text:
    PHILIP EISEN AND MARY HOLSTEIN, PLAINTIFFS-RESPONDENTS, v. PETER S. KOSTAKOS AND TINA P. KOSTAKOS, HIS WIFE, IRVING J. SCHWARTZ AND SYLVIA H. SCHWARTZ, HIS WIFE, UNICO OIL SUPPLY INC., A NEW JERSEY CORPORATION, TRADING AS HASKINS FUELS, THE CITY OF EAST ORANGE, A MUNICIPAL CORPORATION OF NEW JERSEY, AND THE STATE OF NEW JERSEY, DEFENDANTS, AND BENDER INVESTMENT, INC., ALSO KNOWN AS BENDER INVESTMENTS, INC., A CORPORATION OF NEW JERSEY, DEFENDANT-APPELLANT.
    Superior Court of New Jersey Appellate Division
    Argued October 6, 1971
    Decided October 15, 1971.

      Before • Judges Kilkenny, Labeecque and Lane.

      Mr. John S. Bender argued the cause for appellant.

      Mr. Jack L. Holstein argued the cause for respondents.
   The opinion of the court was delivered by

Lane, J. A. D.

The complaint sought foreclosure of a second mortgage on rental property in the City of East Orange owned by defendant Bender Investment, Inc. Upon a motion for summary judgment the trial court on August 5, 1970 ordered that “judgment is granted and shall be entered striking the answer of Bender Investment, Inc., also known as Bender Investments, Inc., in this mortgage foreclosure action and that plaintiffs file their proofs of the amount due on their mortgage in accordance with the Rules of Court.” On October 30, 1970 after a' hearing on the mortgagees’ account final judgment fixing the amount due under the mortgage at $22,699.73 and directing a sale was entered. Defendant appealed without leave, granted from the August 5, 1970 order. . .

The mortgage was given to secure a bond of $20,000. It called for equal monthly installments of $116.67. It contained the usual acceleration clause upon nonpayment 30 days after the due date of any installment of principal, interest, taxes, water rents or liens.

Plaintiffs went into possession as mortgagees in possession on or about December 1, 1969. At that time the mortgagor was in default in two payments of principal and interest due October 18, 1969 and November 18, 1969. Additionally, a quarterly installment of municipal real estate taxes due November 1, 1969 was unpaid.

The complaint was filed April 30, 1970, setting forth the defaults referred to above. The answer filed July 1, 1970 denied the installments of principal and interest due October 18, 1969 and November 18, 1969 were unpaid, alleged that the quarterly installment of taxes was paid during the early part of December 1969, and set forth as separate defenses that the plaintiffs had been in possession since December 1, 1969 and “hence any and all amounts due relative to their mortgage have or should have been paid prior to the complaint herein”; waiver of any alleged default; estoppel to allege any default; accord and satisfaction reached prior to the mortgagees going into possession; and that the $116.67 allegedly due as of the time the plaintiffs entered into possession was “so legally insufficient as to be precluded from constituting a default under the mortgage by virtue of the doctrine of cde minimis: "

On July 7, 1970 plaintiffs filed a motion for summary judgment supported by an affidavit. Among other things the affidavit charged that defendant had failed to pay the monthly installment of principal and interest amounting to $571.67 due on the first mortgage, the October installment of principal and interest amounting to $116.67 due on the second mortgage, municipal taxes amounting to $2,017.74 due November 1, 1969; water rents amounting to $1,111.98 due the City of East Orange, and fire and liability insurance premiums amounting to $49.54. The affidavit further showed that when plaintiffs went into possession they were compelled to advance immediately $571.67 for payment of principal and interest due on the first mortgage; $650 on account of the municipal taxes due November 1, 1969; $1,111.98 due for water rents; fire and liability insurance premiums of $49.54; and payment of $50 for a bill of Public Service Electric and Gas Company. Plaintiffs stated that from December 1, 1969 when they went into possession until the filing of the complaint, the rents collected totaled $10,159.14, whereas the disbursements totaled $13,734.93. Paragraph 11 of the ajffidavit which was not denied stated in part:

Mr. Bender informed us that on December 5, 1969 a new mortgage loan would be obtained which would pay off the mortgage indebtedness to us including the moneys advanced by us. This mortgage loan was never consummated. Additional time was given to Mr. Bender in order to negotiate another loan and when be informed us that all bis sources for a loan were exhausted the within foreclosure proceedings were commenced.

