author: Bischoff, J. A. D.

text:
    RONALD BEEK, PLAINTIFF-APPELLANT, v. OHIO CASUALTY INSURANCE COMPANY, DEFENDANT-RESPONDENT.
    Superior Court of New Jersey Appellate Division
    Submitted June 9, 1978
    Decided June 23, 1975.

      Before Judges Leonard, Seidman and Bisohoee.

      Messrs. Gelman & Gelman, attorneys for appellant (Mr. Howard M. Usdin, of counsel and on the brief).

      Messrs. DeYoe, Guiney & Raziano, attorneys for respondent (Mr. Thomas M. Guiney, on the brief).
   The opinion of the court was delivered by

Bischoff, J. A. D.

This appeal presents another facet of the problem created when a person, injured by an uninsured motorist, seeks to recover under uninsured motorist (UM) endorsements available to him under two separate policies issued by different insurance carriers for the damages and losses sustained.

The procedural history and facts of this case are fully set forth in the opinion of the trial court reported at 127 N. J. Super. 187 (Ch. Div. 1974), and are only briefly restated here.

Plaintiff owned a Eord automobile insured in defendant Ohio Casualty Insurance Company (Ohio) and a motorcycle insured-in Reserve Insurance Company (Reserve). Both policies of insurance contained the UM endorsement required by statute. N. J. 8. A. 17:28-l.l.

While riding his motorcycle plaintiff was severely injured when he was involved in a collision with an uninsured motorist. lieserve paid the $10,000 limit of its liability under its UM endorsement. Plaintiff’s damages exceeded $10,000 and he made demand upon Ohio for payment under the UM endorsement of its policy. Ohio refused to pay, contending its policy contained an exclusion to coverage when a named insured was operating a vehicle owned by him but not insured under the policy issued by Ohio. Plaintiff filed a complaint against Ohio seeking a judgment directing Ohio to proceed to arbitration of plaintiff’s claim. Cross-motions for summary judgment resulted in a judgment dismissing plaintiff’s complaint. The trial judge held it was the legislative intent, in the enactment of N. J. 8. A. 17:28-1.1, to protect the Unsatisfied Claim and Judgment Fund and that “the objective of the statutory scheme [was] not to compel UM coverage in such form as to maximize a policyholder’s recovery in the uninsured motorist situation, but only to insure recovery by the insured motorist in such amount as will avoid liability on the part of the Fund.” 127 N. J. Super, at 195. He concluded that the exclusion in the Ohio policy did not violate either the terms of the statute or the legislative intent and should be applied as written.

After the determination of the trial judge herein, the case of Motor Club of America Ins. Co. v. Phillips, 66 N. J. 277 (1974), was decided. In that case Phillips, a passenger, was injured when his host’s vehicle was involved in an accident with an uninsured motorist. He was paid the policy limits by the insurance carrier under the UM endorsement on the host car. His damages were in excess of that limit, and he sought recovery under the UM endorsement on the policy of his own car. His policy contained an exclusion which purported to prohibit recovery on the UM endorsement if he had recovered or had available access to uninsured motorist coverage on the vehicle he was occupying at the time of the accident. The court recognized a split among jurisdictions having statutes similar to N. J. S. A. 17:28-l.l as to the validity of such an “excess-escape” clause, but found that a majority of jurisdictions held such clauses invalid where an insured was “not seeking multiple recovery on more than one policy on cars owned by a named insured or others in his household, and provided the aggregate of all recoveries will not exceed” his damages. Id. at 288. The court on principle held that

* * * there is no persuasive warrant, in construing a statute designed to provide protection by insurance for victims of uninsured motorists, to refuse to read the statute literally when such a reading will subserve the socially desirable policy of adequate indemnification of innocent automobile accident victims. As to the literal import of the New Jersey statute there ean be no doubt. It commands that “no automobile policy” [emphasis supplied] shall issue in this state unless it offers coverage for payment, within stated limits, of what an uninsured motorist would be liable for to an insured for damages for bodily injuries'. Since every such policy must offer such coverage, and the statute contains no suggestion of relief from its undertaking in favor of an issuing insurer merely because another insurer had assumed the same obligation in favor of the same accident victim, the statute unambiguously grants the victim prima facie recourse to any and all policies applicable, subject to the unquestionably implicit condition that his claims in aggregate not exceed his damages, [at 292; emphasis original]

The “excess-escape” clause under the facts there presented was held “invalid- and ineffective.” Id. at 294. However, the court specifically observed that as to that case, it was implying no view on the- result reached below. Id. at 282-283. This squarely presents to us the issue as to whether the difference between the “excess-escape’’ clause involved in the Phillips ease and the “exclusion to coverage” clause in this case for injuries sustained while the insured is in.a second-owned, nonscheduled vehicle mandates a- different result..

The cases cited by the Supreme Court as illustrative of the majority holding in note 2 at 288, while involving “excess-escape” clauses, all espouse the same theory as that expressed iu Phillips, namely, that any attempt by an insurer to restrict the liability on a UM endorsement by way of the clause is repugnant to both the intent and meaning of the statute.

The cases referred to in Phillips in note 3 at 289, as expressing a contrary and minority view are factually inapposite to the facts here involved, for none of them contains a clause similar to that contained in the Ohio policy. Moreover, those cases are based on theories inconsistent with the holding of the Phillips case.

When considering whether the two clauses impose valid restrictions on the coverage afforded by the UM endorsement, we perceive no difference in principle between them. The application of the exclusionary clause sought by defendant herein is as contrary to the intent and meaning of the statute as are the “excess-escape” clauses.

We recognize the fact that plaintiff is “seeking multiple recovery on more than one policy” on vehicles owned by him, while plaintiff in Phillips sought multiple coverage on UM endorsements where one policy covered a vehicle owned by him and the second policy was on the vehicle owned by his host driver. Id. at 288. This distinction is without significance, for the requirement for the inclusion of UM coverage applies to every policy issued in this State and the statute contains no suggestion that relief from this obligation is to be implied when a person owning two vehicles has purchased two policies of insurance from two different carriers. State Farm Mut. Auto. Ins. Co. v. McNutt, 494 F. 2d 1282 (6 Cir. 1974); Bass v. State Farm Mut. Auto. Ins. Co., 128 Ga. App. 285, 196 S. E. 2d 485 (Ga. Ct. App. 1973), mod. 231 Ga. 269, 201 S. E. 2d 445 (Ga. Sup. Ct. 1973); Crenwelge v. State Farm Mut. Auto. Ins. Co., 277 So. 2d 155 (La. Ct. App. 1973); Boetner v. State Farm Mut. Ins. Co., 34 Mich. App. 510, 191 N. W. 2d 741 (Mich. Ct. App. 1971).

We accordingly hold that the exclusionary clause relied upon by Ohio in this case is invalid and ineffective.

The judgment entered below is reversed and the case remanded for the entry of a judgment consistent herewith;

      Additional cases on the same subject are collected in tbe case note at 28 A. L. R. 3d 55.


source: Caselaw Access Project

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

license: Public Domain

text:
    STATE OF NEW JERSEY, PLAINTIFF-RESPONDENT, v. THOMAS WOOTEN, DEFENDANT-APPELLANT.
    Superior Court of New Jersey Appellate Division
    Argued May 20, 1975
    Decided June 23, 1975.

      Before Judges Kolovsky, Lynch and Allcorn.

      Mr. Arnold M. Mellk, Deputy Public Defender, argued the cause for appellant (Mr. Stanley C. Van Ness, Public Defender, attorney; Mr. Robert Martin, Designated Counsel, on the brief).

      Miss Barbara Ann Villano, Deputy Attorney General, argued the cause for respondent (Mr. William F. Hyland, Attorney General of New Jersey, attorney).
   The opinion of the court was delivered by

Kolovsky, P. J. A. D.

Defendant was brought to trial on a ten-count indictment returned by the State Grand Jury charging defendant, who was then an inmate.,in the New Jersey State Prison at Rahway, with having committed various crimes during the course of disturbances at the prison which occurred on November 24 and 25, 1971.

No evidence was offered by the State with respect to Counts IX and X charging, respectively, kidnapping (N. J. S. A. 2A:118-1) and false imprisonment (N. J. S. A. 2A: 85-1) of one Henderson. Those counts were dismissed, at the State’s request, at the close of thé' State’s -case.

The jury found defendant not guilty on Counts I and VII charging him, respectively, with the kidnapping of Vukcevich, the prison warden, and lorio, a prison guard. However, the jury found him guilty: on Count II charging false imprisonment of Vukcevich; on Counts III and IV charging assaults and batteries upon' uniformed law enforcement officers, Gilgallon and Manyk (N. J. S. A. 2A :90-4); on Count V charging kidnapping of Monteyunas, a correction officer; on Count VI charging false imprisonment of Monteyunas; and on Count VIII charging false imprisonment of lorio.

The trial court, on its own motion, set aside the verdict on Count VI charging false imprisonment of Monteyunas, ruling that it was a lesser included offense which merged into the conviction for kidnapping that victim, Monteyunas. Defendant’s subsequent motions for a new trial and for a judgment of acquittal were denied. Defendant was sentenced to a term of 30 to 31 years bn the kidnapping conviction (Count V) and to terms of two to three years on each of the other convictions (Counts II, III, IV and VIII). All sentences were made concurrent with bach other and with the sentence defendant was then serving.

Defendant appeals arguing six points for reversal. We find no merit to any of them.

Defendant’s principal attack is on his conviction for 'kidnapping Monteyunas for which 'the statute, N. J. S. A. 2A:118-1, provides a mandatory minimum penalty of 30 years. The attack is embodied in the first four points.of his brief, captioned as follows:

Point I The trial court erroneously instructed the jury as to the definition of kidnapping (plain error).
Point II There was not sufficient evidence before the Grand Jury to sustain the kidnapping indictment.
Point III It was an abuse of prosecutorial discretion to indict defendant for kidnapping John Monteyunas.
Point IV The trial court erred in not granting defendant a new trial (raised in part below).

There is no substance to any of those points or to the arguments set forth therein.

The kidnapping statute, N. J. S. A. 2A:118-1 provides in pertinent part:

Any person who kidnaps or steals or forcibly takes away a man, woman or child, and sends or carries, or with intent to send or carry, such man, woman or child to any other point within this state, or into another state, territory or country, * * * or who procures any such act to be done, is guilty of a high misdemeanor, and shall be punished by imprisonment for life, or for such other term of not less than 30 years as the court deems proper.

Contrary to what defendant argues, the State’s proofs were more than sufficient to support the jury’s finding that defendant had violated the statute — that he had participated in the forcible and unlawful asportation and detention of Monteyunas who was held as a hostage during negotiations between the prison inmates and the prison administration.

