author: Eastwood, J.

text:
    MARGARET K. PICK, PLAINTIFF, v. BRAND, INC., A NEW JERSEY CORPORATION, DEFENDANT.
    Decided May 27, 1947.
    For the plaintiff, Carpenter, Gilmour & Dwyer.
    For the defendant, Samuel Freedman.

   Eastwood, J.

This is an application to strike the answer filed in the above cause and for summary judgment. Plaintiff brought suit to recover the sum of $5,500 representing an alleged loan to the defendant corporation made on or about December 1st, 1946. Apparently, the loan was to have been repaid by January 1st, 1947. On or about January 1st, 1947, the defendant issued and delivered to the plaintiff two checks, one in the sum of $4,000 drawn to the order of the plaintiff, and the other in the sum of $1,500 drawn to the order of cash. Plaintiff thereafter deposited the $4,000 check for collection, and said check was subsequently returned to the plaintiff, stamped “Payment Stopped” and with a notice of protest'attached thereto. It is alleged in the complaint, that suit is brought on the two foregoing checks in the total amount of $5,500. The defense pleaded is usury.

. • A- careful reading of the complaint and the affidavit filed by the plaintiff, on her application to strike the answer, clearly discloses that actually the sum of $4,000 was loaned by her to the defendant on December 1st, 1946, and that the understanding between the parties was that the defendant would pay to the plaintiff in consideration of the loan the sum of $5,500 by January 1st, 1947. The transaction is palpably usurious. R. S. 31:1—1; N. J. S. A. 31:1—1.

It is urged, however, by the plaintiff, that the defendant .corporation cannot plead the defense of usury, and cites in support of her contention, R. S. 31:1-6; N. J. S. A. 31:1-6, which reads as follows:

“Ho corporation shall plead or set up the defense of usury to any action or suit brought against it to recover damages or enforce a remedy on any obligation executed by said corporation.”

,The insistment is that the cheeks in question are “obligations” of the defendant corporation within the purview of the statute, and that, therefore, the defendant corporation is barred from ’ pleading the defense of usury. This contention is not sound’. It is clear from the affidavit of the plaintiff, filed in support of the present motion, and in the brief of her counsel, that the nature of the suit is to recover for the loan made on December 1st, 1946, rather than upon the cheeks issued by the defendant on or about January 1st, 1947. Although it is insisted that the suit is brought upon the checks, it seems entirely clear that actually the recovery sought is upon the loan itself. This being so, R. S. 31:1-6; N. J. S. A. 31:1-6, is inapplicable. The statutory bar against the plea of usury on. the part .of a corporation was intended to cover such obligations of corporations as bonds, mortgages and the like. It was not intended to preclude the defense of usury on the part of a corporation in such a transaction as confronts us here. Mazarin v. Hudson County Real Estate and Building Co., 80 N. J. L. 35; 76 Atl. Rep. 322. The defense of usury was, therefore, properly pleaded by the defendant corporation. However, it has been admitted by the defendant that it received the loan of $4,000 on December 1st, 1946, and that the same has not been paid. The plaintiff is entitled to summary judgment for full amount of the loan, namely the sum of $4,000. Inasmuch as the loan was usurious, plaintiff has forfeited all interest thereon and costs of suit. R. S. 31:1-3; N. J. S. A. 31:1-3.

Judgment will be entered accordingly. Counsel may submit an appropriate order.


source: Caselaw Access Project

author: Leyden, S. C. C.

license: Public Domain

text:
    BOROUGH OF FAIR LAWN, A MUNICIPAL CORPORATION OF THE COUNTY OF BERGEN AND STATE OF NEW JERSEY, PLAINTIFF, v. FAIRLAWN TRANSPORTATION, INC., A NEW JERSEY CORPORATION, DEFENDANT.
    Decided June 17, 1947.
    Dor the plaintiff, John A. Christie.

    Dor the defendant, Edward G. Weiss.

   Leyden, S. C. C.

The crux of this matter is the interpretation of the term “town corporate” as used in the statute of limitations, R. S. 2:24-22; N. J. S. A. 2:24-22, as follows:

"All actions or informations which shall be brought or exhibited for any forfeiture upon any penal statute made or to be made, shall be brought or exhibited within the periods of time herein prescribed, and not thereafter:

“a. Within two years next after the offense committed or to be committed against the statute, when the forfeiture is or shall be limited by the statute to the state of New Jersey only;

“b. Within two years next after the offense committed or to be committed against the statute, or cause of action accrued, when the benefit of the forfeiture and the action therefor is or shall be limited or given to the party aggrieved;

“c. Within one year next after the offense committed or to be committed against the statute, when the benefit of the forfeiture and the action therefor is or shall be limited or given by the statute to any person or persons who shall prosecute for the same, or to the state of New Jersey, and to any other who shall prosecute in that behalf, except that, in default of such action, the same shall be brought or exhibited for the state of New Jersey, at any time within one year after the termination of the aforesaid year;

“d. Within one year next after the offense committed or to be committed against the statute, when the forfeiture is or shall be limited by the statute to any county, township, or town corporate, or to any officer of such county, township, or town corporate, or to any person or persons for the use of such county, township, or town corporate, or to the use of the poor of such township or town corporate, either in whole or together with any other person or persons who may lawfully sue for the same.

'^Where, however, any action or information is or shall be limited by any statute to be brought or exhibited within a shorter time than is limited by this section, such action or information shall be brought or exhibited within such shorter time so limited by such statute.”

The matter arises out of a dispute over the collection of franchise taxes, interest thereon and penalties allegedly due the 'plaintiff borough from the defendant. The borough and the transportation company agreed prior to the passage of thé statute providing for the payment of a gross receipts tax, R. S. 48:4-14; N. J. S. A. 48:4-14, that the defendant would charge a five cent fare, and in return the borough would impose a license fee of $10 per year per bus. This agreement was in effect for more than twenty years.

The borough recently became aware of the possibility of collecting the franchise taxes provided for in the law above cited. Suit was started to collect these taxes, interest thereon and the statutory penalty of $100 for each neglect or refusal to make the monthly statement or payment of taxes when due R. S. 48:4-16; N. J. S. A. 48:4-16.

The answer, among others, sets up three separate defenses, each alleging that so much of the plaintiff borough’s cause or causes of action which did not accrue (a) within six years, (b) within one year, and (c) within two years before the commencement of the suit is barred by the statute of limitations in such case made and provided.

The present motion under rule 40, Eules of Supreme Court, N. J. S. A. tit. 2, is to determine the sufficiency in law of these separate defenses under a reservation therefor in the reply, and this in turn brings up for interpretation the term “town corporate” as used in R. S. 2:24-22; N. J. S. A. 2:24-22, hereinabove set forth at length.

Concededly the separate defenses setting up the six year and the two year statute of limitation are insufficient in law and will be stricken.

The term “town” is inexplicit. It is a word of varying signification in our laws. As was pointed out in Banta v. Richards, 42 N. J. L. 497: “Sometimes it is employed in a broad, generic sense, embracing both townships and cities, and the whole range of bodies corporate less than counties, established for local government.” Sometimes it is used in a specific, restricted sense as in Stout v. Glen Ridge, 59 N. J. L. 201; 35 Atl. Rep. 913, and Day v. Morristown, 62 N. J. L. 571; 41 Atl. Rep. 964. “When the words are not explicit the intention of the legislator is to be gathered from the occasion and necessity of the law, the defect in the former law and the designed remedy; being the causes which move the legislature to enact it.” Banta v. Richards, supra.

The statute in question apparently came to us from England and has been in force in New Jersey since 1728. Boswell (qui tam, &c.) v. Robinson, 33 N. J. L. 273. It is a statute of .limitation and should be liberally construed to prevent a penal action from being unlimited.

Analyzing the statute, it limits all actions or informations for any forfeiture upon any penal statute to (a) within two years next after the offense when the forfeiture is to the State of Hew Jersey only; (b) within two years when the forfeiture is,given to the party aggrieved; (e) within one year when thé benefit of the forfeiture is given to any person who -shall prosecute for the same or to the State of Hew Jersey and to any other who shall prosecute in that behalf; and (d)'within one year after the offense when the forfeiture is to any county, township or town corporate for the use of said county, township or town corporate.

In view of the history of1 the legislation, the occasion and necessity for the law, and the designed remedy, the word ‘down” or the term “town corporate” as used-in the act is synonymous with the term “municipality” as defined in R. S. 40:42-1-; N. J. S. A. 40:42—1, and intended to include the whole range of.bodies corporate .established for local government below the grade of county. Cf. Van Riper v. Parsons, 40 N. J. L. 1; Pell v. Newark, 40 Id. 550. - -

.. .Were we to accord the term “town” as used in the act its, narrower signification, it would lead to an unusual result. The legislature would have enacted a law limiting the state apd individuals in actions to recover penalties to a two year, period, and limiting counties, townships-and towns to a one year period, but imposing no limitation upon cities, boroughs, villages and municipalities governed by boards of epmmis-. sioners or .improvement commissions. Such, an,absurdity, was obviously not .the legislative intention. ...

The. separate defense setting-up the one year statute of limitations is sufficient in law and the motion to stribe it is therefore denied. " , , . . , .


author: Drewen, C. P. J.

text:
    Hudson County Court of Common Pleas.
    JOHN BOTTARI, PETITIONER-APPELLANT, v. FEDERAL SHIPBUILDING AND DRY DOCK COMPANY, RESPONDENT-APPELLEE.
    Decided May 22, 1947.
    Por the petitioner-appellant, Albert A. 8ann (Aaron Gordon, of counsel).
    Por the respondent-appellee, James J. STceffingion.

   Drewen, C. P. J.

Petitioner was a shipfitter’s helper in respondent’s employ. The accident, which is alleged to have befallen him on August 1st, 1945, is described in the claim petition as follows: “While butting steel plates, petitioner felt a severe pain over the region of his heart, he became distressed with weakness and felt faint and short of breath.” The resulting injuries are claimed to he “Arteriosclerotic heart, cardiac hypertrophy, auricular fibrillation, left ventricular failure.”

Por all that appears in the petition, as well as in petitioner’s proofs, the claim hero is not for an aggravation of a preexisting condition but for an original injury. Nothing in the evidence justifies our viewing it as other than a claim for original injury. Indeed, it is the emphasis of petitioner’s proof that any other theory of his claim is to be rejected, for he would maintain even in the face of the strongest contrary evidence that there has been no pre-existing condition. This is the issue: Was there an accident; and if so, is it the cause of petitioner’s present incapacity? It is not disputed that he is suffering from a heart ailment and that his disability is total.

