author: John O. Wegnek, Deputy Commissioner.

text:
    New Jersey Department of Labor, Workmen's Compensation Bureau.
    BART DESPOSITO, PETITIONER, v. AMERICAN LATHING COMPANY, OR IN THE ALTERNATIVE VROMAN & MAHIEU, INCORPORATED, AND SCHULSTADT COMPANY, RESPONDENTS.
    Decided April 21, 1938.
    For the petitioner, Nathan Rabinowitz.

    For the respondent American Lathing Company, John Taylor.

    For the respondent Vroman & Mahieu, Incorporated, Cox & Walburg.

   ❖ * -l' i’fi í|í jji *

I find and determine as follows:

1. The petitioner testified that he was notified at the office of the union to which he belonged that he was to report to St. Joseph’s School for employment as a metal lather. On the morning of August 10th, 1937, he reported at the job to a Mr. Braedell whom he knew as the lathing foreman and this foreman told him what to do on this first day of work and while taking metal laths to the roof he stepped on a piece of wood and ran a nail into his foot. He stated he was employed bjr Mr. Braedell whom ho knew as foreman of the Schulstadt Company. He further stated he received his orders as to his work from Mr. Braedell, he did not work after the accident and received his money for the half day’s work but does not know who paid it because ho received it at the union office. He stated he reported the accident to Mr. Braedell and received medical attention thereafter for the condition of his foot.

2. On his behalf Dr. Córtese testified from an examination made by him and estimated there was a permanent disability of five per cent, of the foot.

3. On behalf of the respondent Schulstadt Company, Dr. Einke testified from an examination made by him in which he stated that he found no permanent disability.

4. On behalf of the respondent Vroman & Mahieu, Incorporated, Mr. Mahieu testified that he did not employ the petitioner, did not pay the petitioner and did not have anything to do with the petitioner’s employment or work. He testified that his company was the general contractor on the job, made contracts with the Schulstadt Company for the lath work and plaster work. On the return of the contracts he noticed that the American Lathing Company appeared as the party on the contract for the lath work and the Schulstadt Company appeared as the party on the plaster work. He stated that during the course of the work there arose an argument as to a certain portion of the lath and plaster work at the roof and he told Mr. Schulstadt to do that work and send a bill for it.

5. Mr. Braedell was called by the respondent Schulstadt Company, who testified that he was metal lathing foreman for the American Lathing Company and that Vroman & Mahieu, Incorporated, had come to him to borrow a lather. He testified that the day before the accident he put four men doing roof lathing work and in order to make sure that he would not be short of men on the following day he called union headquarters for another man and on the morning of August 10th the petitioner reported to him at eight o’clock in the morning ready for work. He stated that he showed the man what was to be done and turned him over to Mr. Vroman. He further stated that he engaged the petitioner the morning of August 10th, and expected after the roof lathing job was done to continue the petitioner in his employment.

6. The respondent Schulstadt Company produced Mr. Schulstadt as a witness. He testified that the American Lathing Company was not a corporation nor a partnership but was a name under which certain business was done in Passaic county for labor reasons. He testified that the American Lathing Company was a part of the Schulstadt Company and that he carried workmen’s compensation insurance. He further testified he paid the petitioner his wages for the part time which the petitioner worked and received reimbursement when final payment was made under the contract which he had with Vroman & Mahieu, Incorporated. He testified to a payroll which record was marked in evidence.

At the conclusion of the petitioner’s case a motion was made by the respondent Vroman & Mahieu, Incorporated, for a judgment of dismissal and that motion was renewed at the end of the entire case. On the question of employment in this case I find and determine as follows:

1. Prom the testimony of the petitioner and circumstances under which he obtained employment he was employed by the Schulstadt Company on the morning of August 10th, 1937. He was employed by that company working on the job either under that name or under the name of the American Lathing Company since as Mr. Schulstadt said the American Lathing Company is really a part of the Schulstadt Company, the employment was legally by the Schulstadt Company. It further appears that there was an argument about certain roof lathing to be done on the job and Vroman & Mahieu, Incorporated, asked the Schulstadt Company to either do that work or supply men to do that work. It further appears that the foreman for the American Lathing Company, in order not to be short-handed with lathers, had instructed the union headquarters to send a lather to the job on August 10th, 1937. The petitioner appeared in response to that request and reported to the foreman, Mr. Braedell. It further appears that the petitioner was carried on the payroll of the Schulstadt Company for August 10th, 1937, and paid by Mr. Schulstadt. According to the petitioner, as far as he knew of his employment, he was employed by and working for the Schulstadt Company on August 10th, 1937. I find as a fact that the petitioner was employed by the Sehulstadt Company on August 10th, 1937, and received his wages from the Sehulstadt Company for the work which he did on that day. The request to the union headquarters for the petitioner’s services was made by a foreman of the Sehulstadt Company and in response to the request so made the petitioner reported to work and the employment was confirmed by the foreman of the Sehulstadt Company.

It appears that under the case of Rongo v. R. Waddington & Sons, 87 N. J. L. 395; 94 Atl. Rep. 408, that on the basis of the original employment in this case the Sehulstadt Company is properly deemed to be and I so find as a fact the employer of the petitioner. See, also, Collawn v. 25 North Harrison Street, 11 N. J. Mis. R. 44; 165 Atl. Rep. 91.

If it were considered that after the original contract of employment were made on the morning of August 10th, 1937, the petitioner had been loaned to Yroman & Mahieu, Incorporated, still the obligation of the Sehulstadt Company to the petitioner to respond under the Workmen’s Compensation act of New Jersey, would not be avoided. Furey v. Thompson-Starrett Co., 1 N. J. Mis. R. 176; Jackson v. Erie Railroad, 86 N. J. L. 550; 91 Atl. Rep. 1035.

It is, therefore, on this 21st day of April, 1938, ordered that the petition as against the respondent Yroman & Mahieu, Incorporated, be dismissed and judgment be entered in favor of the respondent Yroman & Mahieu, Incorporated.

John O. Wegnek, Deputy Commissioner.


source: Caselaw Access Project

author: Proctor, D. C. J.

license: Public Domain

text:
    First Judicial District Court of Monmouth County.
    WILLIAM NOVOGROD, PLAINTIFF, v. KAYNE’S, INCORPORATED, OR IN THE ALTERNATIVE MAX KAYNE, DEFENDANT.
    Decided April 19, 1938.
    For the plaintiff, David Goldstein.

    For the defendant, Vincent P. Keuper.

   Proctor, D. C. J.

The basic question to be decided is whether or not a judgment rendered by a Small Cause Court in excess of its jurisdiction may be attacked collaterally.

This is an action in replevin based upon the following facts: A judgment was obtained in this court for the Speed-O-Print Corporation against Kayne’s, Incorporated. Execution was issued, levy made and a sale was held of the articles mentioned in the writ of replevin on February 3d, 1938. The plaintiff was the purchaser of the aforesaid articles at that sale.

In the defense of the present action it appears that one, Hubler, obtained a judgment out of the Small Cause Court holden before George Bailey, a justice of the peace, in the sum of $200, against the defendant. Execution was issued, levy made and the entire contents of the store were sold to Hubler.

The Small Cause Court is situate in the city of Asburv Park, and Kayne’s, Incorporated, is also situate in the city of Asbury Park. The jurisdictional limit of the Small Cause Court is found in Rev. Stat. (1937) 2:8-46, which provides:

“Except as otherwise specifically provided by law, no Justice of the Peace or Small Cause Court shall have jurisdiction over any cause or proceeding cognizable before a District Court, where the defendant or defendants reside within any city or judicial district where a District Court is established, nor shall any Justice of the Peace resident within the limits of any city or judicial district where a District Court is or may be established, exercise any civil jurisdiction whatever.”

The above section is modified as to counties bordering the Atlantic ocean by the following section (Rev. Stat. (1937) 2:8-47), which provides:

“In judicial districts that are or may be created in counties of this state bordering on the Atlantic Ocean, Justices of the Peace or Small Cause Court shall have jurisdiction in every such judicial district in every action of a civil nature where the debt, balance, damages or other matter in dispute does not exceed exclusive of costs the sum of $50.00, as if there were no judicial district in any such county.”

Erom the above legislation it is readily discerned that the judgment of $200 by a justice of the peace situate in the city of Asbury Park is coram non judice. See Aumack v. Cotton, 9 N. J. Mis. R. 1321; 157 Atl. Rep. 549; White v. Gifford, 14 N. J. Mis. R. 788; 187 Atl. Rep. 46. That a judgment in an amount in excess of the jurisdiction of a court is void (as distinguished from voidable), seems to be well settled. The jurisdiction over the subject-matter of the suit cannot be acquired by consent. See Trustees of School District No. 28 v. Stocker, 42 N. J. L. 115; In re Hall, 94 N. J. Eq. 108; 118 Atl. Rep. 347; Palmer v. Freeholders of Essex County, 77 N. J. L. 143; 71 Atl. Rep. 285.

It also seems to be well settled that a void judgment may be subjected to collateral attack. In School Trustees v. Stocker, supra, the court said:

“A judgment pronounced by a tribunal having no authority to determine the matter in issue is necessarily and incurably void and may be shown to be so in any collateral or other proceeding in which it is drawn in question.”

The status of a judgment rendered beyond the jurisdiction of the court is shown in In re Strubles Estate, 87 N. J. Eq. 311; 101 Atl. Rep. 177.

“A judgment which is absolutely void is entitled to no authority or respect and therefore may be impeached in collateral proceedings by any one with whose rights or interests it conflicts. * * * In order to make a judgment subject to collateral it must have been rendered by a court without legal organization or by a court without jurisdiction either of the person or the subject-matter.” 34 C. J. 514.

