author: Eastwood, J. A. D.

text:
    PENNSYLVANIA-READING SEASHORE LINES, APPELLANT, v. BOARD OF PUBLIC UTILITY COMMISSIONERS, DEPARTMENT OF PUBLIC UTILITIES, STATE OF NEW JERSEY AND NEW JERSEY STATE HIGHWAY DEPARTMENT, RESPONDENTS.
    Superior Court of New Jersey Appellate Division
    Argued April 23, 1951
    Decided May 11, 1951.

      Before Judges Eastwood, Bigelow and Ebettnd.

      Mr. John Lloyd, Jr., argued the cause for the appellant (Messrs. Lloyd Horn, attorneys). •

      Mr. Frank A. Mathews, Jr., argued the cause for the respondents (Mr. Theodore D. Parsons, Attorney-General, attorney).
   The opinion of the court was delivered by

Eastwood, J. A. D.

The Department of Public Utilities, Board of Public Utility Commissioners (hereinafter referred to as the “board”), approved the application of the State Highway Department “to construct State Highway Boute 4 at grade over the Stone Harbor Branch of the Pennsylvania-Beading Seashore Lines” (hereinafter mentioned as the “railroad”), and ordered the railroad to install and maintain warning signals and safety devices.

Concisely, the conceded pertinent facts are: The State Highway Department presently is constructing State Highway Boute 4, extending in a northerly-southerly direction almost the entire length of the State, its southerly terminus being Cape May City. The highway, at the proposed crossing, will bo a dual one, separated by an island, with a concrete pavement 24 feet wide for each of the north-bound and southbound lanes of traffic. It is anticipated that Boute 4 will carry a considerable volume of automobile traffic. By reason of the fact that the proposed highway will intersect the Stone Harbor Turnpike, the crossing will have an over-all width of 317 feet. Presently, the railroad has no passenger service and but one customer at the southerly end of its line for transportation of freight. In the winter months, the railroad operates approximately one trip per month and, in the summer months, five or six round trips per month, to transport freight to its one customer, the Stone Harbor Lumber Company. The trips are made either on Monday or Tuesday, as required, between noon and 3 :00 p. m. In 1943, the railroad company's application to the Interstate Commerce Commission for permission to abandon the line was denied. More recently, another application to abandon made by the railroad was withdrawn when the lumber company interposed opposition thereto. The record indicates that the railroad did not raise any procedural questions before the board.

The railroad contends that the application was made by virtue of R. S. 48 :2-28, and the board has no power to make the order. R. S. 48:2-28 provides:

“No highway shall be constructed across the tracks of any railroad company at grade, nor shall any track over which locomotives, railroad or street railway cars are to pass be laid across any highway, so as to make a new crossing at grade, nor shall the tracks of any railroad, street railway or traction company be laid across the tracks of any other such company without first obtaining permission from the board.
This section shall not apply to the replacement of lawfully existing tracks.”

The railroad company argues that merely because the application comes from another agency qf the State, the board’s permission should only be granted after due consideration is given to the interests of the railroad company and the public; that the Legislature, by the enactment of L. 1929, c. 88, R. S. 48: 12-68 ei seq., adopted a declaration of public policy that required the State Highway Commissioner to formulate an annual program “for the elimination of railroad crossings at grade or State Highways” and that this public policy has since been continued in effect; that the board should have given consideration to the financial risk to the railroad attending the creation of the proposed crossing and the financial inequity in requiring the railroad company to install and maintain warning signals and other safety devices when viewed in the light of the fact that the line is only operated for the benefit of one customer; and that the fulfillment of the statutory conditions of R. S. 48 :2-29 requires that there be a crossing in existence at the time the board makes its order. R. S. 48:2-29 provides:

“Whenever it shall appear to the board that a public highway and a railroad or a street railway, or that a railroad and a street railway, cross one another at the same level and that conditions at such grade crossing make it necessary that gates be erected or that some other reasonable provision for the protection of the traveling public be adopted, the board may order the railroad or street railway company or both, to install such protective device or adopt such other reasonable provision for the protection of the traveling public at the crossing as in the discretion of the board shall be necessary.”

The parties are in accord that warning signals and safety devices will be required when the crossing is constructed. R. S. Stewart, an official of the railroad, testified that “we feel if this crossing is permitted or ordered by the Board, it should be protected by flashing lights.” Thus, the necessity for warning signals and safety devices being conceded, the sole question is whether the order requiring the railroad to install and maintain same is reasonably proper under the circumstances and whether it has been prematurely entered.

That the Legislature may empower a state commission to compel railroad companies to provide safeguards at crossings of railroads with highways and to determine the measures to be taken for the protection of the public traveling upon the highways, is settled law. Such a commission may bo authorized to require the erection of gates or bars, or the maintenance of a flagman, at a grade crossing, where the public safety so requires. A railroad company takes its charter subject to the power of the State to provide for the safety of the public, insofar as the safety of the lives and persons of the people are involved in the operation of the railroad. The company here laid its tracks subject to the condition, necessarily implied, that their use could be so regulated by competent authority as to insure the public safety. And as all property, whether owned by private persons or by corporations, is held subject to the authority of the State to regulate its use in such manner as not to unnecessarily endanger the lives and the personal safety of the people, it is not a condition of the exercise of that authority that the State shall indemnify the owners of property for the damage or injury resulting from its exercise. Property thus damaged or injured is not, within the meaning of the Constitution, taken for public use, nor is the owner deprived of it without due process of law. The requirement that compensation be made for private property taken for public use imposes no restriction upon the inherent power of the State by reasonable regulations to protect the lives and secure the safety of the people. The expenses that will be incurred by the railroad in installing and maintaining warning signals and safety devices, if found to be reasonably necessary for the safe operations of its road, necessarily result from the maintenance of a public highway, under legislative sanction, and must be deemed to have been taken by the company into account when it accepted the privileges and franchises granted by the State. Such expenses must be regarded as incidental to the exercise of the police powers of the State. Chicago, B. & Q. R. Co. v. Chicago, 166 U. S. 226, 41 L. Ed. 979, 17 Sup. Ct. Rep. 581 (1897); Eckert v. Perth Amboy and Woodbridge R. R. Co., 66 N. J. Eq. 437 (E. & A. 1903); Central R. R. Co. of N. J. v. Bd. Pub. Utility Commrs., 112 N. J. L. 559 (Sup. Ct. 1934); affirmed 114 N. J. L. 397 (E. & A. 1935).

In support of its argument that R. S. 48:2—29 is not applicable where the highway crossing is not in existence but is proposed to be constructed in the future, the railroad cites the case of Eckert v. Perth Amboy and Woodbridge R. R. Co., supra. In the Eckert case, the court construed L. 1898, p. 110, “An Act for the protection of railroad crossings,” providing that “* * * whenever a condition arises which makes it appear to the satisfaction of the chancellor, * * * that it is reasonable and necessary for the security of human life, or the protection of the public, that gates or bars should be erected or maintained, or a flagman should be stationed at a crossing, the court shall make an order or decree to that effect,” and the court held that the statute “operates upon the situation as it exists at the time of the filing of the petition under the act.” In the Eckert case the court was considering the applicability of the statute with respect to the powers granted to municipalities and the Court of Chancery. However, with respect to the police power of the State, the court significantly remarked:

“Railway corporations, without any express reservation of the powers over them by the legislature in their charter, are subject, like individuals, to be restrained, limited and controlled in the exercise of their powers by such laws as the legislature may pass, based on the principles of safety to the public.”
“The state itself could, by statute, take into its own hands, without using the municipal agency, the protection of railway crossings, and when it confers this power upon its agent it can condition or limit it, as it chooses. By the act of 1898 it has only conferred the initiative upon the municipal bodies of the state and vested in the court of chancery, after hearing, the right to finally order whether the petition o£ the municipality, authorized by its ordinance, shall he granted.”

In addition to the authority granted to the board by virtue of R. S. 48:2-28, 29, the Legislature, in exercising its police power, vested the board with broad powers to supervise and regulate railroads. This delegation of power is set forth in R. S. 48:2-13, the pertinent part of which reads:

“Tlie board shall have general supervision and regulation of and jurisdiction and control over all public utilities as hereinafter in tills section defined and their property, property rights, equipment, facilities and franchises so far as may be necessary for the purpose of carrying out the provisions of this Title.”

