text:
    HAZEL KENT, ADMINISTRATRIX AD PROSEQUENDUM OF JOHN F. CROSBY, DECEASED, AND GENERAL ADMINISTRATRIX OF THE ESTATE OF JOHN F. CROSBY, DECEASED, PLAINTIFF-APPELLANT, v. COUNTY OF HUDSON, DEFENDANT-RESPONDENT.
    Superior Court of New Jersey Appellate Division
    Argued May 13, 1968
    Decided July 25, 1968.
    See also 97 N. J. Super. 90, 234 A. 2d 489.

      Before Judges Coneord, Collester and Labrecque.

      Mr. Lewis M. Holland argued the cause for appellant (Messrs. Warren, Chasan, Leyner & Holland, attorneys).

      Mr. Daniel F. Gilmore, Assistant County Counsel, argued the cause for respondent (Mr. William F. Kelly, Jr., Hudson County Counsel, attorney).
   The opinion of the court was delivered by

Labrecque, J. A. D.

Plaintiff, as general administratrix of the estate of John P. Crosby, deceased, appeals from a judgment iii favor of defendant County of Hudson following a jury verdict of no cause for action.

On March 31, 1964 plaintiff’s decedent, John F. Crosby, was severely burned while a pay patient at the Berthold S. Poliak Hospital for Chest Diseases (Poliak Hospital), a facility owned and operated by defendant. He died on April 4, 1964 as the result of his burns. Thereafter plaintiff, as administratrix ad prosequendum and general administratrix, instituted the present suit to recover, respectively, for decedent’s wrongful death and for his medical and hospital expenses and the pain and suffering he underwent following the accident. Defendant pleaded governmental immunity and contributory negligence as special defenses.

The testimony as to the occurrences leading up to decedent’s death may be summarized as follows. On Novembér 25, 1963 decedent, then 65 and suffering from diabetes, arthritis and a chronic brain syndrome, was transferred from a nursing home to the geriatrics section of the Poliak Hospital for treatment and care. He was described as “incapable of taking care of his physical functions,” was “dizzy at times” and “always falling.” On several occasions while at home he had burned himself or the furniture through the use of cigarettes.

Upon his transfer to Poliak Hospital decedent’s children, told the nurse in charge and the attendants that decedent; “had previous trouble with cigarettes due to senility” and asked them “to control his cigarettes and stay with him while he smoked.” Cigarettes (not matches) intended for decedent’s use, were entrusted to the floor nurse for safekeeping:.

Although it does not appear that decedent’s smoking habits were interfered with during the period immediately following his admission, it was not long before cigarettes were taken away from him by those in charge and he was allowed to have one only when accompanied by an attendant. The cigarettes for his use (entrusted to the nurses by his children) were kept locked in a medicine closet to which only the head nurse and one other nurse had access.

Towards the end of December 1963 three of decedent’s-fingers were burned when a book of matches allegedly flared! up while he was handling it. Thereafter a notation was entered on the “Doctor’s Order Sheet” which read “Not [to] let him have cigarettes.” The order was initialed by Mrs. Looby, the head nurse. Decedent’s daughter testified that on her weekly visits she had regularly noticed holes burned in decedent’s robe and pajamas. However, this was not observed by the head nurse.

A nurse’s aide (one step above an orderly) testified that at about 11 a.m. on March 31, 1964, upon hearing screams emanating from the 11th floor solarium in the geriatrics section, he rushed in and found decedent tied in a reclining chair by a leather belt and on fire. The fire was not extinguished until decedent had sustained- extensive second-degree burns. He was subsequently transferred to the Jersey City Medical Center where he died.

Although there were 46 to 47 patients on the 11th floor, the onfy personnel on duty there at the time of the incident were the nurse’s aide, a nurse and a porter. The person who had moved decedent from his bed to the solarium and had then strapped him into the chair was not identified. However, Mrs. Looby, who was in general charge of the floor, testified that she had observed decedent seated in the chair in the solarium at about 10 a.m. He was then unattended and was restrained with a drawsheet, not straps. She testified that this was done because “Mr. Crosby was starting to wander * * * because every chance he got he went downstairs or the elevator.” The only other people in the room were approximately ten patients (presumably also diabetic geriatrics). She further testified that prior to the accident she had been allowing decedent to have cigarettes, but only when an attendant would procure one from her (or the staff nurse) and then “Give it to Mr. Crosby and light it and stay with him while he smoked.” She confirmed the incident in December 1963 when decedent sustained burns to his fingers when a book of matches flared up in his hand, but could not state whether an attendant was with him at the time this happened. There was no report of this incident in the hospital records.

Miss Vera, the staff nurse who was in charge in the absence of the head nurse, testified that she had been working on another part of the floor when the accident occurred and did not know who had moved decedent into the solarium and strapped him in the chair. When she administered medication to him early in the morning in his room she found him to - be confused. She left him there with a Mrs. Santos, an attendant.

Both nurses testified that the cigarettes (and matches) were kept in a locked cabinet (in which the medicines were also kept) to which only they had access. The inference from' their testimony was that neither had given a cigarette to defendant that morning, prior to the accident. Neither Mts. Santos nor the porter who was on duty were called as witnesses.

There was no direct testimony as to just what happened at the time of the accident. The hospital’s “progress record” of the patient contains a recital that he was “burned while smoking in led.” It is clear from the other proofs that the italicized words should have read “in a chair.” Plaintiff testified that she received a telephone call from Dr. Boylan, the attending physician at the hospital, who said, “I am calling to tell you that your father Mr. Crosby has met with an accident. He was smoking and caught fire and had been burning for quite a while until someone could get to him and he is severely burned * * Dr. Boylan testified that he didn’t think he did any more than tell plaintiff that her father had been burned in an accident at the hospital. A portion of the patient’s “progress record” which bore his signature recited that:

“The [patient] found on solarium engulfed in flames. Attendant immediately wrapped [patient] in blankets and smothered the flames. Then other employees used a Soda and Acid fire extinguisher to douse the blankets and patient who was then returned to bed. Nurse removed remaining charred clothing and cleansed the body with plain water.
There are extensive second degree burns of the head, neck, shoulders, face, arms, chest, back, and trunk onto both *highs. The [patient] is conscious and at present not in shock. Dr. Timmes notified for [consultation], [Patient] to be transferred to 15th surgical floor for further treatment.”

The “incident report,” which was signed by Dr. Boylan, referred to the nurses’ report which recited that:

“While giving pre-lunch Insulin, on the West Side of the 11th floor and upon returning to the treatment room to rinse syringes, I smelled smoke and hurried to investigate the source. When I got to the East side corridor I saw smoke and the floor was all wet. In the solarium the patient, Mr. John Crosby was on the floor along side of a smoldering chair. The porter, Mr. D. Hoffman had by this time smoldered the fire on the patient with sheets. The porter hastily ran and got the fire extinguisher and applied it to the sheets and chair.
Then we picked up the patient and placed him in a chair and put him to bod. I then immediately returned to the phone and called front desk to report the fire. I called physician for emergency .help then returned to the patient’s room and removed bui’ned clothing and applied blankets (as external heat).
Dr. Boylan responded rapidly as well as surgical resident and then emergency treatment was started. M. Vera. R. N.”

The trial judge dismissed the count seeking recovery under the Death Act, N. J. S. 2A :31-1 et seq., for failure to prove damages. He denied plaintiff’s motion to strike and withdraw from the jury’s consideration the defense of contributory negligence. The case was then submitted to the jury under a charge which required it to factually determine whether decedent’s injury had resulted from defendant’s active wrongdoing in the performance of its duty of caring for decedent and whether he was guilty of contributory negligence, and hence barred from recovery. The jury rendered a verdict of no cause for action and a subsequent motion for judgment for plaintiff n.o.v or for a new trial was denied by the trial judge. The present appeal challenges only the judgment against the general administratrix based upon the jury’s verdict.

Disposition of the matter before us calls for resolution of two issues: (1) was it proper to submit to the jury as a matter of defense the issue of decedent’s asserted contributory negligence, and (2) was the jury properly charged as to what constituted active wrongdoing which would justify a recovery against the defendant.

T

In general, the question of the existence vel non of contributory negligence is one for determination by the jury rather than the court. Battaglia v. Norton, 16 N. J. 171, 179 (1954). The test is whether different minds could reasonably come to different conclusions as to the facts, or may reasonably disagree as to the inferences derivable therefrom. Shutka v. Pennsylvania R. R. Co., 74 N. J. Super. 381, 389 (App. Div. 1962), certification denied 38 N. J. 183 (1962). In the absence of disputed facts, or disputed inferences to be drawn from the undisputed facts, it becomes the duty of the court “to declare the judgment which the law imposes” and there is no warrant for submission of the issue to the jury. Kaufman v. Pennsylvania Railroad Co., 2 N. J. 318, 324 (1949). We are satisfied and hold that in the posture of the evidence here presented it was error to do so.