Therefore, it follows that if there was no valid judgment in existence to uphold it, the execution under the aforesaid judgment may be attacked collaterally. I therefore find that the judgment of $200 rendered in the Small Cause Court was a nullity, and that that judgment, together with all proceedings thereunder, may be collaterally attacked in this court.

Therefore, let judgment of possession be entered in favor of the plaintiff.


text:
    First Judicial District Court of Monmouth County.
    ASBURY PARK AND OCEAN GROVE BANK, A BANKING CORPORATION, PLAINTIFF, v. ANDREW C. DAM, DEFENDANT.
    Decided May 4, 1938.
    For the plaintiff, David Goldstein.

    For the defendant, Isaiah Matlack.

   Proctor, D. C. J.

This is a return of a rule to show cause why the defendant, Andrew C. Dam, should not be required to pay out of his income such weekly sum in installments on account of a judgment recovered against him, pursuant to section 201-J of the District Court act, which empowers the court to require the defendant to make payments out of his income on account of an execution.

It appears that the defendant is a retired naval officer of the United States government, and receives a pension of $165 per month. Counsel for the defendant stated at the argument that the defendant, although retired from active duty, is still liable to call for active duty, and I will assume this to be the fact. Defendant contends that at common law it is against public policy to levy an execution against the salaries of officers of the government, and that the New Jersey statute, which permits the salary of governmental officers to be garnisheed, applies only to state and municipal officials, and that due to the fact that defendant receives a pension from the federal government the common law rule applies.

At common law, as pronounced in Schwenk v. Wyckoff, 46 N. J. Eq. 560; 20 Atl. Rep. 259, it was against public policy for an officer, even though retired and subject to call, to assign his future salary and the reason for this rule, as originally proposed in the English courts, was that if the officer should be deprived of his salary there would arise a hazard of his being driven to an inappropriate meanness of living, and of the likelihood of his falling off in that official interest and vigilance which the expectation of pay keeps alive. It was for this reason that the English courts refused to countenance any act or proceeding that might result in stripping the official of his anticipated reward.

I can see no distinction between a voluntary assignment and an involuntary assignment. The Schwenk case held that the rule applies to retired officers still subject to call, and protects his salary from himself and his creditors until he earns it. However, to make an order requiring him to pay the money in advance of his receiving it, seems to me, would be the same as taking an assignment from him in advance of his earning the money, and the public policy of this state in 1890, at the time of Schwenk v. Wyckoff, supra, appears to be against this.

However, the above rule of public policy seems to have changed. See Pamph. L. 1915, p. 470; Pamph. L. 1916, p. 242; Pamph. L. 1933, p. 210; Pamph. L. 1935, p. 508. See, also, Oetjen v. Hintemann, 91 N. J. L. 429; 106 Atl. Rep. 213. The statute in the exemption of income below the prescribed minimum and by the provisions limiting the amount to be made available for creditors, affords ample protection against want. These statutes seem to have modified the common law as enunciated in Schwenk v. Wyckoff, supra, as to public policy and embody the prevailing policy to-day. See Passaic National Bank and Trust Co. v. Eelman, 116 N. J. L. 279; 183 Atl. Rep. 677. A public servant’s salary is liable to attachment. Peterson v. Jersey City, 89 N. J. L. 93; 97 Atl. Rep. 963.

Therefore, it seems that the general policy of the law is to lend the creditor all reasonable assistance for the enforcement of Ms claim, especially against a debtor who, though possessed of the means to pay, seeks to evade his obligation. Consequently, it would seem that in view of the fact that the amount to be deducted from the income is limited, and that only one execution against salary shall be satisfied at one time, the reasons for the policy as set forth in Schwenk v. Wyckoff, supra, are outmoded.

Defendant also cites section 4747 of the Revised Statutes of the United States, which provides in effect that pension funds cannot be attached by creditors while in the course of transmission to the pensioner. However, after the money comes into the pensioner’s hands, the funds are so liable like any other funds. Jardain v. Fairton Saving Fund and Building Association, 44 N. J. L. 376.

In the instant case, there is no application for a levy against the fund while in transmission. The application is merely to have the debtor pay over a certain percentage of his income. The case of Bullard v. Goodno (Vt.), 50 Atl. Rep. 545, cited by the defendant, is not in point, as there the pensioner was indebted to his wife and had turned his pension fund over to her in satisfaction of the debt.

Plaintiff has submitted a decision dated December 20th, 1935, in this court, in the case of Pascal v. Quackenbush et al., wherein the court held that an employer of the United States government was compelled to pay ten per cent, of his salary in installments in satisfaction of the judgment. In that case the court likened the income of the defendant to that of an income from federal government bonds. Of course, the situations are not similar, as the question of an attachment against a governmental employer’s salary is whether or not it would interfere with his services to the government. Schwenk v. Wyckoff, supra; Peterson v. Jersey City; supra. Obviously, no such issue would arise where the debtor merely was in receipt of an income from government bonds. However, I base my conclusions upon the fact that public policy in this state has changed since the time of Schwenk v. Wyckoff, supra, and the prevailing policy has been enunciated by both our legislature and recent court decisions. I can see no reason why a debtor should not pay his past debts out of his income, as well as his current obligations.

It is, therefore, determined that an order of this court shall issue requiring the said defendant to pay on account of said execution, ten per cent, of his income in installments, and that the said payments shall be made monthly.


author: Lawrence, C. C. J.

text:
    Morris County Circuit Court.
    ABRAHAM ELGART, PLAINTIFF, v. J. ELGART MINTZ, DEFENDANT.
    Decided May 5, 1938.
    For the motion, Israel B. Greene.

    Opposed, Milton M. Unger.

   Lawrence, C. C. J.

The parties to this suit are, and were on November 27th, 1937, residents and domiciled in the city of New York. Defendant is the owner of one hundred and sixty shares of the capital stock of the Elblum Holding Corporation, a body corporate of this state, with its principal office in Morristown, where there is an agent in charge. Plaintiff, on the indicated date, claiming to be a creditor of defendant in the sum of $10,850, sought to attach defendant’s stock interest in the corporation through the medium of a writ which he caused to be issued out of this court. The certificate evidencing defendant’s stock, however, was at the time in his possession in New York and still is. The Uniform Stock Transfer act (Rev. Stat. 1937, 14:8-23; 14:8-39) provides that no attachment or levy upon shares of stock for which a certificate is outstanding shall be valid until such certificate be actually seized by the officer making the attachment or levy, or be surrendered to the corporation which issued it, or its transfer by the holder be enjoined. Notwithstanding, the sheriff, it appears, undertook to execute the writ of attachment by serving a copy on the corporation’s agent in this state. There was no seizure of the certificate or surrender to the corporation, nor had its transfer by defendant been enjoined. In other words, it could not be reached because defendant retained physical possession of it in New York and no proceeding had been taken there to prevent its transfer.

Resorting to another provision of the Stock Transfer act, supra, 14:8-40, to the effect that a creditor whose debtor is the owner of a certificate shall be entitled to such aid from courts of appropriate jurisdiction, by injunction or otherwise, in attaching the certificate or in satisfying the claim by means thereof as is allowed at law or in equity in regard to property which cannot be readily attached or levied upon by ordinary legal process, plaintiff following what may be termed the abortive service of the writ on the agent of the corporation endeavored to have defendant enjoined from transferring the stock, pending entry of judgment in the attachment proceeding, by instituting a suit in the Court of Chancery.

In this he failed. See Elgart v. Mintz, 123 N. J. Eq. 404; 197 Atl. Rep. 747, Vice-Chancellor Berry there holding that in the absence of actual seizure or surrender of the certificate as provided by the act, an effective injunction against the transfer by the holder is required, but since process could not be served either personally or by publication on the nonresident defendant, the equity court was without jurisdiction in the premises and no effective injunction could issue in aid of the attachment proceeding. He further held that the situs of the certificate, so far as the question involved was concerned, was in New York.

Defendant, pending the equity proceeding, and by special appearance only, gave the present notice in this court of a motion to quash the writ of attachment on three grounds: (1) the transfer by the holder of the shares of stock sought to be attached had not been enjoined; (2) there was no property of defendant in the state subject to valid attachment or levy under the writ; and (3) the situs of the res, to wit, the certificate oí the shares of stock, which it had been undertaken to attach here, was in the city oí New York.

The law applicable to the controversy was so thoroughly discussed by the vice-chancellor in Elgart v. Mintz, with a wealth of pertinent citation, that it appears wholly unnecessary to go further than to say that no effective injunction against the transfer of the stock had been obtained when the writ of attachment issued and as no seizure or surrender of the certificate was made there was nothing on which the writ could rest by way of attachment or levy. In such a circumstance, it would appear to follow that it should be quashed. Lodor v. Baker, Arlin & Co., 39 N. J. L. 49, and Terry v. Owatonna Canning Co., 119 Id. 455, 457; 197 Atl. Rep. 36. Indeed, it would seem that before a valid levy of an attachment in such a ease can be made, the transfer of the stock certificate, failing seizure or surrender, must first be effectively enjoined in a suit in which jurisdiction has been legally obtained over the defendant. As against a nonresident, it is not perceived how such jurisdiction is to be secured, in the absence of a voluntary appearance generally, assuming the service of process cannot be made upon him personally within the state. Whether the creditor has an available and effective remedy at the place of residence or domicile of the debtor may be suggested, but is not, of course, here considered. That such an injunction, however, should be obtained before the execution of the writ of attachment, where there is no seizure or surrender of the certificate of stock, is indicated in Amm v. Amm, 117 N. J. Eq. 185; 175 Atl. Rep. 186, it having been there said that the efficacy of the writ must be found in its lawful execution. The levy must be self-sufficient. If not, it falls. Injunctions can neither amplify the attachment under the writ, were it valid, nor validate it, if it be deficient.

