author: Ackerman, Harold A., J. D. C.

text:
    O. P. GANJO, INC., A NEW JERSEY CORPORATION, PLAINTIFF, v. TRI-URBAN REALTY CO., INC., A CORPORATION, AND GEORGE MOSKOWITZ, DEFENDANTS.
    Superior Court of New Jersey Law Division
    Decided December 23, 1969.

      Mr. Alfred M. Sauer for plaintiff.

      Mr. Abraham, I. Mayer for defendants (Mayer & Mayer, attorneys).
   Ackerman, Harold A., J. D. C.

(temporarily assigned). This is an action on a promissory note. The ultimate issue is whether plaintiff is a holder in due course.

On May 6, 1968 one John Ferrante, a plasterer, was employed as a subcontractor by the corporate defendant herein, Tri-Urban Eealty Co., Inc. (Tri-Urban). On that day George Moskowitz, the individual defendant and president of the corporate defendant, executed a promissory note as follows:

OO

$3000-May 6, 1968

XX

One Month after date I promise to pay to

The order of JOHN FERRANTE

THREE THOUSAND no .......... ____ DOLLARS

XX

Payable at NATIONAL NEWARK & ESSEX BANK, MAIN

OFFICE

Value received w/int.

TRI-URBAN REALTY CO. INC.

Due 6/6/68 GEORGE MOSKOWITZ

No. 51-5-3433-5

The circumstances surrounding the giving of the note are distinctly familiar to anyone who has had the opportunity of hearing disputes between contractors and subcontractors. Moskowitz was quite concerned over the slow progress of Ferrante’s work in completing the plastering work. Ferrante pleaded that he needed money in order to pay his workmen so that the job could be completed. It is undisputed that Ferrante suggested to Moskowitz that the giving of the above note would be a convenient way to facilitate the objective of getting the job done, it being Ferrante’s stated intention to discount the note elsewhere. Several days later, however, Ferrante was back in Moskowitz’s office claiming that he could not make use of the note previously given because his supplier, Tiger Building Material, Inc., wanted a note with itself named as payee rather than Ferrante. Upon the execution of another note by Moskowitz conforming to Ferrante’s desires, Ferrante, I find, returned the previous note to Moskowitz who placed it in his desk drawer.

Moskowitz testified that he then left the room for a few minutes, leaving Ferrante alone in the office. Subsequent events, which will be set forth hereinafter, make it abundantly clear to this court that during this brief interval with Moskowitz out of the office, Ferrante stole the first note out of the desk drawer. Ferrante in his deposition denied' this invidious act, contending that Moskowitz voluntarily and knowingly gave him two notes for his use in securing capital in order to finish the job. He has since disappeared and was unavailable to testify at the trial of this action. As I have already indicated, I am satisfied that Moskowitz’s version is correct. His testimony that he was in ignorance as to the circulation of the first note until June 6, 1968, when he was called by his bank and informed that the note had been presented for payment, is quite believable.

Several days later we find Ferrante capitalizing on his prior nefarious activity at the expense of plaintiff. On May 15, 1968 Ferrante was also employed as a subcontractor by plaintiff corporation. On that date he asked Martin and Arthur Ganjoin, the officers, directors and principal stockholders of the corporate plaintiff, for monetary assistance. Once again the all too familiar scene emerges portraying a frustrated builder agonizing over the procrastinations of his subcontractor who pleads for sufficient capital to complete the task. In this instance the tableau was augmented by Ferrante’s dangling before the Ganjoins a note made payable to himself (from Moskowitz-Tri-Urban). He asked them to discount the note or to find someone who would. The Ganjoins in their testimony both stated that Ferrante had repeatedly asked for and received advances of money during the course of his work for them. It is clear to me that they were extremely desirous of staying “far enough ahead” of Ferrante monetarily so as to encourage him to finish the job for the agreed upon price of $16,700.

To accomplish this purpose they told. Ferrante that they could not personally discount the note but that “a friend” would. They told Ferrante that their “friend” could only advance $1,000 to him at this time, the balance (less a $200 service charge) to be paid to Ferrante on the due date of the note if he finished the job for the agreed upon price. They further told Ferrante that since the balance in cash would be given to them by this third party, they would first deduct any amount by which Ferrante’s final cost exceeded $16,700.

When Ferrante agreed to this arrangement, the Ganjoins went to their bank and there had the treasurer call the National Newark & Essex Bank to check on Moskowitz’s credit. Upon determining that Moskowitz’s account was new in that bank, they had the treasurer call another financial institution in which Moskowitz maintained an account. Finding his credit to be satisfactory there, they then indorsed the note over to their bank (Colonia) which credited their corporate account with $2,970 ($3,000 less a $30 service charge). To secure the bank against loss, the Ganjoins simultaneously executed a promissory note to the order of the bank in the amount of $3,000 due June 10, 1968. They then cashed a corporate cheek for $1,200, took $200 for themselves and gave Ferrante the balance. Subsequently, like the proverbial thief in the night, Ferrante removed his equipment surreptitiously and departed for climes unknown.

Moskowitz, upon being apprised of Ferrante’s disappearance and the circulation of this note, stopped payment. The Colonia Bank collected on the note executed by the Gan join brothers, who then brought this action against TriUrban and Moskowitz on the stolen note.

Defendants contend that plaintiff is not a holder in due course and therefore the theft of the note is a valid defense. Defendants concede, as indeed they must, that if plaintiff is a holder in due course, the defense of theft must fail. N. J. S. A. 12A:3-305 and 306(d).

A “holder” is “a person who is in possession of * * * an instrument * * * issued or indorsed to him or to his order or to bearer or in blank.” N. J. S. A. 12A:1-201(20). Clearly, plaintiff is a holder within the meaning of the above definition.

A holder in due course is “a holder who takes the instrument (a) for value; and (b) in good faith; and (c) without notice that it is overdue or has been dishonored or of any defense against or claim to it on the part of any person.” N. J. S. A. 12A:3-302(1). Where, as here, a defense exists, the burden of proof is upon plaintiff to show that he is in all the above enumerated respects a holder in due course. N. J. S. A. 12A:3-307(3).

This court finds for the reasons stated hereinafter that plaintiff has met this burden to the extent of $1,000.

I and II

[The court found that plaintiff took the note in good faith and without notice.]

Ill

Yaltje

Under N. J. S. A. 12A:3-303(a) “A holder takes the instrument for value (a) to the extent that the agreed consideration has been performed * * *.” Official comment 3 emphasizes that “an executory promise to give value is not itself value * * I find no New Jersey authority directly in point. In Korzenik v. Supreme Radio, Inc., 347 Mass. 309, 197 N. E. 2d 702 (Sup. Jud. Ct. 1964), plaintiff attorney received two notes “as a retainer for legal services to be performed.” Plaintiff’s client had obtained them by means of fraud in the inducement which would not constitute a valid defense against a holder in due course. Massachusetts’ highest court ruled that a retainer is an executorypromise to give value, and therefore plaintiff failed to satisfy this holder in due course requisite. However, as one legal commentator has noted, “though the plaintiff under Section 3-303 (a) might have given value to the extent that he had actually performed the executory promise and thus have been a holder in due course to that extent, he failed to prove how much value five days’ work represented.” Wittier and Hart, Bender’s Uniform Commercial Code Service, Case Annotations (1969), § 3-303, at 2-846 (emphasis added).