We are not here concerned with whether the known or observed acts of decedent were negligent ones. As noted, supra, the record is devoid of any testimony upon which an inference could be based that decedent voluntarily did anything which contributed in any way to the accident. The burden of adducing such testimony was upon defendant. In the absence of such proof and in view of his physical and mental state, a genuine issue as to his negligence was not presented. Further, any asserted act of negligence on his part could not be held to be a contributing proximate cause of his death since he had placed himself in the custody and care of defendant for the very purpose of protecting himself against its effects.

From the record of his admission it is clear that when defendant accepted decedent as a pay patient it was aware of the fact that he was suffering from, among other things, diabetes as well as a chronic brain syndrome. At the time of the accident its representatives knew (or should have known) that he was incapable of taking care of his physical functions, was dizzy at times, had a tendency to fall, had spells of confusion and had previously burned himself while smoking. Dr. Boylan, who was the director of geriatrics and in charge of the case, testified that some of the symptoms of a chronic brain syndrome were uncoordination and, at times, disorientation as to time or place or people. Mrs. Looby, the head nurse, testified that she understood it to mean that decedent’s “senses were dull and at times he would be very confused.” The record leaves no doubt as to the existence of such confusion on decedent’s part. While there were intermittent references to it in the early nurses’ notes admitted in evidence, his condition in that regard became sharply aggravated during the two weeks prior to the accident. The nurses’ notes, for that period, insofar as referable to his confusion, read as follows:

March 17 (morning)—“Very confused, tried to get on elevator to go Hoboken. * * * Watch carefully.”
(afternoon) “Very confused. * * * Keeping close watch on [patient].” March 18—“Confused.”
March 19-—-“[Patient] wandered off by himself. [Apprehended] on 1st fl. * *
March 21—“[Out of bed] in chair [with] restrain. * * * Keeping close to watch [patient] carefully * * * very confused.”
March 22—“[Out of bed] in chair [with] restrain. Confused. Observed ail time.”
March 23—“Confused.”
March 24—“Very confused.”
March 25—(morning) “[Out of bed] in chair [with] restrain. Very confused. Observed all A. m. carefully.”
(afternoon) “Remains confused. Observed.”
March 26—“Confused [at] times.”
March [27]—“[Out of bed] in chair [with] restrain. [Patient] very confused. Observed all time.”
March 28—(morning) “Confused.”
(afternoon) “Remains very confused.”
March 29—“Remains confused.”
March 30—“Remains very confused.”

The accident occurred on the following day.

There was no substantial contradiction of the foregoing. Most of the notations referred to were in the handwriting of one or the other of the nurses who testified for defendant. We are satisfied that on the foregoing facts submission of the issue of decedent’s contributory negligence to the jury was but an invitation to surmise, conjecture and speculation. 65A G. J. 8. Negligence § 253, pp. 830-832 (1966).

We are likewise satisfied that, assuming the proofs supported the conclusion that some action on decedent’s part had played a part in bringing the fire about, it would not have precluded a recovery for his injuries. There is no proof that decedent was forbidden the use of the solarium and it can hardly be claimed that he tied himself in the chair. The only other act which could have contributed to his injury would have been his smoking or attempting to do so. Defendant’s duty was based upon its contractual obligation to care for one who was no longer able to care for himself. The risk posed by his smoking was reasonably foreseeable as far back as the time of his admission. One of the purposes of his admission had been avoidance of that very risk. The duty of guarding against it was recognized and assumed by defendant and, in consequence, an order was given not to allow him cigarettes. Later, Mrs. Looby, as head nurse, made it a rule that decedent was not to be permitted cigarettes unless from an attendant who would light the cigarettes and remain with him while he was smoking. The duty owing to decedent under the circumstances exceeded that of the public at large and precluded a finding that smoking on the part of the decedent absolved defendant from the effects of negligence (in the sense of active wrongdoing) in the performance of its duty of protecting him against the effects of such action on his part. An institution whose employees negligently omit to put up the sideboards on the bed of an elderly or ill patient should not, in logic, escape liability because the patient did the very thing which the act omitted by its employees was designed to prevent.

Since we are without knowledge as to whether the jury’s verdict was based upon the absence of defendant’s negligence or a finding of decedent’s contributory negligence, there must be a reversal.

II

On the issue of active wrongdoing the trial judge charged, in pertinent part, as follows:

“The operation of the Poliak Hospital by the County of Hudson is a governmental function. It is the law that the County in the performance of the governmental function, is carrying orit a public duty and it is not liable for negligence in the performance of that duty, except upon proof of what is called active wrongdoing, chargeable to the County. * * * Someplace in the sequence of events that happened here, you must find, in order to hold the County liable, some act, that is, the kind of negligence that I described before as being an act of commission as distinguished from merely an action of omission. * !? * It is the law of this State that a County such as the County of Hudson in the performance of a governmental function is not liable for negligence in the performing of such a duty except on proof of active wrongdoing, that is, that kind of negligence which I am defining as an act of commission which is wrongful. * * * Now, it is not necessary that this negligent act of commission be the most proximate or the nearest in time, in a sequence of causes, to the injury sustained. It is sufficient if, in the sequence of causes there is such an affirmative wrongful act, somewhere in the sequence of causes, even though the cause nearest in the succession of events may be a mere omission to act.”

When a juror sought further clarification by inquiring, “[l]s it true that your Honor has directed the jury not to consider the question of negligence by omission?” the trial judge responded:

“Well, all I can say in further explanation beyond what I said in my main charge is that the defendant, County, cannot be held liable unless you are satisfied that it is guilty of a negligent act of commission, at least somewhere in the sequence of events that happened. Now, if you find that somewhere in the sequence of events there was such an act of negligent commission, then you may further consider whether there was a negligent act of omission. In other words, if you first find an act of negligent commission on the part of the County, its agent or servant, you may then consider whether the defendant, County then failed or omitted to do what a reasonable person would do under similar circumstances.” (Emphasis added)

Plaintiffs challenge to the charge on the issue of active wrongdoing is premised upon that portion thereof which precluded a verdict in favor of plaintiff in the absence of proof of “an affirmative wrongful act” on the part of defendant’s agents.

We are in accord with that portion of the charge which holds that in the operation of the Poliak Hospital, the county was engaged in the performance of a governmental function. See Allas v. Borough of Rumson, 115 N. J. L. 593, 594 (E. & A. 1935); Kress v. City of Newark, 8 N. J. 562, 572-73 (1952); 18 McQuillan, Municipal Corporations § 53.86, pp. 359-61 (1963); 26 Am. Jur., Hospitals and Asylums, § 13, p. 594 (1940); 41 C. J. S. Hospitals § 8, p. 341 (1944).

Before proceeding to discussion of plaintiff’s main argument on this point, we consider her contention that the rule extending immunity to municipalities in the exercise of governmental functions in the absence of active wrongdoing should be abrogated. We are mindful that the rule has been the subject of criticism for a variety of reasons. See Prosser, Torts (3d ed. 1964) § 125, p. 1004; 2 Harper and James, Torts § 29.6 (1956). See also Cloyes v. Delaware Tp., 23 N. J. 324 (1957); Weeks v. City of Newark, 62 N. J. Super. 166 (App. Div. 1960), affirmed per curiam o. b. 34 N. J. 250 (1961). It becomes increasingly difficult to reconcile a rule which holds a municipality liable for injuries flowing from its failure to repair a traffic light which had broken loose and was facing in the wrong direction, Bergen v. Koppenal, 97 N. J. Super. 265 (App. Div. 1967), certification granted 51 N. J. 183 (1968), with one which would preclude liability for injuries resulting from its failure to properly repair a washout at the same intersection caused by a storm, Buckalew v. Board of Chosen Freeholders of Middlesex, 91 N. J. L. 517 (E. & A. 1918). However, we incline to the view that as to the liability of defendant county here, until a different rule is promulgated by our highest court, we, as an intermediate appellate court, are bound to follow the law as laid down in Kress v. City of Newark, supra, 8 N. J., at pp. 573-574. This is especially so in the light of the policy exemplified by the modified form of immunity from liability which continues to be enjoyed by charity hospitals under N. J. 8. 2A :53A-7, 8.

The expression “active wrongdoing” appears to have been first used in Hart v. Board of Chosen Freeholders of Union County, 57 N. J. L. 90 (Sup. Ct. 1894), where the county was held liable for injuries resulting from its affirmative creation of an unguarded excavation in a public highway. The rule there laid down has been followed in a number of eases involving injuries resulting from municipally created public nuisances, usually obstructions in a public way entailing unreasonable risk of injury to those travelling thereon. See Milstrey v. City of Hackensack, 6 N. J. 400 (1951); Taverna v. City of Hoboken, 43 N. J. Super. 160 (App. Div. 1956), certification denied 23 N. J. 474 (1957); Hammond v. Monmouth County, 117 N. J. L. 11 (Sup. Ct. 1936); Fredericks v. Town of Dover, 125 N. J. L. 288 (E. & A. 1940); Newman v. Ocean Township, 127 N. J. L. 287 (E. & A. 1941).