Inasmuch, therefore, as there was no seizure or surrender of the certificate of stock in question and nothing was levied upon or attached under the writ, the proof failing to disclose that any effective injunction against the transfer of the stock had been obtained in advance of the attempted service, the conclusion is that the motion to quash should be granted.


author: Egan, V. C.

text:
    Pamrapau Corporation, complainant, v. City of Bayonne and The Central District, Incorporated, a corporation, defendants.
    [Decided April 29th, 1938.]

      Messrs. Gross & Gross, for the complainant-petitioner.

      Mr. J. Raymond Tiffany, for the defendant The Central District, Incorporated.
   Egan, V. C.

The complainant, in October, 1937, was allowed a writ of certiorari in the New Jersey supreme court. That court’s opinion, filed January 31st, 1938, held that the writ should be dismissed, but by its order subsequently made, instead of directing such dismissal, it said: “It is further ordered that the Clerk of this Court do forthwith transfer with the record thereof, all papers and exhibits filed in the cause for hearing and determination by the Court of Chancery of New Jersey.” The cause, accordingly, is now in this court. The complainant filed herein a verified petition of its cause of action. An order to show cause why the defendants should not answer the petition was issued, and argument was had thereon. The defendants contend that the complainant’s procedure in this court should not be by petition, but by way of bill of complaint, and that it should “either take an order to answer or issue a subpoena ad respondendum.” The defendants also contend that “in the proceedings pending in the supreme court, certain stipulations were entered into that are part of that record” and “those stipulations should have no effect or bearing” and is “another ground for refusal on the part of this court to accept a transfer of the cause.”

The petition herein appears to present all the facts in the ease. In the pending situation, it is analogous to a bill of complaint and effects the same purpose. The defendants should answer it if they wish to offer a defense to the suit. They, bjr proper procedure, were brought into the supreme court, and, under the statute, were removed from that court to this court. Carey v. Brown, 92 N. J. Eq. 497; 113 Atl. Rep. 499. I see no force in the defendants argument that a plenary suit should be started and subpoenas ad respondendum issued. Why should a new proceeding be instituted when all the parties are already in court? The instant suit was not dismissed or discontinued; it is not a new one. It is one that was instituted in another court, and that other court shifted it here with all the records and papers filed in the original action. The Transfer of Causes act makes provision for a change of tribunals in' the following language:

“No civil cause or matter hereafter pending in any court mentioned in the above title which has not jurisdiction of the subject-matter, shall be dismissed for that cause only, but the cause or matter shall be transferred with the record thereof arid all papers filed in the cause for hearing and determination to the proper court, which shall thereupon proceed therein as if the cause or matter had been originally commenced in that court.”

This suit shall proceed according to the rules of this court. The defendants shall answer the petition within twenty days after the date of the order incorporating the above determinations.

The stipulations that were entered into in the supreme court, are a part of the record of the proceedings; they were sent here under the order of transfer with the filed pleadings. The consideration of their pertinency will not be passed upon at this time. That point may be raised at some future time.


author: Lawkence, S. C. C.

text:
    JONAS TUMEN, PLAINTIFF, v. THE COUNTY OF MONMOUTH, DEFENDANT.
    Decided May 12, 1938.
    For the motion, Tumen & Tumen (David H. Davis).
    Opposed, Snyder, Roberts & Pillsbury (John M. Pillsbury).

   Lawkence, S. C. C.

Plaintiff served as prosecutor of the Pleas of the county of Monmouth, under the commission of the governor, from April 1st, 1930, to March 31, 1935, at an annual salary of $7,000, fixed by law in a county bordering on the Atlantic ocean, containing according to the state census of 1920 (Pamph. L. 1931, oh. 271, p. 681), a population of between one hundred thousand and two hundred thousand. Rev. Stat. 1937, 2:182-10, p. 502. Monmouth county came within this classification (see Legislative Manual 1938, page 230). The salary was paid semi-monthly in the amount of $291.66 by the county treasurer, on verified vouchers submitted by plaintiff as such officer to the board of chosen freeholders and approved by it. From July 1st, 1932, to December 31st, 1933, the vouchers were paid, but there was deducted from the amount ten per cent., and from January 1st, 1934, to March, 1935, fifteen per cent. It is these deductions, aggregating $2,318.87, which plaintiff seeks in this suit to recover of the county on the ground that the statutes under which they were made (chapters 17 and 446 of the laws of 1933, and chapter 2 of 1935) were unconstitutional and the deductions consequently without lawful authority.

It seems to have been recognized, however, and correctly, that the prosecutor of the Pleas is a state officer and that while his salary is paid by the county (supra,, 2:182-11) it nevertheless could not be reduced without his consent; for, on June 22d, 1932, “due to the financial condition of the county,” an emergency resolution was adopted by the board of chosen freeholders establishing a graduated deduction from the salary or compensation to be paid to any officer or employe holding a position under the government of the county, the deduction in cases where the annual salary was in excess of $4,500 to be ten per cent., to which was added the following:

“Be it further resolved, that all officers, position holders and employes of the county, whose compensation for services as such, payable out of county funds, is exempted from control by this Board because fixed by statute, be and they are hereby respectfully urged to co-operate with this board, with a view to facilitating the general application of the schedule of temporary deductions of compensation to all public officers, position holders and employes, by waiving such exemption by execution and delivery to the county treasurer charged with the paying of such compensation of a written instrument to that effect and instructing such authority to deduct a proportionate part of their compensation in accordance with the schedule set forth in this resolution.”

Thereupon, and on June 27th, 1932, plaintiff signed the following:

“To the Treasurer of the County of Monmouth:
Pursuant to the provisions of the foregoing resolution passed by the Board of Chosen Freeholders of the County of Monmouth on Wednesday, June 22d, 1932, I do hereby consent to the deduction by you of 10% — percentum—of my salary and do hereby waive any rights which I may have under the constitution and laws of the State against such deduction, which reduction of 10 per centum is to be made in accordance with the schedule prescribed for other officers and employes of the County, the above deduction, however, to be made only for the period beginning July 1st, 1932, and ending December 31st, 1932.”

Thereafter, during the period, he presented to the board verified semi-monthly vouchers which were approved by the board and paid by the county treasurer, for salary installment as prosecutor of the Pleas of the county in the amount of $291.66, “less ten per cent, voluntary cut” of $29.17, which payments he accepted without protest or question.

At the organization meeting of the board on January 2d, 1933, a similar resolution was adopted by it, it again requesting the officers whose salaries were fixed by statute and not controlled by the board to accept a voluntary cut of ten per cent, for the year. While not consenting in writing, plaintiff again acquiesced and during the year presented semi-monthly vouchers for $291.66, “less ten per cent, voluntary cut” of $29.16, which were approved by the board and paid by the county treasurer. The payments were accepted by him without dissent or protest.

At the organization meeting of the board on January 2d, 1934, it again adopted a resolution providing for a graduated deduction of salaries paid to officers or employes holding a position under the government of the county, whether paid directly or indirectly out of county funds, effective January 1st, 1934, to December 31st, 1934, which provided, however, for a deduction of fifteen per cent, from all salaries in excess of $2,501. Although not formally consenting in writing to such deduction, plaintiff as prosecutor of the Pleas of the county again presented semi-monthly vouchers for his salary in the amount of $291.66, “less fifteen per cent, voluntary cut” of $43.74.

Finally, at the organization meeting of the board on January 2d, 1935, “due to the business emergency and the financial condition of the county,” a like resolution was adopted for a similar deduction from all salaries in excess of $2,601, and from January 1st, 1935, to March, of the same year, plaintiff’s semi-monthly vouchers for salary as prosecutor of the Pleas were made out by him in the amount of $291.66, “less fifteen per cent, voluntary cut” of $43.75. These were likewise approved, paid and the money accepted by him without question.

The present suit is predicated on the holding in Delmar v. Bergen County, 117 N. J. L. 377; 189 Atl. Rep. 75; Doyle v. County of Warren, 15 N. J. Mis. R. 434; 192 Atl. Rep. 390, and Harley v. County of Passaic, 15 N. J. Mis. R. 641; 194 Atl. Rep. 298, that the statutes (supra) under which the deductions were made contravened the interdict of the state constitution against special legislation regulating the internal affairs of towns and counties and involved an improper delegation of power to boards of chosen freeholders which the legislature alone could exercise as to state officers by general legislation on some rational basis such as population.

Defendant’s answer as amended sets up three defenses: first, that the acts in question were not unconstitutional as to it, since the county of Monmouth was the only county in the state bordering on the Atlantic ocean containing a population of between one hundred thousand and two hundred thousand affected by the statute fixing the annual salary stated for the prosecutor of the Pleas serving therein; second, that plaintiff is estopped, by reason of his voluntary consent to accept his salary, less the indicated deductions, upon which the county relied and appropriated the moneys covered to use otherwise authorized by law; and, third, his waiver of right to receive the full salary provided by law, as set forth in the vouchers presented, with the stated deductions, following the rendition of the service covered thereby, bars recovery.

Plaintiff moves to strike the answer as sham or frivolous because the constitutional question was settled adversely to the position here taken by defendant in the cited cases and on the ground that neither the rule of estoppel nor that relating to the effect of waiver applies, reliance being had on Geddis v. Westside National Bank, 106 N. J. L. 238; 148 Atl. Rep. 917, and Kipp v. Peoples Bank and Trust Co., 110 N. J. L. 178; 164 Atl. Rep. 253, holding agreements of public officials to forego their fees before they are earned or before the services contemplated are rendered are invalid because contrary to public policy.

