place Bar, which is located a block and a half from the Brass Rail, he saw Wallace who was wearing blue trousers, brown shoes, a tan sweater, a cast on his right arm, and a mustache growing into a goatee. Callender testified that he had known Wallace for at least seven years and that he had seen him earlier that day dressed as described by Patten. Callender stated that as he entered the Place Bar, Wallace “immediately started toward a door” until ordered to halt. After frisking him, Callender noticed Jordan who was also in the Place Bar and determined that he fit the description of the other man who had committed the robbery at the Brass Rail. Jordan was ordered to remain where lie stood. Callender then ordered a barmaid to call for assistance. At this point, Jordan smashed his way through a locked door and escaped.

On the evening following the robbery, Patten was again summoned to police headquarters where he identified Jordan who stood in a lineup comprised of four or five other men. According to Patten, he could not remember how the other men looked, but remembered that “Mr. Jordan stood out very well.”

Both Wallace and Jordan testified on their own behalf at trial and each denied any participation in the crime.

On this appeal both defendants argue that the trial court erred in denying their motions to dismiss the indictments on their challenges to the array of the grand jury and, further, in denying their requests to hold evidentiary hearings on their challenges to the array; they also claim that each should have' been acquitted at the end of the State’s case of count two of the indictment against him because the State failed to establish that the robbery was perpetrated with a gun. Einally, both defendants argue that the' identification of each of them was unconstitutionally, impermissibly suggestive under United States v. Wade, 388 U. S. 218, 87 S. Ct. 1926, 18 L. Ed. 2d 1149 (1967).

The first argument dealing with the challenge to the array may be dispensed with summarily. Both defendants, in their briefs to this court, have informed us that an evidentiary hearing on a challenge to the same array was held on April 27, 28 and 30, 1970 before Judge Horn, the assignment judge of Atlantic County, in the case of State v. Dickerson, et at., Indictment No. 614-68-M, et al. Both defendants agree that they should be bound by the facts adduced at that evidentiary hearing, and the decision of Judge Horn in the Dickerson case. Since the filing of the briefs on behalf of each defendant, Judge Horn has filed his opinion in Dickerson in which he rejected the challenges.

Defendants also challenge the sufficiency of proof with respect to count two of each indictment which charged each defendant with the use of a gun during the perpetration of the robbery in violation of N. J. S. A. 2A:151-5. The only evidence in the State’s case with respect to the use of a weapon during the robbery was the testimony of Patten, the bartender at the Brass Rail, who was the actual victim. Patten testified that “Wallace showed me the back end of a gun beneath the cast and asked me to give him money.” In view of this testimony, the question of whether or not a gun was used was for the jury. The jury apparently believed Patten. We cannot substitute our judgment for theirs. State v. Johnson, 42 N. J. 146 (1946).

Finally, we deal with the identification questions raised by both defendants. In Wallace’s case we conclude that the identification procedures there fall within the principles established in State v. Thomas, 107 N. J. Super. 128 (App. Div. 1969). Within minutes after the robbery, defendant Wallace, who had been more than adequately described to the police by Patten, was brought into Patten’s presence and identified. The second identification which took place at police headquarters the following morning was superfluous, from a due process point of view, in view of the positive identification made by Patten the night before.

Jordan was identified in a lineup approximately 24 hours after the robbery. Patten was positive in his identification, claiming that Jordan “stood out very well.” We have little other information about the constitution of that lineup. The question we deal with here is whether Jordan, having waived his right to cross-examine and produce evidence to controvert the State’s witnesses and evidence pertaining to his identification at trial (although a voir dire on the issue had been conducted out of the presence of the jury), should be permitted to prevail in his quest for reversal of his conviction solely on the theory that he did not have counsel during the pretrial lineup. State v. Macon, 57 N. J. 325 (1971); cf. State v. Edge, 57 N. J. 580 (1971).

In United States v. Wade, above, the Supreme Court held that a post-indictment lineup is a critical stage of prosecution at which the accused is entitled to legal representation. Although the court has not extended this finding, lower federal courts, in anticipation of such an extension, have held that there is a similar right to counsel at pre-indictment confrontations as well. See, e. g., Long v. United States, 137 U. S. App. D. C. 311, 424 F. 2d 799 (1969) ; Rivers v. United, States, 400 F. 2d 935 (5 Cir. 1968), and United States v. Kinnard, 294 F. Supp. 286 (D. D. C. 1968). Compare, however, United States v. Venere, 416 F. 2d 144 (5 Cir. 1969); United States v. Davis, 399 F. 2d 948 (2 Cir. 1968), cert. den. 393 U. S. 987, 89 S. Ct. 465, 21 L. Ed. 2d 449 (1969), and Bratten v. Delaware, 307 F. Supp. 643 (D. Del. 1969).

Our courts have consistently declined to determine the applicability of the Wade rules to pre-indictment lineups, or have limited their holdings in applying Wade rules to the specific facts of the case under review. See e. g., Stale v. Mustacchio, 57 N. J. 265 (1970); State v. Sinclair, 49 N. J. 525 (1967); State v. Matlack, 49 N. J. 491 (1967), cert. den. 389 U. S. 1009, 88 S. Ct. 572, 19 L. Ed. 2d 606 (1967); State v. Edge, 111 N. J. Super. 182 (1970), rev’d. 57 N. J. 580 (1971), and State v. Thomas, above.

In Thomas, we stated that we were not holding that the right to counsel did not exist in pre-indictment identification proceedings, but based on the facts of the case we concluded that defendant was not prejudiced by the absence of counsel. Among the facts which led us to our couclusion was the proximity of the time of commission of the crime and the time of confrontation of defendant and victim.

Under the facts of this case, it can hardly he said that the identification of Jordan by Patten could be considered to be “on the scene.” It is not, however, the proximity in time of the occurrence of a crime and the identification confrontation which is the sole criterion in determining whether defendant should have been provided with counsel. The test of criticality is a functional test, based upon the Wade postulate that possible prejudice to the aceused must be weighed against countervailing policy considerations. 388 U. S. at 337, 87 S. Ct. 1936. We suggest that such countervailing policy considerations should not be limited merely to situations temporally and physically "on the scene.”

There is nothing in this record which indicates that Jordan’s identification was unduly suggestive and constituted a singling out of his person for the benefit of the victim, thus making it "unnecessarily suggestive and conducive to irreparable mistaken identification.” Stovall v. Denno, 388 U. S. 293, 303, 87 S. Ct. 1967, 18 L. Ed. 3d 1199 (1967). The record before us discloses quite clearly that Patten knew Jordan to be one of the perpetrators of the crime against him as soon as he saw him. In addition, Jordan, who had been described by Patten, was identified by Sergeant Callender as having been in Wallace’s company at the Place Bar immediately after the robbery, and having fled arrest. Under these facts, we cannot conclude that Jordan was denied due process.

