author: Kole, J. C. C.,

text:
    BRIGHTON CONSTRUCTION, INC., ET ALS., PLAINTIFFS, v. L & J ENTERPRISES, INC., DEFENDANT AND THIRD-PARTY PLAINTIFF, v. BENJ. GRUNAUER CO., INC., THIRD-PARTY DEFENDANT.
    Superior Court of New Jersey Chancery Division
    Decided October 18, 1972

      Mr. Richard, K. Rosenberg for plaintiffs (Messrs. Heller and Laiks, attorneys).

      Mr. Robert B. Hermes for defendant and third-party plaintiff.

      Mr. Milton C. Yarrow for third-party defendant.
   Kole, J. C. C.,

Temporarily Assigned. The basis of this action is a controversy surrounding the title to unimproved land located in the City of Paterson between 9th Avenue and East 29th Street. The land runs along the easterly side of what is now Route 20 for a distance of about 440 feet and along the westerly bank of the Passaic River for a distance of approximately 495 feet and varies in depth between these boundaries from 35 to 175 feet, more or less. Viewed from a non-title perspective^ the premises in question (hereinafter “the property”) appear to be lands remaining in the area involved between Route 30 and the river after Route 30 was constructed.

Plaintiff Brighton Construction, Inc., contracted on August 3, 1971 with Benj. Grunauer Co. Inc. (hereinafter “Benj. Grunauer Oo.”) to purchase the property for $7,500 and recorded the contract. A title search thereafter uncovered an alleged outstanding interest in the property, a quitclaim deed of January 8, 1969, from the City of Paterson to Tenth Avenue Citizens League (hereinafter “League”) which, in turn, on September 30, 1970 had conveyed its interest to defendant L & J Enterprises, Inc. The latter now disputes plaintiff’s title (actually that of plaintiff’s vendor). Plaintiff demands judgment declaring that defendant has no interest in the property and that Benj. Grunauer Oo. has good title as against defendant’s claim, and requiring defendant to execute an instrument removing any cloud from plaintiff’s title.

Defendant, though admitting that title to the property was once held by The Benj. Grunauer Incorporated (hereinafter “Benj. Grunauer, Inc.”), a corporation in dissolution, denies that Benj. Grunauer Co., plaintiff’s vendor, has or has ever-had title. Defendant further notes that the property was the subject of a complaint to quiet title in this court resulting in a judgment entered in favor of the League, defendant’s alleged predecessor in title, on September 4, 1970 (Docket C 3566-68). Defendant has filed a counterclaim charging that plaintiff negligently claimed title to the property and that plaintiff’s filing of the contract caused the cancellation of a contract that defendant had to sell the property for $58,000 to 30 Wildwood Corporation. Defendant demands judgment directing plaintiff to withdraw the contract from the record, divesting plaintiff of any interest in the property, and awarding compensatory and punitive damages, counsel fees and costs.

Leveling demands for judgment similar to those made in its counterclaim, defendant has also filed a third-party complaint against plaintiff’s vendor, Benj. Grunauer Co. In reply, the latter third-party defendant states that it has succeeded to the interests of Benj. Grunauer, Inc. and thus has title to the property; and that Betty Marke and Louise Syracuse, sole stockholders, officers and directors of Benj. Grunauer Co., as residuary legatees of the estate of William Grunauer, deceased, the last surviving stockholder, registered agent and trustee in dissolution of Benj. Grunauer, Inc., are entitled to control the disposition of the property.

Finally, third-party defendant Benj. Grunauer Co. has filed a claim against defendant demanding judgment vacating the aforementioned quiet title judgment in favor of the League, defendant’s predecessor in title; voiding defendant’s deed to the property; confirming that the interests of Benj. Grunauer, Inc., including that in the property, are now held by Betty Marke and Louise Syracuse, as the residuary legatees of William Grunauer, and declaring that a deed conveying the property by Betty Marke and Louise Syracuse to plaintiff be a good deed, free from any lien or encumbrance occasioned by the judgment quieting title in the League.

Motions for summary judgment were made by all the parties and limited testimony was taken in connection therewith. The parties have acquiesced in the court’s determination of the issue of title to the premises in question based on the affidavits and oral and documentary proofs presented.

I have considered the proofs and the law and make the findings predicated thereon which follow.

Benjamin Grunauer acquired title to 15% acres on the west bank of the Passaic River in Paterson on September 12, 1903. The lands ran to the Passaic River. (Second Tract, Deed Book E 16, p. 332). A map of these lands, “Map of PTew Eastside Property of B. Grunauer, Paterson, PT. J., Scale 80' per,inch, Wm. Perguson & Son, Surveyors, April 1904,” was filed with the register of deeds on Pebruary 17, 1908 (Map. PTo. 366). This map (hereinafter “the- map”) delineates and numbers lots and streets, including a street, “Boulevard,” which appears to run on or near the easterly margin of the 15% acres which bound the Passaic River. Prior to this map the ‘Tiouvelard” did not exist as a street or proposed street.

On May 1, 1918 Benjamin Grunauer and his wife conveyed to Benj. Grunauer, Inc. the 153/4-acre tract described in the 1903 deed (Deed Book B 27, p. 280). This conveyance in fact included those lots adjacent to the westerly edge of Boulevard (Lots Nos. 243, 245, 247, 249, 251, 253, 255, 257, 259, 261, 263, 265, 267 and 469) as shown on the map, but did not specifically refer to the map.

There is no disagreement among the parties to this action up to this point. But plaintiffs and third-party defendant on the one hand, and defendant on the other, visualize different chains of title to the property after 1918. By deed of October 31, 1919 (Deed Book A 28, p. 52), Benj. Grunauer, Inc. conveyed to Louis H. Grunauer by a metes and bounds description, the lots adjacent to the westerly boundary of the Boulevard. The description also refers to the lot numbers in accordance with the map.

Defendant contends that Boulevard, as dedicated on the map, is a marginal highway extending to the banks of the Passaic River — i. e., a road laid along the extremity of Benjamin Grunauer’s property as shown on the map — and that the property, between the easterly boundary of Boulevard (State Boute 20) as now constructed and the westerly banks of the Passaic Si ver, was in fact a part of the land dedicated as a marginal highway and is still so dedicated, even though it is not now being used as part of such highway. Since, defendant’s argument continues, abutting lot owners who take in a chain of title leading back to the dedicator of a marginal highway also take the fee interest in the entire adjoining highway or street, title to the property was conveyed out of Benj. Grunauer, Inc. by its deed of October 31, 1919 to Louis Grunauer transferring the abutting lots by reference to the map.

These lots adjacent to and forming the western boundary of the Boulevard eventually passed from Louis H. Grunauer, through several conveyances, to Rhoda Realty Co., Inc., by deed of December 13, 1929 (Deed Book V 35, p. 218). Bhoda Bealty Co., Inc., by deed of March 3, 1931, conveyed to the State of New Jersey, in connection with its acquisition of land for the construction of Boute 20, easterly sections of the aforementioned lots “together with all right, title and interest that the grantor herein may have in and to the Boulevard and Ninth Avenue.” (Deed Book L 36, p. 12).

Thus, according to defendant’s version, the State of New Jersey had title to the property, it being part of the land dedicated as Boulevard and the State having acquired the abutting lot owners’ fee interest in the area dedicated as Boulevard. Defendant’s predecessor in title, The League, a New Jersey corporation not for profit, on January 8, 1969, through its attorney Piarvey Goldberg, Esq., obtained a quitclaim deed from the City of Paterson (Deed Book I 87, p. 187). The League thereafter instituted the aforementioned quiet title action and obtained the September 4, 1970 judgment quieting title to the property against a number of parties, including the State of New Jersey. The rights of the League to the property were obtained by defendant L & J Enterprises, Inc., pursuant to a September 30, 1970 deed for $200 (Deed Book U 89, p. 388). The aforementioned Harvey Goldberg is president of defendant, which is a business corporation.

Plaintiffs and third-party defendant agree that the October 31, 1919 deed by Benj. Grunauer, Inc. conveyed all of that corporation’s interest in the previously mentioned lots abutting Boulevard and that the lots were conveyed pursuant to the map. But they contend that when Benjamin Grunauer, Inc. made the 1919 conveyance of lots by reference to the map, it dedicated, not a marginal road, but a road having adjacent to it lands on the easterly side of the Boulevard which it retained—i. e., that the property is not part of the lands dedicated as Boulevard, but lies between the eastern boundary of the dedicated Boulevard and the western banks of the Passaic River; and that third-party defendant Benjamin Grunauer Co., through Benj. Grunauer, Inc., a New Jersey Corporation in dissolution since October 30, 1919, and its successors in interest, Marke and Syracuse, retain title and the authority to convey title to the property.

Defendant’s claimed interest in the property stemming from the quitclaim deed given by the city and the judgment quieting title in favor of the League, defendant’s predecessor, thus far has not been measured against that of plaintiffs and third-party defendant Benjamin Grunauer Co. Though evidence has been presented suggesting that Harvey Goldberg, attorney for the League and president of defendant, knew of the possible alleged interest of third-party defendant in the property, the latter was not joined as a defendant in the quiet title action. Accordingly, although the nature of defendant’s title established by that action may be binding and conclusive upon the parties therein, such as the State of New Jersey, it is not binding upon nonparties, such as the present plaintiffs and third-party defendant. N. J. S. A. 2A:62-6, 7; O’Neill v. State Hwy. Dept., 50 N. J. 307, 316 (1967). See Elmore Development Co. v. Binder, 97 N. J. Eq. 126, 131 (Ch. 1935), aff’d El Mora Development Corp. v. Horwitz, 98 N. J. Eq. 690 (E. & A. 1925).

The court has furnished counsel with the State Highway Department file relating to the quiet title action, which indicates why the State, although initially filing an answer denying the League’s claim, ultimately did not defend, and judgment in that action was entered unopposed. Moreover, it appears far from clear whether defendant or its predecessor in title, the League, ever had any title or possessory interest at all in the property. Some such interest in the property in the League was a necessary prerequisite to the judgment quieting title. Bridgewater Leasing Corp. v. Wollman, 94 N. J. Super. 28, 36-37 (App. Div. 1967).

