author: Cleaby, S. C. C.

text:
    IDA ROCKER, PLAINTIFF, v. CARDINAL BUILDING AND LOAN ASSOCIATION OF NEWARK, DEFENDANT.
    Decided April 30, 1935.
    For the plaintiff, John J. Siamler.

    For the defendant, Harold Simandl (John Warren, of counsel).
   Cleaby, S. C. C.

Plaintiff is a member of the defendant association and as such, the holder of five so-called “prepaid,” really “paid-up” shares of the defendant association, which shares are now known as “income” shares. Pamph. L. 1932, ch. 91; N. J. Stat. Serv. 1932, § 27-R (73), further amended Pamph. L. 1935, ch. 59; N. J. Stat. Serv. 1935, § 27-R (73). The said shares were issued to the plaintiff April 10th, 1928.

A copy of plaintiff’s certificate of shares is annexed to the complaint and reads as follows:

“This is to certify, That Ida Rocker is entitled to Rive Shares of stock of the Powerful Building and Loan Association of Newark, New Jersey, transferable in person or by attorney only on the books of the Association upon surrender of this Certificate.

The maturity value of these shares has been fully paid. An annual profit of six per cent per annum is guaranteed on these shares in lieu of all other profits, payable semi-annually from July 10th, 1928. These shares may be redeemed by this Association at any time on thirty days written notice, and payment of the maturity value thereof, with such guaranteed profits to the date of redemption, and the holder thereof have the right to withdraw these shares' at such maturity value and guaranteed profit to date of withdrawal upon giving 30 days written notice to1 this Association.”

The complaint alleges that the name of the defendant association was duly changed from Powerful Building and Loan Association to Cardinal Building and Loan Association.

It is alleged in the complaint that on June 1st, 1930, plaintiff filed with the defendant association her written notice of withdrawal and that payment thereof has been postponed by the defendant association for more than six months and that same has not as yet been paid.

The complaint sets forth that on the date of filing the said application for withdrawal, and at the expiration of six months thereafter, sections 49, 52, 73 and 74 of “An act concerning building and loan associations (Revision of 1925),” being Pamph. L. 1925, ch. 65, were in force.

Section 52 of the said Revision provides as follows:

“52. Payment of withdrawals.

Withdrawals from any such association shall be paid in the order in which the notices thereof shall have been received, but not more than one-half of the receipts of any one month shall be required to be used for the payment of withdrawal claims, without the consent of the board of directors, until the oldest of such claims then unpaid shall have been on file for a period of six months; but in no case shall payment be postponed for a period longer than six months from the date of such notice, and any member who has given the said notice may sue for and recover the withdrawal value of his shares in any such association in any court of competent jurisdiction, if the same is not paid in six months from the date of the giving of said notice of withdrawal.”

The suit in the case at bar was instituted September 10th, 1934. Before the institution of this suit, section 49 of the 1925 Revision was amended by Pamph. L. 1932, ch. 92, effective April 21st, 1932 (N. J. Stat. Serv. 1932, § 27-R (49) ; section 52 of said Revision was amended by Pamph. L. 1932, ch, 102; N. J. Stat. Serv. 1932, § 27-R (52), effective April 22d, 1932, and sections 73 and 74 of the said Revision were respectively amended by Pamph. L. 1932, chs. 91, 97; N. J. Stat. Serv. 1932, §§ 27-R (73) and 27-R (74), both effective April 21st, 1932.

Section 52 of the statute as amended in 1932, provides as follows:

“52. Payment of withdrawals.

Withdrawals from any such association shall be paid in the order in which the notices thereof shall ‘have been received, but not more than one-half of the total receipts of any such association in any month, as income on investments authorized by section twenty-six hereof, dues on shares pledged with such association to secure loans authorized by paragraphs II and Y of section twenty-six hereof and repayment of loans authorized by paragraphs II and Y of section twenty-six hereof shall be required to be used for the payment of withdrawals without the consent of the board of directors; provided, however, that if, in any one month the funds of the association required to’ be available for the payment of withdrawals together with any other funds made available for such purpose by its board of directors, are at any time insufficient for the payment of all withdrawals which have been requested, then the right of any withdrawing member to priority of payment of the withdrawal value of his shares in the aforesaid order, shall be only to the extent of five hundred dollars in any one month and if all withdrawing members have received payments in full or on account of their withdrawals to the extent of five hundred dollars in any one month and there is then a balance of such funds available for the payment of withdrawals then said order of priority of payment, to' the extent of five hundred dollars shall continue to apply until such balance is exhausted; and no withdrawals shall be paid if the funds available for the payment of matured shares are insufficient to pay all matured shares, the payment of which has been requested within thirty days after maturity; and members who have thus requested payment of their matured shares shall have a right to such payment prior to the rights of members who have requested payment of the withdrawal value of their shares. A member who has filed a notice or request for withdrawal shall not have the right to sue any such association to recover the withdrawal value of his shares or such part thereof as may not be paid, so long as the funds in the treasury of such association are applied as required herein.”

The complaint contains five counts. The first count is based upon a cause of action alleged to have accrued to the plaintiff under section 52 of the 1925 Revision, six months after the filing of her written application for withdrawal. The second count is based upon the alleged violation by the defendant association of the mandate of the 1932 amendment of section 52. The third count is based upon an alleged violation of Order Number One issued by the commissioner of banking and insurance March 14th, 1933, under the authority, as alleged, of Pamph. L. 1933, ch. 48; N. J. Stat. Serv. 1933, § 27-R (86), which it may be noted, has been amended by Pamph. L. 1933, chs. 166, 258 and 381; N. J. Stat. Serv. 1933 and 1934, § 27-R (86). The fourth count repeats the first nine paragraphs of the first count and alleges “that on the 8th day of May, 1931, the said defendant did agree in writing with the plaintiff that it would pay to the plaintiff one hundred ($100) dollars each, month beginning immediately until such time that the aforesaid prepaid certificate 'Exhibit A/ representing an investment of one thousand ($1,000) dollars would be paid in full” and “that the said defendant has never kept its promise in that regard and failed to make the monthly payments as aforesaid.” The fifth count is the same as the fourth count, except that it alleges a promise of the defendant made July 8th, 1931, to repay plaintiff’s withdrawal in monthly installments of $100, commencing on the first Tuesday of August, 1931.

Plaintiff moves to strike out the further amended answer and separate defenses to the first, fourth and fifth counts and for judgment on the fourth and fifth counts.

This motion is of the nature of a general demurrer and has opened up the pleadings and as the first faulty pleading must fall, it is appropriate to first examine the affected counts of the complaint to ascertain whether or not they respectively set forth legal causes of action. Defendant association does not move its motion to strike the complaint, reserved in its further amended answer, and the consideration of the affected counts of the complaint is caused by the plaintiff’s motion to strike the further amended answer and separate defenses thereto. The quality of the second and third counts of the complaint may not be considered on this motion to strike the further amended answer and defenses to the other counts, for the pleadings are only opened by the motion, as to the counts of the complaint, to which the answer and separate defenses sought to be struck, are responsive.

Giving first consideration to the first count of the complaint, it is apparent at the outset, that if the 1932 amendment of section 52 controls the procedure herein that, inasmuch as this count is based entirely upon the statutory privilege to sue contained in section 52 of the 1925 Eevision and does not allege the violation by the defendant association of the mandate of the 1932 amendment of said section, that the said count does not state a cause of action and must be struck. The plaintiff contends that the said amendment does not affect what she claims are her vested rights which accrued before its enactment and under the prior statute, and that, if the said amendment be construed as affecting her alleged vested right to sue, that it is unconstitutional and within the inhibitions of article 1, section 10 of the constitution of the United States and of section 1 .of the fourteenth amendment of said constitution, and of article 4, section 7, paragraph 3 of the constitution of the State of New Jersey, and further, that the said amendment so construed, cannot affect plaintiff’s vested rights as alleged in the first count of the complaint, because of the provisions of 4 Comp. Slat., p. 4971, § 3. The defendant association argues that plaintiff’s rights were not vested, that the amendment was procedural and that it is a valid exercise of both the reserved and inherent police powers of the state.

A right is not vested unless it is something more than a mere expectation based upon an anticipated continuance of present laws and must be a right or interest in property that has become fixed and established and not open to doubt or controversy (Leach v. Commercial Savings Bank, 205 Ia. 1154; 213 N. W. Rep. 517, 521); and rights dependent upon a statute and still inchoate, not perfected by final judgment or reduced to possession, are lost by repeal or expiration of the statute. Sutherland on St. Const., § 163; Cooley Const. Lim. (7th ed.) 359, 360; Louisiana v. Mayor, &c., of New Orleans, 109 U. S. 285; Morley v. Railway Co., 146 Id. 162.

Plaintiff’s claim is that of a withdrawing member of the defendant association. The privilege of withdrawal of capital from a mutual building and loan association, and the privilege of suit therefor do not exist except as they may be conferred by by-laws or statute. Fitzgerald v. State Mutual Building and Loan Association, 76 N. J. Eq. 137; Thirteenth Ward Building and Loan Association v. Weissberg, 115 Id. 487, and the statutory privilege may not be exercised to defeat the primary equity of all members of a mutual building and loan association of equal participation in assets. Fitzgerald v. State Mutual Building and Loan Association, supra. In fact, in a withdrawal suit under section 52 of the 1925 Bevision, instituted before the enactment of the 1932 amendment, the revered late Chief Justice Gummere refused to strike out an answer filed by a building and loan association, which sot up that the enforcement of the privilege of suit in that case would give the plaintiff therein a preference, would give to the plaintiff more than his proportionate share of assets and would deprive the remaining and continuing members of their right to proportionately share assets. See pleadings and orders in unreported cases of Meyer v. Creative Building and Loan Association, Richman v. Hercules Building and Loan Association and Goldman v. Hercules Building and Loan Association, Hadel v. TriCounty Building and Loan Association. See, also, pleadings and order of Circuit Court Judge Henry E. Ackerson in the Supreme Court case of Bloomberg v. Basic Building and Loan Association. In view of the foregoing authorities, it is clear that the right or privilege of plaintiff under the 1925 Revision, was not vested within the meaning of the aforesaid constitutional and statutory provisions.