It would appear that the first defense set forth in defendant’s answer should be stricken. The acts under which the deductions giving rise to the present suit were made by the county were found to be in Delmar v. Bergen County, supra, special legislation and an unconstitutional delegation of power, that is to say, a power which should have been exercised directly as to state officers (including prosecutors of the Pleas) by the legislature. It may also be observed that although the county of Monmouth, under the census of 1920, was the only county bordering on the Atlantic ocean containing a population of between one hundred thousand and two hundred thousand; if population is to be regarded as the criterion or basis for general legislation in fixing the salaries of state officers serving in the several counties, then there were at least two others within the designated limits and in which the same salary was provided for the prosecutor of the Pleas therein, to wit, Mercer and Middlesex. Rev. Stat. 2:182-10, (2). As a matter of fact each of the latter had a larger population than Monmouth and what sound reason existed for distinguishing the county because of geographical location while giving it the same classification relatively as to population in fixing the salary of the prosecutor of the Pleas does not appear. The acts purporting to provide for deductions in salaries and delegation of the authority to boards of chosen freeholders did not provide for any uniformity in that regard and the application doubtless varied in each of the counties named. They were unconstitutional and no reason is discovered for declaring them constitutional in their application to the county of Monmouth. The first defense in defendant’s answer will therefore be stricken.

But it does not follow that plaintiff is entitled to recover that which he seeks in this suit. The doctrine of estoppel and the rule as to waiver appear to apply to him. It was pointed out in Smith v. National Commercial Title and Mortgage Guaranty Co., 120 N. J. L. 75; 198 Atl. Rep. 407, that “one of the essential elements of estoppel is that the party who seeks the benefit of it must have relied upon the representations or conduct of the other party and thereby have been led into such a course of conduct that he will now be substantially prejudiced if the other party be permitted to repudiate Ms former action or representation. Waiver is a designation of the act, or of consequences of the act, of one side only, and it refers to an intentional abandonment or relinquishment of a known right.”

It is clear, as disclosed by the affidavits presented on the argument of the motion here considered, that in 1933 defendant county, through its board of chosen freeholders, relied on plaintiff’s written consent to co-operate in the financial emergency existing and acted thereon by deducting the percentage of his official salary indicated and diverted the money to other county uses. It is obvious moreover that he, too, intended such action as his vouchers during the period plainly show. All of them were for services theretofore rendered. Again in 1934. and 1935, he voluntarily after similar services had been performed formally, through the medium of vouchers, waived collection of the percentage of his salary therein stated. Eo legislation, in fact, was required to enable him to do so, after the installment of salary falling due had been earned. Weart v. First National Bank of Dunellen, 115 N. J. L. 128; 178 Atl. Rep. 758, is authority for the statement that “in the absence of some legal taint, as for instance that the act is required by and done in fulfillment of a contract against public policy, it is lawful for a notary public (a public officer) to waive or remit a fee after it has been earned, and for him, after the fee has been earned, to take such a position with respect to it that he may be held, to have waived it.” It was therefore held that there is nothing contrary to public policy in the voluntary waiver by such an official of his statutory fee for an accomplished service.

There was no suggestion on the argument of the motion that there is any distinction between the fee of a notary and the salary of any other public official as to the right to waive after being earned in circumstances such as were here evidently involved. At least nothing of a persuasive factual or legal nature developed which makes the finding of such a distinction obligatory. Plaintiff’s relation to the transactions throughout, it appears, did not at any time assume a condition of compulsion or legal obligation on his part. What he did seems to have been entirely voluntary, after his salary in the manner in which it was being paid had been earned, and the natural inquiry arises whether it is not now too late to permit him to retrace his steps and recover that which he so clearly relinquished to the use of the county in the financial emergency which was then regarded as existing and affecting the situation of the county in that respect. Indeed, the affidavits tend to indicate that the deductions made from plaintiff’s salary did not at any time result from airy claimed right within the power of the county to exercise, but as action freely taken by him in compliance with the request of the board of chosen freeholders for co-operation.

The conclusion is that the constitutional question should be stricken from defendant’s answer and that those defenses covering estoppel and waiver should be allowed to stand.


author: Vannaman, D. C. J.

text:
    Passaic District Court.
    DAVID SEIDEN, INDIVIDUALLY AND TRADING AS THE HOTEL LINCOLN, PLAINTIFF, v. PASSAIC VALLEY WATER COMMISSION, A DULY CONSTITUTED PUBLIC QUASI CORPORATION, DEFENDANT.
    Decided May 11, 1938.
    For the plaintiff, Martin Klughaupt.

    For the defendant, Louis J. Bohl.

   Vannaman, D. C. J.

The action is in tort. The plaintiff is the owner and operator of the Lincoln Hotel. The defendant is a public quasi corporation engaged in the business of a water commission and so authorized by statute. It has forty thousand subscribers and between two hundred and fifty thousand and three hundred thousand consumers. It has exclusive control and possession over the water mains and pipes which lead to the plaintiff’s meters and to the meters of other subscribers who use the defendant’s water. The plaintiff has been a continuous subscriber and user of the defendant’s water since 1928. Toward the latter part of 1935 the plaintiff found that the plumbing system in his hotel was clogged; that the faucets leaked; and that the pipes in the plumbing system made rattling noises when the water was used. Thereupon the plaintiff notified the defendant of the existing condition. The condition persisted until the end of 1936.

In the latter part of 1935, when the plaintiff discovered the condition, he hired a plumber who, upon examination, found that there was an excessive amound of sand in the water; that the water containing the sand came exclusively from the defendant’s water mains which led to the plaintiff’s plumbing system. As a result of the sediment in the water, the plaintiff’s plumbing system was damaged and it became necessary for him, on several occasions during that period, to have the plumber repair and clean the affected parts of his plumbing system. The condition no longer exists. The plaintiff brings this action for damages sustained by him as a result of the injury. The doctrine of res ipsa loquitur invoked by the plaintiff finds proper application under the facts of the case. Cf. 59 N. J. L. J. Nos. 24, 25, 26, June 11th, 1936, &c.

At the end of the plaintiff’s case, the defendant moved for nonsuit on several grounds. The first and sixth grounds are that the only duty of the defendant is to deliver potable water fit for domestic use. These will be considered hereafter.

The second ground is that the doctrine of res ipsa loquitur does not apply because the defendant did not have exclusive control over the water mains. The court has found as a fact that the defendant did have exclusive control over the water mains.

The third ground is that the doctrine of res ipsa loquitur does not apply because the presence of excessive sand in the water was not an unusual occurrence. What is an unusual occurrence? In Cleary v. Camden (1936), 118 N. J. L. 215; 192 Atl. Rep. 29, in an opinion by Mr. Justice Perskie, the court sets forth the established rule to be (at p. 219) :

“Where the thing (which caused the accident) is under the management of the defendant, or his servant, and the accident is such as in the ordinary course of things does not happen, if those who have the management use proper care, it affords reasonable evidence, in the absence of explanation by the defendant, that the accident arose from the want of care.”

Tested by that rule and as a matter of fact, the excessive sand in the water was an unusual .occurrence.

The fourth ground is that there was no proof that the defendant had knowledge of the presence of excessive sand in the water. The court finds as a fact that the defendant did have knowledge of the presence of excessive sand in the water. Further, in Jones v. Mt. Holly Water Co., 87 N. J. L. 106; 93 Atl. Rep. 860 (at p. 109) the court held:

“Actual notice or knowledge of the unwholesomeness of the water of the defendant company was not an essential element to be proven in order to establish the defendant’s liability; it was sufficient if there was testimony tending to show that the defendant in the exercise of reasonable care might have discovered the unwholesomeness and dangerous condition of the water.”

The court finds that the defendant in the exercise of. reasonable care should have discovered the presence of excessive sand in the water.

The fifth ground is that the plaintiff is guilty of contributory negligence. Sufficient answer is found to this argument in the case of Hamilton v. Madison Water Co., 116 Me. 157; 150 Atl. Rep. 659 (citing Jones v. Mt. Holly with approval); Waters, 67 Corp. Jur. 1282, § 842, &c., where it is held:

“It is no part of the duty of the consumer to investigate the water supply and ascertain possible sources of pollution. That duty rests on the water company together with the further duty of taking such positive action as is necessary for the protection of its customers. It cannot shift these obligations to the shoulders of the plaintiff.”

The motion for nonsuit was denied and an exception taken.

Jones v. Mt. Holly Water Co. supra (at p. 109):

“Water is a necessity of life and one who undertakes to trade in it and supply customers stands in no different position to those with whom he deals than does a dealer in foodstuffs. He is bound to use reasonable care that whatever is supplied for food or drink shall be ordinarily and reasonably pure and wholesome.”

And in the same ease,

“The duty resting upon the water company was to furnish its customers, for consumption, pure and wholesome water.”

These principles have found universal application. In Waters, 67 Corp. Jur. 1282, § 842, the text writer, discussing the subject, holds:

“While a water company is not an insurer or guarantor of the purity of its water or of its freedom from infection, it is bound to use reasonable care in ascertaining whether there is a reasonable probability that its water supply may be infected with a communicable disease from causes which are known to exist, or which could have been known or foreseen by the exercise of such care; and for failure to use such care, it will be liable in damages to persons injured by reason of the impurity; and if the exercise of such care would have disclosed a reasonable probability of such infection, then it becomes the duty of a water company to adopt whatever approved precautionary measures are, under the circumstances, reasonably proper and necessary to protect the community which it serves from the risk of infection.”

See, also, 5 A. L. R. 1402; 13 A. L. R. 1132; 61 A. L. R. 452; Canavan v. City of Mechanicsville, 229 N. Y. 473; 128 N. E. Rep. 882; 19 Mich. L. Rev. 667; 30 Yale L. Journal 425; 5 Cornell L. Quar. 470; 6 Cornell L. Quar. 207.