Defendant’s own version of the property’s chain of title places in doubt whether the city had any interest which it was able to pass to the League under the January 8, 1969 quitclaim deed. According to defendant the fee to the property was then in the State. If this is so, the city at one time may have had an easement in the property for public passage dedicated as part of Boulevard. But even if such an interest might provide a proper basis for an action to quiet title, that interest was likely acquired by the State before the quiet title action was instituted, through its superior powers when Boulevard became State Highway Koute 20, and was not in the League when the action was commenced. New Jersey Interstate Bridge & Tunnel Commis sion v. Jersey City, 93 N. J. Eq. 550, 553 (Ch. 1922); United R. R. and Canal Co. v. Jersey City, 71 N. J. L. 80 (Sup. Ct. 1904); Cunningham & Tischler “Dedication of Land in New Jersey,” 15 Rutgers L. Rev. 377, 400, fn. 130 (1961).

Assuming, however, that the city retained its easement of passage in the property after the State’s acquisition of the fee from Rhoda Realty Co. Inc., and had such an interest when it executed the quitclaim deed to the League, such conveyance is not the proper vehicle for transfer to a private individual or corporation, even one not for profit, of a municipality’s interest in land dedicated as a public right of way. State v. Cooper, 24 N. J. 261, 267 (1957). There is no evidence that the City of Paterson followed the then statutory procedure leading to extinguishment of the public thoroughfare by vacation or for the sale of its interest in the property, or that it abandoned the public rights to the property in the mode or manner prescribed by law. See e. g., N. J. S. A. 40:67—1, 19, 40:60-26, 28. See also Priory v. Manasquan, 39 N. J. Super. 147, 160 (App. Div. 1956); Lower Tp. v. Reeves, 14 N. J. Super. 180, 183 (Ch. Div. 1951); Osterweil v. Newark, 116 N. J. L. 227, 231 (E. & A. 1935); Newark v. Watson, 56 N. J. L. 667 (E. & A. 1894); State v. Cooper, supra, 24 N. J. at 267-268; Pt. Pleasant Manor Bldg. Co. v. Brown, 42 N. J. Super. 297, 305 (App. Div. 1956); Cunningham & Tischler, op. cit., at 409-413. Cf. Olt v. West New York, 92 N. J. Super. 184, 194-196 (Law Div. 1966). A quitclaim deed of the city’s rights of this nature, if any, in the property is not an abandonment by it of such rights. See Seabright v. Central R. R. Co., 73 N. J. L. 625, 632 (E. & A. 1906).

Defendant takes the position that the city never had a highway easement over the property, relying on its contention that the State took fee title from Rhoda Realty Inc. to all of the land from the westerly line of Boulevard to the river banks, to the exclusion of any municipal highway rights. It finds the requisite possessory interest which the city quitclaimed to its predecessor in title, the League, in the fact that the city allowed the property to be used for the sale of Christmas trees and granted permits for such use. This claimed possessory interest, it contends, sufficed to give the League standing to institute and obtain the judgment in the quiet title action. In fact, it states, the quitclaim deed and the billing by the city of defendant thereafter for taxes on the property are adequate to estop the city from asserting any claim to the property as against defendant, citing Suburban Golf Club v. State Highway Comm’r, 92 N. J. Super. 125 (Law Div. 1966), and 405 Monroe Co. v. Asbury Park, 40 N. J. 457 (1963).

In view of the conclusions hereinafter reached, which can only affect, the parties to this action, I need not determine the nature of the interest of the city or the League in the property, or whether the league had standing to pursue the quiet title action; nor need 1 determine what defendant’s interest in the property is as against the city, or the effect of the judgment in the quiet title action as to the State.

In any event, plaintiffs and third-party defendant in this action, essentially directed at quieting title in their favor, cannot prove their claim of title by relying on the weakness of defendant’s title; rather they must establish their own superior right and title to the property. Monesson v. Alsofrom, 82 N. J. Super. 587, 592 (App. Div. 1964).

Defendant’s claim to title to the property is based upon the assumption that Boulevard was dedicated as a marginal highway, and that, through the League, its predecessor in title, its title had been adjudged superior to that of the State of New Jersey which had acquired the naked fee to the dedicated area from the owner of the adjacent lots.

It is not disputed that the 1919 deed of lots adjacent to Boulevard from Benj. Grunauer, Inc. to Louis H. Grunauer pursuant to the map effectively dedicated Boulevard as a public right of way. The selling of lands with reference to the map (upon which lots and streets were delineated) constituted a dedication of Boulevard as a street or highway to the public, represented by the City of Paterson, and such dedication cannot be revoked except by consent of the municipality in the mode or manner prescribed by law. Brookdale Pk. Homes v. Bridgewater Tp., 115 N. J. Super. 489, 501 (Ch. Div. 1971); Highway Holding Co. v. Yara Engineering Corp., 33 N. J. 119, 124-125 (1956). See also State v. Cooper, Priory v. Manasquan and other eases cited supra.

An owner of a lot adjacent to a nonmarginal highway who can trace his title back to the dedicator of the highway, is presumed to take a naked fee only to the center of the street. But such an owner of a lot adjacent to a marginal highway is presumed to take more—a naked fee in the entire bed of the highway. Wolff v. Veterans of Foreign Wars, Post 4715, 5 N. J. 143, 151-152 (1950). In Wolff the court said as to the rights of an owner of a lot adjacent to a marginal highway:

The street was laid out as a marginal road on and along the southern extremity of the lands of the Edward B. Morris Realty Oompany. The weight of authority holds that in such a circumstance when a description like the one now before us is found in a deed from the dedicator of the street and owner of the subsoil and of the land adjoining on one side, the presumption is that the intention was to invest the grantee with all property rights in the full width of the highway. “Where the highway has been, as in the present case, wholly made from and upon the margin of the grantor’s land, his subsequent grant of the adjoining land should be deemed to comprehend the fee in the whole road-bed, upon the same principle that exists for giving the fee to the center in the other cases. The grantor shall be presumed to have intended by his conveyance the full investure of the grantee with all appurtenant property rights in the highway.” [at 152]

See further, Annotation, 49 A. L. R. 2d 982, 999-1001.

There is no doubt that Boulevard was dedicated as a highway. The basic issue is the extent of that dedication by the map in accordance with which lots were conveyed. Was the intent to dedicate, for example, Boulevard as a highway of normal width and to retain in Benjamin Grunauer and his successor in title, Benjamin Grunauer, Inc., land between the westerly banks of the river and the easterly line of Boulevard as shown on the map ? If the answer is in the affirmative, the court would have to find that such land did in fact exist at the time of dedication and that the dedication thus was of a nonmarginal highway. If the answer is in the negative, Boulevard would have to be found by the court to be a marginal highway — that Benjamin Grunauer and Benjamin Grunauer, Inc. intended to dedicate as Boulevard all of the land from the westerly line of Boulevard as laid out on the map to the westerly banks of the river.

Primary evidence regarding a determination of whether a marginal or nonmarginal highway was dedicated may be supplied by the map. “In other states it seems generally to be held that the intent to dedicate land to public use must be clearly and unequivocally manifested.” Cunningham & Tischler, op. cit., at 385. The New Jersey view is not completely settled. Many New Jersey cases find the dedication to be a mixed issue of law and fact and require a rather high standard of proof to establish a dedication. See Ibid, at 385—386, and cases cited therein. The most recent guide for interpretation of a map with respect to a street dedication was supplied by Judge Clapp in Pt. Pleasant Manor Building Co. v. Brown, 42 N. J. Super. 297, 303-304 (App. Div. 1956), certif. den. 23 N. J. 140 (1957), and is contrary to what appears to be generally the rule in other states:

If an inscription on a map or a description in a deed is unequivocal, then the question whether or not there is a dedication is for the court (indeed in certain circumstances the court will find that there is conclusively an intent to dedicate * * *). But if it is equivocal and an issue is raised on which reasonable minds may differ, the question becomes one of fact to be resolved by the * * * trier of the fact * * * Cf. Osterweil v. City of Newark, 116 N. J. L. 227, 229, 230 (E. & A. 1936) (disapproving the statement in Soper v. Conly, 108 N. J. Eq. 370, 380 (Ch. 1929), affirmed 107 N. J. Eq. 537 (E. & A. 1931), that to establish a dedication, the proof must be strict, cogent and convincing). Indeed, equivocalities on a map prepared by an alleged dedicator, not only do not serve to prevent a dedication, but (rather the contrary) they are, generally speaking to be resolved against him and in favor of the public body. * * * However it should be observed that usually when an issue is raised respecting the intent to dedicate, the court should concern itself with the question whether or not in all likelihood the alleged dedicator had in fact wanted to make a voluntary donation to the public or had reason to represent that he was making such a donation.

The map establishes streets and lots with number designations on what was then the property of Benjamin Grunauer. The area concerned is bounded on the east by the western boundary of Boulevard. Other than the area plotted, the map lacks detail and is generally blank. Except for Boulvard, width dimensions of all streets running through or abutting the plotted area are explicitly given. And while the westerly boundary of Boulevard, abutting as it does the carefully designated lots, is clearly established, the easterly boundary of that road is not so explicitly set — it is unclear, for example, where the easterly edge of Boulevard is fixed and where the Passaic Diver banks begin.

Since an unequivocal dedication of Boulevard as a marginal highway by any standard of proof cannot be established by the map, other evidence must he taken into consideration. Although doubts or equivocalities on a dedicator’s map are generally resolved against the dedicator and in favor of the public, this rule is of less than universal application. Pt. Pleasant Manor Building Co. v. Brown, supra; Velasco v. Goldman Builders, Inc., 93 N. J. Super. 123, 137-138 (App. Div. 1966). Each case must be decided on the basis of the specific facts and considerations presented therein. Where a party to the dispute is a public body or one seeking to establish a right in the public to use the lands claimed to have been dedicated, or a person who is properly a successor in interest to the public body or having title because of the public body’s lawful action, such a situation may very well he a factor warranting resolving a doubt in favor of finding a marginal highway. On the other hand, where, as here, neither party is such a person, the rule as to resolving such doubt might be otherwise. Indeed, in the latter instance, the party claiming the existence of a marginal highway may have the burden of proof on that issue, at least by a preponderance of the evidence. See Pt. Pleasant, supra; State v. Cooper, supra. Cf. Wolff v. Veterans of Foreign Wars, Post 4715, supra.