As Mr. Justice Parker stated in Atlantic City R. R. Co. v. Pleasantville, 99 N. J. L. 328 (Sup. Ct. 1924), at p. 330:

*■* * * by a course of legislation beginning in 1911 and continued to the present time, the supervision and regulation of railroad crossings throughout the state have been substantially turned over to tlie public utility commission.”

Cf. Erie R. R. Co. v. Board Public Utility Commrs., 107 N. J. L. 409 (Sup. Ct. 1931); affirmed 109 N. J. L. 264 (E. & A. 1932).

The railroad's argument that R. S. 48 :2-29 is ineffective because the application here is for a proposed crossing, is not persuasive. Unquestionably, if the proposed crossing is constructed, the board may then, if warranted by tlie existing circumstances, direct the railroad to install and maintain warning signals and safety devices. We-do not think that the statutory provision in question can be given such a narrow ox limited construction as contended fox by the railroad. Certainly, if the crossing is never actually constructed, the order will be meaningless. Therefore, if the board has the requisite authority—and we do not think this can be successfully chailenged—it matters little whether the order is made prior to or subsequent to the construction of the crossing; provided, of course, that the conditions prevailing at the completion of the construction of the crossing are substantially the same as those represented to the board by the State Highway Department at the time of the making of the order.

The railroad contends further that under the proofs before the board, its discretion was not reasonably and properly exercised. The appellant states the applicable law, namely, the board’s order must rest upon a “reasonable basis.” W. J. & S. R. R. Co. v. Public Utility Bd., 87 N. J. L. 170 (E. & A. 1915). The order of the board must not be “extravagant in the light of the circumstances,” and it must not have an improper “effect on economical management and service” of the railroad. Lehigh Valley R. R. Co. v. Board of Public Utility Commissioners, 278 U. S. 24, 49 S. Ct. 69, 73 L. Ed. 161, 62 A. L. R. 805 (1928). It must be based on evidence which “reasonably supports” it. Erie R. R. Co. v. Bd. Pub. Utility Com’rs., 87 N. J. L. 438 (Sup. Ct. 1915). The appellant argues that the Legislature has placed the entire expense of locating and constructing crossings of railroads and state highways not at grade, under certain conditions, upon the Slate Highway Department, and contends that the Legislature intended to similarly impose the cost of installing and maintaining safety devices at crossings at grade upon the highway department. We differ with appellant’s view and think that the Legislature has purposefully enacted certain laws applicable to construction of crossings not at grade and others, as here, affecting grade crossings. The board found that: Our examination of the record leads us to the conclusion that there was evidence before the board to justify their action and to reasonably support it. Under such circumstances, this court will not disturb the adjudication of the board. Rahway Valley R. R. Co. v. Bd. Pub. Utility Com’rs., 127 N. J. L. 164 (Sup. Ct. 1941); New Jersey Power & Light Co. v. Borough of Butler, 4 N. J. Super. 270 (App. Div. 1949); Hohorst v. Marion Bus Transp. Co., Inc., 5 N. J. Super. 279 (App. Div. 1949).

“Upon consideration of the record as a whole the Board finds that establishment of the proposed grade crossing is in the public interest. The Board also finds that because of the extreme width of the crossing, the probably heavy traffic on the State Highway, and the complication of a local highway intersection immediately adjacent to the proposed railroad crossing, some effective means of protection such as flashing light warning signals should be provided to safeguard the public in the use of the crossing.”

The railroad contends further that the order results in a confiscation of its property, denies it the equal protection of the laws and the rights of its property without due process of law, citing the case of Nashville, Chattanooga & St. Louis Railway v. Walters, 294 U. S. 405, 55 S. Ct. 486, 79 L. Ed. 949 (1934). The Walters case is distinguishable from the case at bar. It reviews an order of the Tennessee State Highway Commissioner eliminating a grade crossing and imposing one-half of the total cost on the railroad company. The order here does not impose upon the railroad any part of the cost of the construction of the proposed crossing; consequently, that question is not before us. The question of the constitutionality of the delegation by the Legislature to the board of the authority exercised here is no longer open to challenge. In the case of Chicago, B. & Q. R. Co. v. Chicago, supra, Ur. Justice Harlan, speaking for the court, cited with approval the case of New York & N. E. R. Co. v. Bristol, 151 U. S. 556, 567, stating that in the Bristol case:

“® * * this court declared it to bo thoroughly established lhat the inhibitions of the Constitution of the United States upon the impairment of the obligation of contracts, or the deprivation of property without due process or of the equal protection of the laws, by the states, are not violated by the legitimate exercise of legislative power in securing the public safety, health, and morals. ‘The governmental power of self-protection’ the court said ‘cannot be contracted away, nor can the exercise of rights granted, nor the use of property, be withdrawn from the implied liability to governmental regulation in particulars essential to the preservation of the community from injury.’ ”

As stated in M. & E. R. R. Co. v. Orange, 63 N. J. L. 252 (E. & A. 1899), at p. 268:

ns: # !j ‘Uncompensated obedience to a regulation enacted for the public safety under the police power of the state is not a taking or damaging without just compensation of private property, or of private property affected with a public interest.’ ”

The decision and order of the board are affirmed.


source: Caselaw Access Project

author: Jayne, J. A. D.

license: Public Domain

text:
    ANGELO NICOSIA AND FREDERICK SCHAEFER, PLAINTIFFS-APPELLANTS, v. RALPH MARANGI, DEFENDANT-RESPONDENT, AND JAMES E. ALSTON, DEFENDANT.
    Superior Court of New Jersey Appellate Division
    Argued May 14, 1951
    Decided May 22, 1951,

      Before Judges McGeehan, Jayne, and ¥*. J. Brennan, Jr.

      Mr. Harry Chashin argued the cause for appellants (Messrs. Ma,rcus Levy, attorneys; Mr. Hyman W. Rosenthal, of counsel).

      Mr. Donad G. Fox argued the cause for respondent (Messrs. Fox Sehackner, attorneys).
   The opinion of the court was delivered by

Jayne, J. A. D.

The present litigation arose out of tho occurrence of a collision on the morning of September 10, 1949, at the intersection of Edison Street and Maplewood Avenue in the City of Clifton, between a passenger automobile owned and occupied by the plaintiff Angelo Nicosia and driven by the plaintiff Frederick Schaefer, and a motor truck owned by the defendant Ralph Marangi and operated by the defendant James E. Alston.

At the conclusion of the introduction of the evidence, the plaintiffs submitted to a voluntary dismissal of their cause of action against the defendant Alston, and on motion the court granted a judgment in favor of the defendant Marangi.

We do not concern ourselves with the proof of the circumstances amid which the collision itself occurred. The subject matter of the present appeal pertains solely to the existence of any evidence to establish in a prima facie degree either the express or implied authority of the defendant Alston to operate the truck on that occasion as the agent and servant of the defendant Marangi.

The evidence discloses that the defendant Marangi was engaged in the business of collecting and removing garbage and ashes deposited in front of the premises of the inhabitants of the City of Clifton. In the pursuit of that business he used several motor trucks, and for each truck he engaged a crew consisting of a licensed driver to operate the truck and among the others one or more “lifters” whose duty it was to lift the containers from the curb to the body of the truck. There is no doubt that Alston was employed as a “lifter.” The general supervision of the operations was entrusted by Marangi to his foreman, Curley.

About one-half hour before the happening of the collision, Curley in the course of his customary tour of inspection arrived in the vicinity of the truck and discovered that one Schettino, who was the driver of the truck, had become ill and that he was unable to continue to operate the truck.

Observing the situation Curley announced his intention to take Schettino home and admonished the others including Alston: “Stay right here and wait for me to come back.” “You fellows stay right here until I come back.” “I am going to take Mr. Schettino home, I intend to find someone else, if not I will come back and operate the truck myself. * * *”

Notwithstanding such express instructions, and moreover without any official license to drive a motor vehicle, Alston nevertheless resolved to operate the truck during the temporary absence of his foreman and in so doing engaged in the occurrence of the mishap.