In the matter before me the agreed consideration was $1,000 cash paid to Ferrante at the time of the discounting, with $1,800 to be paid if and when Ferrante completed the job he was doing for plantiff for $16,700. Ferrante in his deposition denied having received $1,000 from the Ganjoins. I find that he did. .As to this amount the agreed consideration was performed. With respect to the balance of $1,800, which the Ganjoin brothers never paid, the consideration was simply an executory promise to give value and as such not “value” within N. J. S. A. 12A:3-303(a).

For the reasons stated above this court finds that plaintiff is a holder in duo course to the extent of $1,000, and therefore as to this amount the theft of the note by Ferrante does not constitute a defense. Plaintiff is not a holder in due course as to the balance of the note and therefore Ferrante’s theft is a defense to that extent.

Since plaintiff is a holder in due course as to the $1,000 actually advanced, it is entitled to that amount of the discount represented by $1,000. That is to say, had it advanced the full agreed upon consideration of $2,800 to Ferrante, it would have been a holder in due course as to this amount and therefore would have been entitled to recover the face value of the note from the maker ($3,000), realizing a discount of $200. Since plaintiff is only a holder in due course as to $1,000, it is entitled to recover not $200 but only so much of this discount which represents the $1,000 advanced. This amount, found algebraically, entitles plaintiff to recover an additional $71.43.

Finally, the only remaining question to he answered is, against whom is the judgment to be rendered, Moskowitz, Tri-Urban, or both? I find as a matter of law that both are liable.

Under N. J. S. A. 12A:3-403(2) (b),

An authorized representative who signs his own name to an instrument * * * except as otherwise established between the immediate parties, is personally obligated if the instrument names the person represented but does not show that the representative signed in a representative capacity * * *.

Since the note named the person represented (Tri-Urban) but did not show that Moskowitz was signing in a representative capacity, Moskowitz is personally bound.

N. J. S. A. 12A:3-118(e) provides:

Unless the instrument otherwise specifies two or more persons who sign as maker, acceptor or drawer or indorser and as a part of the same transaction are jointly and severally liable even though the instrument contains such words as “I promise to pay.”

N. J. S. A. 12A:3-401(2) provides that “a signature is made by use of any name, including any trade or assumed name, upon an instrument, or by any word or mark used in lieu of a written signature.” The comment to this section points out that “a signature may be handwritten, typed, printed or made in any other manner.”

In light of the above sections, two signatures appear on the note in question — that of George Moskowitz and TriUrban. Because it is not otherwise specified, both are jointly and severally liable for the $1,071.43 judgment rendered in this case.


source: Caselaw Access Project

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

license: Public Domain

text:
    ALICE LAST, PATTI LAST AN INFANT BY HER GUARDIAN AD LITEM, RAYMOND LAST AND RAYMOND LAST, INDIVIDUALLY, PLAINTIFFS, v. WILLIE BURNS AND LEWIS WASHINGTON, DEFENDANTS.
    Superior Court of New Jersey Law Division
    Decided January 19, 1970.

      Mr. Richard A. Lustgarien appeared for plaintiffs (Messrs. Cohn <& Lifland, attorneys).

      Mr. William J. Carey appeared for Unsatisfied Claim & Judgment Fund (Mr. Charles J. Kahwaty, attorney).
   Woods, J. P. C. D. C.

(temporarily assigned). Plaintiffs have made two previous unsuccessful similar motions, their purpose being to make substituted service upon the Unsatisfied Claim and Judgment Fund in lieu of service upon defenders personally.

Plaintiffs rely on R. 4:4—4(e) and the recent case of Young v. Bunny Bazaar, Inc., 107 N. J. Super. 320 (Law Div. 1969). That rule permits substituted personal service providing there is due process of law, i. e. that notice of the action be reasonably calculated to reach defendant. Roth v. Jackson, 99 N. J. Super. 546 (App. Div. 1968), certif. den. 52 N. J. 161 (1968). Young permitted service on defendant insurance carrier as valid substituted service upon defendant. In the instant case plaintiffs are seeking to apply both R. 4:4-4(e) and the Young case, substituting the Fund for the insurance carrier.

Upon independent research this court has -been unable to find statutory or case law to support that position.

There is no authority permitting the Fund to accept substituted personal service on a known but absent defendant. Defendants are known. The Fund is neither defendants’ agent nor authorized by appointment or by law to accept service. There is no contractual relationship between defendants and the Fund, as there was between defendant and the insurance carrier in the Young case.

It is for the above reasons that this motion is hereby denied. Plaintiffs’ remedies lie elsewhere.


author: Per Curiam.

text:
    BRYCE Q. CURRY, PLAINTIFF-RESPONDENT, v. SUSAN B. CURRY, DEFENDANT-APPELLANT.
    Superior Court of New Jersey Appellate Division
    Argued February 9, 1970
    Decided February 16, 1970.

      Before Judges Goidmann, Lewis and Matthews.

      Mr. Bobert J. Sussman argued the cause for appellant (Messrs. Bubin, Dolgoff & Sussman, attorneys).

      Mr. Clifford W. Starretb argued the cause for respondent (Messrs. Schenclc, Price, Smith & King, attorneys).
   Per Curiam.

Defendant wife appeals from a trial court order refusing to vacate a default judgment nisi obtained by plaintiff.

After a period of discord and mutual discontent, plaintiff left defendant in January 1967. In August 1968 he filed a suit for divorce on the ground of extreme cruelty, alleging that defendant drank excessively and was abusive and uncooperative. Defendant was properly served with process at her home address but failed to answer. The judgment nisi was entered February 18, 1969.

On April 16, 1969 defendant obtained an order to show cause why the judgment should not be vacated, supported by an affidavit substantially denying the allegations of cruelty. After a brief hearing the trial court refused to vacate the defarrlt judgment and lifted the temporary restraints it had previously granted.

Defendant first argues that the trial judge erred in refusing to vacate the nisi and in not giving her an opportunity to present a meritorious defense and counterclaim. Plaintiff counters by asserting that the denial was not an abuse of discretion and that defendant had, in any event, failed to establish sufficient cause to prevent the entry of final judgment.

Under R. R. 4:56-3 (now R. 4:43—3), a court is clearly empowered to set aside a default judgment for good cause shown, in accordance with the procedures of R. R. 4:62-2 (now R. 4:50-1, 2 and 3). Nevertheless, divorce actions are sui generis, Feickert v. Feickert, 98 N. J. Eg. 444, 448 (Ch. 1926), and the courts will generally be solicitous in protecting the interests of the respective parties.

The trial judge ruled that the judgment nisi would not be vacated because defendant had failed to show matrimonial misconduct, reconciliation, suppression of material facts, or collusion. It is apparent that the judge applied an inappropriate test, apparently inspired by the dissent in Loeb v. Loeb, 50 N. J. 343, 350-351 (1967). A distinction is to be drawn between an application for reopening a judgment nisi obtained by default and an order to show cause why a judgment nisi should not become absolute. In the latter case the defending party must show “sufficient cause” why the judgment should not become absolute — i. e., the circumstances listed in Loeb, above; and see 12 N. J. Practice (Herr, Marriage, Divorce and Separation) (3d ed. 1960), § 3374, at 543.