In Allas v. Borough of Rumson, supra, the court extended the doctrine to defective construction on municipal property, i. e., a ramp constructed adjacent to the borough hall without a guardrail. Such construction, it found, constituted the wrongful act or positive misfeasance required for a showing of active wrongdoing on the part of the municipality. In Newman, liability was predicated upon a curb which had become broken and was alleged to have been improperly constructed many years before. Generally, if the original affirmative act of the municipality did not create the nuisance in the first place (as in Allas) it was followed by an act of omission (usually failure to inspect or repair) which was held to transmute the ..original condition into a nuisance (as in Milstrey and Newman). In Hartman v. City of Brigantine, 42 N. J. Super. 247, 259 (App. Div. 1956), affirmed 23 N. J. 530 (1957), we held that it was not required that all of the causative links in the chain of relationship between the municipality and the accident be comprised of affirmative acts in order for the result to be classifiable as affirmative wrongdoing, so long as there was one affirmative act in the sequence.

In Kress v. City of Newark, supra, the city was held liable to an employee of the Newark City Hospital whose injury had resulted, not from a single “wrongful act,” but from failure to instruct her in the performance of her duties. Although liability was premised upon the defendant’s affirmative act of putting the plaintiff to work before she had been adequately trained and instructed, it could as well have been put in terms of the omission to instruct her before she was put to work. In McAndrew v. Mularchuk, 33 N. J. 172 (1960), the municipality’s liability for the shooting of plaintiff by a police officer was predicated upon its omission to afford proper training to the latter, but in terms of having assigned him to police duty without proper training. The same result followed in Peer v. City of Newark, 71 N. J. Super. 12 (App. Div. 1961), certification denied 36 N. J. 300 (1962), where, in a suit to recover for the accidental shooting of plaintiff by an off-duty police officer, the only wrongdoing chargeable to the municipality was its omission properly to instruct the officer in the handling of firearms (he was required to carry his service revolver during off-duty hours). Again the omission Avas construed as active wrongdoing on the theory that the officer was assigned to duty without proper instructions.

In the earlier case of Cochran v. Public Service Electric Co., 97 N. J. L. 480 (E. & A. 1922), plaintiff was injured through a collision with a safety isle. It could not be said that the erection of the structure was a wrongful act since it was erected under proper authority. The court there held that the omission to keep it lighted together with the fact that it constituted an obstruction to travel, was sufficient to constitute positive misfeasance on the part of the City of Newark.

In the more recent case of Hayden v. Curley, 34 N. J. 420 (1961), the city had created another obstruction by planting a tree at a. point adjacent to the public sidewalk. As the tree grew so also did its roots, with the result that the sidewalk was broken and raised, causing plaintiff to trip and sustain the injury for which she sued. While the court, in reversing the judgment of dismissal in favor of the city, found that by plainting the tree the city had affirmatively created an obstruction in the public way, it held:

“Tlie jury could find it was reasonable [sic] foreseeable at the time of the planting that the tree in the course of its natural growth, which includes the growth and spreading of its roots, would probably disrupt the alignment of the sidewalk. Put another way, a jury could find it was reasonably foreseeable that the tree, if not properly inspected and maintained, would so affect the surrounding sidewalk as to develop from a potential to an actual public nuisance. By assuming sole responsibility for the maintenance of the tree, the city also assumed the duty of avoiding dangerous conditions attributable to its growth. There was evidence that the city failed to fulfill that duty. Under these circumstances, the jury could have reasonably found that the planting of the tree without subsequent adequate inspection or maintenance constituted active wrongdoing.” (at pp. 427-428; emphasis added)

It is difficult to conceive of the planting of a shade tree along the public street by a municipal government or a shade tree commission as a wrongful act.

In Zanca v. Conti, 73 N. J. Super. 23 (App. Civ. 1962), certification denied Zanca v. Village of Ridgewood, 37 N. J. 522 (1962), we reversed a summary judgment in favor of the Village of Ridgewood on the ground that the facts there alleged afforded a basis for Ridgewood’s liability to plaintiffs on the basis of its active wrongdoing. Plaintiffs’ decedents in that case were employees of a contractor engaged by the village to lay a sewer line. During the course of the work the joints of a nearby water main belonging to the village were observed to be leaking. Notwithstanding protests by the contractor that the leaking joints created an extra-hazardous condition, and a demand for their correction, the situation was not remedied and the water main broke, causing collapse of the excavation in which decedents were working and resulting in their death. We found it unnecessary to determine whether the city’s operation of the water system, of which the water main was a part, was proprietary or governmental since:

“[I]f governmental, it is clear that there is ample proof that it installed the water main and permitted it to deteriorate to such a dangerous state as to justify an inference that such neglect amounted to active wrongdoing.” (73 N. J. Super., at p. 36; emphasis added)

In Hoy v. Capelli, 48 N. J. 81 (1966), the court, in discussing an oft-quoted opinion of the old Court of Errors and Appeals in Vickers v. City of Camden, 122 N. J. L. 14 (1939), stated:

“There four traffic lights, one at each corner of the intersection, all went out of order, showing green for both highways at the same time. Both drivers involved relied on the light seemingly in his favor and a collision in the intersection resulted. The court broadly held that the failure to repair properly constructed lights which simply became out of order did not amount to active wrongdoing and so immunity barred the suit. (The opinion gives no indication whether the city knew of the malfunction or whether it had existed long enough to impose knowledge on it.) While we do not have to decide the question, it seems almost certain that the case would not he decided the same way today in view of the expanded concept of active wrongdoing previously outlined, assuming, of course, that a municipality had notice of the malfunction or a sufficient time had elapsed so that it could be chargeable therewith and that the resulting situation was a realistically causative factor in the occurrence giving rise to the asserted cause of action.” (48 N. J., at pp. 85-86 emphasis added)

In Bergen v. Koppenal, supra, the facts closely resembled those in Tickers. At a highway intersection one of the controlling traffic lights had broken loose and was facing in a different direction. There was proof that a township police officer had noticed the condition and reported it to police headquarters, but no effort was made to warn highway users of the damaged light or otherwise render it inoperative. A motorist coming upon the intersection and observing the green indication displayed by the loosened light proceeded to cross and was struck by a car proceeding on the highway, which, actually had the green light. In reversing the involuntary dismissal of the motorist’s action as against the municipality we held:

“In this era of expanding municipal tort liability the traditional proprietary-governmental test has fallen into disrepute. B. W. King, Inc. v. Town of West New York, 49 N. J. 318 (1967). Instead, the relevant inquiry is whether or not the municipality is under a duty to act, as distinguished from a situation where the taking of any action is discretionary, or the matter involves the making of a basic governmental policy decision. Hoy v. Capelli, supra; Visidor Corp. v. Borough of Cliffside Park, 48 N. J. 214 (1966); Amelchenko v. Borough of Freehold, 42 N. J. 541 (1964). Once such duty is found to exist, the municipality is held to the standard of reasonable action under the circumstances.” (97 N. J. Super., at p. 268).

In Jackson v. Hankinson and Bd. of Ed. of New Shrewsbury, 94 N.J. Super. 505 (App. Div. 1967), affirmed 51 N. J. 230 (1968), suit was brought ou behalf of au infaut pupil for loss of eyesight caused by. a pellet propelled at him by a fellow student while on a school bus. We there held that the requisites of active wrongdoing were satisfied by the affirmative action of the board of education in placing the group of children in a moving bus “under circumstances where concomitantly operative omissions by the board could produce a substantial risk of serious injury to any of the children.” In affirming our reversal of the order of the trial judge dismissing the action as against the board of education, the Supreme Court held that plaintiffs were under no obligation to establish active wrongdoing on the part of the board or its agents, but could recover upon a showing that the board had negligently failed to exercise “reasonable supervisory care”, for the safety' of students while being transported in the bus. See also Titus v. Lindberg, 49 N. J. 66, 78 (1967).

We find the correct rule developed by our eases to be that where a municipality embarks upon a course of conduct which creates a condition which reasonably requires specific precautions in order to avoid an unreasonable risk of harm to those affected thereby, the municipality may be held liable for its omission to take such precautions notwithstanding that such course of conduct is not itself a wrongful act or act of positive misfeasance on the part of the municipality or its agents. Gilday v. Hauchwil, 91 N. J. Super. 233, 249 (App. Div. 1966), reversed in part, on other grounds 48 N. J. 557 (1967), cited by defendant, does not hold to the contrary. There the protective measures allegedly omitted by the policeman were not such as were made necessary by any condition brought about by his municipal employer, and plaintiff relied upon the policeman’s signal to proceed as a “wrongful act” which justified a finding of active wrongdoing.

It follows that it was error to charge the jury that plaintiff was required to establish “an affirmative wrongful act” on defendant’s part as a prerequisite to recovery. That the challenged portion of the charge was prejudicial we have little doubt. The request for further clarification by one of the jurors confirms our conclusion.

The prejudicial effect of the challenged portion of the charge was in no wise eliminated by the fact that, at another point in the charge, the court instructed the jury that if it found that defendant’s employees were guilty of negligence in leaving decedent in the solarium without an attendant, that would constitute active wrongdoing. The conduct to be appraised by the jury was not confined to leaving the patient alone in the solarium—it involved leaving him tied in a chair and subject to the dangers posed by cigarettes and/or matches, all while unattended. Further, even had this portion of the charge been adequate, there was no withdrawal of the incorrect portion so that the jury would have been left to choose between the two. Cf. Ellis v. Caprice, 96 N. J. Super. 539, 549 (App. Div. 1967), certification denied 50 N. J. 409 (1967).