We need refer only to the testimony of correction officers Monteyunas, Koetsier and lorio which the jury was entitled to credit.

Sometime between 9:30 and 10 p.m. on November 24, 1971 as Monteyunas was locking prisoners in on the eighth, the top, tier of a section of the prison known as “Four-Wing,” he was struck in the back of the head by an inmate named Harris. His keys were taken from him and he was again struck by Harris. Another inmate, Henderson, helped Mon-teyunas to his feet and placed him in a cell on the eighth tier, at the same time furnishing the officer with his (Henderson’s) prison garb to wear over the officer’s uniform.

About 45 minutes later, another inmate, Cartner, found Monteyunas in the cell, stripped him of the inmate’s uniform and called for defendant Wooten. Wooten came into the cell, grabbed Monteyunas by the belt and pulled him outside the cell where other inmates were standing. Monteyunas was struck by a number of inmates and dragged by Wooten, still holding onto the victim’s belt, some 700 feet into Cell 25, a cell on the fourth tier, two floors below the eighth tier. Other inmates kicked and struck the victim as he was dragged by Wooten down the staircase to the lower tier.

Two other correction officers, lorio and Koetsier, were already in Cell 25, tied hand and foot. Wooten didn’t leave until another inmate had tied Monteyunas’ hands and feet and placed him on a footlocker. Monteyunas remained in Cell 25 for about 24 hours, during which time Wooten entered the cell on about three to five occasions.

According to lorio, defendant Wooten was in charge and on one occasion told the hostages that they “would not be hurt or bothered as long as the State Police did not come in.” Shortly after midnight, Wooten' entered Cell 25 and asked one of the officers to go with him. to get a doctor for the warden. lorio was taken out by Wooten and returned in about five or six minutes, after being taken to a point on the second floor to talk with prison officials who were in the center rotunda. Wooten and two others then took lorio back to Cell 25.

Shortly after 6 p.m., Wooten came back and announced “that they wanted to exchange someone for newspaper men.” The three correction officers decided'that since lorio had a broken arm, he would go. lorio was untied and taken by Wooten to the top of the stairs from whence two other inmates brought him downstairs only to be returned to Cell 25 and re-tied when an inmate below indicated that no exchange was then to be made.

At about 9 p.m. Wooten came in and said to lorio, “come on * * *. The newspaper men are downstairs. We’re going to see if we can exchange you for newspaper men, if they come in.” Wooten remained on the second tier platform. The other two inmates took lorio to a lower floor. There he was released in exchange for permission granted by a lieutenant of correction officers so that newspaper men might enter the area controlled by the inmates. Monteyunas and Koetsier were eventually released at about 10 p.m. by a group of other inmates who led them down, back of the cell sections, to the center rotunda area.

The proofs thus outlined were more than sufficient to support a finding that the State had proven beyond a reasonable doubt the elements of the crime of kidnapping — the unlawful, and here forcible, asportation and detention of the victim. State v. Hampton, 61 N. J. 260, 272-276 (1972); State v. Ginardi, 111 N. J. Super. 435, 438-441 (App. Div. 1970), aff’d. o. b. 57 N. J. 438 (1971); see also People v. Adams, 389 Mich. 222, 205 N. W. 2d 415, 59 A. L. R. 3d 1288 (Sup. Ct. 1973); Annotation, “Seizure of prison officials by inmates as kidnapping,” 59 A. L. R. 3d 1306 (1974).

Defendant’s suggestion that the element of asportation had not been proven — in a case in which the victim was dragged a distance of more than 700 feet to a cell two floors below — lacks a shadow of substance. Nor is there any merit to his contention that the kidnapping may have been merely incidental to a “lesser underlying crime” such as assault and battery or false imprisonment and, hence, not to be deemed a separate event warranting separate prosecution.

The assaults and batteries were committed during the course of the kidnapping; they were not the underlying crimes. The underlying crime was kidnapping — an aggravated species of false imprisonment —■ a crime whose purpose was the taking and holding of a hostage.

Defendant’s reliance on several recent cases which have held that an asportation and detention of a victim is not kidnapping where it is merely incidental to an underlying crime, e. g. robbery or rape, and does not substantially increase the risk of harm to the victim, is misplaced. Here, the underlying crime was kidnapping. Moreover, even those cases and the authorities which recommend the adoption of that rule recognize that the new rule they espouse has no application to situations — such as exist here ■— where the victim was held as a hostage. In such cases, any unlawful or forcible removal and detention will suffice. See Final Report of New Jersey Criminal Law Revision Commission, sec. 2C: 13-1 (a) and Commentary p. 184; People v. Adams, supra, 205 N. W. 2d at 422.

In summary, we are satisfied that, contrary to what defendant argues, the court’s charge was proper; the evidence, both before the Grand Jury and the trial jury, was sufficient to sustain the kidnapping charge; the return of an indictment charging that offense was not an abuse of discretion; and the court ruled properly in denying defendant’s motion for a new trial.

Defendant’s remaining two points require only brief comment. The first involves an attack on N. J. 8. A. 2A :85-l which reads in pertinent part as follows:

* * * false imprisonments * * * and all other offenses of an indictable nature at common law, and not otherwise expressly provided for by statute, are misdemeanors.

Defendant contends that the statute, as it pertains to false imprisonment, "is unconstitutionally vague on its face” because it does not expressly spell out the elements of the crime of false imprisonment and thus makes it necessary to look to the common law for a precise definition of false imprisonment. The contention lacks merit. State v. Crusius, 57 N. J. L. 279, 283 (Sup. Ct. 1894); State v. Bynes, 109 N. J. Super. 105, 107 (App. Div. 1969), aff’d o. b. 55 N. J. 408 (1970), cert. den. 398 U. S. 941 90. S. Ct. 1851, 26 L. Ed. 2d-275 (1970); see also State v. Lair, 62 N.J. 388, 394 (1973).

Nor is there any validity to defendant’s contention that the State Grand Jury had no jurisdiction to return the indictment here involved. State v. Anderson, 120 N. J. Super. 345 (Law Div. 1972), aff’d 132 N. J. Super. 231, 233 (App. Div. 1975), eertif. den. 68 N. J. 143 (May 6, 1975).

The judgments of conviction are affirmed.


text:
    LAURENCE GUDGEON, PLAINTIFF-RESPONDENT, v. COUNTY OF OCEAN, NEW JERSEY; BOARD OF CHOSEN FREEHOLDERS, OCEAN COUNTY, NEW JERSEY, AND MARTIN B. ANTON, PROSECUTOR OF OCEAN COUNTY, NEW JERSEY, DEFENDANTS-APPELLANTS.
    Superior Court of New Jersey Appellate Division
    Argued June 16, 1975
    Decided June 24, 1975.

      Before Judges Leonard, Seidman and Bisohoff.

      Mr. Robert D. Budesa argued the cause for appellants (Messrs. Berry, Summeril.l, Rinck & Berry, attorneys).

      Mr. John Kuhlthau argued the cause for respondent (Messrs. Kuhlthau, Nagle, Briggs & Goddard, attorneys).
   The opinion of the court was delivered by

Bischoff, J. A. D.

Plaintiff had been employed by the Middlesex County Sheriff’s office for 11 years and rose to the rank of captain. He then took and passed a Civil Service examination and accepted a position as a detective in the Ocean County Prosceutor’s Office on February 28, 1974. As of that date he had accumulated 177 sick days, 16 vacation days and a 2% longevity pay increment. Subsequent to his appointment in Ocean County he requested that county to accept the transfer of these employment credits. The request was denied. Thereupon plaintiff filed a complaint seeking a mandatory injunction to compel the County of Ocean to accept the transfer of those credits. Following a hearing a judgment was entered in plaintiff’s favor, and defendants appeal.

The trial judge, as does plaintiff on this appeal, relied upon N. J. S. A. 40A:9-5, which provides:

Whenever heretofore or hereafter a transfer has been or shall be effected by appointment, assignment or promotion of a municipal employee to any other department or position in municipal employment, or to a position or department of the county government; or of a county employee to any other position or department in county employment, or to a department or position of a municipal government, in counties of the first or second class, the period of such prior service in said county or municipal employment, for any purpose whatsoever, shall be computed as if the whole period of employment of such employee had been in the service of the department, or in the position, to which the said employee had been transferred.

Defendant first contends this statute only applies to involuntary transfers. This contention is without merit. Five-house v. Passaic Valley Water Comm’n, 127 N. J. Super. 451, 454-455 (App. Div.), certif. den. 65 N. J. 565 (1974); Libby v. Union Cty. Bd. of Chosen Freeholders, 125 N. J. Super. 471 (App. Div. 1973).

Defendant’s second contention is more substantial. It argues that a consideration of the legislative history of this statute, as well as the punctuation thereof, indicates a clear intention that the statute was only to apply to transfers involving counties on the first and second classes, and that since Ocean County is a county of the fifth class the statute is not applicable. We agree.

We approach this problem of statutory construction bearing in mind the constitutional mandate that statute concerning counties shall be liberally construed in their favor. N. J. Const. (1947), Art. IV, § VII, par. 11; Bergen Cty. v. Dept. of Pub. Util. of N. J., 117 N. J. Super. 304, 310 (App. Div. 1971).

' “The judicial goal is to carry out fairly the legislative principle and plan,” N. J. Pharmaceutical Ass’n v. Fur-mam, 33 N. J. 121, 130 (1960), and in seeking to ascertain what that purpose and plan was we must consider any legislative history which may be of aid. State v. Madden, 61 N. J. 377, 389 (1972).

■ The legislative history of this statute (N. J. S. A. 40A: 9-5) has received judicial consideration in the case of Carroll v. Caufield, 80 N. J. Super. 472, 479 (Law Div. 1963). As it'is there indicated, the predecessor to the statute under consideration wás R. S.. 40 :lí-5’ and the preamble to that ¡act read: '

An Act to conserve the seniority rights of municipal employees and county employees appointed, transferred, assigned or promoted, to other positions or departments in the municipal employ, or in the county service, in counties of the first class of this State. Ud. at 479]
and when introduced the bill was accompanied by the following statement:
At the present time, on account of the lack of legislation on the subject, municipal or county employees, in counties of the first class of this State, who have been appointed, transferred, assigned or promoted to other positions or departments, must begin as new employees thereby losing their seniority rights, which their previous service entitled them to. This act merely establishes a seniority right which has heretofore been denied. [7<Z.]

The statute was thereafter amended to apply to counties of the second class as well as those of the first class. L. 1933, c. 154, par. 1.