However, where the defaulting party merely wishes to interpose a defense, a different and more liberal test prevails. Vice-Chancellor Lewis, in Grant v. Grant, 84 N. J. Eq. 81 (Ch. 1914), said:

Since a judgment by default is not favored in divorce suits, the courts are especially inclined to interpose by opening or setting aside such a judgment and giving defendant a day in court so that the merits of his defence may be passed upon, under such terms and conditions as to the payment of costs and alimony as to the court may seem proper.
* * * s * * * *
It has been said that the rule that a default will not be opened to permit a defence to be interposed which is not meritorious is not vigorously applied in divorce suits.
* sjc * * :¡s * 4"
I think it is the universal practice to open a default in a divorce case, not only when a defence comes out in the evidence, but if, after the evidence is taken, the defendant desires to be heard. In my judgment a defendant who comes forward and says he desires to defend a case for divorce should be given an opportunity to do so at any moment before the chancellor’s signature is actually affixed to the final decree. The only limitation I can think of would be an apparent lack of good faith on the part of the applicant, which would be the case if it clearly appeared he did not intend to answer even after obtaining the right to do so; his attempt being merely for delay prompted by ulterior motive, (at 83-84)

But see Gabriel v. Gabriel, 86 N. J. Eq. 6 (Ch. 1916).

' In view of our determination, based on our review of the -record, that the default should be set aside and defendant permitted to answer and counterclaim, we find it unnecessary to pass upon the questionable ruling of the trial judge in ordering defendant to convey her interest in the marital residence held by the entirety.

Defendant will be allowed costs, to include a counsel fee of $400. Rosecrans v. Rosecrans, 104 N. J. Eq. 193 (E. & A. 1929); and sec R. R. 1:9-3, substantially revised in R. 2:11-4.

Reversed and remanded for further proceedings consistent with this opinion.


author: Leonard, J. A. D.

text:
    IN THE MATTER OF THE GUARDIANSHIP OF B. C. H. BUREAU OF CHILDREN’S SERVICES, PETITIONER-RESPONDENT, v. A. and M. H., DEFENDANTS-APPELLANTS.
    Superior Court of New Jersey Appellate Division
    Submitted January 19, 1970
    Decided February 17, 1970.

      . Before Judges Kilkenny, Labkecqtje and Leonakd.
    Somerset County Legal Services Corp., for appellants (Mr. Francis T. Gleason, Jr., on the brief).

      Mr. Arthur J. Sills, Attorney General, for respondent (Mr. Eugene T. TJrbanialo, Deputy Attorney General, of counsel).
   The opinion of the court was delivered by

Leonard, J. A. D.

This is a proceeding for guardianship instituted by the Bureau of Children’s Services (Bureau) pursuant to N. J. S. A. 30:4C-15 (c). Defendants, parents of the child, appeal from a judgment of commitment, dated May 2, 1969. This judgment committed the child to the guardianship of the Bureau, terminated the parental rights between the child and defendants for all purposes, and gave the right to the Bureau, as guardian, to consent to the adoption of the child.

Defendants were married on February 6, 1967 and the infant was born on February 7, 1968. Defendants, father and mother, are presently 22 and 20 jrears of age, respectively.

The events leading to this litigation began on or about March 17, 1968. On that day the parents took the child to the Raritan Yalley Hospital where it was discovered that he had fractures on both sides of his skull, the one on the left side pre-existing the one on the right. The parents gave several varying accounts of the injuries to Captain Kulpak of the Middlesex Borough police, who learned of the event from the county prosecutor’s office. At first, they stated that the child fell out of a chair to cause one fracture and then three weeks later fell against the side of the crib. Finally, the parents told him their present version that the mother had the child in her arms and as she bent over to get a bottle from the bottom shelf of the refrigerator, the baby’s head struck the side of the gas range. The father came into the room and asked what happened, became angry, and tried to hit his wife who dodged the blow and he hit the baby on the other side of the head.

Captain ICulpak contacted the Bureau. When the child was discharged from the hospital the Bureau, at the parents’ request, provided supervisory service in the parents’ home. Thereafter, suspecting child abuse, the Bureau prevailed upon the parents, on May 3, 1968, to sign a written authorization to place the child in foster care. Such a placement was made. However, on November 20, 1968, at the conclusion of a visitation at the Bureau office, defendants physically took the child with them and revoked their previous consent.

On the same date the Bureau filed a petition for guardianship under N. J. S. A. 30 :4C—15(c) and also an application under N. J. S. A. 30 :4C-17 for an interlocutory order of commitment. An appropriate interlocutory order was entered and the child was returned to a foster home where he has remained.

The trial commenced on January 2, 1969. Only Dr. James Starr els, Director of Psychotherapy at the New Jersey Psychiatric Institute, testified on that day. The matter was continued from time to time until May 2, 1969, when the remaining witnesses testified and the matter was concluded. The court awarded guardianship of the child to the Bureau. Defendants moved for a judgment notwithstanding the verdict, following the denial of which they appealed. Pending appeal the trial court entered a stay of that portion of the judgment which permitted the Bureau to place the child for adoption.

Defendants first contend that the adjournment of the final hearing for more than 90 days without their consent was contrary to the express provisions of N. J. S. A. 30 :4C-19. Therefore, they urge that the Bureau lost its power to proceed and the court ceased to have jurisdiction to terminate parental rights. N. J. S. A. 30:4C-19 provides, “Adjournment of any hearing on a petition filed under section fifteen hereof shall not exceed a total period of ninety days.”

The matter was adjourned from January 2, 1969, with the consent of defendants and the Bureau, because it appeared to the court that more time would be required for the hearing than had been originally planned. The matter was subsequently relisted for February 20, February 21 and March 14. It was finally heard on May 2, 1969, 120 days after the initial hearing. Although the record does not disclose that defendants consented to the last three adjournments, it does show that defendants’ trial counsel was advised of each and voiced no objection. As a matter of fact, defendants did not raise this point below until April 21, 1969 when they served notice upon the Bureau that they would move on May 2, 1969 (the matter having been previously set down for a hearing on that day) for a dismissal of the petition for the reason now asserted.

In any event, we hold that the words “shall not” as used in the above-cited statute are directory only rather than mandatory. See Jersey City v. State Board of Tax-Appeals, 133 N. J. L. 202, 210 (Sup. Ct. 1945), modified on other grounds. Jersey City v. Kelly, 134 N. J. L. 239, 240, (E. & A. 1946). Here, the court, in the first instance, had jurisdiction over the subject matter and the parties. The record does not indicate that the Bureau or defendants were responsible for the delay. We are certain that in using these words the Legislature did not intend that the mere failure of the court to observe the statutory time limit dissipated the Bureau’s power to proceed and the court’s jurisdiction. To so hold would open the door to miscarriages of justice. Id., at 210. Thus, this contention has no merit. Cf. Harvey v. Essex County Board of Freeholders, 30 N. J. 381, 391-393 (1959); In re Munson-Lied Co., 68 N. J. Super. 281, 287-288 (App. Div. 1961).