Although Alston had pursued his employment from January 6, 1948, it is not evident that the defendant Marangi or his foreman, Curley, had any knowledge that Alston had ever driven any of the trucks on a public street. Marangi had expressly forbidden him to drive them.

His employer, Marangi, described the nature of the duties of Alston’s employment:

“He picks cans off the curb and throws them up on the truck to a man waiting up there, and the man on the truck empties the can and throws it back to him and he places the can back on the curb.”

Alston’s acknowledgment of his conduct is exposed by the following excerpt from his testimony:

“Q. And he (Curley) told you that he was going out to see or off to see if he could get another driver, didn’t he? A. Yes.
Q. And he also told you that if he could not get another driver he would come back himself and drive the truck, did he not? A. Yes.
Q. And on the morning of September 10, you had not seen Sir. Morangi that morning, had you? A. No.
Q. You had not talked to him the night before, had you? A. No.
Q. As a matter of fact, Mr. Morangi never at any time gave you permission or authority as a helper to drive that truck on the day of September 10, 1940, did he? A. No.
Q. And Mr. Curley, as your immediate superior and supervisor, never gave you any permission or authority to drive that truck, did he? A. No.
Q. And Mr. Schettino, who was the driver of the truck, never gave you any permission to drive or to operate that truck, did he, on September 10, 1949? A. No.
Q. So that as a matter of fact, when you got into that truck and started to drive that truck, you were driving the truck in violation of or against the instructions of your employers that you were not to operate the truck, is that so? A. That is right.”

True, there is some testimony disclosing that on one occasion Marangi discovered Alston operating a truck on Marangi’s private garage property and expressed in the language of Marangi, “I gave him Hell for doing it.” The foreman, Curley, once saw Alston driving a truck on the garage property up to a gas pump. “A. I saw him one time. The next time I catch him he is fired, and he knows that.”

Prom other testimony it may be justifiably inferred that Schettino, the licensed driver, had on some occasions permitted Alston to drive the truck without the knowledge of his employer or his foreman. Schettino frankly acknowledged that he did not have “any authority whatsoever” to permit any of “his helpers or loaders to operate the truck.”

Counsel for the appellant endeavoT to magnify unduly the evidential weight and legal significance of two of the acknowledged facts: the one, that the defendant Marangi was the owner of the truck; the other, that it was being operated in furtherance of that defendant’s business.

The rule is familiar that proof of the defendant’s ownership of an automobile driven on a public highway raises a presumption of fact that such automobile was in the possession of the defendant, if not personally, then through his servant, the driver, and that such driver was acting within the scope of his employment. Both or either of those presumptions may, however, be overcome by uncontradicted proof to the contrary, and if so overcome by uncontroverted proof that the automobile was not being used by the servant within the scope of his employment, then a motion for judgment for the defendant owner will be granted. It is only where the evidence in such particulars is contradictory or reasonably subject to contradictory interpretations that the question becomes one for the determination of the jury. Tischler v. Steinholtz, 99 N. J. L. 149 (E. & A. 1923); Onufer v. Strout, 116 N. J. L. 274 (E. & A. 1936); Coopersmith v. Kalt, 119 N. J. L. 474 (E. & A. 1938).

In the present case we are oí the opinion that the proofs adduced contained no contradictions nor were they subject to contradictory interpretations concerning the scope of the servant Alston’s employment.

It is an erroneous notion to suppose that a master’s liability may be established merely by7 proving that the act of the servant, although unauthorized, unprivileged, and capricious, nevertheless chanced coincidentally to be “in furtherance of the master’s business.”

Of the reported eases on the point we conceive the following excerpt extracted from the decision in Haining v. Turner Centre System, 50 R. I. 481, 149 A. 376 (Sup. Ct. 1930), to be particularly apposite: “Both cases assert that the employee was acting in furtherance of the master’s business. This alone is not enough. It also must appear that the means of furtherance have been expressly or impliedly entrusted to the employee. If a servant is employed only as a helper on a truck, implied authority to drive the truck on the public highways is not a warrantable inference from such hiring. To find that operation of the truck is within the scope of such servant’s employment, it must be shown to be included in the general type of service in which the servant is engaged. Stone v. Com. Coal Co., 259 Mass. 360, 156 N. E. 737. Operating a motor vehicle is not a task to be intrusted to< every employee. It requires special skill. One may not operate alone without permission from the state until after he has passed an examination to establish his qualifications as a driver. Operation on public highways without a license is contrary to law, and the jury7 may not be permitted to infer from the mere presence of the helper on the truck that the employer impliedly authorized him to do an act in violation of law, nor can the mere fact that injury is done by a servant while using the master’s property in what he honestly believes to be the latter’s service warrant an inference of authority in the face of evidence that the servant is acting outside the scope of his employment. Boettcher v. Best Co., 203 App.. Div. 574, 197 N. Y. S. 1. The intention of the servant to further the master’s business, however laudable, may not make the master responsible for the servant’s torts unless committed while acting within the bounds of duties expressly or impliedly entrusted to him. O’Loughlin v. Mackey, 182 App. Div. 637, 169 N. Y. S. 835.”

Moreover we recognize the well established principle that where a servant, even in the execution of his general duty, uses an instrumentality not expressly or impliedly authorized by his master, and damage results, the master is not liable under the doctrine of respondeat superior. Blackman v. Atlantic City, &c., R. R. Co., 126 N. J. L. 458 (E. & A. 1941).

We conclude that the action of the trial judge in the existing state of the evidence was not erroneous, and the judgment is therefore affirmed.


author: JIrkujsjd, J. S. C.

text:
    THE MOTORLEASE CORPORATION, A CONNECTICUT CORPORATION, PLAINTIFF-APPELLANT, v. ANN B. MULROONY, DEFENDANT-RESPONDENT.
    Superior Court of New Jersey Appellate Division
    Argued April 30, 1951
    Decided May 17, 1951.

      Before Judges Eeeuitd, Doktges and Pboctob.

      Mr. Harry Schaffer argued the cause for the plaintiff-appellant.

      Mr. Walter H. Jones argued the cause for the defendant-respondent.
   The opinion of the court was delivered by

JIrkujsjd, J. S. C.

The plaintiff, owner of a Chevrolet sedan automobile, on August 29, 1949, by written instrument leased it to Yeeder-Eoot, Inc., for one year. The car was in the possession of William T. Ileydt, Sr., an employee of the lessee, and on April 28, 1950, was being driven by him on an errand unrelated to his employment, when it came into collision with an automobile owned and operated by the defendant. Charging the defendant with negligence, the plaintiff brought this suit in the Passaic County District Court to recover for the damage caused to its automobile, but the court determined that the plaintiff had failed to establish the negligence of the defendant and accordingly rendered judgment for the defendant. The plaintiff appeals, urging that the judgment is contrary to the evidence.

At the opening of the trial, pursuant to notice, the defendant moved for the dismissal of the action on the ground that the defendant here, Ann B. Mulroony, had previously brought suit against William T. Heydt, Sr., the operator of plaintiff’s car, in the Essex County District Court to recover for personal injuries and damage to her ear arising out of the collision, and that the trial thereof resulted in a judgment in favor of Heydt and against her because the court found that he was negligent and she was contributorily negligent. The defendant argued that the judgment was res judicata; that the negligence of neydt constitutes contributory negligence chargeable to the plaintiff in this action perforce of R. S. 46:36-1. The court reserved decision on this motion until the close of the case and then denied it, ruling that the statute was inapplicable. The first question for consideration is whether this ruling was correct.

Prior to the enactment of chapter 53 of the Laws of 1939, R. S. 46 :36-l, the law was that the bailor’s right of action for damages to the property bailed was not defeated by the negligence of the bailee in the management or operation of the property. In a suit by the bailor against a third-party tortfeasor to recover damages to the vehicle, the contributory negligence of the bailee was not imputable to the bailor. Commercial Credit Corp. v. Satterthwaite, 107 N. J. L. 17 (Sup. Ct. 1930), affirmed 108 N. J. L. 188 (E. & A. 1931); First National Acceptance Corp. v. Annett, 121 N. J. L. 356 (Sup. Ct. 1938), affirmed 124 N. J. L. 78 (E. & A. 1940).