However, even without imposing such a burden on defendant in this ease, I have determined from the proofs that a marginal highway was not intended to be dedicated by the map and that title to the property was retained in the dedicator of Boulevard. I find that he intended to dedicate as Boulevard only so much of the land between its westerly line and the river as was actually used as a highway when Boulevard was constructed. I hold, therefore, that the dedicator continued to hold fee title to the surplus land between the present easterly line of Boulevard (State Highway 20) and the westerly banks of the river.

Defendant contends that the property, while presently east of the current Route 20, was part of the road-bed of Boulevard as originally laid. This argument is offered to suggest that contemporaneous with or within a few years of dedication, it was the view of the City of Paterson that Boulevard had been dedicated as a marginal road, reserving no property on the west bank of the river to the dedicator. Defendant hypothecates that the State, in building Route 20, moved the road-bed westerly, failing to utilize the easterly portion of Boulevard as dedicated and originally built, such easterly portion being the property now in question. In support defendant offers a part of a plat of an “Atlas of the City of Paterson New Jersey,” prepared by City Engineer J. M. Lathrop and published in 1915, which shows a Passaic Valley Sewer Commission sewer line following generally the center line of Boulevard. All parties agree that there is presently a Passaic Valley sewer line imbedded in the property in question. Defendant claims that this is the same line shown on the atlas plat. But this claim is not borne out by the proofs.

There is no evidence that this is the same line that once, according to the aforesaid plat, was generally centered in Boulevard, or that indeed the line was in the center thereof as there depicted. Furthermore, plaintiffs have presented persuasive evidence to the contrary. A July 1, 1914 Passaic Valley Sewerage Commission map shows Boulevard, and also a “main intercepting sewer” on what appears to be the property in question, east of Boulevard and west of the Passaic River. A present survey of the property shows the same sewer line in the property. A State Highway map, dated December 1929, relating to property to be acquired for Route 20 in the area here involved, which shows the Boulevard as it existed in 1927 and as actually used by the public, indicates the existence of land between the easterly line of the Boulevard and the river. State Highway plan and profile maps of Route 20, dated 1953, show not only such land and the sewer line therein but also trees and brush growing thereon and fences erected thereon. They also show a building located on lands between the Boulevard and the river to the south of the property involved herein. One of these highway profile maps and an earlier “Riparian Survey Passaic Eiver,” made by the Civil Works Administration in 1934, show that buildings existed near the property here involved, between the river and the easterly side of Boulevard. A reasonable inference from these proofs, and I so find, is that Boulevard never actually ran to the river, and was never used by the public or intended to be used as a highway extending to the river banks.

Thus, I find that there is no persuasive evidence that Boulevard was dedicated as a marginal highway; rather, the proofs show it to have been nonmarginal. The map caused Boulevard to be dedicated but only clearly established its western boundary. In view of the circumstances of this case and my findings herein, a road so dedicated but not fully defined is properly deemed to be intended as one of reasonable width manifested by its actual user — i. e., the width of the present Route 20. See Cunningham and Tischler, op. oil., at 386, stating that the land area intended to be dedicated must be described so that it can be located on the earth’s surface with reasonable certainty (citing Soper v. Conly, 108 N. J. Eq. 370, 380 (Ch. 1931), aff’d 107 N. J. Eq. 537 (E. & A. 1931), and 11 McQuillin, Municipal Corporations § 33.26.

The cases of Hoboken Land and Improvement Co. v. Mayor, etc., Hoboken, 36 N. J. L. 540 (E. & A. 1873), and South Amboy v. N. Y. & L. R. R. R. Co., 66 N. J. L. 623 (E. & A. 1901), are not to the contrary.

In Hoboken the dedication oí the street was to a navigable river and its width was undefined. The court indicated, in favor oí a claim by the city, that the dedication was to the banks of the river because it found that “the essence of the gift” intended by the dedicator was “the means of access to the public waters of the river the advantage of which induced the growth oí the city by reason of its adjacency * * * with the important navigable waters * * * which give a peculiar commercial value to the lots put in the market by the dedication.” The jury had found as a fact that the street as laid down on the map extended to the river at the lime the map was made. The court stated that the value of such lots “ea,n only be preserved by maintaining unbroken the connection of the streets and the navigable river. Any obstructions of that access would not only derogate from the effect of the gift but would also be a public nuisance.” [L. at 36 N. J. 548] In the present case (1) the party claiming a dedication to the river is not the city and (2) the matter of preserving, or the dedicator’s intent to preserve, access to the river is not involved.

In South Amboy, supra, the court stated that dedication of a street is a dedication of it in its entirety and that the municipality cannot accept a fraction thereof and reject the balance. But there, unlike the present case, the street was plotted and defined on the map and express reference was made in conveyances to the map and “the confines of the street,” and again, the claim sustained was that of the City in the public thoroughfare. Further, here the very issue is the extent or width of the street when dedicated; whether all or part of it was accepted by the municipality is not involved.

In any event, defendant itself, or its predecessor in title, the League, must have taken the factual position that Boulevard was not a marginal highway when dedicated at the time it instituted its action to quiet title against the State and others. In that action the State filed an answer denying generally the allegations of the complaint. Thereafter, on November 6, 1969 the Deputy Attorney General in charge of the case wrote Mr. Goldberg, attorney for the plaintiff League (and now president of defendant) acknowledging receipt of notice of a pretrial conference and stating that it “cannot find where the State Department of Transportation has any interest in this case. We will appreciate any advice that we may receive as to what possible interest the State can claim.” On November 11, 1969 Goldberg answered, “in my opinion the State Department of Transportation has no interest [in the property]. We were requested by the title company to add the State * * * if they, in any way would recite some rights [in] * * * the above property.” On November 13, 1969 the Deputy Attorney General answered Goldberg, acknowledging receipt of the November 11 letter and stating, “Since we have no interest of anjr kind in the case, we fail to see the necessity of appearing at pretrial. Since you are not asserting any actual right against the State, will you please advise whether you will dismiss as to us.” From what appears in the record, the League obtained an unopposed judgment quieting title in its favor against the State.

Accordingly, in the quiet title action the factual position of defendant’s predecessor in title—and thus defendant—• must have been that Boulevard was not a marginal highway when dedicated. If it were a marginal highway, the State would have acquired all of the land from the westerly boundary of Boulevard to the westerly banks of the river when it obtained the conveyance from Bhoda Bealty Co. Inc. in March 1931. The State, therefore, contrary to the opinion of Goldberg expressed in his letter of November 11, 1969 would have had a fee title interest in the property. Additionally, the fact that the State by letter acknowledged that it had no interest of any kind and requested a dismissal against it would appear to indicate that the State did not view Boulevard as a marginal highway.

Defendant may not, under the circumstances of this case, assume a factual position inconsistent with that taken by its predecessor in title in the quiet title action involving the same property. In re Allison’s Estate, 106 N. J. Eq. 55 (Prerog. Ct. 1930), rearg. den. 107 N. J. Eq. 197 (Prerog. Ct. 1930); Stretch v. Watson, 6 N. J. Super. 456, aff’d in part, rev’d in part, 5 N. J. 268 (1950); Koppel v. Olaf Realty Corp., 56 N. J. Super. 109, 120 (Ch. Div. 1959), aff’d 62 N. J. Super. 103 (App. Div. 1960). See also, Vogel v. Red Star Express Lines, 73 N. J. Super. 534, 542 (App. Div. 1962), aff’d 40 N. J. 44 (1963).

Accordingly, defendant may not predicate its claim in this action on the ground that Boulevard when dedicated was a marginal road.

In view of the foregoing, based on the proofs before me, I find that Benj. Grunauer, Inc. retained title to the property when it conveyed the lots in accordance with the Map to Louis H. Grunauer on October 31, 1919, and that its successors in interest now have such title which is good as against defendant and superior to any interest which defendant may have or claim to have in the property.

Judgment will be entered (1) declaring that title to the property be quieted against defendant and in favor of plaintiffs (Brighton Construction, Inc., Benj. Grunauer, Inc., Betty Marke and Louise Syracuse) and third-party defendant (Benj. Grunauer Co.) ; (3) declaring that the League’s judgment in the quiet title action to which plaintiffs and third-party defendant were not parties is not effective as to them and that defendant has not acquired any title to the property, by virtue of being the League’s grantee, which is superior to that of plaintiffs and third-party defendant; (3) declaring that, as against any claim of defendant, fee simple title to the property is in Benj. Grunauer, Inc.—i. e., Benj. Grunauer, Incorporated, a corporation in dissolution since October 30, 1919, and (4) declaring that such dissolved corporation and Betty Marke and Louise Syracuse, sole residuary legatees and representatives of William Grunauer, deceased, last stockholder and trust.ee in dissolution of the dissolved corporation, upon execution of a deed of the fee simple title to the property to plaintiff Brighton Construction, Inc., will have conveyed title that is good as against, and superior to, any claim of the defendant therein.

The remaining demands for relief in the complaint and third-party complaint—vacation of the quiet title judgment in favor of the League and requiring defendant to execute an instrument removing any cloud from plaintiff’s title—will not be granted. In the posture of this case, I am of the view that such relief would be inappropriate, involving as it does, an apparent collateral attack on the League’s quiet title judgment. See Shultz v. Sanders, 38 N. J. Eq. 154, 157 (Ch. 1884), aff’d, Eisberg v. Shultz, 38 N. J. Eq. 293 (E. & A. 1884); Armstrong v. Brown, 19 N. J. Super. 528, 530 (Ch. Div. 1952).

By reason of the conclusions reached herein, judgment will be entered dismissing, with prejudice, all of defendant’s claims in its counterclaim and third-party complaint.

No costs will be allowed to any party.

      Benjamin Grunauer, Inc. and its claimed successors in interest, Betty Marke and Louise Syracuse, were added as parties plaintiff by order of January 28, 1972. All claims and defenses of defendant L & J Enterprises, Inc., are deemed to apply to such added plaintiffs. As used herein the singular term “plaintiff” refers to Brighton Construction, Inc. only.

      Rosalie Grunauer, widow, was for some reason also a grantor.

      There appears to be an obvious error in the description. In its second course it refers to the “easterly line” of the Boulevard. It is apparent that “westerly” was intended.