Defendants basically contend that the Bureau failed to establish by clear and convincing proof that one or both of the parents were unfit and that the unfitness was permanent. In evaluating the validity of this contention we must keep in mind that we are not reviewing an order for custody, which is always subject to modification in the light of future circumstances. Bather, we are concerned with an order for adoption which will permanently sever defendants’ parental rights. It is elementary that deeper and broader considerations are commanded in adoption proceedings than in eases where custody alone is the issue. In re N., 96 N. J. Super. 415, 423 (App. Div. 1967). Normally and logically, the blood relationship should be continued in the absence of parental consent unless and until the proposed adopters clearly and convincingly establish the unfitness of the opposing parent or some other reason that would justify a judicial finding that the child’s best interest would be served by the adoption. Such an action [adoption] is of the first magnitude and should be sanctioned only after serious consideration of the consequences. The child’s relationship with the parent is of such significance that all doubts are to be resolved against its destruction. Id., at 423-425.

The statute, N. J. S. A. 30:4C-1 et seq., 15, 15(c), under which the Bureau is proceeding, is to be administered strictly in accordance with the general principle that the preservation and strengthening of family life is a matter of public concern as being in the interest of the general welfare of the child. In re Cope, 106 N. J. Super. 336, 340 (App. Div. 1969). The rights of the child’s natural parents are essential factors for judicial consideration and the welfare of a child is inextricably bound up with the rights of the parents. Id., at 340.

The only expert testimony in the case was supplied by Dr. Starrels, who examined only the father on June 13, 1968. He testified on January 2, 1969 and based his opinion as to the father’s “long-standing and frequent aggressive and violent acts” on his examination of that date, certain clinical tests made at the time, and a report of the New Jersey Diagnostic Center, dated November 1965. The court rendered its opinion on May 2, 1969, some four months after the doctor testified and about 10-1/2 months after his examination.

Although Dr. Starrels, on direct examination, stated that the father’s condition did not hold much promise of “modification,” he did admit on cross-examination that it was possible that some change had taken place between 1965 and the date of his examination and even since then. He conceded that it would be possible for this man to improve if he would show a willingness and assume some responsibility for himself. The doctor also admitted that drugs might aid him and that the possible loss of his child might have a sobering effect on him. Miss Charlene Koenig, a caseworker for the Bureau, testified that defendants have been living in the same house since September 1968; they have had no marital difficulties since then and the marriage is “more stable now.”

In view of the time that expired between the date of the doctor’s examination and the court’s determination, and the possibility of improvement in the condition of the father in the interim, we are hesitant to sever his parental relationship with his son without first ascertaining his present condition. Consequently, inquiry should be made as to whether his eondiiton has improved since the last examination or whether it is probable that it will improve within a reasonable period of time. Only then can it be established that he currently remains or probably will remain a danger to the physical safety of his son. This information should be secured by having the father re-examined by Dr. Starrels or some other competent psychiatrist.

Turning to the mother, no expert testimony was offered as to her condition. Rather, the court relied upon a confidential report made by the Bureau which contained an opinion of one Dr. Michael Mendelson, based upon an alleged examination made on May 13, 1968, that she had a “passive-dependent personality.” She, too, should be examined by a competent psychiatrist.

The burden being upon the Bureau to establish the parents’ present unfitness, In re N., supra, 96 N. J. Super., at 424, we direct the Bureau to arrange for these examinations forthwith. Further, the Bureau shall make a current investigation of defendants’ home environment, their marital relationship and the father’s work record. Additionally, defendants may arrange for a timely examination by their own physician.

In view of the above-mandated examinations and investigations, we are of the opinion that this matter should be remanded to the trial court for a further hearing. Therefore, the trial court shall, as soon as practicable, confer with counsel in open court and, consistent with the time required for the completion of the examinations and investigation, fix a firm date for the remand hearing.

At the hearing the Bureau shall first offer its medical and lay testimony. Defendants may then offer pertinent rebuttal testimony. The right of cross-examination is preserved. Each counsel shall give his adversary a copy of his medical reports at least ten days in advance of the hearing.

Upon the completion of all testimony the trial court shall make and file supplemental, specific findings of the present condition of both parents, the probability of improvement of each, and the relationship of these findings to the critical issue of whether there presently exists or will exist in the reasonable future a danger to the physical safety of the child if he is allowed to remain with defendants.

We return to a consideration of the Bureau’s confidential report which the trial court utilized in reaching its conclusion as to the mother’s condition. This report was not received in evidence and defendants had no prior knowledge of it or its contents until the court referred thereto in its “Statement of Seasons For Determination.” We direct that the Bureau immediately supply defendants with a copy of this report. Additionally, at the remand hearing the report should be marked in evidence and the court and defendants should proceed with reference thereto in the manner set forth in In re Cope, supra, 106 N. J. Super., at 343-344.

Pending our final disposition, the stay granted by the trial court shall be continued.

Remanded to the trial court for a hearing in accordance herewith. Jurisdiction retained.


text:
    STATE IN THE INTEREST OF J. W. STATE OF NEW JERSEY, COMPLAINANT-RESPONDENT, v. J. W., JUVENILE-APPELLANT.
    Superior Court of New Jersey Appellate Division
    Argued February 9, 1970
    Decided February 16, 1970.

      Before Judges Goldwahit, Lewis and Matthews.

      Mr. Leonard A. Wolkstein, Assistant Deputy Public Defender, argued the cause for appellant (Mr. Stanley G. Van Ness, Public Defender, attorney).

      Mr. Arthur J. Timins, Assistant Prosecutor, argued the cause for respondent (Mr. Leo Kaplowitz, Union County Prosecutor, attorney).
   Per Curiam.

J. W. appeals through the Public Defender from the denial of his motion for a jury trial in the Juvenile and Domestic JMations Court.

J. W. was charged with several offenses amounting to attempted robbery, assault and battery, breaking and entering with intent to commit larceny, larceny, receiving stolen property, incorrigibility, and behavior endangering his morals, health and general welfare. Since he was only 12, the matter was brought before the Juvenile and Domestic Eelations Court without a jury, pursuant to N. J. S. A. 2A:4-35. His counsel unsuccessfully moved for a trial by jury as to all issues, and this appeal ensued.

Appellant contends that the denial of a jury trial constituted a deprivation of due process and a denial of equal protection of the laws. We affirm substantially for the reasons stated by Judge Kentz in 106 N. J. Super. 129 (J. & D. R. Ct. 1969), noting that since the coming down of his opinion the United States Supreme Court dismissed the appeal brought in DeBacker v. Brainard, 396 U. S. 28, 90 S. Ct. 163, 24 L. Ed. 2d 148 (November 12, 1969).

In Kent v. United States, 383 U. S. 541, 86 S. Ct. 1045, 16 L. Ed. 2d 84 (1966), the juvenile court had waived jurisdiction over a minor arrested on charges of rape, robbery and housebreaking, and remitted him for trial in the criminal courts. Defendant was convicted and on appeal argued that the detention, interrogation and hearing procedures of the juvenile authorities were constitutionally inadequate. In ruling that juvenile proceedings must comport with the rudimentary concepts of fairness, the court held:

* * * We do not mean by this to indicate that the hearing to be held must conform with all of The requirements of a criminal trial or even of the usual administrative hearing; but we do hold that the hearing must measure up to the essentials of due process and fair treatment, [at 562, 86 S. Ct., at 1057]

See also, State in the Interest of Carlo, 48 N. J. 224, 236 (1966).