To remedy this situation, the Legislature enacted chapter 53 of the Laws of 1939, R. S. 46:36—1, N. J. S. A., which provides that in a suit by the bailor against a third party based on the negligence of the third party to recover damages to the goods or chattels in the custody, control or possession of the bailee, his agents, servants or employees, the contributory negligence of the bailee, his agents, servants or employees, shall constitute a proper and valid defense and be a complete bar to the recovery in the same manner as though the suit were brought by the bailee. See Flagg v. Johansen, 124 N. J. L. 456 (Sup. Ct. 1940), which quotes the act in its entirety. In interpreting • and construing this statute, the court must consider: first, the old law; second, the mischief; and, lastly, the remedy. Stephenson v. Stephenson, 102 N. J. Eq. 50 (E. & A. 1927). The mischief which the statute was intended to remedy was the injustice of a situation in which the bailor could recover, although the bailee could not.

The automobile leased by the plaintiff to VeederRoot, Inc., the lessee, was in the possession and control of Heydt, an employee of the lessee, but at the time was being used on a personal errand and not in the business of the employer-bailee. The court assumed that the relationship of employer and employee between the bailee and Heydt did not exist when he was using the automobile on a personal errand, and accordingly considered the statute inapplicable. This construction of the statute by the court imposed a condition which is not to be found in the act', namely, that the vehicle be used by the agent, servant or employee of the bailee in the scope of his employment in order that the contributory negligence of the operator be imputable to the bailor. The relationship of principal and agent, employer and employee, or master and servant is not terminated when the latter is not acting within the scope of his employment, or when he deviates from the line of duty. Such an act may be cause for termination, but does not, ipso facto, terminate the relationship. The ear was in Heydt’s possession as an employee of the bailee, although he was not driving it on his employer’s business. The use io which an employee may be putting property cnf rusted to him by the employer may be personal, but the custody or possession is nevertheless as employee. The statute does not require operation of the vehicle or use of the bailed property to be in the course and scope of the service.

It is to be observed that the statute does not impose liability upon the bailor for the negligence of the bailee or his agent. It applies only to the limited instance of a suit brought by the bailor to recover damages to the goods or chattels against a third-party tortfeasor; then, the contributory negligence of the bailee or his agent, servant or employee shall constitute a valid defense. Therefore, as we construe the statute in a suit by the bailor against a third-party tortfeasor, the defense of contributory negligence is available if the agent, servant or employee of the bailee is in lawful custody, control or possession of the vehicle. It is then immaterial that at the moment of collision, the car was not being nsed in the scope of the bailee's business, for the si atufe does not so limit the defense.

Now, was the judgment entered in the Essex County District Court against Ann T>. Mulroony in the suit which she brought against Heydt res judicata, the court there having decided that both parties had been negligent ? That suit concerned the same accident, but was brought bj1, Ann. B. Mulroony to recover for personal injuries and damages to her ’ automobile, which was not the subject of the bailment by plaintiff. An almost identical situation occurred in Hudson Transit Corp. v. Antonucci, 137 N. J. L. 704 (E. & A. 1948). The opinion makes no reference to R. S. 46 :36-1, N. J. S. A., and our examination of the state of case and the briefs on appeal reveals that it was not pointed out or argued at the trial or on the appeal. Mr. Justice Etcher held: “There is privity of estate or interest between the lessor and the lessee of personal property; but the doctrine of res judicata does not for that reason serve to bar plaintiff’s action. * * * A landlord and tenant have separate and distinct estates in the demised lands; and each has a right of action for a tortious injury to his own particular estate or interest, but not for injury to the estate or interest of the other. * * * Tims, the judgment of the District Court against the bailee for negligence does not constitute a bar to the instant action. The rule of collateral estoppel is not invokable in these circumstances. There is no such identity or privity of parties as to render the judgment in the District Court conclusive of the issue joined herein * * * for the judgment invoked is not one in favor of the bailee for the injury to the chattel, but against the bailee for the damage to Antonucci’s automobile.” Therefore, on the basis of the Antonucci case, it would appear that the judgment in the Essex County District Court is not res judicata here.

The court below did not pass upon the contributory negligence of the plaintiff, but rendered judgment for the defendant because the plaintiff had failed to establish defendant’s negligence. The plaintiff argues that this finding was contrary to the evidence. According to the testimony, the defendant was operating her car in an easterly direction on Bellevue Avenue, Montclair, New Jersey. Heydt was driving in the opposite direction on the same street. The defendant was looking for and intended to turn into The Fairway, a street running northerly from Bellevue Avenue. She was unfamiliar with the exact location of The Fairway and stopped her car at the southerly curb of Bellevue Avenue opposite the centre of The Fairway, took out her wallet, looked through it for a piece of paper which had the address of the place to which she was going, and, having found it, decided to make the left turn into The Fairway. Before doing so, she looked east on Bellevue Avenue and in her rear view mirror, and believing the area clear, she made the left turn in front of Hoydt’s car and was struck. A driver of an automobile intending to make a left turn at an intersection is obligated to use a high degree of care and seek an opportune and safe time lo do so. Oliver v. Leonardo, 135 N. J. L. 210 (Sup. Ct. 1947); Politi v. Pennsylvania Greyhound Lines, 5 N. J. Super. 364 (App. Div. 1949). We think that the evidence indicated negligence on the part of the defendant. But, from our review of the facts, we find that Heydt was not free from negligence. He testified that after making his first observation about 125 feet from The Fairway, he did not again make any observations of any kind and did not see the defendant’s car until it was one foot in front of him. We do not consider, Iherefore, that he exercised reasonable care.

Accordingly, the collision occurred because of the negligence of the defendant and the contributory negligence of Heydt, which is imputable to the plaintiff under R. S. 46 :36-1. N. J. S. A. Therefore, the judgment for the defendant is affirmed, but without costs.


author: FjRkuxd, J. S. C.

text:
    COMFORT SPRING CORP., A CORPORATION, PLAINTIFF-RESPONDENT, v. BROOKS EQUIPMENT CORPORATION, A CORPORATION, DEFENDANT-APPELLANT.
    Superior Court of New Jersey Appellate Division
    Argued May 7, 1951
    Decided May 15, 1951.

      Mr. Marie Townsend argued the cause for the defendant-appellant (Msssrs. Townsend ■& Doyle, attorneys; Mr. Paul Aaroe, on the brief).

      Mr. Stephen P. Piga argued the cause for the plaintiff-respondent.
   The opinion of the court was delivered by

FjRkuxd, J. S. C.

The defendant appeals from an order dismissing the fourth count of its counterclaim. The suit was brought by the plaintiff to recover damages for defendant’s failure to deliver a machine which it had agreed to construct in accordance with specifications, terms and conditions contained in a written order. The complaint alleged that the plaintiff was bi-weekly to pay the defendant’s labor and 'material costs in the construction of the machine, with an agreed maximum of $9,000; that the plaintiff had paid $8,122.11 on account thereof; but that the defendant failed to make delivery within the stipulated time. The defendant’s answer denied default and set up a counterclaim in four counts.

The fourth count alleges that the defendant was induced to enter into the contract and expended large sums of money in experimental work in reliance upon the false and fraxrdulent promise of the plaintiff that 24 additional machines would be ordered, and that by reason of plaintiff’s failure to perform, the defendant suffered damages. The salient portion of the count reads as follows:

“1. The written agreement set forth in the complaint of the plaintiff was obtained by the plaintiff by fraud and misrepresentation in that plaintiff falsely represented to the defendant that the plaintiff desired and intended to obtain and accept the Pilot machine set forth for the use in plaintiff’s manufacturing establishment and after actual cost of manufacture of same had been ascertained to contract for the manufacture of upwards of 24 similar machines, whereas the plaintiff’s true intent and purpose was to induce the defendant to engage in extensive and costly experimental and developmental work for the sole use and benefit of the plaintiff.
2. Defendant relied upon the. aforesaid false representations, believed them to he true and was induced to execute and deliver the written agreement and did engage in extensive experimental and developmental work at great expense to the defendant, to wit, the sum of approximately $30,000.00.”