      The deed into 1 lie State refers to “Slate Highway Route 3 (Rev. 1927) Section 4.” All parties agree that this is in fact State Highway Boute 20.

      The deed recited a nominal consideration: “$1.00 and other valuable consideration.” No transfer fee was paid therefor, the stated reason being: “The grantor has no interest in the title of the lands to be conveyed.”

      See State v. Cooper, 24 N. J. 261, 269 (1957), which reaffirms this principle but holds that the State must pay just compensation to the municipality when it appropriates municipal property held in a governmental capacity in certain circumstances. This latter issue is not involved in the present case.

      The fact that the city had no interest to convey is supported by the affidavit, which is part of the quitclaim deed from the city, prepared by the attorney for the League, reciting that the “grantor has no interest in the title of the lands to be conveyed.”

      Whether the lesser degree of proof required to establish a dedication also applies to a case, such as this, where a dedication is evident but the only question is its extent, need not be decided in view of the conclusions reached herein. Cf. Blank v. Haddonfield, 96 N. J. Eq. 641 (E. & A. 1924), which states generally that “the existence and * * * extent of dedication” both involve a question of intent.

      Plaintiff Brighton produced testimony from one of its principals, an engineer, that the mail's lack of detail as to the width of the Boulevard accords with the usual practice on such a map to fill in only a hare sketch of areas outside the land to be divided into lots. Accordingly, it is argued, the area east of Boulevard and west of the Passaic Iiiver banks, — the properly —, was not clearly delineated on the map because Benjamin Grunauer intended to retain that which was not actually used as a highway, i. e., as the Bouleva "d. I have not considered this testimony since it was the opinion of an interested party and is not substantiated by any other proofs.

      See Haven Homes v. Raritan Tp., 19 N. J. 239, 245-246 (1955) (the attributes of a public street include the whole surface for the ordinary purposes of a street) ; Wolff, supra, at 152 (speaking of the abutting land owner’s interest in a marginal highway as being the fee “in the full width of the highway * * * ‘the whole roadbed’,” suggesting that the interest may be in the highway as built). See further, O’Brien v. King, 49 N. J. L. 79 (Sup. Ct. 1886), which held that where platted lots, in actuality were bound by a street that did not correspond in placement with the street fixed by the plat, it was the street as actually built and used that served as the boundary for the adjacent lots. Compare the rule that generally the width of a road established by dedication is determined by the intention, while the width of a highway established by user is governed by the extent of user. Parsippany-Troy Hills Tp. v. Bowman, 3 N. J. 97, 107 (1949) (concurring opinion), and cases there cited; Lower Tp. v. Reeves, 14 N. J. Super. 180, 187 (Ch. Div. 1951). The present case involves a different factual situation, where the intent of the dedicator was to establish the width of the road dedicated by the extent of its actual user.

      As hereinafter indicated, there is no persuasive evidence in this case that the easterly line of Boulevard in the area involved has been changed in any substantial fashion since it was originally constructed or that the present easterly line of Route 20 in that area differs therefrom.
      The dedicator and his successors in interest thus also retained title to this naked fee in the bed of the easterly half of Boulevard as so constructed and used, subject to the public highway easement. Wolff, supra.

      That the property here involved was not assessed for taxes by the city, or that the city on occasion permitted sales of Christmas trees on the property from time to time, is not decisive on the question of whether or not it was dedicated land. Currie v. Jersey City, 95 N. J. Eq. 412, 415-416 (Ch. 1924). Cf. Osterweil v. Newark, supra, 116 N. J. L. at 231; Pt. Pleasant Manor Building Co. v. Brown, supra, 42 N. J. Super. at 304; Trustees of M.E. Church, Hoboken v. Council of Hoboken, 33 N. J. L. 13, 26 (Sup. Ct. 1868). See also, Arnold v. Orange, 73 N. J. Eq. 280, 282 (Ch. 1907); Brookdale Pk. Homes v. Bridgewater Tp., 115 N. J. Super. 489, 501 (Ch. Div. 1971); Kiernan v. Primavera, 109 N. J. Super. 231, 235, 240-241 (Ch. Div. 1970); Wolf, supra, 5 N. J. at 149.
      There is no merit in plaintiff’s argument that the fact that the conveyance from Benjamin Grunauer or Benjamin Grunauer, Inc. contained a metes and bounds description mentioning only the westerly boundary of Boulevard in itself is proof of an intent not to dedicate a highway or a marginal highway. The fact that the conveyance also expressly or impliedly referred to the lots bordering the Boulevard on the map is sufficient for a highway dedication. See Salter v. Jonas, 39 N. J. L. 469 (E. & A. 1877); Wolff, supra; Pope v. Town of Union, 18 N. J. Eq. 282 (Ch. 1867); Haven Homes v. Raritan Tp., 19 N. J. 239, 244 (1955). Whether a marginal highway was here intended is a question of fact which must be resolved based on all of the evidence, and the map itself is unclear as to that issue. Plaintiff’s reliance on Lambert v. Vare, 88 N. J. Eq. 81 (Ch. 1917) is misplaced. In Lambert the map and the description made it plain that the intent of the grantor was not to convey lands to the ocean and that she retained actual fractional lots between the lots conveyed and the ocean. This clear factual pattern does not exist in the instant case.

      In January 1968 Goldberg, on behalf of the League, unsuccessfully endeavored to obtain a deed to the property from “Benj. Grunauer Company” for $500 by negotiations with the Grunauer attorney. Ho testified that he did not then believe the company had any interest in the property. I do not agree with plaintiff that these negotiations constitute an estoppel against defendant’s claim that third-party defendant and plaintiffs have no title to the property. However, the present litigation could have been avoided had the Grunauer company or interests been made parties to the League’s quiet title action. Similarly, although the State may have in fact adopted the position that Boulevard was not a marginal highway, as discussed above, it would have been desirable to have joined it as a party to this action. In this fashion plaintiffs right to title as to the State could have been determined conclusively. See Michalski v. United States, 49 N. J. Super. 104, 110 (Ch. Div. 1958), cited in O’Neill v. State Highway Dept., supra; 49 Am. Jur., States, etc., §§ 103-104.

      The fact that the conveyance by Benjamin Grunauer, Inc. to Louis H. Grunauer stated that the lots on the map were conveyed by the corporation to Louis H. Grunauer as owner of all its capital stock on dissolution and therefore no consideration passed, does not militate against a finding that that corporation which was in dissolution continued to retain title to the surxfius lands between the easterly line of Boulevard and the river if, in fact, the highway when dedicated was not marginal.

      The status of Benj. Grunauer Co. (i. e., Benj. Grunauer Co. Inc.) in its relation to the dissolved corporation is unclear. It may or may not be, in some fashion, a successor in interest to the dissolved corporation. If it is such a successor, its interest is superior to that of defendant.

      See Bridgewater Leasing Corp. v. Wollman, 94 N. J. Super. at 37 (App. Div. 1967).
      As to the conveyance after dissolution of Benj. Grunauer Incorporated, see N. J. S. A. 14A:12-9; Boyd v. Hankinson, 83 F. 876 (D. Ct. 1899), rev’d on other gds. 92 F. 49 (4 Cir. 1899); Joachim v. Belfus, 107 N. J. Eq. 240 (Ch. 1930), decree vacated on other gds. Joachim v. Joachim, 108 N. J. Eq. 622 (Ch. 1931). See further, R. S. 14:13-4; 19 Am. Jur. 2d, Corporations, § 1679; Kennedy v. Island Development Co., 9 N. J. Misc. 921 (Cir. Ct. 1931). See also, Zabriskie v. Morris & Essex Realty Co., 33 N. J. Eq. 22 (Oh. 1880), aff’d 34 N. J. Eq. 282 (E. & A. 1881); 6 N. J. Practice, Wills and Administration, § 531 at 48; Windmuller v. Spirits Distrib. Co., 83 N. J. Eg. 6 (Ch. 1914).
      I leave it to plaintiff whether to add third-party defendant Benj. Grunauer Oo. Inc. as a grantor since it is a party to this action. See footnote 15. In any event, after the dissolved corporation and Betty Marke and Louise Syracuse were made parties, defendant no longer pressed its objection as to Ben.j. Grunauer Co. Inc.’s alleged lack of title, apparently accepting the fact that if title were quieted in favor of the dissolved corporation, plaintiff Brighton would be able to acquire title from such corporation and its successors in interest.


source: Caselaw Access Project

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

license: Public Domain

text:
    AMERICAN METAL COMPANY, A CORPORATION OF THE STATE OF NEW JERSEY, PLAINTIFF, v. FLUID CHEMICAL COMPANY, A CORPORATION OF THE STATE OF NEW JERSEY, DEFENDANT.
    Superior Court of New Jersey Law Division
    Decided October 24, 1972.

      Mr. George Vaccaro for plaintiff (Messrs. Vaccaro and Osborne, attorneys).

      Mr. Robert H. Simandl for defendant (Messrs. Simandl, Leff, Kraemer & Waldorf, attorneys).
   Byrne, A. J. S. C.

A motion is made to settle the form of an order of judgment in a case involving a right-of-way easement which burdened defendant’s land in favor of plaintiff. Along a common property line defendant erected a fence with a gate three feet wide across the casement. Plaintiff alleged that the effect of this metal fence was to deprive him of the use of his premises in such a manner as to cause him substantial damage. Among the damages claimed was the expense of having to demolish certain of his buildings to provide for the access to his plant eliminated by defendant’s wrongful closure of the easement. Plaintiff sued to recover compensatory and punitive damages, and for an injunction requiring removal of the fence.

The issue of liability was tried without a jury on October 15, 1971; on November 3, 1971 this court ruled that defendant could keep the fence, but was required to widen the gate across the easement ten feet. The issue of damages was reserved for further argument. However, at that time, the issue of exemplary damages was found in favor of defendant.

On August 2, 1972 argument on the issue of damages was heard by this court, and in a letter opinion dated August 4, 1972 damages were awarded in the amount of $7,322.26 in compensation to plaintiff for the construction necessary and proximately related to the closing off of the easement.

In an order of judgment proposed by plaintiff for defendant’s consent, plaintiff included interest at 6% a year from July 13, 1969, pursuant to R. 4:42-ll(b). Defendant, in turn, submitted an order in which it omitted this interest payment. Plaintiff objects to the form of this order which excludes the interest.

