author: Labbecque, J. A. D.

text:
    VINCENZA GRECO AND FRANK GRECO, PLAINTIFFS-RESPONDENTS, v. VALLEY FAIR ENTERPRISES, ETC., DEFENDANT-THIRD PARTY PLAINTIFF, v. RAY DI BRIGIDA, THIRD PARTY DEFENDANT-FOURTH PARTY PLAINTIFF-APPELLANT, v. E. TAMBURELLI AND LITTLE FERRY REALTY CO., FOURTH PARTY DEFENDANTS.
    Superior Court of New Jersey Appellate Division
    Argued May 26, 1969
    Decided June 4, 1969.

      Before Judges Gaulkust, Colibsteb and Labkecqtje.

      Mr. Daniel B. Coburn argued the cause for appellant Ray Di Brígida (Messrs. MosTcin & Weintraub, attorneys).

      Mr. William W. Farrar argued the cause for respondents Vincenza Greco and Erank Greco (Messrs. Parisi, Evers & Greenfield, attorneys).
   The opinion of the court was delivered by

Labbecque, J. A. D.

Pursuant to leave granted, third-party defendant Ray Di Brígida appeals from an order permitting plaintiffs to amend their complaint to join him as a defendant after the expiration of the two-j^ear statute of limitations (N. J. S. 2A-.14-2).

On April 21, 1967 plaintiffs instituted suit against Valley Pair Enterprises, Inc. (Valley Pair) for personal injuries sustained by Mrs. Greco and consequential damages to her husband as the result of the former’s fall on the steps and entranceway of one of Valley Pair’s stores on January 8, 1966. On July 3, 1967 Valley Pair filed a third-party action against Di Erigida seeking indemnification or contribution by reason of his asserted negligence. Thereafter, Di Brigida cross-claimed against Valley Pair and, pursuant to further orders of the court, filed fourth-party complaints against Tamburelli and Little Perry Realty Co.

On December 19, 1968 the Grecos sought and obtained leave to amend their complaint to join Di Brigida as a direct defendant. The latter appeals, urging that the statute of limitations barred the amendment.

It is conceded that the facts before us are substantially on all fours with those in De Sisto v. City of Linden, 80 N. J. Super. 398 (Law Div. 1963). In that case an amendment to plaintiff’s complaint, made after the expiration of the statutory two years, which brought in as an additional party one who had been made a third-party defendant prior to the expiration of the statute, was upheld. The court there held that “a new claim based on the same occurrences and the same wrong against an existing party may be asserted when that party has become a party and has been alerted to the claim before the running of the statute” (at p. 406). Di Brigida urges that we should not follow Be Sisto, pointing out that it is at variance with a number of cases decided under the federal rules and was questioned in Lawlor v. Cloverleaf Memorial Park, Inc., 101 N. J. Super. 134 (Law Div. 1968). See, however, Sinatra v. National X-Ray Products Corp., 26 N. J. 546, 555-556 (1958).

We are in accord with the court’s reasoning in Be Sisto and adopt the rule laid down therein. Specifically, a third-party defendant who was joined as such prior to expiration of the limitation period may, on plaintiff’s motion to amend, be made a direct defendant after the expiration of that period provided the amended complaint is based upon the same occurrence and the same wrong referred to in the pending third-party complaint against him. We are satisfied that this holding accords with the spirit of our rules and is consistent with the objectives of repose and freedom from the burden of defending stale claims sought to be achieved by statutes of limitation. See Union City Housing Authority v. Commonwealth Trust Co., 25 N. J. 330, 335 (1957). As is readily apparent, when defendant has had timely notice that the plaintiff sets up and is seeking to enforce a claim against him because of specified conduct in which he has participated the reason for the statutory limitation no longer exists. See also, R. R. 4:9-3, effective September 8, 1969.

The judgment of the Law Division is affirmed.


source: Caselaw Access Project

author: Kolovsicy, J. A. D.

license: Public Domain

text:
    E. L. ROBINSON, PLAINTIFF, v. EDWARD JANAY AND MURIEL JANAY, HIS WIFE, DEFENDANTS-APPELLANTS AND CROSS-RESPONDENTS, BERGENWOOD CONSTRUCTION CO., A CORPORATION OF THE STATE OF NEW JERSEY, JANAY ELECTRIC COMPANY, A CORPORATION OF THE STATE OF NEW JERSEY, MORSEMERE IRON WORKS, A CORPORATION OF THE STATE OF NEW JERSEY, DEFENDANTS, AND RICH LAN, INC., A CORPORATION OF THE STATE OF NEW JERSEY, DEFENDANT-RESPONDENT AND CROSS-APPELLANT.
    Superior Court of New Jersey Appellate Division
    Argued April 21, 1969
    Decided June 2, 1969.

      Before Judges Goldmann, Kolovsky and Carton.

      Mr. George B. Handler argued the cause for defendants-appellants Edward and Muriel Janay.

      Mr. Jacob M. Goldberg argued the cause for defendant-respondent and cross-appellant Rich Lan, Inc. (Messrs. Klein & Klein, attorneys).
   The opinion of the court was delivered by

Kolovsicy, J. A. D.

After a trial without a jury in the Law Division, the court ruled in part that (1) Edward Janay and Muriel Janay (Janay), the owners of property known as 22 Bergenwood Road, Eairview, were not entitled to damages from their lessee Rich Lan, Inc. (Rich Lan) by reason of the latter’s breach of its covenant to provide and maintain liability insurance coverage for Janay, and (2) that although Rich Lan had the right to recover from Janay the $10,000 deposited by it under a contract for the purchase of the Janay property, interest on that sum would not be awarded it.

Janay appeals from so much of the judgment as embodies the first ruling; Rich Lan cross-appeals from the refusal to allow it interest on the $10,000.

By lease dated July 18, 1963 Janay had leased to Rich Lan, for a term of ten years from October 1, 1963, premises known as 22 Bergenwood Road, Eairview, New Jersey, and the two-story building which the landlords agreed to construct thereon. The premises were to be used by Rich Lan for warehousing textiles and for manufacturing them into finished goods.

The respective obligations of the landlords and tenant of this commercial property and the building constructed for the exclusive use of the tenant are set forth in detail in the lengthy lease. Most of the tenant’s covenants, other than its agreement to pay rent, appear in the eight subparagraphs of paragraph 3.

The tenant’s obligation to furnish and maintain liability insurance coverage not only for itself but also for the landlords is contained in paragraph 3(f), which provides that the tenant shall:

“(f) Provide, maintain and pay the cost of liability insurance insuring the Landlord and Tenant, as their respective interests may aplicar, against any and all claims which may be established or made against the Landlord for property damage and for damages which may result from the death of or injury to any person or persons who may be near-, in or upon the demised premises during the said term, which said insurance shall be in the amount of $5,000.00 for property damage and in the amount of at least $100,000.00 for the death of or injury to one person and in the amount of at least $300,000.00 for the death of or injury to two or more persons.
All insurance provided for herein shall be covered by policies of insurance of responsible companies duly authorized to transact business in New Jersey.
All policies of insurance provided for herein shall be made payable to the Landlord and Tenant and subtenant, if any, as their respective interests may appear, and original policies therefor shall be delivered to the Landlord, together with receipted bills showing payment of premiums therefor.”

Further reference to the tenant’s obligation to furnish insurance is found in paragraph 13, which grants the landlords the option to reenter the premises in the event of default by the tenant in any of its several obligations under the lease. Although the paragraph sets forth grace periods during which the tenant may cure various defaults, it specifically provides “that there shall be no grace period for the furnishing of insurance and the payment of premium therefor.”

In addition, paragraph 11 of the lease provides:

“11. It is hereby agreed that should the Tenant fail to procure, maintain and pay for insurance as provided herein, the Landlord may have such policies issued and pay the premium therefor and the same shall become due from the Tenant as rent on the first of the month following the payment of such premiums by the Landlord.”

Rich Lan did arrange for the issuance of a liability policy but, contrary to what was called for by paragraph 3(f), the policy named only Rich Lan as the insured. Concededly, Janay never was told and had no knowledge of that fact until some time after March 31, 1964, on which date plaintiff Robinson, a truckman delivering merchandise or supplies to Rich Lan, was injured as the result of the fall of the building’s freight elevator.

Paragraph 28 of the lease granted Rich Lan an option, to be exercised by October 1, 1968, to purchase the premises for $130,000. However, under date of May 19, 1964, Janay and Eich. Lan executed a contract providing for the sale of the property to Kich Lan for $125,000, with a $10,000 deposit being paid by Kich Lan on execution of the agreement.

The contract obligated Janay to install a Eevolvator hydraulic elevator in the building prior to September 8, 1964, the date fixed for closing of title. In March 1965 Kich Lan served notice on Janay that it had declared a default because the Eevolvator elevator had not yet been installed and demanded return of its $10,000 deposit. The deposit was not returned. Installation of the Eevolvator elevator was not completed until August 1965.

Kobinson instituted this action to recover for his personal injuries on February 1, 1965. Joined as parties defendants in addition to Janay and Rich Lan were Bergenwood Construction Co., which had constructed the building, Janay Electric Company, the electrical contractor and Morsemere Iron Works which allegedly had installed the elevator shaft.

Janay filed a cross-claim against Rich Lan alleging that by reason of the Eich Lan’s breach of its covenant to furnish liability insurance coverage for Janay, Janay was entitled to judgment against Eich Lan “for all sums that may be adjudged against” Janay in favor of plaintiff Robinson.

Eich Lan’s “counterclaim” to the Janay cross-claim sought, among other things, recovery of the $10,000 deposited under the contract of sale.