On the motion to dismiss, the plaintiff argued that the representations set out in the counterclaim constituted a mere promise to perform an act in the future, and therefore was not actionable; while the defendant urged that plaintiff’s representation that it would purchase additional machines induced the defendant to enter into the contract, and, being false, is actionable. The court concluded that the count failed to set forth a valid claim and dismissed it.

The established rule of law is that a representation, to form the basis of an action for deceit, must relate to some past or existent fact—it cannot ordinarily be predicated on representations involving things to be done in the future. Byard v. Holmes, 34 N. J. L. 296 (Sup. Ct. 1870); Lembeck v. Gerken, 86 N. J. L. 111 (Sup. Ct. 1914); Halpern v. Cafarelli, 98 N. J. L. 77 (Sup. Ct. 1922); Anderson v. Modica, 4 N. J. 383 (1950). A representation of an intention as existing may, if false, avoid a contract induced thereby, because a misrepresentation as to the state of a man’s mind is a misstatement of fact. The distinction is whether the representation of an intention is in fact a mere promise collateral to the contract or an affirmation of a present state of mind. In the former, there is no fraud because there is no misrepresentation ol an existing fact. “There must be a misstatement of an existing fact; bnt the state of a man’s mind is as much a fact as the state of Ms digestion. It is true that it is very difficult to prove what the state of a man’s mind at a particular time is, but if it can be ascertained it is as much a fact as anything else.” Edgington v. Fitzmaurice, L. R., 29 C. D. 483, 55 L. J. Ch. 650 (1885); Roberts v. James, 83 N. J. L. 492 (E. & A. 1912); Gordon v. Schellhorn, 95 N. J. Eq. 563 (Ch. 1924); Zuckerman v. Geller, 103 N. J. Eq. 145 (Ch. 1928); Park Gasoline Co. v. Crusius, 10 N. J. Misc. 147 (Sup. Ct. 1932).

Tested by the foregoing ruies, it seems clear from the allegations of the couni,erclaim that the representation was a mere promise collateral to the contract and did not amount to an affirmation of a present state of mind. The counterclaim alleges that “plaintiff falsely represented to the defendant that the plaintiff desired and intended * * * after actual cost of manufacture of same had been ascertained, to contract for the manufacture of upwards of 24 similar machines * * When the contract was made, there was no present intention to purchase 24 machines; it was dependent upon ascertainment of the actual cost of manufacture. This was necessarily left to future determination, for assuredly the cost could not be fixed until the initial contract had been performed. Accordingly, the representation was a mere collateral promise of future action.

The order is affirmed.


author: Hanem'an, J. S. C.

text:
    KURT DITSCHER, PLAINTIFF, v. ELSIE M. BOOTH AND ARTHUR BOOTH, DEFENDANTS.
    Superior Court of New Jersey Chancery Division
    Decided May 11. 1951.

      Mr. Benjamin Asbeli, attorney for the plaintiff.

      Mr. Horace G. Brown, attorney for the defendants.
   Hanem'an, J. S. C.

Plaintiff brings suit upon two counts. In the first count he alleges that he and the defendant, Elsie M. Booth, purchased certain premises situate in Mantua, Gloucester County, Hew Jersey, each contributing a portion of the purchase price. The title to these premises was, by oral agreement, taken in the name of the defendant, Elsie M. Booth, for the benefit of both parties. The plaintiff and the defendant agreed that they would construct on said property a suitable building for the conduct of a restaurant business and that such a business would, be conducted thereon. Plaintiff further alleges that under the agreement, if the business proved unprofitable, the association could be dissolved and either party could retain the realty upon the payment to the other party of the money contributed toward the purchase and improvement of the property.

By the second count, plaintiff contends that he and the defendants entered into a partnership agreement for the conduct of a restaurant business in the above referred to premises, under the terms of which plaintiff was to have a 25% interest in said business, including the equipment, and the defendants a 75% interest.

The defendants, by way of defense, assert (1) the Statute of Erauds; (2) work, labor and materials were voluntarily furnished by the plaintiff and not under any agreement; (3). any alleged contract is illegal, since it was predicated upon an agreement between the plaintiff and Elsie M. Booth to marry at a time when the plaintiff was already married.

The facts adduced at the time of trial were as follows:

The plaintiff and the defendant Elsie M. Booth had been acquainted and friendly for some 20 years prior to the trial of this matter. Erom at or about 1938 plaintiff, who was then married, boarded with the defendant Elsie M. Booth and her husband, in Philadelphia. Subsequent thereto, the said Elsie M, Booth obtained a divorce and purchased a property at Crescent Park, New Jersey. Plaintiff again came to board with her at that address. Sometime prior to March 25, 1946, plaintiff and the said Elsie M. Booth discussed purchasing a property upon which they could conduct a business. Together they visited several properties, none of which, for one reason or another, were suitable; but they finally purchased the property here involved. Although the said Elsie M. Booth now denies that she had any voice in the selection of this property, I am satisfied that she agreed and consented thereto, and that title was taken in her name because of the marital status of the plaintiff, but for the benefit of both parties and for the purposes expressed by plaintiff.

Subsequent to this purchase, plaintiff and defendant did improve the property and there was established thereon a restaurant business.

Without recounting the evidence in detail, I am satisfied, and find as a fact, that the plaintiff and the said Elsie M. Booth entered into a joint adventure under the terms of which they purchased the property here involved and agreed to and did operate a restaurant business thereon. This agreement lacked the necessary elements of a partnership in various particulars.

A joint adventure has been defined as “a special combination of two or more persons where in some specific venture a profit is jointly sought without any actual partnership or corporate designation.” Kurth v. Maier, 133 N. J. Eq. 388 (E. & A. 1943); Jackson v. Hooper, 76 N. J. Eq. 185 (Ch. 1909).

A joint adventure is not dissimilar to a partnership and the contract between the parties esiablishing the same need contain no particular form of expression. It may be express or it may be implied in whole or in part from the conduct of the parties. Cooperstein v. Shapiro, 122 N. J. Eq. 238 (E. & A. 1937); Stein v. George B. Spearin, Inc., 120 N. J. Eq. 169 (Ch. 1936).

Chancery has the same supervision over a joint adventure as it does over a partnership. Jackson v. Hooper, supra.

It was particularly difficult to ascertain from Elsie M. Booth what the agreement or arrangement was under which title was taken, as herein set forth, and under which the business was operated. She continuously referred to an alleged agreement by the plaintiff to marry her as and when he obtained a divorce. It was quite apparent that she felt outraged because of being jilted by the plaintiff. “.Hell hath no fury like a woman spurned.” Whether the plaintiff had actually so promised her, or whether she implied such a promise from his conduct is of no moment in the present controversy, in view of my finding that such an agreement or arrangement was not a part and parcel of the agreement under which title to the property here involved was taken and the restaurant business-was to be conducted. Although the agreement was inartistic and inartificial, the conduct of the parties and the manner in which the books were kept substantiate such as I have above-found, that the parties entered into a joint adventure.

I find that the defendant Elsie M. Booth holds title to-the realty involved as a constructive trustee for the benefit of plaintiff and herself. Moses v. Moses, 140 N. J. Eq. 575 (E. & A. 1947).

In view of the foregoing, I find that there should be a 'dissolution, an accounting and a sale of the realty and personalty.

If the parties cannot amicably agree, I shall set a short day for such accounting.

Judgment will accordingly be entered.


author: Grimshaw, J. S. C.

text:
    CEDAR KNOLL REALTY COMPANY, A CORPORATION OF THE STATE OF NEW JERSEY, PLAINTIFF, v. GEORGE J. DAMEREL AND FRANCES J. DAMEREL, HIS WIFE, DEFENDANTS.
    Superior Court of New Jersey Chancery Division
    Decided May 17, 1951.

      Messrs. Wallisch & Wallisch, attorneys for plaintiff.

      Mr. Ralph H. Jacobson, attorney for defendant George J. Damerel.

      Mr. Hilbert J. Franlclin,-attorney for defendant Frances J. Damerel.
   Grimshaw, J. S. C.