R. 4:42-11(b) was adopted on December 21, 1971, to be effective January 31, 1972. It reads:

In tort actions, including products liability actions, the court shall include in the judgment interest at 6% per annum on the amount of the award from the date of the institution of the action or from a date 6 months after the date of the tort, whichever is later. The contingent fee of an attorney shall not be computed on the interest so included in the judgment.

Defendant denies that this rule applies to it on two grounds: (1) defendant maintains that the action for interference with the easement lies in contract and not in tort, and that, therefore, this section could not apply regardless of when this action is brought and judgment entered, and (2) even if this action does lie in tort, judgment was rendered on the issue of liability on November 3, 1971, prior to the effective date of the rule. Defendant notes that it objected to the bifurcation of the trial and wanted to argue damages along with liability. But, in any case, defendant argues judgment was rendered prior to the effective date and the mere adjudication of the amount of damages subsequent to that date should not make the rule applicable.

This court finds that the action for obstruction of the right of way easement lies in tort and that the judgment was rendered afer the effective date, so that R. 4:42-11(b) should apply in this ease.

I

When the courts of this State have spoken of an action at law to recover for damages caused by a defendant’s interference with an easement, they have spoken in tort terms. Thus, in Schaaf v. Pennsylvania R. R., 77 N. J. L. 115 (Sup. Ct. 1908), plaintiff could not get her hay wagon onto her premises because of defendant railroad’s obstruction of her right-of-way. The court there spoke in terms of trespass and allowed testimony to be taken showing damage to plaintiff’s business as a proximate result of the trespass.

However, the much more common approach, historically, has been to regard interference with an easement as trespass on the case. Goldman v. Beach Front Realty Co., 83 N. J. L. 97 (Sup. Ct. 1912); Osborne v. Butcher, 26 N. J. L. 308 (Sup. Ct. 1857) (wherein it is specifically noted that “case” and not trespass is the proper form of the action); Runyon v. Bordine, 14 N. J. L. 472 (Sup. Ct. 1834); the action for trespass on the case lies in nuisance in modern pleading when the plaintiff charges damages caused by interference with an easement. Ennis v. Gray, 16 N. J. Super. 184 (Ch. Div. 1951); Schmidt v. Brown, 226 Ill. 590, 80 N. E. 1071 (Sup. Ct. 1907); Stuart v. Larrabee, 14 S. W. 2d 316 (Tex. Civ. App. 1929).

Despite this precedent, it may be well to look into the question further. The basic conceptual problem derives from the question of what is the nature of an easement itself. An easement is a property right which cannot be taken away without observing constitutional rights. Walter v. Danisch, 133 N. J. Eq. 127 (E. & A. 1943). Some courts have ruled that an easement is real property, e. g. Highland Realty Co. v. City of San Rafael, 46 Cal. 2d 669, 298 P. 2d 3 5 (Sup. Ct. 1956), but the general rule seems to be that “[an easement] is not an estate in land, nor is it ‘land’ itself. An easement is, however, property or an interest in land.” 25 Am. Jur. 2d Easements and Licenses, § 2 (1966). Where there exists no privity of contract or estate between the parties at odds in a lawsuit, this question of whether or not an easement is real property, or how closely it approximates real property, probably becomes academic, since the party who allegedly interferes with an easement in such situations infringes on the property rights of another, depending on whether or not those rights exist. The contract which defines those rights clearly does not declare the rights and duties which exist between these particular parties but merely states what is the property of one party. However, where there is privity of estate between parties, and especially where there is privity of contract, there may be diffieult conceptual problems in defining the role of the contract either as the statement of what is the property of an individual party, or as the document setting forth the legal duties which the two particular parties in the lawsuit owe to one another. This is, in the end, the problem which the defendant’s objection poses in this case.

(There exists privity of estate between the parties in this action. Defendant is successor in title to Heller Brothers Company, which, in 1949, granted an easement to one David H. McAvoy, Jr., to whom plaintiff is successor in title.)

A right-of-way easement as is involved herein is a permanent legal interest. Once the property qua easement has been conveyed, any interference with the owner’s property rights will give that owner an action in tort against any interfering party, including the party with whom the easement’s owner contracted to acquire the easement. While an easement is an encumbrance or a grant of a legal estate, distinct from ownership, to use in some way the land of another, Wellmore Builders, Inc. v. Wannier, 49 N. J. Super. 456 (App. Div. 1958), it is essentially and inherently a legal interest in land as distinguished from a restriction resulting from a restrictive covenant, which is but a creature of equity arising out of contract. Leasehold Estates, Inc. v. Fulbro Holding Co., 47 N. J. Super. 534 (App. Div. 1957). As such, the questions arising from the relationship of the parties set down in the contract are not particular to the contracting parties. It is the legal interest in the easement which governs. Once the easement has been granted, any interference with it is a violation of the vested property rights of the easement’s owner as those rights are defined in the contract, and such interference constitutes a tort.

In this case plaintiff sued for the expenses he incurred because defendant interfered with the rightful use of the easement. The damages were proximately caused by that interference. Therefore, plaintiff recovered in an action in tort. R. 4:42-11(b), does apply to such an action for interference with plaintiff’s right of way easement.

II

Defendant does not contest the correctness of the bifurcation of the trial although he does note that he opposed the motion for separate trials. (There is no indication that defendant’s opposition stemmed from a view that R. 4:42-11 (b) might become effective in the interim between the liability and damages adjudication.) Under R. 4:38-2 the court may “whenever [it] finds that a substantial saving of time would result from a trial of the issue of liability in the first instance, * * * on a party’s or its own motion, limit the trial in the first instance to the issue of liability alone.”

Defendant does not argue that R. 4:42-11(b) does not apply to judgments rendered after the effective date of the rule even if the action was commenced prior thereto. However, even if defendant had so argued, the rule on its face makes no such distinction among judgments. Comment to R. 4:42-11(b) (1972 ed.); see Lynch v. Heymann, 119 N. J. Super. 151 (Law Div. 1972).

R. 4:42-11(b) was one of the 1971 amendments designed to stimulate the early settlement of cases. “Notice to the Bar,” 94 N. J. L. J. 341 (1972). It was adopted as part of the court’s calendar control program. Comment, supra. It is arguable, therefore, that since the purpose for which the rule was assertedly adopted will not be served by having this rule apply to actions commenced prior to the effective date of the rule where such action arose more than six months prior to that date, it should not be so applied; or, it might be argued that in such situations, the interest should accrue from at least no earlier than the effective date of the rule. However, as already stated, there is no basis for such an interpretation on the face of the rule. Furthermore, the rule can have the general purpose of making the claimant in a tort action whole — a purpose quite apart from the settlement-inducing function which it assuredly has. In this aspect, it differs from the offer of judgment rule, R. 4:58, the purpose of which was clearly to facilitate the settlement of cases. Comment to R. 4:58 (1972 ed) the courts could, at their discretion, award interest from the date of the tort if the claimant would thereby be made whole. Thus, defendant may be receiving the same treatment he would have received even if the rule had not been adopted during the course of this lawsuit.

A decision must be made as to what was the “judgment” to which R. 4:42-11(b) applies. In West Jersey Title and Guaranty Co. v. Industrial Trust Co., 27 N. J. 144 (1958), it was stated:

A judgment ordinarily establishes the existence of the right; it is an affirmation in regard to the matters submitted to the court for decision; the first and most obvious consequence of a judgment is that it establishes an indisputable obligation and confers upon the successful party the right to issue execution or other process of the court for its enforcement. Yet this is not an integral part of the judgment. The judgment is merely an affirmation of a liability. The right to use the process of the court for its enforcement is a consequence which the law attaches to it. [at 150]

However, where the damages issue has not been decided, there is nothing for a court to enforce. There is no basis for any further action extrajudicially until judgment is rendered on the damage issue. This is not to say that the damages must be liquidated in order to have a final judgment, although in some cases, a judgment has been held not to be final if the damages awarded by it are unliquidated. 47 Am. Jur. 2d, Judgments, § 1053 (1969). Adjudication as to the exact liabilities of the parties must be completed so that there need be no further recourse to the courts to make such decisions. (This may not apply to ongoing judgments as in family support cases.) Thus, the final judgment rendered on August 4, 1972 on the issue of damages is the judgment to which R. 4:42-11(b) applies.

The order for judgment should include the interest as computed under the provisions of R. 4:42-11(b).


author: Handler, J. S. C.

text:
    RUBY WELLS, INDIVIDUALLY, AND AS ADMINISTRATIX OF THE ESTATE OF GEORGE A. WELLS, DECEASED, PLAINTIFF, v. WILBUR B. DRIVER COMPANY AND THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, DEFENDANTS.
    Superior Court of New Jersey Law Division
    Decided October 24, 1972.

      Mr. William L. Brach, for Plaintiff (Messrs. Brach, Eichler, Rosenberg and Silver, attorneys; Alan B. Hammer, South Orange, on the brief).

      Mr. William T. Sutphin, appeared for defendants (Messrs. Stryker, Tams & Dill, attorneys).
   Handler, J. S. C.

This is an action by a beneficiary on a group life insurance policy issued by defendant Prudential Insurance Company of America (hereinafter “Prudential”) to defendant Wilbur B. Driver Company (hereinafter “Driver”) for the benefit of Driver’s employees. Plaintiff is the widow of George A. Wells, who had been an employee of Driver and an insured under the policy. The parties have moved for summary judgment.

Wells had been employed by Driver since 1947. He stopped working on April 30, 1969 due to neoplasm of the colon and received disability payments for six months thereafter. On November 10, 1969 Driver’s personnel director and his assistant held a meeting with Wells and his wife during which there was a discussion of Wells’ employment status. As a result Wells subsequently ceased working. He died on February 12, 1970 and Prudential paid plaintiff, as Wells’ beneficiary, $5,043.15 on April 15, 1970, which amount defendants contend represented the full amount of death benefits due under the group policy. Plaintiff asserts that she was entitled to insurance coverage in the amount of $18,300 and now claims the difference.