The quoted language was repeated in In re Gault, 387 U. S. 1, 30, 87 S. Ct. 1428, 18 L. Ed. 2d 527 (1967). In acertaining “the precise impact of the due process requirement” upon juvenile proceedings, the court in that case went on to find that the specific essential rights to be accorded a juvenile are (1) adequate notice of the charges, (2) the right to counsel, (3) the right to confront and cross-examine witnesses, and (4) the right against self-incrimination. No mention was made of the right to jury trial claimed in the present case. And see Commonwealth v. Johnson, 211 Pa. Super. 62, 234 A. 2d 9 (Super. Ct. 1967), where the court said:

* ■* * It is inconceivable to us * * * that our highest Court attempted, through Gault, to undermine the basic philosophy, idealism and purposes of the juvenile court. We believe that the Supreme Court did not lose sight of the humane and beneficial elements of the juvenile court system; it did not ignore the need for each' judge to determine the action appropriate in each individual case; it did not intend to convert the juvenile court into a criminal court for young people. Rather, we find that the Supreme Court recognized that juvenile courts, while aeting- within the constitutional guarantees of clue process, must, nonetheless, retain their flexible procedures and techniques. The institution of jury trial in the juvenile court, while not materially contributing to the iact-finding function of the court, would seriously limit the court’s ability to function in this unique manner, and would result in a sterile procedure which could not vary to meet the needs of delinquent children. Accordingly, we reject appellant’s request for a jury trial, [at 78, 234 A. 2d, at 17]

We do not read Duncan v. Louisiana, 391 U. S. 145, 88 S. Ct. 1444, 20 L. Ed. 2d 491 (1968), reh. den. 392 U. S. 947, 88 S. Ct. 2270, 20 L. Ed. 2d 1412 (1968), as requiring a trial by jury in juvenile cases. Unlike the reliance on jury trials as part of the structure and style of the criminal process in this State, as in every other state — see marginal note 14 in Duncan — there has been no similar development of reliance on a jury system in the juvenile courts of New Jersey. N. J. S. A. 2A:4^3o reflects our practice of non-jury trials; the trial judge alone hears and determines all cases of children arising under the provisions of Title 2A, chapter 4, relating to the Juvenile and Domestic Kelations Court.

Affirmed.


author: Lynch, J. S. C.

text:
    HAROLD KAMENS, PLAINTIFF, v. ALFRED FORTUGNO ET AL., DEFENDANTS.
    Superior Court of New Jersey Chancery Division
    Decided January 30, 1970.

      Mr. Charles H. Hoens, Jr. appeared for plaintiff (Messrs. Lum, Biunno & Tomplcins, attorneys).

      Mr. Clive Gummis appeared for defendants Alfred Eortugno, Anna E. Camp, Adeline Eortugno, Connie Ruble, individually and as executrix, and Eortugno Realty Company (Messrs Gummis, Kent & Badin, attorneys).

      Messrs. Crummy, Gibbons & O’Neill, attorneys for defendant Connie Eortugno, individually and as executrix.

      Messrs. Warren, Chasan, Leyner and Holland, attorneys for defendant Anthony Fortugno, individually.
   Lynch, J. S. C.

This case, in which plaintiff sues for legal fees, is before the court after remand from the Appellate Division pursuant to its opinion dated June 20, 1969. Therein the court reversed the trial judge’s decision which had held that a written agreement, dated June 14, 1957, with reference to fees for services to be rendered in the United States Tax Court was unenforceable because made under duress. The trial court relegated plaintiff’s right to recover fees for such services to a letter agreement of September 22, 1954 under which that court found that there was owing to plaintiff $6,000 and judgment was entered in his favor in that amount. In reversing, the Appellate Division directed that fees calculated pursuant to the 1957 agreement he awarded to plaintiff. Such calculation thereunder produces a fee owing to plaintiff in the amount of $72,200. There remains the question herein considered as to whether interest will he allowed on that sum and, if so, from what date interest will run.

The agreements concern legal services to he rendered by plaintiff in the United States Tax Court with reference to federal tax difficulties confronting defendants and involving the tax years 1940 to 1952. Defendants had deposited $1,000,000 in cash with the I.R.S. to be applied toward any taxes and penalties which might subsequently have been found to be owing, and to he refunded to defendants to the extent not so applied. Eventually all claims by I.R.S. were settled on October 2, 1962, for the sum of $214,000. The balance of the $1,000,000 deposit — $786,000 — was refunded to defendants on July 30, 1965. Thereafter interest in the amount of $425,000 was later paid to defendants.

The principal dispute between the parties on remand here involves the question as to whether plaintiff shall recover interest on the principal of $72,200 now found to be due under the 1957 agreement and, if so, the period of time for which interest shall be allowed.

Defendants’ basic argument against allowance of interest is that it does not follow as a matter of law. They argue that it should not be allowed where there is a “bona fide dispute as to the validity of the claim”; that their contest of plaintiff’s claim herein was bona fide and reasonable, as evidenced by the judgment of the trial court in finding the 1957 agreement unenforceable, and that the “equities” should preclude an award of interest. Defendants assert that at least until the time of the Appellate Division decision on June 20, 1969, they did not know the amount which was owed to plaintiff, and until the amount legally due was finalty ascertained by that decision they should not be considered in default so as to be liable for interest.

Plaintiff contends that his claim is a liquidated one; that it became due at the time the fee was earned, namely, the date of the settlement of the Government’s claim on October 2, 1962, and that interest on the principal sum owed should run from that date.

In the case of Stout v. Sutphen, 132 N. J. Eq. 583 (Ch. 1943), Vice-Chancellor Jajme stated the general rule with respect to payment of interest as follows:

Broadly stated, interest lias been allowed by the courts of our State either by way of damages for the detention of a fund, or by way of profit earned or advantage attained. In the absence of a definitely controlling precedent, courts of equity are free to decide all questions pertaining to the allowance of interest according to the “plainest and simplest considerations of justice and fair dealing” in the given case [at 590]

It is also true that considerations of “fault” for nonpayment of a debt are indulged to influence the rule with respect to payment of interest. Thus, with respect to unliquidated damages interest is not recoverable except after judgment because the person who is liable for the debt does not know the sum he owes and cannot be in default until the amount he owes is determined by judgment. 47 C. J. S. Interest § 19, at p. 28. In Kearny v. New Jersey Suburban Water Co., 110 N. J. Eq. 214 (Ch. 1932), the municipality had been ordered to pay the water company arrearages for water supplied. The company then sought interest on the arrearages. Vice-Chancellor Baekes said:

Interest, however, would not have been warranted unless the complainants were at fault and they would have been in default only if the amount due for water could have been determined by computation based upon established market values or other generally recognized standard.

Holding that there was no measure of value or method to determine the amount due as arrearages, the court denied interest to the water company on the arrearages although allowing reimbursement to the company for interest that it had to pay for money borrowed during the course of the litigation.

While we recognize the foregoing rule with respect to payment of interest on unliquidated claims, it is also true that “Interest is allowed where the damages are readily ascertainable.” Bachman Choc. Mfg. GC. v. Lehigh Wrhse. & T. Co., 1 N. J. 239 (1949). This rule likewise invokes considerations of “fault” on the part of the debtor, for the reason that since he knows what is due or could easily ascertain the amount, he could have stopped the running of interest by tendering payment thereof. 47 C. J. S. Interest § 19(b), at p. 30.