This legislative history clearly indicates that N. J. S. A. 40A:9-5 was intended to apply only to counties of the first and second classes.

This conclusion is buttressed by consideration of principles of grammatical construction. Where a comma is used to set a modifying phrase off from previous phrases, the modifying phrase applies to all the previous phrases, not just the immediately preceding phrase. 82 C. J. S. Statutes § 334 at 672; cf. N. J. Ins. Underwriting Ass’n, v. Clifford, 112 N. J. Super. 195, 204 (App. Div. 1970); T. I. McCormack Trucking Co. v. United States, 298 F. Supp. 39, 41 (D. C. N. J. 1969). In the instant case, therefore, the modifying phrase “counties of the first or second class” refers to both the phrase “position * * * in county employment” and the phrase “position of a municipal government.”

We, therefore, conclude that the statute in question, insofar as it applies to county employees, applies only to employees in counties of the first and second classes.

Plaintiff alternatively argues here, as he did below, that since the county prosecutor and the county sheriff are constitutional officers, their respective employees are employed “in the classified Civil Service of this State” and as such the provisions of N. J. S. A. 11:11 — 3 and N. J. S. A. 11 :11-4 and the provisions of N. J. A. C. 4:1-17.13 and N. J. A. O. 4:1-17.19 provide for a transfer of earned employment credits.

We disagree.

Although the county prosecutor and county sheriff are, indeed, constitutional officers, their respective employees are county employees, and they are not in the “classified Civil Service of this State.” Rather, they are in local government service. N. J. A. C. 1:2.1.

The judgment for plaintiff is reversed and judgment is entered for defendant.

      This is the converse of the general rule that qualifying words refer solely to the immediately preceding word. See State v. Wean, 86 N. J. Super. 283, 288 (App. Div. 1965) ; State v. Congdon, 76 N. J. Super. 493, 502 (App. Div. 1962) ; 2A Sutherland, Statutory Construction (Sands, 4 ed. 1973), § 47.33 at 159.

       N. J. A. C. 4:1-17.13 provides: “When an employee is transferred within the State service any unused vacation leave shall be certified by the former unit to the Department of Civil Service.”

       N. J. A. C. 4:1-17.19 provides: “In the State service when an employee is transferred from one unit to another, his accumulated sick leave allowance shall be certified by the former unit to the Department of Civil Service.”

         N. J. A. C. 1:2.1 provides: “Local government service” means the offices and positions in the Civil Service of any county, municipality, school district, authority or other public corporation operating under the provisions of the Civil Service Law.


author: Pee Curiam.

text:
    STATE OF NEW JERSEY, PLAINTIFF-APPELLANT, v. JOHN TEARE, DEFENDANT-RESPONDENT.
    Superior Court of New Jersey Appellate Division
    Argued December 3, 1974
    Remanded February 6, 1975—
    Reargued June 3, 1975
    Decided June 25, 1975.

      Before Judges Kolovsky, Lynch and Allcoen.

      Mr. R. Benjamin Cohen> Assistant Prosecutor, argued the cause for appellant (Mr. Joseph P. Lordi> Essex County Prosecutor, attorney; Mr. Robert L. Martin, Assistant Prosecutor, of counsel and on the brief).

      Mr. George J. Minish argued the cause for respondent (Messrs. Minish and Dooley, attorneys).

      Mr. Richard W. Berg, Deputy Attorney General, submitted a Statement in Lieu of Brief on Remand for the amicus curiae (Mr. William F. Hyland, Attorney General).
   Pee Curiam.

Defendant, who was charged with operating a motor vehicle while under the influence of intoxicating liquor (N. J. 8. A. 39:4^5 0(a)), was given a breathalyzer test, with his consent, a short time after his arrest. The reading obtained, .20% alcohol in the blood by weight, would establish prima facie evidence of a violation of the statute. See N. J. 8. A. 39:4-50.1. When defense counsel requested that he be permitted to examine the test ampoule used in the breathalyzer test, he was advised that the ampoule had been destroyed in accordance with the procedure established by the State Police.

In the County Court, defendant moved, pursuant to B. 3:5 — 7, that (a) the complaint be dismissed because of the State’s failure to produce the ampoule, or (b) the results of the breathalyzer test be suppressed. Pursuant to an opinion reported at 129 N. J. Super. 562, the trial judge granted defendant’s motion to suppress the results of the breathalyzer test but denied the motion to dismiss the complaint. The State obtained leave to appeal from the order of suppression. In an opinion dated February 6, 1975, reported at 133 N. J. Super. 338, we reversed and remanded the matter to the County Court for supplementation of the record by receipt of such additional testimony as the parties might offer, and findings of fact and conclusions of law as to whether preservation of the test ampoule involved was feasible or practical and, if so, under what conditions, and whether testing thereof would provide scientifically useful data to determine reliability of the test administered and of the resultant reading.

After taking further testimony pursuant to the remand, the County Court made findings of fact and conclusions as follows:

Findings of Fact
Based on the testimony and evidence presented at this hearing the court finds as fact:
1. It is presently impossible to preserve the breathalyzer ampules so as to reliably eliminate all the factors which cause unpredictable changes in the ampule contents subsequent to the administering of the breathalyzer test.
2. The reactions begun inside the ampule by the original breathalyzer test continue in an unpredictable and uncontrollable manner. These unpredictable reactions cause subsequent analysis or retesting of the ampule to be totally unreliable evidence as a check on the accuracy or validity of the original breathalyzer test.
3. There is no predictable relationship to the changes that occur within the test ampule and the passage of time.
4. At the present time subsequent retesting or chemical analysis of the test ampules provides no acceptable scientific relationship to the accuracy or validity of the original test results.
5. The theory of Dr. Volpe and the experimentation of Dr. Jones have not been thoroughly tested or scientifically scrutinized as to be considered acceptable as scientific fact or accurate enough to produce results admissible as evidence.
Conclusion
Preservation of the test ampule is not feasible or practical since subsequent testing will not give any scientifically reliable results, this being due to the uncontrollable changes that occur in the breathalyzer test ampules after their use in the breathalyzer test. Furthermore, even if these changes or variations could be scientifically accounted for and accurately analyzed, you still could not properly analyze a test ampule subsequent to a breathalyzer test because there is simply no predictable relationship between the changes that occur and the lapse of time.

The above findings and conclusions of the County Court, after remand, are supported by substantial credible evidence in the record. State v. Johnson, 42 N. J. 146, 162 (1964). Since those findings established that preservation of the ampoule would not give any scientifically reliable information regarding the accuracy of the original test results, we hold that the State’s failure to produce the ampoule does not deny defendant due process of law. The holding in People v. Hitch, 12 Cal. 3d 641, 117 Cal. Rptr. 9, 527 P. 2d 361 (Sup. Ct. 1974), essentially to the contrary, was expressly based upon a factual premise that preservation of the test ampoule would have provided evidence of value to a defendant charged with drunken driving. Since the findings here are to the opposite effect and are based on a thorough exploration of the record, we decline to follow the holding of the California court.

We reaffirm our order, expressed in our decision on remand, wherein we reversed the trial court’s order granting defendant’s motion to suppress the results of the breathalyzer test. The matter is remanded to the municipal court for trial.

      We note that the rule there expressed was applied prospectively only and not to defendant there involved.


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

text:
    STATE OF NEW JERSEY, PLAINTIFF-RESPONDENT, v. ISAIAH WASHINGTON, DEFENDANT-APPELLANT.
    Superior Court of New Jersey Appellate Division
    Argued June 17, 1975
    Decided June 25, 1975.
    Before Judges Halpern, Chahay and Ackebman.

      Mr. Seymour Margulies, designated counsel, argued the cause for appellant (Mr. Stanley C. Van Ness, Public Defender of New Jersey, attorney; Mr. Margulies, of counsel and on the brief).

      Mrs. Sara A. Friedman, Assistant Prosecutor, argued the cause for respondent (Mr. Joseph P. Lordi, Essex County Prosecutor, attorney; Mrs. Sara A. Friedman, of counsel).
   The opinion of the court was delivered by

Halpern, P. J. A. D.

Defendant appeals from a judgment of conviction for second degree murder. The jury’s verdict was based upon the circumstantial proofs submitted by the State and the inculpatory statement by defendant in which he intimated he killed the victim in self-defense. In his earlier oral statement he had lied to the police regarding the incident.

The trial judge, after a voir dire hearing, determined the written statement to have been given voluntarily and allowed it into evidence. In so doing, he held that the State had proved the voluntarinéss of the statement by a “preponderance” of the proof and rejected defendant’s' contention that the standard of proof required the State to prove voluntariness “beyond a reasonable doubt.” The trial judge stated it thusly:

I decided it [voluntariness of the statement] by a preponderance of the evidence; that is the standard which 1 followed. I cannot say that I also felt convinced beyond a reasonable doubt. I would like to make [that] clear. If I had to decide it beyond a reasonable doubt, to make a decision beyond a reasonable doubt I would have to decide against the State.

The trial judge’s reliance for his ruling upon State v. Hampton, 61 N. J. 250 (1972), was misplaced.

New Jersey is committed to the “beyond a reasonable doubt” standard in determining the voluntariness of a confession. Our Supreme Court so held in State v. Yough, 49 N. J. 587 (1967). It is true that the “preponderance” of the evidence test was approved in Lego v. Twomey, 404 U. S. 477, 92 S. Ct. 619, 30 L. Ed. 2d 618 (1972), as a matter of federal constitutional law. However, Justice White distinctly pointed out (at 489, 92 S. Ct. at 627.) that “* * * Of course, the States are free, pursuant to their own law, to adopt a higher standard. They may indeed differ as to the appropriate resolution of the values they find at stake.”

Lego was decided January 12, 1972. On July 17, 1972 New Jersey decided to stay with the “beyond a reasonable doubt” standard in State v. Kelly, 61 N. J. 283 (1972). Kelly has since been followed in State v. Foye, 125 N. J. Super. 184 (App. Div. 1973), aff’d o.b. 63 N. J. 534 (1973); State v. Godfrey, 131 N. J. Super. 168 (App. Div. 1974), aff’d o.b. 67 N. J. 267 (1975). If any change in the standard of proof to be used is to be made, our Supreme Court will have to make it. Franco v. Davis, 51 N. J. 237, 238 (1968).

The State urges us to make an independent finding from the record that defendant’s written statement was voluntarily given beyond a reasonable doubt. "We have canvassed the record with this view in mind but are unable to say that the State has carried the required burden of proof. If our views needed support, we need only turn to the experienced trial judge who, after seeing and hearing the witnesses, frankly said if the standard of proof on voluntariness was to be “beyond a reasonable doubt,” he would have to decide the issue against the State. State v. Johnson, 42 N. J. 146 (1964).