The 1932 amendment of section 52 does not reduce the amount of plaintiff’s monetary interest in the defendant association. It is true that it provides a different scheme for the payment of withdrawals than that provided by the section which it amends, but the statutory changes merely related to the time, and not the quantum, of payment. This being so, the said amendment may be upheld as a procedural statute and binding upon all members of building and loan associations instituting suits for withdrawal after its enactment. See Hourigan v. North Bergen Township, 113 N. J. L. 143; Rader v. Southeasterly Road, &c., 36 Id. 273; Bronson v. McKenzie, 1 How. 311; McCrackin v. Hayward, 2 Id. 608; Newark Savings Institution v. Norman, 33 N. J. Eq. 436; Allen v. Allen, 34 Id. 493; Toffey v. Atchison, 42 Id. 182; Potts v. New Jersey Arms and Ordinance Co., 17 Id. 395; Potts v. Delaware Water Power Co., 9 Id. 592, 615; Wooton v. Pollack, 116 Id. 490; Klorman v. Westcliff Co., 12 N. J. Mis. R. 266.

The cited statute (4 Comp. Stat., p. 4971, § 3), is declaratory of the law and is of no aid to plaintiff. As the amendment being considered modifies the procedure for the enforcement of the withdrawal privilege, the terms of 4 Comp. Stat., p. 4971, § 3, as well as the fundamental law of which it is declaratory, require that the proceedings herein conform with the modified procedure required by the amendment which does not deprive any one of a remedy which he could use for his legitimate use or without injury to others. People v. Title Mortgage Guaranty Co., 264 N. Y. 69; 190 N. E. Rep. 153.

The facts in this case do not differ greatly from those before the court in the case of Fornataro v. Atlantic Coast Building and Loan Association, 10 N. J. Mis. R. 1248, the only difference being that in that case, plaintiff’s withdrawal application had been filed less than six months prior to the enactment of the 1932 amendment of section 52. As it is my opinion that the privilege to' sue under the Eevision was not so constitutionally vested as to become a property right, it is my further opinion that the said amendment is constitutionally binding upon the plaintiff herein as a valid exercise of the reserved police power to amend corporate charters and validly controls the procedure in any suit instituted after its enactment for the recovery of a withdrawal. Fornataro v. Atlantic Coast Building and Loan Association, supra.

I further hold that the 1932 amendment of section 52 is constitutional as a valid exercise of the inherent police power of the state, an essential attribute of sovereignty, presupposed by the constitution which must be construed accordingly.

Building and loan associations are gmisi-public instrumentalities and are of public utility and importance in fostering home ownership and systematic thrift. Our legislature’s recognition of this public service is found in the preambles and titles to Pamph. L. 1847, p. 172; Pamph. L. 1849, p. 227; Pamph. L. 1852, p. 83; Revision of 1877, page 92, General Statutes, page 33. This public service is also recognized by text writers and the courts. The following citations will suffice. Sundheim (2d ed.) 23, 24, § 7, p. 25, § 8; 9 C. J. 920; Bath Building and Loan Association (Me.), 136 Atl. Rep. 284, 286; State, ex rel. Bettman v. Court of Common Pleas, 124 Ohio St. 269; 178 N. E. Rep. (Ohio), 258; Treigel v. Acme Homestead Association (Louisiana Supreme Court decided March 4th, 1935, as yet unreported).

The building and loan statutes enacted for the protection of the savings of the public, are enacted under the inherent police power of the state. Krimke v. Guarantee Building and Loan Association, 112 N. J. L. 317; State v. Massillon S. & L. Co., 110 Ohio St. 320; 143 N. E. Rep. 894; Union Savings and Investment Co. v. District Court, 44 Utah 397; 140 Pac. Rep. (Utah) 221; Brady v. Mattern, 125 Ia. 158; 100 N. W. Rep. (Ia.) 359; In re Opinions of the Justices (Mass.), 181 N. E. Rep. 833, 836.

This state first assumed to regulate withdrawals by the passage of Pamph. L. 1899, p. 357, but not until the 1903 Revision did it regulate the method of paying withdrawals. Pamph. L. 1903, p. 457. Statutes regulating withdrawals evidence the public policy of the state with reference to the subject-matter. Latimer v. Equitable Loan and Investment Co., 81 Fed. Rep. 776. The legislature, in enacting the 1903 Revision, for the first time completely legislated upon the subject of building and loan associations and in that revision, enacted the then public policy of this state with reference to such associations. The design of this statute was to reform building and loan operation as conducted by the national associations of other states operating within this state (then emulated by some of the associations of this state), which was inimical to the best interests of the home-owning and wage-earning public of this state. Its designed object was speedily accomplished as the national associations could not operate under our act, with the same profit to management and underlying stockholders as theretofore. The rigid requirements of that revision as to investments, expenses and withdrawals, as well as other matters, forced all associations operating in this state, to operate on a truly mutual basis for the proportionate benefit of all members. Many amendments of the various sections of the said revision were enacted and in 1925, the legislature enacted another general revision of the building and loan statutes. This later revision has likewise been amended and supplemented in many respects prior to the passage of the 1932 amendment of section 52 and all such amendments -were made necessary in the opinion of the legislature, by the changing economic and social conditions affecting the operation of building and loan associations. Each revision, amendment and supplement evidenced the public policy of this state with reference to the subject-matter of such legislation.

Building and loan associations are incorporated under the said statutes as the instrumentalities for effectuating the public policy of the state enunciated in the said statutes. As the creatures of the state for such purpose, they must obey the mandate of the statute and, at all times make effective the public policy of the state, for the time being, as evidenced by the then existing statutes.

It is not to be presumed that in enacting the 1932 amendment of section 52, that the legislature was acting solely for the benefit of future members of associations. The economic conditions affecting building and loan associations were, at that time severe, as evidenced by the numerous amendments of the 1925 Revision enacted at that session of the legislature, which conditions were noticed by Judge Sooy in his illuminating opinion in the Eornataro case. At the time of the enactment of the said amendments unemployment was increasing; the growing needs of the saving public to repossess their savings occasioned unprecedented withdrawals; at the same time, for the same reasons occasioning withdrawals; borrowers were becoming delinquent and associations were acquiring real estate through foreclosure, which real estate was then unsaleable and under the then provisions of the statute, wealthy insiders with large share holdings, by filing early applications for withdrawal, in many cases, preempted the entire receipts of an association for many months to the exclusion of needy unemployed members filing later applications for withdrawal. The design of the legislature in enacting the amendment was to spread the funds available for withdrawal over a larger number of members and those most in need thereof, and also to prevent the wrecking of associations by numerous suits for withdrawals under the provisions of section 52 of the Revision, which would have resulted in the insolvency of associations which, in turn, would have made all sinking fund mortgage loans of home-owning borrowers of insolvent associations immediately due for their face amount, at a time when there was no mortgage money available for refinancing. Weir v. Granite State Provident Association, 56 N. J. Eq. 234; Harris v. Nevins, 68 Id. 684.

A real emergency existed affecting the homes and savings of over one million of the citizens of this state, which confronted the 1932 legislature and the building and loan legislation of that year was emergency legislation enacted for the protection of a large proportion of the citizens of our state. The emergency character of legislation is not to be determined solely by its recital of the emergency requiring its enactment or a limitation of the period it shall remain in force. Legislation may be emergent in character although it does not recite the emergency. Hourigan v. Township of North Bergen, supra; People v. Title Mortgage Guaranty Co., supra. The emergency requiring the enactment of legislation and characterizing it as emergent, are evidenced by the economic facts and circumstances existing at the time of and motivating its enactment, of which the court will take judicial notice. And an emergency statute, the life of which is not limited by its terms, may cease to operate upon the passing of the emergency. People v. Title Mortgage Guaranty Co., supra; and, in any event, such a statute may be later repealed or amended, as the emergency passes, intensifies or wanes.

All presumptions are in favor of the constitutionality of an act enacted by the votes of legislators who have sworn to uphold the constitutions of the state and of the United States.

In construing statutes, the authority of the court is exhausted when it has ascertained that the legislature had power to legislate in matters of police and it is not concerned with the policy of the legislation. Ascertaining the power to legislate, which is apparent in the case of Pamph. L. 1932, ch. 102, unless the statute appears clearly to' be arbitrary or unreasonable and without substantial relation to its object, the judgment of the legislature is final and the statute must be sustained. Williams v. Baltimore, 289 U. S. 36; Hodge v. Cincinnati, 284 Id. 335; Price v. Illinois, 238 Id. 446; McLean v. Arkansas, 211 Id. 539; Purity Extract and Tonic Co. v. Lynch, 226 Id. 192; Green v. Frazier, 253 Id. 223; C. B. and Q. Railroad Co. v. McGuire, 219 Id. 549; Stephenson v. Binford, 287 Id. 251; Sproler v. Binford, 286 Id. 374; McCray v. United States, 195 Id. 27. That the legislation in question was not arbitrary or unreasonable, is evidenced by an inspection of similar legislation cited in defendant’s brief, passed by many states of the union in 1931 and 1932, which changed the withdrawal privileges of then members. It is quite likely that the exercise of rights as claimed by the plaintiff herein, under the economic conditions affecting building and loan associations in 1932 and up to the present time, would have resulted in the insolvency of associations and the delayed and reduced payments to withdrawing shareholders of their proportionate share of assets. It cannot, therefore, be confidently asserted that the amendment before the court delayed plaintiff’s recovery of the withdrawal value of her shares. It was apparently the judgment of the legislature that the contrary would result through the preservation of the solvency of associations from attacks by an importunate minority desiring to withdraw from the common partnership enterprise, when economic' conditions made it impossible for associations to pay all withdrawals promptly. It was the protection of the interests of members of the association holding shares at the time of the enactment of said amendments, which motivated the legislators in enacting the amendment of those years, for in this state, as in other states, chaos and destruction of institutions and loss to home owners and savers would have resulted from the enforcement of rights under preceding statutes enacted under different economic conditions.