In the present case the hospital, with full knowledge of decedent’s condition ond of the danger posed by his smoking, adopted a policy which permitted him to do so upon the taking of certain precautions by its employees. Under the facts adduced, the jury could have found that the omission of its employees to carry out these precautions was the proximate cause of the accident. In so deciding, we rely in part on the jury’s right to disbelieve certain portions of the testimony adduced by defendant, in the light of all the attendant circumstances developed by the proofs as a whole.

By reason of the foregoing we find it unnecessary to pass upon any' additional contentions made by plaintiff, particularly her submission that the recent decision of B. W. King, Inc. v. West New York, 49 N. J. 318 (1967), is a signal of encouragement to disregard the whole active wrongdoing-governmental function ratio decidendi. See Jackson v. Kankinson and Bd. of Ed. of New Shrewsbury, supra, 51 N. J., at p. 235.

Reversed and remanded for a new trial as to plaintiff Hazel Kent as general administratrix of the estate of John F. Crosby, deceased.

       Viewed in another way, there was no proximate relation between any possible negligence on decedent’s part and his injury. Cf. Pangborn v. Central Railroad Co. of N. J., 18 N. J. 84, 100-02 (1955); Jurman v. Samuel Braen, Inc., 47 N. J. 586, 593 (1966).


source: Caselaw Access Project

author: Collester, J. A.- D.

license: Public Domain

text:
    IN THE MATTER OF THE ESTATES OF JULIUS KORTVELLESSY AND BARBARA KORTVELLESSY, DECEASED. DANIEL KORTVELLESSY AND JULIUS KORTVELLESSY, JR., EXECUTORS OF THE ESTATE OF BARBARA KORTVELLESSY, DECEASED, PLAINTIFFS, v. TANIA KORTY, DEFENDANT.
    Superior Court of New Jersey Appellate Division
    Argued April 8, 1968—Decided
    July 29, 1968.

      Before Judges Coneord, Collester and Labrecque.

      Mr. Theodore Bellet argued the cause for defendant.

      Mr. Emil Weisser argued the cause for plaintiffs.
   . The opinion of the court was delivered by

Collester, J. A.- D.

This is an appeal from an order enteerd in a summary proceeding before the Passaic County Court, Probate Division, denying defendant’s petition to revoke letters testamentary issued to plaintiffs by the Passaic County Surrogate as executors under the last will and testament of Barbara Kortvellessy, deceased, and to set aside a restraint barring defendant from collecting money due on a mortgage held by her on real property located in the City of Clifton.

Decision on plaintiffs’ motion to dismiss the appeal on the ground that it was not one from a final judgment or order was reserved pending oral argument. Defendant’s petition to set aside a judgment admitting a will to probate pursuant to B. B. 5:3-4(a) was denied by the County Court. This constituted a final judgment as nothing further re^ mained to be done with respect to the petition and accordingly the motion to dismiss is denied. See In re Costa, 45 N. J. Super. 424, 426 (App. Div. 1957).

The record reveals the following chronology of events leading up to the present litigation. On August 7, 1956 Julius and Barbara Kortvellessy, husband and wife, residing in Clifton, executed a joint will. Under its terms they bequeathed and devised their property to each other. It further provided that upon the death of the survivor, with the exception of a specific devise not here relevant, the residue of their property was to be divided equally among their six children.

On May 10, 1962 Alex Jakimjuk and Rose, his wife, executed a purchase money mortgage to Julius and Barbara in the amount of $15,000 on property located in Clifton. Julius died on May 27, 1965. The Passaic County Surrogate probated the joint will as Julius’ will on June 8, 1965 and Barbara was duly qualified as executrix.

On July 28, 1965 Barbara made a new will revoking the prior will in which she named her son Prank Korty, nee Kortvellessy, as sole beneficiary. On October 25, 1965 Barbara assigned the mortgage on the Jakimjuk property to Prank and Tania, his wife. In August 1966 Barbara moved to Pennsylvania to live with Prank and Tania in Forest City. She died in a convalescent home in Waymart, Pennsylvania on February 9, 1967. (We were informed at oral argument that the will made by Barbara on July 28, 1965 was probated in Pennsylvania on February 1, 1968.)

On July.19, 1967 Daniel and Julius Kortvellessy (stepsons of Barbara), who had been named as successor executors in the joint will executed by Barbara and Julius on August 7, 1956, filed a complaint for the re-probate of that instrument as Barbara Kortvellessy’s will with the Passaic County Surrogate. The complaint alleged that when Barbara died on February 9, 1967 she was domiciled in Clifton and resided at 15 Rosalie Avenue in that city. The surrogate admitted the will to probate and issued letters testamentary to Daniel and Julius on August 15, 1967.

On September 1, 1967 Daniel and Julius as executors (the plaintiffs herein), filed a complaint in the Passaic County Court for “discovery of assets” pursuant to N. J. 8. 3A :12-11, alleging that Frank and Tania Korty had in their posession assets of the estate which the executors had demanded be turned over to them. The complaint alleged that the Jakimjuk mortgage, upon which there remained due $11,-399.16, was an asset of the estate to which the six beneficiaries named in the joint will were entitled. It demanded the entry of a judgment requiring Frank and Tania to appear before the court to make discovery of assets belonging to the estate. Upon filing of the complaint the County Court issued an order to show cause directing Frank and Tania to appear on September 19 to make discovery as to their possession and knowledge of any personal property of Julius and Barbara Kortvellessy, deceased. It also restrained Frank and Tania from disposing of estate assets and from collecting interest or principal due on the Jakimjuk mortgage. It further ordered that Alex and Rose Jakimjuk pay any monies due or to come due on the mortgage to a receiver appointed by the court.

On August 28, five days before plaintiffs’ complaint was filed, Frank Korty assigned his one-half interest in the Jakimjuk mortgage to Tania. On September 26 Tania filed a verified petition with the County Court alleging that she was the sole owner of the mortgage; that Barbara had executed the second will on July 28, 1965 in which Prank Korty was named as the sole beneficiary, and that Barbara had moved to Pennsylvania in the summer of 1966 where she died on February 9, 1967. The petition alleged that when plaintiffs offered the 1956 joint will to the surrogate for probate they untruthfully stated the residence of the decedent Barbara Kortvellessy to be 15 Rosalie Avenue in Clifton, Dew Jersey, and further, that the joint will had been revoked by the later will. The petition requested that an order to show cause issue to vacate the restraints which had been imposed and to revoke the letters testamentary that had been granted by the surrogate to plaintiffs. Based on Tania’s petition an order was entered directing plaintiffs to show cause why the letters testamentary should not be revoked and the restraints imposed in the order of September 1 should not be vacated.

On the return day of the order to show cause the County Court judge held that he could not, in a summary proceeding, pass upon the issues raised in defendant’s petition and that such matters could only be resolved following a plenary hearing. However, rather than grant such a hearing when requested by defendant the judge denied the relief sought. In so doing the judge concluded that the decedent had been contractually obligated under the terms of the joint will not to dispose of property which had been left to her by her husband. He further stated he was denying defendant’s application to revoke the letters testamentary issued to plaintiffs because “there is something to dispose of here in New Jersey.” This appeal followed.

We are satisfied that the County Court judge erred in his ruling. A husband and wife' may enter into an agreement, based upon a valid consideration, to dispose of their combined estates by a joint or mutual wills. When the surviving spouse thereafter violates the terms of the agreement the remedy of persons aggrieved thereby is to bring an action in the Chancery Division of the Superior Court to specifically enforce the contract and impress a trust on the estate’s assets. Tooker v. Vreeland, 92 N. J. Eq. 340, 342 (Ch. 1921), affirmed sub nom. Tooker v. Maple, 93 N. J. Eq. 224 (E. & A. 1921); Minogue v. Lipman, 25 N. J. Super. 376, 389 (Ch. Div. 1953), affirmed 28 N. J. Super. 330 (App. Div. 1953); Sellyei v. Lecso, 28 N. J. Super. 593, 597 (Ch. Div. 1953).

In the instant case we are of the view that it was not appropriate for the County Court judge to decide whether the decedent was contractually bound by the joint will not to dispose of property which she had received under her husband’s will, whether considered from the standpoint of the plaintiffs’ discovery proceeding or that of defendant’s petition seeking, inter alia, revocation of plaintiffs’ letters testamentary for lack of jurisdiction. Cf. In re Estate of Virgilio, 71 N. J. Super. 89 (App. Div. 1961). Furthermore, the determination of the contract issue was not relevant to the issue before the court under defendant’s petition, namely, whether the surrogate’s judgment admitting the joint will to probate should be set aside because of lack of jurisdiction.