The complaint in this matter was for the foreclosure of a second mortgage given to secure a part of the purchase price of the house which defendants bought from the plaintiff. By way of counterclaim the defendants sought a rescission of the sale and cancellation of the bond and mortgage.

As limited by the pretrial order, the issues were as follows:

“a. Whether or not the defendant is entitled to a rescission of the contract and the voiding of the deed and bond and mortgage as a result of alleged false representations made by the plaintiff’s officers.
b. If the defendant is not entitled to a rescission, are they entitled to an abatement in the amount of the mortgage as a result of improper construction of the house.
c. What damages, if any, the defendant is entitled to by reason of the alleged misrepresentations of the officers of the plaintiff.”

Plaintiff is the owner of a tract of land in the Township of West Milford, upon which it has erected five or six dwellings. In March of 1948, defendants, who were living in the vicinity, visited the development and inspected the house which they subsequently purchased. At that time the house, save for the interior decoration, had been practically finished, and was completed before the defendants executed the contract for its purchase.

Before agreeing to buy the home, defendants examined it several times. On those occasions they were accompanied by salesmen employed by the plaintiff and also by the man in charge of construction. And it was then, according to defendants’ story, that misrepresentations were made to them concerning the quality of the workmanship and materials used in the erection of the house. The making of any misrepresentations was denied. And I am unable to conclude that the defendants relied on any statements made to them. They examined the house carefully, liked it and wanted to buy it. It was not until they were threatened with foreclosure that they made charges of fraud.

The agreement for sale was executed in May, 1948. Defendants took possession immediately. Then, they testified, defects in the construction of the house began to appear. And by November, when title was closed, all the alleged defects of which they now complain, were known to the defendants. Yet they accepted a deed without protest and continued to make payments on the mortgage until July of 1949, expressing at that time their appreciation of the consideration shown to them.

Defendants made no offer to reconvey the property to the plaintiff. They did not vacate the premises until September, 1950, a year and a half after the mortgage was in default and almost two years after discovery of the alleged fraud. And during that period defendants made no payments of principal, interest or taxes. Under such circumstances there can be no rescission. Dennis v. Jones, 44 N. J. Eq. 513 (E. & A. 1888); Industrial Savings & Loan Co. v. Plummer, 84 N. J. Eq. 184 (E. & A. 1914).

During the pendency of the trial the first mortgage on the property was foreclosed. No defense to that action was interposed by the defendants herein. The plaintiff, Cedar Knoll Koalty Company, sought only to have determined the amount due upon its mortgage. The property was sold by the sheriff and, presumably, the surplus money is being held by him pending the outcome of this litigation.

The record fails to support the charge of inferior workmanship. It is evident from the testimony that the construction is comparable with that of other houses in the same price range. The bank which held the first mortgage appraised it and placed upon it a value of $12,500. A builder, called by the plaintiff, expressed the opinion that the cost of replacement, exclusive of land, would be $11,700. Defendants paid $11,400 for the property.

Defendants complained that the heating system was not adequate. This was denied by an expert offered by the plaintiff. Defendants’ expert testified that the flues or ducts were improperly installed. However, instead of estimating the cost of correcting this defect, he confined his testimony to the cost of installing an entirely different heating plant. Therefore, the record was left without any evidence from which a conclusion could be reached as to the cost of repairs to the heating system.

An architect, produced by the defense, sweepingly criticized the entire structure. The changes suggested by him would almost have necessitated the rebuilding of the house. And he neglected to state how many of the suggested improvements could have been accomplished in the first instance for the amount which defendants paid for the house.

There was some testimony concerning the fact that the ceiling rafters were not strong enough to support additional rooms on .the second floor. Since defendants conceded that the expense for such an addition would be his obligation, the evidence on this point lacked significance.

Two practical builders were called by the plaintiff. They agreed that the construction of the house left something to be desired. However, they each expressed the opinion that the workmanship and materials were of the quality one would expect to find in a house selling for $11,400.

I find that the charges of misrepresentation and of defective workmanship have not been sustained. And even if the first mortgage had not been foreclosed, defendant’s failure to move promptly upon discover)'' of the alleged fraud would bar rescission.

The foreclosure of the first mortgage makes necessary the dismissal of the complaint. The absence of adequate and satisfactory proof will result in a dismissal of the counterclaim.

Judgment accordingly.


author: Feexind, J. S. C.

text:
    JAMES D. WINANS, PLAINTIFF, v. ASBURY PARK NATIONAL BANK AND TRUST COMPANY, &c., ET AL., DEFENDANTS. ASBURY PARK NATIONAL BANK AND TRUST COMPANY, AS EXECUTOR, &c., PLAINTIFF, v. JOSEPHINE V. WINANS, INDIVIDUALLY AND AS EXECUTRIX, &c., ET AL., DEFENDANTS.
    Superior Court of New Jersey Chancery Division
    Decided April 27, 1951.

      Mr. Alan V. Lowenstein for James D. Winans (Messrs. Biker, Emery Danzig, attorneys).

      Mr. Conover English for Asbury Park National Bank & Trust Company (Messrs. McCarter, English '■& Studer, attorneys).

      Mr. Milton M. Unger for Josephine V. Winans, individually (Messrs. Milton M. and Adrian M. Unger, attorneys).

      Mr. John Winans for Josephine V. Winans, executrix.

      Mr. James L. B. Lafferty for Elizabeth C. Winans, guardian ad litem of Derek Torrey Winans and Peter Torrey Winans (Messrs. Lindabury, Steelman <& Lafferty, attorneys).

      Mr. Charles S. Smith for Fannie W. Winans and the Rector, Wardens and Vestrymen of Trinity Church.
   Feexind, J. S. C.

These two consolidated actions involve 1,552 shares of the common capital stock of 0. G. Winans Company, owned by the estate of Wiliam Winans, deceased. The first suit by James D. Winans was brought to enforce the sale of the stock to him pursuant to the terms of an agreement with his uncle, the decedent, dated December 20, 1934, referred to as the 1934 agreement, or in the alternative under an agreement between them dated April 27, 1943, referred to as the 1943 agreement. The second suit by the Asbury Park National Bank & Trust Company, one of the executors under the last will and testament of William Winans, seeks instructions regarding the disposition of the stock held in the estate.

C. G. Winans Company was incorporated under the laws of New Jersey in 1905, being the successor to a partnership known as Coulter and Winans, which had been engaged in business since the 1890’s. Carlton G. Winans, father of the plaintiff, James D. Winans, and older brother of William Winans, had been a member of the firm, and he and William were original stockholders, directors and officers of the corporation. Upon the death of Carlton G. Winans in 1925, William became the active head of the corporation and continued as such until his death on February 3, 1949. The plaintiff, James D. Winans, inherited some stock from his father, was elected a director of the corporation in 1926, and became actively associated with the company in 1930. William Winans was a bachelor, and a relationship of mutual trust and confidence existed between him and his nephew, James. From 1934 until 1943, several agreements were entered into between them, the purport of which was that James vested in his uncle, William, full voting rights on his shares, and William granted James the right to acquire his shares of stock after his death. Evidently, William planned that James should succeed him in the management and control of the corporation.

The last agreement was executed on April 27, 1943. It was clearly the intention of the parties that it should supersede the original agreement of December 20, 1934. Both James D. Winans and the defendants in his suit claim that the 1943 agreement is ineffective, but for different reasons. James D. Winans claims that it is invalid being in contravention of R. S. 14:10-10, in that it granted to William Winans a voting trust with respect to James’ stock for a period beyond the statutory maximum of ten years, and that by reason thereof the 1934 agreement is revived. The defendants, however, urge that the 1943 agreement is valid, but that the plaintiff has forfeited his rights thereunder because of his default in performance.