Public policy is not constant. It is ever changing, varying with circumstances caused by new economic and social conditions. Merrick v. N. W. Halsey Co., 242 U. S. 568; William v. Baltimore, supra; and a building and loan association, incorporated under a statute enacted under the police power, and subject to amendment under the same power, must effectuate at all times the public policy of such regulatory statutes in force at the time. As the creature o£ the statute for such purpose, it may not disobey, or, in any way, contravene, the statute. It must be kept in mind that the privileges of plaintiff were acquired under an amendable statute enacted under the inherent police power of the state and subject to future amendment under the same power and this was known by the plaintiff. Fornataro v. Atlantic Coast Building and Loan Association, supra.

The building and loan statute and the constitution of every association are constituent parts of the membership contracts of every member of a building and loan association. Both are amendable—the former by the legislature under its constitutional power—the latter by action of the members or directors in accordance with its terms. When the statute is amended, the membership contract is correspondingly amended and such statutory amendment becomes part of the membership contract. Constitutions may not be in derogation of the statute evidencing the public policy of the state and when the statute is amended, such amendment controls the rights and privileges of the association and its members and any existing provision of the constitution, in conflict with such amendment, becomes a nullity. The contract, therefore, which includes the amendable statute, is itself amended by an amendment of the statute and is not within the constitutional interdictions as the obligation of such contract or a remedy for its enforcement, is not impaired by such statutory amendment.

But the plaintiff asserts that upon the maturity of her withdrawal notice or, at the end of six months after the filing thereof, that she became a creditor and that as such her rights were not affected by the amendment of the statute, passed after the termination of her membership by her attempted withdrawal. It is true that withdrawing shareholders have been held to be general creditors (United States Building and Loan Association v. Silverman (1877), 85 Pa. 394), a rule quickly modified in that state (Christians Appeal (1883), 102 Id. 184), and now entirely discarded by the courts of Pennsylvania. Brown v. Victor Building and Loan Association, 302 Id. 254; 153 Atl. Rep. 349; Stone v. New Schiller Building and Loan Association, 302 Pa. 544; 153 Atl. Rep. 758; Publicker v. Potash Brothers Building and Loan Association, 159 Atl. Rep. 58; Weinroth v. Homer Building and Loan Association, 310 Pa. 265; 165 Atl. Rep. 28. It has also been held that they are gmsi-creditors (Heinbokel v. National Saving and Loan Association, 58 Minn. 340; 59 N. W. Rep. 1050); but this rule, in these times, works great hardship on needy withdrawing members from solvent but frozen associations, for they cannot share in profits or claim interest, from the maturity of their notices until the funds in the treasury enable the associations to pay their withdrawals when reached in the order provided by the statute or by law. Synott v. Iron Belt Building and Loan Association, 89 Fed. Rep. 292. This rule, it seems to me, defeats equal participation in assets for it deprives a withdrawing member, unpaid perhaps for a long period, of dividends on his shares representing his proportionate share of earnings, the right to which is an incident of share ownership. The better rule is that membership continues after withdrawal and until payment or, at least, until the association breaches the membership contract by failing to obey the mandate of the statute as to payment of withdrawals. This rule preserves solvency and that it is the Few Jersey rule is, I think, evident in the decisions of our courts in Fitzgerald v. State Mutual Building and Loan Association, supra; Meyer v. Creative Building and Loan Association, supra, and Richman, Goldman v. Hercules Building and Loan Association, supra. A mere attempt to withdraw cannot transmute the status of a member into that of a creditor. Mutual B. & I. Co. v. Frederick, 43 Ohio App. 270; 183 N. E. Rep. 114; affirmed, sub nom. Frederick v. Mutual B. & I. Co., 128 Ohio St. 474; 191 N. E. Rep. 729. For a full discussion of the status of a withdrawing member see Building and Loan Annals, 1932, pages 281, 298.

But even assuming for the purpose of argument solely, that plaintiff’s status is that of creditor (Pamph. L. 1932, ch. 102; N. J. Stat. Serv. 1932, § 27-B (52), constitutionally binds her because of the rules of law now to be stated.

Defendant’s brief cites numerous cases holding that contracts made with, institutions regulated under the police power, or contracts, the future regulation of which is appropriate under the police power, may not be enforced in the face of later enacted legislation, prohibiting their enforcement and that such statutes enacted under the police power do not come within the interdiction of the constitutional prohibition against the impairment of the obligations of contracts or of the fourteenth amendment of the constitution of the United States. Gold clause cases (Norman v. Baltimore and Ohio Railroad Co., 555 Ct. 407; Nortz v. United States, Ibid. 428; Perry v. United States, Ibid. 432), recently decided by the United States Supreme Court are the latest decisions enunciating these now well settled rules of law. These rules are applicable to building and loan statutes and are authority for the holding herein, that Pamph. L. 1932, ch. 102; N. J. Stat. Serv. 1932, § 27-R (52), amending section 52 of the 1925 Revision of the Building and Loan act, retrospectively construed, is a valid exercise of the inherent police power and is constitutionally binding upon the plaintiff herein. Treigle v. Acme Homestead Association, supra. This case deals with facts and statutes quite similar to those under consideration in the case at bar. The logic of that decision is apparent, is applicable to the present situation and is adopted by this court. See, also, Building and Loan Annals, 1932, pages 299, 307 for the first, and excellent, statement of the rules of law enunciated in the Fornataro and Treigle cases and upon which this decision is based.

The plaintiff contends that the 1925 statute in force at the times of her subscription for shares, withdrawal thereof and at the expiration of six months thereafter, gave her a vested contractual right constitutionally protected from subsequent legislation, and that the contract contained in the certificate itself, is likewise untouched byr the subsequent legislation. What has heretofore been said concerning contracts made unenforceable by later enactments under the inherent police power negatives this argument. It may also be noted that no legislature can curtail the power of its successors to make such laws as they deem proper in matters of police (Metro politan Board of Excise v. Barrie, 34 N. Y. 657; Boyd v. Alabama, 94 U. S. 645; Stone v. Mississippi, 101 Id. 814), and parties may not by their contracts, oust the state of its right to exercise its police power (Manigault v. Springs, 199 Id. 473, 480; Louisville and Nashville Railroad Co. v. Mottley, 219 Id. 467, 482; Atlantic Coast Line Railroad Co. v. Goldsboro, 232 Id. 548, 553; Denver v. Rio Grande Railroad Co., 250 Id. 241, 244; Union Dry Goods Co. v. Georgia Public Service Corp., 248 Id. 372; Dillingham v. McLaughlin, 264 Id. 370), and the gold clause cases, 55 Supreme Court 407 et seq.; Home Building and Loan Association v. Blaisdell, 290 U. S. 398; Erie Railroad Co. v. Public Utilities Commission, 89 N. J. L. 57; affirmed, 90 Id. 673.

Examples of the rights and privileges of members and creditors of building and loan associations under statutes and contracts falling upon the enactment of subsequent legislation under the police power, are found in State v. Massillon S. & L. Co., supra; Shore v. Lone Star Building and Loan Association, 71 S. W. Rep. (2d) 863; Dillingham v. McLoughlin, supra; In re Opinions of the Justices, supra; Hacker v. Farm and Home S. and L. Association, 6 Fed. Supp. 610; Lowell Co-Operative Bank v. Co-Operative Central Bank (Mass.), 191 N. E. Rep. 921; Egg Harbor Building and Loan Association v. Baake, 72 N. J. Eq. 603; Huber v. Home S. and L. Association (Wash.), 169 Pac. Rep. 979; Krimke v. Guarantee Building and Loan Association, supra; State, ex rel. Contonio v. Italo-American Homestead Association (La.), 149 So. Rep. 449; Iowa Central Building and Loan Association v. Klock (Ia.), 104 N. W. Rep. 352.

Plaintiff relies upon the decision in Intiso v. Metropolitan S. and L. Association, 68 N. J. L. 588, but this decision is not in point for the reasons that there the statute impaired contractual rights, while here it modified a statutory privilege and amended the membership contract; there it reduced the quantum of the recovery whereas here, it merely modified the remedy for the enforcement of a statutory privilege. Besides this, the right of the state to enact the legislation there in question under the police power, was apparently not called to' the attention of the court. The decision in that case was before judicial recognition of the extent of the police power and if this power had been considered by the court in that ease, it might have upheld the constitutionality of the legislation there questioned. The case cannot be considered as a precedent for the case at bar.

I have dealt at length with the questions involved because of their great public importance. The inherent police power of the legislature to legislate from time to time so as to preserve the financial institutions of our state and thereby protect the homes and savings of their members, depositors and policy holders (for what has been here said as to statutes affecting building and loan associations is applicable to statutes affecting banks and insurance companies), should be, unequivocally and judicially, settled. The protection of the economic system of the "state, as well as social justice for many citizens, whose homes and savings are involved, require it.

For the reasons hereinbefore expressed, the first count of the complaint must be struck, as it does not allege that the defendant association violated the statutory mandate contained in Pamph. L. 1932, ch. 102; N. J. Stat. Serv., supra, as to the payment of withdrawals. Complaints in similar cases have, on motions to strike answers, been struck by Circuit Judge William A. Smith in the unreported case of Horowitz v. Guarantee Building and Loan Association (Essex Gounty Circuit Court), and Circuit Judge Hewton H. Porter, sitting in the unreported Supreme Court case of Bucsi v. Longworth Building and Loan Association.

The fourth and fifth counts set up contracts to pay withdrawals in accordance with the terms of the contracts. As the statute concerning withdrawals evidences the public policy of the state, any contract contravening such public policy is void, for the parties cannot waive or contract away the provisions thereof or rights or privileges acquired thereunder. Latimer v. Equitable Loan and Investment Co., supra; Appeal of Powell & Doyle, 93 Mo. App. 296; Shapiro v. Mortgage Building and Loan Association (Pa.), 158 Atl. Rep. 573; Adams v. Union National S. and L. Association (Ind.), 100 N. E. Rep. 389; 102 Id. 145. Such contracts as alleged in the fourth and fifth counts providing for payments to a withdrawing member in installments not provided for by the statute, would give to such withdrawing member a preferential right of payment over other members, violate mutuality, contravene the statute and, likewise, are void. Publicker v. Potash Brothers Building and Loan Association, supra; Weinroth v. Homer, 310 Pa. 265; 165 Atl. Rep. 28; Conservative Homestead Association v. Dreyfuss, 175 La. 404; 143 So. Rep. 356.