In answer to the motion for summary judgment, the affidavit of John S. Bender, Esq., was filed. He alleged that the amounts due for taxes and water rents were fully paid before the filing of the complaint. Obviously such payments were made by plaintiffs as mortgagees in possession. He further alleged that from the rents collected plaintiffs “should presently have a surplus on hand after the payment of all amounts due relative to the continued operation of the premises, all amounts currently due upon their mortgage and the prior first mortgage, as well as any and all amounts advanced by them during the 7-month period.” The affidavit concluded, “Any and all defaults alleged relative to the plaintiffs’ mortgage have been, or should have been, cured as of the present time from the net income realized from the continued operation of the premises by the plaintiffs since December 1st, 1969.”

On the hearing of the motion for summary judgment the court merely said that there was a default without specifying what the default was and that it would grant the motion for summary judgment. We call attention to R. 1:7—4, which is incorporated in the summary judgment rule, R. 4:46-2. It is not sufficient for a trial court merely to state the conclusion that there was a default and that, therefore, summary judgment is being granted. The trial court should have specifically set forth findings of fact and conclusions of law. A discussion of the facts and the law would not only be of great help to an appellate court, it might well have caused defendant to reconsider an appeal.

The issues before us are: (1) Is the order appealed from interlocutory, and since no leave to appeal has been granted, should the appeal be dismissed? (2) Assuming the mortgagees had collected more rents than they had disbursed, were they obligated to apply the excess rents to their mortgage so as to cure the default that occurred before they went into possession? (3) Did the affidavit submitted on behalf of the defendant raise a genuine issue as to a material fact?

I

The final judgment in an action to foreclose a real estate mortgage fixes the amount due under the mortgage and directs the sale of the real estate to raise funds to satisfy the amount due. The order for judgment appealed from here determined that there had been a default under the mortgagee so that the real estate should be sold to satisfy the obligation to plaintiffs and that plaintiffs were entitled to proceed before the standing master, or before the court if there was a dispute, to prove the amount due under the mortgage. It was clearly interlocutory because it did not determine all of the issues. It was in fact a partial summary judgment. As such it was not appealable as of right. Applestine v. United Board & Carton Corp., 35 N. J. 343, 350-352 (1961); Haelig v. Mayor, etc., Bound Brook, 105 N. J. Super. 7, 11 (App. Div. 1969). However, the appeal raises an important question in the mortgage field that, has not specifically been dealt with in New Jersey by an appellate court. On our own motion we will, therefore, grant leave to appeal now as of the date the notice of appeal was filed. Cf. Butler v. Bonner & Barnewall, Inc., 56 N. J. 567, 573 (1970).

II

Generally, a provision in a mortgage granting the mortgagee the option to accelerate the maturity of the debt upon a default in the pajunent of principal, interest or municipal liens is a legitimate contractual stipulation. A mortgagee has the right to insist upon a strict observance of the terms of such provisions unless the default is attributable to the conduct of the mortgagee. Gilbert v. Pennington Trap Rock Co., 135 N. J. Eq. 587, 591 (Ch. 1944).