We have also considered whether the harmless error doctrine enunciated in Chapman v. California, 386 U. S. 18, 87 S. Ct. 824, 17 L. Ed. 2d 705 (1967), Harrington v. California, 395 U. S. 250, 89 S. Ct. 1726, 23 L. Ed. 2d 284, (1969), and State v. Bankston, 63 N. J. 263 (1973), would permit us to affirm the conviction even though the trial judge erred with respect to the standard of proof on voluntariness, and have decided the doctrine should not be applied. As previously indicated, the State’s proofs were primarily circumstantial and there is a reasonable possibility that the erroneous admission into evidence of defendant’s inculpatory statement may have contributed to the conviction. Fahy v. Connecticut, 375 U. S. 85, 86-87, 84 S. Ct. 229, 11 L. Ed. 2d 171 (1963).

Eeversed and remanded for a new trial.


author: Lynch, J. A. D.

text:
    HUMBLE OIL AND REFINING COMPANY, PETITIONER-RESPONDENT, v. BOROUGH OF ENGLEWOOD CLIFFS, RESPONDENT-APPELLANT.
    Superior Court of New Jersey-Appellate Division
    Argued June 3, 1975
    Decided July 2, 1975.

      Before Judges Kolovsky, Lynch and Allcokn.

      Mr. Melvin, Qittleman argued the cause for appellant (Messrs. Capone, Qittleman Anastasi, attorneys).

      Mr. Lawrence S. Berger argued the cause for respondent (Messrs. Lasser, Lasser, Sarokin and Hockman, attorneys; Mr. Jonathan A. Bernstein on the brief).
   The opinion of the court was delivered by

Lynch, J. A. D.

Over two years ago, on June 4, 1973, this court remanded this matter (together with a companion case, Mobil Oil Corp. v. Englewood Cliffs, Docket A-498 — 72), to the Division of Tax Appeals (Division) for a new hearing and for the making of “adequate findings of fact and conclusions of law, together with an expression of reasons for the finding and conclusions.” We specifically pointed to two areas to be considered in such findings and conclusions, namely:

(1) The land lease for 15,000 net a year from Nichols to Humble Oil and Defining Company (Humble), and

(2) The relevance and usefulness of the “gallonage” standard in valuing the subject property. As to the latter, we directed attention to the case of Aetna Life Insurance Co. v. Newark, 10 N. J. 99, 108-109 (1952).

We also called attention to Van Realty, Inc. v. City of Passaic, 117 N. J. Super. 425 (App. Div. 1971), and Park-view Village Ass'n. v. Collingswood, 62 N. J. 21 (1972), in the hope that the Division judge, after remand, would heed the guidelines there set out as to the nature of, and the necessity for, adequate findings and conclusions. See also Benjamin Moore & Company v. Newark, 133 N. J. Super. 427 (App. Div. 1975).

After our remand further testimony was taken by the Division judge on August 29, 1973. A written opinion was subsequently rendered and a judgment entered on April 23, 1974. While we consider that the instructions in the cases cited and in our remanding opinion herein were clear and explicit, apparently they' were not understood by the Division judge. His opinion after remand is totally lacking in adequate findings, conclusions and attendant reasons.

Tax litigation should not be prolonged and should be brought to an end with definiteness if possible. Aetna Life Ins. Co. v. Newark, supra, 10 N. J. at 103. This is so because of the necessity for some stability in municipal finances as well as similar interests of a taxpayer. Recognizing the abortive result of our prior remand with consequent delay, we feel compelled to assume the original jurisdiction which we may invoke under R. 2:10-5. Accordingly, we make our own findings and conclusions.

This appeal involves the 1969 and 1970 assessments on the property involved, a parcel of land of approximately 18,000 square feet which is used for a gasoline station and automobile repair facility. The property was assessed for those years as follows: land, $170,000; improvements, $26,300; total, $196,300. Neither party disputes the assessment of the improvements. Humble appealed to the Division which, after our remand, reduced the land assessment to $101,365. The borough appeals to this court.

The property was leased in 1964 for a 20-year term by its owner, Virginia Nichols, to Humble, for a net annual rental of $15,000, with all costs of maintenance, real estate taxes, etc., being borne by the lessee. The lease also granted Humble options to renew for four additional five-year terms and Humble was free to demolish the then existing service station building and to construct another in its place. This was accomplished in 1967. Humble, in turn, leased the property (including land, building, tanks, pumps, signs, lights, compressor and lifts) to third-party service station dealers.

Taxpayer’s expert, John Lasser, relied on what we shall call the “gallonage” approach in valuing the property. He took the average gallonage sold during the years 1964 through 1969 (700,000 gallons) and multiplied that by 1.8 cents a gallon (representing what in his opinion was the fair rental value paid by dealers to major oil companies) to attain a gross income figure of $12,600. A deduction for expenses and vacancy factor yielded a net income of $11,146. Because the value of the building ($26,300) was known and by assuming certain rates (7.5% interest, 4% depreciation, 1.8% real estate taxes), Lasser concluded that the net income attributable to the building was $3,498, so that the balance of net income ($7,648) was attributable to the land. By capitalizing the latter figure at 9.3% (7.5% interest plus 1.8% taxes), a value for the land of $82,200 was obtained, or a total valuation (land plus building) of $108,500. The expert reached the same result by what he calls the reproduction cost approach, by allocating $4.50 to each square foot of land.

Lasser expressly rejected the long-term ground lease at the annual net rate of $15,000, claiming that (a) such rent included compensation for the use of a “permit” to operate the gasoline station and thus did not accurately reflect the rental value of the land alone; (b) a constant rent over such a long period of time is not indicative of fair rental value, and (c) certain developments, allegedly anticipated in 1964 at the time the lease was signed (particularly the paving of adjacent Hollywood Avenue, a paper street, and an eventual 900,000-gallon annual sale volume) had not materialized so that the $15,000 ground rent was not economically sound during the period relevant to the instant tax appeals, i.e., for the tax years 1969 and 1970.

John Cattanach, the borough’s expert, also considered the gallonage approach, though he used a figure of 2 cents a gallon as the “going market rental for a service station in Englewood Cliffs.” However, lie supported the “economic rent” by the actual rental paid by Humble to the owner Hiehols, namely, $15,000 a year net.

Although, as stated above;, we do not have the benefit of the tax judge’s reasoning in the instant case, his approach essentially parallels that of the taxpayer’s expert in that he (1) totally rejected the $15,000 a year net ground lease as an indicium of value and (2) instead placed principal reliance upon the gallonage approach.

We are unable to accept the reasoning of the Division. Eirst of all, it must be recognized that gallonage figures, depending as they do on the brand of gasoline sold, the skill and efficiency of the dealer, the advertising efforts made, etc., are more reflective of the business conducted on the property than on the market value of the real estate for assessment purposes. Indeed, it has been said that the volume of gasoline sold depends upon five major factors: price, management, brand, location and suitable improvements, only two of which are related to the value of the real estate. Brick, “Gasoline Service Station Appraising,” in Friedman, Encyclopedia of Real Estate Appraising (rev. ed 1968), 849, 863-864. The gallonage approach, applied exclusively, is contrary to the philosophy expressed in Aetna Life Ins. Co. v. Newark, supra:

* * * the theory asserted is a formula based on sales volume and therefore is subject to the variables of goodwill and management practices which are factors entirely foreign to the true value of the real estate as such. For this reason the evidence adduced in this category was neither competent nor sufficient to establish the fair and full value of the property. [10 N. J. at 109]

We do not decide whether, under some circumstances, the gallonage approach might be a satisfactory method of valuing gasoline service station property. Here, however, we find, for the reasons stated below, that the net ground lease is the most persuasive factor in determining the value of this property.

We start with the proposition that

The search, of course, is for the fair value of the property, the price a willing buyer would pay a willing seller. [New Brunswick v. Div. of Tax Appeals, 39 N. J. 537, 543 (1963)]

To that end, “rental income may be a relevant factor in reaching true value of real estate for tax assessment purposes.” Aetna Life Ins. Co. v. Newark, supra, 10 N. J. at 106.

In McCrory Stores Corp. v. Asbury Park, 89 N. J. Super. 234 (App. Div. 1965), the taxpayer had introduced evidence of (1) the gross sales figures realized by the business conducted on the subject property during the tax years in question; (2) actual rent paid under a long-term fixed rental lease, and (3) rents paid for comparable commercial properties in the same location, along with income analysis of these figures. Both parties had also introduced calculations based on the cost approach to valuation. The Division relied exclusively on the gross sales data (with deductions for expenses) in utilizing the income approach to valuation. This court reversed, finding no basis for the Division’s total reliance on gross sales data as a factor:

It is true, as the court said in New Brunswick, that in using the income approach “the fair rental value, rather than the actual rent payable under an existing lease, must control” (at p. 544), citing Somers v. City of Meriden, 119 Conn. 5, 174 A. 184, 186-187, 95 A. L. R. 434 (Sup. Ot. Mrr. 1934), annotated 95 A. L. R. 442 (1935) ; People ex rel. Gale v. Tax Gomm’n of City of New York, 17 App. Div. 2d 225, 233 N. Y. S. 2d 501, 506-507 (App. Div. 1902). But as the cited authorities clearly indicate, this does not mean that the actual rent is to be disregarded. On the contrary, in Somers v. City of Meriden, supra, the Connecticut court said:
“The trial court correctly held that in the situation here presented ‘in determining what is fair rental income, the actual rental income, while not controlling, is an element to be considered.’ ” (174 A., at p. 186)
“The fact that property is under lease is a relevant and, if for an extended term, an important consideration. Leases soon to expire or tenancies at will, involving possibilities of early vacancies or lowering of rents, or long-term leases at rentals inadequate when measured by prevailing standards tend to impair, and equally, leases having a long term yet to run and reserving relatively high rents measurably appreciate present value.” (Ihid., at p. 187)

, In People ex rel. Gale v. Tax Comm’n of City of New York, supra, the court said:

“An outstanding lease may be a benefit or a detriment to the subject property, and thus its duration, covenants and the rental fixed are simply elements along with many other considerations used to arrive at the value of the property. The amount of rental fixed by a lease, even though negotiated at arm’s length, could be very misleading, as to the true value of property, for it is well known that many rental contracts may be at excessive or inadequate rentals because of poor business judgment on the part of one party or another. Then, too, long term rental contracts may be made in boom times or in times of depression, so do not necessarily reflect true value on a change in times. And, as Mr. Justice Bergan, sitting in this court, has very appropriately said, “Assessments cannot be made to trail behind every turn in the fortunes of real property. There are times when property must bear a share of taxation proportionate to value even though it may then have no income, or an income inadequately focused to true value. There are times when the full measure of ephemeral surges of increased income should not be reflected in assessments in fairness to the owner.’ (People ex rel. 379 Madison Ave. v. Boyland, 281 App. Div. 588, p. 590, 121 N. Y. S. 2d 238, p. 241)
Of course, an outstanding bona fide lease and the rental income established thereby are matters to be considered in determining ‘the full value’ of the whole property, land and improvements. Value arrived at by capitalization of the fair rental value is, in ordinary cases, the surest guide to a sound appraisal. In that connection, the actual rent realized is significant as an important factor in determining what the fair rental value is. * * * But when there is evidence that factors such as long-term leases made under distress or boom conditions affect the actual rent, the weight to be given to the actual rent must be discounted accordingly.” (233 N. Y. S. 2d, at p. 506)
But power to discount the weight to be given the actual rent would hardly seem to justify disregarding it completely in this case and adopting a rental value computed by a formula based on sales volume which is “subject to the variables of good will and management practices.” If anything, the inability of the Division to determine the fair rental value from a consideration of the MeCrory rental and the rentals being paid for other commercial property in the area suggests that it should have adopted some recognized approach to value other than the income approach, [at 243-244]

And in Parkview Village Ass’n v. Coilingswood, supra, the Supreme Court, after citing McCrory for the proposition that “actual income is a significant probative factor in the inquiry as to economic income” (62 N. J. at 30), went on to state:

In the absence of convincing evidence to the contrary the current ongoing income scale of a large, well-managed apartment project like this, functioning as customary with leases of relatively short length, should be deemed prima facie to represent its fair rental value for purposes of the capitalized income method of property valuation. m Readily to be distinguished is the case of a taxjiayer owning commercial property tied to a long term lease made long before the current assessing date, where the present rent may well be out of line with current fair rental value. See New Brunswick, supra (39 N. J. at 544). [62 N. J. at 34-35]

In the instant case we are of course confronted with a long-term lease. However, we find insufficient credible evidence in the record to support the taxpayer's contention that the 1964 contract rent for the ground lease is out of line with the fair rental value during the tax years in question, so that the ground lease should be disregarded. Moreover, even if such a disparity were shown, we are convinced that the ground lease is nevertheless highly relevant since, realistically, the purchase price paid by a prospective buyer for the subject property would be strongly determined by the existing lease provisions. The instant ground lease is “a long-term lease to a triple-A tenant at a high rental” which would indeed “make the property more attractive to a buyer.” New Brunswick, supra, 39 N. J. at 544. The ground lease assures a prospective purchaser of a specified return over the balance of the 20-year term, with the possibility that Humble would exercise its options to renew for the extra five-year terms. With the original lease having approximately 15 years remaining after the assessment dates here involved, we find that the net lease provisions far outweigh any possible influence of the “gallonage” factor in determining the value of the property. We are thus in accord with the suggestion by Brick in the article cited above that “[t]he data to be gathered by the appraiser and to be used in the Income Approach to value should consist of rentals which oil companies are paying to owners, and not amounts paid [to the oil companies] by dealers for operating rights.” Encyclopedia of Real Estate Appraising, supra at 864.

We have noted that one of the reasons why Lasser, the taxpayer’s expert, rejected the ground lease as a factor in his appraisal was that the rent contemplated use of the "permit” to operate a gasoline station on the site, and that the value of such permit should not be included in the assessed value of the real property. But see the Brick article, supra at 857: "[I]n appraising a gasoline service station site, the value of the permit must be taken into account.” We need only note Lasser’s concession here that the five gasoline stations in the borough have a "monopoly” in that no new stations can come into town unless a variance is obtained. The subject property can be operated as a gasoline station only by virtue of a valid nonconforming use. In our opinion the existence of such nonconforming use, rather than the permit itself, is a "condition” of the subject real property which must be considered in assessing such property. See Aetna Life Ins. Co. v. Newark, supra, 10 N. J. at 110.

Thus we conclude that the Division erred in capitalizing income based on gallonage volume and disregarding net income to the fee owner under the long-term ground lease. We follow the suggestion of Brick, supra, and find that “capitalization of net income should he based on rent data and not on gallonage volume.” Op. Cit. at 880. We accept the capitalization rate of 7.5% as used by taxpayer’s expert (insofar as he applied that figure to the interest phase of his capitalization process). Capitalizing the $15,000 rental at that rate would result in a value of $200,000 for the land. Since this exceeds the land assessment of $170,000, we conclude that the record does not justify reduction of that assessment.

Accordingly, the judgment of the Division of Tax Appeals is reversed and the assessment affirmed.

      This approach is not inconsistent with the holding in New Brunswick, supra, that “[t]he capitalization rate, including a factor for tames, must be applied to net income hefore .taxes.” (39 N. J. at 547; emphasis supplied). That holding is applicable only where no reliable estimate of true net income is obtainable without first subtracting taxes from gross income (or from gross income less other expenses).

        Here, since the lessee is responsible under the lease for all taxes and expenses, the $15,000 annual rent payable to the lessor truly represents net income to the fee owner.

      As noted above, Lasser purported to rely also on the reproduction cost approach to valuation by allocating $4.50 to each square foot of land. Since there is no factual basis in the record to support his opinion in that respect, we rest our own findings solely on the evidence relevant to the income approach to valuation.


author: Pee Clfbiam.

text:
    BEVERLY ROSS, PLAINTIFF-RESPONDENT, v. DAVID J. ROSS, DEFENDANT-APPELLANT.
    Superior Court of New Jersey Appellate Division
    Submitted June 9, 1975
    Decided June 26, 1975.
    Before Judges Michels, Mobgan and Milmed.

      Mr. John C. Love, attorney for the appellant {Mr. Melvin Randall on the brief).
    No brief was filed on behalf of the respondent.
   Pee Clfbiam.

The order of the Essex County Juvenile and Domestic Relations Court under review is affirmed substantially for the reasons expressed by Judge Bellfatto in his opinion of December 5, 1973, reported at 126 N. J. Super. 394 (J. D. R. Ct. 1973).


author: Gelman, J. S. C.

text:
    HERMAN BERKOWITZ, PLAINTIFF, v. POWER/MATE CORPORATION, A NEW JERSEY CORPORATION, GENERAL AMERICAN INDUSTRIES, INC., A NEW JERSEY CORPORATION, RICHARD GRAHAM, MARION GRAHAM, AND MARTIN CHARTER, DEFENDANTS. ROBERT GREENBERG, PLAINTIFF, v. POWER/MATE CORPORATION, A NEW JERSEY CORPORATION, GENERAL AMERICAN INDUSTRIES, INC., A NEW JERSEY CORPORATION, RICHARD GRAHAM, MARION GRAHAM, AND MARVIN CHARTER, DEFENDANTS.
    Superior Court of New Jersey Chancery Division
    Decided May 8, 1975.

      Mr. Donald Coburn for plaintiffs (Messrs. Jacobs & Co-burn, Esqs.) and Mr. Robert Greenberg (Messrs. Greenberg & Reiner, attorneys),

      Messrs. Boardman & Epstein for defendants (Messrs. Bachner, Tally & Mantell, of the New York bar, of counsel.)
   Gelman, J. S. C.

These are consolidated class actions brought by public stockholders of defendant Power/Mate Corporation (Power/Mate) to enjoin a proposed merger of Power/Mate into defendant General American Industries, Inc. (General). The actions were instituted by orders to show cause and, on notice to and in the presence of counsel for all parties, the court restrained the consummation of the merger pending further hearing. The matter is before the court at this time on plaintiffs’ application for a preliminary injunction against the proposed merger.

The undisputed facts are as follows: Prior to December 1968 Power/Mate was a privately held New Jersey corporation engaged in the business of manufacturing and marketing electronic modular and laboratory power supply equipment. It had been organized in 1966 to succeed to a business founded by defendant Diehard Graham in 1965. During December 1968 Power/Mate issued and sold to public investors 110,000 shares of its stock at a price of $5 a share. The public offering was made pursuant to a registration statement filed with the Securities and Exchange Commission under the Securities Act of 1933. At the time of the public offering the “inside,” or majority stockholders, retained ownership of 225,000 shares, or about 69%, of Power/Mate’s stock.

After the public offering and for a period of about 1)-., years, Power/Mate’s publicly held stock was traded in the over-the-counter market. During December 1968 the price of the stock ranged between a low bid of $9 a share and a high asked price of $21. During 1969 and the first half of 1970 the range was between $2.25 and $18. The stock was listed for trading on the National Stock Exchange in the second half of 1970 and continued to be so listed until that Exchange terminated operations on January 31, 1975. During the period of its listing the high and low prices ranged from $4.50 a share (Second quarter of 1971) to a low of $.50 a share (fourth quarter of 1974). Since February 1, 1975 the stock has been traded in the over-the-counter market at a high asked price of $2.50 and a low bid of $.75.

Since the public sale of its stock Power/Mate has continued to carry on its business activities on a profitable basis. The per share earnings record for the years 1970-1974 has been as follows: 1970 — $.41, 1971 — $.04, 1972 — $.14, 1973 — $.33, and 1974 — $.45. Between 1970 and 1974 Power/Mate’s sales increased from $1,857,812 to $5,169,272, and the book value of its stock increased from $2.60 a share to $4.10 as at December 31, 1974. Power/Mate has never declared or paid a dividend on its stock at any time.

Por the six-month period ending December 31, 1974 the earnings were $.41 a share, as compared to $.12 for the equivalent 1973 period. On December 30, 1974, it should be noted, the individual defendants, Richard Graham and Marvin Charter — who are the principal officers, directors and controlling stockholders of Power/Mate — declared a bonus of $100,000 each to themselves. But for the bonus, the earnings for the six months ending December 31, 1974 would have been approximately $1.04 a share. Prior to the declaration of the bonus Graham and Charter were being paid salaries at the rate of $60,000 and $55,000, respectively.

Power/Mate’s sales for the six-month period ending December 31, 1974 increased to $3,253,195 from $2,331,544 for the 1973 period. January 1975 sales were 65% over those for January 1974, and Pebruary 1975 sales showed a decrease of 6.5% from Pebruary 1974. As of March 3, 1975 orders on hand totalled $2,300,000 as compared to $1,250,000 on March 3, 1974. At December 31, 1974 Power/Mate’s current assets were $2,271,854 as compared to current liabilities of $1,257,408. Its noncurrent assets totalled $352,581 as against noncurrent liabilities of $74,029.