The claims asserted by Janay and Eich Lan against each other were severed for trial after trial of the Robinson personal injury action. That action, tried to a jury, resulted in a verdict awarding Robinson damages of $14,500 against Janay, Bergenwood Construction Co. and Janay Electric Company, and a verdict of no cause for action in favor of Eich Lan. A dismissal was granted Morsemere Iron Works during trial.

On April 26, 1967 Robinson caused execution to issue on his judgment. On May 3, 1967 Janay served notice of appeal from the judgment in Robinson’s favor. On May 8, 1967 Robinson served notice of appeal from the judgment in Rich Lan’s favor. The appeals were thereafter abandoned and dismissed following the delivery by Robinson to Janay’s attorney of a warrant for satisfaction of the judgment. The warrant, dated January S3, 1968, was filed with the clerk of the court on March 1, 1968.

Some six weeks later the Janay and Rich Lan cross-claims were tried and resulted in the judgment under appeal.

The Janay Appeal

The trial judge’s conclusion that the damages which Janay sought to recover for the breach of Rich Lan’s covenant to furnish liability insurance — the amount of the Robinson judgment — “do not naturally and freely flow from the breach thereof” and were “not within the contemplation of the parties,” was bottomed on his interpretation of paragraphs 3(f) and 11 of the lease. He recognized that paragraph 3 (f) obligated the tenant to furnish a liability insurance policy affording coverage to the landlords. However, in his opinion, the landlords’ remedy in the event that the tenant did not furnish the policy was limited to the exercise of the right granted them by paragraph 11—the right to procure the policy themselves and to collect the premium paid as additional rent.

We find no justification for that interpretation of the lease. By paragraph 3(f) the tenant assumed the unconditional obligation to furnish liability insurance coverage to the landlords. If it breached that covenant, it was liable in damages for the breach. Nothing in the lease provides —• and there is no warrant for incorporating such a provision by implication — that Rich Lan’s obligation under paragraph 3(f) or its liability in damages for a breach thereof is in any wise limited because the lease also grants the landlords additional remedies for such breach, viz., the right to reenter (paragraph 13) and the right to procure the policy themselves and collect the premium therefor as additional rent (paragraph 11).

Finally, Kich Lan may not in any event invoke paragraph 11 of the lease to diminish its obligation and liability under paragraph 3(f) since it did not give notice to Janay that it had failed to procure the requisite insurance. Cf. Marano v. Sabbio, 26 N. J. Super. 201, 206 (App. Div. 1953); Rider v. Lynch, 42 N. J. 465, 477 (1964).

The damages which may be recovered for breach of an agreement to furnish an insurance policy is the loss sustained by reason of the breach, “the amount that would have been due under the policy provided it had been obtained.” 43 Am. Jur. 2d, Insurance, § 174, p. 231. That measure of damages has been consistently applied in actions for breach of agreements to furnish fire or liability insurance, and this whether the action was against a lessee (Marconi Wireless T. Co. of America v. Universal Transp. Co., 194 App. Div. 272, 185 N. Y. S. 65 (App. Div. 1920), affirmed 233 N. Y. 581, 135 N. E. 926 (Ct. App. 1922); Franck v. Stout, 139 Wis. 223, 120 N. W. 867, 868 (Sup. Ct. 1909) ; Jacksonville, M., P. Ry. & Nav. Co. v. Hooper, 160 U. S. 514, 529, 16 S. Ct. 379, 40 L. Ed. 515 (1896); American Trust Co. v. Truck Insurance Exchange, 147 Cal. App. 2d 395, 305 P. 2d 73, 75 (D. Ct. App. 1957); Benton v. Alcazar Hotel Co., 352 Mo. 836, 180 8. W. 2d 33, 39 (1944); 32 Am. Jur., Landlord & Tenant, § 183, p. 176), against a bailee (Lazar v. Cohen, 127 N. J. L. 310 (Sup. Gt. 1941); Ditmars v. Grand Stores, Inc., 134 N. J. L. 115, 116 (Sup. Ct. 1946), reversed on other grounds 134 N. J. L. 570 (E. & A. 1946)), or against an insurance broker (43 Am. Jur. 2d, Insurance, § 174, p. 231; Rider v. Lynch, 42 N. J. 465 (1964); Marano v. Sabbio, 26 N. J. Super. 201 (App. Div. 1953)).

(We need not consider whether the damages otherwise recoverable would be diminished in a case where the promisor had notified his promisee that the policy could not or would not be provided. Cf. National Mahaiwe Bank v. Hand, 80 Hun. 584, 30 N. Y. S. 508 (Sup. Ct. 1894); Franck v. Stout, 139 Wis. 223, 120 N. W. 867 (Sup. Ct. 1909). Here, it is conceded that Janay had no such notice.)

A liability insurance policy, had it issued as called for by paragraph 3(f), would have required the insurance company to provide and pay for J anay’s defense of the Robinson action as well as to pay the judgment entered in Robinson’s favor against Janay, and this without any necessity that Janay first pay the judgment. The policy called for was one insuring against liability, not a policy of indemnity. See Viddish v. Hartford Accident and Indemnity Co., 41 N. J. Super. 221, 225 (App. Div. 1956).

Janay has not sought recovery of the expenses of defending the Robinson action; all their cross-claim seeks is recovery of the amount of the Robinson judgment, $14,500 plus costs of $250. Janay’s right to recover that sum was established by proof of the entry of the Robinson judgment against them, Viddish v. Hartford Accident and Indemnity Co., supra, even if they had not also proved, as we find they did, that they had paid $14,750 in satisfaction of the judgment. The fact that, as noted above, the judgment was entered not only against Janay but also against two corporations, Janay Electric Company and Bergenwood Construction Co., will be of significance only if Rich Lan, after reimbursing Janay, institutes, as subrogee of Janay’s rights, an action against the two corporations for contribution under the Joint Tortfeasors Contribution Law, N. J. S. 2A :53A-1 et seq.

The Rich Lan Gross-Appeal

While the trial court ruled that Rich Lan was entitled to recover the $10,000 deposited by it under the contract for the sale of the premises because of Janay’s delay in installing the Revolvator elevator, it refused to award interest thereon because no demand for interest was embodied in the pretrial order or in counsel’s opening statement to the trial court. Whether those omissions were fatal despite the fact that Rich Lan’s counterclaim concluded with a general prayer for judgment on both counts thereof “together with interest and costs of suit,” need not be resolved, for we are satisfied that in the circumstances of this case, interest should not be awarded.

The contract did not stipulate for interest; Eich Lan’s right to call a default for the delay in installation of the elevator was justifiably disputed; and by reason of what has transpired Eich Lan, as tenant, now has the benefit of a Eevolvator elevator not called for under its lease. In those circumstances, “considerations of justice and fair dealing,” John Agnew Co. v. Paterson Bd. of Education, 83 N. J. Eq. 49, 67 (Ch. 1914), affirmed o.b. 83 N. J. Eq. 336 (E. & A. 1914), mandate that interest be denied. See Jardine Estates, Inc. v. Donna Brook Corp., 42 N. J. Super. 332, 341 (App. Div. 1956).

The judgment in favor of Eich Lan on the cross-claim of Janay is reversed and the cause remanded to the trial court with directions that judgment be entered thereon in Janay’s favor for $14,750. The judgment in favor of Eich Lan on its counterclaim, from which it has appealed, is affirmed. Costs on the appeals are awarded to Janay.


author: Seidmast, J. C. C.

text:
    CARDELL, INC., A CORPORATION OF THE STATE OF NEW JERSEY AND J. RICHARD HUDANICH, PLAINTIFFS, v. THE TOWNSHIP OF MADISON, A MUNICIPAL CORPORATION IN THE COUNTY OF MIDDLESEX, STATE OF NEW JERSEY, AND MANZO CONTRACTING CO., A CORPORATION OF THE STATE OF NEW JERSEY, DEFENDANTS.
    Superior Court of New Jersey Law Division
    Decided March 13, 1969.

      Mr. Stewart M. Butt for plaintiffs (Messrs. Butt & Berkow, attorneys).

      Mr. Marc J. Gordon for defendant Township of Madison.

      Mr. Mark L. Stanton for defendant Manzo Contracting Company (Messrs. Stanton & Becht, attorneys).
   Seidmast, J. C. C.

(temporarily assigned). In these proceedings in lieu of prerogative writ, plaintiffs Cardell, Inc., and J. Kichard Iludanich seek to compel the defendant Township of Madison to award to the corporate plaintiff as low bidder a contract for resurfacing of various streets. Manzo Contracting Co., the codefendant, claims that it had been awarded the contract as the lowest bidder and that the municipality could not thereafter validly rescind the award and reject all bids. The inclusion of Iludanich, a resident and taxpayer of the municipality, as a plaintiff, is presumably technical in nature, designed to enable the raising of issues not available to a bidder. See Camden Plaza Parking v. City of Camden, 16 N. J. 150, 158 (1954).

Since the basic facts are not in substantial dispute, the parties agreed at pre-trial conference that the matter should be considered at final hearing as though on motions and cross-motions for summary judgment.

On or about October 1, 1968, the Township of Madison advertised for the receipt of bids for the resurfacing of various municipal streets. Cardell and Manzo, duly prequalified, submitted bids on the forms and in the manner prescribed by'the specifications. The bids were opened at a council meeting held October 10, 1968. Cardell’s proposal contained a grand total bid of $975,850.00; Manzo’s bid was $898,810.00. Upon a tabulation by the municipal engineer, mathematical errors were discovered in Cardell’s bid. which, the plaintiffs contend, reduced its bid to a corrected total of $873,250.00, thus making Cardell the lowest responsible bidder. The next night, at a special meeting of the Township Council, a resolution was adopted declaring Manzo the lowest bidder and awarding it the contract. On October 18, the plaintiffs filed their complaint in lieu of prerogative writ. At a subsequent special meeting held October 31, another resolution was adopted rescinding the one of October 11, rejecting aU the bids, and directing the readvertising for new bids.