The Group Policy No. G—8489 herein was a noncontributory plan which provided life insurance coverage for each employee of Driver based upon the employee’s compensation. Upon the death of an employee while insured the amount of insurance which would be payable was that set forth in a certificate issued to each insured employee periodically. Upon the attainment of age 65 or retirement the policy provided that the amount of an employee’s life insurance was $5,000. Upon the termination of employment there was also provided a right to convert all or a portion of the insurance to an individual policy without additional evidence of insurability. The employer under the contract was responsible for the administration of various phases of the insurance policy, including maintenance of records concerning the particulars of each employee’s insurance, the furnishing of periodic reports to Prudential indicating new employees, changes in amounts of insurance and terminations of insurance.

The insurance documents must be assessed within a statutory frame. N. J. S. A. 17:34-32 states that

No policy of group life insurance shall be delivered in this' State unless it contains in substance the following provisions, * * * (9) [a] provision that if the insurance, or any portion of it, on a person covered under the policy ceases because of termination of employment * * * such person shall be entitled to have issued to him by the insurer, without evidence of insurability, an individual policy of life insurance * * * provided application for the individual policy shall be made, and the first premium paid to the insurer, within thirty-one days after such termination * * *.

Now N. J. S. A. 17B:27—19. The group policy was faithful to this statutory directive. In the section entitled “Conversion Privilege” it provided that

If employment with the Employer is terminated, the Employee insured hereunder shall be entitled to convert all or part of his insurance, without evidence of insurability, to an individual policy of life insurance, provided written application and the first premium payment are made to the Insurance Company within thirty-one days from the date of termination of employment * * *.

The statute does not further explicate what acts or circumstances constitute a “termination of employment” sufficient to trigger the conversion privilege accorded by N. J. S. A. 17:34-32(9). The policy itself, however, states specifically that

* * * Termination of employment shall for all purposes of the Policy, be deemed to occur upon cessation of active full-time work * * '•*' except that an Employee who is * *■ * retired will nevertheless be considered as still employed on a full-time basis until the Employer, acting in accordance with rules precluding individual selection, terminates the Employee’s insurance by notifying the Insurance Company to that effect or by discontinuing premium payments for his insurance * * *.

Issue is joined initially on whether there was such a termination of employment.

It is not unusual that a group insurance policy provide that termination of employment shall end an employee’s insurance coverage. Mau v. Union Labor Life Ins. Co., 31 N. J. Super. 362 (App. Div. 1954); Keane v. Aetna Life Ins. Co., 22 N. J. Super. 296 (App. Div. 1952); Shaffer v. Metropolitan Life Ins. Co., 133 N. J. L. 53 (Sup. Ct. 1945). But it must be “such a termination of the relationship of employer and employee as will make applicable and effective all parts of the insurance contract.” Ambrose v. Metropolitan Life Ins. Co., 18 N. J. Misc. 42, 43, 10 A. 2d 479, 480 (Sup. Ct. 1939). A retired employee is one who has voluntarily withdrawn from employment and has ended his regular activity by arrangement with the employer. Jacobs v. N. J. State Highway Authority, 54 N. J. 393 (1969); Watson v. Brower, 24 N. J. 210 (1957). Consequently, retirement is a termination of employment within the meaning of a “termination of employment” clause in a group insurance policy. See Geist v. National Bellas Hess, Inc., 241 F. Supp. 209, 212-213 (E. D. N. Y. 1965); Young v. Minton, 49 Ga. App. 545, 176 S. E. 662 (Ct. App. 1934).

There was a meeting on November 10, 1969, between Driver’s representatives and Wells, the subject of which was his retirement; a written request by Wells for payment from the Driver’s Employee’s Security Plan was sent on the same date and there was a notation thereon to the effect that retirement was as of November 28, 1969; his retirement was also noted in the 1969 Christmas issue of Driver’s publication. There was also correspondence from Driver’s director of personnel to the administrator of group insurance and Driver’s manager that Wells would retire December 1, 1969 and his last day on the payroll would be November 28, 1969. Thereafter Wells received wage security benefits, sabbatical payments and a pension payment, the last of which was on or about January 9, 1970. These events can be assimilated only upon the rationale that Wells had retired from Driver.

A termination of insurance in the context of this case requires a coalescence of two events. There must, in the language of the policy, be a “cessation of active full-time work.” Where such “cessation” is brought about through retirement there must also be either a notification by the employer to the insurer that the retired employee’s insurance has been terminated or a discontinuance of premium payments for his insurance. Plaintiff contends that notwithstanding Wells’ retirement, his insurance was not terminated because there was no subsequent notification of the termination of his insurance to the insurer or a discontinuance of premiums as required under the policy with respect to a retired employee.

Group insurance policies frequently provide that individual coverage shall terminate when the insurer is notified to that effect. Cf. Kowalski v. Travelers Ins. Co., 115 N. J. Super. 545 (Law Div. 1971); Novern v. John Hancock Mut. Life Ins. Co., 107 N. J. Super. 570 (Law Div. 1969); Keane v. Aetna Life Ins. Co., supra; cf. Passkowski v. Prudential Ins. Co. of America, 182 F. Supp. 819 (D. Conn. 1960). The facts herein are that a report dated December 1, 1969 was sent to Prudential by Driver on December 10, 1969, which showed the amounts of group insurance added and terminated on that date. While there was no specification in the report of the names of the employees involved and no breakdown regarding the amounts of such individual changes, the records of Driver disclosed that the terminations included the subtraction of Wells’ insurance by $13,300. This was the difference between $18,300, the face amount on Wells’ insurance certificate, and $5,000, which would be payable with respect to a retired insured. The premiums which were paid to Prudential based on this report did not therefore include a premium for Wells’ insurance over and above $5,000. This report sent on December 10, 1969 is sufficient to evidence a discontinuance of premiums attributed to Wells’ insurance coverage. It follows that Wells having retired, there was a termination of insurance, at least according to the explicit terms of the group insurance policy. What remains shrouded, however, is the exact date upon which each of these critical events occurred. The implications of this ambiguity are explored infra.

Upon the hypothesis that there was a termination of employment and insurance, the succeeding issue is whether there was a continuation of full insurance for some period of time inclusive of decedent’s death on February 12, 1970. Defendants contend that there was no “pro rata right of conversion upon a decrease of coverage.” Because Wells remained insured after retirement in the amount of $5,000 there could be no continuation of insurance since he would have no right to convert from group to individual insurance.

The policy provides, as emphasized by defendants, that “Any individual policy issued under [the conversion privilege] * * * shall be in place of all benefits under this policy.” (Emphasis added). But as previously noted, the conversion privilege clause of the policy also provides that “If employment * * * is terminated, an Employee insured hereunder shall bo entitled to convert all or part of his insurance * * * to an individual policy.” (Emphasis added). The parent statutory provision cited earlier similarly requires that a group insurance policy must contain “[a] provision that if the insurance, or any portion of it, * * * ceases because of termination of employment * * * such person shall be entitled to have issued to him by the insurer * * * an individual policy of life insurance * * N. J. S. A. 17:34-32(9). (Emphasis added). Significantly, this provision goes on to state, “and provided further that (b) the individual policy shall be in an amount not in excess of the amount of life insurance which ceases because of such termination * * It is evident from the terms of the policy and the applicable statute that upon a reduction of a portion of Wells’ insurance in the amount of $13,300 following his retirement, he became entitled to convert all or a part thereof to an individual policy of life insurance.

Wells did not exercise this privilege to convert. But, as urged by plaintiff, the full amount of insurance was nevertheless payable as a death claim because the decedent did not receive any actual notice that this privilege to convert had ripened into existence, as contemplated by N. J. S. A. 17:34-32.2 (now N. J. S. A. 17B:27-24). The insurance policy provides:

sr * * If, * * * however, the Employee is entitled by the terms of this policy to convert all or part of his insurance to an individual policy but dies during the thirty-one day period following termination of insurance, the amount of insurance which might otherwise have been converted will be paid as a claim under this Policy, whether or not application for conversion has been made.”

This clause is directly responsive to the statutory mandate that a group insurance policy contain

A provision that if a person insured under the group policy dies during the period within which he would have been entitled to have an individual policy issue to him * * * and before such an individual policy shall have become effective, the amount of life insurance which he would have been entitled to have issued to him under such individual policy shall be payable as a claim under the group policy whether or not application for the individual policy or the payment of the first premium therefor has been made. [N. J. S. A. 17:34-32(11), now N. J. S. A. 17B:27-21]

Plaintiff contends that full insurance coverage was extended by N. J. S. A. 17:34-32.2 beyond this initial 31-day conversion period for an additional 60 days, or a total of 91 days from the termination of insurance: this would be inclusive of the date of the decedent’s death on February 12, 1970.

N. J. S. A. 17:34-32.2 provides:

If any individual insured under a group life insurance policy hereafter delivered in this Slate becomes entitled under the terms of such policy to have an individual policy of life insurance issued to him without evidence of insurability, subject to the making of application and payment of the first premium within the period specified in such policy, and if such individual is not given notice of the existence of such right at least fifteen days prior to the expiration date of such period, then the individual shall have an additional period within which to exercise such right; but nothing herein shall be construed 1 o. continue any insurance under the policy beyond the period provided in the. policy. Such additional period shall expire fifteen days next after the individual is given such notice, but in no event shall such additional period extend beyond sixty days next after the expiration date of the period provided in such policy. Written notice presented to the individual, or mailed by the policyholder to the last known address of the individual, or mailed by the insurer to the last known address of the. individual as furnished by the policyholder, shall constitute notice for the purpose hereof.

Historically it has been recognized that the conversion privilege in a group insurance policy does not ordinarily provide an extension or continuation of full insurance coverage coterminous with the option to convert. E. g., Juhl v. John Hancock Mut. Life Ins. Co., 107 Cal. App 2d 188, 236 P. 2d 628, 629 (D. Ct. App. 1951). See Aetna Life Ins. Co. v. Catchings, 75 F. 2d 628, 629 (5 Cir. 1935); Couch on Insurance 2d, § 82.93 at 1049 (1968); Annotation, “Termination or change in employment as affecting group insurance,” 50 A. L. R. 1286 (1927). The first New Jersey statute which compelled the inclusion of a conversion clause in group life insurance policies was passed in 1927. L. 1927, c. 53, provided for the issuance of an individual policy in place of group insurance coverage within 31 days after termination of employment, provided an application was made and the premium paid. There was no provision for a continuation of insurance in the interim. This was remedied by a 1935 amendment, L. 1935, c. 82, which extended insurance coverage under the group policy during the 31-day period from the date of termination of employment. This provision was clarified by L. 1938, c. 255, and L. 1942, c. 86.

