author: Commissioner.

text:
    Division of Tax Appeals.
    ERIE RAILROAD SYSTEM, APPELLANT, v. FRANK E. WALSH, DIRECTOR OF TAXATION, DEPARTMENT OF TAXATION AND FINANCE, AND CITY OF JERSEY CITY, RESPONDENTS. CITY OF JERSEY CITY, APPELLANT, v. FRANK E. WALSH, DIRECTOR OF TAXATION, DEPARTMENT OF TAXATION AND FINANCE, AND ERIE RAILROAD SYSTEM AND ERIE RAILROAD COMPANY, RESPONDENTS.
    Decided January 6, 1948.

      For the Erie Kailroal System, Collins & Corbin (by Raymond J. Lamb).

    For the City of Jersey City, Charles A. Rooney (by Joseph C. Glavin).

    For the State of New Jersey, Walter D. Tan Riper, Attorney-General (by Benjamin Taub, Deputy Attorney-General).
   Commissioner.

The Director of the Division of Taxation established certain valuations and assessments for the year 1946 of properties owned or leased by the Erie Kailroad Company and used for railroad purposes. Properties in Classes T and III are located within the State of New Jersey but outside of Jersey City; properties in Classes I and II are located within Jersey City. Both Erie and Jersey City filed complaints and appealsjo-this Division, Erie seeking decreases and cancellations^! certain assessments and Jersey City seeking increases of certain assessments?^

For purposes of convenience and clarity we will consider first the appeal of Erie. The properties involved under the complaint filed and the various contentions with respect to them are:

(1) Floating equipment (assessed as a portion of Class III property under R. S. 54:29A-9; N. J. S. A. 54:29A-9)— Erie seeks cancellation of the assessment thereon asserting with respect to the various units of equipment that there is no taxable situs existing in this state and bases this on the following: (a) all units assessed are registered in the Port of Yew York and have a situs for taxation in the State of Yew York and (b) the domicile of the owner is in Yew York, the Erie being a corporation of that state. Additionally, it is asserted that the assessment is contrary to the due process clause of the federal constitution, Amendment Fourteen, and is also an undue burden on interstate commerce and thus does violence to article 1, section 8, of the federal constitution.

(2) Grade crossing elimination structures (assessed as a portion of Class I property)—Cancellation of this assessment is also sought, Erie claiming exemption under the provisions of R. S. 54:29A-10; N. J. S. A. 54:29A-10.

(3) Main stem parcels (parcels A to TJ on schedule attached to complaint) and second class parcels (parcels 1 to 26 and parcel 52) Erie contends that assessments on these parcels are in excess of the true value standard set forth in R. S. 54:29A-7; N. J. S. A. 54:29A-7, and guaranteed by article 4, section 7, paragraph 12 of the, state constitution., N. J. S. A., are in violation of the due process clause of the federal constitution, are an undue burden on interstate com,merce and are made under unconstitutional and illegal statutes.

Our determination as to each of the foregoing classifications of properties under appeal is as follows:

Floating Equipment.

Yo testimony was taken by Erie as to this portion of its appeal. The same assessment was made by the Director for the year 1945 and the same grounds of appeal were filed by Erie in that year as are filed in the instant appeal. There was no change in the facts or the law between the assessing dates for 1945 and 1946. Thus counsel for Erie and the state stipulated that the testimony of the 1945 appeal be deemed a part of the record in this case and that the decision of the Division in the 1945 appeal of Brie on this issue be binding on both Erie and the state. Erie, of course, reserved the right to appeal from the decision of the Division.

The record of the 1945 appeal with respect to floating equipment constituting the record of the instant appeal, the judgment entered in that case by the Division must of necessity be the same in this proceeding. The opinion adopted by the Division in connection with the judgment of dismissal of the 1945 appeal on this issue sets forth the statute under which the assesment was made, the basis of the finding by the Division, and the applicable law. See Erie Railroad System v. Walsh, 25 N. J. Mis. R. 269; 53 Atl. Rep. (2d) 155. No good purpose would be served to repeat these factors here. However, Erie has applied to the Supreme Court for a writ of certiorari with respect to the 1945 judgment and pending final determination upon the writ, entry of a judgment on this phase of the 1946 appeal will be withheld.

Grade Crossing Elimination Structures.

As in the previous item under appeal, counsel stipulated that the record of the 1945 appeal as to this item be deemed a part of the record of this appeal and that the 1945 decision of the Division be binding here.

Eor the reasons forming the basis of the judgment of the Division in the 1945 case see Erie Railroad System v. Walsh, supra. In that opinion it is stated that the principle on which the claim for exemption was advanced by Erie had been determined adversely to Erie by the Supreme Court in State of New Jersey et al. v. State Board of Tax Appeals, 134 N. J. L. 34; 45 Atl. Rep. (2d) 599, and that the Division was bound by this ruling of a higher tribunal. Although this body is not concluded by its former determination, Continental Purchasing Co., Inc., v. City of Newark, 18 N. J. Mis. R. 304; 13 Atl. Rep. (2d) 133, the Supreme Court’s ruling having been since affirmed by the Court of Errors and Appeals in State of New Jersey et al. v. State Board of Tax Appeals, 135 N. J. L. 481; 53 Atl. Rep. (2d) 852, the tenet followed by the Division in the 1945 case is even more firmly established as a standard to be followed in the instant appeal.

It being the judgment in the 1945 case that the appeal be dismissed, the instant appeal will also be dismissed.

Main Stem and Second Class Parcels.

Ho extensive comment is necessary in disposing of the appeal by Erie from the valuations of Class I (main stem) parcels. The statute, R. S. 54:29A—17; N. J. S. A. 54:29A-17, provides that the Director shall ascertain the true value of railroad property according to the classes defined in the statute. One of the classes, the value of which is to be determined, is “the length and value of the main stem of each railroad and the length of such main stem in each taxing district.”

There are twenty-one separate parcels constituting the main stem of the Erie Kailroad Company from its terminus at the bulkhead line at the foot of Pavonia Avenue to the point where it crosses the westerly boundary line of Jersey City. However, it is apparent from a reading of the statute, that it is not necessary for assessment purposes that the “length” of the main stem in a particular taxing district be divided into parcels and that a value be established relative to each parcel. See Pitney v. Kelly, State Tax Commissioner, 21 N. J. Mis. R. 405; 34 Atl. Rep. (2d) 547. As stated by Mr. Fryer for the state: “In the valuation of main stem land, the main stem is assessed as a unit from the beginning of the line * * * to the state line * * * and the land is so considered as a continuous strip of land and it is valued that way—that is, assessed as one unit.”

The Director properly valued these lands in the physical condition in which they were held by Erie, taking into consideration work done on the land, such as clearing, grading and grubbing. See Borough of Emerson v. State Board, 6 N. J. Mis. R. 326; 141 Atl. Rep. 23. In addition, he as-scribed to these parcels a factor of value inherent in them by reason of the particular purpose which they served, namely, as the right-of-way of a going railroad company.

Erie’s witnesses ignored the foregoing considerations necessary for the determination of true value. They gave individual values to the individual parcels and these values were based on either or both of the following premises: (1) so-called “comparable sales” and (2) valuations established by these witnesses for adjoining Class II lands. An analysis of the testimony indicates that the properties that were the subject-matters of the so-called “comparable sales” were not in similar use at all. Additionally, both experts for the Erie admitted that they had arrived at their opinions of value without considering the main stem as a running whole from the terminal to the border line where it leaves the State of New Jersey. Hor did they estimate what the various parcels of main stem forming “a narrow strip of land, with valuable easements annexed to it, adapted to railroad uses” would “bring in the market.” Central Railroad Co. v. State Board of Assessors, 49 N. J. L. 1; 7 Atl. Rep. 306.

From an examination of the testimony, proofs and exhibits. we are forced to two conclusions: (1) that the Director assessed these lands in the actual physical condition as held by the owner (State Board of Assessors v. Central Railroad of New Jersey, 48 N. J. L. 146; 4 Atl. Rep. 578; Williams v. State Board of Assessors, 51 N. J. L. 512; 18 Atl. Rep. 750; Pitney et al. v. Kelly, 21 N. J. Mis. R. 405; 34 Atl. Rep. (2d) 547; State v. State Board of Tax Appeals, 134 N. J. L, 34; 45 Atl. Rep. (2d) 599; affirmed, 135 N. J. L. 481; 52 Atl. Rep. (2d) 852), but that the experts for appellant did not so value them; (2) the Director, following an established- method that has been in existence in the railroad taxing division of the state since 1884, properly considered these parcels of land as an integral part of the main stem from the standpoint of their “contribution to the value of the main stem as an entirety” but that the experts for appellant did not so consider these parcels. Central Railroad Co. v. State Board of Assessors, 49 N. J. L. 1 (at p. 5); 7 Atl. Rep. 306; Central Railroad Co. v. Thayer-Martin, 114 N. J. L. 69 (at p. 75); 175 Atl. Rep. 637 (at p. 639); but that the experts for appellant did not so value them.

For the reasons stated, this portion of the appeal by Erie with, respect to main stem parcels will be dismissed.

We will subsequently consider all appeals relating to Class ÍI lands together.

Jersey City filed its complaint and appeal seeking increases in assessments on certain Class II structures (Hos. 1 to 18) and on the Glass II lands (parcels 1 to 52). The city contends:

(1) As to Class II structures—that the assessments are less than true value in contravention of article 4, section 7, paragraph 12 of the state constitution, N. J. S. A. that the assessments are contrary to law in that: (a) the structures were valued separately and their values were not based on the actual condition of the property on the assessing date and (b) they were made on the basis of the original cost of the structures less an arbitrarily determined sum for depreciation and obsolescence.

(2) As to Class II lands—that the assessments are less than “true value” and were determined under illegal and erroneous formulae and not by “uniform rules,” thus contravening article 4, section 7, paragraph 12 of the state constitution, N. J. S. A.; the assessments are illegal, erroneous and contrary to law and that in the making of the assessments the Director failed to value lands in the actual condition in which they were held by Brie on the assessing date.

Stettcttjkes.