Moreover, the court’s conclusion that the probate judgment could not be revoked because real property, which was encumbered by defendant’s mortgage, was located in New Jersey cannot be sustained. This fact did not provide the jurisdictional basis on which the will was offered for probate. Probate was granted only because plaintiffs’ complaint for probate alleged that decedent was a resident of Clifton. In fact, the surrogate had no power to do otherwise (R. R. 5:3-3) because authority to probate a nonresident’s will is vested only in the County Court and the Superior Court. N. J. S. 3A :3~29. Also, it is undisputed that legal title to the mortgage was held by the defendant—-it was not owned by the testatrix at the time of her death.

Jurisdiction to probate a will is vested in the Surrogate’s Court only if the decedent resided in the county at the time of death. N. J. S. 3A :3-18. As used in the statute, “residence” and “domicile” are synonymous. In re Fisher, 13 N. J. Super. 48, 55 (App. Div. 1951). Where such jurisdictional requisite is found lacking, i. e., the decedent was not domiciled in this State, the judgment admitting the will to probate is void. 5 N. J. Practice (Clapp, Wills and Administration), § 140, p. 254 (1962) (and see cases cited at fn. 2). Moreover, a perjurious affidavit, purposely false and willfully given to the surrogate in order to secure probate of a will, alleging that decedent died while domiciled in New Jersey when in fact she was not, is a fraud upon the Surrogate’s Court. Cf. Gray v. Cholodenko, 34 N. J. Super. 190 (App. Div. 1955).

N. J. S. 3A :2—3 empowers the County Court to review a judgment entered by the surrogate and to grant relief therefrom. B. B. 5:3-4 provides that any person aggrieved by the judgment may move before the County Court to set aside or modify the same, and B. B. 5 :3-5 (a) directs that such an action shall be heard de novo.

Here the issue of decedent’s domicile at the time of her death was in dispute. Defendant, who had been restrained from collecting the proceeds of her mortgage, was a person who was aggrieved' by the judgment admitting the will to probate. Having applied to the court for a review of and relief from the surrogate’s judgment under B. B. 5:3-4, she was entitled to a de novo hearing under B. B. 5:3-5 (a). The County Court erred in not granting the hearing and denying her petition for relief. The order discharging the order to show cause is reversed and the case is remanded to the County Court to conduct a plenary hearing on the issue of decedent’s domicile at the time of her death. If, upon such a hearing, the court determines that she was not domiciled in this State, the surrogate’s judgment should be vacated on the ground of lack of jurisdiction. If the court determines that she was domiciled in this State, the court may transfer the issue of specific performance of her alleged agreement to dispose of the property as provided in the joint will to the Chancery Division of the Superior Court. In re Estate of Virgilio, supra, 71 N. J. Super., at pp. 94-95.

Since the undisputed evidence in the record shows that defendant is the legal owner of the Jakimjuk mortgage, the restraints barring her from collecting the proceeds thereof and the Jakinrjuks from paying over the same should be lifted.

Reversed and remanded for further proceedings in accordance with this opinion.


author: Matthews, J. S. 0.

text:
    EVALINE B. RAY CAMPBELL, PLAINTIFF, v. GLADYS A. RAY, ETC., ET AL., DEFENDANTS
    Superior Court of New Jersey Chancery Division
    Decided June 14, 1968.

      Mr. Jesse Moslcowitz for plaintiff.

      Mr. Murray Greiman for defendants (Messrs. Lifland and Greiman, attorneys).
   Matthews, J. S. 0.

This is an action instituted by plaintiff Evaline B. Ray Campbell against defendant Gladys A. Ray, as guardian of Lisa Ray, a minor, and as administratrix of the estate of Burt R. Ray, deceased, seeking to recover the proceeds of certain policies of life insurance on the life of decedent of which she was originally named beneficiary, and her statutory share of the estate of the said Burt R. Ray who died intestate.

Originally, plaintiff named as defendants Mrs. Ray, individually, Murray Greiman, counsel for the administratrix, the Metropolitan Life Insurance Company and the Equitable Life Assurance Society of the United States. The claims against these parties were dismissed on motion prior to the commencement of trial.

Although plaintiff Evaline Ray Campbell was the named beneficiary, the Metropolitan Life Insurance Company paid the proceeds of the two policies that it had issued on the life of the decedent totalling $13,276.76 to defendant Gladys Ray, in her capacity as administratrix of the estate of Burt R. Ray, deceased, since plaintiff had been convicted of second degree murder in the death of her husband, Burt Ray. The Equitable Life Assurance Society refused to make payment on the policy which it had issued until plaintiff executed a change of beneficiary designating her infant daughter Lisa as beneficiary in her place. Such a document was executed by plaintiff while she was detained at Clinton Reformatory for Women on March 29, 1963. Additionally, a document entitled “Release and Disclaimer” was executed by plaintiff under the same circumstances on April 8, 1963. On April 22, 1963 Equitable Life paid the sum of $20,000, representing double idemnity1 for accidental death on a $10,000 policy, and the sum of $366.58 as accrued interest from the date of death to the date of payment to Gladys A. Ray, as guardian for Lisa Ray.

Defendant, both in her capacity as guardian and as administratrix, resists the action instituted herein on the following grounds: (1) regardless of any other consideration, insofar as the Equitable policy is concerned plaintiff assigned any rights she may have had thereto and (2) plaintiff had murdered her husband and is, therefore, not entitled to the proceeds of the Metropolitan policies, despite the fact that she was the named beneficiary thereon, because of the doctrine recognized in this State that one may not benefit from his own wrong. See In re Estate of Kalfus, 81 N. J. Super. 435 (Ch. Div. 1963).

Plaintiff denies that she murdered her husband and, in any event, claims that at the time of the alleged act, concerning which she has no present memory, she was legally insane and incapable of forming the requisite intent to have committed the crime with which she was charged. Accordingly, she contends she is entitled to the proceeds of the Metropolitan policies mentioned herein and the widow’s statutory share of her husband’s estate. With respect to the Equitable policy, she claims that the change of beneficiary and the release and disclaimer allegedly executed by her are invalid because she lacked mental capacity at the time both were signed.

Plaintiff testified at trial that she has no present recollection of any of the events surrounding the death of her husband or her incarceration at Clinton Reformatory. In view of this fact, I have permitted into evidence the testimony given by plaintiff at her first trial under the indictment charging her with murder. Rule 63(3), Rules of Evidence (1967). The facts adduced at the first trial of plaintiff which resulted in her conviction for the murder of her husband are reported in State v. Ray, 43 N. J. 19, 21-24 (1964). That opinion reversed the conviction below and remanded the matter to the Hudson County Court for a new trial. The statement of facts hereinafter set forth serve to supplement the facts set forth in State v. Ray, supra, and describe the events that transpired subsequent to conviction. [The court here reviewed, the testimony.].

Dr. Litkey who treated plaintiff at Trenton was most familiar with plaintiff’s personality traits. While it is true that plaintiff was under stress at Clinton, it must be remembered that Dr. Litkey’s opinion was arrived at during his course of treatment of plaintiff and not as the result of an isolated interview held some years after the event in question. I find I must accept his conclusion that plaintiff’s psychiatric condition predated her confinement and that she was legally insane at the time she caused the death of her husband.

Having determined the question of plaintiff’s insanity at the time of the death of her husband, there remains for determination the factual question as to whether plaintiff was competent to understand the nature of her act in signing the Change of Beneficiary and Release of benefits on March 29 and April 8, 1963, respectively. It was Dr. Litkey’s opinion that plaintiff was not competent to execute eithei document on the dates in question. This opinion was concurred in by Dr. Sherman.'

I must conclude that plaintiff’s action in signing both the Change of Beneficiary and the Release forms was well within the response expected of the stimulus presented to her, i. e., a desire to see that her infant daughter was cared for.

The question remaining for consideration is one of law. Stated simply, it is as follows: Does a wife who murders her husband have a right to claim the proceeds of an insurance policy on his life where she is named beneficiary, and to inherit an intestate share of his estate where she was insane at the time that she committed the act? As thus phrased, this is a question of first impression in this jurisdiction.

We have had a number of decisions in this State in which the rights of a murderer to acquire property from his victim by devise, descent, as a surviving co-tenant, or as the beneficiary of a life insurance policy have arisen. In none of these cases, however, did the question arise as to the rights of a wrongdoer who did not possess the requisite mental capacity on which to base legal responsibility for his or her acts. A finé summary of the cases which have been adjudicated by our courts are found in Judge Pashman’s opinion in In re Estate of Kalfus, 81 N. J. Super. 435 (Ch. Div. 1963). These eases hold, briefly, that as a matter of equity the courts will not allow a wrongdoer to enrich himself as a result of his own criminal acts at the expense of an innocent person. In such cases, equity raises a constructive trust which it imposes on the property in question because of the unreasonable mode of its acquisition and thereby prevents the wrongdoer from unjust enrichment.

The question presented here has been answered in the decisions of courts in other jurisdictions. A reading of those decisions leads to the conclusion that there are three situations in which acquisition of property from one deceased is permitted to his slayer even though the events leading to the transfer of the property in question were initiated by a murder. Thus, it has been held that a wrongdoer may acquire property from his victim if the slayer is insane at the time of the commission of his act if the killing was accidental or in self defense, or if the wrongdoer was convicted of the reduced charge of manslaughter.