Defendant argues that since the taxes had been paid before the foreclosure action was filed, the action is barred. It is true that where there is a default in tax payments which, under the terms of the mortgage, would allow an acceleration of the payment of the principal, such default may be neutralized if the taxes are paid before the complaint is filed. Williams v. Evenstein, 2 N. J. 60, 63 (1949); Haase v. Moser, 121 N. J. Eq. 344, 345 (E. & A. 1937); S. D. Walker, Inc. v. Brigantine Beach Hotel Corp., 44 N. J. Super. 193, 203 (Ch. Div. 1957); Gilbert v. Pennington Trap Rock Co., 135 N. J. Eq. 587, 593, supra. However, defendant did not pay the taxes. Plaintiffs paid them in order to protect their interest in the property. A mortgagee who pays taxes which the mortgagor is under a duty to pay is entitled to be reimbursed for the amount paid .and may add it to the mortgage debt. South Amboy Trust Co. v. McMichael Holdings, 141 N. J. Eq. 12, 16 (Ch. 1947); The Pennsylvania Co. v. Broadway-Stevens Co., 105 N. J. Eq. 494, 496-497 (Ch. 1930). Where a mortgagee in possession is required to pay taxes, the payments are a proper charge against the mortgage debt. Clark and Smith v. Smith, 1 N. J. Eq. 121, 137 (Ch. 1830).

Defendant argues that plaintiffs received enough funds from the rents and profits of the property to cover all payments on the mortgage. The question is whether a mortgagee in possession must apply the not income to payments required under the mortgage and further, if he is so required, whether such application would cure any default occurring before the mortgagee went into possession.

Where there is a default in payment of principal or interest which under the terms of the mortgage would permit an acceleration of the payment of the entire principal, a mortgagee is not required to accept payments of the overdue principal or interest even before his election to accelerate the principal. Haase v. Moser, 121 N. J. Eq. 344, 345, supra.

In Haase v. Moser plaintiff filed a foreclosure action and defendant moved to dismiss on the grounds that there were no arrearages at the time of the filing of the complaint. The facts were stated in 120 N. J. Eq. 437 (Ch. 1936). Certain taxes had been unpaid for 90 days after they were due. The mortgage provided that if any taxes were not paid within 90 days, the principal and interest should become immediately due at the option of the mortgagee. Defendant had paid the taxes before the filing of the complaint. Vice-Chancellor Kays held that when taxes in default are paid before the complaint is filed, the mortgagee is barred from foreclosing. In affirming, the Court of Errors and Appeals said:

AA'e concur in the view expressed by him [the vice chancellor] that where there is default in taxes which under the terms of a mortgage would accelerate the payment of the principal, such default may be neutralized if the taxes are paid before bill filed. AYe find, however, some language in the opinion which might support an inference that default in payment of interest might be neutralized in a similar manner. It is unlikely that the learned Vice Chancellor intended to be so understood, particularly as that question was not before him; but we deem it prudent to note that our affirmance of the decree is predicated on the tax default, which was the only default existing in the case.
In Sire v. Wightman, 25 N. J. Eq. 102, it was held that voluntary acceptance of overdue interest was a waiver of the default and forfeiture “to which [the complainant] had become entitledthe natural inference being that he was not bound to accept. And in O’Connor v. Meskill, unofficially reported in 39 Atl. Rep. 1061, the late Vice Chancellor Grey expressly held that after such default in interest a mortgagee was not required, even before his election to ac-clerate the principal, to accept payment of the overdue interest. We think this has been the uniform practice in this state. [121 N. J. Eq. at 344-345]

A default- in payment of principal or interest will allow an acceleration of the entire principal due, even if tender is made but refused.

Normally a mortgagee is not entitled to rents and profits until he takes possession of the property or has' a receiver appointed. Stewart v. Fairchild-Baldwin Co., 91 N. J. Eq. 86, 89-90 (E. & A. 1919); Scult v. Bergen Valley Builders Inc., 82 N. J. Super. 378, 380 (App. Div. 1964). A mortgagee in possession is bound to account for all rents, issues and profits received by him and must deduct the allowance for these matters from the amount due on his mortgage. Orange Land Company v. Bender, 96 N. J. Super. 158, 165 (App. Div. 1967); Onderdonk v. Gray, 19 N. J. Eq. 65, 66 (Ch. 1868). See Zanzonico v. Zanzonico, 2 N. J. 309, 314, cert. den. 338 U. S. 868, 70 S. Ct. 143, 94 L. Ed. 532 (1949). The mortgagee is entitled to a credit for all proper expenses in connection with the property. Zanzonico, 2 N. J. at 314. The claim of right to a credit due on the accounting is merely a matter of ascertaining the amount due on the mortgage. It is of the same nature as a payment on the mortgage. The determination of the amount thereof becomes a necessary part of the foreclosure action. Orange Land Company v. Bender, 96 N. J. Super. 158, 166, supra.