In support of its contention that the assessments of certain structures were too low, Jersey City offered proof through its witness Hugh J. Phillips, whose exhibits were based upon “reproduction cost new, less depreciation.” After satisfying himself as to the various quantities of materials that go to make up each structure, the witness “applied the labor and material prices as of the assessing date to each type of material used in the construction of each individual structure.”

We are not impressed with certain aspects of the “reproduction cost new” figures testified to by the city’s expert. Bor example, in his cost calculations, the witness employed the scale of wages for union labor rather than for railroad labor, the former being admittedly higher than the latter. But the probative effect of these figures is somewhat dimmed by the observation that in the case at bar practically all construction was accomplished by the use of railroad labor.

As to the depreciation factor the opposing estimates of the experts for Erie and Jersey City are in wide disagreement. As to ten of the eighteen structures the depreciation factor 'testified to by Mr. Sobbot (Erie) was more than double that applied by Mr. Phillips (city). As to three of the remaining eight structures Sobbot’s estimate was almost double Phillips’. However, we cannot attach great weight to the depreciation factor testified to by the city’s expert, as nothing more than “physical deterioration” was considered. Elements of functional and economic obsolescence, each of which is requisite in a proper determination of depreciation, are ignored.

Aside from the relative weight to be attached to the figures certified to by the opposing witnesses, there is, perhaps, a more fundamental basis for our conclusion of value as to these items under appeal. We refer to the basic inadequacy of the “reproduction cost less depreciation” approach as an exclusive method in determining true value. It is true that this approach to the sound value of a structure or an improvement may under certain circumstances help the witness and the court to arrive at true value and this has met with judicial approval. In Village of Ridgewood v. State Board of Tax Appeals, 129 N. J. L. 121; 28 Atl. Rep. (2d) 303, it was stated: “Original cost, cost of reproduction, depreciation and the like, are pertinent incidents” but that they “do not control the taxable value.”

In Schetty v. Jersey City, 18 N. J. Mis. R. 37; 11 Atl. Rep. (2d) 18, it is stated: “Testimony that is based exclusively upon reproduction cost and disregards selling price carries little weight.’’j See, also, Central Railroad Co. v. State Board, 49 N. J. L. 1; 7 Atl. Rep. 306; Turnley v. City of Elizabeth, 76 N. J. L. 42; 68 Atl. Rep. 1094, and Pitney et al. v. Kelly, 21 N. J. Mis. R. 405; 34 Atl. Rep. (2d) 547.

(The testimony given by the witness for Jersey City in the instant appeal was practically the same as that commented upon by the court in State of New Jersey v. State Board of Tax Appeals et al., 134 N. J. L. 34; 45 Atl. Rep. (2d) 599. The court held in that ease that this type of proof, in substantiation of the appeal filed by Jersey City, was not “sufficient to sustain its claim” and “that the method employed by Mr. Phillips did not comprehend the necessary consideration of the obsolescence and outmoded structures, and, at all events, it was questionable as to whether a good many of the structures would have been rebuilt at the then advanced costs of rebuilding them.”

Our conclusion is that the proofs offered by Jersey City are not persuasive that the assessments of the structures complained of are not less than the true value as of the assessing date. This portion of the appeal with respect to second class structures will therefore be dismissed.

Class II Lands.

(Appeal of Erie—Parcels 1 to 36, 53.)

(Appeal of Jersey City—Parcels 1 to 53.)

Re: Parcels 40, 42, 43, 44, 45 and 50.

Ho appeal was taken by Erie but an appeal was taken by Jersey City with respect to these parcels, all of which are in what is referred to by the experts as the “backland” terminal of Erie. The assessment of each of these parcels is at the rate of $1,400 per acre. Experts for both Jersey City and Erie gave opinions of value with respect to these parcels in excess of the amount of the assessment, Jersey City experts testifying to acreage rates ranging from $3,600 to $4,000 and Erie experts testifying to an acreage rate of $1,500.

The Division of Tax Appeals is bound by the evidence adduced where all experts testify to opinions of value higher than the amounts of the assessment. See Town of Kearney v. State Board of Taxes and Assessments, 4 N. J. Mis. R. 834; 134 Atl. Rep. 620; affirmed by the Court of Errors and Appeals, 103 N. J. L. 699; 137 Atl. Rep. 919; Long Dock Co. v. State Board of Assessors, 86 N. J. L. 593; 93 Atl. Rep. 439; Lawrence Township v. State Board of Tax Appeals, 134 N. J. L. 465; 12 Atl. Rep. (2d) 244.

By reason of the foregoing the Division must of necessity increase the valuations of these parcels so that the assessment will reflect a per acreage rate of valuation of at least $1,500 instead of $1,400.

Judgments with respect to these assessments will be entered at an acreage rate of $1,500.

Re: Parcel 3.

The situation with respect to this parcel is similar to the situation affecting the foregoing Class II lands. Both Erie and Jersey City appealed from the assessment based on an acreage rate of $33,333. Experts for both sides testified to a valuation higher than the amount of the assessment. Mr. Morrison, for Erie, testified to a value based on an acreage rate of $35,000 and Mr. Stack, for Erie, testified to an acreage rate of $34,848.

The question remains as to the extent to which the assessment should, be increased on the appeal by Jersey City. Parcel Ho. 3 fronts on the south side of and abuts Hoboken Avenue, lying east of the New Jersey Junction Eailroad, Parcel Ho. 4 is practically, contiguous to Parcel Ho. 3 and lies on the east side of the New Jersey Junction Eailroad. But the northerly end of Parcel Ho. 4 instead of abutting Hoboken Avenue is approximately 300 feet south of the south line of Hoboken Avenue. With respect to Parcel Ho. 3 experts for Erie testified that the per acreage rate of valuation it contributed to the valuation of the terminal' as a whole is the same as that contributed by Parcel Ho. 4. Three of the four witnesses for Jersey City testified to the same per acreage rate of valuation for parcels 3 and 4, their rates being $87,120, $90,000 and $94,000. The fourth witness for Jersey City testified to a higher per acreage rate of valuation for Parcel Ho. 3 ($98,000) than for Parcel Ho. 4 ($90,000).

Parcel Ho. 3 has an area of .015 of an acre and Parcel Ho. 4 has an area of .061 of an acre. Except for this difference in size, Parcels Hos. 3 and 4 are almost identical. They are both situate on the east side of New Jersey Junction Railroad, both are put to the same use by the owner and both form a part of the same terminal. The Division agrees with the five experts who testified that the contribution to the value of the entire terminal by each of these two parcels is the same.

Inasmuch as the assessment of Parcel Ho. 4 is being affirmed at its valuation based upon a rate of $70,000 per acre, for reasons elsewhere stated, it is our judgment that the assessment of Parcel Ho. 3 should be increased to reflect a valuation at the rate of $10,000 per aere.

Re: Parcels 1, 2, 4 to 39, inclusive, 41, 46 to 49, inclusive, 51 and 52.

The general pattern of appraisal technique used by the experts for both Erie and Jersey City in the valuation of these Class II lands was as follows: All witnesses considered Parcels Hos. 5 to 19 as forming the “waterfront” portion and the remaining parcels under appeal, Hos. 1 to 4 and Hos. 20 to 52 as forming the “backland” or “supporting” portion of the Erie terminal. In arriving at their opinions of value all witnesses drew upon their general knowledge and experience. With respect to the valuation of the “backland” parcels all witnesses submitted schedules of sales of so-called comparable properties. With respect to the valuation of the “waterfront” parcels witnesses for Erie submitted schedules of sales of so-called comparable properties, whereas witnesses for Jersey City maintained that no properties comparable with the “waterfront” parcels had ever been sold, and therefore submitted no schedules of sales of properties alleged to be comparable with the “waterfront” parcels.

All witnesses agreed that there had been no sales of railroad property in railroad use in Jersey City, Hudson County, or in the New Jersey “port” for the past fifty years.

We are in accord with the principle followed by exports for Jersey City in not submitting schedules of “comparable sales” of waterfront properties. We are of the opinion that there have been no waterfront properties comparable to the waterfront portion of the Erie terminal sold within a sufficient period of time to indicate a basis of value to be applied to this case. As stated by a witness for Jersey City, the waterfront properties that have been sold were not “comparable enough in order to be used as a proper basis of valuation in and of themselves” and this was due to “their size, shape and availability for different uses, and specifically not being available for railroad use.” The waterfront sales that have taken place between 1938 and January 1st, 1945, and with reference to which, testimony was adduced, do not affect any properties which are sufficiently comparable to be used as a standard of valuation for these Erie Railroad waterfront terminal lands. Laing v. United New Jersey Railroad and Canal Co., 54 N. J. L. 576; 25 Atl. Rep. 409.

As to the “backland” parcels, witnesses for Jersey City were all of one mind in their criticism of the comparable sales used by witnesses for Erie to support their valuation of “backland” properties, and with this view the Division agrees. However, the criticisms leveled by witnesses for Jersey City, can be leveled with equal force at their own “backland” schedules and the principles employed by them in arriving at their opinions of true value of these parcels. Properties, the sales of which are quoted by witnesses for Jersey City, are equally as deficient in similarity as to utility, size and location as are the properties, the sales of which are quoted by Erie witnesses. In fact, a number of sales quoted by witnesses for Jersey City are the same sales as are quoted by witnesses for Erie.

An interesting phase of testimony, new to the record in railroad appeals, was introduced at the hearings by witnesses for Jersey City. The opinions of value of these witnesses for the current assessing date were about 20% higher than their opinions of value for the assessing date of the prior year. This phase of testimony consisted of a series of studies, schedules relating thereto, twenty-one in number, being marked JGV-7 to JCV-27. The schedules covered a wide range of subjects, among them being: population statistics for Jersey City, Hudson County, State of New Jersey, New York City and the United States from 1790 to 1945; tabulation of Home Owners’ Loan Corporation properties in the State of New Jersey; industrial space vacancy and rent comparisons for various periods from 1933 to 1945; vacant land sales and resales; elevator apartment house sales and resales; upward trend of Jackson Avenue store rents; vacancy survey, Monticello Avenue; elevator apartment house rent and vacancy comparisons; etc. The information contained in the exhibits was submitted with the understanding that it was subject-matter considered by the experts, but that it did not constitute proof of the facts therein set forth. This restriction did not apply to certain comparable sales included in the exhibits, which comparable sales were evidential by reason of R. S. 2:101-1; N. J. S. A. 2:101-1.