The judgments of conviction are affirmed.


author: Mintz, J. A. D.

text:
    BROOKCHESTER, INC., PETITIONER-APPELLANT, v. DIRECTOR, DIVISION OF TAXATION, RESPONDENT. RICHFIELD VILLAGE, INC., PETITIONER-APPELLANT, v. DIRECTOR, DIVISION OF TAXATION, RESPONDENT.
    Superior Court of New Jersey Appellate Division
    Argued February 2, 1971
    Decided March 11, 1971.

      Before Judges Lewis, Matthews and Mintz.

      Mr. David Waldman argued the cause for appellants (Messrs. Heller & Lailcs, attorneys; Mr. Murray A. Lailcs, of counsel).

      Mr. Herbert K. Gliclcman, Deputy Attorney General, argued the cause for respondent (Mr. George F. Kugler, Jr., Attorney General of New Jersey, attorney).
   The opinion of the court was delivered by

Mintz, J. A. D.

Petitioners appeal from a judgment of the Division of Tax Appeals which affirmed the action of the Director of the Division of Taxation with respect to 18 related corporations, in his denial of claims for refunds for the taxable year ended March 31, 1962 and his revaluation of the net worth as included on the Corporation Business Tax Returns for the years ended March 31, 1963 and March 31, 1964.

Petitioners are engaged in the business of operating residential apartment units. In filing their tax returns under the Corporation Business Tax Act, N. J. S. A. 54:10A-1 et seq., for the taxable year ended March 31, 1962, they valued their fixed assets, consisting of lands and apartment house buildings, in accordance with their estimate of the market value of those assets. However, in filing their tax returns for the taxable years ended March 31, 1963 and March 31, 1964, the fixed assets were reported at cost, less accumulated depreciation. Presumably the returns for those two years show little or no net worth for the respective corporations. The actual mortgages on the respective parcels of realty exceed the book value of the fixed assets. The record discloses that some of the parcels were re-mortgaged through lending institutions. The extent of such refinancing is not indicated.

The Director of the Division of Taxation disallowed the claims for refunds and made a revaluation of all the corporations’ net worth for the taxable years ended March 31, 1963 and March 31, 1964. He was of the view that the franchise tax should be calculated upon a value equal to the mortgage balance on the real estate then outstanding on each parcel. All the corporations appealed the decision of the Director of the Division of Taxation to the Department of the Treasury, Division of Tax Appeals, contending that the Director’s determinations wore not in accordance with sound accounting principles as prescribed in N. J. S. A. 54:10A-4(d).

The Division of Tax Appeals upheld the Director’s action and, while conceding that the experts agree that the only acceptable basis for stating the value of fixed assets is historical cost less depreciation, concluded, nevertheless, that the Director was authorized under the circumstances here presented to adjust the book values to reflect fair values and affirmed the Director’s action in increasing the book values to equal the amount of the outstanding mortgages. In effect, he found that fair valuations could not be determined in accordance with “sound accounting principles.” In view of the conflicting requirement of N. J. S. A. 54:10A-4(d) he concluded that the principle of fair value adjustments is to be preserved at the expense of violating “sound accounting principles.”

N. J. S. A. 54:10A-4(d) defines “net worth” as the aggregate of the values disclosed by the books of the corporation and further provides that:

* * * if in the opinion of the commissioner [director], the corporation’s hooks do not disclose fair valuations the commissioner may make a reasonable determination of the net worth which, in his opinion, would reflect the fair value of the assets carried on the books of the corporation, in accordance with sound accounting principles, and such determination shall be used as net worth for the purpose of this act. [Emphasis supplied]

The expert testimony was' generally to the effect that fixed assets are properly recorded on the corporate hooks at cost less depreciation and that such valuations are in accordance with “generally accepted accounting principles.” However, Norman Cogliati, an expert who testified for petitioners, conceded on cross-examination that where a balance sheet shows a mortgage liability in excess of the corresponding asset stated at cost less depreciation, a disclosure should be made identifying the long-term obligation related to the fixed asset. Gerard Pisauro, an accountant who testified for respondent, also testified that sound accounting principles dictate that a footnote disclose the mortgage and the asset which secured the mortgage. All the accountants who testified appeared to equate the term “sound accounting principles” with “generally accepted accounting principles.” Cf. American Can Co. v. Director, Div. of Taxation, 87 N. J. Super. 1, 11 (App. Div. 1965).

In R. H. Macy & Co. Inc. v. Director, Div. of Taxation, 77 N. J. Super. 155, 167 (App. Div. 1962), aff’d 41 N. J. 3 (1963), the court indicated that the Legislature, by the adoption of the Corporation Business Act, N. J. S. A. 54:10A-1 et seq., sought to provide a relatively simple and administratively feasible formula for measuring the value of the exercise of the corporate privilege in this State. It chose to do so by using the taxpayer’s net book worth rather than becoming enmeshed in the complexities and difficulties attendant upon true value or market value appraisal of assets for that purpose. However, the court further indicated that N. J. S. A. 54:10A-4 conveys the thought that the net worth of the assets appearing on the books may not represent fair value, in which instance the Director, in assessing the franchise tax, may revise book figures to reflect fair value of the assets, providing that the resulting readjustment is "in accordance with sound accounting principles.”

We note that N. J. S. A. 54:10A-5(e) provides a formula for the assessment of the annual corporate franchise tax, predicated upon a determination of "total assets,” a term left undefined. Under such circumstances we should accord the phrase its ordinary and usual meaning. Morris & Essex Invest. Co. v. Director of Div. of Taxation, 33 N. J. 24 (1960). This section is in pari materia with N. J. S. A. 54:10A-4(d), and they should be construed together. We should look for the clarification of meaning of statutory standards whore discernible from the whole of specific or cognate statutes. R. H. Macy & Co. Inc. v. Director of Div. of Taxation, supra, 77 N. J. Super. at 169.