In Onderdonk v. Gray, 19 N. J. Eq. 65, the Chancellor said:

® * * A mortgagee in possession is bound to account for all rents, issues, and profits received by him, and for all waste and destruction of the premises, and must deduct the allowance for these matters from the amount due on his mortgage; and Gray has adopted the proper coarse to entitle him to such allowance filing a cross-bill praying for such account, and to be allowed to redeem on paying the balance.
But such allowances can only be claimed, either on bill to foreclose, or bill to redeem, against a mortgagee in possession, and in possession as mortgagee. * * * [19 S. J. Eq. at 66; emphasis added]

In 4 American Law of Property (1952), § 16.105 at 201, the rule is stated:

Itents received by a mortgagee in possession are not automatically applied on the mortgage debt or the interest on it. Before any of the income received by him is appropriated to such a purpose there must be an accounting in which the mortgagee’s allowable expenses and charges are first set off against what he has taken in, and such an accounting is had only when there is either an action to foreclosure or to redeem. Consequently, the mortgagor cannot omit payments of interest or installments of princijial on the ground that the mortgagee has in his hands income from the property more than sufficient to cover them. * * *

Osborne on Mortgages (2d ed. 1910), § 165 at 286-287 states:

* * * However, the mortgagee in possession in the course of his management of the property, in addition to receiving income, will have incurred various expenses for which he is entitled to be reimbursed, or by liis affirmative conduct or neglect have subjected himself to charges other than income actually received which will be assessed against him. It is only the balance, after these charges and debits have been cast up and set off against each other, that goes in satisfaction of the debt. But in determining this balance “in many cases complicated equities must be determined and adjusted before it can be ascertained what part, if any, of the rents and profits received is to be applied upon the mortgage debt.’’ From the foregoing two things are apparent. One is that before it can be known how much of the income is to be applied to the mortgage debt there must be an accounting which can be made only in accordance with equitable theory and practice regardless of whether the jurisdiction is title or lien. The other is that the application in the accounting of the balance when ascertained is in the nature of an equitable set-off when the debt is being paid. This being so, it must be made in a proceeding or transaction directly involving the satisfaction of the mortgage debt. * * *

See also 2 Glenn on Mortgages (1943), § 206 at 1033; Id., § 224 at 1080, 1082.

Since an accounting for all rents and profits received by the mortgagee in possession can only be claimed on a bill to foreclose or a bill to redeem, it is clear that the rents and profits received are not automatically applied to the mortgage debt. It follows that they cannot be applied to cure any default so as to preclude an acceleration and foreclosure. Cf. Joliet Federal S. & L. Ass’n v. Bloomington Loan Co., 265 N. E. 2d 400, 403 (Ill. App. Ct. 1971). We point out that we are not dealing with a situation where there is an available credit or setoff to the mortgagor existing at the time of the default equal to, or in excess of, the amount required to be paid and alleged to be in default as in Arco Co. v. Hawthorne Fuel & Ice Inc., 135 N. J. Eq. 315 (Ch. 1944), aff’d o. b. 136 N. J. Eq. 514 (E. & A. 1945), and White v. Stretch, 22 N. J. Eq. 76 (Ch. 1871).

Insofar as Doyle v. Di Medio, 99 N. J. Eg. 23 (Ch. 1926) may appear to hold otherwise, it is overruled.

Ill

Although we have held that even if plaintiffs as mortgagees in possession had in their hands an excess of rents over disbursements, such funds would not cure the defaults in the payment of the October and November interest and the unpaid taxes, we will discuss whether a genuine issue was raised by the affidavits on the motion for summary judgment to support the existence of an excess of rents over disbursements.