When asked how these exhibits had affected his determination that there had been an increase in the values of the properties under appeal between January 1st, 1944, and January 1st, 1945, one expert stated: “Well, those were just cumulative factors which * * * supported my conviction that there had been a general increase in the valuation of real estate * * *. Those were just cumulative factors that helped indicate to me that there had been an increase in the general real estate market.” Hone of the witnesses stated how the data and information contained in any of these twenty-one exhibits definitely pointed to an increase in value of the railroad properties under appeal.

With respect to this testimony concerning these exhibits the Division has determined that it is without probative force as far as the value of railroad properties is concerned.

It will thus be seen that other than their “general knowledge and experience” witnesses for Erie base their opinions of value solely upon the comparable sales quoted with reference to both “waterfront” and “backland” parcels. And the witnesses for Jersey City had no basis for their valuation of “waterfront” parcels other than their “general knowledge and experience” and the study of trends already commented upon. As to “backland” parcels witnesses for Jersey City had only comparable sales supplemented by their “general knowledge and experience” as their basis for value.

The type of comparable sales considered by experts for both appellants does not meet the standard laid down by the Court of Errors and Appeals in Laing v. United New Jersey Railroad and Canal Co., 54 N. J. L. 576; 25 Atl. Rep. 409, wherein it was held that there must be “substantial similarity” between the properties, that is, enough similarity as to “admit of reasonable comparison.” On this point the court said:

“Generally, in this and other states (Lewis, Em. Dom. Par. 443), evidence of sales of land in the neighborhood is competent on an inquiry as to the value of land, and if the purchases or sales were made by the party against whom the evidence was offered it might stand as an admission. Wyman v. Railroad Co., 13 Metc. (Mass.) 316. Bnt such testimony is received only upon the idea that there is substantial similarity between the properties. The practice does not extend,, and the rule should not be applied, to eases where the conditions are so dissimilar as not easily to admit of reasonable comparison, and much must be left to the discretion of the-trial judge, in the determination of the preliminary question,, whether the conditions are fairly comparable. Chandler v. Aqueduct Corp., 122 Mass. 305.”

The court in Long Dock Co., Pros., v. State Board of Assessors et al., 89 N. J. L. 108; 97 Atl. Rep. 900; affirmed, 90 N. J. L. 701; 101 Atl. Rep. 367, considered sales of lands-in the “business’ section” of Hoboken and Jersey City as-evidential but recognized the principle laid down in Laing v. United New Jersey Railroad and Canal Co., supra, stating, “what is looked for is substantially similar conditions.” The-comparable sales listed and testified to by the experts seem to be of that type that caused the Supreme Court in Colonial Life Insurance Company of America v. State Board of Tax Appeals, 126 N. J. L. 126; 18 Atl. Rep. (2d) 625, to comment that “evidence of ‘comparable sales’ is ofttimes of questionable force and is rarily, if ever, conclusive.”

As opposed to the principles of appraisal followed by experts-for Erie and Jersey City, testimony in behalf of the state indicates that the terminal lands were valued “as a whole,, the entire tract.” As Mr. Eryer for the state remarked, the Director was “not concerned with separate valuations of the-parcels in the terminal” and that any sub-division that might be made depends upon “the value of the tract as a whole.”

It is true that all witnesses for Erie and Jersey City asserted that they valued the terminal as a whole and then allocated proportionate values for the various parcels into-which the terminal was divided, ascribing a higher unit of' value to the “waterfront” parcels than to the “baekland” or-“supporting” parcels. But none of the witnesses in valuing-the terminal as a whole considered it from the standpoint-of its contribution of value as a waterfront terminus “as— sembled and peculiarly adaptable” to the business the terminal serves. See Long Dock Co. v. State Board of Assessors, supra. Additionally, none of the witnesses for Erie or Jersey City considered the value of the terminal from the standpoint of its contribution to the total value of the trunk line railroad system of which it forms a part.

On the other hand, testimony produced by the state was persuasive that the method followed in reaching the figures of assessment was the same as the method that has in the past been uniformly approved by the courts of New Jersey. Director Walsh was insistent that the general method followed by his department, being the method sustained by the courts in the past, had been followed by him in the making of the assessments complained of herein.

We should not disturb the assessments levied by the Director in the absence of “palpable error.” Central Railroad of New Jersey v. State Board of Assessors, 49 N. J. L. 1; 7 Atl. Rep. 306. Before we can reduce, alter or modify the assessments we must determine, as did the Supreme Court in United New Jersey Railroad and Canal Co. et al. v. State Board of Taxes and Assessments, 103 N. J. L. 33; 134 Atl. Rep. 669, that “the testimony of the prosecutors must so preponderate as to overcome the judgment of the State Board of Taxes and Assessment and the testimony that supports it.”

The question is, then, as to whether or not there is enough weight to the testimony offered by Erie which on the one hand contends that the assessments are too high or by Jersey City which on the other hand contends that the assessments are too low for us to determine that there was “palpable error” in the making of these assessments being attacked. We think that this question must be answered in the negative.

Our determination as to the assessments is the same as stated by the Supreme Court in Central Railroad of New Jersey v. State Board of Assessors, supra:

“We can perceive nothing in the facts before us that would justify us in interfering with valuations of this case. We do not consider that we have the right to alter or annul any of the proceedings of this body of officers except for palpable error; for it is not to be overlooked that the statute in question expressly declares that these assessors ‘shall be entitled to use their personal knowledge and judgment as to the value of the property’—a capacity with which this court is not endowed by the legislature.”

For the reasons stated, the respective appeals from the assessments of these parcels will be dismissed.

Some mention perhaps should be made relative to the contentions of unconstitutionality made by both Erie and Jersey City. These contentions were not argued at the hearing but in any event we are not qualified to pass upon them. Schwartz v. Essex County Board of Taxation et al., 129 N. J. L. 129; 28 Atl. Rep. (2d) 482.


source: Caselaw Access Project

author: Felleb, D. 0. J.

license: Public Domain

text:
    First Judicial District Court of the County of Union.
    KATHERINE DZIOBAK, PLAINTIFF, v. NICHOLAS KOWITSKY, DEFENDANT.
    Decided January 23, 1948.
    For the plaintiff, Nathan Reibel.

    For the defendant, Weiner & Weiner.

   Felleb, D. 0. J.

This action is brought by the plaintiff, Katherine Dziobak, against the defendant, Nicholas Kowitsky, by reason of the alleged holding over by the defendant beyond the date upon which the defendant’s tenancy was terminated—to wit., from June 15th, 1947, to on or about October 15th, 1947.

This suit is the result of a dispossess action instituted by the former landlord, the plaintiff herein, against this defendant who was formerly the tenant of the premises at Ho. 340 Myrtle Street* Elizabeth, New Jersey. Said action was filed June 17th, 1947, in the Eirst Judicial District Court of Union County. This action was filed before July 1st, 1947, when the new Housing and Eent Act passed by Congress went into effect. This law contained some substantial changes from the old law which expired—with some exceptions—on June 30th, 1947. This cause although filed on June 17th, 1947—before the new law went into effect—was not tried until July 11th, 1947, after the new law became effective. This court at that time denied a motion to dismiss the dispossess proceedings, holding that the terms of the old law were applicable. A judgment for possession was entered in favor of the landlord after a jury returned a verdict.

The tenant then applied to the New Jersey Supreme Court, for a writ of certiorari and also appealed to the United States District Court, and to the New Jersey Court of Chancery. Each time the decision—in effect—was in favor of the landlord. In each of these successive steps temporary orders were signed restraining the landlord from proceeding with the eviction of the tenants until the matter had been determined by each court appealed to. After these various proceedings had been completed, which was in the month of October, 1947, ■the tenant moved out.

Although the allegations of the plaintiff’s state of demand are general, an agreed statement of facts indicates that the said plaintiff seeks to recover double the amount of rent as a penalty under the statute, by reason of the holding over of the tenant after the expiration of the term—namely, June 15th, 1947—as well as treble costs under the statute.

R. S. 2:58-6; N. J. S. A. 2:58-6, permits a suit in the .nature of a penalty where a tenant in possession of real estate willfully holds over after the termination of the term and after demand made and notice in writing for delivering the possession thereof, for double the yearly value of the real estate so detained.

It is stipulated that the rental for the premises in question ■was $23 per month, the maximum rent allowed. Double this amount is $46 a month. The plaintiff therefore claims $46 per month for four months—from June 15th, 1947, to October loth, 1947—making a total of $184 for rent. In addition the plaintiff claims $112.38 as treble the costs. The total claim is for $296.38.

Under the Emergency Price Control Act of 1942, 50 U. S. C. A. Appendix, §§ 901, et seq., and the various rules and regulations promulgated thereunder, rent ceilings were established in the North Jersey area' which includes the City of Elizabeth. These rent ceilings were continued by the provisions of section 204 (b) of the Housing and Pent Act of 1947, 50 U. S. C. A. Appendix, § 1894(b), which proves as follows:

“During the period beginning on the effective date of this title and ending on the date this title ceases to be in effect, no person shall demand, accept, or receive any rent for the use or occupancy of any controlled housing accommodations greater than the maximum rent established under the authority of the Emergency Price Control Act of 1942, as amended, and in effect with respect thereto on June 30, 1947.”

Under this act, section 204 (c), the Housing Expediter is authorized to remove any or all maximum rents at any time, in any defense rental area, if in his judgment the need no longer exists. However, it is a matter of common knowledge that the said maximum rents have not been removed in the Elizabeth area.

Furthermore, section 206 (a) of the said Housing and Rent Act, 50 U. S. C. A. Appendix, § 1896 (a), provides:

“It shall be unlawful for any person to offer, solicit, demand, accept, or receive any rent for the use or occupancy of any controlled housing accommodations in excess of the maximum rent prescribed under section 204 (b).”

These two provisions continue rent ceilings and make it unlawful for any person to solicit, demand, accept, or receive any rent in excess of the maximum rent. They are evidently in conflict with R. S. 2:58—6; N. J. S. A. 2:58-6, which permits a landlord to collect double the rental value which in this case is double the rent.