In these citations water companies have been held liable for infected and polluted water. In the case at hand the claim is not for injuries resulting from using the water for its ultimate purposes but rather for damages resulting from an excessive amount of sand in the water which injured the subscriber’s plumbing system. The legal issue is: What is the extent of the duty of a water company supplying water to the subscriber ? That it must be potable and fit for domestic use is conceded. Must it also be free from sediment which may damage the subscriber’s plumbing system and property? The court so believes.

Civilization has progressed and life made more enjoyable with the advance of science. It is no longer necessary nor should it be, to go to the well with a bucket. Water can be and is delivered through pipe lines. Water companies should be and are under a legal duty to properly distribute it. The delivery of the water is equally as important as the water itself. Water companies are obligated not only to furnish the commodity but to provide for its delivery. As well as they are answerable for furnishing polluted water, so also they are answerable for furnishing water which interferes with or impedes its own free flow through the common and ordinary water conduits and systems. The defendant is just as liable for injuries to the plaintiff’s property resulting from water containing excessive sand as it is for injuries to the plaintiff’s person resulting from polluted water.

From the defendant’s case it appears that prior to 1934 the plaintiff received raw or unfiltered water. In December of 1933, and for sometime previous to that, the defendant began to receive complaints from its subscribers that the water was distasteful, discolored and odoriferous. As a result of those complaints it became necessary for the defendant to construct filters to remove the impurities.

There are two types of water filters: Pressure filters and gravity filters. Pressure filters induce the discharge of sand into the water system. Gravity filters restrain the discharge of sand into the water system.

In November, 1934, the defendant erected twelve pressure filters which were placed in operation in July, 1935. The defendant advances two main reasons to justify the construction of pressure filters rather than gravity filters: First, they were necessary. Second, they were cheaper.

To sustain its first contention, the defendant shows that the water came from the Wanaque Reservoir which is three hundred feet above sea level and that it went to the Little Falls filtration plant, which is one hundred and forty feet above sea level. It was not necessary to restore the lost pressure with the use of pressure filters. However, if gravity filters could have been erected at the Wanaque Reservoir there would be no need for restoring pressure even though there would be such a need if those gravity filters were erected at Little Falls. The defendant has argued that it could not erect gravity filters at the Wanaque Reservoir because it did not own the property. But, there has been no proof offered by the defendant to satisfactorily explain why it could not, or did not, exercise its power of eminent domain to obtain the use of that property. Rev. Stat. 21:1 and 58 :6-l.

The second reason advanced by the defendant for installing pressure filters rather than gravity filters is that it was cheaper. It appears that the defendant owned twenty pressure filters which were not in use at the time it became necessary to install filters, and, therefore, they could be erected at a saving. Besides, it would cost between $50,000 and $70,000 a year more to maintain gravity filters at Little Falls as compared with pressure filters. The court is not impressed with this argument for two reasons: (a) The saving is for the benefit of the company only. In the eyes of the law the water company stands in the same position as a private corporation. Cf. Waters, 67 Corp. Jur. 1168, § 643, note 67; cases collected underNew Jersey and Atlantic Digest, Municipal Corporations, 24 N. J. D., § 733 (4); Olesiewicz v. City of Camden, 100 N. J. D. 336; 126 Atl. Rep. 317; Morganweck v. Egg Harbor City, 147 Atl. Rep. 468; Zboyan v. City of Newark, 104 N. J. D. 258; 140 Atl. Rep. 225. (b) The saving, even if it might be construed as beneficial to the subscriber, could only be had at the risk of an ultimate and far greater loss to the subscriber by reason of a damaged plumbing system.

It further appears that if sand traps were erected with the pressure filters, they would have completely prevented the discharge of sand into the water system. Based upon an accepted principle of hydraulic engineering, sand traps have long been recognized as a means for removing sand from water. The defendant did not start to design sand traps until the latter part of 1936. They were not placed into operation until the early part of 1937 although it appears that the defendant received complaints of excessive sand in the water immediately after the twelve pressure filters were placed in operation in July of 1935. It takes two or three months to construct a sand trap and the reason advanced by the defendant for its failure to erect and operate a sand trap prior to the early part of 193*7 is that the defendant sought “the most economical type of sand trap.”

At no time did the defendant attempt to explain why it took so long, after it had learned of the excessive sand in the water, to complete the sand traps. The only two things that the defendant did to alleviate the condition was to flush the various parts of the water system and replace the sand in the filters with a substance called anthrafilt. Neither of these removed the cause. Excessive sand was still discharged into the plumbing system of the subscribers.

The court finds that the defendant was guilty of negligence because:

1. It did not prove sufficient facts to show that in failing to exercise its power of eminent domain, so that gravity filters could he erected at Wanaque Beservoir, its conduct was consonant with the exercise of reasonable care.

2. It did not prove sufficient facts to show that the increased cost which would have been necessary if gravity filters were erected at Little Palls was so great as to indicate that its action in using the cheaper method was consonant with the exercise of reasonable care.

3. It did not prove sufficient facts to show that in failing to erect sand traps immediately that the pressure filters were erected its conduct was consonant with the exercise of reasonable care.

4. It did not prove sufficient facts to show that the length of time it took to erect the sand traps was a reasonable length of time under the circumstances and, therefore, was consonant with the exercise of due care.

Judgment will be entered in favor of the plaintiff in the sum of $102.30.


author: Caffrey, C. C. J.

text:
    RUTH C. GHENT, PLAINTIFF, v. CLIFFSIDE PARK TITLE GUARANTEE AND TRUST COMPANY, A BANKING CORPORATION OF THE STATE OF NEW JERSEY, AND FEDERAL DEPOSIT INSURANCE CORPORATION, A BODY CORPORATE CREATED BY AN ACT OF CONGRESS OF THE UNITED STATES OF AMERICA, DEFENDANTS. SYLVIA R. SHARPE, PLAINTIFF, v. CLIFFSIDE PARK TITLE GUARANTEE AND TRUST COMPANY, A BANKING CORPORATION OF THE STATE OF NEW JERSEY, AND FEDERAL DEPOSIT INSURANCE CORPORATION, A BODY CORPORATE CREATED BY AN ACT OF CONGRESS OF THE UNITED STATES OF AMERICA, DEFENDANTS. LESTER H. GHENT, PLAINTIFF, v. CLIFFSIDE PARK TITLE GUARANTEE AND TRUST COMPANY, A BANKING CORPORATION OF THE STATE OF NEW JERSEY, AND FEDERAL DEPOSIT INSURANCE CORPORATION, A BODY CORPORATE CREATED BY AN ACT OF CONGRESS OF THE UNITED STATES OF AMERICA, DEFENDANTS.
    Decided May 20, 1938.
    For the plaintiffs, John J. Fallon.

    For the defendant Cliffside Park Title Guarantee and Trust Company, Thomas S. Doughty.

    For the defendant Federal Deposit Insurance Corporation, William M. Seufert.

   Caffrey, C. C. J.

Prior to December 24th, 1934, one Eachel E. Ghent was the owner of one certificate of deposit in the sum of $12,500 issued to her by the defendant Cliffside Park Title Guarantee and Trust Company (hereinafter referred to as Bank), said Bank having heretofore been incorporated and doing business under the provisions of the act concerning trust companies, as enacted by the legislature of our state, and having been also duly licensed by the commissioner of banking and insurance of New Jersey to so transact business as a banking institution, in the borough of Cliffside Park, in the county of Bergen.

On the date aforesaid, the certificate of deposit aforementioned, was exchanged by the Bank, for three certificates of deposit, aggregating the said amount- — one of these certificates (No. 43) was issued to the plaintiff Lester H. Ghent in the sum of $5,000, another certificate (No. 42) in the sum of $5,000 was issued to the plaintiff Buth C. Ghent and the third certificate (No. 44) which is in the sum of $2,500 was issued to the plaintiff Sylvia E. Sharpe. The plaintiffs are the son and daughters of the said Eachel E. Ghent — the original holder of the single certificate of deposit in the amount of $12,500 above referred to.

The defendants contended that Eachel E. Ghent was in fact the sole owner of said three certificates, even though they had been issued in the names of her children as aforesaid, and claimed that it was her purpose to establish separate accounts so as to become entitled to he reimbursed by the Federal Deposit Insurance Corporation under the Banking act of 1933, approved by the president on June 16th, 1933 (Public No. 66, 73d Congress) as amended by Public No. 362, approved June 16th, 1934 (73d Congress) by Public Resolution No. 38, approved June 28th, 1934 (74th Congress). The Banking act of 1933 was subsequently amended hv the Banking act of 1935, approved August 23d, 1935 (Public No. 305, 74th Congress). Public No. 305 was not in effect at the time of issuance of certificates. 12 U. S. C. A. 264.

The Bank ceased to do business on January 3d, 1935, its affairs being taken over by the commissioner of banking and Insurance of New Jersey on that day. The deposits of the Bank, prior to its becoming defunct, had been insured by the Federal Deposit Insurance Corporation (hereinafter referred to as Corporation). The chief function of the Federal Deposit Insurance Corporation is to insure deposits of all banks which are entitled to the benefits of insurance under the law, to the extent of $5,000 for each depositor.

A second function of the Corporation is to act as receiver for insured banks which fail. The Corporation may be appointed receiver for closed insured state banks, if such appointment is tendered by the state banking authority and is permitted by state law.

Upon the closing of an insured bank, the Corporation immediately assumes the insured deposit liability of the closed bank and makes available the funds needed to discharge such liability. The claim of each insured depositor is paid upon assignment to the Corporation by the certificate holder of all rights to dividends and recoveries on account, and to the extent of his or her insured deposit.

The three certificates of deposit, held by the respective plaintiffs, have been received in evidence in these present proceedings before this court, and copies thereof are also set forth in the complaints filed in these proceedings.

The affairs of the Bank are in process of liquidation by the commissioner of banking and insurance of New Jersey, pursuant to chapter 255 of the laws of 1931, and under the direction of our Court of Chancery.