In providing for continued insurance coverage following termination of employment the Legislature, in N. J. S. A. 17:34-32(9) and (11), used distinctive terminology — to the effect that if death occurs during the 31-day conversion period, the amount of life insurance which the person insured would have been entitled to convert “shall be payable as a claim * * This provision was set forth in section 2 of L. 1950, c. 301. In contrast is the language of N. J. S. A. 17:34-32.2, which was enacted as section 3 of L. 1950, c. 301. This provided, in effect, that if such an individual insured was not notified of the existence of his right to convert at least 15 days before the end to the 31-day conversion period, “then the individual shall have an additional period within which to exercise such right * * *." There is no provision in N. J. S. A. 17:34-32.2 for a continuation of full coverage under the group insurance policy during the extension of the conversion privilege period as provided therein. Indeed, this is explicitly countermanded: “* * * nothing herein shall be construed to continue any insurance under the policy beyond the period provided in the policy.” The period provided in the policy (and in the statute, N. J. S. A. 17:34-32(9)) is the 31-day period following emplojonent termination. It is this 31-day period which delimits the continuation of insurance coverage payable as a death benefit under N. J. S. A. 17:34-32(11).

The Yew York courts have reached a seemingly different result. E. g., Payne v. Equitable Life Assur. Soc. of United States, 14 A. D. 2d 266, 220 N. Y. S. 2d 493 (App. Div. 1961), aff’d 11 N. Y. 2d 1006, 229 N. Y. S. 2d 752, 183 N. E. 2d 763 (Ct. App. 1961). In De Ville v. Continental Assurance Co., 10 A. D. 2d 386, 199 N. Y. S. 2d 876 (App. Div. 1960), aff’d 8 N. Y. 2d 1080, 207 N. Y. S. 2d 453, 170 N. E. 2d 457 (Ct. App. 1960), an insured had died 43 days after his group insurance coverage was terminated. The court noted that an insured had a conversion right for 31 days following termination of employment, and that full coverage continued during this time. The court held that under the applicable insurance code the failure of the insurer to notify the insured of his eligibility to convert to an individual policy during this time served to extend the insurance coverage for an additonal period of 90 days. Significantly, the New York statute did not contain a stricture comparable to that included in N. J. S. A. 17:34-32.2, i. e., that the statutory extension of the period within which to exercise the conversion privilege shall not be construed to continue the insurance coverage beyond the period of the extended coverage which is provided in the insurance policy itself. Moreover, the policy of insurance considered in the Be Ville case did not by its own terms limit the continuation of full insurance coverage to 31 days following insurance termination. This is in contrast to the policy herein which does delimit the period of extended coverage to 31 days.

Plaintiff also bases her claim upon the certificate apart from the insurance policy. It has been recognized that an insurance certificate does not of itself create any contractual relationship between the employee and the insurer. Kloidt v. Metropolitan Life Ins. Co., 18 N. J. Misc. 661, 16 A. 2d 274 (Sup. Ct. 1939). Ordinarily an insured holding a certificate of insurance is held to have constructive knowledge of the group insurance policy. 13 Appleman Insurance Law & Practice, § 7530 at 274 (1943); 19 Couch on Insurance 2d, § 82.13 at 987 (1968). In this vein defendants emphasize the clause in the certificate that

The provisions of the Group Policy principally affecting the Employee’s insurance are described on this and the following pages of this certificate. All benefits described herein are governed by and are subject in every respect to the Group Policy which alone constitutes the agreement under which payments are made.

Nevertheless, in a particular context a certificate issued pursuant to a group insurance policy may, together with the policy itself, constitute the contract between the parties. Metropolitan Life Ins. Co. v. Poliakoff, 123 N. J. Eq. 524 (Ch. 1938). Moreover, the certificate herein is not a mere memorial of the insurance contract. It is a document required to be issued by statutory directive. Every group life insurance policy issued in New Jersey must contain

A provision “that the insurer will issue to the policyholder for delivery to each person insured a [individual] certificate setting forth a statement as to the insurance protection to which he is entitled, to whom the insurance benefits are payable, and the rights and conditions set forth in (9), (10) and (11) following. [N. J. S. A. 17:34-32(8), now N. J. S. A. 17B:27-18]

Insurance contracts have been characterized as adhesion contracts whose terms often are unintelligible to the insured. Harr v. Allstate Ins. Co., 54 N. J. 287 (1969); Allen v. Metropolitan Life Ins. Co., 44 N. J. 294 (1965). Insurance companies have a duty to make policy provisions plain and prominent, especially those relating to coverage. Harr v. Allstate Ins. Co., supra. With respect to a certificate of group insurance this obligation to be clear is crystalized in N. J. S. A. 17:34-32(8). Correlatively, the clauses in an insurance policy should be given their ordinary and usual meaning; if there is no ambiguity, a strained or distorted construction will not be indulged. Jorgenson v. Metropolitan Life Ins. Co., 136 N. J. L. 148 (Sup. Ct. 1947). Moreover, when the contract is clear, the court is bound to enforce its terms as they are written, James v. Federal Ins. Co., 5 N. J. 21 (1950); Atlantic Casualty Ins. Co. v. Interstate Ins. Co., 28 N. J. Super. 81 (App. Div. 1953); it may not make a better contract for either of the parties, Kampf v Franklin Life Ins. Co., 33 N. J. 36 (1960); Rotwein v. General Accident Group and Cas. Co., 103 N. J. Super. 406 (Law Div. 1968).

The certificate herein designated the amount of insurance at $18,300. It further provided that “[i]f the Employee dies while insured under the Group Policy, the amount of insurance then in force on the life of the Employee will be paid to the beneficiary.” This indicates with reasonable clarity the amount of insurance payable as a death benefit if insurance was in effect at the time of an insured’s death. The certificate, as required by N. J. S. A. 17:34-32(8), also fairly and accurately summarizes the rights and conditions with respect to the termination of insurance, the elements of the conversion right and the continuation of insurance during the 31-day conversion period. By necessary implication these clauses indicate that if there were such a termination of insurance and a failure to convert, there would be a loss or a dimunition of insurance payable upon the subsequent death of the insured after the expiration of the conversion period. True, the certificate does not state, as does the policy, the extent of this insurance drop, but the failure to specify the amount of reduction cannot in the context of this case be considered as so confusing or misleading to an insured as to induce the belief that there would be no loss of coverage whatsoever. To reach the result urged by plaintiff the certificate would have to be read as though the mandatory provisions pertaining to termination of insurance, the conversion privilege and the continuation of insurance after the expiration of the 31-day period were nonexistent.

Another and critical issue must be addressed in the context of this case — - whether the failure to give a retired employee actual notice of the particular date when the termination of insurance is effective serves to continue full insurance coverage. It has been held that where insurance protection under a group insurance policy can be lost upon the termination of employment, there will be implied an obligation on the part of the employer to give actual or definite notice thereof to the insured. In Walker v. Occidental Life Ins. Co., 67 Cal. 2d 518, 63 Cal. Rptr. 45, 432 P. 2d 741 (Sup. Ct. 1967) the court considered a group insurance policy similar to the present one, and the California Insurance Code which contained a clause comparable to N. J. S. A. 17:34-32(9). It noted the position of a majority of jurisdictions holding

* * * under similar policy provisions, that the employee is entitled to receive notice that the employer has terminated their relationship. [Citations omitted.] The rationale of these decisions is that the privilege of converting the policy regardless of an employee’s physical condition is a valuable property right, that it would be inequitable to hold that an employee may be deprived of this' right without his knowledge at the whim of the employer, and that the inclusion of such a clause in the policy implies an intention that the employee should have knowledge of the precise date of termination of his employment. [63 Cal. Rptr. at 48. 432 P. 2d at 744; emphasis added]

In following the majority rule, the court stated:

* * * It is evident that the privilege of converting a group policy to a policy of individual insurance within 31 days after termination of employment would be of dubious value if an employee was not entitled to be notified when the employer had effected a termination. * * * We therefore hold that notice of termination is essential in order to render viable the conversion privilege contained in the certificate issued by defendant. [Id., emphasis added]

It has also been recognized that there cannot be a loss or forfeiture of coverage where there is a failure to notify an insured of pivotal events. Mau v. Union Labor Life Ins. Co., supra; cf. Elmhorst v. Prudential Life Ins. Co. of America, 48 Haw. 121, 148, 395 P. 2d 683 (1964). In Keane v. Aetna Life Ins. Co., supra, 22 N. J. Super. at 312, the court held that where there was “obscurity” as to whether the active work of an employee had been terminated, “a duty existed in the employer to spell out plainly the position it intended to take as to the continuance of the insurance.”

Here Wells received no actual notice as to the particular date upon which his retirement would be or had become effective. Wells obviously knew, following the conference on November 10, 1969 and his subsequent receipt of various payments, and benefits thereafter, that his retirement had been effectuated. But he was not advised as to any specific date that his retirement became effective so that he could estimate the accrual of the crucial period of time during which he would remain protected with continued insurance coverage and afforded an option to convert to an individual policy. Insofar as Driver did not notify Wells as to the actual date of the termination of his employment, this constituted a breach of its implied obligation. Its dereliction in this respect is shared vicariously by Prudential. “[E]mploymont can be terminated only by notice given by the employer to the employee * * * [and] the insurer contracted to be bound by what transpired between the employer and employee.” Keane v. Aetna Life Ins. Co., supra, 22 N. J. Super. at 305.