A decision most directly in point with the facts of this case is Holdom v. Grand Lodge, A. O. U. W., 159 Ill. 619, 43 N. E. 772, 31 L. R. A. 67 (1895), where the beneficiary of an insurance policy murdered the insured. The beneficiary claimed that he did not murder the insured so as to forfeit all rights of the certificate of insurance, although he did kill the insured while he (the beneficiary) was insane. After reviewing the tort liability of the insane and the liability of a life insurance company when the assured commits suicide while insane, the Court concluded without further reasoning that:

“* * * Where an insane beneficiary in a life policy kills the assured under such circumstances as would cause the killing to be murder if the beneficiary were sane, such killing does not cause a forfeiture of the policy, nor bar his right of recovery for the insurance money.” (43 N. E. at 774).

Subsequently, in Blair v. Travelers Ins. Co., 30 Ill. App. 2d 191, 174 N. E. 2d 309 (1961), the Appellate Court of Illinois reaffirmed the Holdom, decision, stating:

“The Court in the Holdom case had in view the ‘maxim’ against a wrongdoer profiting by his intentional wrong and also had in mind the humane rule that an insane killer is not a murderer. The reason for its decision was that there was no law and, therefore, no public policy in Illinois which forfeits the right of an insane beneficiary killer under circumstances which would be murder if the beneficiary had been sane.” (174 N. E. 2d at 211)

In In re Eckardt's Estate, 184 Misc. 748, 54 N. Y. S. 2d 484 (1945), a Surrogate’s Court considered the question of whether or not a wife may share in her husband’s estate, claim the proceeds of his insurance, and take sole ownership of the realty owned by the entirety, where she had been acquitted of the husband’s murder on the ground that she did not know of the nature of her act. After stating that there was no prior case law in New York and citing Holdom, the Court concluded that, since “legally the wife committed no wrong, not knowing at the time the nature and quality of her act” (54 N. Y. S. 2d at 490), she could receive the proceeds of the life policy, take sole ownership of her joint real estate, and claim as distributee of the estate. Similar results were reached: in Ohio State Life Ins. Co. v. Barron, 274 Mich. 22, 263 N. W. 786 (1935), where it was held that the single issue of fact concerns the sanity of the beneficiary because there would be no forfeiture of the right to claim the proceeds if the beneficiary was insane at the time the insured was murdered; and Shoemaker v. Shoemaker, 263 F. 2d 931. (6 Cir. 1959), where it was held that the beneficiary of a National Service Life Insurance policy who murdered the insured may not claim the proceeds “unless the beneficiary was insane at the time, or the killing was accidental, or was committed in self-defense.” See also, Simon v. Dibble, 380 S. W. 2d 898 (Ct. Civ. App. Tex. 1964).

The decision in United States v. Kwasniewski, 91 F. Supp. 847 (E. D. Mich. 1950), is not contrary to the decisions just cited. In that case, which involved an action in the nature of interpleader instituted to determine who had claim to the proceeds of a National Service Life Insurance policy, the principal beneficiary was dead and the contingent beneficiary was responsible for the death of the insured. The Court chose to disregard defendant’s acquittal of the killing on the defense of temporary insanity by making its own independent finding that the defendant had committed a wrongful, unlawful and intentional act. Thus, the Court concluded that although murder by an insane person is an exception to the rule of permitting recovery of benefits by a person who kills another and to whom such benefits would accrue only on the death of the victim, it could not find the defendant insane under the facts of the case.

The conclusion that an insane beneficiary of a life insurance policy may recover the proceeds and share in the estate even though he murdered the insured is supported by several analogous property decisions found in other jurisdictions. See e. g. Anderson v. Grasberg, 247 Minn. 538, 78 N. W. 2d 450 (1956) (joint tenancy); and Eisenhardt v. Siegel, 343 Mo. 22, 119 S. W. 2d 810 (1938) (reversion).

In applying the equitable doctrine that a person should not profit by his own wrong, a court of equity imposes a constructive trust whenever the legal title to property is obtained under such circumstances that it would be unconscionable for the recipient of the legal title to enjoy the beneficial interest and thus be unjustly enriched. When one who perpetrates a killing is insane, it is appropriate to inquire whether the basis upon which such a doctrine rests still exists. As a civilized society we recognize that insanity is a defense against punishment for crime. We recognize this defense because if the perpetrator of the alleged crime is mentally diseased to the extent that ho does not have the requisite intent to commit the crime, the act lacks an element constituting the crime which the law seeks to punish. So in a case where one benefits from an unlawful act, such as a killing, committed without intent because of disease of the mind, it cannot be concluded that he perpetrated the act with the end in view of profiting thereby. In such circumstances, if it was not his will that the act be perpetrated, it does not seem proper for the law to conclude that he has committed a wrong such as to bar him from receiving benefits which arise solely because of the death of an individual which in fact was not intended.

Since theré is nothing in our law with respect to this question, based upon the reasoning of the courts just cited, and the absence of any expression by the Legislature in this area, I conclude that it is not against the public policy of this State to permit one who has killed while insane subsequently to take a share of the estate of the deceased or the proceeds of a policy of life insurance on the life of the deceased of which the insane killer is beneficiary. Accordingly, I conclude that the plaintiff is entitled to the proceeds of the Metropolitan Life Insurance policies in the amount of $13,276.76 which were paid to defendant Gladys A. Ray in her capacity as administratrix of the Estate of Burt R. Ray, and to her statutory intestate share of the personal estate of her husband, Burt R. Ray. I further find, in the first instance, that plaintiff was entitled to the proceeds of the Equitable Life Assurance policy; however, in view of my finding that plaintiff had the requisite mental capacity when she signed both the Change of Beneficiary and the Release in favor of her daughter Lisa, the proceeds of that policy were properly paid to Gladys A. Ray, as guardian for Lisa Ray. No costs to either party.


author: Matthews, J. S. C.

text:
    SILCO AUTOMATIC VENDING CO., INC., A NEW JERSEY CORPORATION, PLAINTIFF, v. NELLIE HOWELLS, ET AL., DEFENDANTS.
    Superior Court of New Jersey Chancery Division
    Decided June 21, 1968.

      Mr. Richard Jon Gontant for plaintiff (Messrs. Gontant and Gontant, attorneys).

      Mr. Paul Colvin for defendants Howells and Al’s Cozy Inn, Inc.

      Mr. Sheldon Schiffman for defendant Eose & Harry James, Inc.
   Matthews, J. S. C.

Plaintiff sues defendant Al’s Cozy Inn, Inc. for breach of contract, seeking damages, and defendant Eose and Harry James, Inc. for the establishment of a constructive trust resulting from defendants’ alleged violation of N. J. 8. 124 :6-101 et seq. Defendant Howells has been joined as an agent of defendant Al’s Cozy Inn, Inc., and damages for the aforementioned breach of contract are sought against her in the event this court should hold that the contract in question was entered into by defendant Howells without corporate authority.

Plaintiff conducts a business which includes the extensive management and rental of various coin-operated machines, including cigarette vending, music and game machines. Plaintiff’s operating procedure involves what is described as an exclusive lease from a customer of space in the customer’s place of business (usually a tavern or restaurant) in which the particular machine is located. As “rent” for the use of such space, the proceeds of the machine are divided between plaintiff and his lessor at an agreed rate. Plaintiff ■ states that its business depends on the number of locations in which machines are placed, the volume of business therein, and the length of time for which it has the exclusive right to have its machine located in any particular place; the greater the length of time such right exists, the greater stability and profit the plaintiff can rely on. Plaintiff’s usual form of lease provides for a five-year term. ,Apparently it is the practice in the vending machine business, for the purpose of encouraging continued or more active operation of the business, to make loans to the various lessors and often to pay “bonuses” to said lessors, for the purpose of encouraging continued contractual relations.

During the period with which we are here concerned, defendant Al’s Cozy Inn, Inc. operated a tavern business at 507 So. 17th Street, Newark. On or about July. 19, 1965 defendant Nellie Howells, an agent for defendant Al’s Cozy Inn, Inc., entered into a written agreement with plaintiff in which Al’s Cozy Inn, Inc. agreed to lease space to plaintiff for the location of a cigarette vending machine in its place of business at the aforementioned location, for a period of five years. In return for the letting, plaintiff agreed to pay said defendant a commission on each pack of cigarettes sold through the machine. Thereafter, plaintiff installed a cigarette vending machine on defendant’s premises, supplied cigarettes therefor, and at fixed periods paid APs Cozy Inn, Inc., through defendant Nellie Howells, the agreed commission rate, and otherwise performed terms of its contract.

On or about August 33, 1965,.in consideration of a loan of $350 by plaintiff to APs Cozy Inn, Inc., the parties entered into a further written contract under which APs Cozy Inn, Inc. agreed to lease space to plaintiff for the location of a music machine in its aforementioned place of business for a period of five years. Under this latter agreement plaintiff agreed to pay a commission to APs Cozy Inn, Inc. based upon the use of the machine. Thereafter, plaintiff installed a music machine on the premises, supplied records therefor, and at stated intervals paid APs Cozy Inn, Inc. the agreed commission rate, and otherwise performed the terms of its contract. The loan has been completely repaid.