A motion for summary judgment will be granted where the pleadings, answers to interrogatories and affidavits filed in support of and in opposition to the motion do not show the existence of a genuine issue of material fact.

Summary judgment is not to be denied if other papers pertinent to the motion show palpably the absence of any issue of material fact, although the allegations of the pleadings, standing alone, may mist; such an issue. Summary judgment procedure pierces the allegations of the pleadings to show that the facts are otherwise than as alleged. Sokolay v. Edlin, 65 N. J. Super. 112, 121 (App. Div. 1961).

Ilere tile affidavit of Mr. Bender did not raise any genuine issue as to a material fact. All it said is that the plaintiffs “should presently have a surplus on hand.” If defendant was sincere in its allegation, it could have requested an adjournment of the hearing on the motion for summary judgment to undertake discovery. No such request was made.

As pointed out in N. J. Mtge. and Inv. Corp. v. Calvelli, 68 N. J. Super. 18, 32 (App. Div. 1961) :

* * '■ However, mere sworn assertions of ultimate fact supposedly based on information and belief, without revelation of the source of the information or any material basis for the belief, and without any supporting affidavits of persons having actual knowledge of the facts, will not effectively blockade issuance of summary judgment. *' * *

See also Robbins v. Jersey City, 23 N. J. 229, 241 (1957).

The separate defenses set up in the defendant’s answer that there should have been enough income received from the premises to cure all defaults and that the defaults were insignificant were insufficient in law and fact. The separate defenses of waiver, estoppel and accord and satisfaction were not supported by any evidence. The papers lie-fore the trial court on the motion showed clearly that there had been defaults under the mortgage at the time the mortgagees went into possession in the payment of interest and taxes and that defendant had not cured such defaults before the complaint was filed. Plaintiffs were entitled to a partial summary judgment.

The order of August 5, 1970 granting partial summary judgment is affirmed.


source: Caselaw Access Project

author: Byrne, J. S. C.

license: Public Domain

text:
    MAPLEWOOD VILLAGE TENANTS ASSOCIATION, A NONPROFIT CORPORATION, PLAINTIFF, v. MAPLEWOOD VILLAGE, A PARTNERSHIP; STATE OF NEW JERSEY, DEPARTMENT OF LAW AND PUBLIC SAFETY, DIVISION OF LAW, BUREAU OF SECURITIES, AND THE TOWNSHIP OF MAPLEWOOD, DEFENDANTS.
    Superior Court of New Jersey Chancery Division
    Decided September 22, 1971.

      Mr. S. Arthur Stern for plaintiff.

      Mr. Fred R. Gruen for Maplewood Village (Messrs. Gruen & Goldstein, attorneys).

      Mr. Douglas J. Harper for State of New Jersey, (Mr. George F. Kugler, Jr., Attorney General, attorney).

      Mr. Mortimer Katz for Township of Maplewood.
   Byrne, J. S. C.

The court is called upon to decide the following issues:

(1) Where there is an offer to sell an apartment unit to an existing tenant as part of a process of converting an apartment house into a condominium, does this offer to sell constitute sufficient basis to bring into play existing New Jersey warranty law and does it further justify extensive use of pretrial discovery by the prospective tenant-purchaser by reason of the relationship created by the offer to sell, perhaps coupled with the existing landlord-tenant relationship ?

(2) Is a proposed conversion of an apartment house which is owned by a partnership into a condominium a subdivision requiring approval as such by the appropriate local government agency?

(3) Does the conversion as described constitute a sale of securities within the meaning of N. J. S. A. 49 :3-27 and/or 49:3-49 ?

There are other points raised, none of which the court regards as presently critical, e. g., a question involving the rule against perpetuities, which defendant represents it will avoid by changing the offering slightly. That portion of the complaint which seeks the appointment of a rent receiver is sufficiently controverted so that summary relief is not appropriate.

The case arises out of a simple factual situation. Defendant is a partnership that owns an apartment house and proposes to convert the apartment dwelling into a condominium, offering each tenant an option to purchase his own apartment prior to a general offering to the public. Plaintiff is an association, in corporate form, of tenants formed primarily to raise the issues considered in this case.