We do not agree with the Division’s determination that "fair values” cannot be established "in accordance with sound accounting principles,” and thus the latter requirement be disregarded. As was observed in United States Steel Corp. v. Director, Div. of Taxation, 38 N. J. 533 (1962) :

* * * The Director was not bound by the company’s bookkeeping. He could properly conclude the books did not disclose fair valuation of the components of net worth under accounting principles ichich are sound in the light of this tax statute. See section 4, “net worth.” [at 544]

We are of the view that the outstanding mortgage balances, presumably none of which is in arrears, are an indicia of minimum fair values of the respective properties under accounting principles which are sound and administratively feasible in the light of this tax statute and the particular circumstances of this ease. We reject the notion that some of these corporations owning fixed assets of a clearly discernible minimum value evidenced by the outstanding current mortgage balances have no or little "net worth” because of the accumulated depreciation reflected on their respective hooks. We do not perceive it our duty to construe the statute in question to reach such an absurd result. The judgment is affirmed.


text:
    STATE OF NEW JERSEY, PLAINTIFF-RESPONDENT, v. JOANNE LAVENDER, DEFENDANT-APPELLANT.
    Superior Court of New Jersey Appellate Division
    Argued February 22, 1971
    Decided March 2, 1971.

      Before Judges Goldmann, Leonard and Mountain.

      Mr. Alfred T. Sanderson argued the cause for appellant.

      Mr. Martin F. Caulfield, Gloucester County Prosecutor, argued the cause for respondent.
   The opinion of the court was delivered by

Goldmann, P. J. A. D.

Defendant was charged in three indictments: bookmaking (N. J. S. A. 2A:112-3), engaging in a lottery business (N. J. S. A. 2A:121-3(a)), and possession of lottery paraphernalia (N. J. S. A. 2A:121-3 (b)). The jury found her guilty on the last-mentioned indictment. She then retracted her former pleas of not guilty to the first two indictments and pleaded guilty. The trial judge sentenced her to the Clinton Reformatory for Women for 1-5 years on the bookmaking indictment and in addition imposed a fine of $1,000, defendant to stand committed until the fine was paid. On the other two indictments she was sentenced to concurrent indeterminate terms at the same institution, not to exceed three years.

Shortly after sentence was imposed the reformatory superintendent wrote the sentencing judge requesting a corrected sentence on the bookmaking charge, calling his attention to the fact that N. J. S. A. 30 :4-155 mandates that sentences to the Clinton Reformatory, except for murder or manslaughter, be indeterminate. The judge responded that the bookmaking sentence conformed to N. J. S. A. 2A:112-3, which calls for punishment by a $1,000-$5,000 fine or imprisonment in the State Prison for 1-5 years, or both. He stated that State v. Ammirata, 104 N. J. Super. 304 (App. Div. 1969), and State v. Pallitto, 107 N. J. Super. 96 (App. Div. 1969), were authority for the sentence imposed.

N. J. S. A. 30:4-155 provides in pertinent part:

The several courts in sentencing to the Women’s Reformatory shall not fix or limit the duration of the sentence, except as otherwise provided for herein, but the time which the prisoner shall serve in the reformatory or on parole shall not exceed five years, except for the crimes of murder or manslaughter, or the maximum term provided by law for the offense of which the prisoner is convicted and sentenced if such maximum be less than five years; provided, however, that the court, in its discretion, for good cause shown, may impose a sentence greater than five years, but in no case greater than the maximum provided by law, and the commitment shall specify in every case the maximum of the sentence so imposed. * * *

In Ammirata, above, defendant was convicted of unlawful possession of narcotics under N. J. S. A. 24:18-4 and sentenced, pursuant to N. J. S. A. 24:18-47(e) (1), to an indeterminate term in the Keformatory for Males of not less than two years. He appealed on the ground that the reformatory statute, N. J. S. A. 30:4-148 (similar to N. J. S. A. 30:4-155 for these purposes) prohibited a minimum term. The court rejected the argument for the reason that the narcotics sentencing statute (N. J. S. A. 34:18-47) was amended three times between the date of enactment of the reformatory statute (N. J. S. A. 30:4-148) and the date of the offense, and it therefore controlled the disposition of the ease. 104 N. J. Supper, at 308. Presumably the court’s rationale was this: since the Legislature confronted the subject of sentencing in narcotics cases at a time when it was aware of the possible conflict inherent in the reformatory statute, its specific inaction in dealing with this issue indicated, sub silentio, a legislative policy that the mandatory minimum in the narcotics law should supersede the prohibition on minimum sentences in the reformatory statute. This position was merely reaffirmed in Pallitto, 107 N. J. Super., above, at 100.

Defendant here argues that N. J. S. A. 30:4-155, having twice been amended since 1940, the year of the last amendment to the bookmaking statute, N. J. S. A. 2A:113-3, the same logic as underlay the Ammirata decision should apply here, and therefore the sentence is illegal.

In 1940 the bookmaking penalty was changed to provide for either a fine of not less than $1,000 nor more than $5,000 or imprisonment for not less than one nor more than five years, or both. The penalty had previously been in the conjunctive. L. 1940, c. 205, § 1. In 1946 the women’s reformatory statute was amended to include a special provision as to manslaughter and murder, L. 1946, c. 312, § 3 (see also, R. S. Cum. Supp. 30:4-155, at 371 (1947)). It was again amended by L. 1951, c. 335, § 3 (see also, R. S. Cum. Supp. 30:4-155, at 197 (1952)). The purpose of the legislation, as set out in the Statement accompanying the bill on introduction, was to limit the duration of any sentence a prisoner had to serve in Clinton to a maximum of five years. However, if the sentencing court felt that a greater maximum sentence was indicated by the facts and circumstances, it might impose such sentence. The Statement continued with the observation that courts, in committing to the reformatory rather than to the State Prison, “have uppermost in mind the rehabilitation of the individual and his eventual return to society better qualified to take his proper place in community life.” Eurther, the introducer of the bill stated that the legislation had the approval of the State Parole. Board and of a special committee of judges appointed to study sentencing practices, as “desirable and necessary legislation as disclosed by their extensive experience on the bench.”

The legislative pattern is clear: sentences to the Clinton Reformatory were to continue indeterminate, and in no ease to exceed five years except in the case of homicide of where the maximum term fixed by statute for the offense was less than five years; however, the sentencing court, in its discretion and for good cause shown, might impose a sentence greater than five years, but in no case greater than the maximum provided by law. Accordingly, we hold that the reformatory law, N. J. S. A. 30:4-155, dictates that the no-minimum rule apply in this ease. It must be assumed that the Legislature was fully informed as to the sentence fixed by the bookmaking statute (last amended in 1940), as Well as that provided in any statute not amended after 1946, when it passed L. 1946, c. 312 and L. 1951, c. 335.

The sentence imposed by the court for the bookmaking offense must therefore be vacated.