Cardell argues that the determination of the corrected bid price, having been done in accordance with the specifications, made it the lowest bidder; consequently, it should have been awarded the contract. The Township claims that the errors in the proposal invalidated Cardell’s bid. With respect to Manzo, whose contention is simply that the award to it should be reinstated, the Township asserts that it reserved in the specifications the right to reject any and all proposals.

The form of proposal to be submitted by prospective bidders called for the submission of unit prices for seven items, with a stated total price bid for all items. CardelPs proposal was as follows:

The unit prices, both in figures and words, the extended totals, and the grand total were all hand-written.

The mathematical errors contained in the proposal were these:

1. The extensions, as set forth, actually totalled $873,-250.00, rather than $975,850.00.

2. In Item 1, the quoted unit price of $10.00 for 10,000 cubic yards should have produced an extended total of $100,000.00, whereas the actual extension was $10,000.00.

3. In Item 4, the resetting of 560 manhole covers to grade at $25.00 each should have totalled $14,000.00, not $1,400.00.

It is observed that, had the extensions conformed to the quantities multiplied by the unit prices, the total would have been as indicated; namely, $975,850.00.

In support of the contention that Cardell was the low bidder, plaintiffs refer to the computations made by the municipal engineer pursuant to paragraph 1. .14 of the specifications, captioned “Comparison of Bids”, which reads as follows:

“For the purpose of comparison of bids received, the grand total stated in the Proposal will be considered to be the amount bid for the project, with the exception that the total of each item must equal the grand total. Should the grand total be unequal to the sum of the individual totals, it will be made equal to the sum of these totals. Should it be found that the total of any item is not equal to the product of the quantity and the unit price, the unit price will be assumed to be the total divided by the item quantity.”

On the comparison sheet prepared by the municipal engineer, to reconcile the total of the extended amounts, he calculated the unit price in Item 1 to be $1.00, and the one in Item 4 to be $2.50. As noted above, the plaintiffs contend that the corrected figures made Cardell the lowest bidder, entitling it to the contract. The contention is unsound.

One who claims to be the lowest bidder may seek a judicial review of the award of a municipal contract, but “must stand or fall on its own entitlement to the contract”. William A. Carey & Co. v. Borough of Fair Lawn, 37 N. J. Super. 159, 168 (App. Div. 1955); J. Turco Paving Con., Inc. v. City Council of Orange, 89 N. J. Super. 93, 100 (App. Div. 1965).

Cardell argues that the specifications anticipated the possibility of errors in the preparation of a bid; and, since provision was made for the procedure to be followed in such event, the municipal engineer’s computations control, thereby establishing Cardell as low bidder. This reasoning, in my view, is a misconception of the scope of the applicable specification.

The evident purpose of the specification was to enable the engineer, for comparison purposes, to check the bid computations, and, if errors were discovered, to utilize the given formula for reconciling the computations. Thus, in the instant case, upon adding the item totals, the engineer noted the grand total to be $873,250.00, and he placed that figure on his comparison sheet. Applying the formula further, he changed the unit price for Item 1 from $10.00 to $1.00, and the unit price for Item 4 from $25.00 to $2.50. Then, also in accordance with the specification, he forwarded the proposals to the Township Council for consideration.

Cardell claims that the prescribed procedure removed any doubt or ambiguity as to the amount of the bid or the unit prices. This is not so. The engineer’s calculation merely sought to reconcile the computations made by the bidder. The doubts or ambiguities remained. For example, in Item 1 Cardell inserted a unit price of $10.00 in figures and then wrote the amount in words. Since the quantity was 10,000 cubic yards, the total should have been $100,000.00; instead, it was $10,000.00. Where was the error? Was it in the extended figure, or in the unit price? Although the specification provided a method of reconciliation, it could not thereby establish the bidder’s intent at the time the proposal was prepared. The same reasoning applies to Item 4. According to the unit price of $25.00, stated in both words and figures, the extension should have been $14,000.00, not $1400.00. A significant indication of what the bidder may actually have intended is the total bid of $975,850.00, which would have been correct had the extension of Ttems 1 and 4 corresponded to the inserted unit prices.

It is not necessary, however, to determine the bidder’s intent. The facts are, irrespective of the specification, that the total figure was $975,850.00; and that the unit prices in question were $10.00 and $25.00. If the low bid is to depend upon the engineer’s calculations, made for comparison purposes, then it is not necessarily the one submitted by the bidder, but rather, in the case oE errors, the revised one prepared by the municipal engineer. To allow such result, in the face of uncertainties created by the bidder itself, would be manifestly unjust to other bidders and contrary to the spirit, if not the letter, of the applicable statute. N. J. S. A. 40:50-l. In such event, the bidder responsible for the errors could await the opening and reading of all the proposals, and then, with knowledge of what his competitors had done, decide whether to accept the engineer’s computations. The other bidders would be prejudiced by an advantage their competitor had gained through its own carelessness. All bidders must be put on the same footing. Case v. Trenton, 76 N. J. L. 696, 699 (E. & A. 1909) ; Shakel v. North Bergen, 37 N. J. 369, 378 (1962).

The fact that Cardell, by instituting suit, has expressed its willingness to do the work for the adjusted amount cannot control, since the action taken was unilateral, and it does not follow therefrom that Cardell could not have withdrawn its bid upon discovery of the errors. A competitive bid is an option, and if given for a consideration, is both an offer and a unilateral contract. The distinguishing characteristic is that it imposes no binding obligations upon the person holding the option; but, when the option is accepted, it becomes a contract. Conduit & Foundation Corp. v. City of Atlantic City, 2 N. J. Super. 433, 438-439 (Ch. Div. 1949). In the case of unilateral mistake by an offeror, relief in the form of rescission may be granted by a court of equity if appropriate conditions exist. Conduit & Foundation Corp., supra, at pp. 439—440. See also Carlin v. City of Newark, 36 N. J. Super. 74, 86 (Law Div. 1955). There is no need to determine whether equities were present in the instant case justifying rescission, had the issue of withdrawal arisen. It is enough that litigation might have ensued, the outcome of which would be uncertain. Aside from the issue of rescission, there is also a question whether, had the municipality decided to accept the amount as adjusted by the engineer, such acceptance would have corresponded to the essential terms contained in the proposal.

Considering all the circumstances of the case, I conclude that Cardell’s bid, because of the errors, was sufficiently irregular as to affect fair and competitive bidding, and that the engineer’s computations did not convert the proposal into the lowest bid. The record before me does not indicate that, in refusing to accept the adjusted figure, the municipality acted unfairly, unreasonably, and beyond its statutory power. See Fereday & Meyer Co., Inc., v. Elizabeth Bd. of Public Works, 27 N. J. 218, 224 (1958).

Accordingly, judgment will be entered dismissing the complaint of the plaintiffs.

I turn now to Manzo’s cross-claim for an adjudication that it is entitled to the award of the contract. As noted earlier herein, it is undisputed that the municipal council adopted a resolution on October 11, 1968, declaring Manzo to be the lowest qualified bidder; and that on October 31 another resolution was adopted rescinding the earlier one, rejecting all bids received on October 10, and ordering the readvertising for new bids.

The issue here is not whether a governing body can reject any and all bids upon their receipt. This problem, commented the court in Poling v. Roman, 86 N. J. Super. 484, 488 (Law Div. 1965), is a troublesome one. In the frequently cited case of Armitage v. Newark, 86 N. J. L. 5 (Sup. Ct. 1914), the court found that the statute then in effect allowed the rejection of any and all bids. Subsequently, the statute was amended and the rejection power deleted. Whether the power can now be reserved and exercised by a municipality has not been clearly and definitely determined. In Poling, supra, at p. 489, the court merely said that “absent a reservation a municipality may not arbitrarily or capriciously reject all bids, but must award the contract to the lowest responsible bidder unless fair-minded and reasonable men would deem it not in the best interests of the municipality.”

To state it precisely, the issue before the court is whether Manzo was the lowest responsible bidder and, if so, whether a duly adopted resolution so declaring could thereafter he rescinded.

The general rule is that the acceptance of a valid hid by the proper municipal authorities, where all legal requirements are observed, constitutes a binding contract, 10 McQuillen, Municipal Corporations (3rd Ed. 1966), § 29.78. It should be observed, however, that Specification 1.1.1, captioned “Award of Contract”, reads as follows:

“Award, if made, will be to the lowest responsible bidder whose proposal conforms in all respects to the requirements stated herein.
“The award shall be made by the Town Council at a regular or Special Township meeting. The award shall not be binding upon the Township until the contract has been executed by the Bidder and the Township, nor shall any work be performed on account of the proposed Contract until the Contract has been duly executed and delivered.”

Other specifications relating to the award and execution of the contract (1.1.2, Return of Proposal Guaranties; 1.1.3, Progress Schedule; 1.1.4, Execution Contract) indicate that within 10 days of the date of the award, a performance bond and progress schedule are to be furnished and the contract executed. The municipality does not contend that Manzo failed to comply with the requirements preceding the execution of the contract. Even if it be assumed that the right to reject any and all bids can be reserved, the statute may not be evaded under the color of such rejection. Armitage v. Newark, supra, at p. 9; Poling v. Roman, supra, at p. 488: Scatuorchio v. Jersey City Incinerator Authority, 14 N. J. 72 (1953).