APs Cozy Inn, Inc. is a New Jersey corporation organized during 1958. It operated a tavern and held a liquor license from September 1958 to August 13, 1966, on which date the business and license were sold to co-defendant Rose and Harry James, Inc. During its existence APs Cozy Inn, Inc. never owned any real estate, it operated its business at 507 South 17th Street, Newark, under a month-to-month tenancy granted by a landlord who is not a party to this action.

Testimony taken during the trial establishes that plaintiff, upon learning that Rose and Harry James, Inc. had contracted to buy the tavern business from APs Cozy Inn, Inc., sought on several occasions to induce the principals of Rose and Harry J ames, Inc. to enter into leases for cigarette and amusement machines. Apparently, some negotiations were carried on, but plaintiff was unable to satisfy the new buyers and consequently Rose and Harry James, Inc. entered into cigarette and music leases with a competitor of plaintiff.

At the closing of the sale of the tavern business Rose and Harry James, Inc. received a bill of sale for various chattels included in the sale. Attached to the bill of sale was a form of affidavit which contained provision for a list of creditors, designed to satisfy the requirements of N. J. S. 13A :6-104.

In the space in which creditors would be listed, AFs Cozy Inn, Inc. placed the word “None.” Plaintiff contends that AFs Cozy Inn, Inc. violated the provisions of chapter 6 of Title 12A of the New Jersey Revised Statutes in that no notification was given of its existence as a creditor of that defendant. It also contends that defendant Rose and Harry James, Inc. had sufficient notice of the actual existence of its standing as a creditor of AFs Cozy Inn, Inc. so as to require that Rose and Harry James, Inc. be held a constructive trustee to the extent of the obligation owed by AFs Cozy Inn, Inc. to plaintiff under the aforementioned lease agreements.

As to actual notice on the part of Rose and Harry James, Inc., I find, based on the record before me, that the issue of fact must be resolved against plaintiff. While it may be true that the principals of Rose and Harry James, Inc. probably saw the cigarette machine and a juke box on the premises held by AFs Cozy Inn, Inc., I do not regard that as sufficient notice to the purchaser that plaintiff was probably a creditor of AFs Cozy Inn, Inc. In the testimony elicited before me, it is apparent that no mention was made by any principal of plaintiff who negotiated with the principals of Rose and Harry James, Inc. as to the existence of leases between AFs Cozy Inn, Inc. and plaintiff. All conversations and all negotiations between those parties had to do with the creation of new leases or loan agreements between plaintiff and the purchaser of the tavern business. If anything, such conduct would leave defendant Rose and Harry James, Inc. in a state of believing that no agreements existed between plaintiff and AFs Cozy Inn, Inc., or, at least, that any subsisting agreements were about to be terminated by reason of a sale. Eor this reason, I conclude that defendant Rose and Harry James, Inc. cannot be held as a constructive trustee, assuming the provisions of N. J. S. 12A :6—101 et seq. are applicable to this transaction. See N. J. S. 12A :6-104(3).

There is an additional reason why Rose and Harry James, Inc. may not be held as a constructive trustee under the provisions of chapter 6 of Title 12A. I cannot conclude that the sale of a business such as that which is the subject matter of this action, i. e., a tavern business, is covered under the bulk transfer provisions of the Uniform Commercial Code. There are no New Jersey cases directly on point in support of this conclusion.

N. J. 8. 12A:6-102(3) defines the enterprises subject to the chapter as “those whose principal business is the sale of merchandise from stock, including those who manufacture what they sell.” The official study comment appended to this section of the code states:

“2. The businesses covered are defined in subsection (3). Notice that they do not include farming nor contracting nor professional services, nor such things as cleaning shops, barber shops, pool halls, hotels, restaurants, and the like whose principal business is the sale not of merchandise but of services. While some bulk sales risk exists in the excluded businesses, they have in common the fact that unsecured credit is not commonly extended on the faith of a stock of merchandise.”

The New Jersey study comment also appended to this section indicates that there was no language in B. 8. 46:29-l, the prior Bulk Sales Act, which corresponded to N. J. 8. 12A :6-102(3). Our courts decided at least two cases under the prior law, Van Genderen v. Arrow Bus Lines, 107 N. J. Eq. 217 (E. & A. 1930), and Samuelson v. Goldberg, 13 N. J. Misc. 204, 177 A. 260 (Sup. Ct. 1935), which held that sellers covered under the act were only those whose business it was to sell stock or merchandise to intending customers who resort to the place where such stock is kept for sale to such persons. Van Genderen involved the sale of a fleet of buses by a transportation company, and Samuelson involved a poultry farmer.

Cases decided in other jurisdictions indicate that the sale in bulk of liquor, wine and cigars will be construed as within the scope of bulk sales laws as a sale of merchandise, depending upon the language used in the particular statute, while the sale of equipment comes within the act only if the statutes include “equipment” as well as merchandise. See Parham v. Potts-Thompson Liquor Co., 127 Ga. 303, 56 S. E. 460 (Sup. Ct. 1907); Kolander v. Dunn, 95 Minn. 422, 104 N. W. 371, 483 (Sup. Ct. 1905); Marshon v. Toohey, 38 Nev. 248, 148 P. 357 (Sup. Ct. 1915); Pritz v. Jones, 117 App. Div. 643, 102 N. Y. S. 549 (App. Div. 1907); Seattle Brewing and Malting Co. v. Donofrio, 34 Wash. 18, 74 P. 823 (Sup. Ct. 1904); Albrecht v. Cudihee, 37 Wash. 206, 79 P. 628 (Sup. Ct. 1905).

In Berger v. Berger, 271 Wis. 292, 73 N. W. 2d 503 (Sup. Ct. 1955), the court held that the Bulk Sales Law applied to merchants selling at retail and that it did not apply to items that are to be processed or to which labor is to be added prior to sale. The court concluded that a question of fact was presented in each case as to the nature of the business. It refused to take judicial notice of the manner in which a tavern business is operated, i. e., mixing drinks, as the addition of labor prior to sale.

In Pennsylvania there are a series of lower court cases which rely largely on the prior Pennsylvania Bulk Sales Act, all of which conclude that an operating tavern and restaurant business is subject to the prior bulk sales provision of the Uniform Commercial Code. The Pennsylvania decisions, which include Plumer v. Flynn, 86 Pa. Dist. & Co. R. 47 (1953); Lazofson v. Steiner, 66 Pa. Dist & Co. R. 179 (1948); Brooks v. Lambert, 10 Pa. Dist. & Co. R. 2d 237, 44 Del. Co. 153 (1957); Uhr v. 3361, Inc., 21 Pa. Dist. & Co. R. 2d 348 (1960), Miskiel v. Hide-Away Hut, Inc., 12 Bucks Co. L. J. 755 (1963); and Zinni v. One Township Line Corp., 36 Pa. Dist. Co. R. 2d 297, 53 Del. Co. 11 (1964), were all decided under the provisions of the old Pennsylvania - Bulk Sales Law, excepting Brooks, Uhr and Zinni, which construed the provisions of the Uniform Commercial Code by using pre-Code precedents. These latter three cases have been criticized in Bender’s UGG § 15.02 wherein it is stated:

“Clearly, this application was erroneous and Article 6 should have been held not to have applied to the transaction involved. The reason given for excluding these types of enterprises from the scope of Article 6 is that the particular creditors involved are not normally trade creditors. That is, they have not extended unsecured credit ‘on the faith of a stock of merchandise.’ They may well have ex-. tended unsecured credit but it would be with regard generally, to equipment rather than to inventory.”

The nature of the transactions under examination here' established beyond peradventure that plaintiff at no time relied upon the inventory of APs Cozy Inn, Inc. when it either entered into the agreements in question or advanced the loan under the second agreement. In support of this finding I observe that the closing statement used at the closing of the sale of the tavern business to Rose and Harry James, Inc., shows that out of a total purchase price of $16,738.23 only $185.73 was allocated for the dollar-for-dollar sale of the inventory on the premises.

On the basis of the facts before me and considering the authorities cited above, I conclude that plaintiff is not entitled to the protection of the provisions of N. J. S. 12A :6-101 et seq.

There remains the question of the liability, if any, of APs Cozy Inn, Iuc. to plaintiff because of the early termination or alleged breach, of the agreements in question. In Silverstein v. Keane, 19 N. J. 1, 12 (1955), our Supreme Court had before it an agreement substantially similar to the agreements presently before this court. The agreement there was characterized in the following language:

“Percentage lease agreements, which are analogous to the agreements involved in the actions under review, are ‘mainly used where location of the property is a very important part of its value,’ but ‘it is obvious that generally the lessor’s return will also depend upon the ability and energy of the lessee.’ I American Law of Property (1952), sec. 3.66, p. 321. Covenants to occupy and use the property and to use reasonable diligence to operate the business in a manner productive of profits or receipts have been implied in percentage leases. E.g., Seggebruch v. Stosor, 309 Ill. App. 385, 33 N. E. 2d 159, 161 (App. Ct. 1941). The implication of an obligation from the terms of the agreement considering what ivas written in the light of the attendant circumstances and conditions is a settled, principle in New Jersey law. See Casriel v. King, 2 N. J. 45, 51-53 (1949). Cf. William Berland Realty Co. v. Hahne & Co., 26 N. J. Super. 477, 485-489 (Ch. Div. 1953), modified 29 N. J. Super. 316 (App. Div. 1954). Cf. Zone Co.v. Service Transportation Co., Inc., 137 N. J. L. 112, 117-118 (Sup. Ct. 1948).” (Emphasis added)

In establishing the obligations between the parties arising out of the agreements before me I must, accordingly, view the provisions of these agreements in light of the circumstances attendant to and surrounding their execution. The provision contained in both agreements with which we are most interested, of course, is that calling for a term of five years. Coneededly, defendant Al’s Cozy Inn, Inc. is no longer in a position to perform the agreements, despite the fact that the five-year term provided in each had not expired at the time that the inability to perform arose.