The claim of the several plaintiffs was filed with the commissioner aforesaid, also with the Corporation, as insurer of said respective sums represented by the three certificates aforesaid, the plaintiffs also making known to the Corporation that they and each of them would assign to said Corporation (as required by law), their respective rights in their certificates, upon payment of the amounts of their respective insured deposits, as represented by said three separate certificates. The claims of the said plaintiffs, individually, were rejected and disallowed and the sums alleged to be due to them, not paid. Leave was given by order of the Court of Chancery to institute suit in the New Jersey Supreme Court against the Bank and the commissioner in charge of its liquidation, the Corporation being joined as a defendant by reason of its having- insured the deposits made with said Bank by the plaintiffs-depositors.

It was stipulated by counsel that the single issue of fact for the jury to determine in these three cases which are being tried together is whether or not the respective plaintiffs are the sole owners of the deposits represented by the respective certificates of deposit on which they have based their suits, and were they the sole owners on December 24th, 1934, and did they continue so to be to and including January 3d, 1935, and have they continued so to be up to the time of the institution of these suits, and up to this present time F After all the evidence was received, the court directed a verdict on those issues in favor of the respective plaintiffs herein.

It was further stipulated by counsel that all other issues arising out of the controversy should be decided by the court, and a jury trial on these other issues would be waived.

After a careful consideration of the briefs and argument presented by counsel, this court finds as a fact, that the requirements of both the federal and state statutes were met and complied with by the plaintiffs and that the claims of each of said plaintiffs, Buth C. Ghent, Sylvia B. Sharpe and Lester II. Ghent, is a valid one and that each of them are the lona fide holders of the certificates issued to them respectively.

Postea may be filed, entering judgment in favor of the plaintiffs — Buth C. Ghent, in the sum of $5,000 and costs to be taxed; Sylvia B. Sharpe, in the sum of $2,500 and costs to be taxed; and Lester H. Ghent, in the sum of $5,000 and costs to be taxed.


author: Smith, Joseph L., C. C. J.

text:
    GOTTLIEB HOCKENJOS, PLAINTIFF, v. FEDERAL DEPOSIT INSURANCE CORPORATION, DEFENDANT.
    Decided May 20, 1938.
    For the plaintiff, Harold Simandl.

    For the defendant, Andrew F. Zazzali.

   Smith, Joseph L., C. C. J.

This comes on a motion to strike the complaint as frivolous. According to the complaint, The Livingston State Bank, a banking corporation, was operating as such until December 16th, 1935, its deposits being insured by the defendant company under the Federal Banking act of 1935. The complaint further pleads that the plaintiff was a customer of the bank and maintained a commercial and checking account; that he was indebted to the bank in the sum of $5,000, and as collateral security therefor assigned and pledged with the bank a certain lease he had, by the terms of which the lessee was instructed and required to pay the monthly rentals directly to the bank for and on behalf of the plaintiff, the bank agreeing to credit the amounts on account of the obligation until the said obligation was paid. It is further pleaded that the bank collected under the said lease, from the lessee, a greater amount than necessary for payment of the obligation. The complaint pleads that this excess was received by the bank in the usual course of its business for the account of the plaintiff. The bank having-failed to make proper entries and to give the proper credit to the plaintiff for such excess, the plaintiff sued the bank, after insolvency, and recovered a judgment of $1,231.27, which is now sought to be recovered from the defendant corporation as insuror.

It should be noted in limine, that it is a well settled rule that the power to strike a pleading as sham, frivolous or false, will not be exercised unless it clearly and palpably appears to be so. The cautious exercise of such power is imperative. Louis Kamm, Inc., v. Flink, 113 N. J. L. 582; 175 Atl. Rep. 62; Barnes v. P. & D. Manufacturing Co., Inc., 117 N. J. L. 156; 187 Atl. Rep. 186; and it is also well settled that a pleading attacked as frivolous is assumed to be true in fact as to all matters properly pleaded. Milberg v. Keuthe, 98 N. J. L. 779; 121 Atl. Rep. 713; therefore, in deciding the legal soundness of the complaint before the court, the court must assume the above stated facts as admitted.

The Anal question to be determined by the court is: do the facts as pleaded in the complaint bring this claim under the insurance provisions of the Banking act of 1935, and that question depends upon the interpretation of the word “deposit” as used in the said act. According to the said act:

“The term ‘deposit’ means the unpaid balance of mone}^ or its equivalent received by a bank in the usual course of business and for which it has given or is obligated to give credit to a commercial, checking, savings, time or thrift account, or which is evidenced by its certificate of deposit, and trust funds held by such bank whether retained or deposited in another bank, together with such other obligations of a bank as the board of directors shall find and shall prescribe by its regulations to be deposit liabilities by general usage: * *

It should be borne in mind that the Banking act of 1935 is a remedial act and its purpose is to inspire confidence in banks by safeguarding, to the limit therein designated, namely: $5,000, the credits of those dealing with banks covered by such insurance. As stated in Weir v. United States, 92 Fed. Rep. (2d) 634 (at p. 636) :

“Its obvious intent was, by insuring deposits, to prevent runs on banks by depositors, to preserve solvency of insured banks and thus to keep open the channels of trade and commercial exchange.”

The act, therefore, must be interpreted broadly in order to carry out its purpose and intent and to maintain the confidence of those dealing with banks by extending to them the protection of the insurance, if such interpretation is reasonable.

The defendant argues at length that the trust that arose from the transaction hereinabove outlined was a constructive trust ex maleficio, and did not arise from a fiduciary relationship; and yet defendant admits in his brief that the bank was acting as an agent of the plaintiff in the collection of such rents, under the assignment of rents for collateral. If the relationship was that of principal and agent, it follows then that the trust which is implied, arises from a contractual relationship of principal and agent, that is: the implied trust is derived from the contractual relationship between the parties, and is not merely imposed upon the bank for some wrong it has done towards the property of a stranger. The defendant characterizes the implied trust as ex maleficio, in the sense that the constructive trust is imposed by law upon a wrongdoer in order to provide a remedy to the injured party. Such a distinction might have been relevant if the plaintiff were a stranger to the bank, and its rights or remedies arose by the misconduct of the bank towards some property right of the plaintiff, but that is not the situation here. The obligation of the bank arose in the usual course of its business in collecting, as the agent of the plaintiff, upon the assigned lease, albeit it failed to enter such excess collections properly on its books.

The court will take judicial notice that banks receive commercial papers and other collateral for collection during the usual course of business. Birmingham First National Bank v. Newport First National Bank (Ala.), 22 So. Rep. 976. The distinction made by the defendant between implied trusts and express trusts therefore becomes immaterial in the present case, because if the complaint in the present case presents a trust, be it called implied or express, it arises from and out of the contractual relationship in the due course of the business of the bank and is not one imposed upon the bank as a penalty, in order to provide a remedy.

The general purpose of the Banking act of 1935 being to offer to one trading with a bank a sense of security concerning any moneys he entrusts to the bank either directly by his own hands, for his own account, or through a third party, for and on his behalf to be credited to his account, it is clear that the plaintiff in the present case comes within the class of persons intended to be protected by the insurance provided by the said act. It is no excuse to say that the officers of the bank did not properly show the credits upon their books or that they had embezzled the funds in question, or that the account did not appear on the books of the bank so as to provide a basis upon which deposit insurance premiums were computed. It is enough to say that it was the duty of the bank to account for the excess collection, and the failure of the bank to make proper bookkeeping entries may equally be present and applicable in the case of normal deposits in a thrift or savings account. As stated in Weir v. United States, 92 Fed. Rep. (2d) 634, supra, the wrongdoing of the officers of the insured bank is to the loss of the insurance corporation and not to the loss of the customer.

The conclusion, therefore, is that whether the transaction be viewed as a deposit or as a trust, a proper cause of action is pleaded by the facts set forth in the complaint, and the motion to strike the complaint will be denied.


author: Hartshorne, C. P. J.

text:
    Essex County Court of Common Pleas.
    ABRAHAM FISHMAN, PLAINTIFF, v. FISCH HAT COMPANY, DEFENDANT.
    Decided May 20th, 1938.
    For the plaintiff, Michael Silver.

    For the defendant, Newton H. Porter, Jr.

   Hartshorne, C. P. J.

Can a belated appeal be perfected nunc pro tunc by the appellate court in workmen’s compensation cases?

That it cannot in the ordinary case was a question which the Court of Errors and Appeals expressly refused to pass on in Haines v. Seabrook Farms Co., 99 N. J. L. 273; 122 Atl. Rep. 748. Numerous New Jersey cases exist, however, holding that an appeal will be dismissed where not taken within the time required by the statute. Mackay v. Mackay, 83 N. J. Eq. 650; 91 Atl. Rep. 316; Rogers v. Pennsylvania Railroad Co., 81 N. J. L. 40; 78 Atl. Rep. 664; State Council, Jr. O. U. A. M., v. National Council, Jr. O. U. A. M., 79 N. J. Eq. 193; 69 Atl. Rep. 975. Such is the general rule throughout the country, unless "the power to extend the time to appeal * * * [is] given by statute.” 2 R. C. L. 104, § 80.

Respondent below, the would-be appellant, contends that the workmen’s compensation statute gives the appellate court this power (Rev. Stat. 1937, 34:15-66), providing that “any appeal may be dismissed by the judge if the transcript of the record and testimony is not transmitted, or if the appeal is not prosecuted in accordance with the provisions of this chapter.” And merits here exist to invoke the aid of the appellate court if such aid is possible.