By law, where bidding is required, the contract must be awarded to the lowest responsible bidder. N. J. 8. A. 40:50—1. Although the acceptance of the bid, according to the specifications in this case, is not binding until the execution of the contract, it does not appear from the stated facts that the signing of the contract was to be more than a formality, subject only to the furnishing of a performance bond and a progress schedule, neither of which is in issue. The resolution of October 31 gives no reasons for the rescission of the award to Manzo. All that appears is the municipality’s factual recitation in the pretrial order, which the court will accept in view of the stipulation by the parties to proceed as though on motion and cross-motions for summary judgment. It is conceded therein that the Manzo bid was declared the lowest responsible bid and that the council unanimously determined to award it the contract. Following the institution of suit by Cardell the matter was discussed at a council meeting on October 31 and “At that time the Township Engineer indicated that, in his opinion, the price quoted for the work to be done was high, and that readvertising might result in lower bids. In an effort to avoid delay and avoid litigation and to afford itself the opportunity of receiving lower bids, the Council adopted a resolution rescinding the October 11, 1968 resolution and directing the re-advertisement for new bids.”

If the Council was, in fact, motivated by a desire to obtain lower bids, it should have acted before accepting Manzo’s bid, since the same information was available at that time and the engineer could have made an appropriate recommendation to the Council. The real reason seems to have been the fear of litigation; however, the action taken by the governing body not only failed to resolve Cardell’s suit, it also produced Manzo’s cross-claim for affirmative relief.

I conclude that there was no valid basis for the rescission of the award to Manzo; consequently, the municipal resolution of October 31, 1968, is vacated and set aside, and the Township of Madison is directed to proceed with the execution of the required contract, provided Manzo has furnished or will furnish forthwith the requisite performance bond and progress schedule.

An order for judgment consistent with my conclusions shall be submitted promptly, consented to with respect to form or settled upon notice.


author: Per Curiam. Labrecque, J. A. D.

text:
    CARDELL, INC., A CORPORATION OF THE STATE OF NEW JERSEY AND J. RICHARD HUDANICH, PLAINTIFFS-APPELLANTS, v. THE TOWNSHIP OF MADISON, A MUNICIPAL CORPORATION IN THE COUNTY OF MIDDLESEX, STATE OF NEW JERSEY, AND MANZO CONTRACTING CO., A CORPORATION OF THE STATE OF NEW JERSEY, DEFENDANTS-RESPONDENTS.
    Superior Court of New Jersey Appellate Division
    Argued April 28, 1969
    Decided May 1, 1969.
    Before Judges Gaulkin, Collester and Labrecque.

      Mr. Stewart M. Huit argued the cause for plaintiffs-appellants (Messrs. Mutt & Berlcow, attorneys).

      Mr. Marc J. Gordon and Mr. Marie L. Stanton argued the cause for respondents (Messrs. Stanton <6 Recht, attorneys).
   Per Curiam.

The judgment is affirmed for the reasons stated by Judge Seidman, 105 N. J. Super. 594.

Labrecque, J. A. D.

(dissenting). In this case I would hold that plaintiff Cardell was the lowest responsible bidder and should have been awarded the contract on the basis of $873,350, the corrected grand total of the individual items comprising its bid.

The specifications called for bids on seven different items of work. They contained the following provision:

“1.0.14 Comparison of Bids — Por the purpose of comparison of bids received, the grand total stated m the Proposal will be considered to be the amount bid for the Project, with the exception that the total of eaoh item must equal the grand total. Should the grand total he unequal to the sum of the individual totals, it loill he made equal to the sum of these totals. Should it be found that the total of any item is not equal to the product of the quantity and the unit price, the unit price will be assumed to be the total divided by the item quantity. After all Proposals have been read, the Township Engineer will tabulate the Bids and forward them to the Township Council for their consideration.” (Emphasis added.)

Upon tabulating the bids, the Township Engineer discovered an error in the addition of the items in Cardell’s bid. He thereupon applied the “comparison of bids” rule and reported that the sum of the total of each of the seven items on which Cardell had bid was $873,350. Notwithstanding this, the governing body awarded the contract to Manzo on its bid of $898,810. Both bidders were prequalified.

The purpose of bidding statutes is to secure competition and guard against favoritism, improvidence, extravagance and corruption. Hillside Twp. v. Sternin, 25 N. J. 317, 322 (1957). In general they are to be construed with sole reference to the public good. James Petrozello Co., Inc. v. Chatham Township, 75 N. J. Super. 173, 180 (App. Div. 1962). Here the “comparison of bids” provision was for the protection of the township, and Manzo and Cardell, by the submission of their bids, consented to be bound thereby. Thus Cardell, on submitting its bid, became obligated to perform the work for $873,350 if its bid which totaled that amount was accepted.

Wholly aside from Cardell’s claimed right, as low bidder, to the contract, the municipal taxpayers, of which plaintiff Hudanich was one, were entitled to the benefit of the lower bid. The possibility, envisioned by the trial judge, that Car-dell might have sought to be relieved of its low bid upon discovery of the discrepancies noted by the engineer, afforded no ground for its rejection. The same possibility may be present in cases where the grand total as submitted corresponds with the totals of the individual items. Further, here the major discrepancy was in item one where Cardell’s bid was $10,000 for 10,000 cubic yards of excavation at $10 a cubic yard. The Township Engineer, applying the second portion of the "comparison of bids” proviso, adjusted the nnit. price to $1 a cubic yard. This was identical with the unit price bid submitted by Manzo.

I would therefore reverse and remand for the entry of an appropriate judgment in favor of plaintiffs.


author: Collester, J. A. D.

text:
    STATE OF NEW JERSEY, PLAINTIFF-RESPONDENT, v. WALTER R. MORSE, DEFENDANT-APPELLANT.
    Superior Court of New Jersey Appellate Division
    Argued December 4, 1967
    Decided January 10, 1968.

      Before Judges Coneord, Collester and Labrecque.

      Mr. Peter 8. Valentine, assigned counsel, argued the cause for appellant (Mr. Joseph R. Rusignola, on the brief).

      Mr. James R. Zazzali, Assistant County Prosecutor, argued the cause for respondent (Mr. Brendan T. Byrne, County Prosecutor, attorney).
   The opinion of the court was delivered by

Collester, J. A. D.

Defendant appeals from his conviction of the crime of unlawful possession of a narcotic drug in violation of N. J. S. A. 24:18-4.

On April 13, 1966 two Newark detectives, assigned to the narcotics squad, stopped defendant while he was walking on Elizabeth Street to check on his narcotics registration card. Defendant said he was living in New York City. His registration card listed his address as 176 Badger Avenue, Newark. The detectives placed him under arrest as a disorderly person for having failed to notify the chief of police of his change of address within the 24-hour period required by N. J. S. 2A :169A—6. A search of his person revealed that he was carrying a rubber receptacle which contained 10 glassine envelopes of heroin. At his trial, following an indictment for unlawful possession of narcotics, defendant did not testify or call any witnesses in his defense. He was found guilty by the jury and appeals from that conviction.

Defendant concedes that no motion was made prior to trial, pursuant to R. R. 3:2A-6(a), to suppress the heroin as evidence on the ground that it was obtained by an unlawful search and seizure. Moreover, no objection was raised to the admission of such evidence at the trial.

Defendant argues that he should be permitted to raise the question of illegal search and seizure on this appeal. He bases his claim on the opinion rendered by this court in State v. Orr, 93 N. J. Super. 140 (App. Div. 1966), where we held that an arrest for violation of N. J. S. 2A :169A-6 without a warrant was invalid and that evidence secured as a result of a search and seizure incidental to the unlawful arrest must be suppressed.

R. R. 3:2A-6(a) provides that a motion for the return of property seized and to suppress the evidence obtained shall be made within 30 days after the initial plea to the charge unless for good cause the court shall enlarge the time. It provides that the motion shall be determined before trial and may be entertained at trial only if the court finds the defendant conld not reasonably have made the motion prior thereto. It further provides that if a timely motion is not made in accordance with the rule, the defendant shall be deemed to have waived any objection during the trial to the admission of the evidence based on the ground that it was unlawfully obtained.

We are satisfied that defendant’s argument cannot be supported on several grounds. First, our Supreme Court in State v. Fair, 45 N. J. 77, 85-86 (1965), clearly indicated that a strict approach should be taken to the requirements of R. R. 3:2A-6 (a) and that the issue of illegal search and seizure raised for the first time on appeal did not warrant application of the plain error rule. R. R. 1:5—1(a). Second, State v. Orr, supra, which was decided two months after the trial of the instant case, did not pronounce any new principle of law but held, in accordance with the well established rule, that an arrest without warrant for violation of the Disorderly Persons Act is not valid if the offense was not committed in the presence of the arresting officers. And finally, no good reason is shown, or argued in defendant’s brief, why the motion to suppress was not made in accordance with the provisions of R. R. 3 :2A-6 (a).

Defendant further contends that there was plain error in the admission of testimony by one of the detectives that defendant admitted ownership of the heroin found on his person because it was “fruit” of an illegal search and seizure. The contention is without merit because (1) defendant cannot now challenge the illegality of the search and so cannot complain that the admission he made was the fruit of that illegality, and (2) the admission was brought into the case by cross-examination of the detective by defendant’s counsel — not by the State.

In a pro se supplemental brief defendant, in addition to challenging the validity of the search and seizure, contends he was inadequately represented by his assigned trial counsel. He asserts numerous matters of fact which are not contained in this record. As such they are not cognizable on this direct appeal from his conviction.

The judgment of conviction is affirmed.


author: Gaulkin, S. J. A. D.

text:
    STONCO ELECTRIC PRODUCTS COMPANY, APPELLANT, v. BOARD OF REVIEW, DIVISION OF EMPLOYMENT SECURITY, DEPARTMENT OF LABOR AND INDUSTRY, STATE OF NEW JERSEY, AND CAROLYN BRANTLEY, RESPONDENTS.
    Superior Court of New Jersey Appellate Division
    Submitted June 2, 1969
    Decided June 9, 1969.

      Before Judges Garlei», Collesteb and Labbecque.