General was organized as a New Jersey corporation on March 27, 1975, by defendants Graham and Charter, who own all of General’s capital stock. Graham and Charter contributed all of their Power/Mate stock, consisting of 225,250 shares, to General, and the Power/Mate Stock is General’s sole asset. General carries on no business activity of its own.

On March 31, 1975 the boards of directors of Power/Mate and General — both boards consisting of the same persons, i. e., Richard Graham, his wife Marion Graham and Marvin Charter — entered into a merger agreement. The basic terms of the merger agreement provide for the merger of Power/Mate into General, and the payment of each Power/ Mate shareholder at the rate of $2 a share (except for the Power/Mate shares held by General, which will be can-celled) . Upon completion of the merger the name of General will be changed to Power/Mate and the new Power/Mate will have succeeded to all of the assets and liabilities and the business of the old Power/Mate. As stated in the proxy statement, the sole objective of the merger “is to eliminate the publicly-held interest” in Power/Mate.

There are presently 89,850 shares of Power/Mate in the hands of the public, representing 28.5% of the issued and outstanding Power/Mate stock. General intends to borrow from a bank the $179,700 required to pay the public stockholders, and to repay the bank loan immediately after the merger from the cash assets of Power/Mate it will receive as a result of the merger.

On April 3, 1975 Power/Mate’s board of directors sent notice to its stockholders of a special meeting of stockholders to be held on April 30, 1975 to consider and vote on the proposed merger of Power/Mate into General. The notice was accompanied by a proxy statement containing essentially the facts set forth above. In addition, the proxy statement notes that General, as the owner of 71.5% of Power/Mate stock, intends to vote its stock in favor of the merger; that a two-thirds majority is required for approval, and that pursuant to N. J. 8. A. 14A:11-(1) (a) the stockholders of Power/Mate will have no right to dissent bnt will be bound by the terms of the merger.

After advising the stockholders that the officers and directors of Power/Mate and General are identical, the proxy statement goes on to say that “[i]t might be considered that these directors had a conflict of interest in making the decision and that the exchange price * * * might not have been the same had there been no common directors * * *.” Later on in the statement it is said that the price to be paid to Power/Mate’s public stockholders and the terms of the proposed merger is, in the opinion of Power/Mate’s board of directors, “fair and equitable to the public stockholders.” It is also noted, however, that the Grahams and Charter “believe that the merger will enable them to acquire full ownership of Power/Mate’s business at a price which is advantageous to them.”

According to the proxy statement, the public stockholders will derive a benefit from the merger for two reasons: (1) the price being paid is above the bid price of $1.25 a share on March 27, 1975 (the asked price on that date was $2), and (2) the publicly held stock has no liquidity since there is but a limited market demand for the stock. The statement further notes that in December 1974 Power/Mate purchased 20,000 shares of its stock from a “non-affiliated stockholder in an arms-length” transaction at $2 a share. Finally, it is said that the price of $2 a share being paid to the public stockholders is ifbased primarily on the analytical report prepared for Power/Mate’s Board of Directors by M. J. Papier Co., Inc.,” who is said to be an independent financial consultant retained for this purpose. A copy of the Papier report is annexed to the proxy statement. Papier was paid $10,000 by Power/Mate for this report.

The special meeting of stockholders was held on April 30, 1975. General voted its stock in favor of the merger. Of the 89,850 shares of publicly held stock, 20,140 votes (22.4%) were cast in favor of the merger and 11,750 votes (13.1%) were cast against. Only 35.5% of the publicly held stock voted at the meeting.

The facts before the court present a classic example of the now popular concept of “going private” which, in the vernacular of the financial community, has become the “newest game in town.” Numerous privately-held companies which were taken “public” by their insiders during the boom market for new issues that prevailed during the late 1960’s are now, as a result of the current stock market depression, seeking ■ — • through the same insiders ■ — ■ to buy back the public’s interest at a fraction of the price paid by the public for its stock. This phenomenon has been commented upon in the law reviews. See Note, “Going Private”, 84 Yale L. J. 903 (1975); Borden, “Going Private-Old Tort, New Tort or No Tort”, 49 N. Y. U. L. Rev. 987 (1974); cf. Brudney and Chirelstein, “Pair Shares in Corporate Mergers and Takeovers,” 88 Ha/rv. L. Rev. 297 (1974); Vorenberg, “Exclusiveness of the Dissenting Stockholder’s Appraisal Right,” 77 Ha/rv. L. Rev. 1189, 1192-1193. In a recent speech Commissioner A. A. Sommer, Jr. of the SEC offered the following comment on the subject of “going private”:

What is happening is, in my estimation, serious, unfair, and sometimes disgraceful, a perversion of the whole process of public financing, and a course that inevitably is going to make the individual shareholder even more hostile to American corporate mores and the securities markets than he already is. [Sommer, “Going Private”: A Lesson in Corporate Responsibility, BNA Sec. Reg. & L. Rep. No. 278 (Nov. 20, 1974)]

The resulting freeze-out of minority stockholders has been likened by one author to “a sort of private eminent domain proceeding.” Vorenberg, op. tit. at 1191. Through the precise observance of statutory merger provisions the inside controlling stockholders can compel the minority to sell their stock to them at a price fixed by the insiders and paid for, as here, out of corporate assets.

The New Jersey Business Corporation Act sets forth the procedure for and authorizes a merger between domestic corporations. N. J. S. A. 14-A :10-1 et s&q. The act requires only approval by the boards of the directors of a plan of merger, N. J. 8. A. 14A :10-2, and the vote of two-thirds of the stockholders in favor of the plan. N. J. S. A. 14A :10-3. The merger becomes effective upon filing a certificate of merger with the Secretary of State. N. J. S. A. 14A.:10-4. Where, as here, the stockholders of the corporation which is a party to the merger are to be paid in cash, the stockholder does not have the right to dissent to the terms of the merger. N. J. 8. A. 14A:11-1(1) (a). Hence, the proposed merger of Power/Mate is in full technical compliance with the requirements of the act, and the public stockholders have no statutory rights to prevent the merger from taking place.

Furthermore, there are no rules or regulations of the Securities and Exchange Commission presently in force which would be violated by the proposed merger; its rules and regulations call only for full disclosure in the proxy statement issued to stockholders, and for present purposes, we may assume that such disclosure has been made. It may be noted, however, that the SEC has given notice of a public fact-finding investigation and rule-making proceeding in the matter of "going private” transactions by public companies. SEC, Securities Act of 1933, Release No. 5567/February 6, 1975, published in BNA, Sec. Reg. L. Rep. No. 289 (Feb. 12, 1975). Proposed Rule 13e-3.B would prohibit the merger proposed here, since the merger has no valid business purpose.

However, neither the parameters of the Business Corporation Act nor the regulations of the SEC dispose of the matter at issue here. Those who control the affairs and conduct of a corporation, whether public or private, have a fiduciary duty to all the stockholders and the powers they have by virtue of their majority status are powers held by them in trust. See Lebold v. Inland Steel Co., 125 F. 2d 369, 372-3 (7 Cir. 1942). They cannot use their powers for their own personal advantage and to the detriment of the minority stockholders. And as fiduciaries they cannot do indirectly through a corporation that which they cannot do directly. Pepper v. Litton, 308 U. S. 295, 60 S. Ct. 238, 84 L. Ed. 281 (1939).

In Outwater v. Public Serv. Corp. of N. J., 103 N. J. Eq. 461 (Ch. 1928), aff’d 104 N. J. Eq. 490 (E. & A. 1929), Vice-Chancellor Backes was presented with a substantially similar set of facts arising out of the merger of several public utility companies into the Public Service Electric & Gas Company. There, Public Service Corporation owned all of the stock of Electric & Gas, which in turn owned more than two-thirds of the stock of the merging companies, and Public Service Corporation’s board of directors controlled all of their boards of directors. The minority stockholders of the merging companies were to receive preferred stock (nonvoting) in exchange for their shares at prices fixed in the merger agreement. The court offered the following comments which are pertinent here:

The merger agreement, procedurally, is in legal form, and the right to merge is in entire harmony with the complainants’ corporate contract, but as the merger is, in reality, an appropriation of corporate property by a majority of stockholders, by force of numbers and the grace of the statute, and while no valid legal objections can be interposed on that score (Colgate v. United States Leather Co., 73 N. J. Eq. 72), the agreement calls for careful judicial scrutiny, and the burden is on the majority to show that the consideration is fair and equitable, and judgment, as to fairness, is not to be influenced by the heavy vote of approval, as it otherwise would be if the vote were independent, as indicated in Berger v. United States Steel Corp., 63 N. J. Eq. 809.
$ $ >h 4
The Public Service corporations contest the right of a court of equity to interfere in the internal affairs of the merging companies in the absence of fraud, actual or constructive. There is, of course, no suggestion that the majority stockholders entered into the merger agreement with actual intent to defraud the minority. Neither have they earned a decoration for unselfishness. * * * The complainants’ companies are about to be absorbed and the minority stockholders face the possibility, if not the probability, of being cast into the discard. This, by right of might and by means unwarranted and oppressive, and their only appeal for relief is to this court. The merger will be enjoined. [103 N. J. Eq. at 464, 467-468]

More recently our Supreme Court had occasion to consider the issue anew in Brundage v. New Jersey Zinc Co., 48 N. J. 450 (1967), a case which also addressed itself to the rights of minority stockholders upon a merger. While the court there sustained the merger as being fair and equitable to the minority, it dealt with the question of equity’s jurisdiction to intervene even though the merger complies with statutory law. Speaking for the court Justice Jacobs said:

The power reserved in our organic and statutory law was broadly phrased and broadly intended. It should liberally be viewed as part and parcel of the tripartite arrangements between the State, the corporation and the stockholders * * * and thus viewed, as permitting reasonable corporate charter amendments having legitimate business ends. Under this approach there can be no question with respect to the application here of the two-thirds vote provision of our present merger statute * * * bearing in mind not only the broad appraisal rights afforded to dissenters * * * but also the broad protection afforded to them under the settled and continuing New Jersey doctrine that a merger, even though it complies procedurally with the statutory requirements, must also satisfy basic equitable requirements of good faith and fair treatment, [at 470]

In Bryan v. Brock & Blevins Co., Inc., 490 F. 2d 563 (5 Cir. 1974), the controlling stockholders of a privately-held corporation sought- unsuccesfully to purchase -the stock interest of a minority stockholder through a private sale. They then formed a new corporation to whom they transferred their stock and the boards of directors of each voted upon a plan of merger the effect of which would be to freeze out the minority stockholder, leaving him with the cash price fixed by the merger agreement for his stock or his appraisal rights under the Georgia corporation statute. The court noted (at 569) that there was little law on this subject as it pertained to mergers. However, it affirmed the judgment of the trial court setting aside the merger, stating:

The trial court here simply held that the dominant stockholder interests in this case utilized the Georgia Corporation Merger Statute to accomplish something that they could not accomplish directly. The finding was to the effect that a new corporation was set up, having no business purpose of its own and no pre-existing viability of any kind, solely for the purpose of effecting a “freeze-out,” * *
It was with this concept in mind, that the trial court found the absence of a “business purpose” for the proposed merger of Brock and Blevins into Power Erectors. In the absence of such business purpose Power Erectors was purely a sham party created to circumvent the rule of law that prohibits a majority of stockholders of a corporation, absent any charter provision as to the contrary, to force the minority interests to surrender their stock holdings. Implicit in this holding was a construction of the Georgia statute that comports with equity in good conscience. Such construction would read out of the statute a situation where there was no pre-existing corporation to be merged, but instead where such corporation was created solely for the purpose of accomplishing an illegal result. Such construction is clearly warranted by the language quoted above from Pepper:
“He cannot use his power for his personal advantage and to the detriment of the stockholders and creditors no matter how absolute in terms that power may be and no matter how meticulous ho is to satisfy technical requirements.” [at 570]

The court in Bryan thus set aside the merger based upon a finding that a merger which serves no business purpose other than the termination of the minority stockholder’s interest is ipso facto a breach of the controlling stockholders’ fiduciary duties to the minority. This view was followed in Albright v. Bergendahl, 391 F. Supp. 754 (D. Utah, 1974), and is advocated by some in the academic community. See Yorenberg, op. cit. at 1204. It is not without its detractors, however. See Borden, op. cit. at 996, 1037-1038. There is language in our Supreme Court’s decision in Brundage (quoted supra) which suggests that New Jersey may follow the “business purpose” test to prevent the destruction of minority stockholder rights in this factual setting, but the issue was not squarely presented nor passed upon by the court in that case. While the Bryan approach is tempting to follow, it is unnecessary at this time to rule that the lack of a valid business purpose is sufficient to prevent a merger which otherwise complies with our Business Corporation Act.

Enough has been shown by the pleadings, the undisputed facts and the testimony to raise serious questions as to the fairness of this “freeze-out” of the minority stockholders. By their own admission the controlling stockholders of Power/ Mate intend to acquire the public’s stock at a price advantageous to them. Some measure of their gain may be found in the fact that after payment of the purchase price to the minority stockholders, the insiders will have achieved a gain of $.66 a share in the book value of the stock they will hold in the new Power/Mate. This represents an absolute gain to them of $148,648 in the book value of their stock, after deducting merger expenses estimated at approximately $40,000.

Then again, the timing of the merger suggests that the insiders have chosen a most opportune time — in relation to Power/Mate’s earnings record since it went public — to buy out the minority at an unreasonably low price. Coupled with this is the fact that the two principal officers of Power/ Mate gave themselves bonuses of $100,000 each so as to significantly reduce the company’s earnings only three months prior to the proposed merger. While we can only speculate at this juncture, it may be doubted whether the market price of Power/Mate stock would have remained at $1.25 bid and $2 asked had the company announced earnings for the six-month period ending December 31, 1974 in excess of $1 a share. Since the justification for the $2 a share being offered to the minority is closely tied to the market price of the stock, the conduct of the insiders obviously may have adversely affected the market price. Closer scrutiny of this aspect of the transaction is clearly warranted.

As noted in Outwater, supra, and in countless other decisions of the courts of this state and elsewhere, corporate officers and directors who engage in self-dealing transactions have a heavy burden of showing that they have not violated their fiduciary obligations to the minority stockholders. At a minimum their conduct is subject to a searching inquiry to determine whether it conforms to accepted concepts of fairness and equity. It may well be that the public stockholders of Power/Mate would benefit from the purchase of their stock. If so, the question at issue is whether the price they are being offered for their interest in Power/Mate is a fair and reasonable one.

Defendants urge in effect that any price offered the minority in excess of the market price is per se fair and reasonable. This surely is an anomalous position inasmuch as the principal justification for the transaction is that there really is no market for the public stock, and hence the “market price” may only be an arbitrary if not an altogether fictitious concept in this setting. Nor does the report of the independent consultant add much weight to defendants’ position. His conclusions as to the fairness of the price being offered to the Power/Mate stockholders is based largely upon a comparison with a series of cash offers in other “freeze-out” or “going private” transactions which presumably may suffer from the same basic infirmity as that involved here, i. e., the prices offered were determined not as the result of arms-length bargaining but by the corporate insiders. Such transactions are surely not a barometer by which one can or should measure the fairness of the price offered here.

Finally, defendants urge that injunctive relief is not an appropriate remedy. It is suggested that the minority stockholders can be adequately compensated by an award of money damages if it is ultimately determined that the terms of this merger are unfair. This argument, of course, presumes that a “freeze-out” of the minority stockholders via the nierger route is permissible under our law so long as the price paid is a fair one, and further presumes this court has the power to fix the price to be paid to the minority stockholders for their stock. Neither presumption is free from doubt, and until such doubts are resolved the consummation of the merger should be enjoined. See Brundage v. The New Jersey Zinc Co., supra, 48 N. J. at 461-463.

      There are 95,300 shares of issued Power/Mate stock held as treasury stock.

      Elsewhere in the proxy statement it is said that only a majority of the stockholders need to approve the merger. In this respect the proxy statement is confusing, if not misleading.

      With respect to corporations organized after tie effective date of the recent amendment to N. J. S. A. 14A:10-3, a simple majority vote will suffice. L. 1973, c. 366, § 53.

      It is suggested by defendants that this merger has a “valid” business purpose in going private, since the new corporation will save expenses “inherent in its status as a publicly held corporation.” The expenses referred to include SEO fees, transfer agent fees and printing expenses. It may be noted, however, that Power/Mate’s registration under § 12(b) of the Securities Exchange Act of 1934 has been terminated, and since it has but 267 stockholders it is not required to register under § 12(g) of that act, and it is not required to file its proxy materials with the SEO, nor will it be required to file any reports with the SEO under § 15(d) after July 1, 1975. In the judgment of the court, the saving of such expenses as claimed by defendants do not constitute a valid business purpose. See Note, “Going Private,” 84 Yale L. J. 903, 907-8 (1975).


author: Gruccio, J. S. C.

text:
    JUDITH PONTER, R. P. GOTCHEL, M. D.; R. KESSLER, M. D.; R. A. RODGERS, JR., M. D.; J. P. BURNS, JR., M. D. INDIVIDUALLY AND COLLECTIVELY AS ASSOCIATES OF THE WESTWOOD OBSTETRICAL AND GYNECOLOGICAL ASSOCIATES, P. A., A PROFESSIONAL ASSOCIATION, PLAINTIFFS, v. JOHN PONTER AND AETNA CASUALTY AND LIFE CO., DEFENDANTS.
    Superior Court of New Jersey-Chancery Division
    June 9, 1975.

      Mr. John L. Ensminger for plaintiff Judith Ponter (Camden Regional Legal Services, Inc.).

      Ms. Phyllis G. Warren and Mr. Raymond J. Lesnialc for plaintiffs Judith Ponter, Gotchel, Kessler, Rodgers, Burns & Westwood Obstetrical and Gynecological Associates, P. A. (New Jersey State Office of Legal Services).

      Mr. Leonard O. Horn for defendant Aetna Casualty and Life Co. (Messrs. Horn, Weinstein & Kaplan, attorneys).
    No one appearing for defendant John Ponter.
   Gruccio, J. S. C.

The facts in the instant case are not disputed and are as follows: Plaintiff Judith Ponter and defendant John Ponter are married but have been living separate and apart since 1969. During the period they co-habited three children were born. Judith is due to give birth to another child fathered by someone other than her husband. She has unilaterally decided that she no longer desires to utilize her capacity to procreate and wishes to effectuate this end by the means of sterilization.

Throughout the term of her present pregnancy and for some ten years preceding it, Judith Ponter has received obstetrical and gynecological care from Drs. E. P. Gotchel, E. Kessler, E. A. Eodgers, Jr., and J. P. Burns, all being affiliates of Westwood Obstetrical and Gynecological Associates, P. A. These individual doctors and the professional association are also plaintiffs herein. Judith Ponter planned to have one of these doctors perform the sterilization within one day subsequent to the delivery of her expected child. Such an operation can be performed most economically and efficiently within the time period. However, the doctors will not perform such an operation unless Judith obtains the consent of her husband John Ponter, which she is unable to procure.

Plaintiff doctors, as well as other doctors engaged in similar practices through the State, require spousal consent prior to the performance of sterilization operations. By this means the doctors seek to protect themselves against potential civil liability which might arise at the behest of the nonconsenting spouse. In light of the fact that there has never been a declaration as to the law in New Jersey on this point, such a precaution is not without basis.

In this action Judith Ponter seeks to have this court determine whether a married woman has a constitutional right to be sterilized without spousal consent. The doctors and professional association further seek to enjoin John Ponter from instituting any action against them for the performance of the operation without his consent.

Plaintiffs’ action is based in large measure on the theory of law established in the landmark cases of Doe v. Bolton, 410 U. 8. 179, 93 S. Ct. 739, 35 L. Ed. 2d 201 (1973), and Roe v. Wade, 410 U. S. 113, 93 S. Ct. 705, 35 L. Ed. 2d 147 (1973). These cases establish a new era in women’s continuing struggle for the establishment of their individual rights.

In Bolton and Wade the Supreme Court dealt with the issue of a woman’s right to an abortion. It held that at least in the first trimester of a pregnancy such a right emanates from the Bill of Eights and is protected against unwarranted state interference by the Fourteenth Amendment. The court further established that within that term only state restrictions which were related to the state’s interest in “safeguarding health, in maintaining medical standards and in protecting potential life” Roe v. Wade, supra 410 U. S. at 154, 93 S. Ct. at 121, would pass constitutional muster. The decision for or against the operation is left to the woman and her doctor alone.

The precedent established by Bolton and Wade, although controversial from the moralists’ and theologians’ viewpoint, is required to be followed by all lower courts. The Supreme Court by these decisions sanctioned the ideology that a woman has a right in most circumstances to control her reproductive functions. Indeed, the ideology was raised from the “bandwagon” of various women’s rights movements to constitutional proportions.

Having thus established the major thesis which binds all courts, we now must look to the application of this theory as delineated and expanded by other courts.