Defendants argue that “where either the amount in dispute is unliquidated or there is a bona fide dispute as to the validity of a claim the courts need not, and generally will not, allow interest.” (Emphasis defendants’). In support thereof they cite the cases of Jardine Estates v. Donna Brook Corp., 42 N. J. Super. 332 (App. Div. 1956); Deerhurst Estates v. Meadow Homes, Inc., 64 N. J. Super. 134, 155 (App Div. 1960), certif. den. 34 N. J. 66 (1961); Southern Painting Co. of Tenn. v. United States, 222 F. 2d 431, 435 (10 Cir. 1955); Watson Lumber Co. v. Guennewig, 79 Ill. App. 2d 377, 226 N. E. 2d 270 (Ct. App. 1967); Mid-South Engineering Co. v. Buchanan, 440 S. W. 2d 600, 610 (Tenn. Ct. App. 1967); Hunter v. Wilson, 147 Colo. 36, 362 P. 2d 553 (Sup. Ct. 1961); Baker County v. Huntington, 48 Or. 593, 89 P. 144 (Sup. Ct. 1907).

An examination of the eases cited by defendants indicates that all of them involve unliquidated damages or cases where, for other reasons, the debtor was unable to determine the amount actually owed until after judgment. In every instance the amount due was in dispute.

But defendants argue in this case that they “did not know” the amount owed to plaintiff until after the determination by the decision of the Appellate Division in sustaining the 1957 agreement and the subsequent denial of certification by the Supreme Court. Rhetorically, they ask how they could “know” that $72,200 was due to plaintiff until after that decision, especially since up to that time the judgment of the trial court had denied that damages were owing to plaintiff under the 1957 agreement and had allowed damages in the amount of only $6,000 pursuant to the 1954 agreement. The argument is specious. Defendants are charged with knowledge of the only-obligation which the courts have now finally imposed upon them, namely, the 1957 agreement, even though the prior trial court’s judgment, now abortive, would have lifted that obligation from them. The decision of the Appellate Division established that the defendants were liable under the 1957 agreement. The trial court’s judgment now has no meaning. However much we may respect it and its reasoning, it is now held to have been in error and serves as no monument to determine what was owing by defendants to plaintiff.

A judgment in favor of a debtor, if later reversed, does not toll the running of interest on a liquidated claim from the time it became due. Small v. Schuncke, 42 N. J. 407 (1964). That case involved a dispute between two insurance companies, Pennsylvania Threshermen & Farmers’ Mutual Casualty Insurance Company (Pennsylvania) and Liberty Mutual Insurance Company (Liberty), as to coverage for liability arising out of an automobile accident. After several days of trial of the negligence suit the two companies agreed that the case should be settled by payment to the claimant of $20,000, leaving for future disposition the question of coverage as between the companies. Pursuant to this arrangement Liberty paid the $20,000 on December 16, 1958 and the suit to determine coverages between the companies proceeded. On February 27, 1962 the Superior Court, Law Division, granted judgment holding Pennsylvania liable for coverage and ordering it to pay to Liberty $20,000 plus 6% interest from December 16, 1958, with costs. On July 18, 1963 the Appellate Division reversed, holding that neither Liberty nor Pennsylvania was liable for coverage. On June 1, 1964 the Supreme Court reversed the Appellate Division, reinstated the trial court’s judgment holding Pennsylvania liable to Liberty for the $20,000, and allowed Liberty interest from the date it made the payment of December 16, 1958.

It will be seen that in Small, during the period from July-18, 1963 (when the Appellate Division held Pennsylvania not liable) to June 1, 1964 (when the Supreme Court reversed), Pennsylvania was under the umbrella of a favorable decision, just as defendants were here from the date of the trial judge’s opinion of March 3, 1968 to the date of reversal by the Appellate Division on June 19, 1969. Nevertheless, the Supreme Court in Small reinstated the running of interest to the original date set by the trial court and continued the running thereof through all the period when, after reversal by the Appellate Division, there appeared to be no liability on the part of Pennsylvania. The period of apparent triumph on the part of Pennsylvania after that reversal did not suspend the running of interest for that period of time, nor did the reversal by the Appellate Division endow Pennsylvania’s contest of Liberty’s claim with the virtue of a “bona fide dispute” so as to excuse it from payment of interest during that period. In Small the Supreme Court said:

“Interest is in contemplation of law damages for the illegal detention of a legitimate claim or indebtedness. Fidelity Mut. Life Ins. Co. v. Wilkes-Barre, etc., Co., 98 N. J. L. 507, 510 (E. & A. 1923). And in practice a court should charge and allow interest in accordance with principles of equity in order to accomplish justice in each particular case. Jardine Estates, Inc. v. Donna Brook Corp., 42 W. J. Super. 332, 340 (App. Div. 1956). The amount of the settlement paid by Liberty is eoncededly fair and reasonable, and in accordance with our holding, Pennsylvania was obligated to pay it on December 16, 195S. Liberty has been deprived of the use of this liquidated amount since that time, and Pennsylvania, on the other hand, has had the use of it. Moreover, Liberty has been put to the expense and inconvenience of defending Schuncke and litigating this action to establish Pennsylvania’s liability under its policy. We find no error in the trial court’s allowance of interest. See United Delineries, Inc. v. Norwich, etc., Ltd., 133 N. J. L. 393 (E. & A. 1945).
The judgment of the Appellate Division is reversed, and the judgment of the trial court is reinstated. [42 N. J., at 415, 416; emphasis added]

See also, Fassbinder v. Pennsylvania R. R. Co., 233 F. Supp. 574 (W. D. Pa. 1964).

So here, “in accordance with” the holding of the Appellate Division, plaintiff is owed fees in the amount of $72,200, calculated under the 1957 agreement. Interest is to be allowed on that sum to the same extent as though the trial court’s decision voiding said agreement had never been rendered.

Defendants further urge that because of the trial judge’s decision in their favor, it must be recognized that there was reasonable grounds for their contest of plaintiff’s claim under the 1957 agreement, and their disputing of the claim was in good faith and should toll the payment of interest. But interest on a claim, the amount of which is certain, is not avoided by disputation in good faith over legal liability. Restatement, Contracts, §331 (d), at 544. A party’s mistaken legal view that he had a valid defense to a claim does not toll the obligation to pay interest from the date that claim is found to be due. Jos. L. Muscarelle, Inc. v. Central Iron Mfg. Co., 319 F. 2d 715, 719 (3 Cir. 1967). See also, Union Deliveries, Inc. v. Norwich, Ltd., 133 N. J. L. 393 (E. & A. 1945). Nor does a mistaken view of the law toll a normal obligation to pay interest from the due date. Thus, in Morton v. Godfrey L. Cabot, Inc., 134 W. Va. 55, 63 S. E. 2d 861 (Sup. Ct. App. 1949), defendant withheld payments which it had the right to do under an apparently valid statute. That statute was later held unconstitutional and plaintiff sought recovery of the payments with interest. Defendant contended it was not liable for the interest because it acted in good faith in withholding the payments in accordance with the statute. It was held that even though defendant acted in good faith pursuant to the statute, it nevertheless owed interest to the plaintiff from the due dates until paid. So here, even though it may be said that defendants disputed plaintiff’s claim in good faith, interest is nevertheless due on the debt now found to be due.

There remains the question as to the date at which interest shall begin to run. Plaintiff argues that since the settlement with T.E.S. occurred on October 2, 1962, that was the date when he earned his fee under the 1951 agreement and interest should run from that date.