      Mr. Myles A. Cane for appellant {Mr. Mark A. Buclestein, on the brief).

      Mr. Edward A. Kaplan for respondents {Mr. Charles Quinn, on the brief).
   The opinion of the court was delivered by

Gaulkin, S. J. A. D.

Claimant Mrs. Brantley was awarded unemployment compensation and her employer, Stonco Electric Products Company, appeals.

Claimant quit after being employed by Stonco for almost two years. She claimed she was compelled to do so because the work was too heavy and the working area too cold.

The employees of Stonco, including claimant, were members of a union. The union contract with Stonco provided for “grievance and arbitration procedure.” Grievances were to be presented in writing, the first step being “Between the Steward on the one hand and the assistant Production Superintendent on the other hand. The aggrieved employee may, upon request to the union, be present.”

The Division of Employment Security held that claimant was disqualified for benefits because she left work “voluntarily and without good cause attributable to such work.” It based its decision on the fact that claimant left “without attempting to adjust grievances.” We presume the Division meant under the collective bargaining agreement. The Appeal Tribunal affirmed. In its opinion, it said:

“The claimant was a member of the union. She complained to her supervisor many times that the packing job was too heavy for her. She also discussed the matter with union representatives. However, she did not file a formal grievance at anytime because she felt that the union was ‘no good’ and could not do anything for her. She left her work because of the weight of the packages she handled and because the work area was cold.
The claimant left her work before she attempted fully to adjust her grievance. A principal function of a union is to intercede in behalf of a worker who has a justified complaint about working conditions. Before finally deciding to voluntarily leave work, the claimant could have filed a grievance with her union in an attempt to alleviate her complaints about her work.”

The Board of Review reversed. It made no mention of the collective bargaining agreement or of the failure to use its grievance machinery. It said:

“The Findings of Fact of the Appeal Tribunal are substantially correct and are affirmed and adopted as though fully set forth herein at length.
The claimant’s work was too heavy for her and the area in which she worked caused her to catch colds frequently. She complained about both and nothing was done about either. There was nothing else for the claimant to do but to leave her work and she had good cause attributable thereto for so doing. Hence, no disqualification arises.”

Stonco’s principal argument on appeal is that the claimant should bo denied benefits for failing to pursue the grievance procedures. It contends variously that a quit cannot be for “good cause” if no attempt has been made to use existing grievance procedures to correct the alleged “cause,” and that grievance procedures, as well as the arbitration with which they are to culminate under the contract involved here, are administrative steps which must be exhausted before unemployment benefits may be sought.

The basic purpose of the Unemployment Compensation Act is to relieve employees, and the general public as well, from the adverse impact of involuntary unemployment. N. J. S. A. 43:21-2; Sweeney v. Board of Review, 43 N. J. 535, 539 (1965); Campbell Soup Co. v. Board of Review, Division of Employment Security, 13 N. J. 431, 436 (1953). Pursuant to this aim the statute specifies those situations in which the claimant’s separation from his job shall be deemed not “involuntary,” thereby disqualifying him for benefits under the law. N. J. S. A. 43:21-5. First among those categories is the one relied upon by the parties and the tribunals below in the present case, N. J. S. A. 43 :21-5(a), which disqualifies from benefits any claimant who “has left work voluntarily without good cause attributable to such work * *

There is no reference in the statute to exhaustion of collective bargaining remedies nor suggestion that prior prosecution of a grievance under a collective bargaining agreement is a requisite to coverage. N. J. S. A. 43:21-5 (d) disqualifies employees whose unemployment is due to a work stoppage produced by a labor dispute in which he is participating or has a direct interest, but it sheds no light on the question presented here. Clearly, claimant’s quit is not the product of a work stoppage within N. J. S. A. 43 :21-5 (d) and there is no reference to exhaustion or compliance with union contracts in that section.

It seems to us that Stonco’s position that compliance with available grievance procedures is a necessary requisite to a showing of good cause or a filing for benefits is without merit. The burden of showing good cause under N. J. S. A. 43:21-5 is on the claimant and the test is whether there was “cause sufficient to justify an employee’s voluntarily leaving the ranks of the employed and joining the ranks of the employed.” Zielenski v. Board of Review, 85 N. J. Super. 46, 52 (App. Div. 1964). In arriving at a conclusion on this question it is necessary for the administrative tribunal to consider all the evidence bearing on the claimant’s decision to quit.

Evidence of claimant’s failure to seek redress of his grievances before quitting, including failure to press his right to pursue a grievance procedure, is certainly relevant and probative on the bona fides of his claim. Cf. Zielenski, supra, at p. 54. But failure to pursue such remedies does not, by itself, disqualify the claimant, disentitle him to benefits, or establish that the grievances alleged to have produced the quit were not sufficient to constitute “good cause” under N. J. S. A. 43:21-5.

It is true that the grievance procedure has been established in order to achieve expeditious resolution of labor disputes and that correction of the working conditions complained oí here are likely within the purview of that intent. It is also true that courts are often loath to place themselves in the stead of the arbitration boards designed to administer such agreements and decide such disputes. See Cox, “Eights Under a Labor Agreement,” 69 Harv. L. Rev. 601, 648 (1956). But that reluctance typically manifests itself when an employee seeks to bypass the grievance procedure and go directly to the courts for common law relief from an alleged breach of the collective bargaining agreement. E. g. Henderson v. Eastern Gas and Fuel Associates, 290 F. 2d 677 (4 Cir. 1961), affirming a dismissal of plaintiffs’ claim for wages, alleged to be due under a collective bargaining agreement, on the ground that they had failed to exhaust grievance procedures with respect to their claim; Hooser v. Baltimore and Ohio R. R. Co., 177 F. Supp. 186 (S. D. Ind. 1959), affirmed 279 F. 2d 197 (7 Cir. 1960), dismissing plaintiffs’ suit for damages for wrongful discharge on the ground that they had failed to submit these claims to their employer within the time period prescribed by the collective bargaining agreement; Cox, “Eights Under a Labor Agreement,” supra, at pp. 647-652.

Here, the claimant’s action is specifically authorized by a carefully constructed statutory scheme which makes no mention of collective bargaining. We hold that claimant’s remedies in the grievance procedure and before the Division are concurrent and failure to exorcise the former does not necessarily preclude the latter.

The authorities cited by Stonco do not dictate a contrary result. In Zielenski, supra, the court did not hold that failure to file a grievance was of itself dispositive of the claim, but did accept it as evidence which militated against the bona fides of the claim.

In the Pennsylvania case of Nathan Feldman Sons v. Unemployment Compensation Board of Review, 185 Pa. Super. 205, 137 A. 2d 839 (Super. Ct. 1958), the court reversed, as not supported by the evidence, the decision of the Board of Eeview that claimant had been fired from her job, and reinstated the referee’s finding that claimant voluntarily terminated her employment without good cause. The court upheld the referee’s finding as supported by the evidence, largely on the grounds that claimant’s grievances against her foreman could have been pursued through the grievance procedure and that a quit prompted by a temperamental clash with a superior is not for good cause. The court did not hold that the failure to file a grievance was itself fatal, but rather that it was evidence in support of the referee’s holding.

On the other hand, in Board of Review v. Kearfott Mfg. Corp., 46 N. J. Super. 39 (App. Div. 1957), the court affirmed the Board’s allowance of benefits to a claimant who quit his job because his employer failed to permit him to return to a former job, from which he had been promoted, as required by the union contract. The court held that the employer’s breach of the union contract in that case justified claimant’s quit. No mention was made of whether there was a contractual grievance procedure or whether claimant pursued it, although the opinion does state that he had complained unsuccessfully to his union representative.

In short, we hold that failure to pursue grievance machinery does not necessarily bar a claimant from collecting unemployment benefits.

The next question is, broadly, whether the decision of the Appeal Tribunal and the Board of Review that she quit because the work was too heavy and the working area too cold is supported by substantial evidence. We find that it is.

Affirmed.


author: Kilkenny, J. A. D.

text:
    IN THE MATTER OF THE ESTATE OF KATHERINE MEIER KUEBLER, LATE OF THE STATE OF FLORIDA. THE FAIRVIEW CEMETERY COMPANY, A NON-PROFIT NEW JERSEY CORPORATION, PLAINTIFF-APPELLANT, v. WILLIAM KINGSLEY, DEPUTY DIRECTOR, DIVISION OF TAXATION, DEFENDANT-RESPONDENT.
    Superior Court of New Jersey Appellate Division
    Argued April 14, 1969
    Decided June 10. 1969.

      Before Judges Coneord, Kilkenny and Leonard.

      Mr. Howard M. Nashel argued the cause for appellant {Messrs. Plaiof, Heftier & Harlcer, attorneys).

      Mr. T. Robert Zochowski argued the cause for respondent {Mr. Arthur J. Sills, Attorney General of Few Jersey, attorney).
   The opinion of the court was delivered by

Kilkenny, J. A. D.

The Eairview Cemetery Company, a

nonprofit Few Jersey corporation, appeals from the determination of the Few Jersey Inheritance Tax Bureau, Division of Taxation, that a devise to the cemetery company, under the will of Katherine Kuebler, of some five unimproved lots in Dover Township, Ocean County, was taxable as an inheritance under N. J. S. A. 54:34-2(d). The testatrix died on October 4, 1966.

The Bureau appraised these lands at $500 and assessed a tax of $75 plus interest, for a total of $82.50, which the cemetery paid under protest on May 22, 1968. The devise was absolute and unconditional, without any limitation upon it or the use of the funds which the cemetery company expects to receive upon the sale oí the lots. Fairview Cemetery is located in Fairview, Bergen County, at or near the boundary oí that community with the boundary line of North Bergen, in Hudson County.