For the reasons stated, the fourth and fifth counts do not disclose causes of action and should be struck.

Plaintiff has so' vigorously urged both in argument and brief, that the shares held by her are preferred stock and therefore, she has a preferential right as to payment, that some mention should be made- as to this point. Plaintiff relies largely upon the decision in the case of Newark Twenty-one Building and Loan Association v. Zukerberg, 115 N. J. Eq. 579. I cannot give that decision the effect contended by the plaintiff. Section 73 of the 1925 Revision and as amended by Pamph. L. 1932, ch. 91; N. J. Stat. Serv. 1932, § 27-R (73), defines all types of shares which associations of this state are authorized to issue and speaks of “their status as common shares.” Section 74 of the same Revision and its amendment (Pamph. L. 1932, ch. 97; N. J. Stat. Serv. 1932, § 27-R (74), provides that “no such association shall issue preferred or other than common shares.” Section 74 of the 1925 Revision further provided that “paid up shares shall only be surrendered and withdrawn on the same terms and under the same conditions as provided in the constitution for the surrender and withdrawal of installment shares” and the 1932 amendment of said section provides that “all classes of shares shall be surrendered and withdrawn on the same terms and under the same conditions as provided in the constitution and in this act, for the surrender and withdrawal of shares.” Section 49 of the said Revision and its amendments (Pamph. L. 1932, ch. 92; N. J. Stat. 1932, § 27-R (49), provides the procedure for withdrawal of all shares and the amount to be paid thereon and the losses to be shared by all members. Section 52 of the said Revision and its aforesaid amendment in 1932, provide the method of payment of withdrawals.

Prom a reading of the said statute, it is apparent that the holder of once called “paid up,” but now called “income,” shares, holds common shares, is a shareholder and is not a creditor. Fitzgerald v. State Mutual Building and Loan Association, supra. The quoted extracts of these enactments were not mentioned in the opinion in the Zukerberg case and their significance could not have been called to the attention of the court, and, in view of them, it is impossible to adopt the construction of the opinion in that case which is placed upon it by the plaintiff herein. Both under the 1925 Bevision and the stated amendments thereof, the withdrawal privileges of all members other than with respect to' the withdrawal of profits upon income shares, were identical, without regard to the type of shares held by them. As those holding income shares had withdrawn their profits at stated periods, there are no profits to be paid upon withdrawal, as the withdrawal profits to which they have agreed with the association, under the authority of section 74, have been withdrawn by them, the said permission being an exception to the preceding language of the same sentence that all shares shall be withdrawn under the same terms and conditions. The plaintiff as the holder of income shares has no rights as to withdrawal, or payment of withdrawal, different or superior to those of members holding other types of shares and her withdrawal privileges are, in all respects, controlled by the statutory provisions concerning withdrawals. 4 John Marshall Law Journal (No. 3) 53.

The foregoing conclusions make it unnecessary to consider the motion to strike the further amended answer and separate defenses to the first, fourth and fifth counts. The case will proceed to trial on the second and third counts of the complaint and the further amended answer and separate defenses thereto. An order may be presented in accordance with these views.


source: Caselaw Access Project

author: Porter, C. C. J.

license: Public Domain

text:
    Passaic County Circuit Court.
    IN THE MATTER OF THE APPLICATION TO VACATE ARBITRATION AWARD BY McLEAN PIECE DYE WORKS, A CORPORATION OF NEW JERSEY, APPLICANT, v. SAM VERGA, RESPONDENT.
    Decided May 2, 1935.
    For the applicant, Evans, Smüh & Evans (by John F. Evans).

    For the respondent, Harry Joelson.

   Porter, C. C. J.

The motion is to vacate an arbitration award. It appears that the respondent, Yerga, was in the employ of the applicant, McLean Piece Dye Works; that on February 26th, 1935, he was discharged from such employment by Garry Io'zia, one of the officers and general manager of the applicant, after an argument or disagreement between them. It further appears that in December, 1934, exact date not given, an agreement was entered into in writing between the applicant and the Federation of Silk and Rayon Dyers and Finishers of America, whereby among other things it is provided, in paragraph 6, that no worker shall be discharged without cause; that if an employe who has been discharged is of the opinion that the discharge was "unjust,” said employe shall have the right to have that question decided by a tribunal of two, consisting of a representative of the union and a representative of the employer, who, if unable to agree, shall choose “a disinterested person whose decision shall be final.”

It further appears that the respondent did, in pursuance with this agreement, appeal from the employer’s action and an arbitration hearing was held on March 6th, 1935, by two men duly selected for that purpose. These men were unable to agree and they appointed on that date George I. Grabow to act as umpire, whereupon he heard the witnesses produced by each party and rendered an award in writing, without date, but apparently announced his decision at the close of the hearing. In his findings he reviews the testimony and states his conclusions and reasons therefor. He finds as a fact that the respondent was guilty of improper conduct in the shop on the occasion in question, but that his motives were not improper and that his misconduct “was not sufficient to warrant his discharge.”

The clear meaning of this award is that the discharge was unjust.

Eighteen separate grounds are urged in support of the contention that the award is improper and should be vacated.

One group of reasons urged is that the award is defective on various technical grounds, viz., that it is contrary to the law and the contract, that no authority vested in the arbitrators or the umpire, that the award is not in proper form, and that the umpire was not properly appointed.

I think there is no merit to these contentions. The contract under which this arbitration was made is binding on the parties under the Arbitration act. Pamph. L. 1923, ch. 134. Moreover, the act provides that awards incorrect as to form may be modified or corrected “so as to effect the intent thereof, and promote justice between the parties.”

hior is there any merit in the contention “that the right of the employer to discharge an employe is not arbitrable under the law of this state, because the award could not be confirmed by order of any court nor can judgment be entered in conformity with the award. The very purpose of the act as contained in the first section is to make “valid, enforceable and irrevocable” any written contract of arbitration. There is no limitation in the act that arbitration is not to be valid and effective where the nature of the dispute renders the entering of a judgment unnecessary. Section 12 does provide that judgment "may” be entered, but nowhere is it mandatory that judgment be entered.

The remaining questions raised on the argument against the award go more to the merits of the matter.

It is claimed that Mr. Grabow was not a disinterested party and that he was biased. He was associated with Mr. Joelson, counsel for the Federation of Silk Dyers and Finishers, one of the parties to the contract. His association with Mr. Joel-son was not known to Mr. Iozia, he says in his affidavit, nntil after the award. Mr. Grabow and John Lyding, one of the arbitrators, both in affidavits deny the truth of that statement. They say that Mr. Iozia was told of Mr. Grabow’s association with Mr. Joelson and did not object. Be that as it may, it seems immaterial whether he objected to Mr. Grabow or not, because the arbitrators had a right to' select a third arbitrator or umpire as long as he was their choice and was disinterested. Of course, if Mr. Iozia was consulted and did approve of Mr. Grabow, knowing of his association with Mr. Joelson, any objection made by him after the award is entitled to scant consideration.

I have carefully considered the question of whether Mr. Grabow was interested and biased and have concluded that the applicant has failed to establish that fact. The hearing took place in Mr. Joelson’s office. Mr. Joelson was himself asked to act and refused. It seems unlikely that Mr. Grabow was selected by both arbitrators and in the presence of Mr. Iozia, and with Mr. Joelson probably there, also, or nearby, with deception practiced on Mr. Iozia as to who he was. If Mr. Iozia was not informed who he was and what his business or profession was, it seems highly improbable that he would not have inquired into those matters when he was introduced to him. It is not disputed that the two men were introduced and did converse before the selection.

The issue of fact that Mr. Grabow was called upon to decide was solely whether or not Verga 'had been unjustly discharged. In order to decide that question he inquired into the facts and circumstances leading up to the discharge. That he considered the facts and circumstances which were not very much in dispute is evident from the language of his award. Honest men might differ as to whether the discharge was just or unjust. The two arbitrators did in fact differ. Nor is the correctness of his award the issue, but rather whether his judgment was arrived at because of a whim, bias, prejudice, caprice or some other improper or unworthy motive. I am unable to find from the affidavits before me that he was so motivated.

The application to vacate the award is denied.


author: Egan, Y. C.

text:
    Marneil Realty Corporation, a corporation of New Jersey, complainant, v. Twin Brook Realty Corporation, a corporation of New Jersey, defendant.
    [Decided May 16th, 1935.]

      Mr. Frederick F. Riethmuller, for the complainant.

      Mr. Peter Bentley, for the defendant.
   Egan, Y. C.

This is a motion to strike interrogatories and the supplemental bill of complaint filed herein. The notice of motion, in effect, presents the following:

1. That at the time of the filing of the bill of complaint and supplemental bill, and the service of interrogatories, the charter of the corporation had been declared forfeited by a proclamation of the governor.

2. That the bill of complaint and the supplemental bill were filed by the corporation and not hy the trustees in dissolution.

3. That at the time of the filing of the bill of complaint, the supplemental bill, and the service of interrogatories, an order had been issued by this court restraining the complainant from exercising its franchises or rights.

It appears that by a decree of this court dated July 12th, 1932, the complainant was enjoined from the exercise of its franchises, or the transaction of any business. On December, 30th, 1933, the defendant gave its bond and mortgage to Leinow Holding Corporation in the sum of $20,000, which mortgage, afterward, was assigned to the complainant. On January 2d, 1934, the governor issued a proclamation forfeiting the charter of the complainant for non-payment of taxes. P. L. 193Ji. p. 795. On November 1st, 1934, the bill of complaint was filed to foreclose the mortgage because of default in the conditions thereof. The defendant, on November 20th, 1934, filed an answer to the bill. The complainant, on December 26th, 1934, filed its replication. An order of reference was duly issued, and the case was set down for a hearing on March 19th, 1935. The defendant, on March 6th, 1935, served a notice of motion to strike the bill of complaint because the corporation’s charter had been' forfeited for the non-payment of the state franchise tax; that motion was returnable March 19th, 1935. The motion was argued, and, at its conclusion, an order was signed denying the defendant’s application. The defendant was given leave to file an amended answer. On March 20th, 1935, the court allowed the complainant to file the supplemental hill.