In ascertaining if the statute permits the exercise of such discretion, we must bear in mind the general principle that in every appeal there are two main parts: First must occur the acts or act “which invokes the jurisdiction of the appellate court.” Williams v. White (Court of Errors and Appeals), 98 N. J. L. 140; 117 Atl. Rep. 615. Or “the combined action necessary to remove the cause from the court of first instance to the appellate tribunal.” Prantl v. Junk (Court of Errors and Appeals), 93 N. J. L. 387; 101 Atl. Rep. 56. Thereafter “it is encumbent upon the appellant * * * to prosecute” the appeal. Williams v. White, supra. It is quite apparent, on reading the clause above quoted from the statute, that the discretion given the appellate court is solely as to steps taken or not taken during the prosecution of the appeal, not as to the statutory steps necessary to give the court any power to act at all, i. e., to invoke its jurisdiction. Such is the very basis for the decision in Hvizdock v. Brock’s Garage, Inc., 117 N. J. L. 352; 188 Atl. Rep. 815, construing the statute in question; for there the appeal had been perfected, the notice of hearing--a mere step in the prosecution of the appeal — having been delayed.

Nor is there any force to the contention of the would-be appellant that his filing of the notice of appeal with the secretary of the bureau had perfected the appeal and given this court jurisdiction. For the statute expressly says that such appeal may be taken “by filing with the secretary of the bureau, and with the clerk of the county where the accident occurred, a notice of appeal.” Clearly, the filing of the one notice, in duplicate, at both places constitutes “the combined action necessary to remove the cause from the court of first instance to the appellate tribunal.” The notice of appeal not having been filed “with the clerk of the county where the accident occurred,” the appeal has not been perfected, and this court, the appellate court, has no jurisdiction in the premises to enter an order nunc pro tunc, or of any other kind.

The application will be dismissed.


author: Brennan, C. P. J.

text:
    Essex County Court of Special Sessions.
    STATE OF NEW JERSEY, PLAINTIFF, v. WALTER HORN, DEFENDANT.
    Decided April 25, 1938.
    For the state, Joseph E. Conlon, first assistant prosecutor of the Pleas.
    For the defendant, Millon Unger.

   Brennan, C. P. J.

This defendant is before the court on an allegation in two counts, the first of which is that the defendant on the 23d day of March, 1937, did promise to pay a certain sum of money, to wit.: $50, upon the event and contingency dependent on the drawing of a ticket, the second of which is that the defendant on the 23d day of March, 1937, did promise to pay a certain sum of money, to wit.: $50, upon the event and contingency dependent on the drawing of a number in a lottery. The allegation is based on a statute concerning lotteries, in the following language:

“Any person who shall give, barter, sell, or otherwise dispose of, or offer to give, barter, sell or otherwise dispose of, any ticket or tickets in any lottery, whether erected, set up, opened or made in this state or elsewhere, or the chance or chances of any such ticket or tickets; or who shall issue any policy of insurance, or insure or receive any consideration for insuring for or against the drawing of any ticket or tickets, number or numbers, or any share or interest in any ticket or tickets, in any lottery, or shall receive any money, goods or thing in action, in consideration of any agreement to repay any sum or sums of money, or to deliver any goods or thing in action, if any ticket or tickets, or any share of any ticket or tickets, in any lottery, shall prove fortunate or unfortunate, or shall be drawn or not drawn on any particular day, or in any particular order, or shall promise or agree to pay any sum of money, or deliver any goods or thing in action, or to do or forbear to do anything for the benefit of any other person or persons, upon any event or contingency dependent on the drawing of any ticket or tickets, or any share of any ticket or tickets, or upon the drawing of any number or numbers in any lottery shall be guilty of a misdemeanor.” Pamph. L. 1898, p. 809.

The moot question is whether or not this prolix legislative outgiving interdicts bank night, so called, in the manner and form conducted by the defendant, on the date charged in the allegation, which is March 23d, 1937. The process of bank night is one where by the medium of handbills, signs and trailers, so called, there was advertised that there would be held at a theatre managed by the defendant, a drawing and an award to the fortunate winner. The preliminaries were first, the placement of registration books, so called, in the lobby of the theatre where persons who desired, signed their names and addresses. These books were so placed that they were accessible to passersby as well as to the patrons. A book of similar character was taken by the employes to homes in the community, and persons invited to sign. The persons signing paid nothing, and were obliged to pay nothing for the privilege of signing and participating in the drawing. The handbills were distributed generally in the community, advertising the drawing. After the registration and number was assigned to each registrant and that placed in a drum in the theatre on March 23d, 1937, the drawing was held. The drum containing the numbers was on the stage, and the master of ceremonies read a typewritten statement to the assembled, in the theatre, and those outside. The text of the statement read by this functionary, in substance, was to the effect that it was desired that all persons in the theatre and lobby understand the reasons for making the award. There was as well, the statement that there was no increase in price on the occasion of bank night; that the purchase of a ticket was not a condition precedent to participation, and the other general rules incident to the drawing. By the rules, the person selected to receive the award, if he did not claim it within five minutes, forfeited the award, and it was carried over to the subsequent week and apparently added to the capital prize for that week. The scheme plainly is a new form of breaking down a sales resistance and designed, of course, to attract a larger number of the movie theatre-going public to the picture offered for display by the theatre. It offers in theory, at least, a dual benefit; the prospective procurement of something for nothing, and the opportunity to follow the romantic fortunes of one’s favorite movie hero or heroine. My own experience with the progress of these in pictures which I have had the dubious fortune to see, would impel me to the viewpoint that some sort of bait might be necessary to attract the general public.

While the process of “bank night” may be a cheap and trashy advertising expedient, the legal question to be resolved is whether or not it is a lottery and as such a violation of the statute heretofore referred to. The statute does not define lotteries, but a lottery is “a species of gambling, which may be defined as a scheme for the distribution of prizes or things of value by lot or chance among persons who have paid, or agreed to pay, a valuable consideration for the chance to obtain a prize; or as a game of hazard in which small sums of money are ventured for the chance of obtaining a larger value.” Bishop's Statutory Crimes, 952; Bouv. Dict., Rawle’s Third Revision.

The frequent difficulty with statutes gener-al in terms, and of the character of that here for consideration, is that by reason of the loose language and the failure of specific prohibition, the private moral viewpoint of the judge or the court, may become the lex loci. The question is one apparently of novel impression in this jurisdiction, but has had serious and elaborate consideration in others, and there is a prevailing contrariety of judicial opinion as to whether or not a scheme substantially like that here for consideration, is a violation of the law. The judicial resolution in each case apparently turns on the presence of three elements; prize, chance, and consideration. It is apparent that two of those elements are present in the instant case. Is the third?

In the case of People v. Shafer, 273 N. Y. 475; 6 N. E. Rep. (2d) 410, the Court of Appeals of the State of New York held that a scheme similar to that here the subject of consideration was not a violation of the law where the actual payment of admission to the theare was not a prerequisite to eligibility. To the same general effect is State v. Crescent Amusement Co., 95 S. W. Rep. (2d) 310; 170 Tenn. 351, as well as People v. Cardas, 28 Pac. Rep. (2d) 99; 137 Cal. App. 788. See, also, State v. Eames, 183 Atl. Rep. 590; 87 N. H. 477; City of Roswell v. Jones, 67 Pac. Rep. (2d) 286.

Probably the best considered case on the question of whether or not a scheme in all particulars like that here the subject of consideration is a lottery, is State v. Hundling, 264 N. W. Rep. 608; 220 Iowa 1369. In that case the court held that such was not a lottery. The court opinion turned upon the proposition that there was absent the element of consideration which took the case out of that class where the three elements of prize, chance and consideration must be present. It was suggested by the court as well, in that ease, that criminal statutes such as this, must be strictly construed.

It was elucidated in the Hundling case, supra, that because profit might accrue remotely and indirectly to the person or corporation, the element of consideration was not present. It points out with a good deal of clarity, that such was even the case in the event that the corner grocer gave children cakes or candy to increase good will and the potentiality of sale.

There are, of course, cases holding to the contrary, where upon a tenuous legal theory the element of consideration is spelled out, by reason of the conceivable increase in patronage of the theatre upon “bank night” operation. These are Central States Theatre Corp. v. Patz, 11 F. Supp. 566 (D. C. S. D., Iowa), in which the court held that the prospect of increased patronage was consideration, and Iris Amusement Corp. v. Kelly, 8 N. E. Rep. (2d) 648, as well as City of Wink v. Griffith Amusement Co., 100 S. W. Rep. (2d) 695.

My own viewpoint is that there should be the strict construction indicated in State v. Hundling, supra; and this because first, criminal statutes should be strictly construed, and secondly and more fundamentally, because there is a problem involved in the construction of our gaming statutes, infinitely more important than the narrow judicial proposition embraced within the four corners of a single issue. This problem is one social in character, and should not be ignored from the standpoint of realism. Our statutes in their essential terminology and application, are such as to create a situation whereby the casual or intermittent offender is brought before the court upon what may be an extremely narrow issue and if the cause is adversely decided as to him, he is branded a criminal for the rest of his life, where there may be all around him violations apparently as obvious, going ignored.

I am not able to look with complacence on a statutory situation or the construction of such, which serves no purpose except to breed disrespect lor the law in its apparent inequalities, and promotes no good social purpose looking toward the control of the vice of gaming. It is, I am well aware, a fixed judicial habit whore legislation is inadequate, to dismiss such state of affairs with the casual outgiving that that is a matter for legislative and not judicial concern; but that, it seems to me is not enough. The obvious answer is remedial legislation definitely interdicting all those forms of gambling which common experience indicate are anti-social in their character and results, in which case there can be no equivocation about the violation of the statute if the offender comes within the purview of such interdiction and no situation whereby a person heretofore an innocent and valuable member of the community, may be branded with the taint of criminality. My settled viewpoint is that the better legal view is that enunciated in State v. Hundling, supra, and the one which should be followed in the light of the character of our present legislation on this subject.