The cemetery company claimed and still claims before us that the devise to it was exempt from inheritance tax under N. J. S. A. 54:34-4(d), which exempts from inheritance tax transfers to, or for the use of or in trust for

“any educational institution, church, hospital, orphan asylum, public library or Bible and tract society or to, lor the use of or in trust for any institution or organization organized and operated exclusively for religious, charitable, benevolent, scientific, literary or educational purposes, * * * no part of the net earnings of which inures to the benefit of any private stockholder or other individual or corporation; * * (Italics ours)

Fairview Cemetery Company maintains that it qualifies under this exemption as a “charitable” and as a “benevolent” organization. Obviously, it does not qualify under any of the other specified categories.

Fairview Cemetery Company has operated the cemetery in Fairview for about 67 years. It is nonsectarian and has served people of all taces, religions and national origins, primarily of North Hudson and East Bergen County. It has sold and continues to sell cemetery plots to all people wishing to purchase and use the same. It alleges in its brief, without reference to any proof thereof in the record, that it makes provision for the burial of people who are unable to pay for the plot or for burial charges, by either reducing the fees charged or not charging any fees.

On April 20, 1936 it was adjudged insolvent by the former Court of Chancery. Receivers were appointed and they were authorized “to carry on the business [of the cemetery] as a charitable trust.” Docket No. 113/495. Litigation concerning this receivership is reported in Burke v. Gunther, 128 N. J. Eq. 565 (Ch. 1941), affirmed 133 N. J. Eq. 609 (E. & A. 1943), and Moore v. Fairview Mausoleum Co., 39 N. J. Super. 309 (App. Div. 1956). On September 28, 1962 the cemetery company was discharged from receivership by order of the Chancery Division and trustees were appointed by the court pursuant to N. J. S. A. 8:1-20.1.

The cemetery company advises us that there is presently outstanding and due to holders of receivers’ certificates the aggregate sum of $104,150.61. There are no stockholders or holders of any other legal or beneficial interest in the cemetery association, other than the well over 10,000 plot-holders. The Superior Court will retain control and select the trustees of the cemetery, audit their accounts and determine their compensation until the receivers’ certificates have been paid in full. Hone of the present trustees has any pecuniary interest in the cemetery.

Eairview Cemetery Company has not had an operating profit since at least 1936. But there is pending in the Chancery Division an action for an accounting, for appointment of a successor trustee and for instructions. Ho fees have been paid to any trustee to date.

The devised lands will be sold at a public sale to the highest bidder and it is intended that the proceeds will be added to the Permanent Maintenance Eund, the income from which will be used for the general upkeep and embellishment of the cemetery and to make up operating deficits inherent in the cemetery due to its past financial history.

“It is well settled that a cemetery dedicated for the burial of the dead is a charitable or public trust.” Moore v. Fairview Mausoleum Co., 39 N. J. Super. 309, 314. “The cemetery, and the conduct of its affairs, is a trust, a charitable or public trust. * * * Those who administer the affairs of a cemetery are in reality trustees, and are subject to all the rules of law, respecting the duties and liabilities of a trustee.” Burke v. Gunther, supra. Thus, as that case points out, it is contrarjr to our public policy to permit the trustees of a cemetery “to make for themselves a profit.” 128 N. J. Eq., at p. 571. In fact, the statute itself precludes anyone from making a profit in the operation of the cemetery. R. S. 8:2:11 provides that the moneys derived from all sales of plots or lots must be first appropriated to the payment of the purchase money of the lands acquired by the cemetery, and the residue must be used for the preservation, improvement and the embellishment of the cemetery grounds, avenues and roads leading thereto and to defray the incidental expenses of the cemetery establishment.

Is a cemetery company, which sells plots and lots generally for the burial of the dead for a consideration paid to it and maintains the cemetery out of the proceeds of such sales and out of other funds received by it as maintenance charges or otherwise, a “charitable” or “benevolent” institution or organization within the meaning of N. J. S. A. 54:34-4(d)? In answering that question we note at the outset that statutes granting exemption from taxation are strictly construed and doubts as to the eligibility for exemption are resolved against the claimant. “[A] claimed exemption from taxation must find support in clear and unmistakable expressions of the legislative act.” Hopkins v. Neeld, 41 N. J. Super. 345, 351 (App. Div. 1956). On the other hand, “strict construction does not mean a construction which begrudges. Eather it means an exemption shall not be extended beyond the ascertainable intention of the Legislature and hence an exemption must be denied if a purpose to grant it is doubtful.” Deubel v. Kervick, 33 N. J. 568, 574 (1960). The burden of proving tax-exempt status is upon the claimant. Town of Bloomfield v. Academy of Medicine of N. J., 47 N. J. 358, 363 (1966).

“The fundamental approach of our statutes is that ordinarily all property shall bear its just and equal share of the public burden of taxation. As the existence of government is a necessity, taxes are demanded and received in order for government to function. * * Bloomfield, supra, at p. 363.

Plaintiff equates “charitable trusts” with “charitable institutions” and argues that since a cemetery is a “charitable trust” it is, therefore, a “charitable institution” and entitled to exemption from inheritance taxes. That a cemetery is a charitable trust has oft been stated. See, too, Terwilliger v. Graceland Memorial Park Ass’n, 35 N. J. 259, 265 (1961); Frank v. Clover Leaf Park Cemetery Ass’n, 29 N. J. 193, 201 (1959). But does the claimed consequence follow that it is a “charitable institution” within the meaning of the tax exemption provision of our inheritance tax law, N. J. S. A. 54:34-4(d) ?

Our law has generally not treated cemeteries as equatable with charitable institutions. Whenever it was intended to embrace a cemetery as within the orbit of a tax exemption provision, it has always been done so expressly. For example, our 1947 Constitution, Art. VIII, § 1, par. 2, refers to exemptions from taxation of real and personal property “used exclusively for religious, educational, charitable or cemetery purposes, as defined by law * * (Emphasis added). Again, although N. J. S. A. 54:4-3.6 exempts from taxation buildings and land owned by associations or corporations organized exclusively for “charitable” and other designated purposes, a separate legislative provision was deemed necessary and adopted to exempt “graveyards and burial grounds * * * and cemeteries.” N. J. S. A. 54:4-3.9.

N. J. S. A. 54:34r-4(d) exempted onty “educational institutions” from inheritance taxes prior to the 1962 amendment of that section. It is noteworthjr that the statement annexed to the 1962 bill recited:

“New Jersey is one of the few States which subjects churches, hospitals and other charities to taxation on gifts received by will.
The purpose of this bill is to exempt our charities from such taxation and thereby make the New Jersey law uniform with that of the other States and with the exemptions accorded by Federal law.” (Italics ours)

We do not find a “cemetery” reasonably embraced within the words “churches, hospitals and other charities,” either expressly or by fair implication, under the rule of ejusdem generis.

The statement accompanying the 1962 amendment indicates that the Legislature had given consideration to the laws of other states and federal law in formulating the exemption, because it notes the legislative desire to “make the New Jersey law uniform” therewith. How, then, do the laws of other states and the federal law treat cemetery associations in the matter of inheritance tax exemption?

The majority of decisions by the courts of other states demonstrates that cemetery companies or associations are not deemed to bo charitable institutions for the purpose of exemption under their respective taxing statutes. See Town of Milford v. Commissioners, 213 Mass. 162, 100 N. E. 60, 61 (Sup. Jud. Ct. 1912); Bulloch v. Long, 260 Mass. 129, 156 N. E. 743 (Sup. Jud. Ct. 1927); In re Hill’s Estate, 131 Me. 211, 160 A. 916, 83 A. L. R. 928 (Sup. Jud. Ct. 1932); Lexington Cemetery Co. v. Commonwealth, 297 Ky. 851, 181 S. W. 2d 699 (Ct. App. 1944); Christgau v. Woodlawn Cemetery Ass’n, 208 Minn. 263, 293 N. W. 619 (Sup. Ct. 1940) ; Industrial Comm. v. Woodlawn Cemetery Ass’n, 232 Wisc. 527, 287 N. W. 750 (Sup. Ct. 1939).

In re Hill’s Estate, supra, is illustrative. That case involved an inheritance tax exemption similar to New Jersey’s. Decedent made certain bequests to the Berwick Cemetery Association and an inheritance tax was assessed against the bequests. Claim was made for tax exemption under Maine’s inheritance tax law, which excepted from operation of the tax transfers “to or for the use of any educational, charitable, religious, or benevolent institution.” It was held that, 3a dealing with cemetery corporations, the Legislature i£has not regarded them as included within the statutory provisions relating to charities.”

In Town of Milford, supra, it was held that a cemetery corporation, selling lots to members of the public generally, is not a charitable or benevolent corporation within the meaning of a statute exempting from taxation the property of “benevolent” and “charitable” institutions.

The cemetery cites Bushong v. Taylor, 161 Tenn. 522, 33 S. W. 2d 80 (Sup. Cl. 1930), as supportive of its contention that a cemetery is a “charitable institution.” That case does not so say. It holds only that a bequest in trust, the income to be expended in caring for a cemetery and church, was a charitable trust “not within the meaning of the constitutional ban on perpetuities” (at p. 83), and not subject to the inheritance tax payable, if the bequest passed to the residuary legatee, upon failure of the trust.

As to the federal law, the Federal Estate Tax Act, 36 U. S. C. A. §3055, delineates the entities transfers to which are deductible under that act. To this day Congress has not created a tax exemption for transfers to cemetery corporations. In the Internal Revenue Code, 36 U. S. C. A. § 501, the entities exempted from taxation for inter vivos gifts are specifically listed under § 501(c)(3) in the case of corporations organized and operated for “charitable” purposes. Deductions for cemetery companies, however, are separately listed under § 501(c) (13). This clearly indicates that “charitable institutions,” as such, are not deemed to include “cemetery companies.”