(We note that in sentencing defendant to concurrent indeterminate terms for the other two offenses the judge directed that they were not to exceed three years. No maximum should have been mentioned; N. J. S. A. 30:4-155 provides the necessary limitation by stating that the term to be served shall not exceed the maximum fixed by law for the particular offense. In this case N. J. S. A. 2A :121-3 (a) and (b) denote the lottery law violations as misdemeanors, which carry a maximum term of three years. N. J. S. A. 2A:85-7.)

At the time the trial judge imposed sentence he had before him a presentence report indicating that defendant had no prior record, was suffering from an ulcer, had three children, ages 9, 6 and 3, and incarceration would be a hardship on her family. The senior probation officer had recommended leniency. We were informed at oral argument that defendant, who has been out on bail, is now pregnant.

The three indictments returned by the grand jury all stem from a single raid. Aside from the bookmalring sentence, defendant will be required to serve concurrent indeterminate terms at Clinton not exceeding three years. In our view, the sentences for engaging in a lottery business and possession of lottery paraphernalia are sufficient punishment.

In the exercise of our authority to revise a sentence, defendant will serve an indeterminate term at Clinton, all sentences to run concurrently and for the same period of time. The matter is remanded to the County Court for the entry of an accordant judgment of conviction.


author: Herbert, J. S. C.

text:
    IN THE MATTER OF THE ESTATE OF PARKER WEBSTER PAGE, DECEASED.
    Superior Court of New Jersey Chancery Division
    Decided December 23, 1970.

      Mr. Coleman Burlce for plaintiffs (Messrs. Burlce & Schmid, attorneys).

      Mr. Clyde M. Noll for defendant (Messrs. Bourne & Noll, attorneys).
   Herbert, J. S. C.

Parker W. Page died in 1937 and his will was probated with the Essex County Surrogate. By paragraph Third of the will he left the residue of his estate in trust for his wife Nellie for life, and provided for remainders in the following words:

Upon her death I give, devise, bequeath and appoint the principal in equal shares to my daughters Helen Page Wodell and Lois Page Cottrell and if either of my daughters should then be dead to snch persons and in such proportions as such (laughter may by will duly admitted to probate legally appoint and in default of such appointment to such daughter’s issue then surviving in equal shares per stirpes.

Nellie Page, the widow, died on April 14, 1970 at the age of 100. She was survived by the two daughters, Helen Page Halbaeh (named in Mr. Page’s will as Helen Page Wodell) and Lois Page Cottrell. On April 19, 1970 Mrs. Halbach signed and acknowledged a document entitled “Disclaimer and Renunciation” which reads as follows:

TO THE SURROGATE OP THE COUNTY OP ESSEX, STATE OP NEW JERSEY:
I, HELEN PAGE HALBACH (formerly Helen Page Wodell), residing at 19 Porest Drive, Short Hills, New Jersey, do hereby irrevocably disclaim and renounce all my right, title and interest as a remainderman of the trust established by my father, Parker Webster Page, in Paragraph THIRD of his Last Will and Testament, dated January 12, 1935, and admitted to probate by the Essex County Surrogate’s Court on February 10, 1937.
Dated: April 19, 1970 HELEN PAGE HALBACH
Helen Page Halbaeh

On April 30, 1970 Mrs. Cottrell signed and acknowledged a paper identical in all pertinent respects to the one executed by Mrs. Halbaeh.

The disclaimer and renunciation of Mrs. Halbaeh and that of Mrs. Cottrell were delivered on May 4, 1970 to Summit and Elizabeth Trust Company, the corporate trustee of Mr. Page’s residuary trust, and on June 15, 1970 were filed with the Surrogate of Essex County.

The trustees of the trust created by paragraph Third of Mr. Page’s will have brought this action for approval of their accounts and in addition ask for a judgment determining the effect of the documents executed hy Mrs. Halbach and Mrs. Cottrell and described above, and directing distribution of the trust assets.

Mrs. Halbach has two children and Mrs. Cottrell has three. These five are the only grandchildren Mr. and Mrs. Page ever had, and all of them are of age.

In Dare v. New Brunswick Trust Co., 122 N. J. Eq. 349 (Ch. 1937), a bequest of income from a small trust fund was rejected by the Salem Quarterly Meeting of the Society of Friends. Vice-Chancellor Sooy had this to say about the refusal to accept:

That a devisee or legatee cannot be compelled to accept a devise or legacy is definitely settled. See [1] Bogert on Trusts, vol. 1, §§ 171 to 173, and 1 Restatement, vol. 1, § 36 par. c. In re Howe's, 112 N. J. Eq. 17, and Olsen v. Wright, 119 N. J. Eq. 103, among the many cases that might be cited.
As to the time for renunciation or declining a legacy, the rule is that the rejection should be made promptly after the legatee has notice of the legacy, and while it is true that the legatee, being a remainder-man, might be considered to have acted prompts if he gave notice after the death of the life tenant, still there is nothing that prevents the giving of such notice prior thereto. See Page on Wills § 1202. [at 351]

Page on Wills observes that testate succession depends upon the voluntary act of a testator in executing his will, and then comments:

As a part of this general theory of testate succession the devisee or legatee may prevent the passage of title to himself by renunciation, disclaimer and the like.

6 Bowe-Parker, Page on Wills, § 49.2 at 39 (1962), where many cases are cited, including Dare v. New Brunswick Trust Co., supra.

The only sensible assumption is that the daughters of Mr. Page learned the provisions of his will soon after his death. It thus becomes appropriate to ask whether they should have renounced promptly after getting such knowledge even though Mrs. Page was then alive, and, as events proved, had many years ahead of her. My research, though not exhaustive, has not turned up any ruling that a remainderman’s renunciation, to be effective, must occur within a reasonable time after learning that a will provides for him. The statement in Dare v. New Brunswick Trust Co. to the contrary has been quoted above. Clapp on Wills and Administration cites that case with approval for the proposition that a remainderman may wait until termination of a prior estate before accepting or rejecting benefits conferred upon him by a will, but must then act promptly. 5 N. J. Practice (3d ed. 1962), § 278 at 525. In Montclair National Bank & Trust Co. v. Seton Hall College of Medicine & Dentistry, 96 N. J. Super. 428 (App. Div. 1967), the court said in a different though somewhat related context,

Clearly there is a distinction between outright gifts of present interests with present enjoyment intended, and future interests, vested or contingent, with distribution not intended to bo immediate, [at 437]

On this subject Page, op. cit., says:

If the interest is one which will not take effect in immediate possession, even if accepted, it is said that the remainderman and the like has the entire period during which the particular estate lasts, to determine whether he accepts or renounces. [§ 49.8, at 47, citing eases from Alabama, Missouri and New Hampshire.]