The plaintiff, James D. Winans, can rely only upon the 1943 agreement, which superseded all prior contracts. Implementing it, William Winans on April 30, 1947, executed his last will and testament, and incorporated it by reference. The 1934 agreement, in so far as the stock of William was concerned, gave James an option to buy upon William’s death. The price was to be the actual value, including good will, to be agreed upon or determined by the president of a Newark banking institution. The 1943 agreement effected two changes in the 1934 agreement, viz.: there was to be a sale of the stock by the estate to James rather than an option in James to buy, and the price was to be the book value, without allowance for good will. Thus, the parties to the agreements were the same, and the subject matter was the same. The terms being inconsistent, the prior agreement was superseded by the latter. The general rule is that an executed contract, which covers the whole subject matter embraced in a prior one between the same parties rescinds the prior agreement. Long v. Hartwell, 34 N. J. L. 116 (Sup. Ct. 1870); Curtiss-Warner Corp. v. Thirkettle, 99 N. J. Eq. 806 (Ch. 1926), affirmed 101 N. J. Eq. 279 (E. & A. 1927) ; Montclair Distributing Co. v. Arnold Bakers, Inc., 1 N. J. Super. 568 (Ch. Div. 1948).

In the 1943 contract James granted to his uncle, William, for life the right to vote his shares of stock. It provided as follows:

“11. Voting Rights. Prom and after the execution and delivery of this contract and during and throughout the lifetime of ‘vendor’ (William), the ‘vendor’ shall have, exercise and enjoy full ‘voting rights’ under and in relation to the ‘vendee’s’ (James’) stock; * *>>
“s= « * and ‘vendee’ hereby agreed that he will not grant, convey, transfer or pledge all or any part of the ‘vendee’s stock’ at any time during the life time of the ‘vendor’ in such manner as to defeat or impair the ‘voting rights’ hereby granted to ‘vendor.’ ” (Paragraph 9.)

The plaintiff argues that the foregoing provision is invalid, not only because R. S. 14:10-10 prohibits vesting of voting rights for a period exceeding ten years, but also because the agreement did not provide for the transfer of the stock to a voting trustee, but merely for the bare transfer of voting rights. The pertinent provisions of the statute read as follows:

“14:10-10. Voting trust
One or more of the stockholders of any corporation organized under this title may, by agreement in writing, deposit capital stock with or transfer capital stock to any person or corporation authorized to act as trustee, for the purpose of vesting in such person or corporation the right to vote thereon, or for such other lawful purposes as may be agreed, for any period of time determined by the agreement, not exceeding ten years, upon terms and conditions stated in such agreement, pursuant to which such person or corporation shall act.
After filing an unexecuted copy of the agreement in the principal office of the corporation in this state, which copy shall be open to the inspection of any stockholder of the corporation or any depositor under the agreement, daily during business hours, the certificates of stock so transferred shall he surrendered and canceled, and new certificates therefor shall be issued to such transferee, who may be designated voting trustee, in which such new certificates it shall appear that they are issued pursuant to such agreement, and in the entry of such transferee as owner of such stock in the proper books of the issuing corporation that fact shall also be noted. Thereupon said transferee may vote upon the stock so transferred during the period specified in the agreement.”

William Winans died on February 3, 1949, so that actually the voting trust agreement was operative for only six years. Hence, under the facts of this case, it is not necessary to decide whether a grant of voting rights for life is invalid by reason of R. S. 14:10-10. Here, the question is moot. The trustee lived less than ten years and any taint of invalidity in the agreement because its duration was for life rather than the statutory maximum period has been absolved by his death. So, too, with respect to the failure to transfer the stock into the name of the voting trustee.

The portion of the contract dealing with the voting rights to James’ stock is separable from that part which relates to the agreement for the sale of William’s stock to James. James carried out his part of the agreement in so far as it related to his stock, that is, he vested the voting rights in his uncle William for life and he did not transfer or pledge his stock during that time. Therefore, even if his agreement contravened R. S. 14:10-10, he had performed. Neither did he repudiate the agreement. Dy this proceeding, he is seeking specific performance of the stock sale provisions of the 1934 agreement, or in the alternative the 1943 agreement.

Assuming, arguendo, the invalidity of the voting trust agreement, it would not, under the circumstances of this case, render separable portions of the contract void and unenforceable. The general rule is: “A bargain that is illegal only because of a promise or a provision for a condition, disregard of which will not defeat the primary purpose of the bargain, can be enforced with the omission of the illegal portion by a party to the bargain who is not guilty of serious moral turpitude unless this result is prohibited by statute. Recovery is more readily allowed where there has been part performance of the legal portion of the bargain.” Restatement, Contracts, sec. 603, p. 1119; Fishell v. Gray, 60 N. J. L. 5 (Sup. Ct. 1897). Cameron v. Intl. Alliance, &c., U. S. & Canada, 119 N. J. Eq. 577, 590 (E. & A. 1935). “It may sometimes happen that a bargain is illegal when it is made either because of the illegal purpose of the parties to it or for other reasons, and that when the bargain is performed the transaction has become lawful either because the purpose of the parties has changed or because changes in the law or other external circumstances have made that lawful which was previously unlawful.” Williston, Contracts (Rev. ed.), vol. VI, sec. 1758, p. 4992.

The 1943 agreement being valid, has the plaintiff defaulted in performance? Under Paragraph 6 of the contract, the plaintiff agreed to pay the purchase price of the stock in ten equal annual instalments, the first to be paid to the decedent’s estate “not later than six (6) months after the time of the probate of the last will and testament - of the ‘vendor’ (decedent) and issuance of letters testamentary thereon.” The Seventh Paragraph of the agreement provided, “the personal representatives of ‘vendor’ may at any time by an instrument in writing signed by them unanimously extend the time of any payment or payments of principal, interest or both to become due hereunder, upon such terms and conditions as they may see fit to impose, or unconditionalty.” The decedent’s will was probated February 21, 1949, and letters testamentary thereon were issued on or about February 23, 1949. The will by reference incorporated the 1943 contract and charged the executors with observance of its terms. The plaintiff was, therefore, obligated to pay one-tenth of the purchase price not later than August 23, 1949, unless the time for such payment had been extended unanimously in writing signed by the decedent’s executors. Admittedly, the plaintiff did not make such payment before August 23, 1949, nor was an extension of the time for such payment requested by the plaintiff or granted by the executors. Following William’s death, the plaintiff, as a result of consultation with his tax advisors and attorneys, decided that performance in accordance with the terms of the agreement would be burdensome and disadvantageous to him because of tax liabilities. Therefore, he submitted to the executors divers proposals for consummation of the sale. In order to save taxes, he suggested conversion of the stock held by the estate into preferred stock. However, these proposals were unacceptable, the plaintiff did not perform within the time required by the contract, and the executors did not extend the time for performance. Indeed, the plaintiff does not seriously contend that he did not default. Accordingly, he is not entitled to relief under his complaint, and it will be dismissed.

We come now to the complaint of the executor,-the Asbury Park National Bank and Trust Company, seeking instructions regarding the sale of the shares of stock. The executor has received offers for the purchase of the stock from Eidgewood-Winans Company and Josephine V. Winans, each for one-half of the stock at a price of $121,940.64, conditioned upon acceptance of the other’s offer. Together the offers amount to $243,881.28, which is the book value, the price at which James D. Winans had the right to buy the stock under the contract. By his complaint, Winans represented himself as ready, willing and able to perform under the 1943 agreement, and at the trial tendered to the executors a sum equal to the principio and interest then owing under the contract.

It is my opinion that a public sale of the stock should bo held by the executors and the stock sold at the highest price and upon the best terms obtainable, with the first right to James D. Winans to buy at such price and terms. My reason for granting him this privilege is to carry out the manifest intention of the testator. Prom the history of the corporation, the interest of the Winans family therein, the relationship between the decedent and his nephew, the various agreements and the will, it is abundantly clear that it was the desire and intention of the decedent that his nephew should succeed to his interest in the corporation. Paragraph “Sixth” of the will expressly stipulates: “* * * No sale or other disposition of any capital stock shall be made in derogation of any rights of James Dusenberry Winans as mentioned and recognized by Paragraph ‘Seventh’ of this will,” which refers to the contract of April 27, 1943, and provides as follows: “* * * Now, therefore, I hereby make all and singular the provisions of said contract and power of attorney a testamentary disposition hereunder and hereby authorize and direct by executors and trustees and their several successors in office in all respects to perform and carry out all and singular the provisions aforesaid with the same force and effect as it (if) the same were incorporated at length herein, * *

Although James D. Winans has by reason of default forfeited his right to acquire the stock under the contract, I have not the slightest doubt but that the intention of the testator will be effectuated if he is given the right to purchase the stock in preference to any other bidder at the price and upon the terms of the highest bid. To allow another to acquire the stock without according Winans the opportunity to meet the bid would be to disregard the clear intention of the decedent. When the intention of a testator is as patent as here, it is the duty of the court to make its achievement possible.