An accidental happening is vouched for by the testimony of petitioner alone; there is no corroboration in any form. His immediate superior testifies that he recalls no such event; and petitioner himself is shown to have admitted to one of respondent’s physicians that the illness experienced by him at the time and on the day in question was not coincident with an injury. In his testimony he says: “I was fitting two plates with an iron bar. So I feel a pain in my heart and I go to the dpctor, which doctor give me an injection.” The pain described' is said to have been felt ten minutes after he started to fit the plates, and he amplifies his description by saying: “I no feel good. I got heart trouble. My ankles swell up, short breath—can’t breath no more.” He says he cannot work; that he cannot climb stairs; that he is “all out of breath;” that his heart beats too fast; that his ankles swell up; that he cannot stand for any length of time. In his first reference to the subject as a witness in the hearing petitioner declares that the condition he describes had never been experienced by him prior to the accident alleged and that until then he had been in continuous good health. As will be seen, his testimony in this respect does not hold.

Such testimony as there is that an accident occurred is most unsatisfactory. As already stated, it is entirely uncorroborated, though that alone could not defeat its credibility. More important are the contradictions with which petitioner is confronted and quite unable to reconcile. It cannot be doubted upon the whole record that prior to August 1st, 1945, the date on which the injurious mishap is said to have occurred, petitioner was a cardiac patient complaining of the very symptoms and ills which he would now have the court determine resulted solely from an accident. It appears that prior to the date in question petitioner had consulted his own physician, a Dr. DeVito of Brooklyn, Hew York City. He first insisted that this recourse to Dr. DeVito was after August 1st, 1945, though later he admits it was prior.

During a considerable period preceding August 1st, 1945, petitioner made frequent visits to respondent’s first aid station which he says wore occasioned by the need of eye treatment following welding flash. The last of these visits took place on July 28th or July 29th, 1945. At any rate, on the latter date he made a statement in writing which in the course of his testimony he acknowledges. He then complained of a swelling in the leg but ascribed it to a bump received during his work a year before, but which he says he did not report. It is in the same statement that he admits the prior examination by his own physician, Dr. DeVito, and the advice of the doctor that he go to the hospital for treatment of a heart condition. Petitioner states further that the doctor told him the leg swelling was caused by the disease of his heart. On the occasion of the latter visit to the first aid station respondent’s physician gave petitioner the same advice as previously had by him from Dr. DeVito, more particularly with reference to needed surcease of effort.

Respondent admits that on August 1st, 1945, petitioner did present himself to its doctor but denies that he did so by reason of any occurrence like that which he now claims to have been the accidental happening of that day. Nothing that he told respondent’s doctor on August 1st includes any reference to an accident. What he described to the doctor was an exacerbation of illness. Petitioner’s words were: “I was working and all of a sudden everything turned dark before my eyes and remained so for ten minutes. * * * I didn’t fall down during that time but held onto the tool box. The eyes feel better now. The cause, I don’t know. I didn’t sustain any injury at that time.” This explicit denial of accident and injury made on the very day and subsequent to the time of the alleged happening is nowhere explained or reconciled and it precludes rational belief that an accident occurred.

Petitioner’s proofs upon the hearing in the Bureau include the testimony of two physicians, Dr. Koppel and Dr. Elwood. Each gave it as his opinion that the happening described as the accident of August 1st, 1945, is the efficient cause of petitioner’s cardiac illness. Needless to say, however, the hypothesis addressed to these physicians excludes any assumption of the pre-existing cardiac illness which respondent’s proof and petitioner’s own admissions would seem to place beyond controversy. In the circumstances this just about renders valueless the hypothetical testimony of the doctors named. .

Dr. Coyle had examined petitioner for respondent on July 27th, 1945, .four days prior to the alleged accident. His findings and diagnosis are generally the same as those of all other physicians in the case, which for all present purposes may be regarded as in accord. And petitioner evidenced to Dr. Coyle.at the time symptoms that are included in those which he says resulted from the accident. It was Dr. Coyle who examined the petitioner on August 1st, 1945, and to whom petitioner made the statement already mentioned. Dr. Coyle testifies that he believes the condition to be one of chronic heart disease plus arteriosclerosis of many months .duration, about two or three years or more, a period in which .the patient-would have from time to.time acute exacerbations or symptoms, and that the patient exhibited such acute exaeer- . bations when- the doctor saw him on August 1st, 1945. He 'add? that the, weakness- of petitioner’s heart muscle had been . progressing for probably seven years. .

Hone of respondent’s medical proof is contradicted in any respect, neither that of Dr. Coyle nor of the other physicians called by it.

Petitioner’s-counsel would make much of the fact that at the time of Dr. Coyle’s .examination.petitioner stated to the doctor that his condition was caused by strain. Certainly, in -view of the uncontradicted testimony that stands so. over- . whelmingly. against petitioner’s accuracy and. probity as a witness, we cannot permit him to diagnose his own case even were it otherwise allowable. . At any rate, Dr. Coyle disagreed with -this statement of petitioner and told him so.

Dr. Salmon is another physician who examined petitioner, the latter having beén referred to - him by respondent as a ' medical patient and not because of any accident or injury. ■ The- examination was made .July 28th, 1945, when -the doctor found valvular heart disease with auricular fibrillation in a progressed state. A prior examination by Dr. Salmon had been made as early as July 16th, 1943, at which time there were vericosities of both legs, with pain; discoloration and scars; swollen ankles and healed ulcers. As already indicated, none of this medical proof is contradicted in any way.

Lastly, Dr. Kaufman made an examination on July 5th, 1946, and his pathological findings are in general like the others. Needless to say, the credibility of petitioner is not helped by his denial to Dr. Kaufman of any illness, including heart disease, prior to the date of the claimed accident. Specifically Dr. Kaufman gives it as his opinion that there is no causal relation between petitioner’s cardiac disability and any accidental happening, and does so by reason of the nature and phase of the illness and the character of the symptoms.

Counsel for petitioner tries to bring the case within the principle of Rivers v. East Coast Shipyards, Inc., 24 N. J. Mis. R. 223; 48 Atl. Rep. (2d) 311. The two situations are not at all similar. In the Divers case exertion,'though within the normal limits of the work, caused the workman’s death. In the present case nothing is credibly shown to have occurred in the course of the employment as inducing the condition or as aggravating a prior state thereof. '

We are in complete accord with the Deputy Commissioner that the plaintiff has manifestly failed to carry his burden of proof. The petition is dismissed.


author: Gioedano, C. P. J.

text:
    Monmouth County Orphans Court.
    MARY D. VAUGHAN AND ELSIE D. VAUGHAN, PETITIONERS RESPECTIVELY, v. JOHN W. VAUGHAN, INDIVIDUALLY AND AS EXECUTOR UNDER THE LAST WILL AND TESTAMENT OF AMBROSE ERNEST VAUGHAN, DECEASED, AND ALICE VAUGHAN, DEFENDANTS.
    Decided June 19, 1947.

      For the petitioner Mary D. Vanghan, Sidney Alpern.

    For the petitioner Elsie D. Vanghan, Parsons, Ldbrecque, Canzona & Combs (by Edmund J. Canzona).

    For the defendants, John Vaughan and Alice Vaughan, Millón Cranmer.

   Gioedano, C. P. J.

Elsie D. Vaughan and Mary D. Vaughan filed petitions in the Orphans Court of this county praying for the assignment of dower. Both women claim to be the lawful wife of Ambrose Ernest Vaughan, deceased.

The respective petitions were, with the consent of counsel, consolidated into one proceeding and the matter was referred by this court on November 25th, 1946, to Maurice Potter, a master in Chancery, and the order of reference recited that the two applications aforesaid were consolidated and the master was instructed to ascertain the truth of the allegations of each petition and to report specifically who is the lawful widow of Ambrose Ernest Vaughan and which petitioner is entitled to an assignment of dower in the lands and tenements whereof Ambrose Ernest Vaughan died seized and what the premises consisted of.

The master filed his report with the court on April 16th, 1947, and the matter is now on before me to either approve or disapprove the master’s findings.

The issue concerning the nature and extent of the lands of which Ambrose Ernest Vaughan died seized was resolved by stipulation of the parties. It was agreed that the decedent was seized in fee of eleven lots or parcels of land together with two dwelling houses in the Borough of Oceanport and that these were the only lands in which dower might be claimed by either petitioner.

The only question therefore under consideration and which is the subject-matter of this opinion is whether the Orphans Court has the right to consider the legality of an alleged Florida divorce decree obtained by Ambrose Ernest Vaughan, deceased, against his wife, Mary D. Vaughan, and what effect such decree might have.

Ambrose Ernest Vaughan obtained a divorce, as evidenced by a transcript of the Circuit .Court of the Eleventh Judicial District in and for Dade Countjr, Florida, on March 11th,. 1939, against his wife, Mary D. Vaughan. Said divorce dissolved the marriage a' vinculo.

Subsequent to Ambrose E. Vaughan obtaining his divorce-in Florida he married the other petitioner, Elsie D. Vaughan.

The Florida decree is challenged, one, because of the failure of service of process upon Mary D. Vaughan and, two, because-the, court.lacked jurisdiction over the .subject-matter. Mary D. Vaughan was not served personally and did not appear bathe Florida cause and I am satisfied after reading the evidence submitted before the master that she did not know of the action .while it was pending or of the decree until after the event. -The Florida court rested its jurisdiction upon publi-r cation, and the order for publication, according to an exemplified copy of- a, transcript of the divorce proceedings which was-offered and marked in evidence, was predicated upon an affi-; davit of Ambrose Ernest Vaughan that he did not know and. could not. learn - of the address of Mary D. Vaughan. I am of the opinion that this affidavit was false and a fraud upon the court. After reading the testimony I am convinced that Vaughan .knejy where his wife was at the time, at least, he was, in .a position to .ascertain her residence. - The uncontradicted'testimony of his son, John Vaughan, executor of hisj last:will ,^nd". testament, and of his secretary, Mrs. Freundschuh, leaves no room for doubt that they knew where she was-at all timps'-and that the deceased knew that they knew.

It is contended that the.Florida court obtained due process upo.n the. defendant, Mary D. Vaughan, and that its proceed-, ings can. not, be challenged -in tiffs court unless it can likewise be shown that Vaughan was without a -6ona.fide domicile- in. Flprida-. . ... ■ . r ■ . •.