My conclusion is that Mrs. Halbach and Mrs. Cottrell, having acted very promptly after their mother’s death, effectively disclaimed and renounced the remainders in trust provided for them by the will of their father.

The conclusion just stated leads to this question: In the light of the disclaimers should the will bo construed to bring into operation the provisions for the issue of Mr. Page’s daughters, as though the daughters had died before their mother? The will is silent about possible renunciation of benefits by the daughters. Mr. Page did specify, however, that if a daughter predeceased him, the share such daughter would have taken if living should go to her issue, and he also specified — in language quoted above — that if either of his daughters, after surviving him, should die in the lifetime of his wife, the share in question should pass to the deceased daughter’s issue in default of testamentary appointment by that daughter. Thus he was explicit about the contingency of death, but not about the contingency of disclaimer.

The disclaimers have produced a situation much like the fairly common one in which a life tenant voluntarily surrenders a life estate that a testator, judging by the language of his will, thought would be ended only by the life tenant’s death. The usual result in cases of that type is acceleration of the remainder and treatment of voluntary termination by the life tenant as if termination had occurred through death. A portion of Vice-Chancellor Buchanan’s opinion in Bennett v. Fidelity Union Trust Co., 123 N. J. Eq. 198 (Ch. 1938), is especially pertinent here:

It is obvious that the question of when and to whom distribution is to be made is basically a question of what was the testator’s intent in that behalf as expressed in his will. The testator intended that the wife should take an estate for her life (in one of the trusts it was an estate for life or widowhood), and that at the end of that life estate the corpus should go to those persons whom he specifically designated in that behalf. The widow, however, cannot be compelled to take the life estate — nor to keep it even if she does take it. If the life estate which he gave her should be refused, or subsequently given up, by her, her life estate is thereby terminated prior to her death. His intent that she should have the fund for life is thereby rendered nugatory. To whom is it then to go? Naturally it is to go to whomsoever and at such time as he has directed, in such circumstances, by his will. But what does his will specify in this behalf? In most cases, just as in the instant case, the will does not specifically provide for such a contingency. Most people—lawyers as well as laymen— think of a life estate as ending at the death of the life tenant and not otherwise. Most wills, therefore, specify that the distribution which is intended to be made after the expiration of the life tenant’s enjoyment of the property shall be made “at” or ‘after the death of (the life tenant)’; and fail to contain any specific provision as to what shall hapi)en to the estate if the life tenant, prior to her death, refuses to have anything more to do with it. In the absence of such specific provision, the will must be searched for some implied provision—some indication of what the testator desires. If any such can be found, it will control. If nothing of that kind can be found, the court must needs dispose of the estate in some way, and hence makes such disposition as it thinks the testator would have made if he had thought about it. That disposition is the one which in the judgment of the court a testator would naturally make under those circumstances; and it is embodied in a general rule, laid down as being applicable and operative, if the will does not indicate a different intent.
It is the most natural presumption that a testator would desire the fund or estate to go, on the termination of a life estate by some cause other than the life tenant’s death, in exactly the same way as if the termination had been caused by the life tenant’s death. Hence such has been laid down as the rule where there is no different intent or desire on the part of testator evident from the will. Beideman v. Sparks, 61 N. J. Eq. 226, 47 A. 811, supra; Anthony v. Camden Safe, &c., Co., 106 N. J. Eq. 41, supra, [at 200-201]

Although the Bennelt case held that vested remainders should be accelerated and Mr. Page provided only contingent interests for his daughters’ issue, the distinction is not important. Both vested and contingent remainders are subject to acceleration. 3 Simes on Future Interests, §§ 756 and 757 at 232 et seq. (1963), where the author says, among other things:

It is interesting to note that, in a number of cases in this group, the courts definitely refused to consider distincUons between vested and contingent future interests. The whole notion seems to be that they are construing the words in the light of the renunciation, and that fact renders inapplicable ordinary rules of construction. The question which the courts profess to consider is not, is this technically a vested or a contingent remainder, but to whom would the testator have given his property in the absence of any life estate in the widow? Thus, in *Scotten v. Moore [5 Boyce 545, 93 A. 373 (Del. ch. 1914], the court, after observing that acceleration was based on presumed intention, said: ‘If the principle is based on the presumed intention of the testator, there need be no distinction made between vested and contingent remainders in its application.’ Other eases have expressed the same idea in still more elaborate terms, [at 234]

Though Bennelt v. Fidelity Union Trust Company, supra, dealt with distribution of trust funds following voluntary termination of a life estate, and the eases collected in Simes, supra, are also of that type, principles that are equally applicable to the present problem clearly emerge. To ask how a testator would have disposed of his property if he had anticipated that his wife might reject or surrender a life estate is essentially like asking how a testator would have disposed of his property if he had anticipated that his daughters might disclaim remainders provided for them in his will. In both situations the real inquiry is addressed to the testator’s intent.

In New Jersey we have strong and recent declarations that our courts should undertake to ascertain and carry out the probable intention of testators. A leading case is Fidelity Union Trust Company v. Robert, 36 N. J. 561 (1962). A subsequent comment by the Supreme Court about the significance of that case may be quoted:

The current view of probable intent to which this court is now committed was crystallized in Justice Jacobs’ opinion in Fidelity Union Trust Co. v. Robert, supra (36 N. J. 561), following the groundbreaking decisions in In re Klein’s Estate, 36 N. J. Super. 407, 415 (concurring opinion of Judge Clapp) (App. Div. 1955) and Bank of New York v. Black, 26 N. J. 276 (1958). The essence of this broader and more liberal approach to will construction, is found in certain key expressions in Robert. “* * *‘when we say we are determining the testator’s intent, we mean his probable intent.’ ” “* * * [I]n ascertaining the subjective intent of the testator, courts will give primary emphasis to his dominant plan and purpose as they appear from the entirety of his will when read and considered in the light of the surrounding facts and circumstances * * *. So far as the situation fairly permits, courts will ascribe to the testator, those impulses which are common to human nature, and will construe the will so as to effectuate ‘those impulses’.” ‘* * * [T]he court’s endeavor is to put itself in the testator’s position insofar as possible in the effort to accomplish what he would have done had he “envisioned the present inquiry’.” (36 N. J., at pp. 564-566) “Since the goal is the ascertainment of the testator’s probable intent in this particular will construction case, precedents involving the construction of other wills have no great force * * [In re Estate of Burke, 48 N. J. 50, 63 (1966) ]

Neither Burke nor Robert involved disclaimer or surrender of a testamentary benefit but both cases did involve factual situations which the respective testators had failed to provide for and those situations were held to be properly solved by construing the respective wills under the doctrine of probable intent and without resorting to the laws of intestacy. In Robert the court stressed the importance of the presumption against intestacy in any inquiry about probable intent by quoting as follows from In re Fabbri’s Will, 2 N. Y. 2d 236, 159 N. Y. S. 2d 184, 140 N. E. 2d 269.