It is apparent from the testimony and exhibits which have been adduced before me at trial, that at no time did plaintiff ever attempt to determine either on its own or by asking a representative of APs Cozy Inn, Inc., the term of the lease under which that corporation operated its tavern business at the premises aforementioned. Nor is there any indication that at any time did any representative of APs Cozy Inn, Inc. ever indicate the type or term of lease which that corporation held for the premises in question. As I have mentioned, the lease from the third-party landlord was month-to-month.

Similarly, when plaintiff determined that APs Cozy Inn, Inc. had negotiated to sell the tavern business to Rose and Harry James, Inc., no conversations were held with representatives of APs Cozy Inn, Inc. with respect to the continuance of the location of the cirgarette and music machines on the premises after the sale. To the contrary, representatives of plaintiff immediately, upon gaining knowledge of the sale, commenced negotiations with representatives of Rose and Harry James, Inc., seeking to have that corporation enter into similar arrangements with it. Mr. James testified at trial, as did a representative of plaintiff. Both indicated that the negotiations they had went to the creation of a relationship between Rose and Harry James, Inc. and plaintiff, and not to the continuance of the arrangements heretofore made between plaintiff and Al’s Cozy Inn, Inc.

The inference to be drawn from the factual context of this case is that plaintiffs main object in negotiating leases such as those before the court, is to gain exclusivity and, hopefully, stability with respect to the machines placed on a given premises. Exclusivity appears to be paramount. After obtaining exclusivity, plaintiff seems to be more or less at the mercy of its lessor with respect to the volume of business the machines placed on the premises will produce. If the tavern in which the machines are placed is not popular and does not draw business, the machines will not produce well. It is probably for this reason that no liquidation formitla, or liquidated damages formula, is contained in either agreement.

Significance must be given to the fact that neither contract mentions the sale or cessation of the lessors’ business during the life of the agreement. With respect to this observation, I point to the negotiations carried on by plaintiff with Rose and Harry James, Inc., once it had gained the intelligence that the tavern business was to be sold. These two facts raise a strong inference that the five-year term contained in the agreements was meaningless unless the lessor, here, Al’s Cozy Inn, Inc., remained in the tavern business.

Finally, I do not regard the provision of each contract which states that it “shall be binding on the heirs, devisees, successors and assignees of both parties” to be of any significance in reaching my conclusion. Clearly, defendant Rose and Harry James, Inc. may be placed in none of the classifications described in that phrase.

It is my conclusion that under the facts and circumstances existing here, both of the agreements in question terminated upon the sale of the tavern business from Al’s Cozy Inn, Inc. to Eose and Harry James, Inc. and, accordingly, plaintiff is not entitled to judgment against Al1 23s Cozy Inn, Inc. for breach of those contracts. No costs to any party.


author: Rosenberg, J. C. C.

text:
    JULIO LOPEZ, PLAINTIFF, v. CARIDA RODRIQUEZ LOPEZ, DEFENDANT.
    Superior Court of New Jersey Chancery Division
    Decided July 18, 1968.

      Mr. Raymond P. Vivino for plaintiff.
   Rosenberg, J. C. C.

(temporarily assigned). On July 10, 1968 plaintiff Julio Lopez appeared at a hearing before me seeking to annul his marriage to defendant Carida Rodriquez Lopez. It is clear from the pleadings that on or about May 4, 1966 a contract for marriage by proxy was entered into between said parties wherein plaintiff, a resident of New Jersey, and defendant, a resident of Havana, Cuba, executed and then forwarded between the respective countries documents of marriage while each remained in his own country.

Initialty, in order to resolve the status of these parties, it is first necessary to determine which law to apply. In Bucca v. State, 43 N. J. Super. 315 (Ch. Div. 1957), plaintiff, a resident of New Jersey, met his alleged wife on a visit to Italy and married there. Subsequently, on his return to this State he sought to bring his alleged wife here. Nowhere in the moving papers was there any evidence that plaintiff intended to remain in Italy and establish his domicile there.

“* * * It. m£ly; therefore, be inferred that it was the intention of these parties at the time of the ceremony in Italy to establish their family domicil in New Jersey. Therefore, the validity of the status of these parties should be determined by the law of New Jersey.” (at ,p. 321)

In the instant case the facts at the hearing disclosed that plaintiff, a resident of New Jersey, had met his alleged wife in Cuba and on his return here had asked her to marry by proxy, to which she agreed. The proxy was then executed! Thereafter, he had endeavored several times without success to arrange for her to come to New Jersey by telephoning her and withdrawing money for her passage.

Therefore, under the reasoning in Bucea, it may be inferred that at the time the proxy marriage was entered into, the parties intended to make New Jersey their family domicile. Consequently, the validity of the proxy marriage should be determined by the law of New Jersey.

Eesearch has failed to disclose any statute or case law in this State respecting the validity or invalidity of proxy marriages. In other states where common law marriages were recognized as valid, proxy marriages were also considered valid. 55 O. J. 8. Marriage § 6. In New Jersey, however, N. J. 8. A. 37:1—10 in effect invalidates all common law marriages which may have been declared valid according to common law principles and, in addition, provides that any marriage contracted after 1939 is invalid unless there is a valid license and solemnization. Dacunzo v. Edgye, 19 N. J. 443, 451 (1955).

Does a proxy marriage meet the statutory requirements of N. J. S. A. 37:1—10 and other appropriate sections of that chapter ? A clear example of a court invalidating a proxy marriage which did not comply with a statutory provision is found in an Ohio case, Respole v. Respole, 34 Ohio Aps. 1, 70 N. E. 2d 465, 170 A. L. R. 942 (C. P. 1946). In that case plaintiff, a resident of Ohio, entered into a proxy marriage in West Virginia. The court, in applying West Virginia law, stated:

“Since proxy marriage is not authorized by the statutory law of West Virginia and no exact ceremony is provided for celebrating the rites of marriage then the statutory law of West Virginia comprehend and requires a solemnization of the marriage ceremony as that term is generally understood and applied in law. Solemnization of marriage, or the celebration of the marriage ceremony or rites comprehends a personal appearance together by the contracting parties before one authorized by law to celebrate marriage ceremonies, and that the marriage ceremonies or rites be entered into and performed by the parties to such marriage together with the minister or other person authorized to perform such in the presence of each other and one or more witnesses, in order that the fact of the marriage contract may have due publication for the sake of notoriety and the certainty of its being made.”

Such reasoning is applicable to New Jersey; the failure of the proxy marriage to comply with the statutory requirements, such as solemnization, renders it subject to annulment by either party.

Assuming, arguendo, the validity of the proxy marriage, the marriage may also be annulled by reason of defendant’s fraud. Annulment of marriage on the ground of fraud is granted only when fraud is of an extreme nature, and goes to an essential of the marriage and where the proof is clear and convincing. Pisciolta v. Buccino, 22 N. J. Super. 114, 117 (App. Div. 1952). Yet it has been held that an unconsummated marriage is little more than an engagement to marry and may be annulled for. fraud which will render ordinary contracts voidable. Houlahan v. Horzepa, 46 N. J. Super. 583 (Ch. Div. 1957). In other words, a nonconsummated marriage may be annulled for less fraud than would be necessary if the marriage had been consummated. 10 N. J. Practice (Herr, Marriage, Divorce and Separation), § 27 (3d ed. 1963). Here, the testimony is sufficient to establish that the alleged wife fradulently intended not to consummate the marriage at its inception. More specifically, plaintiff testified that ever since the parties agreed to and then did in fact marry by proxy in 1966, defendant repeatedly refused to come to the United States—“she didn’t care.” Plaintiff also testified that there was never any consummation of the marriage. In addition, the two other witnesses, Euben Lopez and Louis Fernandez, revealed that they knew plaintiff for 2 to years, respectively and that they never saw defendant. Fernandez further testified that on one occasion he was present when plaintiff called defendant in Cuba asking her to come to New Jersey.

I am satisfied from the evidence of defendant’s repeated refusal to join plaintiff in the United States since the proxy agreement was entered into, that the marriage was not consummated, that defendant did, in fact, from the inception of the marriage form a fixed determination not to consummate the marriage and, therefore, committed such a fraud as to constitute a ground for annulment.

For either of the foregoing reasons, plaintiff’s annulment is hereby granted.