Article 6, clause 2, of the Constitution of the United States provides as follows:

“This Constitution, and the Laws of the United States which shall be made in Pursuance thereof; and all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, anything in the Constitution or Laws of any State to the Contrary notwithstanding.” ■

It must be noted under this section that the Laws of the United States passed in pursuance of the Constitution shall not only be the Supreme Law of the Land, but that the Judges in every State are bound thereby regardless of the Constitution or Laws of any State. This leads to the conclusion that whenever a conflict exists between the federal and state laws on matters concerning the freezing of rents to prevent inflation due to the acute shortage of housing accommodations, the federal laws must take precedence and be enforced to the exclusion of the state law so far as it is consistent with constitutional sanction. Ricci v. Claire, 21 N. J. Mis. R. 266; 33 Atl. Rep. (2d) 591. “When the Congress legislates in a field common to both the federal and state sovereignties, the federal act supersedes all inconsistent state legislation.” B. R. Waldron & Sons Co., Inc., v. Milk Control Board, 131 N. J. L. 267; 35 Atl. Rep. (2d) 27, 29.

Although the claim for double rent is, in effect, an attempt to create a penalty (as distinguished from rents) a landlord should not be permitted to receive pursuant to a state statute what the laws of Congress expressly or by implication intend to prohibit. These laws were intended, during the emergency created by the housing shortage, to prevent any exaction from the tenant of an amount above the rent as frozen—even though such exaction may be classified as a penally. Ricci v. Claire, supra. Therefore to permit the landlord to recover the penalty that she claims would be a violation of section 204 (b) and section 206 (a) of the Housing and Rent Act of 1947.

Furthermore, the tenant in this ease cannot be classified as a willful hold-over under R. S. 2:58-6; N. J. S. A. 2:58—6. “A belief of the tenant that he has a right to hold over must, in order to avoid the penalty of double yearly value, be an honest one, based on reasons sufficient to induce a jury to believe he had a right to remain in possession after written demand therefor * * Ancona Printing Co. v. Welsbach Co., 92 N. J. L. 204; 104 Atl. Rep. 132, 133. “A tenant cannot relieve himself by the mere statement that he believed, he had a right to hold the premises. He must furnish reasons sufficient to induce a jury or court hearing the case to believe he had a right to remain in possession.” Ancona Printing Co. v. Welsbach Co., supra.

The tenant believed that he had a right to remain in possession because the dispossess proceedings explained above were filed before July 1st, 1947, when the old law was in effect—even though they were tried after this date, which was the date that the Housing and Kent Act of 1947 went into effect. Under the old law the landlord had a cause of action, while under the new law she did not have a cause of action. This court decided that the old law applied to that particular cause. However, this court takes judicial notice of the fact that this decision, under the circumstances was a novel one and that apparently there was a lack of precedent for the same. Because of the novelty of the situation, and lack of precedent for said decision, the tenant was justified in believing that he had a right to remain in possession at least until such time as the law might possibly be construed and interpreted by some higher court. I am satisfied that the tenant had an honest belief in his right to remain in possession of the premises, while he attempted by legal process to have the courts sustain his right to remain. Under the peculiar circumstances of the case, a tenant should not be penalized because he has unsuccessfully applied to the courts for relief in a lawful manner. Therefore I am convinced that as a matter of fact the tenant had sufficient reasons to believe he had a right to possession.

Since it is the opinion of this court that the tenant is not a willful hold-over under the statute, he accordingly has not been guilty of an unlawful detention to justify the landlord in recovering treble costs.

The plaintiff herein is entitled to recover the costs connected with the dispossess action but these costs have already been taxed in that suit.

Consequently, a judgment is hereby entered for the defendant.


author: IjABEboqxte, Coiimissioneb.

text:
    Division of Tax Appeals.
    CITY OF UNION CITY, PETITIONER, v. CAPITOL-THEATRE AMUSEMENT COMPANY AND PETER DOELGER REALTY COMPANY, INC., RESPONDENTS.
    Decided January 27, 1948.

      For the petitioner, Milton B. Gonford.

    For the respondents, Manuel Meth.

   IjABEboqxte, Coiimissioneb.

The respondents move to dismiss the appeal heretofore filed with us by the petitioner from the action of the Hudson County Board of Taxation, dismissing petitioner’s appeal from the assessment on their property in Union City, New Jersey.

The evidence before us consists of a stipulation of facts, together with affidavits and exhibits.

Brieflly summarized, it appears that in the year 1945 the assessor of Union City assessed the respondents’ premises at

Land .................. $157,000
Improvements .......... 443,000
Total ............... $600,000

Subsequently, the County Board revised and corrected the assessment to

Land .................. $157,000
Improvements .......... 293,000
Total $450,000

The assessment, as revised, was certified to the municipal collector of taxes, and thereafter, final tax bills for the year were sent out by him at the tax rate struck by the county board.

On August 9th, 1945, the taxpayer filed its appeal to tibe county board praying for a further reduction in its assessment. Under date of August 13th, the city likewise filed an appeal to the county board praying for an increase. This petition of appeal was actually filed with the county board on August 15th. The return of service indicates that the process server was unable to make service in the manner provided by law for the service of summons, and that he thereafter served a copy thereof, on August 14th, 1945, by mailing the same to the respondents’ attorney, Manuel Meth, Esq., at his office, 5.318 Bergenline Avenue, West New York, New Jersey. In the petition of appeal thus filed, the municipality charged that it was discriminated against by reason of the fact that the assessment of the subject property was below the true value thereof.

The municipality’s appeal to the county board was dismissed, apparently on the sole ground that the petition of appeal was not served in the manner provided by rule 15 of the county board. This rule provides:

“A copy of each petition of appeal filed by a taxing district shall be served upon the respondent taxpayer in the manner provided by law for the service of summons. If service cannot be so effected, same may be made by mailing copy of petition to taxpayer at his last known address.”

The respondent taxpayers urged before the county board, and now urge before us, that service upon Mr. Meth, their attorney, could not confer jurisdiction upon the county board. In support of this they show that they are both corporations, maintaining offices in this state with agents or officers in charge, upon whom process allegedly should have been served. It is claimed that there is an absence of evidence to indicate any attempt to serve such officers or agents.

The process server, who is charged with the duty of effecting service, was not called as a witness by either side, so that his affidavit is the sole evidence before us as to the facts concerning service.

It is urged by the respondent taxpayers that compliance with the rule of the county board hereinabove referred to was a jurisdictional prerequisite and, in the absence thereof, the county board had no choice but to dismiss the municipality’s appeal. For its part, the municipality contends that the rule in question was non-jurisdictional, that compliance therewith was directory only and that Mr. Meth had been and was authorized to accept service on behalf of the taxpayers. It was further claimed that the taxpayers were estopped from denying Mr. Meth’s authority.

It seems clear that if compliance with the county board’s rule 15 was a prerequisite to the conferring of jurisdiction, in the absence of substantial compliance therewith, the county board properly dismissed the appeal and we are required to do likewise.

We find, however, that there was sufficient service of the petition of appeal upon the taxpayers. The general rule is and has been that service of process upon an authorized agent or attorney is as valid and binding as statutory service upon the principal himself. Purcell v. Bennett, 68 N. J. L. 519; 53 Atl. Rep. 235. From the evidence before us, it appears that attorney Meth has continuously represented the taxpayers in their tax litigation with the municipality since the year 1938. In 1943 he filed a petition of appeal with the county board, in which he was designated as the attorney or person to be notified of hearing and judgment. In the same year he filed a petition with the State Board of Tax Appeals, designating himself as such attorney. The municipality likewise filed a petition of appeal to the state board during the same year, serving the taxpayer at the office of one of them in Union City. When this was done, Mr. Percy L. Limouze, the municipality’s agent who had done so, was directed to serve further appeals on Mr. Meth. His affidavit on this score reads as follows:

“After the State Board appeals of 1943 tax assessments had been filed, Mr. Meth visited my office, as he frequently does, and informed me that I was thereafter to see to it that at all times thereafter, including later years, any tax appeals by the City of Union City affecting the assessment of the property here in question should be served upon him for the taxpayer, and not upon any other person or persons.”

In 1944, pursuant to the directions mentioned above, service of the municipality’s appeal against the taxpayers was made upon Mr. Meth. His authority to accept service seems not to have been questioned.

In 1945 Mr. Meth was again designated by the taxpayers as their agent or attorney for the purpose of the present appeal. On July 6th, 1945, he was authorized in writing “to file a petition of appeal to the Hudson County Board of Taxation” and “then to the Division of Tax Appeals.” He was further authorized “in the event that the City of Union City should file an appeal to the County Board” to “handle the matter in the same manner as the direct appeal; that is, we give you full authority to handle the matter in any way you believe advisable.” (Italics ours.)

Thereafter and on September 4th, 1945, his agency was further confirmed by the taxpayers in a written document, the pertinent portion of which reads as follows:

“This is to acknowledge receipt of your advice dated Aug. 22, 1945, that you were served with a copy of a petition of appeal filed with the Hudson County Board of Taxation asking that the assessment of $450,000 on the above property as revised by the said County Board, be increased to $600,000 —the amount originally assessed by the municipality for 1945.

“On July 26, 1945, we authorized you to file for us a direct appeal asking that the assessment of $450,000 be reduced and also to defend any appeal by the City should such appeal be filed with the County Board.

“You are to proceed to handle our direct appeal as authorized and also to defend the direct appeal of the City before the County Board, and if necessary, before the Division of Tax Appeals in the Department of Taxation and Finance of the State. of New Jersey (former State Board of Tax Appeals.)”

Although service of the petition of appeal was made by mail on August 11th, nothing was done by the respondent taxpayers to disaffirm Mr. Meth’s authority to accept service until October 11th, 1945. At that time, a motion was made to dismiss the appeal for the reason that it had not been served in accordance with the provisions of county board rule 15.

The inescapable conclusion to be reached from these various facts would seem to be that Mr. Meth was the duly authorized .agent of the taxpayers with the full authority to act in their behalf. He had been held out by them as the person on whom service should be made. With full knowledge of the fact that service had been made upon Mr. Meth in the instant case, they elected to defend the appeal rather than question the mode of service. They are now estopped from doing so.