. Tbe .-master,found it ,tor be a -fact that-Ambrose Ernest Vaughan,,, deceased, was -and ■ remained -a resident of Hew: Jersey jintü Jiffs’,death,^and I concur.with him. . .

) It is true,, as contended;, that the jurisdiction, of the Orphans-Court"is limited' to those matters which have,by statute been, ■confided to it. It has no inherent jurisdiction to decide whether a divorce obtained in a foreign jurisdiction is valid or void. The utmost that can be claimed is it may determine ■questions of law and equity, the decision of which is necessary to the decision of some other matter expressly committed to it. It is a court invested with complete and general juris•diction of the matters which are expressly given it in charge by the statute. Its action is binding upon all persons in interest. And it follows as a necessary incident to the exercise of this jurisdiction, that the court shall possess the power to determine who the parties in interest are, and as incident to the exercise of that power, to solve any question which must necessarily be decided in reaching that end. But the binding effect of the court’s conclusion upon the question will not ■extend beyond the end for which the conclusion is necessarily reached. The Orphans Court, par takes of the powers of Chancery and Prerogative jurisdictions and the statute creating it, being remedial in its nature, is to be liberally construed.

R. S. 3:38-4; N. J. S. A. 3:38-4 provides that: “A widower or widow entitled to curtesy or dower in real estate whereof his or her spouse died seized may apply by petition to the Orphans Court for the appointment of commissioners to assign the widower or widow his or her curtesy or dower therein.”

The petitioners must show that they are entitled to dower und every element in the proof therefor becomes a necessary element of the cause, and the cause is one which has been expressly given to the Orphans Court.

The decision in this ease necessarily depends on whether full faith and credit should be given to the alleged Florida ■decree and that question can not be answered until inquiry is made to learn whether that decree was void or valid. The validity of the alleged Florida decree is therefore a question which must necessarily be decided in reaching a conclusion ■on a matter entrusted to this court, and there is ample authority that the court may determine questions of law and equity, the decision of which is necessary to the decision of some ■other matter expressly committed to it, just as the Court of Chancery may decide legal questions when they arise incidentally and collaterally in a suit rightly instituted for equitable relief.

The case of Mullaney v. Mullaney, 65 N. J. Eq. 384; 54 Atl. Rep. 1086, enunciates the principle that the Orphans Court had power to decide the question whether Mrs. Mullaney was in fact the widow of Michael Mullaney, for letters of administration could only be granted to her on this foundation, and if the question were in doubt, it would necessarily hear proof on the subject and this case fully enunciated the theory that if that court, namely, the Orphans Court, could perform its statutory duty without trying questions properly cognizable by some other tribunal, it would be without jurisdiction to pass upon them.

And Dunham v. Marsh, 52 N. J. Eq. 256; 30 Atl. Rep. 473; affirmed by the Court of Errors and Appeals, 52 N. J. Eq. 831; 31 Atl. Rep. 619, said in part: “An Orphans Court may determine any question incidentally and necessarily involved in the due exercise of its jurisdiction, though the determination of that question, if directly presented, would not be within its jurisdiction; but the binding effect of its conclusion upon the question will not extend beyond the end for which the conclusion is necessarily reached.”

For the reasons herein expressed the court assumes jurisdiction over the subject-matter and concurs in the factual findings of the master. Mary D. Yaughan was the lawful wife of Ambrose Ernest-Yaughan at the time of his death and she is entitled to have dower admeasured to her in the lands agreed upon by stipulation.


author:
Conklin, Commissioner.
      Waesche; President.

text:
    Division of Tax Appeals.
    LESLIE H. JAMOUNEAU v. CITY OF NEWARK.
    Decided June 10, 1947.
    Dor the petitioner, Saul A. Wittes.

    Dor the City of Newark, Vincent J. Casale.

    Dor the C-0 Two Dire Equipment Co., Pitney, Hardin, Ward & Brennan (by John R. Hardin, Jr.).

   Conklin, Commissioner.

Leslie H. Jamouneau, alleging that he is an aggrieved taxpayer of the City of Newark, filed a petition claiming that Block 5088, Lot 138, consisting of 8.58 acres, together with buildings erected thereon, is in the possession of the C-0 Two Dire Equipment Company and is used by it under a lease from the City of Newark, owner of the fee of the premises, under such circumstances as to render the said C-0 Two Dire Equipment Company legally liable to assessment as owner for the year 1943 of the said premises.

Under date of August 13th, 1941, the City of Newark entered into an agreement of lease with the C-0 Two Fire Equipment Company by which it leased unto them a plot of meadow land near State Highway 25 and Haynes Avenue in the City of Newark. This lease commenced October' 1st, 1941,. and was for a term of fifty years. (Eecorded in Book A-99 of Deeds, pages 328-33'i' in the register’s office of the County of Essex.) The annual rental is $5,000, and the city covenants to satisfy any taxes or assessments which may become-a lien upon the. said land or premises or be charged against the tenant by reason of its interest in said lands and premises or any building or improvements thereon. Should the city decide to sell the leased land, then the C-0 Two Fire Equipment Company has a prior option under the lease to purchase the property at the established price of $10,000 an acre, regardless of any other offer made. The city further agreed that this lease contain a renewal clause, that the city should open and pave a street, put in fill on the land, and assist in having-a railway spur installed. By its terms the C-0 Two Fire Equipment Company agreed to erect a factory building,, which became the property of the city and part of the demised premises. In case of condemnation through eminent domain,, the C-0 Two Fire Equipment Company would be entitled,, if that contingency occurred, to a part of the award made for the improvements. The lease further provided that the interest of the company is subject to mortgage.

This matter was appealed to the Essex County Board of Taxation, which board held that it did not have jurisdiction of the matter in controversy. In the hearing before this Division a certified copy of the lease was offered as evidence- and received. There is no dispute that the land is assessed at $42,900 and the building at $250,000 but carried on tbe tax books of the City of Newark as exempt. The C-0 Two-Fire Equipment Company carried a book value on the building of $482,540.24.

This action was brought by the taxpayer under the provisions of R. S. 54:3—21; N. J. S. A. 54:3—21, wherein feeling-that ho was discriminated against by the assessed valuation of other property in the county or taxing district he appealed-to the Essex County Board by filing a petition of appeal with the County Board, which appeal was dismissed, and under the provisions of R. S. 54:2-39; N. J. S. A. 54:2—39, being dissatisfied with the judgment of the County Board, he appealed to this Division. ’ '

The authority of the City of Newark to enter into an agreement of lease is given under R. S. 40:176-11; N. J. S. A. 40:176-11, which provides:

“Every city of the first class of this state may lease to any person or persons any land or building of the municipality not needed for public use for a fixed term not exceeding fifty '(50) years.”

And if the authority of the City of Newark is not found under that section, then the city claims the authorization as given by R. S. 40:179-34; N. J. S. A. 40:179-34, which provides :

“Any city fronting upon the navigable waters of this state is hereby authorized to establish docks, warehouses, ferries, terminals and shipping and industrial facilities in such city and upon adjoining lands under water, and to construct, • establish, equip, maintain and operate or to lease to lessees for a term of years, in whole or in part, such docks, warehouses, ferries, terminals and shipping and industrial facilities, including piers, bulkheads, slips, basins, industrial buildings, equipment, railroads and other structures and improvements (all the foregoing together with the lands and lands under water upon which the same may be located, being hereinafter collectively referred to as an 'industrial terminal’), and for that purpose to use any available lands owned by such city and to acquire such other lands and rights in lands, including lands now or formerly under water, as may he necessary for the purpose. Such city shall have power to acquire in fee simple all the lands, lands under water and all other property, easements, rights and appurtenances by purchase, condemnation or grant, and to enter into such contract or • conlraets with the board of commerce and navigation, or other board or department of this state and with other municipalities, persons, and corporations for the use of any lands, lands under water or rights therein and for the erection, construetion and equipment of such, industrial terminal and the appurtenances thereof as may be necessary to carry out the purposes of this act.”

And the authority to enter into a lease for the properly is provided in R. S. 40:179-35; N. J. S. A. 40:179-35:

“The governing body of any city where such industrial terminal may be established shall have the power to operate and maintain such terminal or to lease for a term not exceeding fifty years the whole or any part thereof, or the lands, lands under water and rights therein, upon which such terminal is proposed to be established under an agreement or agreements for the construction, erection, and equipment thereof by the lessee or lessees upon such terms and conditions as may be determined by such governing body. Every such agreement shall, provide that all interest upon bonds to be issued as hereinafter provided and the principal amount of all serial bonds as they severally mature during the term of any lease made as provided herein shall be paid by the lessee to the city at least fifteen days prior to the day on which said principal or interest may become due.”

It is not within the province of this Division, a quasi-judicial body, to determine the constitutionality of any act of the legislature, for it has been held in the decisions of this Division in the case of City of Newark v. Mutual Benefit Life Insurance Co., 1934-1939 New Jersey Tax Reports, 440, President Weaver said:

“As this board is a gwasi-judieial body, it has no power to pass upon constitutional questions of law, but must interpret the statutes as they are written.”

And later in the Supreme Court case of Schwartz v. Essex County Board of. Taxation, 129 N. J. L. 129; 28 Atl. Rep. (2d) 482, 484, Mr. Justice Colie, speaking for the court said:

“It is indisputable that the determination of the constitutionality of an act of the legislature rests with a judicial body; not with a qmsi-judicial body such as the State Board of Tax Appeals. The final responsibility to pass upon the constitutionality of a given piece of legislation rests in the courts and it is the duty of the various state agencies and administrative bodies to accept a legislative act as eonstitutional until such time as it has been declared to be unconstitutional by a qualified judicial body.”

The Division of Tax Appeals of the Department of Taxation and Finance is not such a qualified judicial body as to pass upon the constitutionality of an act of the legislature.

It was the argument and contention of the petitioner that even admitting the constitutionality of the act, the lease was fraudulent and was entered into for the purpose' of evading taxation by the C-0 Two Fire Equipment Company and that the lease was in reality a deed of conveyance.

For this Division to make such a finding would be tantamount to declaring that this Division by its judgment has the power to order a reformation of the lease. This power we do not have, and should be the proper subject-matter of a writ of certiorari in the Supreme Court. Such is the remedy that was available to the petitioner and the authority for such a procedure is clearly set forth in the case of Shea v. Ellenstein et al., 118 N. J. L. 438; 193 Atl. Rep. 551.