Judgment accordingly.


author: Conlon, J. 0. C.

text:
    IN THE MATTER OF THE ESTATE OF ETHEL M. ATKINSON.
    Essex County Court Probate Division
    Decided May 17, 1951.

      Mr. Boberl Carey, Jr., for petitioner Laura J. French.

      Mr. David Weinich, attorney for the “plaintiffs.”
   Conlon, J. 0. C.

The moving papers are improperly entitled, and the “plaintiffs” improperly appear in response to the motion. This is not an appeal from the judgment of the surrogate in probating the will. All proceedings-should be entitled as above and the proper parties are any petitioner who seeks a review on the one hand and the duly appointed executors on the other. If an order to show cause is issued on the motion as provided in Buie 5 :3-4 all persons who may be interested must be notified and given the opportunity to intervene. The respondents to this motion mistakenly conceive that the proper persons to whom the motion should be addressed are the persons who filed the complaint for the probate of the will. Apparently Mr. Weinick, who appears on this motion, appears for them, while the surrogate’s records indicate that Philip Mandelbaum registered as the attorney (formerly proctor) of the estate. These inaccuracies in the proceedings are pointed out since they have further significance as the facts develop.

The deceased died testate on December 15, 1950, leaving a sister, Laura J. French. The will, which was executed six days before death, left the bulk of the estate to the doctor and the nurse who attended at the last illness of the testatrix. They were also named executors. On December 20, 1950, five days after death, a complaint on probate was filed by the executors and the will probated in due course, on December 26, 1950, the eleventh day after death. On March 26, 1951, and within three months after the judgment of probate, by virtue of Buie 5:3-4, a notice of motion for an order to show cause why the judgment of the surrogate’s court should not be set aside, returnable before this court on April 17, 1951, was served on behalf of the surviving sister upon Philip Mandelbaum, the registered attorney of the estate. Ordinarily that motion would be granted as of course and an order to show cause would issue to all parties in interest so that the matter might proceed in the same fashion as it formerly did when an appeal from probate was filed.

However, the “plaintiffs,” who are not otherwise named but who are apparently the two executors and beneficiaries under the will, move to dismiss the motion on two procedural grounds. It is first contended that service upon the attorney was insufficient, and that since, in addition thereto, service was made personally on only one of the co-executors, and that one day late, the notice is insufficient and out of time. There is no merit to that contention. Service upon the attorney was sufficient and being within the three months’ period was in time. Rule 3 :5-2.

It is next contended that, assuming that the notice was sufficient and was served in time, nevertheless it was not filed within ten days of service in accordance with Rule 3 :5-5. It is further contended that since this is an “appeal,” under Rule 1:2-5, the court has no discretion to enlarge the time for filing the notice and that consequently the proceedings must be dismissed. Citing Weaver v. North Bergen Township, 10 N. J. Super. 96 (App. Div. 1950) and In re Pfizer, 8 N. J. Super. 6 (App. Div. 1950). Counsel failed to cite the opinion of the Supreme Court in the Pfizer case, 6 N. J. 233 (1951), which reversed the Appellate Division insofar as it exercised discretion in enlarging the time for appeal. ■

The fallacy of that argument is that this proceeding is not an “appeal” within the contemplation of Rule 1:2-5. It is merely an application to this court to review a judgment of the surrogate. The entire proceeding and the discretionary powers of this court are contained in Rule 5 :3-4. That rule provides, so far as it is applicable to this case, that the notice of motion must be served within three months after the entry of judgment of probate. Nothing is provided as to the filing of the notice of motion, but we may assume, without deciding, that the filing is controlled by Rule 3 :5-5 which requires that “all papers after the complaint required to be served upon a party shall be filed with the court before service or within ten days thereafter.” The precise question presented, therefore, is that since the moving parties are in default, has this court the discretion to waive the default ? The answer is found in the very rule itself (5:3-4) which provides in part:

“If no such motion is served within the time limited, the judgment in every action stated shall be conclusive except where the person aggrieved by the judgment seeks relief therefrom under Rule 3 :60-2 for reasons (4), (5) and (6) enumerated in the rule, or for fraud upon the court or by independent action."

Rule 3 :60-2(6) provides that “* * * the court may relieve a party or his legal representatives from a final judgment, order or proceeding for the following reasons: * * * or (6) any other reason justifying relief from the operation of the judgment or order.”

Since the notice in this case was sufficient and was served in time, and since the parties appeared in court on the motion only for the perfunctory purpose of agreeing upon the return date of the order to show cause, the court in the exercise of its discretionary powers declines to dismiss the motion and thus deprive the parties of their opportunity to contest the validity of the will merely because the notice of motion was not filed until the return day thereof.

An order to show cause will issue returnable on a date agreeable to the parties.


author: Tenejstbattm, J. C. C.

text:
    THE STATE OF NEW JERSEY, PLAINTIFF, v. JOHN VAN BUEREN, DEFENDANT.
    Cape May County Court
    Decided May 12, 1951.

      Mr. Albert M. Ash, County Prosecutor, attorney for the State.

      Messrs. Molondra and Tomaselli, attorneys for the defendant.
   Tenejstbattm, J. C. C.

On April 26, 1951, in response to a subpoena, the defendant, John Yan Bueren, appeared before the grand jury of Cape May County, and upon being sworn by the foreman of the grand jury, the following questions were asked the witness:

(1) Are you aware of the business engaged in by Mr. Thurtle ?
(2) Ifave you consulted an attorney?
(3) Is your attorney from Wildwood, New Jersey?
(4) Have you ever seen Mr. Thurtle taking a bet?
(5) Have you ever placed a bet with Mr. Thurtle?
(6) Have you ever placed a bet with anyone?
(7) When did you consult an attorney?

All of which he refused to answer on the ground that “it will tend to incriminate and degrade me.”

The State seeks an order to compel the defendant to again appear before the grand jury and answer those questions above propounded.

The defendant is not required to answer questions No. 2, No. 3 and No. 7, as they appear to have no relevancy, and in any event, the answers thereto have been supplied by the appearance of counsel in behalf of the defendant on the return of the rule to show cause.

If the witness is compelled to answer the remaining questions, will the answer or answers thereto, if in the affirmative, expose him to a criminal prosecution ? Assuredly the answer to question No. 4, even though the answer thereto be in the affirmative, would not expose the witness to criminal prosecution, since the taking of a bet by another and viewed by this witness, at most, would taint the transaction as bookmaking, which is a misdemeanor, and thus does not oblige the witness to disclose the same in order to exonerate himself from a charge of concealment. Concealment of a crime extends to certain designated offenses in the statute and to high misdemeanor. B. S. 2:118-2.

Now as to questions No. 1, No. 5 and No. 6: Could any harm be visited upon the witness by exposing him to criminal prosecution if he made a bet upon the outcome of a horse race with a bookmaker ? The answer is no.

Mr. Justice Case in a concurring opinion out of our court of last resort in State v. Lennon, 3 N. J. 337, at page 345 (1949), said:

“It is a substantive statutory offense, with penalty, to make a book and take bets; it is not a substantive statutory offense, with penalty, to place a bet.”
In the Lennon case, one Pellecchia was indicted with two other alleged bookmakers for conspiracy, but the conduct of

Pellecchia extended beyond the mere making of a bet by him, but rather it was a grand plan, concerted in action, to bet and accept huge sums of money on the outcome of horse races. The result of the answers in the affirmative to the three questions propounded could not, in anywise, elicit such a scheme, and therefore, the probability of exposure to criminal prosecution of conspiracy is nonexistent.

I direct that the witness, John Van Bueren, answer questions No. 1, No. 4, No. 5 and No. 6 before the grand jury