Section 54 of the Corporation act (2 Comp. Stat. p. 1635) provides:

“Upon the dissolution in any manner of any corporation, the directors shall be trustees thereof, with full power to settle the affairs, collect the outstanding debts, sell and convey the property and divide the moneys and other property among the stockholders, after paying its debts, as far as such moneys and property shall enable them.”

Section 55 of the same act provides:

“The directors, constituted trustees, as aforesaid, shall have authority to sue for and recover the aforesaid debts and property, by the name of a corporation, and shall be suable by the same name, or in their own names or individual capacities, for the debts owing by such corporation, and shall be jointly and severally responsible for such debts, to the amount of the moneys and property of the corporation which shall come to their hands or possession as such trustees.”

The supplemental bill alleges the payment of the state franchise tax and the reinstatement of the corporation to the rights and privileges of which it had been deprived by the governor’s proclamation.

Section 53 of the General Corporation act provides as follows:

“All corporations, whether they expire by their own limitation or be annulled by the legislature or otherwise dissolved, shall be continued bodies corporate for the purpose of prosecuting and defending suits by or against them, and of enabling them to settle and close their affairs, to dispose of and convey their property and to divide their capital, but not for the purpose of continuing the business for which they were established. L. 1896 ch. 185 p. 295 § 53; Comp. Stat. p. 1634 § 53."

The dissolution of a corporation does not extinguish debts due or owing by it. McCarter v. Ketcham, 72 N. J. Law 247; 62 Atl. Rep. 693. The defendant maintains that the filing of the bill in the name of the corporation, rather than in the name of the trustees, as provided in section 55 of the General Corporation act, is a substantial error which precludes relief. It also contends that the filing of the supplemental bill showing that the status of the corporation had been changed since the filing of the original bill, could not give jurisdiction as of the date of the filing of the original bill, because the complainant was, at the time of the filing of the original hill, non-existent; and since jurisdiction was not acquired through the original hill, the supplemental bill could not overcome the weakness of, or supply what is amiss with the original bill. I do not believe the reasoning of the counsel for the defendant is in accord with the law, or practice of this court. Shipman on Equity Pleading (1st ed.) 292, says a supplemental bill may be filed under the following conditions:

“Where events had occurred since the institution of the original suit, creating new rights or relations, and thus calling for the introduetion of new matter in the original bill, when such matter referred to and supported the latter, without changing the rights or interests of those already before the court; or to correct or support the prayer of the bill.”

And on page 293 of the same work is said:

“When properly filed, it becomes part of the original bill, and the whole is taken as one amended bill.”

And in Dickinson’s Chancery Precedents, note, 50&, is the following:

“A strictly supplemental bill is always founded on facts that have occurred since the filing of the original bill. These may be necessary either to aid the complainant in obtaining the relief sought, or in obtaining new or additional relief. Allen v. Taylor, 2 Gr. Ch. 485. A supplemental bill should be used in preference to an original bill, whenever it can equally subserve the purposes of justice. Allen v. Taylor, supra.”

It has been held that: “A bill in the nature of a supplemental bill is not an addition to the original bill, but another original bill, to which a new defense may he made.” New Jersey Zinc Co. v. New Jersey Franklinite Co., 13 N. J. Eq. 322 (at p. 347).

In Edgar v. Clevenger, 3 N. J. Eq. 464, it was held:

“It is not the practice to reiterate substantially in the supplemental bill, all the charges of the original bill, hut to set them out by way of reference, and charge the new and additional facts by way of supplement.”

The facts expressed in the supplemental bill arose since the filing of the original bill; they support the latter, and do not change the rights or interests of the parties to these proceedings.

In Seymour v. The Long Dock Co., 17 N. J. Eq. 169, it was held:

“The allowance of amendments after issue joined, is a matter of indulgence to be granted in the discretion of the court.”

In Vaiden v. Edson, 85 N. J. Eq. 65; 98 Atl. Rep. 635, the principle was enunciated that:

“An additional right accruing to a complainant during the pendency of the suit should be set up by way of supplemental bill, and this may be done for the purpose of varying the relief as such newly-occurring facts may demand.”

In my opinion, complainant was absolutely within its right in filing the supplemental bill and in doing so, it proceeded properly.

The defendant by its motion .to strike admits the truth of all the material allegations in the bill, or bills, which are well pleaded. Loudenslager v. Pacific Imp. Co., 93 N. J. Eq. 218; 115 Atl. Rep. 752.

In Reade v. Broadway Theatre Co. (1926), 99 N. J. Eq. 282; 132 Atl. Rep. 477, Yice-Chancellor Berry held as follows:

“The business of these corporations, notwithstanding their dissolution by proclamation of the governor, has been and still is being conducted as usual under the management of the complainant. The corporations are not dead (Held v. Crosthwaite (1919), 260 Fed. Rep. 613; 171 C. C. A. 377); they merely sleep. They are practically in a state of coma from which it requires the exercise of no miraculous power to revive them. The procedure for their revival is plainly indicated by the statute.”

The federal court in construing the New Jersey statutes relating to forfeiture of corporate charters for non-payment of franchise taxes and subsequent reinstatement held in Held v. Crosthwaite, supra, that a claim against the officers of a company, based on the theory that they had continued to carry on its business after its charter had been declared void by proclamation, could not be maintained, because the company had remained in existence from the time when the proclamation was issued until the time when it had been reinstated by a second proclamation. By section 7, laws of 1905, chapter 259, page 511; section 146 Of the General Corporation act, it is provided that the governor may “upon payment by said corporation to the secretary of state of such sum in lieu of taxes and penalties as to them may seem reasonable * * * permit such corporation to' be reinstated and entitled to all its franchises and privileges, and upon such payment as aforesaid the secretary of state shall issue his certificate entitling such corporation to continue its said business and its said franchises.” The court, after stating that the question raised by this complainant had not been passed upon by the courts of New Jersey, continued thus :

“We think it clear that the charter may be and by the statute is repealed by the governor’s proclamation, without the necessity of any application to the courts. It seems to us equally clear that the legislature cannot have intended by section 7 that upon payment of taxes by the corporation the governor should create a new corporation. The legislature alone can grant corporate franchises, and no intention should be imputed to it to delegate the power to the governor. Indeed, such a delegation would be invalid. ‘Delegatus non potest delegare.’ Therefore, the second proclamation of reinstatement must be held to1 relate to the first proclamation of repeal, and the corporation must be regarded as having continuously existed so far as the state is concerned.”

In Dloss Realty Co. v. Schultz Brewing Co., 13 N. J. Mis. R. 389, the principle was laid down that:

“A motion to strike the bill carries with it an admission of the truth of the allegations in the complaint—just as a demurrer does.”

I believe that the questions propounded by the complainant in its interrogatories are material and should be answered. Magie v. Magie, 108 N. J. Eq. 483; 155 Atl. Rep. 609.

The defendant’s motions to strike the bills and the interrogatories are denied; and since the motion carries with it an admission of the material allegations of the supplemental bill which are well pleaded, I feel that the complainant is entitled to a decree upon those allegations. I shall accordingly advise.


author: Pee Curiam.

text:
    MARY ALEXANDER ET AL., RESPONDENTS, v. ANNA MARECH, APPELLANT.
    Submitted January 25, 1935
    Decided April 25, 1935.
    Before Bbogan, Chief Justice, and Justices Pabkeb and Bodixe.
    For the appellant, Edward A. Marhley and Charles W. Broadhurst.

    For the respondent, Elias C. Willman.

   Pee Curiam.

The case arises out of an automobile accident, the circumstances of which are not relevant to this appeal. The car that did the damage was owned by defendant’s brother, one Klein, and defendant had the privilege of using it. The only errors alleged are refusal to nonsuit and refusal to direct a verdict for defendant. The question is whether there was legal evidence for the jury that at the time of the accident the car was being operated by defendant’s servant on defendant’s business.

Defendant, as has been said, had the privilege of using the ear, which was kept at the garage operated by one Isidore Katerwitz. The defendant did not drive the car, and when she used it, she employed Katerwitz to do the driving. On the occasion now under examination she desired to go and see her mother, and called up the garage. The telephone was answered by an employe of Katerwitz named Clarkson. Defendant asked for “Izzy” meaning Katerwitz and Clarkson said he had gone to supper. Defendant said, “I want him to take me some place,” and hung up. Clarkson testified that he said he would take her, but that “she evidently had hung up” and “did not say anything.” Defendant also testified that she hung up, on saying that she “wanted him to take her some place.” Plaintiff undertook to impeach Clark-son’s testimony by proof of an inconsistent statement in another action, but of course such statement could not be used as evidence on the main issue.

However, Clarkson undertook to drive the car to defendant’s house, which was some blocks, away, to the southwest of the garage. His shortest route was south along Quitman street, then west five blocks on a convenient intervening cross street, then south on Stratford Place to defendant’s home. But he needed some cigarettes, and to get them at a store on West Kinney street, started north, instead of south, on Quitman street, and the accident occurred at the very first corner, while he was northbound.

Without taking time to discuss the border line cases on deviation in detail, we are of opinion that assuming the defendant heard and assented to Clarkson’s offer to bring the car, he was not operating it for her at the time of the accident. Hot only had he ignored the natural route, but was actually going away from defendant’s house at the time. In Shefts v. Free, 105 N. J. L. 577; 146 Atl. Rep. 185, the normal journey had ended. Here, we consider it had not begun.

But if we err in this regard, there was still no case for the jury, as the evidence altogether failed to show that defendant was in any way apprised that Clarkson was coming, let alone that she asked him to do so or even assented to his doing so. Quite conceivably she might have answered, if she had heard what he said over the telephone, that she did not know Clark-son and wanted “Izzy” or no one. The testimony failed to indicate Clarkson as anything more than a mere volunteer. There was consequently no case for the jury, and the refusal to control them was error, for which the judgment must be reversed to the end that a venire de novo issue.


author: Fee Cueiam.

text:
    THATCHER’S, INCORPORATED, PLAINTIFF-RESPONDENT, v. JOHN SCHNEIDER, Jr., DEFENDANT-APPELLANT.
    Submitted January 25, 1935
    Decided May 2, 1935.
    Before Justices Lloyd, Case and Donges.
    For the respondent, Charles S. Smith.