And even were this not so, the city’s appeal could not thus be defeated. The statute itself, R. S. 54:3—21; N. J. S. A. 54:3—21, fails to provide any particular method of service upon the taxpayer. Thus, the county, board could not, by the adoption of a rule, restrict or dimmish its jurisdiction in the promises, or restrict the right of the municipality to have its appeal heard. Eules of court may not be adopted which diminish the jurisdiction conferred by statute. Venner v. Great Northern Railway, 209 U. S. 24; 28 S. Ct. 328; 52 L. Ed. 666; Danoff v. Larsen, 368 Ill. 519; 15 N. E. Rep. (2d) 290; HeTbush v. HeTbush, 209 Cal. 758; 290 Pac. Rep. 18; American Brake Shoe and Foundry Co. v. Interborough Rapid Transit Co., 1 Fed. Supp. 820. In a somewhat similar case, involving the same statute, the State Board of Tax Appeals rejected the contention that any particular method of service was necessary, holding:

“We are clear, however, that the pertinent statute, R. S. 54:3—21; N. J. S. A. 54:3—21, requires no such service where a taxing district is not the party respondent. It is enough, we believe, that respondent had sufficient notice of the hearing before the county board to enable it to appear and be heard.” Wanaque v. North Jersey District, &c., 20 N. J. Mis. R. 232; 26 Atl. Rep. (2d) 569. A substantially similar rule was applied in cases involving appeals to the State Board under the provisions of R. S. 54:2-35; N. J. S. A. 54:2-35. Newark v. Calco Chemical Co., N. J. Tax Reports (1934-1939), 593; Newark v. General Motors Acceptance Corp., N. J. Tax Reports (1934-1939), 265. In the case sub judice, We find that the taxpayers had sufficient notice to enable them to appear and be heard. Wanaque v. North Jersey District, &c., supra.

It is next urged by the taxpayers that the municipality’s petition of appeal failed to allege discrimination. The applicable statute, R. S. 54:3-31; N. J. S. A. 54:3-21, provides that a taxing district "which may feel discriminated against” may appeal to the county board. The respondents charge that although the city’s petition of appeal alleges discrimination, such allegation is insufficient in the absence of a further allegation setting forth some actual discrepancy between the assessed valuation of the subject, property, and some other specific property in the municipality. This argument loses sight of the presumption that the county board, in correcting and revising the municipal assessments, performed its full duty, so that all property in the municipality was assessed at its true value. The charge in the petition of appeal, .that the respondents’ property was assessed at less than true value, must be considered by us in the light of this presumption.

The facts in the instant ease bear no similarity to those in the case of In re Jersey City, 23 N. J. Mis. R. 311; 44 Atl. Rep. (2d) 189. In that ease, appeals were taken by the municipality from some 80 per cent, of the assessments in the taxing district. In the instant case, it appears that we are dealing with the only appeal taken by the municipality.

It is also urged by the respondents that the municipality waived its right to appeal because of the fact that it failed to appeal directly to us from the action of the county board in revising and correcting the assessments and striking the tax rate. There appears no statutory authorization for such an appeal directly to us. On the contrary, the municipality was required to’ exhaust its remedies before the county board before appealing to us. Township of North Bergen v. Hackensack Water Co. (decided November 25th, 1947), 26 N. J. Mis. R. 6; 55 Atl. Rep. (2d) 903.

Some point is made of the fact that although' the petition of appeal was mailed to Mr. Meth on the 14th day of August, 1945, it was not actually received by him until the 17th. It is undisputed that this delay was occasioned by the fact that by Presidential Proclamation August 15th and 16th, 1945, were generally observed as legal holidays throughout the United States. Such being the case, service upon Mr. Meth on the next secular day was sufficient. Ettrick v. State Board of Tax Appeals, 12 N. J. Mis. R. 432; 172 Atl. Rep. 365. Newark v. Calco Chemical Co., N. J. Tax Reports (1934-1939), 593.

It is urged by the taxpayers that the action of the municipal collector in sending out tax bills, based upon the tax rate and upon the assessments as revised by the county board, constituted a waiver of the municipality’s right to appeal. Clearly, this is not so. The tax collector was obliged to perform this duty. R. S. 54:4-64; N. J. S. A. 54:4-64. Por non-performance of it, he would have been subject to discipline. Were this contention of the taxpayers to prevail, chaos in municipal taxation would be the inevitable result.

It is also urged that to permit the present appeal to stand would enable the municipality to raise more money by taxation than the amount set forth in its annual budget. The record is devoid of any evidence in support of this contention. Obviously, the amount actually raised by taxation in any given year may not coincide exactly with the amount set forth in the municipal budget, but may be affected by increases or decreases in the assessed valuations, as fixed by the county board or by us on appeal. Any surplus revenue resulting therefrom is carried over into the municipal budget for the following year. R. S. 40 :2—13, et seq.; N. J. S. A. 40 :2—13, et seq.; Penn T. & T. R. R. Co. v. Hendrickson, 87 N. J. L. 239 (at p. 243) ; 93 Atl. Rep. 589.

Lastly it is urged that by failing to appeal to us from the county board’s action in dismissing the taxpayers’ appeal, the matter has become res adjudicata and bars the present appeal. This is not so. It is well established that a judgment is not res adjudicata of another suit unless the issues in the first suit are the same as those raised in the second. In re Walsh’s Estate, 80 N. J. Eq. 565; 74 Atl. Rep. 563; Godomsky v. Freeman, 120 N. J. L. 116; 198 Atl. Rep. 391, obviously the issues in the two appeals were not the same.. In the city’s appeal, an increase in the assessment was sought,, while the taxpayers’ appeal sought a reduction. Here were-two separate and distinct issues. And aside from this, the-dismissal of the taxpayers’ appeal for a reduction was not. inconsistent with the city’s contention that the assessment was too low. Nor could the city be said to have been aggrieved by such action.

For the reasons stated, the motion to dismiss the appeal' is denied.


author: Brown, S. C. C.

text:
    MARTHA DAVIS, PLAINTIFF, v. THE TRUST COMPANY OF NEW JERSEY, A BANKING CORPORATION OF THE STATE OF NEW JERSEY, DEFENDANT.
    Decided February 10, 1948.

      Martha Davis, pro se.

    For the defendant, Nugent & Rollenhagen.

   Brown, S. C. C.

This matter is before the court for determination on a motion made by defendant to strike out the amended complaint on the grounds that the complaint does not disclose a cause of action; that it is uncertain, vague and indefinite; that special damages are not pleaded and that there was no publication. A history of this case discloses that the original complaint as well as an amended complaint, were stricken by another member of the Circuit Court on substantially the same grounds as above mentioned. Under those circumstances it is felt necessary to make copious references to dependable authorities for a better understanding of the proper procedure' in pleading based upon a charge of slander. Chitty, a dependable authority on the practice at common law, stated that “technical objections to declarations for causes of action * * *, whether for written or verbal slander have certainly been admitted to an extent injurious to the mode of administering justice.” There has been a change in the practice and pleading of those cases, since the time of Chitty, and it is necessary to have some idea of the rules as they existed at common law in order to better understand the proper procedure at the present time. At common law there were four principal items that were required in order to present a legal and proper declaration. First, was the inducement or prefatory statement in which it was held that an inference or presumption of law need not in general be stated in the pleading because the law presumes the innocence of crime or other misconduct. The plaintiff need not in his declaration aver his innocence of the charge or attack upon his character. It was, however, usual to state by way of introduction plaintiff’s innocence of the imputation. It was also held that where the libel or slander is prima facie or per se actionable, a declaration stating the defendant’s malicious intent and the defamation, showing that it refers to the plaintiff, was sufficient without any prefatory inducement of the circumstances under which the words were spoken. But if the slander did not naturally and per se convey the meaning, the meaning the plaintiff would wish to assign to them, it must expressly show that such matter existed and the slander related thereto. Upon the same ground in declarations for libel or slander which are only actionable in regard to having affected the plaintiff in his trade, profession or business there must be a distinct allegation that the plaintiff was at the time of the scandal in such profession, or exercising such calling—otherwise the record will be substantially defective. If the slanderous matter is actionable of itself and independent of the plaintiff’s trade or profession it would not be fatal to introduce by averment the plaintiff’s trade or profession. In the practice at common law the second necessary item was the colloquium. In this item the declaration was required to show words spoken and published of and concerning the plaintiff. The third item necessary in a proper pleading at common law was the statement of the slander itself and the publication thereof. Great care was required to be taken in setting out the words and that they should be uttered and whether about the plaintiff or to him. Pourth, was the innuendo which required great attention and proof, and fifth, the consequent damages.

In the year 1903 there was enacted a law in the State of New Jersey which provided as follows:

“2:59-3. In an action for libel or slander, plaintiff may aver that the words or matter complained of were used in a defamatory sense, specifying such sense, without a prefatory averment to show how the words or matter were used in that sense. Such an averment shall be put in issue by a denial of the alleged libel or slander. If the words or matter set forth, with or without the alleged meaning, show a cause of action, the complaint shall be sufficient.”

If the words themselves, or the words together with the meaning attributed to them by the plaintiff, disclose a cause of action the complaint will be deemed valid. Jaeger v. Beberdick, 70 N. J. L. 372; 57 Atl. Rep. 157. If the words, either as such or in the meaning imputed to them by the plaintiff, are slanderous per se, an allegation of special damages is not essential. The Empire Cream Separator Co. v. De Laval Dairy Co., 75 N. J. L. 207; 67 Atl. Rep. 711; Ramsdell v. Pennsylvania Railroad Co., 79 N. J. L. 379; 75 Atl. Rep. 444; Ritchie v. Widdemer, 59 N. J. L. 290; 35 Atl. Rep. 825; Freisinger v. Moore, 65 N. J. L. 286; 47 Atl. Rep. 432. On the other hand where the words are not actionable per se special damages must be alleged in the complaint. In alleging special damages it is not always necessary to name the customers whose business has been lost by the defamation. Trenton Mutual Life and Fire Insurance Co. v. Perrine, 23 N. J. L. 402.