“A testator, by the act of the making of a will, casts grave doubt on any assumption that he expressly intends to chance dying intestate as to any portion of bis property. Indeed, the law has taken cognizance of this teaching of common experience and crystallized it into a presumption, expressed in various terms, but requiring essentially that the courts favor a construction which avoids partial intestacy and adopt one which results in a complete disposition of the estate. Haug v. Schumacher, 166 N. Y. 506, 514-515, 60 N. E. 245, 246, supra; Lewis v. Howe, 174 N. Y. 340, 346, 66 N. E. 975, 977, 1101. This presumption against intestacy is particularly weighty where the gift, as here, is made out of the residuary estate. Matter of Hayes’ Will, 263 N. Y. 219, 225, 188 N. E. 716, 718. The opinion in the Hayes case, 263 N. Y., at page 225, 188 N. E., at page 718, quotes the following forceful statement of the rule: ‘The idea of anyone deliberately purposing to die testate as to a portion of his estate and intestate as to another portion is so unusual in the history of testamentary disposition as to justify almost any construction to escape it. 2 Redfield on Wills (3d Ed.) 235.’ ” [2 N. Y. 2d at 243, 159 N. Y. S. 2d at 196, 140 N. E. 2d at 273]

Mr. Pago recognized that his daughters might not live to enjoy the remainders bequeathed to them. With that in mind he made provision for their issue. If he had contemplated that his daughters’ enjoyment might be forestalled not by death but by their own disclaimers, would he have intended anything other than the same disposition of the trust property he had provided for expressly in the event of death? I think not. There is nothing in the will as a whole which even suggests a different answer.

The probable intent of Mr. Page, the testator, is clear: That any suggestion of a partial intestacy he ruled out; that the two children of Mrs. Halbach divide equally the share which would have been hers if she had not disclaimed; and that the three children of Mrs. Cottrell divide equally the share which would have been hers if she had not disclaimed. As Professor Simes suggests in the sections from his work on future interests which are cited above, the will, in order to carry out this probable intent of the testator, is to he construed as though originally written to make the testator’s bequests to issue of each of his daughters effective upon disclaimer as well as in the event of death.


author: Consodine, J. C. C.

text:
    COLON MC COY, PLAINTIFF, v. GERALDINE MC COY, DEFENDANT.
    Superior Court of New Jersey Chancery Division
    Decided March 3, 1971.

      Mr. Gerald Kaplan argued the cause for plaintiff. (Messrs. Liéb, Teich and B&rlin, attorneys).
   Consodine, J. C. C.

(temporarily assigned). Plaintiff seeks divorce on the ground of desertion. The Domestic Relations Court file (R. 4:79-6) discloses that during the charged period of desertion defendant was of necessity in receipt of public assistance payments from the Essex County Welfare Board to a total of $1,470.00, all of which remains unreimbursed by plaintiff to that board. Plaintiff was able-bodied and employed in that period and still is.

By virtue of his marriage to defendant, plaintiff incurred the obligation of her support. Bonanno v. Bonanno, 4 N. J. 268 (1950).

Does the equitable maxim—He who comes into equity must come with clean hands—apply to matrimonial cases and if so to the facts herein involved?

The maxim does apply to matrimonial cases. Woodward v. Woodward, 41 N. J. Eq. 224 (Ch. 1886); Shepherd v. Ward, 5 N. J. 92 (1950); Untermann v. Untermann, 19 N. J. 507 (1955).

The iniquity which deprives a suitor of a right to justice in a court of equity, is not general iniquitous conduct, unconnected with the act of the defendant which the complaining party states as his ground or cause of action, but it must be evil practice or wrongful conduct in the particular matter or transaction in respect to which judicial protection or redress is sought. 1 Pom Eq. Jur. § 399. [Woodward v. Woodward, supra, at 225]
A court of equity acts only when and as conscience commands, and, if the conduct of the plaintiff be offensive to the dictates of natural justice, then, whatever may be the rights he possesses, and whatever use he may make of them in a court of law, he will be held remediless in a court of equity. [Deweese v. Reinhard, 165 U. S. 386, 390, 17 S. Ct. 340, 341, 41 L. Md. 757, 758 (1897)].

See also, Bein v. Heath, 6 How. 228, 247, 12 L. Ed. 416, 424 (1848); Precision Instrument Manufacturing Co. v. Automotive Maintenance Machinery Co., 324 U. S. 806, 814-815, 65 S. Ct. 993, 89 L. Ed. 1381, 1386 (1945).

There can be no doubt but that a failure to support a wife while able to do so is evil practice or wrongful conduct or offensive to the dictates of natural justice where the spouse to the marriage seeks divorce on a desertion covering the period of time in which plaintiff did not support defendant and threw her on public welfare for the necessities of life.

Complaint dismissed.


author: Horn, A. J. S. C.

text:
    STATE OF NEW JERSEY, PLAINTIFF, v. SIDNEY EDWARD BOYKIN, ET ALS., DEFENDANTS.
    Superior Court of New Jersey Law Division (Criminal)
    Decided February 19, 1971.

      Mr. N. Douglas Russell, Assistant Prosecutor for plaintiff, (Mr. Joseph Tuso, Prosecutor, attorney).

      Mr. Ivan M. Sherman for defendants (Messrs. Davidoui & Sherman, attorneys).
   Horn, A. J. S. C.

Defendants were indicted for possession of lottery paraphernalia. They move to compel the State to have a hearing as to probable cause as provided by R. 3 :4-2 and 3:4-3 or, in the alternative, to dismiss the indictment.

Defendants’ motions must be denied.

R. 3:4—2 provides in part that, "If the complaint charges the defendant with an indictable offense, the court shall inform him of his right to have a hearing as to probable cause and of his right to indictment by the grand jury.” R. 3:4-3 provides in part that,

* * *If the defendant does not waive a liearing as to probable cause and if before the hearing an indictment has not been returned against the defendant with respect to the offense charged, the court shall hear the evidence offered by the State within a reasonable time and the defendant may cross-examine witnesses against him * * * [Emphasis added].