    For the appellant, William J. O’Hagen.

   Fee Cueiam.

This is a motion to dismiss an appeal from the District Court of the First Judicial District of Monmouth County for failure to settle the state of the case within the time fixed by the statute.

The following are the pertinent sections of the District Court act:

“213b. Such appeal shall be in the form of a case agreed on by both parties or their attorneys, and if they cannot agree, the judge being applied to by them or their attorneys, shall settle the case and sign it, and such case shall be transmitted by the appellant to the clerk of the Supreme Court and filed by him in his office.

“213e. Such case shall be agreed upon or settled within twenty-five days after such determination or direction, unless the judge shall grant further time for that purpose.”

The facts are that the judgment was entered on September 26th, 1934. Notice of appeal and bond were duly served and filed. On October 16th, 1934, appellant presented a state of case to respondent, which was returned on October 19th with the request that the case be settled by the court. Although no inaccuracy in the state of ease was pointed out and later respondent admitted it was correct, there arose in effect a situation where the parties could not agree and the case had to be settled by the court.

On October 17th appellant’s counsel secured an order from the District Court judge extending the time for settlement of the case to November 10th, 1934. The time would have expired on October 21st. On October 23d, 1934, appellant requested the judge to' settle the case, forwarding him a copy of the case as he had presented it to the respondent. The state of the case was settled by the court on January 18th, 1935, after letters had been written and the judge had been away on a vacation.

The situation thus presented is like that in Syring v. Zelenski, 77 N. J. L. 406, where Mr. Justice Bergen said:

“In this case the parties were not able to agree, and applied to the court to settle the case, and it does not appear that anyone was responsible for the delay except the court, from which it is proper to infer, without any evidence or record to the contrary, that the time was extended by it. The statute does not require that there should be an order entered extending the time for settling the state of the case by the court, and in the absence of anything to the contrary the presumption is that the proceeding was regular.”

We are of the opinion that the motion should be denied. Appellant’s counsel did all that he was called upon to do. While the control of the settling of the ease was still in counsel he obtained an order extending time; before the time expired he made proper application to the trial judge; he was not called upon to take any step to force the judge to act before the time expired. The very fact that the judge did not act and held the matter before him, is an indication that he did in fact further extend the time, which he had power to do.

The motion is denied, with costs.


author: Bobine, J.

text:
    VINCENT MURZDA, PROSECUTOR, v. ANDREW J. DUCH, JUDGE OF THE FIRST DISTRICT POLICE COURT OF TRENTON, RESPONDENT.
    Decided May 15, 1935.
    For the prosecutor, George Pellettieri.

    For the respondent, Romolous P. Rimo.

   Bobine, J.

(At chambers.) The prosecutor in certiorari was convicted in the Police Court of Trenton. The charge was that he had in his possession lottery slips, an offense denounced by subdivision c of section 1 of the Disorderly Persons act (Comp. Stat. 1910, p. 1764, §§ 57, 58) as amended in 1934. N. J. Stat. Annual 1934, § 59-48.

Section 58 of the Crimes act (similar to a provision of law existing in 1897), in part provides that any person who shall knowingly have in his or her possession any slip or memoranda in any way pertaining to a lottery shall be guilty of a high misdemeanor.

The constitution of this state, as amended in 1897, provided in part, that the penalty then provided fo'r the infringement of any of the gambling laws of this state should be in nowise diminished.

It was settled in Dombrowski v. State, 111 N. J. L. 546; 168 Atl. Rep. 722, that the 1933 amendment to the Disorderly Persons act, in so far as it provided that any one who should possess a number game slip should be deemed a disorderly person, was unconstitutional, because a number slip was after all a slip in a lottery game and the legislature was precluded from making that which was a high misdemeanor a mere disorderly act.

As was pointed out in Dombrowski v. State, supra, those who infringe the gambling laws may be as easily prosecuted for a high misdemeanor as for a mere disorderly act.

Since the constitution precludes the legislature from making any change which will in any way diminish the punishment provided by law, for the suppression of gambling, existing at the time the constitutional amendment was adopted, • the prosecuting authorities will be obliged to proceed under the statute and laws which existed in 1897, and may not avail themselves of the provisions of the Disorderly Persons act as amended in 1933 or 1934. N. J. Stat. Annual 1933, § 59-2, and 1934, § 59-48.

The conviction will be set aside.


author: GtOldberger, D. C. J.

text:
    Perth Amboy District Court.
    HERBERT LUNN, PLAINTIFF, v. CARL T. LEPPER, t/a LEPPER’S MOVING AND STORAGE COMPANY, DEFENDANT.
    Decided May 1, 1935.
    Por the plaintiff, Huyler Romond.

    Por the defendant, David I. Stepacoff.

   GtOldberger, D. C. J.

On or about the 24th day of May, 1933, the plaintiff entered into an agreement for the storage of his furniture with the defendant. The agreement set forth that the defendant was a warehouseman and owned and operated a warehouse at 283 Madison avenue, and that he would haul the furniture of the said plaintiff to said warehouse and receive the same into storage to be stored in a room by themselves and to be delivered to said owner upon the payment of the storage charges, &c. No reservations were made in the agreement giving the defendant the right to store furniture elsewhere.

Prom the testimony it appears that the said defendant in all of his literature set forth that he had a warehouse at said address and gave no intimation that he had any other place for storage. It further appears from the evidence that the advertised place consisted of a brick building, two stories in height, occupied by the defendant and was used as a storage on the second floor, and the ground floor for the sale of new furniture at retail. The plaintiff’s furniture was never stored in the place agreed upon, but was taken without the knowledge of the plaintiff to another warehouse, two stories in height, of hollow tile construction; the ground floor of which was used as a garage for the trucks of the defendant, and the upper floor for the storage of furniture in wooden coops. There appears to' have been no fire protection between the garage part of the building and the upper story. Sometime thereafter, a fire took place and partially destroyed plaintiff’s furniture, most of the damage being caused by smoke.

This suit is brought to recover for the loss of several articles unaccounted for after the fire, the value of the other furniture having been adjusted by the plaintiff’s insurance company, although the insurance policy covered the plaintiff at the intended place of storage.

It does not appear that the warehouseman was obliged to store the furniture in a place other than agreed upon, and even if it were so, it is undoubtedly the law that where a bailee expressly contracts, as in this ease, to keep property in a particular place, he will be liable for his failure to' do so, nor could he escape liability by alleging he was not negligent.

The weight of authority appears to support the rule that if the warehouseman bailor), without authority, deviates from the contract as to the place of storage or keeping of the property, and a loss occurs which would not have occurred had the. property been stored or kept in the place agreed upon, the bailee is liable even though he is not negligent. Lilley v. Doubleday, 7 Q. B. D. 510; Bradley v. Cunningham, 61 Conn. 485; 23 Atl. Rep. 932; McCurdy v. Wallblom Furniture Co., 94 Minn. 326; 102 N. W. Rep. 873; St. Losky v. Davidson, 6 Cal. 643; Butler v. Green, 49 Neb. 280; Scott-Mayer Commission Co. v. Merchants Grocer Co. (Ark.), 226 S. W. Rep. 1060; Mortimer v. Otto, 206 N. Y. 89; 99 N. E. Rep. 189; Mandell v. McKegney, 162 N. Y. Supp. 920. See 12 A. L. R. 1322, where all the cases appear to have been collected.

The rule which regards the bailee as assuming, by his breach of contract the risk of any injury which would not have resulted had he not committed such a breach, even though the place he moves the goods is equally safe and proper for the purpose, seems to be in accord with the general proposition which is stated in 2 Cooley Torts (3d ed.) 1332, 1333, as follows:

“Every bailee is bound, in his use of the property, to keep within the terms of the bailment. If he hires a horse to go to one place, but goes with it to another, he is guilty of a conversion of the horse from the moment the departure from the journey agreed upon takes place. It is immaterial that the change is not injurious to the interests of the bailor; it is enough that it is not within the contract. Contracts are matters of agreement, and even a more beneficial contract cannot be substituted for another without the mutual assent upon which all agreements must rest.”

The leading case is that of Lilley v. Doubleday, supra, where a bailee who had contracted to keep goods at a certain place, but who removed them to another place where they were destroyed by fire without his fault, was held liable for their loss to the bailor, who had taken out insurance on the goods as in the place first deposited. The decision is not based especially on the ground of loss of insurance but on the theory that the bailee by the unauthorized removal of the goods, assumed the risk and was liable for any damage that would not have occurred had they been left in the agreed place. It was said (Judge Grove):

“In said case the defendant was entrusted with the goods for a particular purpose and to keep them in a particular place. He took them to another, and must be responsible for what took place there. The only exception I see to' this general rule is where the destruction of the goods must take place as inevitable at one place as at the other. If a bailee elects to deal with the property intrusted to him in a way not authorized by the bailor, he takes upon himself the risk of so doing, except where the risk is independent of his acts and inherent in the property itself * * *.”

In the Mortimer case (supra), as well as in the case under consideration, it was insisted by the warehouseman that the destruction of the goods was caused by the fire, and not by the placing of the goods in a particular warehouse where they were destroyed; in other words the fire was the proximate cause of the destruction of the property and that the ■warehouseman was not liable, because the fire did not occur through any lack of reasonable care on his part. In overruling this contention the New York Court of Appeals said:

“The defendants as bailees were obligated to exercise such care in regard to the property as a reasonable careful owner of similar goods would exercise. * * * They by their express agreement subjected themselves to the additional obligation that they would store the goods in a specified place. No degree of care or vigilance, short of complete performance, would relieve them of that obligation. * * * A cause of damages which the parties seek to avoid by their contract cannot he said to be an independent of intervening cause, although there is not between it and the damages the direct relation of cause and effect. The plaintiff in this cause deposited their property with the defendant, and a regard for its safety and security while in the keeping of the defendant was obviously within their contemplation, and it may be justly assumed, known to the defendants. For the purpose of making effective that regard, the parties selected the precise place of storing. Fire is an ordinary and frequent agency of destruction and injury, and safetjr as against it was in the contemplation of the parties when they agreed that the property should be stored in the specified room. Had the property been there stored, the plaintiff would have assumed all the risks of injury to it except those ordinarily imposed by law upon the defendants as bailees. When, however, the property was burned in the building in which the defendants in fact placed it, the consequent lo’ss and damage was that which the parties apprehended and sought to avoid, through the written agreement that the property should not be there, and the defendant must therefore indemnify the plaintiff.”