By its action the Essex County Board of Taxation dismissed the petition of appeal on the grounds that it did not have jurisdiction. This Division does not concur with said County Board for the reason that under R. S. 54:3-21; N. J. S. A. 54:3-21, any taxpayer feeling that he is discriminated against may- appeal to the County Board and under R. S. 54:2-39; N. J. S. A. 54:2-39 to this Division. If we found that the County Board in its dismissal for lack of jurisdiction had made a proper disposition of the case, then we would not have attempted to determine the matter before us on its merits. But the Division of Tax Appeals has the authority to determine if dismissal by the County Board for lack of jurisdiction was proper (see Borough of Oradell v. State Board of. Tax Appeals, 125 N. J. L. 37; 13 Atl. Rep. (2d) 479.

From the proofs presently before us it appears that this property should be excluded from taxation, or under the provisions of R. S. 54:4—3.3; N. J. S. A. 54:4-3.3, exempted from taxation.

Judgment has been entered in accordance with the foregoing conclusions.

Waesche; President.

(Dissenting.) The City of Newark is the owner in fee-simple, free and clear of all liens and encumbrances, of eight and fifty-eight hundredths (8.58) acres of industrial land located in the city. On August 13th, 1941, the city leased this industrial acreage, which was then vacant and unimproved land, for a term of fifty (50) years to the C-0 Two Eire Equipment Company, a private manufacturing corporation of the State of Delaware. In consideration for the said letting, the C-0 Two Eire Equipment Company agreed to pay the city a fixed yearly rent of five thousand dollars ($5,000) for the term of the lease. And said corporation further agreed, as part consideration for the lease, to erect and build on the demised land, at its own cost and expense, a factory building containing at least 65,000 square feet. By the terms of the lease, any building or buildings erected by the said corporation on the land described in the lease became the property of the city and a part of the land and premises demised by the lease.

Pursuant to the said lease, and prior to November 10th, 1942, the C-0 Two Eire Equipment Company erected on the land described in the lease a factory building or buildings.

The land described in the aforesaid lease and the buildings erected thereon by the aforesaid corporation are the properties involved in this appeal.

The 1943 tax duplicate of the City of Newark shows that the 1943 assessed value of both the land and the buildings is $292,900, being $42,900 for the land, and $250,000 for the buildings. However, both the-land and the buildings appear on the said tax duplicate as exempt from taxation. This appeal is to have this property, land and buildings, made subject to taxation at its true value.

The lease gives the C-0 Two Eire Equipment Company an option to purchase the demised premises at any time during the term of the lease at the price of $10,000 per acre, or $85,800. As stated above, the assessed value of the land and buildings for the year 1943 is $292,900. It is therefore apparent that the purchase price of $10,000 per acre is intended to represent only the value of the land. The purchase price agreed upon in the lease could not include the value of any buildings because when the lease was made and the purchase price was fixed no buildings had as yet been erected.

Furthermore, the C-0 Two Fire Equipment' Company carries on its corporate books the buildings it erected on the land described in the lease as fixed assets of the corporation. It valued those buildings as of October 1st, 1942, at $411,934.48.

The lease provides that if the property described in the lease is taken by condemnation or eminent domain the city will receive only the awrnrd for the value of the land, and the C-0 Two Fire Equipment Company will receive the award for the value of the buildings. The lease also provides that the city itself will not, during the term of the lease, condemn and take any part of the leased premises. Since the city “warrants and represents that it is the owner in fee-simple of the land,” the only premises the parties could have contemplated that the city would condemn would be the buildings.

The tax rate for the City of Newark for the year 1943 was $5.31 per $100 of valuation. As pointed out above, the 1943 assessed value of the buildings wras $250,000, and their book value, as of October 1st, 1942, was $417,934.48. The 1943 assessed value of the land was $42,900, and its agreed upon purchase price was $85,800. Therefore, if the property were subject to taxation, the taxes for the year 1943 on the assessed value of the land and buildings would have been $15,552.99, but, if the true value of the property for the year 1943 was $503,734, then the 1943 taxes should have been $26,748.28. Therefore, by leasing the property from the city at $5,000 a year, the corporation saves in taxes from $10,000 to $20,000 a year. Certainly this advantage is a flagrant violation of the principle of equality in matters of taxation. Equal right to the use of land requires equal taxation.

It is apparent that the corporation was to enjoy many of the aspects of ownership without the obligation of paying taxes. It seems that it was the intention of the city and the corporation that the buildings were to belong to the city only when they were to be taxed, but for all other purposes they were to belong to the corporation. The question is whether such an attempt to evade the payment of taxes is legal. I do not think so, and apparently the parties to the lease do not think so, because the lease provides that if any taxes are assessed against the land or buildings or any interest therein the city will pay them.

The property involved in this appeal is occupied by a private corporation and used exclusively by it in a strictly private business enterprise. By the very terms of the lease the possession of the property is given to the C-0 Two Eire Equipment Company with the right to use the demised premises in connection with its private business including “the handling, treating, manufacturing, remanufacturing, fabricating, storing, warehousing, and selling of goods, wares and merchandise of all kinds whatsoever as will not as such business is conducted by the Tenant give off deleterious or offensive odors, or constitute a public nuisance.”

The statute, R. S. 54:4—3.3; N. J. S. A. 54:4—3.3, exempts from taxation property owned by a taxing district only when “used for public purposes.” In the case of Essex County Park Commission v. State Board of Tax Appeals, 129 N. J. L. 336; 29 Atl. Rep. (2d) 739, 740, our Supreme Court said that, under the above statute, the test which determines the taxability of property owned by a taxing district is “the use to which the property is put.” The property of a taxing district is taxable, the court held, “unless devoted to that public use which the statute recognizes as a basis for exemption. * * * classification fox exemption based on use is consistent, meritorious as a matter of fair and just distinction and, in our judgment, valid.” By limiting the exemption from taxation of property owned by a taxing district to that which is “used for public purposes,” the statute contains a clear expression of legislative purpose to tax city owned property which is occupied by a private corporation and used exclusively by it for private business purposes. Jersey City v. Blum, 101 N. J. L. 93, 96; 127 Atl. Rep. 214.

Eor the above reasons, I do not think the property is exempt from taxation. The question of the true value of the property did not come up for consideration.


author: Waesche, Pbesident.

text:
    Division of Tax Appeals.
    IN THE MATTER OF THE COMPLAINTS OF THE TAXING DISTRICTS OF THE CITY OF NEW BRUNSWICK AND THE BOROUGH OF HIGHLAND PARK, IN THE COUNTY OF MIDDLESEX, STATE OF NEW JERSEY, AGAINST THE MIDDLESEX COUNTY EQUALIZATION TABLE, FOR THE YEAR 1947.
    Decided June 10, 1947.

      Por the City of New Brunswick, Paul W. EuAng and Samuel G. Cohen.

    Por Highland Park Borough, Horace E. Barwis.

    Por Carteret Borough, Benedict W. Harrington.

    Por Cranbury Township, Albert C. Barclay.

    Por Dunellen Borough, Henry Handelman.

    Por East Brunswick Township, Thomas C. Mitchell.

    Por Helmetta Borough, Stanley Diclcerson.

    Por Jamesburg Borough, Guido J. Brigiani.

    Por Madison Township, Fred M. Burlew.

    Por Metuchen Borough, DuBois S. Thompson.

    Pbr Middlesex Borough, Joseph M. Mutnich.

      For Milltown Borough, Kearney Y. Kuhlthau.

    For Monroe Township, Henry C. Berg.

    For JSTorth Brunswick Township, Morgan B. Seiffert.

    For Perth Amboy, Francis M. Beaman.

    For Piseataway Township, Maurice M. Bernstein.

    For Plainsboro Township, John E. Wicoff.

    For Baritan Township, Thomas L. Hanson.

    For Sayreville Borough, Joseph T. Karcher.

    For South Amboy City, John P. McGuire.

    For South Brunswick Township, Klemmer Kalieisen.

    For South Plainfield Borough, Edward J. Santoro.

    For South Biver Borough, George L. Burton.

    For Spotswood Borough, J. Randolph Appleby.

    For Woodbridge Township, Leon E. McElroy.

   Waesche, Pbesident.

The statute, Pamph. L. 1934, ch. 191, § 3, provides that the State Board of Tax Appeals may review a county equalization table on the complaint of any taxing district, or on its own motion, R. S. 54:2-37; N. J. S. A. 54:2-37. This section of the statute also authorizes the Board to make all orders necessary to carry out such a review. The Division of Tax Appeals is the successor to the State Board of Tax Appeals. Pamph. L. 1944, ch. 112; N. J. S. A. 52:27B-52.

By a later statute the Division of Tax Appeals also is given authority to review a county equalization table. Pamph. L. 1946, ch. 161, § 5. This section provides that the Division “shall succeed to and exercise exclusively all the powers and perform all the duties concerning the review, hearing and * * * apportionment or equalization of taxes, formerly exercised or performed by, or conferred and charged upon, the State Board of Taxes and Assessment * * *.” N. J. S. A. 54:2-33. The State Board of Taxes and Assessment succeeded the Board of Equalization of Taxes and was invested with all the powers and duties of the prior board. Pamph. L. 1915, ch. 244. Chapter 67 of the laws of 1905, N. J. S. A. 54:1-18, et seq., 54:2-14, 54:2-15, 54:2-18, established the Board of Equalization of Taxes “for the equalization, revision, review and enforcement of taxation.” Section 3 of this act provides:

“In case it shall, by written complaint of any taxing district * * * appear that any other taxing district * * * that is by taxes contributing to a common cause with such complainant, is- by inequality of valuation or otherwise avoiding or escaping from its fair share of the common burden, the said board shall thereupon cause an investigation of such complaint to be made, and shall render such aid and assistance as it may be able to give for the purpose of arriving at a fair and equitable adjustment of values of both real and personal property of any and every kind, * * *; to this end the said board may examine any assessor or board of assessments, under oath, as to his or their assessments, both as to the valuation as a whole and as to any particular piece of property or as to any property omitted from assessment, and may inquire by the testimony of witnesses concerning the same, and if it shall deem proper it may make a personal examination of any property in any taxing district * * *, for the purpose of equalizing assessments between such districts * * * bearing a common burden of taxation.”