The amended complaint, in its first paragraph, now under consideration alleges that the plaintiff resides in the City of Jersey City and that she was “always reputed, esteemed and. accepted by and among all her neighbors and other good and worthy citizens of this state to be in anywise known, to be a person of good name, fame and credit.” The second paragraph alleges, “that on the 14th of February, 1947, at the defendant’s bank, located at Ho. 921 Bergen Avenue, in the City of Jersey City, County of Hudson and State of New Jersey, in the presence of divers persons, whose names are unknown to the plaintiff and too numerous to refer to herein, the defendant, through its agent, Mr. Lounsbury, who is employed by the defendant as a teller, falsely and maliciously and for the purpose of injuring the plaintiff in her good name, reputation and credit, spoke of and concerning the said plaintiff in a loud and malicious manner, as follows: “Don’t lend Mrs. Davis any money. We don’t want to do business with her; her credit isn’t any good.” And did on the date aforesaid, tell the Local Loan Company on Sixth Avenue and Forty-second Street, in the City, County and State of New York, not to do business with the plaintiff because she was not a responsible person, and further did make the same false statements to various other banking and loan institutions so as to ruin the credit of the plaintiff.” The third and last paragraph alleges, “that by reason of the speaking of the said remarks in the presence of said several people, among whom were neighbors and business associates of the said plaintiff, the said plaintiff has been and is greatly injured in her good name, character, reputation and credit and has found it difficult to carry on her usual business because of her injured credit, so as to deprive her of certain sums of money, which she otherwise might have made;” thereafter follows the demand for damages. It should be noticed that the defendant corporation is being sued and not its alleged employee, who is charged with having made the utterances upon which, the suit is based. A corporation is liable for a slander uttered by its agent while acting in the scope of his employment and in the actual performance of the duties thereof touching the matter in question though the corporation had no knowledge and did not ratify the act of the agent. Fensky v. Maryland Casualty Co., 264 Mo. 154; 174 S. W. Rep. 416; Ann. Cas. 1917D, 963. It is also well-settled that a corporation is liable for slander spoken by its agent within the scope of his employment and in the actual performance of his duties and particularly so where the words spoken were ratified by the corporate employer. Waters-Pierce Oil Co. v. Bridwell, 103 Ark. 345; 147 S. W. Rep. 64; Ann. Cas. 1914B, 837. The pleading under consideration, while it alleges that the occurrence took place at the bank of the defendant, it does not state in what part of the bank and particularly fails to allege that the agent at the time the words were spoken did so in the course of his employment, or that the words were spoken within the authority given to him by his employer or that the words spoken were ratified by the defendant. It is also apparent that the plaintiff has failed to allege in what business or profession she was engaged at the time the words were spoken. The business and occupation of the plaintiff should be clearly described in the amended complaint and also the effect thereof. If the allegation is not sufficient to meet the test of an actionable slander per se the damages incurred should be specifically alleged. The amended complaint now before the court for consideration is stricken. The plaintiff will be allowed to file another amended complaint on ot before the 8th day of March, 1948. Further amendments will not be allowed.


author: Haktshoene, 0. P. J.

text:
    Esses County Couet oe Common Pleas.
    NICKOLAI BLAZIAK, PETITIONER-APPELLANT, v. EASTWOOD-NEALLEY CORP., RESPONDENT-APPELLEE.
    Decided February 24, 1948.
    For the petitioner-appellant, Joseph A. Fuerstman.

    For the respondent-appellee, John W. Taylor.
   Haktshoene, 0. P. J.

This appeal lies from an award entered in the Bureau, reducing to 25% of total permanent disability a previous award to petitioner, Blaziak, of 50% of total permanent disability, "on the ground that the disability has diminished,” R. S. 34:15-27; N. J. S. A. 34:15-27, subsequent to the making of the original award.

Counsel for Blaziak questions the legal validity of the present proceedings in certain aspects. Whether the proceedings to ascertain such subsequent change in disability—unknown to the common law, and of purely statutory origin— should be on formal petition, as in Drake v. C. V. Hill Co. (Court of Errors and Appeals), 117 N. J. L. 290; 187 Atl. Rep. 637, or on rule to show cause as here, would seem, in the absence of statutory specification, not to be jurisdictional, but merely procedural.

Similarly, the question of whether the application to diminish disability should be heard by the Commissioner who made the original award, or by another, would not seem jurisdictional either. On the other hand, and without any personal reflection whatever, there would seem to be sound reason why the Commissioner who heard the evidence, and entered the determination which fixed the basic disability, should also hear the subsequent evidence, and make the subsequent determination, as to whether such basic disability had been unexpectedly changed by lapse of time. The matter is not merely one of individual judicial comity. More important than that is the fact that the mind which made the original determination, and put its mere results in writing, has, in evaluating the testimony at the second hearing, the benefit of much which a new judicial mind lacks. The former, and not the latter, has seen and heard all the witnesses, the petitioner included, as they physically appeared and testified during the course of the first hearing. He is therefore in an unequaled position to pass on the credibility of their testimony, as to the claimed subsequent change in disability, as they—and most of them the same witnesses—testify at the second hearing. This is regardless of the waste of time and effort involved in seeking to acquaint a new mind with the full factual background, with which the Commissioner previously sitting is already fully acquainted. For analogous reasons other courts habitually adopt the same practice. For instance, the Court of Chancery requires an application for a modification of a stay to be made to the same Yice-Chancellor who entered the original stay, and our courts of criminal jurisdiction regularly refer the sentence of a newly convicted defendant to the same judge who previously sentenced him for an earlier ofíense in the light of his character disabilities at-that time. Though the procedure adopted in this ease is not fatally defective, it is adverted to because of its importance to the wise administration of justice.

We turn to the facts. The original award was entered January 17th, 1946, as the result of an accident occurring November 17th, 1944, which was then determined to have resulted in the following specific injuries: to the left hand a disability of 65%, to the left shoulder 5%, and for a psychoneurosis 15%, the above aggregating a total permanent functional disability of 50%, as stated. These disabilities, as so determined, are the definite adjudicated base, from which is to be calculated the subsequent disability, on an application such as the present, either for increase or diminishment.’ Drake v. C. V. Hill Co., supra; Tucker v. Beltramo, 117 N. J. L. 72; 186 Atl. Rep. 821; 118 N. J. L. 301; 192 Atl. Rep. 62; Watts v. Newark, 25 N. J. Mis. R. 402; 54 Atl. Rep. (2d) 622. In addition to the present lengthy record on this second hearing of some 500 pages we have the rather unusual exhibit of a series of motion pictures, taken of the petitioner, Blaziak, oh three occasions, when he was clearly not aware of the purpose of their taking. Since “actions speak louder than words," both in law and in fact, the propriety and, if properly taken and projected, the helpfulness of these motion pictures,, as evidence of the condition of the person or scene they portray, is undeniable. They permit the judge, as it were, to become a “jury of view," and of not the lifeless scene of the occasion in question, as is usually the case with such a jury, but of a portion of that very occasion itself—the disability of the person in question. The normal mode of taking such pictures—16 frames a second—and of projection at an equal speed, was duly proved. Indeed, the projection before this Court was by an expert projectionist suggested by the court itself. Thus these moving pictures, of the petitioner himself, in action subsequent to the time of the original award, are of interest and -importance. Three reels are shown, two of which show him at work in his backyard, handling some light lumber with both hands, picking up and holding nails with his left hand, the disabled one, and hammering them with his right hand in the course of some rather ordinary carpentry work. The third reel shows petitioner on a farm, doing some farm work, and also carrying a bag of mash and a small anvil a short distance to his house. These pictures clearly indicate that, while the man can use both his left hand and his left shoulder, which are claimed to have been disabled, and in carpentry work, his previous profession, this hand is by no means normal and of equal use with his right in such work. Dor his left thumb is definitely stiff, and several of the fingers of his left hand do not have the free and full movement of those on the other hand. As to his shoulder, while it does not prevent him from carrying this bag of mash and small anvil, such pictures bring out one of their own intrinsic limitations, i. e., they show no more than they show. Thus the carrying of the bag and anvil for but the short distance portrayed, though without apparent difficulty to the shoulder for such a brief period, by no means proves that such weights could be carried for a much longer period without distress. Mor does the brief carpentry work portrayed by the pictures, prove that such carpentry, even with the disability indicated, could be carried on by the man for the extended periods required of a regular carpenter. And the verbal testimony raises a question as to this.

In addition to the above rather exceptional evidence, the record further discloses that petitioner, in addition to being a carpenter, had originally been a church organist and choirmaster as well, the which he was entirely prevented from prirsuing immediately after the accident. Then, in departure from this basic finding, the evidence at the present hearing shows that, following the first determination in January of 1946, he was re-employed to play an organ in certain churches from May to Setpember of 1946, and from December of 1946 to May of 1947. But, in the first place, he was engaged to do this work only because the churches could not get another organist, and, in the second place, he was discharged from both positions because “the people were not satisfied * * * with the playing;” obviously because his almost ankylosed thumb and several stiffened fingérs on his left hand did not permit him to satisfactorily handle the organ manuals.

In short, while he is no longer completely disabled from acting as an organist and a carpenter, as he was at the time of the first, and basic, determination, he still has substantial disability in that regard.

Turning to the brief verbal testimony, supplementing the moving pictures, as to his farm work, we find the situation substantially the same. He was able to undertake it, but could not perform it as could an ordinary man.

By far the bulk of the written record is taken up with the medical evidence. On behalf of the employer, here the moving party, upon whom falls the burden of proving the alleged change in disability, appear Dr. Bohl, Dr. Eisenberg and Dr. Bergman. On behalf of the petitioner appear Dr. Ein, Dr. Gorten and Dr. Schwartzberg. As to the change in disability of the left hand, which it will be recalled was basically fixed at the first determination as 65% of that member, and which is the major disability, every one of the doctors who testify in that regard on both sides, with the exception of Dr. Schwartzberg, testifies there was a diminution of disability. Moreover, all of such doctors testify that this hand disability decreased, according to their own respective estimates, from 10 to 15%. This accords with the above lay testimony. It should be noted, however, that Dr. Schwartz-berg, even after his attention was called to the findings on the first determination, did not clearly understand the binding effect of the legal principal above alluded to, to wit, that the original determination finally fixes, as of the time of its entry, the actual disability as there and then stated, and that it is from this fixed disability, as a base, that the present change is to be calculated. Eor Dr. Schwartzberg, who did not testify, as did the others, at the time of the first hearing, now fixes the hand disability at a figure greater than that fixed at the original hearing, and this in the face of all the other lay and medical testimony on both sides to the contrary. Of course it does not follow, simply because he did not testify on the original hearing, that his testimony is now totally inadmissible, since, even though the issue at this time is the change from the original basic finding, nevertheless an estimate of present disability, if in fact different from the disability originally found, is corroborative evidence of a change. But that such testimony is much less likely to be helpful than that from a doctor who examined and testified on both occasions, is clearly shown in this very instance. The upshot is therefore clear that Blaziak’s left hand has improved, on the doctors’ estimates, some 15%, i. e., to a 50% disability of the hand itself, the moving pictures, subject to their intrinsic limitations, indicating an even greater improvement.