As the above rules indicate, a hearing as to probable cause is contemplated, but may be superseded by the return of an indictment. Once the grand jury has acted, the indictment establishes the existence of probable cause and eliminates the need for a hearing.

The law in New Jersey is clear that a preliminary hearing to establish probable cause is not an essential part of the criminal procedure. In State v. Spindel, 24 N. J. 395 (1957), the court said, "At common law, there is no right to a preliminary hearing on a complaint charging a criminal offense.” It has been pointed out that there is no statute in this jurisdiction requiring a preliminary hearing; the matter is controlled by court rule and is thus a matter of procedure. State v. War, 38 N. J. Super. 201 (Cty. Ct. 1955).

Our Supreme Court has repeatedly held that the failure to conduct a preliminary hearing as to probable cause will not invalidate an indictment or conviction. State v. Smith, 32 N. J. 501 (1960); State v. Dennis, 43 N. J. 418 (1964); State v. Jackson, 43 N. J. 148 (1964); State v. Ordog, 45 N. J. 347 (1965). See also State v. Wade, 89 N. J. Super. 139 (App. Div. 1965). Although our rules provide for a preliminary hearing and a defendant should ordinarily be given one, it is well settled that the right is not so vital that the failure to afford it will invalidate an indictment or conviction. A grand jury has the right and power to find an indictment before, as well as pending, a preliminary examination. Even if the municipal magistrate finds lack of probable cause at the preliminary hearing and dismisses the complaint, defendant may still be indicted and convicted for the same offense. State v. Kirkland, 82 N. J. Super. 409 (App. Div. 1964).

The United States Supreme Court has never held that there is a constitutional right to a preliminary hearing. Although the case did not deal directly with the issue, there is language in Jaben v. United States, 381 U. S. 214, 85 S. Ct. 1365, 14 L. Ed. 2d 345 (1965), reh. den. 382 U. S. 873, 86 S. Ct. 19, 15 L. Ed. 2d 114 (1965), which indicates that an indictment supersedes the complaint procedure and eliminates the need for a preliminary hearing. The court said:

Furthermore, we think that the Government must proceed through the further steps of the complaint procedure by affording the defendant a preliminary hearing as required by Rule 5, unless before the preliminary hearing is held, the grand jury supersedes the complaint procedure by returning an indictment, [at 220, 85 S. Ct. at 1369]

The Circuit Courts of Appeal have held that there is no necessity for a preliminary hearing after the grand jury has returned an indictment. Crump v. Anderson, 122 U. S. App. D. C. 173, 352 F. 2d 649 (D. C. Cir. 1965); United States v. Chase, 372 F. 2d 453 (4th Cir. 1967), cert. den. 387 U. S. 907, 87 S. Ct. 1688, 18 L. Ed. 2d 826 (1967); Bayless v. United States, 381 F. 2d 67 (9th Cir. 1967).

Although recent cases from the Court of Appeals for the District of Columbia have held that a defendant is entitled to a preliminary hearing under the Federal Rules of Criminal Procedure, and that a subsequent indictment does not excuse the failure to have one, this was decided under the rules and not on constitutional grounds. Ross v. Sirica, 127 U. S. App. D. C. 10, 380 F. 2d 557 (D. C. Cir. 1967). Other circuits have not followed Boss. Sciortino v. Zampano, 385 F. 2d 132 (2 Cir. 1967), cert. den. 390 U. S. 906, 88 S. Ct. 820, 19 L. Ed. 2d 872 (1968).

The Third Circuit also takes the position that a preliminary hearing is not essential. In United States v. Conway, 415 F. 2d 158 (3 Cir. 1969), it was held that:

* * * the purpose of a preliminary hearing is to afford an arrested person a prompt determination as to whether there is probable cause to hold him for grand jury action. * * * This purpose is served and the hearing rendered unnecessary by the return of an indictment. * * * Nor, vre think, is it controlling that a pre-indictment request for such a hearing was made here, [at 160]

It should be observed that part of the rationale for the Boss decision was to afford the defendant an opportunity for discovery. The New Jersey rules already provide for discovery by a defendant of the State’s ease. R. 3 :13-3.

Finally, there is nothing in Coleman v. Alabama, 399 U. S. 1, 90 S. Ct. 1999, 26 L. Ed. 2d 387 (1970), which alters the existing law on this point. Coleman held that if there is a preliminary hearing, defendant is entitled to counsel. Implicit in the court’s discussion of the case was the fact that a state may not have a preliminary hearing at all but can go directly to the grand jury.


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    MARION COBB, ET ALS., PLAINTIFFS, v. CITY OF CAPE MAY, ET ALS., DEFENDANTS.
    Superior Court of New Jersey Law Division
    Decided February 8, 1971.

      Mr. Walter G. Wright, Jr., attorney for plaintiffs.

      Mr. Nathan W. Navis, Jr., attorney for defendants.
   Horn, A. J. S. C.

Plaintiffs have moved for summary judgment in this action in lieu of prerogative writs. R. 4:46-2 requires that such judgment shall be rendered if the pleadings, depositions and admissions on file, together with the affidavits, if any, show palpably that there is no genuine issue as to any material fact.

Wright, one of the plaintiffs in the instant action, had brought a libel action against Cape May City Mayor Prank A. Gauvry and others. Harry Green, Esq. was retained by the city to represent Mayor Gauvry. Pursuant to a resolution adopted by the city council, Green was paid $2500 as a retainer. In addition, litigation expenses were also paid by the City.

Wright conceived himself to have been libelled as the result of certain declarations made by Gauvry. The libel action was ultimately terminated by a summary judgment entered for all the defendants on a holding by the court which included a determination that the words used were not defamatory.

The statements attributed to the mayor appeared to have been made as a representative of the city; that is to say, in his capacity as mayor and as a member of city council. The subject matter of the libel suit dealt primarily with the qualifications of the city manager of the City of Cape May.

Plaintiffs’ contentions on the merits of the issue may be summed up in the questions of whether Gauvry was acting as mayor when he made the statements, whether he had the right to make statements as such and whether the city, under the circumstances, had the right to pay for his defense.

Plaintiffs rely on N. J. S. A. 40 :81-8 which defines the duties of the mayor in the form of government adopted by the city as follows:

The mayor shall preside at all meetings of the municipal council and shall have a voice and vote in its proceedings, but shall not have the power of veto. He shall fill vacancies occurring in the trustees of the public library for such terms of offices as are provided by law. All bonds, notes, contracts and written obligations of the municipality shall be executed on its behalf by the mayor or, in the event of his inability to act, by such councilman as the municipal council shall designate to act as mayor during his absence or disability. The powers and duties of the mayor shall be only such as are expressly conferred upon him by this subtitle.