Judgment will go for the plaintiff.


author: Gkosman, A. M.

text:
    Edna B. Flavell, complainant, v. William Watson Flavell, defendant.
    [Decided March 30th, 1935.]

      Mr. John Trier, for the complainant.

      Mr. Andrew J. Steelman, of Messrs. Linddbury, Steelman, Zinh if- Laffer ly, for the defendant.
   Gkosman, A. M.

This matter presents itself on exceptions to the report of the master to whom it was referred to ascertain and report the needs of the complainant, the assets and income of the defendant, as well as the financial condition of the respective parties. The report indicates that the complainant has an independent income of $800 per year; that the defendant, since the separation, has come into an inheritance amounting to approximately $110,000; that his income is approximately $6,000 per year and that in his opinion, the complainant requires the sum of $2,200 for her support and maintenance. To this report both parties have excepted, the complainant objecting to the master’s recommendation as being inadequate, while the defendant contends it is excessive.

The parties were married on December 25th, 1921, and lived together at Deal Beach and Bradley Beach, Monmouth county, in this state, until May 6th, 1932, when the defendant went to Beno, Nevada, where, on August 9th, 1932, he obtained a decree of divorce. Dor some considerable time thereafter the complainant was apparently satisfied with the situation. On December 8th, 1933, the defendant’s father passed away and he thereupon came into his inheritance. Following this, on January 18th, 1934, some eighteen months after the Beno decree was obtained, she initiated a suit for separate maintenance in this court and prayed that the Nevada decree be nullified. To this relief complainant is entitled and I so indicated upon the conclusion of the final hearing. The parties were unable to agree upon the alimony and thereupon at their request, the matter was referred to a master so as to' afford both sides an adequate opportunity to ascertain the wife’s needs and income and the husband’s faculties.

During the eleven years of their married life, the parties lived very humbly. If anything, the complainant was more advantageously situated financially than the defendant. Her testimony before the master indicates that about the time of the separation, $20 per week was sufficient to maintain both her and her husband, there being no children of the marriage. She states that this sum did not include certain items, such as coal. Everything considered, $30 per week was more than sufficient to maintain complainant and defendant, prior to the separation according to their standard of living. In view of this fact, the question that presents itself is how much is the complainant entitled to receive for her individual needs. If we are to be guided entirely by the complainant’s testimony, she requires the sum of $4.4 per week for this purpose. Why she should require an allowance approximately fifty per cent, greater for her individual needs than was necessary for the maintenance of both herself and her husband, prior to the separation, does not satisfactorily appear except it be upon the theory that the husband’s inheritance justifies it. On an issue of this nature, the husband’s faculties are not the sole criterion for the fixing of an allowance. We must necessarily take into consideration the wife’s requirements as indicated by her style of living prior to1 the separation. Generally, she is entitled to be supported and maintained on the basis of the standard mutually adopted by the parties and found satisfactory while living together. She cannot take advantage of the separation to require her husband to support her on a more luxurious scale than she had been accustomed. True, in this case, we have the added factor that since the separation, the husband has come into an inheritance, but there is nothing in the law which requires that a husband who finds himself unable to live harmoniously with his wife and separates, is to be treated as a vanquished foe and stripped of his possessions. Consideration will, of course, be given to the husband’s present financial worth but not to the degree contended for by the complainant. She is not entitled to an allowance of such nature as will enable her to obtain luxuries which prior to the separation were unthought of; nor will the allowance to bo made be so great as to enable her to save money therefrom. She is entitled merely to a sum sufficient to presently maintain and support her in the manner which for the eleven years of her married life satisfied her, plus a modest added allowance based on her husband’s increased affluence. The complainant contends that she is entitled to one-third of the defendant’s income and that in addition thereto, consideration must be given to what the defendant might earn if he applied himself to some gainful occupation. This, of course, is the general rule but it is not a rule of thumb to be followed blindly in every case. It is a standard adopted for the guidance of the court and may be disregarded or enforced as circumstances require. Each case must be dealt with upon its own merits. There is a marked distinction between permanent alimony allowed on divorce and the allowance made for separate maintenance. In the first instance, consideration must be given to' the fact that by the decree, the wife loses all interest in her husband's property, while this result does not attend the entry of a decree for separate maintenance. The general rule applicable to allowances for maintenance is well stated by Vice-Chancellor Learning, and affirmed by our court of errors and appeals, in Walsh v. Walsh, 88 N. J. Eq. 368; 104 Atl. Rep. 821:

“In making an order of that nature, I believe it to be the duty of a court to carefully limit the order to the demands of necessity as discerned by the condition and station in life of complainant and the ability of defendant to pay. An order for an amount calculated to render separation attractive to complainant, is in my judgment, unwarranted by a statute that favors cohabitation and contemplates only suitable support and maintenance during the period of separation * *

Considering the fact that the complainant and defendant while living «together maintained themselves satisfactorily upon an allowance of approximately $30 per week; after giving due consideration to the husband's inheritance, I believe the complainant should be well able to1 maintain and support herself alone on $30 per week. Her personal income amounts to $800 per year. The defendant will be ordered to contribute the sum of $700 per year towards .the complainant's maintenance. In addition thereto, the defendant will be directed to pay the master's fees, the amount of which, together with a suitable counsel fee to complainant’s solicitor, will be fixed upon the entry of the decree.

The complainant's exceptions are overruled. The defendant’s exceptions are sustained to the extent herein indicated. Submit a decree on notice.


author: Rogers, A. M.

text:
    Linwood Judd Webb, petitioner, v. Mildred Geraldine Webb, defendant.
    [Decided August 6th, 1934.]

      Mr. Vincent A. deBenedetto, for the petitioner.
   Rogers, A. M.

This is a suit for divorce commenced in March, 1934. The husband charges in his petition that he is a resident of the State of Yew York, that he was married to the defendant in this state in June, 1922, that she deserted him in April, 1926, and that the defendant has been a bona fide resident of this state ever since that cause of action arose down to the commencement of this suit. The defendant was personally served with process within this state, failed to answer, and the cause came on for hearing ex parte. A continuance was granted to permit the taking of further testimony to better corroborate the defendant’s alleged residence in this state.

It appears that, after the marriage, the parties resided in this state until the commencement of the alleged desertion. In April, 1926, the husband prepared a new home for his wife at Greenport in the State of Hew York, where he then went to live and has ever since resided. The wife, without legal justification, then refused to accompany him, and has ever since resisted his diligent efforts to resume marital relations. It seems that she preferred to remain in the locality in this state in which she had lived before marriage, where they had also cohabited after the marriage until the husband changed his domicile to Hew York to be nearby his new place of employment.

At the time the continuance was granted referred to above, I intimated to counsel my doubt that this conrt had jurisdiction over the subject-matter of this suit. Petitioner’s case proceeds upon the theory that the residential qualifications for jurisdiction prescribed by our statute are fully met, by the fact that the defendant has continued to be a resident of this state ever since she deserted her husband in April, 1926. Inasmuch as my judgment on that proposition is dispositive of the case, it will be needless to proceed further with the hearing. It may be assumed that the wife’s alleged residence, in fact, can be fully established.

In legal contemplation upon marriage, the wife’s domicile merges with and becomes that of her husband. It continues thereafter within her husband’s properly exercised control, and it is unchangeable by her except by his acquiescence or consent, or for such misconduct on his part inimical to the union, as justifies her in selecting another. Thompson v. Thompson, 89 N. J. Eq. 70; 103 Atl. Rep. 856; Rinaldi v. Rinaldi, 94 N. J. Eq. 14; 118 Atl. Rep. 685; approved in Floyd v. Floyd, 95 N. J. Eq. 611; 124 Atl. Rep. 625; Pennello v. Pennello, 97 N. J. Eq. 421; 128 Atl. Rep. 596.

When the husband in 1926 removed from this state to New York and his wife, without warrant in law, refused to accompany him and cohabit there, her domicile, nevertheless, thereafter became that of her husband and continued to be such. And that is so despite the fact that she may have continued to reside in this state, lie changed the matrimonial domicile lawfully to New York and she simply refused physically to accompany him. His act did not constitute misconduct on his part, nor justification for his wife then to select a separate residence in the sense of domicile. It cannot be said that she has maintained a separate domicile in this state with her husband’s acquiescence or consent, for that would not only bo contrary to the fact but dispositive of one of the essential elements of the alleged cause of action—obstinacy of the desertion. Such is the reasoning in Atherton v. Atherton, 181 U. S. 155.

It is urged that, though the complaining husband is a nonresident, this court has jurisdiction under section 6, subdivision (a) of our Divorce act of 1907 for the reason that personal service of process was made upon the guilty party within this state, and the latter has continued to reside here ever since the parties separated. That section of the statute does provide for jurisdiction based upon the residence of either party in this state where such service is made. But the quality of the proscribed residence must always be determined in light of the law defining residence of married persons, and the limitations and privileges pertaining thereto. To hold otherwise would give this court authority to alter the marital status in any case where personal service of process was made within this jurisdiction and in which one of the parties had resided here with bona fides the prescribed length of time regardless of whether this state was the situs of the marital res or status by virtue of such residence. That cannot be so. A suit for divorce necessarily involves the marital status. It is not strictly a personal action. Biddle on New Jersey Divorce Law {2d ed.) 32. In Thompson v. Thompson, supra, Vice-Chancellor Baekes dealt with the New York decree in a prior suit, refused to accord it recognition, and granted the husband a decree for divorce finding that the matrimonial status was in this state, and that our courts were in nowise bound by the New York judgment where the wife had evidently endeavored to establish a separate residence from her husband without legal justification. It is unnecessary to cite the many cases which thus deal with the efficacy of decrees gotten in sister states in so far as concerns the rights of citizens of our state where the matrimonial res has remained here. It is sufficient to say that I am not aware of any case in which our courts have recognized a decree of a court of a sister state altering the marital status where the complete matrimonial res has continued to remain in this jurisdiction. The situation, of course, is somewhat different where the parties have, in legal contemplation, acquired separate domiciles, and the res is in part found to be in another jurisdiction- as well as here. If our courts have thus dealt vigorously with such judgments of the courts of our jurisdictions, it is certainly logical, and quite essential, that the same rule of residence controlling the matrimonial status be applied to causes instituted in the first instance in our court relating to this status. It is to be concluded, therefore, that the quality of residence required by our statute is that which carries with it the complete res, or a part of it. The principle is elementary and fundamental.