Interest is payable on a liquidated obligation from the due date. Mahoney v. Minsky, 39 N. J. 208 (1963) ; Restatement, Contracts, § 331, at 542; 41 C. J. S. Interest § 26, at p. 38. But any determination in the awarding of interest is subject to the overriding consideration that it should be allowed in accordance with principles of equity in order to accomplish justice in each particular case. Small v. Schuncke, supra, at 414, 415. Since interest is awarded as either damages for detention of a fund or by way of profit earned or advantage attained {ibid.), the equities demand consideration of the period of time defendants withhold the payment of the debt from plaintiff after they received the avails of his services.

It may be said that in the contractual sense plaintiff actually earned his fee at the date of the settlement in the Tax Court, namely, October 2, 1962. But it was not until July 30, 1965 that defendants gained the avails of that settlement, namely, the refunding to them of $786,000, the balance remaining of their *1,000,000 deposit with I.R.S. after deducting the amount of the settlement in the sum of $214,000. Thus, from October 2, 1962 to July 30, 1965 defendants earned no profit and gained no advantage from the settlement agreement. Since that was so, it would be inequitable to assess interest as damages for detention of plaintiff’s fee. However, from the time they received their refund of the principal balance remaining after deduction of the settlement figure, namely, on July 30, 1965, defendants had the use of the money and presumably earned such interest, dividends or other benefits therefrom as were available. Likewise, from that date plaintiff was deprived of the use of the money which he had earned by the settlement agreement. Therefore, a judgment will be entered awarding interest at 6% on the sum of $72,200 from July 30, 1965.

Defendants also seek a credit against the amount due to plaintiff represented by that paragraph of the trial court’s judgment which awarded to plaintiff the sum of $7,500 for services performed in the United States Tax Court in seeking to recover interest on so much of the $1,000,000 deposit as exceeded the settlement figure of $214,000. Defendants argue that such credit should be allowed to them because, in their view, the services rendered came within the terms of the June 14, 1957 agreement.

However, the trial judge expressly held that the services for which he awarded the $7,500 were not covered by the June 14, 1957 agreement. Indeed, since he held the latter void and imenforceable, he would not have awarded judgment to plaintiff for the services represented by the $7,500. In any event, defendants did not file a cross-appeal from the judgment for $7,500. To allow a credit now for that amount would nullify the judgment which stands unassailed. Accordingly, defendants’ prayer to obtain credit for said sum is not properly before the court and therefore is denied. Liberty Title & Trust Co. v. Plews, 6 N. J. 28 (1950).

As to the form of the judgment, I have provided that the judgment entered herein shall not affect the third, fourth or fifth ordering paragraphs of the trial court’s judgment of July 8, 1968, which were not involved in the appeal to the Appellate Division. Thus, those paragraphs wherein damages were awarded to plaintiff respectively in the amounts of $7,500 (without interest), $1,500 (with interest from February 1, 1965) and $13,066.31 (with interest from December 1, 1966) remain in full force and effect. I have also provided that the judgment in favor of plaintiff here entered in the sum of $72,200 plus interest from July 30, 1965 shall be paid by defendants Alfred Fortugno, Anne F. Camp, Adeline Fortugno, Mollie Fortugno and Anthony Fortugno, individually, Connie Euble, individually, Connie Fortugno, individually, and as executrix of the estate of Daniel Fortugno, deceased, and Anthony Fortugno and Connie Euble, as executors of the estates of Silvia Fortugno, deceased, and Paul Fortugno, deceased, pro rata and not jointly, together with costs of suit to be taxed. Since defendant Fortugno Eealty Company was not a signatory to the 1957 agreement, there will be a dismissal as to that defendant.

       By this is meant services in the Tax Court in contesting the claims of the Internal Revenue Service (hereafter I.R.S.) against defendants for deficiencies, interest and penalties, as distinguished from other services related to recovery by defendants of interest on money held on deposit by I.R.S. as security for payment of such deficiencies, etc. See infra.

       The 1957 agreement which was sustained by the Appellate Division provided a sliding scale by which fees due to plaintiff were to be determined. The fee to be paid in the event of settlement with I.R.S. depended upon the amount of the settlement. Applying the scale to the settlement agreed upon in the amount of $214,000, plaintiff is entitled to the total fee of $72,200 calculated as follows:

        Settlement Fee

      At $500,000 Plaintiff would be entitled to:
      $20.000 (par. 2 of agreement)
      At a sum between 15,000 (par. 3 of agreement)
      $400,000 and $500,000
      At $214,000 (20% of savings 37,200 (par. 4 of agreement)
      below $400,000, i. e., $186,000)
      Total fee $72,200


author: Mintz, J. S. C.

text:
    VICTORIA MEGARO IERROBINO, PLAINTIFF, v. LEWIS D. MEGARO, DONALD MEGARO, INDIVIDUALLY AND AS GUARDIAN AD LITEM FOR DENNIS MEGARO AND VICTORIA MEGARO, DONNA MEGARO PERRUSO, DIANE MEGARO AND JAMES MEGARO, DEFENDANTS.
    Superior Court of New Jersey Chancery Division
    Decided February 4, 1970.

      Mr. Letvis L. Erieger appeared for plaintiff and defendants Donna Megaro Perruso, Diane Megaro and James Megaro (Messrs. Lasser and Erieger, attorneys).

      Mr. Richard A. Walsh attorney for defendant Lewis D. Megaro.

      Mr. Paul Alongi appeared for defendant Donald Megaro, individually and as guardian ad litem for Dennis Megaro and Victoria Megaro (Messrs. Alongi & Bregg, attorneys).
   Mintz, J. S. C.

Plaintiff, co-executor and co-trustee under the will of Donato Megaro, deceased, seeks a construction of the will and an accounting. Although the right to partition was not included as a legal issue in the pretrial order, it was presented in the amended complaint, in plaintiff’s factual contentions in the pretrial order, and was argued at the trial. In view thereof, the pretrial order will be deemed amended to include such issue. B. 4:9-2. At the conclusion of the trial an accounting was directed to be filed by plaintiff and defendant Lewis D. Megaro as co-executors and co-trustees. Decision was reserved with respect to the matters hereinafter determined.

The testator executed his will on January 25, 1952. He died on August 18, 1965 and his will was admitted to probate on October 18, 1965. The will was prepared by Martin Simon, a New Jersey attorney engaged in the general practice of law. At the time of its execution testator’s wife Nevicella was alive, but Ms son James Megaro, Sr. had already died. Nevicella pre-deceased the testator by several years. But notwithstanding this fact, testator never revised his will. At the time of Ms death he was survived by his daughter, plaintiff Victoria Megaro Ierrobino, his son, defendant Lewis D. Megaro, who is married and has three children, and by three children of his deceased son James Megaro, Sr., all of whom are named defendants.

[The court here reviewed the provisions of the will and determined that plaintiff and defendant Lewis D. Megaro each acquired an undivided one-third interest in fee in all of testator’s realty and an undivided one-third absolute ownership in his personalty. The remaining undivided one-third interest in the personalty and realty passed to plaintiff and defendant Lewis D. Megaro in trust to use the whole or any part thereof for the benefit of any of the issue of testator which they may, in their sole and unqualified discretion, deem advisable. The term “issue” was held to include the children of testator’s deceased son James. If the trust property is not distributed in full by January 1, 1977, the trustees are to divide the trust property remaining in their hands equally between themselves or turn the same over to the survivor, thereby terminating the trust.]