Plaintiffs argue that the mayor was not authorized to make statements in behalf of the city; that since he allegedly made them as an individual, the city had no legal authority to furnish him with counsel or otherwise indemnify him against loss in defending the resulting suit.

The law is well settled that a public official is entitled to compensation for expenses incurred in the performance of his official duties. As early as 1874 the Supreme Court of New Jersey held that public funds may he expended for the payment of "expenses honestly incurred by courts, public officers or private citizens in furtherance of the due administration of justice.” State, Lewis, prosecutor v. Freeholders of Hudson County, 37 N. J. L. 254 (Sup. Ct. 1874). This case was cited a few years later in State, Bradley, prosecutor v. Council of Hammonton, 38 N. J. L. 430 (Sup. Ct. 1876), where a councilman was sued for malicious prosecution. In that case the councilman had been authorized by the council to bring the suit on which the malicious prosecution charge was based. Therefore, the court said this was clearly a “town purpose” for which money could properly be spent.

This principle was reaffirmed more recently in O'Donnell v. Morris County Freeholder Board, 31 N. J. 434 (1960), where it was said that a public official may be reimbursed for expenses incurred in the discharge of his duties.

This is also the law in other jurisdictions. Maitland v. Town of Thompson, 129 Conn. 186, 27 A. 2d 160 (Sup Ct. Err. 1942), involved a taxpayers’ suit to restrain payment of a hill for attorney’s services in defending a libel suit against members of the board of education. The libel suit arose out of a letter that the school board wrote to the state commissioner of education giving reasons for its action in firing the superintendent of schools. The superintendent sued and judgment was entered for defendants. The court held that a public officer was entitled to indemnification for loss sustained in the discharge of his official duties, provided :

The officer must have been acting in a matter in which the corporation has an interest, he must have been acting in the discharge of a duty imposed or authorized by law and he must have acted in good faith. [27 A. 2d at 162]

The court went on to say that:

The responsibility of public officers is to tbeir constituents and the latter are entitled to know the reasons for official acts in order to judge whether the officers in question continue to deserve public confidence and support. The interest of the town in the matter clearly appears. The fact that the act of sending the letter was not the official action of the hoard does not necessarily determine the issue in favor of the plaintiffs, [at 162; emphasis added].

In 10 McQuillin, Municipal Corporations, § 29.14 at 268, it is stated that

* * * where an action is defended as an official duty rather than for personal motives it is proper for the municipality to authorize payment of expenses. Thus, it has been held that the corporation may employ an attorney to defend a suit against an officer growing out of a transaction in the performance of a duty, for example, an action for malicious prosecution, or for libel.

I do not believe that the right of the municipality to provide for the defense of the mayor or other official of the municipality is circumscribed by whether he acts precisely within his statutory authority. Public policy dictates that public officials, acting bona fidely within the apparent sphere of their duties and for the benefit of the municipality, should be protected by the municipality against personal loss from such actions as the one involved here. There should be no fine line drawn to distinguish when such officer is entitled to such protection. He should not be constantly apprehensive in the performance of his duties that he may be involved in litigation which might prove expensive to himself personally. Cf. N. J. S. A. 14A:3-5; 18A:12-20; 18A:16-6; 18A:60-4. Such concern would have a tendency to stifle debate and curtail appropriate action in matters of public concern.

In 64 C. J. S. Municipal Corporations § 1835b at 334-335, it is said:

There is no universal test for distinguishing between a purpose which is public or municipal and, therefore, a proper object of municipal expenditure and one which is private and, therefore, an improper object to which to devote public money. Each case must be decided in the light of existing conditions, with respect to the objects sought to be accomplished, the degree and manner in which that object affects the public welfare, and the nature and character of the thing to be done; but the court will give weight to a legislative determination of what is a municipal purpose, as well as widespread opinion and general practice which regard as city purposes some things which may not be such by absolute necessity, or on a narrow interpretation of constitutional provisions. Where an appropriation of public funds is primarily for public purposes, it is not necessarily rendered violative of constitutional provisions against gifts and loans of public credit by an incidental result which may be of private benefit. On the other hand, if the result is chiefly that of private benefit, an incidental or even ostensible public purpose will not save its constitutionality. A purpose may be a public one so as to be within a municipal power to appropriate funds therefor, even though it is not a necessary purpose.

City Affairs Committee of Jersey City v. Jersey City, 134 N. J. L. 180 (E. & A. 1945), involved the action of a municipality in publicizing, through public advertisments at public expense, what the governing body conceived to be sound reasons, relating to the essential local welfare, for the rejection by the people of this State of proposed amendments to the State Constitution. In uphoiding such right on the part of the municipality the court said:

While a municipal corporation is a government of enumerated powers, acting by a delegated authority, it possesses also such rights as arise by necessary or fair implication, or are incident to the powers expressly conferred, and such as are essential to the declared objects and purposes of the municipality, [at 1821

In a sense, the action of the mayor, as confirmed by the action of the city council in adopting the challenged resolution, was incident to the powers not of the mayor alone, but also of the city council. It is true that the mayor, under the municipal manager form of government, is not the chief executive officer. But it is also true that he does have a voice in the city management, having a vote as a member of city council. In these capacities he has an interest in the dissemination of information to the public which bears upon and otherwise explains the action of the governing body. In this respect the mayor was acting within the scope of his duties and apparent authority.

Errington v. Mansfield Township Board of Education, 81 N. J. Super. 414 (App. Div. 1963), 42 N. J. 320 (1964) and 100 N. J. Super. 130 (App. Div. 1968) is not to the contrary. In that case, the issues were somewhat similar in that they involved the questions of whether a board of education could validly appropriate school board funds for the purpose of defraying legal fees and expenses of an individual member of the board as well as other members sued in a libel action arising out of words, written by the individual member. The Appellate Division (100 N. J. Super. 130) held that under the circumstances of the alleged libel, the individual member was not entitled to legal defense at the public’s expense.

This case is distinguishable because here the Mayor clearly uttered the allegedly defamatory statements, and it was so charged, as the Mayor. The statements arose out of a public controversy involving action taken by City Council, of which he was a member, and nowhere did it appear, as in Erribgton, that his statements were made “for the purpose of defending (his) own reputation.”

If the parties can agree that there are no facts or inferences which conflict with the apparent factual situation stated by me, I would enter summary judgment for defendants.

Counsel for defendants shall prepare an order denying the motion for summary judgment made by plaintiffs.