The following decisions demonstrate that under federal law the status of a company organized exclusively “for cemetery purposes” is not regarded as an institution organized exclusively for “charitable or benevolent purposes.” See Schuster v. Nichols, 20 F. 2d 179 (D. Mass. 1927); Wilber National Bank of Oneonta v. Commissioner of Internal Revenue, 17 U. S. B. T. A. 654 (1959). As was noted in the last-cited case:

“Those who did buy lots, secure deeds thereto and have interments made therein acquired inheritable property, for which they are presumed to have paid full value and were in no sense objects of charity or the recipients of charitable gifts.”

To the same effect, see Gund’s Estate v. Commissioner of Internal Revenue, 113 F. 2d 61 (6 Cir. 1940), and Craig v. Commissioner of Internal Revenue, 11 U. S. B. T. A. 193 (1938).

The foregoing analysis of the law of other states and of federal law establishes that the probable intent of the Legislature, by the 1962 amendment, was not to include cemetery companies as among the "charities” to be accorded inheritance tax exemption.

Nor does the fact than an occasional indigent may be buried free of charge make Eairview Cemetery an institution organized "exclusively” as a charitable or benevolent organization. It admittedly has 10,000 lot or plot owners who paid value for their deeds. In the cemetery’s letter to the Bureau, under date of February 23, 1968, it acknowledged:

“Any party who pays the charges set by Resolutions of the Board of Trustees from time to time may purchase a plot for his use in the Cemetery.”

Such a policy negates an "exclusively” charitable purpose.

The Division of Taxation concedes that, generally, the word “benevolent” is considered to be synonymous with the word "charitable.” It cites in support thereof Hight v. United States, 256 F. 2d 795 (2 Cir. 1958); Union & New Haven Trust Co. v. Eaton, 20 F. 2d 419, 421 (D. Conn. 1927) In re Murphy’s Estate, 184 Pa. 310, 39 A. 70 (Sup. Ct. 1898); In re Snell’s Will, 154 Kan. 654, 121 P. 2d 200, 203 (Sup. Ct. 1942); Ministers and Missionaries Benefit Board of Northern Baptist Convention v. Thayer-Martin, 118 N. J. L. 465 (Sup. Ct. 1937); Pitney v. Bugbee, 98 N. J. L. 116 (Sup. Ct. 1922). This being so, the State limits its argument to the term “charitable” in the tax exemption provision. So, too, plaintiff cemetery company does not find any specific value to it in the word i£benevolent” and relies essentially on the word "charitable” in the statute as the basis of its claim for exemption. Accordingly, we need not consider the word “benevolent” as material to the issue herein.

For the reasons above stated, we affirm the determination of the State Inheritance Tax Bureau, Division of Taxation, and hold that Fairview Cemetery Company was properly denied its claim of inheritance tax exemption.


author: Per Curiam.

text:
    SERBIAN EASTERN ORTHODOX CONGREGATION OF “ST. GEORGE”, ELIZABETH, N. J., A CORPORATION, ETC., PLAINTIFF-APPELLANT, v. SERBIAN EASTERN ORTHODOX CONGREGATION OF “ST. GEORGE”, ELIZABETH, N. J. (DIOCESE FOR EASTERN STATES OF AMERICA AND CANADA) AN UNINCORPORATED ASSOCIATION, AND LOUIS VASITY ET AL., DEFENDANTS-RESPONDENTS. SERBIAN EASTERN ORTHODOX CONGREGATION OF “ST. GEORGE”, ELIZABETH, NEW JERSEY, A RELIGIOUS CORPORATION OF THE STATE OF NEW JERSEY, AND RAY V. JURICH (AND 15 OTHERS), PLAINTIFFS-RESPONDENTS, v. CASLOV NIKITOVIC (AND 13 OTHERS), DEFENDANTS-APPELLANTS.
    Superior Court of New Jersey Appellate Division
    Argued June 2, 1969
    Decided June 13, 1969.

      Before Judges Gaulkdt, Coluester and Labrecque.

      Mr. Daniel J. Bussell argued the cause for appellants.

      Mr. Paul B. Williams argued the cause for respondents (Mr. Theophil D. Iirehel of the New York Bar, on the brief).
   Per Curiam.

This appeal involves a controversy between two groups for control of the Serbian Eastern Orthodox Congregation of “St. George,” Elizabeth, N. J.

Prior to May 10, 1903 St. George’s was a constituent part of the “Serbian Eastern Orthodox Diocese in the United States and Canada.” As originally constituted, that diocese (hereafter the old diocese) comprised the entire territory of tile United States and Canada and was one of those making up the Serbian Orthodox Church (the mother church), with headquarters in Belgrade, Yugoslavia. The spiritual head of the mother church was the Serbian Patriarch and the power of appointment of its bishops was vested in its Holy Assembly of Bishops (the Holy Episcopal Council). Prior to May 10, above, Dragoljub Milivojevich, under the name of Bishop Dionisije, was bishop of the old diocese by appointment of the Holy Assembly.

On May 10, 1963 the Holy Assembly, with the approval of the Patriarch, divided the American and Canadian Diocese into three. St. George’s was in the new Mid-Eastern American Canadian Diocese. Bishop Dionisije was assigned as bishop of the new Mid-Western Diocese. Bishop Dionisije was assigned as bishop of the new Mid-Western Diocese but was suspended from office pending the hearing and determination of certain charges which had been made against him.

Bishop Dionisije opposed the subdividing of the old diocese and sought to enlist support in resisting it. Certain members of the congregation of St. George (hereinafter the Dionisije group) responded by advising him in a letter of their desire to “help to revoke the decision of the Holy Synod” and by later participating in a Diocesan Assembly in which the old diocese, in effect, declared its independence of the mother church. Other members of the congregation (hereafter the Belgrade group) were unwilling to adopt a position in opposition to that of the mother church, and when they sought to cooperate with the bishop appointed to preside over the newly created Mid-Eastern Diocese (the new diocese), they were expelled from membership in the congregation and prohibited from attending its meetings or social functions. The bylaws of the congregation were also amended to exclude from future membership those “not recognizing the jurisdiction of the Serbian Orthodox Diocese for the United States of America and Canada having its seat in Libertyville, Illinois,” (meaning the old diocese). Since that time St. George’s has been in the hands of the Dionisije group while those opposed have been compelled to hold services elsewhere.

The charges against Bishop Dionisije were heard by the Holy Assembly of bishops which found him guilty and entered an order, dated March 15, 1964, removing him as bishop and reducing him to layman status. One of the charges of which he was found guilty was schism. On March 24, 1966 the bishops having jurisdiction over the three newly created American-Canadian dioceses issued a bulletin in the form of a Declaratory Hierarchical Act which, in effect, branded his followers as schismatics who had lost their “status and all rights or privileges in the Serbian Orthodox Church.”

The judge of the Chancery Division, following Watson v. Jones, 13 Wall. 679, 80 U. S. 679, 20 L. Ed. 666 (1872), determined that St. George’s was an integral part of the Serbian Orthodox Patriarchate and of the new diocese established by the mother church, and that neither Bishop Dionisije nor the old diocese any longer had jurisdiction over it. Ho declared invalid the exclusion of the Belgrade group from membership, declared vacant all offices held by members elected by the Dionisije group, and ordered that the books and other records be turned over to those recognizing the Patriarchate and the new diocese. The present appeal by members of the Dionisije group challenges the resultant judgment.

As the law stood at the time the matter was tried, we are satisfied that Watson v. Jones applied and that the judgment was fully sustainable, substantially for the reasons set forth in the written opinion of the trial judge. Compare St. John’s Greek Catholic, etc. Church v. Fedak, 96 N. J. Super. 556 (App. Div. 1967), certification denied 50 N. J. 406 (1967). However, the case was tried, and appellants’ original brief was filed, prior to the coming down of the decision of the United States Supreme Court in Presbyterian Church in United States v. Mary Elizabeth Blue Hull Memorial Presbyterian Church, 393 U. S. 440, 89 S. Ct. 601, 21 L. Ed. 2d 658 (1969), and appellants urge in their reply brief, inter alia, that in determining the issues here the trial judge invaded fields of decision which were held in that case to be denied the courts by the First Amendment to the Federal Constitution. We disagree and hold that Presbyterian Church in United States p. Mary Elizabeth Blue Hull Memorial Presbyterian Church also calls for affirmance.

Appellants take the stand that they remain members of the Serbian Orthodox Church, although not following it in the matters here involved. That church is an autocephalous hierarchical one which functions under the spiritual guidance of its Patriarch. Its highest body is the Holy Assembly of Bishops, upon whom rests the power to appoint and remove bishops. The Holy Assembly, which had appointed Bishop Dionisije, has removed him as bishop and solemnly declared him to be no longer an Orthodox clergyman. We are assured by appellants that they do not ask us to review that action, and we recognize that we may not do so. Presbyterian Church in United States v. Mary Elizabeth Blue Hull Memorial Presbyterian Church, supra; Watson v. Jones, supra; Kreshik v. St. Nicholas Cathedral, 363 U. S. 190, 80 S. Ct. 1037, 4 L. Ed. 2d 1140 (1960). Thus, with certain exceptions to which reference will be hereafter made, we may not look beyond the ecclesiastical determination that Dionisije is no longer a bishop having jurisdiction over the diocese of which St. George is a part, but is a schismatic, cut off from the body of the church.

As to the status of those, including, allegedly, appellants, who continue to follow Dionisije in spite of his removal and unfrocking, we are confronted with the Declaratory Hierarchical Act of the bishops appointed by the Holy Assembly to govern the three new Serbian Orthodox Dioceses in the United States and Canada, which declares that those who follow Bishop Dionisije are schismatics who ipso facto “have cut themselves off from the Mystical Body of Christ, the Holy Orthodox Church and so have excommunicated themselves from the family of Holy Orthodoxy throughout the world.” The trial judge implicitly determined, and we find the proofs support that conclusion, that appellants here qualify as followers of Bishop Dionisije who thus became schismatics.