If I had found the law in this state permitted a married woman at will to carry with her a part of the marital res when, independently from her husband, she determined upon establishing a residence separate from his, undoubtedly the husband here would be entitled to' relief. It would then appear that, after the separation, the wife’s residence continued in this state in all respects satisfied the jurisdictional requirements of paragraph 6, clause (a) of the Divorce act of 1907. There certainly seems to be no good reasoii that the law in such case should not be such in light of the modern policy tending to constantly broaden the rights of married women. But that must be the subject of legislative enactment, not judicial determination. It may be noted that P. L. 1927 ch. 168; Cum. Supp. Comp. Stat. 1980 § 124-19, provides that, for the purpose of voting, office holding, &c., the domicile of married women should be determined by the same facts and law as that of any other person. However, the legislature has not yet extended to a married woman, in respect to the marital domicile, like control of her residence free from the properly exercised authority of her husband.

I do not perceive that there are any distinctions of facts in the case sub judice from those in Pennello v. Pennello, supra, and Rinaldi v. Rinaldi, supra, which would warrant not applying here the jurisdictional principle decided in those cases. It is true that they were suits for nullity of marriage. The quality of residence required for jurisdiction in nullity suits cannot be differentiated from that required in suits for divorce under our statute. The statute simply prescribes a different period or term of residence. The controlling feature of either of these types of suits in respect to the quality of residence prescribed is that they each alter the marital status.

Nor is there any distinction to be found in the fact that in each of the last cited cases the petitioner had come into this state and acquired a residence, and that the defendant was a non-resident who had remained at the matrimonial domicile, and was brought into this court as an absent defendant pursuant to the provisions of our Divorce act. It was decided in those cases, as here, that the petitioner-wife could not acquire a separate matrimonial domicile within this state for the purpose of giving jurisdiction under our statute, except with the acquiesence or consent of the husband, or because of such misconduct on his part as justified her in maintaining such a separate residence. The same factors controlling the ability of a wife to acquire a separate matrimonial domicile from her husband are present in this case;, and it is equally evident in this case that she has not had such a separate domicile within this state at any time since the separation by virtue of which this court would have any jurisdiction to decree relief for the petitioner upon the alleged desertion. Petition will be dismissed.


author: Perskie, J.

text:
    THE CITY OF NEWARK, A MUNICIPAL CORPORATION, AND MICHAEL P. DUFFY, DIRECTOR OF THE DEPARTMENT OF PUBLIC SAFETY, PROSECUTORS, v. CIVIL SERVICE COMMISSION OF THE STATE OF NEW JERSEY, AND SAMUEL J. GODDIESS, RESPONDENTS.
    Argued January 16, 1935
    Decided April 15, 1935.
    Before Justices Heher and Perskie.
    Por the prosecutors, Frank A. Boetiner (Thomas M. Kane, of counsel).
    Por the respondent Civil Service Commission, David T. Wilenlz, attorney-general.
    Por the respondent Samuel J. Goddiess, Simon L. Fisch.

   The opinion of the court was delivered by

Perskie, J.

This writ seeks to review the action of the civil service commission in setting aside the dismissal of the respondent Samuel J. Goddiess as a patrolman of the police department of the city of Newark and ordering his reinstatement.

Again it becomes necessary to point out that the record submitted does not contain a judgment, which should set out a statement of the evidence upon which it is based. Freudenreich v. Mayor, &c., Fairview, 114 N. J. L. 290; 176 Atl. Rep. 162, and cases therein cited. And there is doubt whether the transcript of the testimony is properly before us as authorized by chapter 208. Pamph. L. 1914, p. 419; Kerr v. Atlantic City, 108 N. J. L. 219; 157 Atl. Rep. 559. While we have concluded to dispose of this case on the merits we desire to point out, in furtherance of proper practice, that the court cannot be deprived of a proper record by stipulation of respective counsel. Advance Dev. Corp. v. Mayor, &c., Jersey City, 105 N. J. L. 234; 143 Atl. Rep. 447; Ford Motor Co. v. Fernandez, 114 N. J. L. 202; 176 Atl. Rep. 152.

It appears from the testimony, that the respondent is a married man, living with his wife and six children; he is devoted to his family and bears a good reputation. He has been a patrolman since July, 1929. On January 20th, 1934, he was charged with having illicit sexual intercourse with one Y. B., during the month of July, 1933; at the trial the date was changed to September, 1932. It will serve no useful purpose to detail the proofs. Suffice it to say that if the respondent’s action with the complaining witness were true, it indicates a moral degeneracy of the lowest type.

The civil service commission, having heard the witnesses, and observed their demeanor, is best able to determine the probative force and value to be given to their testimony.

The time intervening between the date of the alleged offense and the date of the complaint; the character and criminal record of the complainant and some of her corroborating witnesses; the uncertainty and indefiniteness of the material proofs, leaves us unconvinced of the truth of the charge. The proofs do not ring true.

We are not willing to brand respondent guilty of charges which would effect his ostracism from friends, associates and all decent society (O’Brien v. O’Brien, 103 N. J. Eq. 214; 142 Atl. Rep. 898; affirmed, 105 N. J. Eq. 250; 147 Atl. Rep. 911), unless the proofs clearly warrant such a result. The findings of the commission must, of course, be based on competent evidence; it cannot determine substantial rights from hearsay testimony. Friese v. Nagel Packing Co., 110 N. J. L. 588: 166 Atl. Rep. 307. What the grand jurv did or did not do about this case was purely hearsay. But the unfortunate reference thereto in the opinion of the commission, does not indicate that the rights of the parties were determined merely because the grand jury dismissed the complaint. And, moreover, prosecutors stipulated the admission of this report without objection. They cannot now be heard to complaint about it.

We have carefully considered the proper and legal proofs before the commission and are of the opinion that they fully support the result reached; and we so find. The jurisdiction of the commission, in the premises, is no longer open to debate. City of Newark v. Civil Service Commission, 114 N. J. L. 406; 177 Atl. Rep. 121.

The writ is dismissed, with costs.


author: Pekskie, J.

text:
    JOHN HOMMEL, PROSECUTOR, v. TOWNSHIP OF EAST HANOVER, A MUNICIPAL CORPORATION IN THE COUNTY OF MORRIS, RESPONDENT.
    Submitted January term, 1935
    Decided April 15, 1935.
    Before Justices Heher and Perskie.
    For the prosecutor, Thomas Brunetto.

    For the respondent, Harry Amsterdam (Abraham M. Herman, of counsel).
   The opinion of the court was delivered hy

Pekskie, J.

Section 1, of an ordinance of the respondent township, entitled “An ordinance concerning garbage disposal” provides: “no person, firm or corporation shall dump, deposit or place in the township of East Hanover any garbage collected outside of the township of East Hanover.”

Prosecutor was charged with and convicted of having violated the aforesaid section of the ordinance, in that on the 12th day of October, 1934, he did dump, deposit and place garbage in the township of East Hanover, collected outside Of the township of East Hanover. This writ of certiorari seeks to review the judgment of conviction.

Prosecutor assigns thirty-one purported reasons in support of his claims that the conviction should be set aside. Many of these reasons are merely restated in the prosecutor’s brief without argument or supporting authorities. A reason so treated is a reason abandoned; it is not considered. There is, however, one substantial and meritorious reason assigned and argued as a result of which the conviction must be set aside.

It is the settled law that in a summary proceeding on a penal ordinance nothing will be presumed or intended in favor of the complaint, or of a conviction thereon. Owens v. Camden, 6 N. J. Mis. R. 279; 141 Atl. Rep. 24; Haviland v. Egan, 11 N. J. Mis. R. 799; 168 Atl. Rep. 171; McKenna v. Paterson, 11 N. J. Mis. R. 945; 169 Atl. Rep. 287.

Under the complaint as charged it was necessary for the respondent to prove first, that garbage was collected outside of the township, and second, that it was deposited in the township.

These essential facts were not proved. While there was proof that the prosecutor entered the township in question with garbage in his truck, there was no evidence that the garbage was collected outside the township. The only witness to testify in the case stated: “Q. Did you see any of this garbage placed in the truck, A. Ho. Q. The only knowledge you had of this garbage was when }rou first saw this truck, that is right, isn’t it? A. Yes.” This testimony fails to support the complaint and the conviction thereon.

As to the second essential, we also find an utter lack of proof. Frequent references are made to “John Earrusso’s place” as the point where the prosecutor entered and, three or four hours later, emerged with his empty truck, but nothing appears in the case to show whether John Earrusso’s place is within the township. The statement of a witness that the place is about three miles away from the point where the prosecutor was first observed in the township, does not offer any assistance. The cro'ss-examination of the complaining witness is illustrative. “Q. Then you followed him to the Earrusso property? A. Yes. Q. Then you saw this truck enter the Earrusso property? A. Yes. Q. And then about three or four hours afterwards the same truck and the same driver emerged from the Earrusso property? A. Yes. Q. And at that time, in your opinion, there wasn’t any garbage in the truck when you saw him come out, that is right, isn’t it? A. That is right. Q. And that is your whole story? A. That is right.” Nothing is presumed or intended in favor of the complaint or conviction in a proceeding of this character.

Counsel for the prosecutor at the end of the case made a motion to dismiss the complaint for the reason herein discussed. It was denied; this was erroneous. It is not necessary to discuss any of the other reasons that are properly assigned and argued.

Conviction is set aside, with costs.