In the case of State (Vail’s Executors, Pros.) v. Runyon, 41 N. J. L. 98, 106, our Supreme Court said that the object of the constitutional amendment of 1875 “was the equalization of taxation in its relation to the several parts of the state, and the prevention of unjust discriminations in the apportionment of the public burdens among its citizens liable to taxation.” In order to carry out this constitutional mandate, the legislature established the Division of Tax Appeals and expressly charged it, among other things, with the duty of equalizing the aggregate valuations of taxing districts within a county by reviewing, either on the complaint of a taxing district or on its own motion, the county equalization table. Hence, the Division is a constituent part of the machinery of taxation created by the legislature to secure an equal and fair distribution of the burden of taxation. West Hoboken v. Commissioners of Appeal, 66 N. J. L. 162; 49 Atl. Rep. 9. Consequently, the Division of Tax Appeals has the jurisdiction and the duty to review the county equalization table and the aggregate valuation of each and every taxing district in the county. The grant of the authority to equalize carries with it the authority to perform, as well as the duty to execute the details necessary to the execution of the official function imposed. Morrill v. Simpkins, 53 N. J. L. 582; 22 Atl. Rep. 57.

Furthermore, the aforementioned statute, R. S. 54:2-37; N. J. S. A. 54:2-37, requires the Division of Tax Appeals to revise and correct the equalization table, if the Division finds that the aggregate valuation of any taxing district is erroneous, and to ascertain the amount of county taxes actually charged against each taxing district in the county and the amount which should have been charged to each, district according to the corrected table. The statute is mandatory in this respect. It sajrs that the Division “shall revise and correct the equalization table.” The word “shall” is used here in the imperative sense. Haythorn v. Van Keuren & Son, 79 N. J. L. 101; 74 Atl. Rep. 502. Therefore, the Division must have the necessary jurisdiction to comply with the statute, and this jurisdiction cannot be taken from us by any act of a taxing district since no complaint of a taxing district is necessary to enable this Division to act. 3 Cooley, Taxation (4th ed.), § 1194.

The express purpose of the above mentioned statutes, which confer upon the Division of Tax Appeals the authority to review a county equalization table, is to equalize and justly apportion the county tax burden among the several taxing districts in the county. The statute provides that this Division shall ascertain the difference between the amount of the county taxes actually charged against each taxing district and the amount which should have been charged. This difference is debited or credited, as the case may be, to each taxing district on account of its share of the county taxes next due. R. S. 54:2-37; N. J. S. A. 54:2-37.

A similar duty was assigned to a county board of equalization of taxes by an act entitled “An act creating a county board of commissioners to equalize assessments for taxes, and defining their powers and duties,” approved March 22d, 1900 (Pamph. L. 1900, ch. 74, § 5. In the case of New Jersey Zinc Co. v. Sussex County Board, &c., 70 N. J. L. 186 (at p. 188); 56 Atl. Rep. 138, 139, our Supreme Court said:

“There is no power under the act of 1900, under which the defendants are organized, to direct that any particular parcel or class of property shall have its valuation increased. Pamph. L., p. 134. The power conferred by the fifth section of that act is to equalize the assessments of the several taxing districts of the county where it shall appear 'that the value of the property contained in any duplicate is relatively less than the value of other property in the county,’ then they may, after a careful, particular and thorough comparison of the respective duplicates, 'add thereto such sum as shall appear just and proper and warranted by such comparison, but not otherwise.’ ”

Eeviews of valuation assessments are of two kinds. One is a review of the aggregate assessments of taxing districts to avoid inequalities between the aggregate assessments of the taxing districts in a county, as distinguished from a review of an assessment on a particular piece of property. 3 Cooley, Taxation (4th ed.), § 1194.

“Equalization of assessments has, for its general purpose, to bring the assessments of different parts of a taxing district to the same relative standard, so that no one of the parts may he compelled to pay a disproportionate part of the tax. * * * This is not done by changing individual assessments, but by fixing the aggregate sums for the several districts at what, in- the opinion of the board, they should be, * * *.” 3 Cooley, Taxation (4th ed.), § 1195.

The statute does not point out the mode for equalizing the county equalization table. írWhere a statute empowers a state board to equalize valuations for taxation, but does not point out the mode, any reasonable and efficient mode may be adopted. Such boards may take as a standard the particular assessment roll which, in its judgment, most nearly represents a true valuation and conform the others to it.” 3 Cooley, Taxation (4th ed.), § 1196.

We have determined that there is error in the aggregate valuations of several taxing districts as fixed by the County Board of Taxation of Middlesex County. In our opinion, the equalization table of the County of Middlesex for the year 1947, according to the evidence before us, should be corrected and revised as follows:

Aggregate Valuations as Revised and
Taxing District Corrected
Carteret Borough ................. $9,964,509
Cranbury Township ............... 1,575,750
Dunellen Borough ................ 4,388,671
East Brunswick Township .......... 2,247,653
Helmetta Borough ................ 655,480
Highland Park Borough ........... 8,967,101
Jamesburg Borough ............... 945,672
Madison Township ................ 2,409,988
Metuchen Borough ................ 5,782,333
Middlesex Borough ............... 4,180,037
Milltown Borough ................ 2,563,452
Monroe Township ................. 1,424,153
New Brunswick City .............. 38,422,375
North Brunswick Township......... 5,917,876
Perth Amboy City ................ 42,612,631
Piscataway Township .............. 5,129,897
Plainsboro Township .............. 1,240,411
Baritan Township ................. 8,630,389
Sayreville Borough ................ 10,658,004
South Amboy City ................ 4,120,913
South Brunswick Township......... 2,414,961
South Plainfield Borough .......... 4,157,104
South Biver Borough .............. 5,913,346 ■
Spotswood Borough ............... 929,94?
Woodbridge Township ............. 18,533,904

A judgment has been entered accordingly, setting forth the revised and corrected county equalization table and also the difference between the amounts of county taxes actually charged against each taxing district of Middlesex County and the amount which should have been charged according 'to the corrected table.


author: Conklin, Commissioner.

text:
    Division of Tax Appeals.
    LEHIGH VALLEY RAILROAD SYSTEM, PETITIONER, v. FRANK E. WALSH, DIRECTOR OF THE DIVISION OF TAXATION, RESPONDENT. CITY OF JERSEY CITY, PETITIONER, v. FRANK E. WALSH, DIRECTOR OF THE DIVISION OF TAXATION, AND LEHIGH VALLEY RAILROAD SYSTEM, LEHIGH VALLEY RAILROAD COMPANY, LEHIGH VALLEY HARBOR TERMINAL RAILWAY, RESPONDENTS.
    Decided May 19, 1947.

      For the Lehigh Valley Railroad System, Collins & Corbin {Raymond J. Lamb, of counsel).
    For the City of Jersey City, Charles A. Rooney {Joseph C. Glavin, of counsel).
    For the State of 3STew Jersey, Walter B. Van Riper, Attorney-General, and Benjamin C. Van Tine and Benjamin Taub, Assistant Attorneys-General.
   Conklin, Commissioner.

The Lehigh Valley Railroad System and the several companies comprising it appealed from the assessment of its property as made by the Director of Taxation for the year 1945 and filed a complaint seeking a reduction. The City of Jersey City filed a complaint seeking an increase in the assessments as made. The Attorney-General defends the assessments as made and asks that this Division affirm the same.

All the issues raised in this case have been raised in the several cases in which opinions have been filed: Shelton Pitney and Walter H. Gardner, Trustees of the Property of the Central Railroad of. New Jersey v. Frank E. Walsh, Director of Taxation, Department of Taxation and Finance, 25 N. J. Mis. R. 196; 51 Atl. Rep. (2d) 871; Pennsylvania Railroad System v. Walsh, 53 Atl. Rep. (2d) 156; Erie Railroad System v. Walsh, 53 Atl. Rep. (2d) 155, and Delaware, Lackawanna and Western Railroad Co. v. Walsh, 53 Atl. Rep. (2d) 153.

There was no palpable error proven and no proof that the Director of Taxation departed from his statutory duty in valuing and assessing the said property. For these reasons we dismiss the appeals of both the railroad and the City of Jersey City.

At the outset of the hearing on July 18th, 1945, counsel for the railroad made a motion to amend Schedule “A.” annexed to the complaint by incorporating therein the Claremont Yard, which is described as land outside of main stem, Claremont Yard at Caven Point, 43.692 acres. It was the intent of the proposed amendment to allege that the assessment of $655,380 at a rate of $15,000 per acre was too high and that the property should be assessed at $8,000 an acre, or ,$349,536.

President Wáesche, who heard the appeal, permitted the petitioner railroad to offer proof as to valuation of the Claremont Yard, subject to the ruling on the amendment by the entire Division. Under R. S. 54:29A-31, et seq., a method of appeal from the assessment or reassessment of property made by the Director is provided, but it is specified that the said appeal must be filed on or before the third Monday of May following said assessment or reassessment. If the amendment were allowed, it would in effect permit additional matter to be added to the complaint already filed by the petitioner railroad, which new matter could not possibly be brought after the third Monday of May by an original complaint, as it would be out of time. This motion is dismissed for that reason.

Judgments have been entered in accordance with the foregoing conclusions.


author: Coniclix, Commissioner.

text:
    Division of Tax Appeals.
    IN THE MATTER OF THE APPEAL OF CITY OF NEWARK, v. TOWNSHIP OF JEFFERSON, FOR THE YEARS 1943 AND 1944.
    Decided June 24, 1947.
    For the City of Newark, Vincent J. Gasale.

    For the Township of Jefferson, Robert H. Schenck.

   Coniclix, Commissioner.

These appeals involve the assessments of property owned by the City of Newark in the Township of Jefferson for the years 1943 and 1944. The township assessed the land at $71,100 for each year, and the improvements at $13,000 for the year 1943 and $12,700 for the year 1944. The city seeks to have the assessment on the improvements canceled.

The facts in this ease are clear and are not in dispute. For the protection of its watershed, the City of Newark owns approximately 924 acres of land in the Township of Jefferson, which has been valued by the local assessors at $71,100. With this the city does not quarrel, but does claim that it is entitled to a full exemption on the improvements on which an assessment has been made. The improvements consist of a two and one-half story frame building, a two story frame and stone storehouse, a one story frame and stone ice house, a one story frame storehouse, a two story frame storehouse, a frame lumber shed, and a store building, all rented by the City of Newark to a certain Davenport and Moody for the sum of $75 a month, and used for commercial purposes. There is also a one and one-half story frame building with a one story frame garage, occupied by a city laborer who pays the City of Newark $6 a month rent.