I therefore find the defendant not guilty on either count of the allegation.


author: Delmar, C. P. J.

text:
    Bergen County Court of Common Pleas.
    JACOB J. FATZER, PETITIONER-APPELLEE, v. JAMES NAJARIAN, RESPONDENT-APPELLANT.
    Decided May 18, 1938.
    For the appellee, Vanderward & Scharnikow.

    For the appellant, Samuel H. Nelson.

   Delmar, C. P. J.

The petition for compensation was filed by the appellee, naming the appellant, James Najarian, the K. & N. Incorporated, New Jersey corporation, and A. Amirkanian, as his employers. An answer was filed on behalf of James Najarian denying that he was an employer; the others named as employers did not appear.

After a hearing the referee found that the said corporation had no legal existence, not even as a de fado corporation, and rendered an award in favor of the petitioner and against the appellant, without any finding that he was the employer, said judgment being printed in 15 N. J. Mis. R. 379. Prom this determination the appellant has appealed to this court.

After carefully reviewing the evidence, I find the following facts:

On August 29th, 1936, the appellant, together with John Najarian and Karl Kalfaian, executed a certificate of incorporation of the K. & N. Cleaners, Incorporated, under the General Corporation act of New Jersey. The object of said corporation, as stated in the certificate, among other things, was to engage in the cleaning and dyeing business. Said certificate was recorded in the clerk’s office of the county of Essex, on August 31st, 1936, and filed in the secretary of state’s office on January 21st, 193?.

On August 31st, 1936, a lease was made in the name of said corporation, whereby said corporation rented from the Liberty Cleaners and Dyers, a New Jersey corporation, certain premises at 203-205 Passaic street, in the city of Garfield, which premises were equipped with machinery and fixtures suitable for conducting a cleaning and dyeing business. This lease was executed on behalf of said corporation by James Kajarian, as president, and Karl Kalfaian, as secretary. Said corporation immediately took possession of the demised premises, and from that time until after the occurrence of the accident, which is the basis of this litigation, conducted on said premises a cleaning and dyeing business.

The petitioner, who had, prior to August 31st, been in the employ of the Liberty Cleaners and Dyers, continued to be employed on the premises by the K. & N. Cleaners, Incorporated. That he knew that he was being employed by the latter corporation clearly appears from his admission, under cross-examination, that he applied for a license to operate a boiler. In the application, which was in his own handwriting, he stated that the K. & N. Cleaners, Incorporated, was his employer, which statement he admitted on the witness stand to be true. Similar testimony was offered on behalf of the alleged corporation.

A hank account was opened in the name of said corporation in a Garfield bank, and the appellee was paid by means of checks drawn against said bank account, in the corporation name. A suitable resolution was delivered to the bank, certifying to it the names of the officers of the corporation authorized to withdraw funds therefrom. Books of account were opened, a seal was obtained for the corporation, and a president, secretary, and a treasurer were selected to represent the corporation, but no stock certificate book had been obtained for it.

The referee found, as a matter of fact, that the incorporators held no meeting. With this finding I disagree. I think a presumption should be made in favor of the regularity and legality of the selection of the officers and the passage of the resolution in question. I conclude, in the absence of direct evidence thereof, that a corporate meeting was held, at which the corporation was duly organized, the officers selected, and the resolution relating to the bank account was passed.

Two of the incorporators were actively employed by the alleged corporation, in driving its trucks and soliciting business which was conducted on the leased premises, at which place the petitioner was injured during the course of his employment.

If at the time of the accident in question the K. & N. Cleaners, Incorporated, was a de facto corporation there should be no judgment against the appellant.

The petitioner, by his own admission, knew that he was employed by the K. & N. Cleaners, Incorporated, and not by the appellant.

The legal existence of a corporation de facto cannot be inquired into collaterally, although some of the legal formalities may not have been complied with. “No private person having dealings with a de facto corporation can be permitted to say that it is not also a corporation de jure." Vanneman v. Young, 52 N. J. L. 403; 20 Atl. Rep. 53.

It is well settled in this state that in order for a de facto corporation to exist, there must be a law under which it could have been incorporated; there must have been an effort in good faith to organize the corporation under such law; and thereupon, as a result of such effort, corporate functions must have been assumed and exercised. Stout v. Zulick, 48 N. J. L. 599; 7 Atl. Rep. 362; Vanneman v. Young, supra; McCarter v. Ketcham, 72 N. J. L. 247; 62 Atl. Rep. 693; Frawley v. Tenafly Transportation Co., 95 N. J. L. 405; 113 Atl. Rep. 242; Paragon Distributing Corp. v. Paragon Laboratories, Inc., 99 N. J. Eq. 224; 129 Atl. Rep. 404; Gallant v. Fashion Piece Dye Works, 116 N. J. Eq. 483; 174 Atl. Rep. 248.

In the case at bar all of these elements are present. In the Frawley case, supra, the certificate of incorporation had not even been filed in the county clerk’s office at the time when the litigation arose, and there was less evidence of a Iona fide attempt to incorporate than appears in the present case.

The following cases relied upon by the appellee are not in point: Garford Trucking, Inc., v. Hoffman, 114 N. J. L. 522, 529, 530; 177 Atl. Rep. 882, in which case the meritorious question under review was the lona fides of a transfer of the title to some trucks to a de jure corporation. Trachman v. Trugman, 117 N. J. Eq. 167, 170; 175 Atl. Rep. 147, which involved a fraudulent transfer of assets to a de jure corporation. Stockton v. Central Railroad Company of New Jersey, 50 N. J. Eq. 52, 75, 76; 24 Atl. Rep. 964, which related to ultra vires acts of a de jure corporation.

I find that the appellant was not the employer of the petitioner, and, therefore, judgment should be rendered in favor of the appellant and against the appellee. No adjudication having been made as to the other alleged employers, and they not being parties to this appeal, the matter will be remitted to the Workmen’s Compensation Bureau for further proceedings not inconsistent with this opinion.


author: William A. Smith, C. C. J.

text:
    Essex County Circuit Court.
    FRANCIS REALTY COMPANY, A CORPORATION, PLAINTIFF, v. THE CITY OF NEWARK, A MUNICIPAL CORPORATOR DEFENDANT.
    Decided May 20, 1938.
    For the plaintiff, Hannoch, Lasser (by Arthur A. Hannoch).

    For the defendant, James F. X. O'Brien (by Joseph A. Ward).

   William A. Smith, C. C. J.

This matter is submitted to me on a motion to strike out the answer on the ground that it is not sufficient in law.

On October 1st, 1934, the plaintiff owned real estate located at 673-5 Broad street in the city of Newark, known as Lot 62, Block 61, which was assessed for taxes for 1935 in the sum of $274,800. Plaintiff appealed from this assessment, which appeal was carried to the State Board of Tax Appeals, and pending these appeals the plaintiff paid the taxes which were assessed for 1935 which were the subject of the appeal based on the original assessment, the payments being made in four quarterly payments aggregating $9,233.29. The State Board of Tax Appeals finally granted a reduction in the assessment of $24,500. This entitled the plaintiff to a refund for overpayment aggregating $823.20, and this action is brought to recover that refund.

The answer admits the allegations of the complaint except a claim that the plaintiff is entitled to a refund, and the answer alleges as an affirmative defense that the plaintiff has received credit for the refund by its application to tax charges due and owing the city of Newark by Francis Realty Company. This raises the question of whether the city may use the indebtedness represented by the refund to pay tax charges due and owing the city of Newark. I understand that it is stipulated as a fact that the credit was applied as a credit against the 1936 real estate taxes on the same property, so I will consider the answer as amended accordingly. It is necessary that I do this in order to dispose of the question on its merits. There is no allegation in the answer that the set-off was made by and with the consent of the plaintiff. The city justifies this set-off by virtue of the statutory provision, Rev. Stai. 1937, 2:27-255:

“Offset against judgment of taxes, &c., due municipality. Whenever any judgment shall be or shall have been recovered in any court of competent jurisdiction in this state against any municipality by any person who is or shall have been at the time of the recovery of such judgment indebted to such municipality for taxes, assessments, water rates, or other indebtedness of a public nature, or who shall become so indebted before the satisfaction of such judgment, it shall be lawful for such municipality to settle and extinguish such judgment, and any execution issued thereon, by offsetting and crediting the amount thereof upon and against any overdue taxes, assessments, water rates, or other indebtedness of a public nature due from such judgment creditor.”

The determination of the Board of Tax Appeals does not fix the liability for payment but settles the amount of the assessment. The statute, therefore, is hardly applicable when it refers to a judgment recovered by the taxpayer; but regardless of this the statute is inapplicable and does not give a right of set-off in a ease of this character because it authorizes the set-off of the judgment where the taxpayer “is indebted to the municipality for taxes, assessments, water rates, or other indebtedness of a public nature.” A tax against real estate is not a debt of the owner; it is not founded on a contract express or implied but is an imposition against the property and no personal liability attaches. Wrightstown v. Salvation Army, 97 N. J. L. 89; 123 Atl. Rep. 607; Baker v. East Orange, 95 N. J. L. 365; 111 Atl. Rep. 681; City of Camden v. Allen, 26 N. J. L. 398.

The plaintiff is entitled therefore to have the answer stricken out as not setting up a defense. I might say that if no amended answer is contemplated a judgment interlocutory should be entered and that the plaintiff is not entitled to recover interest. Hahne Realty Corp. v. City of Newark, 119 N. J. L. 12; 194 Atl. Rep. 191.

The brief on behalf of the city and the reply thereto made by the plaintiff contains facts not before me. I prefer to decide the matter on the issues raised in the pleadings with the stipulation as to the amendment of the answer to set off the application of the refund to the payment of the 1936 taxes on the same property.