Assuming adequate notice of the termination date of employment, the court in Keane declined to consider the insurer liable on the policy for any failure to notify the insured of the actual termination of insurance. It stated that “[t]he insurer nowhere conditioned its obligation upon such notice and we cannot revise the contract to embody that obligation.” (At 309). Similarly in this case there is no explicit contractual undertaking set forth in the policy that a retired employee receive notice that premiums for his insurance were not paid or that his insurance was otherwise discontinued in order for there to be a termination of insurance. Nevertheless, the policy and certificate herein provided that an employee who is retired will be considered “as still employed on a full lime basis until the Employer, * * * terminates the Employee’s insurance by notifying the Insurance Company to that effect or by discontinuing premium payments for his insurance.” (Emphasis added). Thus, in this ease an insured employee by the very terms of the group policy and certificate was entitled to consider himself as fully employed for insurance purposes despite his actual retirement unless and until certain acts were performed. If, by necessary implication, an employer is obligated to notify an insured of the termination of his employment, this would import a comparable duly to apprise a retired employee of the actual date upon which there was a notification to the insurer or a discontinuance of premiums in order to conclude the employee’s insurance coverage. It follows by a parity of reasoning that this implied obligation would fall within the pale of the insurer’s contractual undertaking.

Wells received no notice at any time that as of a particular date his insurance would be terminated or decreased. There was a vague disclosure to the Wellses at the conference of November 10, 1969 that the insurance would be reduced to $5,000 following his retirement. This involved a discussion of future events. Subsequent retirement benefits received by Wells occurred on varying, dates. Moreover, the last insurance certificate indicating the face amount of his insurance sent to Wells while he was alive was in the amount of $18,300. He was not privy to the interoffice reports of Driver or the report sent by Driver to Prudential in December 1969 which, at best, is merely an indicium of the discontinuance of premiums or a notification that Wells was then categorized as a retired employee. Without definite notice, knowledge could not be imputed to Wells that upon a particular date his group insurance terminated, that his right to convert to an individual policy had become activated, and that the limited period of time during which he would remain fully protected was running.

In conclusion, the failure of Driver to furnish the insured with actual and definite notice of the exact date of the termination of his employment through retirement, compounded by the further failure to notify the insured that Prudential had been so notified of his actual retirement or that premiums had been discontinued as of a particular date, served to continue Wells in the status of a fully employed employee for insurance purposes under the group insurance policy. As a consequence there was no effective termination of his insurance coverage or any portion thereof, and insurance in the amount of $18,300 was payable to Wells’ beneficiary as a claim upon his death on February 12, 1970. Accordingly, summary judgment in favor of plaintiff against defendants is granted.

Plaintiff has moved for summary judgment with respect to count two of the complaint sounding in negligence; Prudential has cross-moved on this issue. Plaintiff contends that if there were a loss of insurance coverage under the terms of the group insurance contract by virtue of decedent’s failure to exercise his privilege to convert, decedent had not been properly or carefully advised as to his insurance protection by Driver’s representatives and this negligence occasioned the loss. Defendants urge that neither Driver nor Prudential owed an antecedent duty to Wells, the negligent discharge of which can give rise to liability in tort.

An individual may not be obligated to perform a service for another, yet, upon his voluntary undertaking to act, may be found liable in tort for negligently performing or failing to perform the service gratuitously assumed, even in the absence of a contractual undertaking. Valdez v. Taylor Automobile Co., 129 Cal. App. 2d 810, 278 P. 2d 91 (D. Ct. App. 1954); Prosser, Torts, § 32 at 190 (1941). The principle that a volunteer must act with due care recurs in all areas of the tort field. E. g., O’Neill v. Suburban Terrace Apartments, Inc., 110 N. J. Super. 541 (App. Div. 1970); Barbarisi v. Caruso, 47 N. J. Super. 125 (App. Div. 1945); Freddi-Gail, Inc. v. Royal Holding Corp., 45 N. J. Super. 471 (App. Div. 1957); La Brasca v. Hinchman, 81 N. J. L. 367 (Sup. Ct. 1911); Restatement, Torts 2d, § 324 at 139 (1965); Restatement, Agency, 2d, § 378 at 175 (1958); Seavey, “Reliance upon Gratuitous Promises or Other Conduct,” 64 Harv. L. Rev. 913 (1951).

In the present case a triable issue of fact endures with respect to whether, by virtue of any express contractual undertakings, including the employer-employee relationship or because of a course of dealing with its employees, Driver owed Wells, as its employee, a duty to give adequate advice concerning his options upon retirement including his insuranee protection. Such an issue at trial would involve an elucidation of the duties of Driver’s personnel officers vis-avis employees, the administration of the group insurance policies, the purpose and nature of the meeting with the Wellses on November 10, 1969, and the extent to which the Wellses relied upon the superior knowledge of Driver’s representatives. A trier of fact might well conclude that there was a duty on the part of Driver to guide Wells through the maze of his retirement and insurance options, or that there was a voluntary undertaking sufficient to posit such a duty on the part of Driver. That being so, the employer was bound to exercise reasonable care in the discharge of that duty, and liability would attach if it were determined that reasonable care was not exercised and Wells suffered a loss of insurance as a proximate result thereby. This would be within the parameters of the common law doctrine that one who undertakes to perform an act and performs it negligently is liable for his malfeasance. Dudley v. Victor Lynn Lines, Inc., 48 N. J. Super. 457 (App. Div. 1958), rev’d on other grounds, 32 N. J. 479 (1960); La Brasca v. Hinchman, supra; cf. Stockmen’s Nat. Bank of Casper v. Richardson, 45 Wyo. 306, 18 P. 2d 635 (Sup. Ct. 1933); Carr v. Maine Central R. Co., 78 N. H. 502, 102 A. 532 (Sup. Ct. 1917). No such course of action, however, was undertaken by Prudential. Nor is there any factual or other basis to imply an antecedent duty owed by it to Wells. Moreover, the facts do not suggest that in advising Wells as to his status and rights as a retired employee, Driver through its representatives acted as the agent for Prudential.

Summary judgment in favor of Prudential with respect to plaintiff’s complaint of negligence is granted. Summar3r judgment in favor of plaintiff against Driver on the issue of negligence is denied, there being genuine issues of material facts to be tried.

      The statutory provisions applicable to this ease have been repealed and superseded by L. 1971, c. 144; N. J. S. A. 17B:27-1 et seq., a revision of the insurance laws which became effective January 1, 1972. The superseding provisions are comparable to those sections which are germane to this litigation and will be noted accordingly.


author: Wiener, J. C. C.,

text:
    CITY OF NEWARK, PLAINTIFF, v. SUE CORPORATION, DEFENDANT.
    Essex County Court
    Decided October 25, 1972.

      Mr. Irving B. Venokur, Assistant Corporate Counsel, for Plaintiff.

      Mr. Walter R. Cohn for the defendant (Messrs. Cohn & Turk, attorneys).
   Wiener, J. C. C.,

Temporarily Assigned. This matter comes before the court on appeal from the Municipal Court of the City of'Newark and was heard de novo on the transcript below, as provided for in R. 3:23-8(a). Both sides filed briefs in accordance with R. 3:23-8(b). The question before this court is: What are the responsibilities of an owner as to the maintenance and safety of real property where possession of the premises have been taken by the municipality which has purchased the tax sale certificate under N. J. S. A. 54:5-53.1?

The pertinent portion of the statute reads:

Whenever a municipality has heretofore or shall hereafter become the purchaser of any lands at any tax sale and the certificate of sale has been or shall be recorded in the manner provided by chapter five of Title 54 of the Revised Statutes, such municipality shall be entitled to immediate possession of the property sold and described in the certificate and to all the rents and profits thereof while the holder thereof, until redemption, but all rents and profits collected by such municipality shall be credited on the amount due upon said certificate of tax sale and for subsequent taxes, assessments or other municipal charges assessed against said lands and when the total amount due for the same, including all interests and costs, has been paid, the said lands shall be redeemed from said tax sale.

Sue Corporation, defendant below, owned a six-family dwelling located at 786 Hunterdon Street, Newark, New Jersey. Prior to 1967 Sue was in default on its real estate taxes. The City of Newark held a tax sale, became the owner of the tax certificate and recorded it in the Essex County Register’s Office on November 9, 1967. In September 1969 the Newark tax collector commenced collecting rents from the tenants, to be “credited on the taxes, assessments and other Municipal charges assessed against said lands.” Newark continued in possession and collected rent until May 1971, at which time the premises had deteriorated to the extent that all tenants vacated. A Newark building inspector inspected the premises on June 33, 1971 and served the first notice on Sue July 6, 1971. Thereafter Newark brought the present charges in the Newark Municipal Court, to wit: four complaints alleging structural defects, debris, hazardous conditions, vacancy, lack of security and fire hazard, to which Sue pleaded not guilty. Sue was found guilty on all four complaints and fined a total of $1,500. This appeal followed.

In their briefs counsel on both sides see the issue as one of a constructive trust. Sue says that Newark held the land as a constructive trustee and as such should have maintained the property. Newark counters with the argument that Sue had legal title and Newark’s possession and abandonment removed it from any responsibility for the maintenance and safety of the premises.

The court finds both Sue’s “constructive trustee” and Newark’s “legal title argument” nonpersuasive. Research of the authorities finds no reported case on point with the instant matter. There is no reason why basic real property law and fundamental fairness should not apply. Newark purchased the certificate in accordance with N. J. S. A. 54:5-32, which provides that “the sale shall be made in fee to such person as will purchase the property, subject to redemption.” Thereafter Newark acquired possession and control of the premises by exercising the option granted under N. J. S. A. 54:5-53.1. Such option was granted by the Legislature to allow municipalities to gain revenue where property owners have been collecting rent and not paying taxes. The exercise of this option must carry with it certain duties and obligations. It could not have been intended that a municipality join those who milk properties, permitting them to deteriorate and thereby become uninhabitable, vacant, dangerous, and then abandoning them when the tenants are forced to vacate because of neglect.

In summary, the admitted fact pattern reveals that Newark took possession and control of a habitable, occupied multi-dwelling house and collected rents and profits therefrom. Three years later, in 1972, Newark abandoned the property in an admittedly deteriorated, dangerous and vacant condition, and now seeks by punitive measures to pass responsibility for repairs and safety to the absent nominal owner of record.

Assuming arguendo that the nominal owner is a defunct corporation or a person absent from the jurisdiction, does that mean the blight upon the community must remain ? This court does not think so. Certainly three years of possession, management and retaining of rents and profits estops Newark from transferring responsibility by abandonment, followed by punitive prosecution.

The court finds as a fact that the subject matter complaints herein are chargeable to Newark and are not transferable to defendant Sue Corporation upon abandonment of the premises by Newark. I therefore conclude that the complaints have not been sustained beyond a reasonable doubt and they are dismissed.