It is the contention of the Township of Jefferson that these buildings are in no way connected with the development, improvement, or maintenance of the watershed property and that the statutes exempting improvements on watershed property do not apply. The pertinent statute is R. S. 54:4-3.3; N. J. S. A. 54:4-3.3, wherein it provides in part:

“* * * the land of counties, municipalities, and other municipal and public agencies qf this state used for the purpose and for the protection of a public water supply, shall be subject to taxation by the respective taxing districts where situated, at the true value thereof, without regard to any buildings or other improvements thereon, in the same manner and to the same extent as the lands of private persons, but all other property so used shall be exempt from taxation * * •

This statute has been construed by the courts and more particularly by the Division of Tax Appeals in President Quinn’s opinion in Town of Morristown v. Township of Randolph, 19 N. J. Mis. R. 413; 20 Atl. Rep. (2d) 355. In that ease the municipality assessed the buildings which were tenanted structures and which did not relate to the water supply functions served by the lands. President Quinn stated the rule in said case as follows:

“* * * The attempt to lay an assessment on the property here in question is not based upon any cited act subjecting such property to taxation. While, under R. S. 54:4-3.3; N. J. S. A. 54:4-3.3, lands of municipalities, used for public water supply, are subjected to taxation, that act specifically excludes £any buildings or other improvements thereon, from its scope.’- There is no distinction made based upon the nature of the use to which such buildings are put. As a matter of plain statutory construction therefore, none of the improvements here in question were taxable, and cancellation will be ordered of all such assessments in the pending appeals ’ * *•

See, also, Town of Morristown v. Township of Mendham, 19 N. J. Mis. R. 141; 18 Atl. Rep. (2d) 291.

The petition of the City of Newark should be granted and the assessment on the improvements canceled.


text:
    Division of Tax Appeals.
    IN THE MATTER OF THE APPEAL OF CITY OF NEWARK, v. ELECTROLUX CORPORATION, FOR THE YEAR 1944.
    Decided June 24, 1947.
    Dor the City of Newark, Vincent J. Casóle and Harry A. Pine.

    Dor the Electrolux Corporation, John A. Bennett.

   Conklin, Commissioner.

The petitioner City of Newark appeals from the determination of the Essex County Board of Taxation wherein the original assessment on personal property for the year 1944 of $23,600 was reduced to $7,700, and seeks an increase of the assessment. The question is one of the construction of a statute and its application to “capital employed.”

The Electrolux Corporation, not organized under the statutes of New Jersey, is a merchandising concern which carried in its inventory household equipment and spare parts for same. The average inventory as found by the County Board was $7,354.96 and there were fixed assets of $347.94, or a total of personal property in the amount of $7,702.90. The city does not dispute that this is the average inventory as shown by the respondent in its return, but does claim that the corporation should be taxed for capital employed.

R. S. 54:4-19; N. J. S. A. 54:4-19 provided:

“All corporations regularly doing business in this state and not being corporations thereof shall be assessed and taxed for and in respect of the business so done by them, and all such companies other than insurance companies, shall be assessed for the amount of capital usually employed in this state in the doing of such business, and not otherwise taxed as real property or tangible personal property by virtue of this chapter. The assessment shall be made in the taxing district where the business is most usually carried on and 'transacted.” (Repealed by chapter 163 of the laws of 1945.)

The City of Newark called Arthur J. Flynn, a practicing accountant, who testified that he made an examination of the books and assets of the Electrolux Corporation for the year 1944. From his examination and discussion with an officer of the respondent corporation, he determined that the operating costs of the business in Newark amounted to approximately $60,000. He then divided that figure by 12 and obtained $5,000 which he considered capital employed, and that was added to the average inventory and fixed assets, making a grand total of $12,702.90. It was admitted by the witness that of the capital employed he had already assessed $7,000 as inventory.

On the examination of Robert Rose who was in charge of the accounts for the Electrolux Corporation, it was brought out that the $60,000 of expenses are actually paid out of the turnover of inventory and that it is used for rent, power, light, salaries, commissions and the purchase of additional inventory.

R. S. 54:4—19; N. J. S. A. 54:4-19, above cited, provided that capital usually employed in this state not otherwise taxed as real property or tangible personal property shall be assessed and taxed for and in respect to the business so done by the foreign corporation. It is clear from the facts as developed in this hearing that this property was already taxed as tangible personal property. Apparently it was not the intention of the legislature to permit dual taxation; therefore the action of the Essex County Board of Taxation in reducing the assessment to $7,700 is affirmed.


author: Kinicead, C. C. J.

text:
    Monmouth County Circuit Court.
    CITY OF ASBURY PARK, A MUNICIPAL CORPORATION OF THE STATE OF NEW JERSEY, PLAINTIFF, v. TILLIE EHRLICH AND BROAD AND MURRAY REALTY COMPANY, DEFENDANTS.
    Decided July 9, 1947.
    For the plaintiff, E. Alexander Edelsiein.

    For the defendants, Durand, Ivins & Carton.

   Kinicead, C. C. J.

This is an ejectment suit, whereby the City of Asbury Park seeks possession of premises occupied by defendants. The plaintiff alleged in its complaint that its rights to possession accrued on the Soth day of June, 1946. The defendants in their answer filed a general denial, and the plaintiff now moves to strike the answer.

The premises involved had been formerly owned by Coleman House, Inc. In 1934, they were sold to the plaintiff for nonpayment of 1933 taxes. The certificate of tax sale was not recorded until January 16th, 1940. In December, 1945, the plaintiff filed a hill to foreclose its tax title and the foreclosure proceedings were completed by the entry of a final decree dated June 21st, 1946. The defendants were not joined in the tax foreclosure suit, despite the fact that they, or one of them, have been in continuous possession since 1934. Furthermore, the city had actual knowledge of the defendants’ possession through the issuance of mercantile licenses to the defendants to do business on the property involved. Since 1943, the defendants have occupied the premises by virtue of successive written leases from Coleman House, Inc., the last lease being dated January 2d, 1946.

After the city obtained final decree in the foreclosure, it demanded possession from the defendants, who refused to quit. This suit was thereupon instituted. During its pend-ency, plaintiff made written demand on defendants for the payment of rent. The defendants complied and sent the sum of $500 to the city which, after being retained for a few days, was returned to the defendants with the information that the city desired only possession of the property.

Plaintiff bases its claim for possession on N. J. S. A. 54:5-53.1, and on the theory that defendants were bound by the foreclosure decree even though not joined therein.

The tax statutes of Hew Jersey, commencing with the year 1903, as they affect the right of a holder of á tax certificate to possession, are as follows:

Chapter 208, laws of 1903, section 56, which gives the purchaser of a tax certificate the right to record the same, who “thereupon shall be entitled to immediate possession of the property sold and described in the certificate and to all the rents- and profits therefrom * *

Chapter 237, laws of 1918, section 34, wherein the language is similar to that of the 1903 act.

Chapter 81, laws of 1926, which amended the 1918 act to provide that the purchaser was not entitled to rents for such part of a dwelling house occupied by an owner or his family until after two years after recording the certificate.

. Chapter 169, laws of 1929, which amended the 1918 act ■by - eliminating the right to possession.

Chapter 54, laws oi 1943, which gave the municipality, after recording its tax certificate, the right to “immediate possession of the property sold and described in the certificate and to all the rents and profits thereof from and after the date of record and'while the holder thereof * * *.”

The next statute is N. J. S. A. 54:5-53.1, the pertinent provisions of which are as follows:

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

“Whenever a municipality shall take possession of any property pursuant to the provisions of this section, the col-' lector of taxes or other officer thereof, whose duty it shall he to collect taxes therein, shall take possession of said property and collect the rents and profits thereof for said municipality and, with the approval of the governing body of said municipality, may designate any competent person to act as the agent of said municipality for the collection of the rents and profits of said property and for the management of the same and such person shall account promptly to such collector or other officer, and the collector or other officer shall account promptly to the municipality, for the rents and profits so collected.”

The first point to be decided is whether the city acquired actual or constructive possession of the premises by virtue of the provisions of N. J. S. A. 54:5—53.1. The plaintiff maintains that the statute confers actual possession including the right to evict tenants of the owner. The only case which I have been able t© find, construing this statute, is that of United States v. 7.41 Acres of Land, &c., 63 Fed. Supp. 43. Judge Forman (at p. 46) held:

“Tne possession contemplated under N. J. S. A. 54:5-53.1 ib a constructive one, • as cowira-distinguished from actual possession which a municipality would have the right to take by a writ of assistance after foreclosure bf the right of redemption under a tax sale certificate. The municipality, however, can only exercise its right to take immediate possession of the premises, under this statute, when they are income producing. Then it may receive the rents and profits, apply them to the payment of the delinquent taxes and give the owner an accounting thereof. To this extent it is clothed with the same powers as a receiver. A tenant has no election but to attorn.”

The rights of the holder of a tax certificate are similar to those of a mortgagee in possession. Merchants’ and Traders' Realty Co., Inc., v. Stern, 101 N. J. Eq. 629; 138 Atl. Rep. 697; affirmed, 102 N. J. Eq. 290; 140 Atl. Rep. 390. Vice-Chancellor Berry, 101 N. J. Eq. (at p. 633); 138 Atl. Rep. (at p. 699), held:

“Under the 1918 act, however, on redemption he is entitled to reimbursement for those expenditures. A fortiori, then, a purchaser at a tax sale in possession should now pay taxes and other municipal liens accruing during such possession. His rights under the 1918 act are those of a mortgagee in possession. Cohn v. Simon and Cohn v. Schrader, supra. In those cases the Supreme Court, in referring to section 34 of the Tax Sale Revision of 1918, said:

“cWe think the intent of the statute was to enable the purchaser of a tax title upon recording his certificate to acquire the right of a mortgagee in possession, but in this respect the statute was not self-executory, and the purchaser of the tax title might, if he chose, avoid the responsibility of the mortgagee in possession.’ (Italics mine.)

“The rights of a mortgagee in possession are to collect the rents and profits; his responsibilities include a liability to account for those rents and profits on redemption. Stewart v. Fairchild (Court of Errors and Appeals), 91 N. J. Eq. 86 ; 108 Atl. Rep. 301.”