Likewise, under Presbyterian Church in United States v. Mary Elizabeth Blue Hull Memorial Presbyterian Church we may not on this appeal review the validity of the action of the Holy Assembly of Bishops, acting under the authority of Article 16 of the constitution of the mother church, in subdividing the old diocese, and appellants make it clear in their reply brief that they are not seeking such review. Further, assuming, as the court there pointed out, that a narrow review of a specific ecclesiastical decision would be permissible under Gonzalez v. Roman Catholic Archbishop, 280 U. S. 1, 50 S. Ct. 5, 74 L. Ed. 131 (1929), to determine whether fraud, collusion or arbitrariness appeared, the proofs here are entirely deficient in that respect. While there was some suggestion of communist domination of the mother church as having played a part in the division of the old diocese, supporting proof was entirely lacking and the trial judge specifically found to the contrary.

Thus it would appear that the basic conclusions of the trial judge rest, not upon his determination of ecclesiastical questions whose determination by the courts may be inhibited by Presbyterian Church in United States v. Mary Elizabeth Blue Hull Memorial Presbyterian Church or Watson v. Jones, supra, but upon the recognition of decisions made by the highest airthority of the mother church of which the Church of St. George was a constituent part from the time of its organization. The resultant judgment leaves intact the congregation’s constitution and bylaws as they existed prior to the amendment, excluding those not recognizing the old diocese. Since the constitution of the old diocese has been carried over into the new diocese, the relations between St. George’s and the new diocese, and between the latter and the mother church, remain the same.

The judgment of the Chancery Division is accordingly affirmed.


author: Herbert, J. S. C.

text:
    CHICAGO INSURANCE COMPANY, A CORPORATION AND STANLEY ZEIDNER, PLAINTIFFS, v. SECURITY INSURANCE COMPANY OF HARTFORD, A CORPORATION, MURRAY BROTHERS, INC., HELEN WEST, SOPHIE FILIPSKI, JOHN A. HARRIS AND CHARLES BEVERLY, DEFENDANTS.
    Superior Court of New Jersey Chancery Division
    Decided May 23, 1969.

      Messrs. Zuclcer, Lowenstein, Gurny & Zuclcer, attorneys for plaintiffs (Mr. Milton Gurny, appearing).

      Mr. Rocco L. D’Ambrosio, Gaffey, Webb, & McDermott, attorney for defendants Security Ins. Co. of Hartford and Murray Brothers, Inc.
   Herbert, J. S. C.

Plaintiffs sue for a judgment declaring what insurance coverage applies to the liabilities of Stanley Zeidner for damages resulting from an automobile accident in which he was involved on June 3, 1966. By counterclaim defendant Security Insurance Company of Hartford demands similar relief.

On June 3, 1966 Stanley Zeidner’s father was the principal owner of defendant Murray Brothers, Inc. Stanley was an employee. The senior Zeidner was also principal owner of Murray Realty Co., Inc. and certain other companies. It was part of Stanley Zeidner’s duties to collect rent and do other chores on occasion for Murray Realty Co., Inc., although he drew his salary from the more active company, Murray Brothers, Inc. Late in the afternoon of June 3 he was going on business to a building of the real estate company located on Mulberry Street in Newark. He was driving a rented Dodge automobile because the company-owned car which was treated as his, more or less exclusively, had been recently stolen. The rented car had been procured from a commercial company and had been rented in the name of Murray Brothers, Inc. on a credit card issued to that company.

At or near the point in Newark where Edison Place intersects the easterly side line of Broad Street, Stanley Zeidner had to bring the rented car to a stop because he found that vehicles ahead of him were not moving. Immediately in front of him was a bus which was at standstill. He got out of the rented car and went around to the front of the bus to investigate. There he found an automobile so parked as to prevent vehicles from moving easterly along Edison Place, the path which Stanley planned to take in order to get to the Mulberry Street address. This parked car was owned by defendant Beverly. There was no driver in it, but it was occupied by a young boy. In the absence of the driver of the Beverly car Stanley Zeidner got into it, took the wheel and undertook to move it to a position which would permit traffic to flow along Edison Place. When he put the Beverly car in motion an accident followed which resulted in personal injuries to defendants West and Eilipski and damages to the automobiles of defendants Harris and Beverly.

If Stanley Zeidner had been at the wheel of the rented Dodge automobile and had so operated it — rather than Beverly’s car — as to cause the accident, then insurance coverage for Stanley would be furnished by the policy of defendant Security Insurance Company. That policy was issued to Murray Brothers, Inc. and affiliated companies including Murray Realty Co., Inc. The policy broadly states the undertaking of the insurance company as an obligation “to pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages * * *.” However, following the quoted language there is a definition of “insured” and insofar as pertinent here it reads:

“Any person while using an owned automobile or a hired automobile and any person or organization legally responsible for the use thereof, provided the actual use of the automobile is by the named insured or with his permission. * * *”

There has been no argument made that Stanley Zeidner lacked permission to operate the rented car when he went on his rent-collecting assignment, but for plaintiffs, and particularly the Chicago company, it is argued that Stanley’s unfortunate experience as driver of the Beverly car was such an extension of his use of the rented car that it should be covered by insurance as though the rented car, with Stanley at the wheel, had been the instrumentality which inflicted the damage. This argument is, of course, based upon the conception that clearing the planned route for the rented Dodge was so closely and necessarily related to the actual use of that car as to be, in the eyes of the law, a part of that use.

I am not persuaded by plaintiffs’ arguments. Stanley Zeidner might have waited for the driver of the Beverly ear to appear and move it, as the driver of the bus immediately in front of the rented car was apparently doing. He might have maneuvered the rented Dodge out of its temporary cul-desac and taken another route to his destination on Mulberry Street. In short, the Beverly car was not a blockade on the only available road and one which Stanley Zeidner had to clear away himself if the road was to bo opened to Ms rented car within any reasonable time.

A case close to the point is Federal Ins. Co. v. Forristall, 401 S. W. 2d 285 (Tex. Sup. Ct. 1966). There one Vallee had parked his Pontiac automobile at the Beaumont Country Club. Defendant George Z. Eorristall, at or about the same time, was driving a car owned by his father, with his father’s consent and permission. He parked that car immediately behind Yallee’s vehicle. Later, when defendant desired to leave the country club he found that he was unable to do so because the car he had driven to the club was parked between the Vallee Pontiac and another car, and in order to get space in which to move his car he entered the Yallee Pontiac and released the gearshift from park position- Then he and another pushed the Yallee vehicle, but did so with such ineptitude that it rolled down an embankment, crashed into a boathouse and went into the river. Yallee instituted suit against the Eorristalls, and the Eorristalls sought a defense from Gulf Insurance Company. Gulfs policy provided liability coverage for injury to or destruction of property, etc., “arising out of the ownership, maintenance or use of the owned automobile * * The Eorristalls maintained that Gulf was obligated to defend them under this clause and argued that the movement of the Yallee car was necessary so that the Eorristall car could he extricated from the place where it was parked and put to use. Gulf maintained that there had been no use of the Eorristall car within the contemplation of the insurance clause. The Supreme Court of Texas held that Gulf was not obliged to defend the Eorristalls, as the pushing of the Yallee vehicle was not within the liability policy insuring against damage from use of the insured’s vehicle. In reaching this decision the court rested its holding on the Delaware case of Wiebel v. Am. Farmers Mut. Ins. Co., 1 Storey 151, 140 A. 2d 712 (Super. Ct. 1958). In that case one Wiebel was asked by his neighbor Scherff to assist him in starting his (Scherff’s) car. Wiebel drove his car into Scherff’s driveway and pushed the Scherff car toward the highway. However, this was not enough to start the car, so the two men then manually pushed the Scherff car the remainder of the distance to the highway and onto the highway, fully intending thereafter to use the Wiebel car to push the Scherff car at a high enough rate of speed to start it. When Scherff’s car was pushed manually onto the highway, a bad accident happened involving third persons. A suit was brought to declare the coverages available to both Wiebel and Scherff under their automobile liability policies. The Delaware court held that Wiebel at the time of the accident was not using his own automobile within the meaning of his policy. The court stated that although he had used his own ear to push Seherff’s in the driveway and although he was pushing the Scherff car manually so that later he could use his own to push Scherff along the highway, the manual pushing of the Scherff car did not arise out of, nor was it to be considered a use of the Wiebel car.

Chief Justice Hightower, in his opinion for the court in Federal Ins. Co. v. Forristall, supra, while commenting on the applicability of Wiebel, stated:

“If young Forristall had pushed the Yallee ear with his own, then obviously, he would have been using his own car. However, when he elected to push the Vallee car manually, he put aside the use of his own car.” (401 S. W. 2d, at p. 292)

An annotation in 89 A. L. R. 2d 150 et seq. (1963) has been cited by plaintiffs. It is entitled, “Automobile liability insurance: what are accidents or injuries ‘arising out of ownership, maintenance, or use’ of insured vehicle.” I find nothing there which requires a holding that the policy of defendant Security covered the accident caused by Zeidner when he drove the Beverly car. At page 154 the note writer said:

“It is well settled that a causal relation or connection must exist between an accident or injury and the ownership, maintenance, or use of a vehicle in order for the accident or injury to come within the meaning of the phrase ‘arising out of the ownership, maintenance or use’ of a vehicle.”

In my judgment, no such causal relation or connection can be found in the facts of this case. When Stanley Zeidner became the driver of Beverly’s automobile he was beyond the scope of coverage provided by Security’s policy.