Turning to the left shoulder, which is of less serious import, the medical testimony here is in dire conflict, some to the effect that there is presently no disability, and some to the effect that it or the neck is slightly worse than formerly. Here it must be borne in mind that the company’s investigator who took the moving pictures, and who certainly would not be prone to color his recollection in petitioner’s favor, admits that petitioner had a tremor in his arm when sawing. Since no brachial plexus was found to exist on the original hearing, this tremor would seem to indicate the continuance of some shoulder disability, despite the fact that same did not appear on the petitioner’s carrying of the bag of mash and anvil for the short distance there involved. This disability, however, is not claimed to be great, and was originally fixed at but 5% for that location.

Finally, we come to the psyehoneurosis, fixed at the original hearing at 15%, and testified to at the present hearing by Dr. Bergman, on the one hand, and Dr. Gorten, on the other. Dr. Gorten says this continues the same now as then. Dr. Bergman now considers it “minimal,” i. e., 5%. Here the moving pictures are important. For while they do not cover a long period of time, they do present a vivid picture of the man in his normal state, among his friends and family, and in the various types of occupation, either of carpentry or on the farm, that he would be most apt to undertake. In short, they show his functional state. Outside of the fact that these pictures, like the ordinary movies taken by the average amateur, even at normal projection, somewhat speed up the action, for which the court of course makes allowance, there was nothing in these pictures of this man mingling with his friends or family, or doing odd jobs, including carpentry, either on the farm or 'around his home, which in' anywise indicated him to be a real psychoneurotic. Both his psychoneurosis and left shoulder disability are therefore minimal at the present time.

In conclusion, in order to determine petitioner’s present disability, we must merge his various partial disabilities of the left hand, the left shoulder, and the alleged psychoneurosis, and consider him as a functional -unit. Thus considered, there is no question but what his disability, fixed at the first hearing January 17th, 1946, at 50% of total permanent, has been substantially diminished. Looking at the moving pictures alone, the court would, without hesitation, say that a fair estimate of his present functional disability would be 25%. But bearing in mind the fact that these pictures throw little light on his capacity for continuous work, and bearing in mind the testimony, that he has real limitations in this regard, this court is of the’ opinion that petitioner’s present disability has been diminished to the point where a fair award therefor is 35% of total permanent disability. A determination may be entered accordingly.


author: Labkecque, Commissioner.

text:
    Division of Tax Appeals.
    THE RECTOR, WARDENS AND VESTRYMEN OF CHRIST CHURCH IN SHORT HILLS, NEW JERSEY, PETITIONER, v. THE TOWNSHIP OF MILLBURN IN THE COUNTY OF ESSEX, RESPONDENT. 1945 Assessment (Two Cases).
    Decided February 24, 1948.

      Por the petitioner, Fred Uerrigel, Jr.

    Por the respondent, Reynier J. WortendyTce, Jr.

   Labkecque, Commissioner.

The above eases, involving two separate parcels of land, were tried and argued together by consent.

The petitioner is a non-profit religious corporation, organized and existing under the laws of the State of New Jersey since the year 1883. The present appeals involve two tracts of vacant land, located at the intersection of Porrest Drive and Highland Avenue in the Township of Millburn. They were acquired by petitioner sometime in July of 1944 and assessed as taxable for the year 1945. On appeal, the Essex County Board of Taxation affirmed the assessment.

The petitioner contends that the lands in question are entitled to exemption for the following reasons:

1. The lands are those on which buildings used exclusively for religious purposes are erected.

3. The lands are necessary for the fair enjoyment of the church and the parish house buildings,

3. The lands are devoted exclusively to religious purposes.

Prom the facts adduced at the hearing, it appears that for many years prior to the assessing date, petitioner maintained its plaee of worship on a tract of land directly across the street from the subject properties. Diagonally across from the church property, it also maintained a parish house. Both of these have been held exempt from taxation by the local assessor. Subsequently, the lots in question were acquired, and these were held not to be tax exempt.

The only witness called by the petitioner testified that each of the lots in question was vacant. In discussing the uses and. purposes for which the new lots, were intended, he stated:

“The vestrymen, in their judgment as the operating board of the church, believe it essential that additional property be acquired to take care of these future uses and needs, and these two properties together with others were acquired by purchase from their previous owners.”

Plans later made seem to call for the eventual erection of a new rectory on one of the lots. Pending the determination of the final use to be made of the remaining lot, it has at times been used for parking by those attending church services.

The total area of petitioner’s property does not exceed the statutory five acres.

The applicable portions of the statute relied upon in support of the petitioner’s claim for exemption, R. S. 54:4—3.6; N. J. S. A. 54:4-3.6, read in part as follows:

“The following property shall be exempt from taxation under this chapter: * * * all buildings actually and exclusively used for * *■ * religious worship * * * all buildings actually and exclusively used in the work of associations and corporations organized exclusively * * * for religious * * * purposes, or for one or more of such purposes; * * * the land whereon any of the buildings hereinbefore mentioned are erected, and which may be necessary for the fair enjoyment thereof, and which is devoted to the purposes above-mentioned and to no other purpose and does not exceed five acres in extent; * * *. The foregoing exemptions shall apply only where the association, corporation or institution claiming the exemption owns the property in question and is incorporated or organized under the laws of this state and authorized to'carry out the purposes on account of which the exemption is claimed.”

It is entirely settled that statutes granting exemption from taxation are in the nature of a renunciation of sovereignty. Hence, such statutes are generally construed against those claiming the exemption. Trenton v. State Board of Tax Appeals, 127 N. J. L. 105; 21 Atl. Rep. (2d) 644; affirmed, 128 N. J. L. 320; 25 Atl. Rep. (2d) 630. The burden of proof is on the claimant to establish its exemption from taxation. Trustees of Rutgers University v. Piscataway Town ship, 134 N. J. L. 85; 46 Atl. Rep. (2d) 56. One seeking-exemption must establish it by proofs that are free from fair doubt. College of Paterson v. State Board of Tax Appeals, 131 N. J. L. 57; 34 Atl. Rep. (2d) 740; Trenton v. State Board of Tax Appeals, supra. In fact, through the-proofs, the owner must “establish facts entitling it to exemption” as this establishment of facts is a prerequisite to exemption. City of Hoboken v. Division of Tax Appeals, 136 N. J. L. 328; 55 Atl. Rep. (2d) 290.

The application of the legal principles enunciated depends entirely upon the facts and circumstances of each particular case. Dana College v. State Board of Tax Appeals, 14 N. J. Mis. R. 308; 184 Atl. Rep. 412.

. Prom an examination of the facts before us, we find -that the appellant has failed to meet the burden east upon it bylaw. Prom the uncontroverted testimony, it appears that the lands for which exemption is sought, are not the lands upon which any exempt structure is erected. Sisters of Charity v. Cory, 73 N. J. L. 699; 65 Atl. Rep. 500. They constitute-additional vacant land subsequently acquired and intended for future expansion. As of the assessing date, no structure-had been erected on either plot.

Our courts have uniformly held such vacant lands to be-taxable. Thus in Stevens Institute v. Bowes, 78 N. J. L. 205; 73 Atl. Rep. 38, the Supreme Court, in construing a., similar statute (placitum 4 of section 3 of the General Tax Act of 1903) held that the fact that certain buildings belonging to Stevens Institute were exempt from taxation did not likewise exempt certain additional lands of the institution; which were located in the next bloek. To the same effect is Stevens Institute v. State Board of Taxes and Assessments, in 3 N. J. Mis. R. 1094; 130 Atl. Rep. 925, decided in 1925. The principle enunciated in these eases seems to have been: uniformly followed. Thus in First M. E. Church of Red Bank v. Borough of Red Bank, N. J. Tax Reports, 1912-1934, 742; 57 N. J. L. J. 245, the late President Weaver of the-State Board of Tax Appeals held certain vacant lands belonging to a religious congregation to be taxable. The congregation had contracted to sell its church building and had purr chased two lots intended for the erection of a new church. Religious dedication services were held on these lots and open-air Teligious services were conducted on them when the weather permitted. A barn on the property was also used for the storage of church property. In dismissing the claim for exemption, he held:

“ 'Ownership by a religious corporation and incidental use for religious or moral purposes are not sufficient to entitle a building to exemption.’ In re M. E. Church of Englewood, 36 N. J. L. J. 238. In the absence of any buildings used for religious purposes, the land cannot be exempted. It thus fails to come within the provisions of the exempting section of the Tax Act, and was properly assessed for taxation.”

To the same effect is Mount Olivet Baptist Church v. Newark, 19 N. J. Mis. R. 232; 18 Atl. Rep. (2d) 581, where the State Board of Tax Appeals held that vacant lots belonging to a religious congregation, which were actually used for open-air religious services, were not exempt from taxation. Other decisions substantially to the same effect are Sisters of Charity of St. Elizabeth v. Sea Girt, N. J. Tax Reports, 1912-1934, 333; 47 N. J. L. J. 18; Stevens Institute v. Hoboken, N. J. Tax Reports, 1912-1934, 340; 47 N. J. L. J. 145, and St. Mary’s Church v. Burlington, N. J. Tax Reports, 1912-1934, 315; 46 N. J. L. J. 13.