Other courts following Bolton and Wade, have struck down state statutes requiring spousal or parental consent in abortion situations. The courts have consistently held that such a requirement falls within the proscription set up by Wade against restricting the availability of abortions based on other than health related considerations. Doe v. Doe, 314 N. E. 2d. 128 (Mass. 1914); Coe v. Gerstein, 316 F. Supp. 695 (S. D. Fla. 1913); Jones v. Smith, 278 So. 2d 339 (Fla. App. 1913), cert. denied 415 U. S. 958, 94 S. Ct. 1486, 39 L. Ed. 2d 513 (1914).

An examination of the abortion related decisions reveals that a hierarchy of rights is evolving which includes the rights of the mother, the rights of the father and the rights of the fetus. The right of a woman to determine whether or not to bear children has been consistently given priority within this hierarchy.

■ Notwithstanding the fact Skinner v. Oklahoma, 316 U. S. 535, 62 S. Ct. 1110, 86 L. Ed. 1655 (1942), characterized procreation as a basic civil right, the courts have still considered a woman’s right not to procreate paramount. In fact, when the rationale of Skinner was asserted by a potential father in an attempt to enjoin the termination of his wife’s pregnancy, the court in Doe v. Doe, supra, limited' the application of the holding of that case. The court in Doe v. Doe (at 130) characterized the right described in Skinner as one which “involved a shield for the private citizen against government action, not a sword of government assistance to enable [the potential father] to overturn the private decisions of his fellow'- citizens.” Doe v. Doe, supra, at 130.

Granted there are distinctions both factually and as to the legal issues raised which can be drawn between the cases cited supira and the instant case.

For' one thing, we are not dealing here with a woman’s right to an abortion but rather with a married woman’s right to a sterilization operation regardless of her husband’s desires. Furthermore, there is no New Jersey statute herein which requires spousal consent before the operation is given, However, in light of the trend of law developing from the cited cases, these are clearly distinctions without differences.

Courts have refused to grant relief to plaintiffs in various instances where operations were performed on their spouses without plaintiffs’ consent. Murray v. Vandevander, 522 P. 2d 302 (Okl. App. 1974); Janney v. Housekeeper, 70 Md. 162, 16 A. 382 (Ct. App. 1889); Herko v. Uviller, 203 Misc. 108, 114 N. Y. S. 2d 618 (Sup. Ct. 1952); Pratt v. Davis, 224 Ill. 300, 79 N. E. 562 (Sup. Ct. 1906). These cases were based on the premise that an individual, regardless of his or her marital status, has a right to receive medical treatment. As the court referred to in Jones v. Smith, supra, citing Union Pacific Ry. Co. v. Botsford, 141 U. S. 250, 251, 11 S. Ct. 1000, 35 L. Ed. 734 (1891), “No right is held more sacred, or is more carefully guarded, by the common law, than the right of every individual to the possession and control of his own person, free from all restraint or interference of others, unless by clear and unquestionable authority of law.” (at 342)

In Murray v. Vandevander, supra, a husband who did not consent to his wife’s hysterectomy sued the physician and the hospital for loss of consortium and deprivation of the right to reproduce another child. The court declined to grant relief, finding that a married woman had a right to her health and such right could not be qualified by the requirement of spousal consent. The court found that the right of a competent person to control his or her body to be paramount to his or her spouses’ desires. In accord with this principal is Karp v. Cooley, 493 P. 2d 408 (5 Cir. 1974).

In effect, the courts in Doe v. Rampton, 366 F. Supp. 189 (D. C. Utah 1973); Doe v. Doe, supra; Coe v. Gerstein, supra, and Jones v. Smith, supra, in striking down certain state requirements based on nonmedical criteria for abortions and sterilizations, eliminated the distinction between surgical operations in general and abortions or sterilizations.

This court recognizes here, as did the court in Doe v. Doe, supra, the sensible, logical and well-reasoned desirability of consultation between husband and wife regarding decisions in such matters. However, this is not to say that the spouse does or should have a power of veto.

It is this court’s opinion that Judith Ponter has a constitutional right to obtain a sterilization operation without the consent of her husband. Such protection is available whether it be in the form of the proscription of state action requiring the contrary or refusing to recognize the spouse’s civil suit against the treating physician as meritorious. Cf. Shelley v. Kraemer, 334 U. S. 1, 68 S. Ct. 836, 92 L. Ed. 1161 (1948).

Whether such a unilateral decision on the part of one spouse would be sufficient basis for a divorce, either on its own grounds or as evidence of desertion or extreme cruelty, is for the legislators or the courts to determine at another time. It is not before this court. Indeed, the exercise of many constitutional rights by a' spouse could lead to marital discord and ultimate divorce. One spouse may insist that he or she wants to be an involved politician or legislator whose duties would require almost total absence from the marital abode, contrary to the desires of the other spouse. A spouse may exercise religious freedom so obnoxious to the marriage partner’s beliefs that marital discord could result. Such ramifications should not be considered herein.

Women have emerged in our law from the status of their husband’s chattels to the position of “frail vessels” and now finally to the recognition that women are individual persons with certain and absolute constitutional rights. Included within those rights- is the right to procure an abortion or other operation without her husband’s consent. A natural and logical corollary of those rights is a right to be sterilized without her husband’s consent.

Having determined the right of the wife aforesaid, I do not find it necessary or proper to grant the injunctive relief requested by plaintiff doctors and professional association.

The action against Aetna Casualty and Life Company, the malpractice carrier, is dismissed. They are not a necessary party to these proceedings.

      Of course, the state has the superior right when regulating in the area defined hy Roe v. Wade, supra.


author: McKenzi, J. C. C.,

text:
    CATHERINE C. GOOD, PLAINTIFF, v. ALLEN H. GOOD, DEFENDANT.
    Superior Court of New Jersey-Chancery Division
    Decided June 10, 1975.

      Mr. John TP. Oooper for plaintiff.

      Mr. Vincent M. Mangino for defendant.
   McKenzi, J. C. C.,

Temporarily Assigned. The parties were married April 25, 1959. Two children, both still un-emancipated, were born of the marriage. Within the past few years defendant commenced staying out late. Differences developed and.tensions mounted until about October 1973, when after an argument he stated he wanted a divorce. 'She suggested that they consult a marriage counselor. He, interested in another woman, declined. When she became convinced that he was so involved and was adamant in pressing for a divorce, she felt embarrassed and humiliated by his continuing presence in the marital home.

Accordingly, they agreed that under the circumstances it would be best for both of them that he move from their residence, and he did so on September 23, 1973.

The question presented, and not yet decided in any reported opinion in any courts since- the Divorce Law was amended in 1971, is whether under such circumstances the husband is guilty of a desertion.

Under N. J. 8. A. 2A:34^2(b), the previous description of the desertion cause of action was: “willful, continued and obstinate desertion for the term of 2 [two] years.” Under the prior law consent of plaintiff to the separation negated obstinacy, and the desertion cause of action for divorce was not sustained. Howes v. Howes, 125 N. J. Eq. 272 (E. & A. 1939); Dowling v. Dowling, 91 N. J. Eq. 464 (Ch. 1920).

Since the 1971 revision the desertion cause of action is described as: “willful and continued desertion for the term of 12 or more months, which may be established by satisfactory proof that the parties have ceased to cohabit as man and wife.”

Aside from reduction in the time period, the principal change in this cause of action is the omission of the requirement that the desertion be obstinate — that is, against the will of the deserted part. See Stover v. Stover, 94 N. J. Eq. 703 (Ch. 1923); Howes v. Howes, supra.

However, under our prior law obstinacy on the part of defendant was not construed to require in all cases that plaintiff be actually opposed to the separation of the parties. A separation brought about by the marital fault (such as adultery or extreme cruelty) of defendant was construed to be a desertion on his part, although the actual separation may have been taking place at the will of plaintiff. See Gutmann v. Gutmann, 70 N. J. Super. 266 (App. Div. 1961); Fitzgerald v. Fitzgerald, 66 N. J. Super. 277 (Ch. Div. 1961). Also, the offended spouse had the right to require as a condition of marital cohabitation that defendant desist from future offensive conduct. See Wilson v. Wilson, 66 N. J. Eq. 231 (Ch. 1904). An additional modification of the obstinacy requirement was recognized where, although plaintiff was the one who actually left the home, it was nevertheless clear that the cessation of marital relations was caused by defendant’s intent not to cohabit, established before the parties separated. See Jacobs v. Jacobs, 109 N. J. Super. 287 (App. Div. 1970).

The Divorce Law Study Commission, in commenting on their recommended deletion of the requirement that the desertion be “obstinate,” found no apparent reason for retention of this “quaint” requirement, stating that “willful” was an adequate adjective to describe the requisite intent óf defendant. Divorce Law Study Commission, Final Report to the Governor and Legislature, May 11, 1970, at 65-66.

Clearly the Legislature, in adopting the recommendation of the Divorce Law Study Commission, restricted the focus on intent to that of defendant alone. No longer need defendant’s leaving be contrary to plaintiff’s wishes. However, since it also adopted the recommendation of the Commission in creating a new cause of action based on separation without regard to fault, N. J. S. A. 2A:34-2(d), it is also clear that, something more than a voluntary departure by defendant from the marital home must be shown to find him guilty of the fault cause of action of desertion. To hold otherwise would subject the party leaving the matrimonial home as a result of a consensual separation to a charge of desertion. Such was not the intent of the Legislature.

A “willful” act is one which is intentional or voluntary. But the primary definition has been given as “bent on having one’s own way; headstrong.” Eunk & Wagnall’s Standard Desh Dictionary, (1966). Erom the foregoing, the latter appears to be the construction intended by the Legislature, and this court so holds. '

That is, where defendant, from his statements and conduct, is found to have acted upon a fixed determination to put an end to the marital relationship, regardless of the desires or intentions of plaintiff, the fact that plaintiff acquiesces or even expressly concurs in that determination does not bar plaintiff from succeeding on a desertion cause of action. In view of the prevailing philosophy undergirding our present Divorce Law, much of which is embodied in the report of the Divorce Law Study Commission previously referred to, volenti non fit infuria no longer seems to be a viable concept in this area of the law. Put simply, plaintiff has the right to say, “Good riddance!”

Applying the foregoing to the facts in the instant case, the court is satisfied that the requirement of “willfulness” under 'our' statute has 'been met. Although plaintiff joined in the decision that defendant should leave the matrimonial home, she did so only after it became clear that defendant was firm in his intent to dissolve the marital relationship. The breakup of the marriage can be attributed only to him. To hold that her agreement that he should leave under such circumstances deprives her of a fault cause of action, and relegate her to only the nonfault ground of separation for relief, would be patently unfair and would ignore the actualities of the case.

A judgment for divorce will be entered accordingly.