Testator at the time of his death owned seven parcels of realty and four cemetery plots. The realty consists of multi-family dwellings, commercial properties consisting of stores and apartments, and vacant lots. Since the respective improved properties are not physically divisible and the vacant lots realistically are not physically partible, plaintiff contends that she is entitled to a partition through sale. N. J. S. A. 2A:56—2. Defendant Lewis D. Megaro opposes the demand for partition, contending that testator indicated his intention in paragraphs Fourth (e) and Fifth (a) that his realty not be sold until his youngest grandchild living at the time of his death attains the age of 21 or until January 1, 1985, which ever event first occurs.

I am satisfied from a reading of the will and the oral testimony presented that testator was opposed to the sale of his real estate. He was advised by Simon that he could not restrain alienation, so he endeavored to limit the term of the restraint in the hope that such a limited restriction might be valid. But while the testator’s intent is plainly expressed, it is settled law that an unlimited power of alienation is an inseparable incident of an estate in fee simple and that such estate cannot be restrained by any provision or condition whatever. The reasonableness of a restraint is immaterial. Any restraint is invalid even, if limited in duration, since such attempted restriction is repugnant to the nature of a fee simple. White v. White, 105 N. J. Super. 184, 190-192 (Ch. Div. 1969); Krueger v. Frederick, 88 N. J. Eq. 258 (Ch. 1917); Wrubel Realty Corp. v. Wrubel, 138 N. J. Eq. 466 (Ch. 1946). This State adheres to the policy of favoring alienation of property and its ready marketability. Highway Holding Co. v. Yara Engineering Corp., 22 N. J. 119, 133 (1956). However, it is equally clear that reasonable restraints against the alienation of trust property are not against public policy and are valid. 4 Restatement, Property, § 405 (1944) : 6 N. J. Practice (Clapp, Wills and, Administration), § 667, at 221 (1962). A testator may require the trustees to retain the original trust property in his hands for the duration of the trust. 6 American Law of Property, § 26.13, at 427 (1952).

Testator’s direction that his properties not be sold for a certain period of time is a valid restraint upon the undivided one-third of all the properties held in trust, but is invalid as to the undivided two-thirds interest devised in fee. His intent, to the extent it is consistent with the law, should be effectuated. However, it is unrealistic to order a sale of the undivided two-thirds fee interest in each property. A sale of such interests would not attract bidders, and the interested parties would be severely prejudiced by any such disposition of the realty.

There is considerable authority in other jurisdictions holding that where the properties sought to be partitioned consist of separate and distinct parcels, the whole may be treated as one estate for the purpose of making division and allotment where no injustice results. Thus, one tract may be allotted to one party and another to another where the values are properly proportionate to their respective interests, or the share to which a party is entitled may be set off to him entirely out of one of several tracts if the rights of the other parties are not thereby prejudiced.

In Von Herberg v. Von Herberg, 6 Wash. 2d 100, 106 P. 2d 737 (Sup. Ct. 1940), the court, in partitioning property composed of several separate parts owned in common by a divorced couple, stated that

* * the parts may be considered as comprising one composite estate, a partition of which may be effected by the award of separate parcels, rather than by a partition in kind of every parr, when such a division is to the best interest of the parties. [106 P. 2d, at 747]

In allotting the whole of some properties to the husband and the whole of others to the wife, the court attempted to make an equitable division by taking into consideration the husband’s outstanding qualifications as a businessman. He was given the encumbered property while the wife was given unencumbered property.

In Kirk v. Maynard, 298 Ky. 576, 183 S. W. 2d 547 (Ct. App. 1944), the ten tracts of land involved ranged in size from 26 acres to approximately 1,000 acres. Plaintiffs were the heirs of one who owned the tracts in common with defendant. Plaintiffs, in the partition proceeding, were transferred outright the whole of eight parcels. Defendant was given two parcels. The value of each share was equal, and the fact that defendant owned lands adjacent to his tracts was considered in determining which tenant would get which tract. The court rejected plaintiffs’ claim that they were entitled to have each of the ten tracts partitioned. To the same effect, see Hagar v. Wiswall, 27 Mass. 152 (Sup. Jud. Ct. 1830); Perry v. Jones, 48 Okl. 362, 150 P. 168 (Sup. Ct. 1915); Slannard v. Sperry, 56 Conn. 541, 16 A. 261 (Sup. Ct. Err. 1889); Claude v. Handy, 83 Md. 225, 34 A. 532 (Ct. App. 1896); 68 C. J. S. Partition § 156 e, at 261—262.

This principle was recognized in Hall v. Piddock, 21 N. J. Eq. 311 (Ch. 1871), where the court stated:

The peculiarities of an equitable partition are, that such part of the land as may be more advantageous to any party on account of its proximity to bis other land, or for any other reason, will be directed to be sot off to him if it can be done without injury to the others; that when the lands are in several parcels each joint owner is not entitled to a share of each parcel, but only to his equal share in the whole; that where a partition exactly equal cannot be made without injury, a gross sum or yearly rent may be directed to be paid for owelty or equality of partition, by one whose share is too large to others whose shares are too small; * * *. [at 314]

See also Brookfield v. Williams, 2 N. J. Eq. 341, 345 (Ch. 1840).

Hall v. Piddock and Brookfield v. Williams, supra, recognize the principle of “owelty” wherein if one cotenant receives property with a value greater than his proportionate share, he will owe to the other cotenant an amount of money which would equalize the partition. See also Hay v. Estell, 19 N. J. Eq. 133 (Ch. 1868), and 68 C. J. S. Partition § 142 a, at 232, where the author states:

Where property to be partitioned is of such a character that it cannot be divided equally without impairing the value of all portions, and a sale would likewise be disadvantageous, the court may divide the property into shares of unequal value, and correct the inequality by requiring an amount to be paid or secured by the cotenants receiving allotments in excess of their shares to those receiving less.

Accord, R. R. Thompson Estate Co. v. Kamm, 107 Or. 61, 213 P. 417, 28 A. L. R. 722 (Sup. Ct. 1923); Von Herberg v. Von Herberg, supra.

Under all the circumstances here presented the partition sought by plaintiff will be effected by an allotment of a separate parcel or parcels of realty to her to the extent of one-third of the total value of all testator’s properties. The realty so received by plaintiff will be freed from any restraint of alienation. If plaintiff receives property greater than her proportionate share, she will be required to pay or to satisfactorily secure the payment to her cotenants of such excess sum. If she receives property of less value than her proportionate share, her cotenants will be required to satisfy the deficit.

The parties will endeavor to agree upon an equitable allotment to the plaintiff and report such agreement to the court. If no such agreement is presented by March 6, 1970, the allocation will be made by the court. An early date for a hearing will be fixed, at which time the parties may present expert testimony respecting valuations of the properties, and such other testimony as may be deemed pertinent in the resolution of this issue. Perhaps the court could appoint one or more persons as commissioners to ascertain and report the property or properties to be allotted to plaintiff. B. 4:63-1. However, it appears expedient under the unusual circumstances in the instant situation for the court to effectuate the partition in the manner indicated.

A form of judgment should be submitted in accordance with B. 4:42-1.