The petitioner, in seeking to avoid the effects of the cited decisions and others of similar import, advances the claim that the lots for whieh exemption is sought are, in law, physically contiguous to and a part of the tract upon whieh the church buildings are erected. It is thus urged that the exempt and the non-exempt tracts are really one, notwithstanding the presence of the public highway, which separates them. Ho applicable decision by us, or by the reviewing courts, is adduced in support of this contention. On the contrary, in St. Joseph’s Roman Catholic Church v. West Hoboken, N. J. Tax Reports, 1912-1934, 97, the State Board of Equalization of Taxes, in an opinion by the late Judge Jess, held to the contrary. There the appellant operated a parochial school, and the school playground, which was located directly across the street from the school itself, was held to be taxable. Likewise, in Sisters of Charity of St. Elizabeth v. Borough of Sea Girt, supra, the appellants purchased several lots adjoining the exempt property, and these were held to be taxable by the State Board of Taxes and Assessment.

Nor has the appellant carried the burden of showing that the lands in question were actually devoted to religious purposes. It is undisputed that one of the lots is and has been always vacant. As to the remaining lot, some evidence was introduced to the effect that it was used as a parking lot by members of the congregation; but whether such use was in effect on the assessing date was not made clear. But even such use under the circumstances here shown would not meet the requirements of the statute.

Lastly, it is urged that the lands involved are necessary for the fair enjoyment of the church building by the congregation. Before the test of “fair enjoyment” can be invoked, it is necessary that it appear that the land for which exemption is sought constitutes a parcel on which a building devoted to religious purposes is erected. Sisters of Charity v. Cory, 73 N. J. L. 699; 65 Atl. Rep. 500. Not until this has been established, is it necessary to go into the question of whether the land in question is necessary for the fair enjoyment of the building. But even were this not so, the evidence before us fails to establish that the subject lands aré necessary for the fair enjoyment of the exempt building. On the contrary, the testimony of the appellant’s own witness indicates that the lots in question were purchased for the future expansion of the church. What the eventual disposition of these lots will be is not definitely made to appear. Such being the case, it is obvious that the appellant has not established that they are necessary for the fair enjoyment of the present church buildings.

Bor the reasons stated, the petitions will be dismissed and the action of the Essex County Board of Taxation affirmed.


text:
    New Jersey Department of Labor, Workmen’s Compensation Bureau.
    JOHN J. DOOLEY, PETITIONER, v. SMITH’S TRANSFER CO., RESPONDENT.
    Decided February 11, 1948.

      Dor the petitioner, Abraham 8. Arnold.

    Dor the respondent, Henry M. Grosman.

   Formal petition and answer having been filed in this cause, the matter came up before this Bureau at Perth Amboy, New Jersey, A. S. Arnold, Esq., appearing for the petitioner and Henry M. Grosman, Esq., appearing for the respondent.

By stipulation of counsel for the respective parties hereto, it was stipulated, with the approval of this court, that the question of whether or not the petitioner, who admittedly was injured on March 29th, 1946, received said injury as a result of an accident arising out of and during the course of his employment with the respondent. The determination of this point, was to be first settled, and if resolved in favor of the petitioner, then testimony was to be taken for the purpose of determining the elements of temporary and permanent disability.

It appears that there is no dispute of the fact that the petitioner was a regular employee of the respondent, engaged as a manager, and that incidental to his work and as a necessary part thereof, he was required to make use of his own automobile. The place of business of the respondent was located in Newark, New Jersey. The petitioner’s home was located in Metuchen, New Jersey, at which place the petitioner, by custom and approval of the respondent, kept his car when not in use for the company’s business. The petitioner was paid a weekly allowance by the respondent for the use of his automobile in connection with his business.

In the original petition filed by the petitioner, he allages under oath, in allegation No. 15 of the formal petition, “that he was attending a meeting to settle employer’s labor difficulties.” Actually, the testimony indicates that the petitioner, who was a business solicitor for the respondent, had concluded his day’s work at 4:30 p. m., and then proceeded, by appointment with a fellow workman, to meet at a tavern on a corner near the respondent’s business where both admittedly were drinking until 6 :00 P. M. Petitioner then returned to respondent’s place of business nearby where he had his car parked. Petitioner left his ear at respondent’s place of business parked on the street and admittedly went uptown in Newark and attended a movies. He returned after nine o’clock and tells a story of having trouble with his car and changing a wheel and arriving at a gas station in Newark at 12:00 p. m., to get the tire repaired. Subsequently, he was involved in an accident in Eahway, New Jersey, at 2:20 a. m., when his car crashed into a road stanchion.

Henry Specht, the union shop-steward, for the respondent who was indicated by the petitioner as his companion when they stopped in the tavern stated that the petitioner had nothing to do with respondent’s labor activities and that they just went down to have a few drinks. He stated that when they returned to respondent’s place of business after leaving the tavern, he together with Dooley, the petitioner, proceeded to make the rounds of various taverns, and that ultimately Dooley left him off at “his, ‘Specht’s’ home in Newark.” Specht says he does not remember who was driving Dooley’s car or what Dooley’s condition was, but that he knows for himself that he personally had had enough to drink so that he did not know what he was doing.

It was admitted that the respondent as part of petitioner’s employment made him an allowance for the use of his car, in connection with the business of the respondent which required that the petitioner use an automobile, and the case simmers, down in the final analysis to one where the petitioner now claims that his accident arose out of his employment with the respondent by reason of the fact that in being allowed for the use of his automobile in the respondent’s business, he was on the respondent’s employment going to his home from the respondent’s place of business which admittedly had left at 4:30 p. m., the previous day. The accident in question occurred on March 29th, 1946, at 2:20 A. ir., in Bahway, New Jersey, when the petitioner’s car crashed into the center isle of the highway.

Por the purpose of my conclusions, I am convinced and find as a fact, that the petitioner’s employment with the re-, spondent ended at 4:30 p. m., on March 28th, 1946, and that his activities at that time were of a personal nature and had absolutely no relation whatever with his employer’s interest; that the petitioner had the right under his arrangement with his employer to utilize his automobile for the purpose of going back to his home in Metuchen and on returning the car there, his employment ceased until he subsequently had occasion to drive back to Newark to commence the company’s business;, that the accident was suffered by the petitioner at 2:20 o’clock in the morning at Rahway, New Jersey, which was on his way homeward bound, a period of nine and one-half hours having elapsed between the time of his leaving his employer’s place of business and the occurrence of his accident which resulted in personal injuries.

I further find that the petitioner was not out with his fellow-worker, “Speeht,” to discuss any labor business of the respondent.. I find in fact that he and Specht left the respondent’s place of business at 4:30 p. m., and proceeded to make a round of taverns for their own personal enjoyment.

I am satisfied that if the petitioner had proceeded to his home within a reasonable period of time after leaving his place of business and while thus proceeding homeward had suffered an accident resulting in his personal injuries, I would have had no hesitancy in finding that the injuries arose as the result of an accident while in the course of his employment with the respondent, as the petitioner had a right to use his automobile under his agreement with his employer in order to proceed from his place of work to his home, and that the accident happened on a route which would lead him to his home from his. place of business. The problem as presented is one wherein the question arises as to whether the employee, having a right to use his automobile as part of his contract of employment, has the right to deviate from his employment for so long a time as he did in this ease, and during such deviation, engage in a series of personal activities unrelated to his employment, and then, upon proceeding homeward, still to be within the sphere of his employment to the end that if an accidental injury arose, it is compensable.

It is my conviction that where an employee leaves his place of business for so long a period of time as that taken by the petitioner in this case, and engages in so many personal activities during that period of time, wholly unrelated to his employment, in so doing he completely abandons his employment, even though he subsequently worked his way on to the highway which was on his way homeward bound. There must be a resemblance of reasonableness in a deviation from the sphere of employment in order that one may be reasonably considered within that sphere. In considering the reasonableness of the deviation, in order to determine whether or not one has taken himself out of that sphere, and by doing so abandoning his employment, the time element and the activities of the individual should be carefully scrutinized and considered. Let us assume that the petitioner, after his regular working hours, decided instead of driving his car toward Metuchen, which is south of Newark, instead elected to take a week’s fishing trip in the woods of Maine. Then, on his return home went through Newark and on his way home to Metuchen would have an automobile accident and was injured. Here certainly the element of time and the activity of the petitioner would be carefully scrutinized and considered in determining whether or not the employment was abandoned until such time as the petitioner was subsequently on his way to work or engaged in his work, in order to bring him back within the sphere of his employer’s interest.

It is conceded that the negligence of an employee is not a defense in compensation; however, to what extent may an employee proceed in enlarging upon the dangers and risks of his employment, without his acts being construed as willful misconduct on his part? The petitioner by his actions engaged in numerous social activities which involved the consumption of intoxicating beverages, the amount of which is unknown. He went to the movies in Newark and otherwise deliberately spent many hours before proceeding homeward, at a time which was unreasonable, in so far as the obligation of his employer was concerned. It would appear that his activities, in the City of Newark during the interval that he left his place of business and the time that he drove home in the early hours of the morning created a greater hazard than that which was normal in his employment and the increase in the hazard, including his weariness resulting from the late hour, may reasonably be an indication of willful misconduct which greatly magnified the hazard of his employment to the end that it is not a question of negligence, but one wherein the petitioner, by his own actions, created a situation which is not reasonably contemplated as a part of his employment and to the end that if he is injured as the result of an accident, the consequences thereof would deprive him of the benefits of the provisions of the Workmen’s Compensation Act, N. J. S. A. 34:15-1, et seq.

Before setting forth my ultimate conclusion, I am finding as a fact that the Workmen’s Compensation Act does not contemplate an employee has the right to unreasonably delay his trip homeward bound with a vehicle of employment in order to extend the time of his employment to cover a hazard which would never have reasonably occurred had he proceeded within a reasonable period of time following terminatiqn of. such employment to go home in the vehicle used in his employment.

As I have already indicated, there was an unreasonable lapse of time between the hour when the petitioner left his place of employment and when he finally started homeward bound.

I, therefore, conclude that the petition must be dismissed for’ want of jurisdiction, and that the injuries suffered by the petitioner did not result from an accident arising out of and in the course of his employment with the respondent, which are jurisdictional factors in order to impose liability upon the employer.

The formal petition filed in this matter is hereby dismissed. Let judgment of dismissal be entered accordingly.

Haeky S. Medinets,

Deputy Commissioner.