In considering that the rights of the holder of a tax certificate are similar to those of a mortgagee in possession, it must be kept in mind that in the instant case, the defendant, upon demand for rent, attorned to plaintiff and paid $500 which sum, I assume, was the amount due under defendants5 lease with Coleman House, Inc. However, plaintiff thereupon retened the rent, with the advice that the city sought only possession of the premises.

It has been held in How Jersey that when a mortgage is in default, the mortgagee has the right to maintain ejectment, but the tenant may avoid ejectment by attorning to the mortgagee. Del-New Co. v. James, 111 N. J. L. 157; 167 Atl. Rep. 747. In this case the court, 111 N. J. L. (at p. 159); 167 Atl. Rep. (at p. 748), held:

“How, since a mortgagee, after default, has the right to maintain ejectment, it follows the tenant may attorn to such mortgagee in order to avoid ejectment and to keep himself in possession of the leased premises.”

Since the rights of the tax certificate holder are no stronger than those of a mortgagee in possession, it follows that a tenant may avoid ejectment by attorning to the tax certificate holder and tendering the rent which is due under teiiftnt’s lease with the owner.

The holding of the court in United States v. 7.41 Acres of Land, &c., supra, that to a certain extent the holder of a tax certificate is clothed with the powers of a receiver, leads to a consideration of the rule in Hew Jersey that a receiver is not authorized to dispossess a tenant who occupies premises by virtue of a lease with the owner.

In Fidelity Union Trust Co. v. 75 Prospect Cooperative Apartment, 131 N. J. Eq. 387 (at p. 389); 25 Atl. Rep. (2d) 508 (at p. 509), Vice-Chancellor Bigelow held:

“Established practice confines the receiver of leased property to the collection of rents due the owner of the mortgaged estate, and does not permit him to dispossess tenants in disregard of the terms of their leases.”

The language of the second paragraph of the statute is, in my opinion, most significant:

“Whenever a municipality shall take possession of any property pursuant to the provisions of this section, the collector of taxes or other officer thereof, whose duty it shall be to collect taxes therein, shall talce possession of said property and collect the rents and profits thereof for said municipality * * (Italics mine.)

It is quite clear that the legislative intent was to empower any municipality holding a tax certificate, to collect the rents and revenue of premises on which the certificate is held, and to specify the method by which the municipality shall effectuate such collection.

My conclusion on this point is therefore that under N. J. S. A. 54:5-53,1, the plaintiff acquired only a constructive possession of the involved premises, and has no right under this statute to evict any tenant of the owner who attorns to the municipality.

The remaining point to be considered and decided is as to whether or not the foreclosure decree empowered the city to evict the defendants, despite the lease entered into with the owners on January 2d, 1946, prior to the date of the final decree in June, 1946. The city contends that, despite the failure to join the defendants in the foreclosure suit, it has the right, nevertheless, to evict the defendants.

In support of this contention, the city relies upon the holding of the Court of Errors and Appeals in Strong v. Smith, 68 N. J. Eq. 686; 60 Atl. Rep. 66; 63 Atl. Rep. 493. In that case, one Al,bert G. Spalding on June 12th, 1900, executed a mortgage to Alice C. Strong on land in Monmouth County, and the mortgage’was recorded June 20th, 1900. On April 25th, 1901, Spalding conveyed the property to Bernard Smith, by deed, duly recorded April 29th, 1901, and Smith gave back to Spalding a purchase-money mortgage of the same date, which was 'also duly recorded on April 29th, 1901. On July 15th, 1903,- Alice C. Strong filed a-bill in Chancery to foreclose her mortgage, making Spalding’and Smith parties defendant, and in pursuance thereof the property was, on May 13th, 1904, sold to Spalding by virtue of an execution to satisfy the Strong and Spalding mortgages. On July 21st, 1904, Spalding received a deed for the property, and on October 12th, 1904, presented to the Chancellor a petition for a writ of assistance commanding Smith and anyone claiming under him to deliver possession of the property to the petitioner. This petition having come to the knowledge of David Lamar, he appeared at the time set for the hearing to oppose the issuance of the writ, and was thereupon formally admitted as a party to the proceeding. By the testimony subsequently presented on his behalf, it was disclosed that he claimed to be in possession and entitled to possession of the mortgaged premises under an unrecorded lease made to him by Smith on May 22d, 1901, for the term of five years from that date, and that his possession had been open and continuous since the date of the lease.

It will be helpful to follow the facts as further outlined by Yice-Chancellor Stevenson in his opinion which precedes the decision of the Court of Errors and Appeals. At p. 696 of 68 N. J. Eq.; at p. 71 of 60 Atl. Rep., the Yice-Chancellor stated:

“Smith, who had no wife, was the owner of the equity of redemption by virtue of a deed duly recorded. Smith took title subject to the mortgage of the complainant, and gave a purchase-money mortgage to Spalding. Smith took possession of the mortgaged premises, which consisted of a large country residence, with extensive grounds. Smith owned the furniture in this residence. In fact, Lamar and his wife also occupied this property with Smith. If the solicitor of the complainant, before commencing the foreclosure suit, made diligent inquiry in order to ascertain who was in possession of the mortgaged premises, he no doubt learned that the owner of record (Smith) was in possession, and that with him were residing his sister, Mrs. Lamar, and her husband, the three persons constituting practically one family. Such inquiry might have disclosed Smith’s ownership of the furniture. Lamar knew that all the ascertainable facts in regard to the real estate and furniture which this family were occupying and using would indicate that Smith was the owner in possession, while he (Lamar) had no more of an independent possession than had Mrs. Lamar, his wife. I do not think that this sort of use of the property by Lamar gave notice to the solicitor for the complainant that Lamar had-any right of possession independently of Smith’s right of possession, or, in other words, that the possession of Lamar was not, or might not, be equivalent in law to the possession of Smith. But the disposition of this case does not depend upon the correctness of this proposition, in view of the subsequent conduct of Mr. Lamar, which, in my judgment, amounted to a most emphatic representation on his part that he had no right of possession which would not be terminated by the suit when Smith’s right of possession should be terminated thereby. In fact, Mr. Lamar had in his possession a written lease which Smith had given to him, letting the mortgaged premises, as well as the furniture therein, for the term of five years. This lease was subject to the complainant’s mortgage, and also subject to the mortgage to Spalding, but it was in existence prior to the commencement of the foreclosure suit, and if the complainant received notice, by Lamar’s possession or otherwise, of the existence of this lease, he would have been bound to inquire of Lamar in regard to his interest in the mortgaged premises, and to make Lamar a party defendant in the foreclosure suit. Lamar, however, kept the lease concealed during the whole course of the foreclosure suit, of which lie (Lamar) had full notice, and of which he practically took charge, ostensibly on behalf of his brother-in-law, Smith. He actively'' engaged in various efforts to thwart or delay the procéedings of the complainant to bring his suit to a sale. He applied for and obtained adjournments, of which he,1 as lessee in possession, enjoyed the full benefit. He was present at the sheriff’s sale and gave no notice of his lease. He is charged with knowledge of the fact that the complainant and his solicitor were proceeding with their foreclosure suit to a sale without bringing him (Lamar) in as a party defendant, in reliance upon the representation which Lamar was making by his entire conduct, including his concealment of his lease, that his physical possession was merely the possession of Smith, and that he was interested in the foreclosure suit only as Smith’s agent.”

The Vice-Chancellor allowed the writ of assistance sought by the complainant, and the Court of Errors and Appeals, in affirming this ruling, held, 68 N. J. Eq. (at p. 705); 63 Atl. Rep. (at p. 494):

“Of course, it is necessary that the rights of the person from whom possession is sought in some lawful mode be subjected to the jurisdiction of the court. Ordinarily this is done by making him a party to the suit in which the decree to be enforced is rendered. But it may be done by giving him notice of the possessory proceeding instituted on the basis of the decree, or by his appearance in such proceeding. If, when he is thus brought in, it is clearly shown that he claims under one who was a party to the suit, and that his right of possession is undoubtedly subordinate to the right for the enforcement of which the writ of assistance is prayed, then it may be issued against him, even though technically he is not bound by the decree.”

This decision, at first blush, would seem to be dispositive of the second point. Yet, although the Court of Errors and Appeals has never expressly reversed its holding in Strong v. Smith, supra, the more recent decisions of the court have, by implication, reversed that holding.

In Ellveeay Newspaper, &c., Association v. Wagner Market Co., 110 N. J. L. 577 (at p. 580); 166 Atl. Rep. 332 (at p. 333); affirmed, 112 N. J. L. 88; 169 Atl. Rep. 692, the Supreme Court held as follows:

“In 14 A. L. R. 664, the law on the subject is stated as follows:

“ ‘Whether a lease of real estate previously mortgaged is terminated by a foreclosure action and sale is held by the majority of decisions, to depend on the joinder of the lessee as a party to the foreclosure action. Though there are some conflicting decisions, such a lease by the weight of authority is thus terminated in case, and only in case, the lessee was made a party to the foreclosure suit.’ To like effect is 42 Corp. Jur. 59, 260.”

In American-Italian Building and Loan Association v. Liotta, 117 N. J. L. 467 (at p. 471); 189 Atl. Rep. 118 (at p. 120), the Court of Errors and Appeals held:

“We have held, following the great weight of authority and the soundness thereof is not questioned, that unless a tenant is made a party defendant to the foreclosure suit his interest is unaffected thereby. Ellveeay Newspapers, &c., Association v. Wagner Market Co., 110 N. J. L. 577; 166 Atl. Rep. 332; affirmed, 112 N. J. L. 88; 169 Atl. Rep. 692.”

In line with the more recent trend of decisions in our courts is the opinion in Walgreen Co. v. Moore, 116 N. J. Eq. 348 (at p. 349); 173 Atl. Rep. 687 (at p. 588); where Vice-Chancellor Berry held:

“The sole question presented on this motion is whether or not the lease of a lessee who is not a party defendant to a bill to foreclose a prior mortgage is terminated by the appointment of a rent receiver in a foreclosure suit. The answer is that it is not, and this proposition seems to me to be too plain to admit of argument.”

Then, too, there is the holding of the Court of Errors and Appeals as set forth in the syllabus in LaCombe v. Headley, 91 N. J. Eq. 63; 108 Atl. Rep. 185, 186:

“It is the duty of an intending purchaser of land which is in the possession of a person other than the proposed grantor to inquire of the occupant and ascertain the rights under which he holds, and if he does not make such inquiry, he is chargeable with notice of, such facts as the inquiry would have revealed.”

It must be taken into consideration that in Strong v. Smith, supra, the Court of Errors and Appeals affirmed the allowance of a writ of assistance against a party who had not been joined in the foreclosure proceedings where said party had concealed the possession of his unrecorded lease, and whose conduct throughout the entire proceedings had been most deceptive. There is no element of concealment or deception present in the instant case. The possession of the defendants had been continuous for many years. The city had actual notice of the defendants’ possession and had issued mercantile licenses to the defendants, permitting them to transact business.

Therefore, despite the fact .that the Court of Errors and Appeals decision in' Strong v. Smith, supra, has never been expressly reversed, I conclude nevertheless that it is unequivocally the law in New Jersey at the present time that a tenant’s right to possession of premises remains unaffected if the tenant is not joined in foreclosure proceedings, and if the tenant attorns. The failure of the city to join the defendants in the foreclosure proceedings leaves unimpaired the defendants’ occupancy during the period specified in defandants’ lease.

Counsel for the plaintiff has contended that it might be possible for an owner and tenant to defraud a municipality by entering into a lease for a lengthy term at a ridiculously low rental. Counsel does not contend that such circumstances exist in the instant case, and in disposing of this contention, 1 conclude that where collusion or fraud could bo shown, that an appropriate remedy could always be sought in the Court of Chancery.

The motion of the plaintiff is therefore denied, and an order in conformity with my opinion may be presented for my signature.


author: Dulop, D. C. J.

text:
    Second Judicial District Court of the County of Union.
    BENJAMIN M. FLEETWOOD, PLAINTIFF, v. HERSHEY CREAMERY CO., DEFENDANT.
    Decided July 23, 1947.
    Dor the plaintiff, McOarter, English & Studer.

    Dor the defendant, James A. Goolahan.

   Dulop, D. C. J.

Plaintiff was employed by defendant as-a salesman from about January 15th, 1939, to May 10th, 1942, when he obtained leave of absence to go into war work.. He received vacation pay until June 15th, 1942, when he-was severed from the payroll. He received a salary and bonuses. His work required that he use his own automobile-The defendant agreed to pay for gasoline, oil and repairs for the car and also agreed to set aside $15 a month in a trust fund to be paid out on plaintiffs behalf when he purchased .a new automobile. Defendant reserved the right to stipulate when defendant should buy a new car in order that plaintiff, as defendant’s sales representative, might maintain a proper •appearance.

In June, 1940, plaintiff purchased a new car and defendant paid to the dealer all or part of the amount on deposit in the automobile depreciation reserve fund which had been accumulated at the rate of $15 per month for the plaintiff. Thereafter, plaintiff did not purchase a new car up to the time when he left the defendant’s employ.

In May, 1942, when plaintiff quit, he asked defendant for the sums accumulated 'as depreciation reserve on his behalf. His supervisor said the money was controlled at the company’s homo office at Harrisburg and he would find out about it.

On May 22d, 1942, defendant issued a “ruling” in which, among other things, it said:

“The definite decision that has resulted from this ruling is that accumulated car depreciation is intended for the sole value of replacement of their motor vehicle while they are •employed by the Company—and that any accrued depreciation will not be paid on their leaving the Company permanently or on the basis of a leave of absence. However, if and when they return to the employ of the Company, such depreciation as existed at the date of their leaving will be in turn ■credited to their depreciation fund.”

Plaintiff refused to agree to this “ruling.”

Plaintiff seeks to recover $15 a month deposited to his credit in the company’s depreciation fund from June 21st, 1940, to May 10th, 1942, or a total of $345, plus interest.

Defendant contends that plaintiff forfeited any interest in this depreciation fund when he left defendant’s employ, that the fund was to be used for his benefit only if he purchased a new car while continuing in his employment, and that plaintiff had no other right to the money.

It may well be that if plaintiff had clearly agreed to the contract for which defendant contends, he would be barred from recovering. Whether or not he did so is a question of fact. The testimony on behalf of defendant does not support its contention. My recollection is that the man who hired the plaintiff testified that nothing was said at the time of hiring as to what would happen to the depreciation fund in the event that plaintiff quit before he bought a new car.

On the other hand, plaintiff testified that his employer explained at the time of hiring that the depreciation fund was set up in lieu of mileage payments to the salesmen and that the plan was designed to assure the company that the salesmen would have the money available to buy a new car when needed.

I am convinced that the plaintiff’s version is correct. If so, the accumulation was his money, earned by him, but held in trust for him by the defendant. I am satisfied that plaintiff never agreed that he would wear out his car on the business of the company, with compensation to depend upon the fortuitous circumstance whether he bought a new car before or after he left his employment.

No subsequent unilateral “ruling” by the company could deprive him of his vested interest in the fund.

Since the only purpose of the trusteeship was to protect the company to the extent of its interest in seeing to it that plaintiff had a new car when needed, and since the company no longer has any such interest, the trust has become a “dry” trust and plaintiff is entitled to the money.

Judgment will be entered in favor of the plaintiff and against the defendant in the sum of $345 plus legal interest to be calculated from May 10th, 1942, and costs of suit;


author: Flanagan, C. P. J.

text:
    Essex County Court of Special Sessions.
    STATE OF NEW JERSEY, COMPLAINANT, v. MARJORIE HALL, DEFENDANT.
    Decided April 24, 1947.
    For the plaintiff, Edward Schoen, Jr.

    For the defendant, William Osterweil,

   Flanagan, C. P. J.

This is an appeal from the Family Court of the City of Newark.

The statute under which this prosecution is brought (R. S. 2:202-16; N. J. S. A. 2:202-16) provides, in so far as we are concerned with it, that any person who shall “be apprehended * * * who cannot give a good account of himself * * * and who is in this state for an unlawful purpose, shall be adjudged a.disorderly person. * * * The fact that the person apprehended cannot give a good account of himself * * • * shall be prima facie evidence that he is present in this state for an unlawful purpose.”

It can be of no avail to the defendant to argue in this court (T) that one cannot, under pain of incurring a penalty by way of an inference or presumption, i. e., that he is guilty of being “present in this state for an unlawful purpose,” be, compelled to discuss or reveal his private present purposes or to disgrace or incriminate himself; or (2) that the statute places the affirmative burden upon him to explain (“to talk”), imposing a penalty more onerous than if he had failed to take the stand in his own defense on a trial after indictment, the penalty being that his silence shall be taken as “evidence?’ prima facie of guilt of presence for an unlawful purpose; or (3) that the words “present in this state” for an unlawful purpose indicate that the only purpose of the statute is to, protect our state from expeditions by the legion of those criminally inclined who reside nearby in adjacent and more populous states; or (4) that the defendant has a record of criminal conduct which, within the law, cannot be used against him beyond the scope of affecting his credibility, to wit, cannot be used as evidence indicating or tending prima facie to show guilt of “an unlawful purpose.”

All of these contentions have been disposed of adversely to the defendant in the Supreme Court and consequently, of course, cannot be considered here. See McNeilly v. State, 119 N. J. L. 237; 195 Atl. Rep. 725; Carroll v. First Criminal District Court of Jersey City, 129 N. J. L. 416; 30 Atl. Rep. (2d) 54; affirmed, 130 N. J. L. 559; 33 Atl. Rep. (2d) 907; Archer v. First Criminal Judicial District Court of Bergen County, 10 N. J. Mis. R. 1159; 162 Atl. Rep. 914.

The essence and substance of the offense prescribed in the statute is the unlawful purpose of the prisoner for which he is present in the state.

In the event one cannot give a good account of himself that circumstance is taken as evidence prima facie against him; in substance, a rebuttable presumption is raised that he is present for an unlawful purpose.

The statute does not establish the failure to give a good account of oneself whenever apprehended as a new and distinct offense of a criminal nature. It merely sets up a rule of evidence. '

When one is apprehended and cannot give a good account of himself this rule of evidence does not raise any conclusive presumption or even an omnibus one of unlawful intent or purpose, but only of a purpose having a rational connection or relation to the person’s conduct and situation and the surrounding circumstances as established by legal evidence adduced and reasonably inferable therefrom.

The rule of evidence is merely an aid to the state. The fundamental and ultimate rule of proof beyond a reasonable doubt is not mitigated, the burden still remaining on the state to establish upon all the evidence beyond a reasonable doubt the object or purpose of the prisoner’s presence and that such purpose is an unlawful one. Cf. McNeilly v. State, 119 N. J. L. 237 (at p. 242); 195 Atl. Rep. 725. His failure “to talk,” to give a good account of himself, is made “evidence” prima facie only of “an unlawful purpose.”

In the instant case the complaint before this court upon which the trial was had contains no allegation that the defendant entertained or was present for an unlawful purpose. The limit of the accusation is that the defendant when apprehended “could not give a good account of herself.”

The complaint is legally insufficient and does not allege any offense. See eases cited, supra.

However, the third paragraph of the act (R. S. 2:206-11; N. J. S. A. 2:206-11) under which this case comes before this court upon appeal provides that the appeal shall operate as “a waiver of all technical defects in the record, including * * * absence of, any * * * charge laid in the complaint, and as a consent that the court shall enter judgment solely upon the basis of the testimony presented before such court.”

It is the duty of this court to proceed upon that waiver and consent.

In the instant case the evidence is that the defendant, a youngish, likely-looking colored girl, was walking along the street in Hewark at about three a. m. A white man in an automobile was passing in the opposite direction. He “honked” his horn, to which the defendant responded and was received into the car by him, and they drove away together. Shortly thereafter they were stopped by policemen, who had been observing her and were observing them. The defendant had three times before been in contact with the police for soliciting, and had served time for that offense and was on parole. She gave as her address a place in Yaux Hall, which was not a bona fide residence of hers; it was the residence of her sister, where she went on occasion. She testified to no steady fixed employment or earnings, but said that her sister paid her sums for the care of her children. The man was a healthy looking white man approaching middle age in appearance. He stated he was impelled to “honk” the defendant by a desire or impulse to offer her a ride home or in that direction, though he made no claim that he had any information as to any definite address where her home was located. The extent of his acquaintance with the defendant was, he said, having met her in a tavern.

I am satisfied that defendant was engaged in “street walking,” looking to be solicited or for opportunity to solicit. The evidence before me indicates that the man in the automobile was a willing or, rather, an aggressive subject. I am satisfied from all the evidence beyond a reasonable doubt that defendant was then and there present for the unlawful purpose in which she was engaged, to wit, soliciting. The finding is guilty of that offense.