Plaintiff’s first point is, on its face, remarkably simple. It states that since a sale of an apartment unit is contemplated and since that sale would be accompanied by various warranties, the breach of which would give rise to a cause of action, it is entirely appropriate to have pre-sale discovery as to any defects in the item warranted, either expressly or impliedly.

Defendant’s response is equally simple. It says, first, that it makes no warranty, that the apartments are being offered as is; and, second, that plaintiffs are merely prospective purchasers and are not clothed with the standing requisite to test the warranties, and, in any event, it has made representations as to the condition of the premises sufficient to allow purchasers to make an intelligent decision. Defendant further points to a local ordinance requiring an inspection of each apartment by the local housing inspector for defects upon a change in occupancy of multiple-dwelling apartment units, and a requirement that it cure any defects that may be found.

Both parties admit that the wealth of New Jersey law dealing with warranties, expressed or implied, and the standing to take advantage of them do not quite reach the present factual situation, Marini v. Ireland, 56 N. J. 130 (1970); Reste Realty Corp. v. Cooper, 53 N. J. 444 (1969); Berzito v. Gambino, 114 N. J. Super. 124 (Cty. D. Ct. 1971); Academy Spires, Inc. v. Brown, 111 N. J. Super. 477 (Cty. D. Ct. 1970), nor do the cases along the line of Henningsen v. Bloomfield Motors, Inc., 32 N. J. 358 (1960).

Plaintiff describes itself as more than merely a group of prospective purchasers, but rather purchasers coupled with an interest, i. e.., an existing leasehold and an option to purchase. The question is whether, under these circumstances, a court should make warranty concepts contained in our law prospective in operation. There are policy arguments against it. An offer is made to a prospective purchaser, who proceeds to make extended inquiry and inspection. The period of inquiry extends beyond the time of ex-pixation of the offer and court aid is sought by the prospective purchaser to extend the offer until he can satisfy himself as to expressed and implied -warranty status. An offer is made to more than one purchaser, or to a group of purchasers, each of whom wants to make his own independent inquiry. An offer is withdrawn after a purchaser has gone to great trouble and expense in making the inquiry described. Here the proposed inquiries cover the broadest range and include inquiry as to financial statements, accounting methods, profit and loss, etc.

The warranty sections of the Uniform Commercial Code, N. J. 8. A. 12A :2-312 to 318, seek to protect the ordinary purchaser from being defrauded. The gist of these remedies is to protect the actual purchaser. The nature and extent of the warranties are subject to negotiation between purchaser and seller. The right of inspection can be part of those negotiations. Under some circumstances an offering to the general public is regulated in regard to type and sufficiency of disclosure. Where such disclosure is required by law as part of an offering, 'it serves as protection to a buyer. To give an interested possible purchaser the extent of pre-purchase discovery here sought would, in effect, be to require either formal or court-aided action in the furnishing of a prospectus to virtually every prospective purchaser. In theory, if not in practice, the housewife would be able to submit interrogatories to the manager of her favorite grocery store prior to purchasing a dozen eggs. That policy, enunicated by the courts but not yet by the Legislature, might do more to frustrate rather than open avenues of commerce, even assuming that the direction of those avenues is toward honest dealing between seller and purchaser. It would be a burden on the market place of a kind we have not yet seen cause to impose under existing law.

The purchasers do not have the right of discovery prior to their decision as to whether to exercise a right to purchase their particular apartment. This view is reinforced by a consideration of the extent of disclosure sought, to wit: list the purchase price of each unit; what is the present occupancy rate and that for the past two years; give the assessed valuation for the years 1967 through 1970 for Maplewood Village; describe the surrounding neighborhood, its growth and changing phases; submit any other instruments relating to debt of the seller incurred or intended to be incurred, whether short or long term.

As to a requirement that defendant seek subdivision approval by Maplewood Township, the township zoning ordinance makes no reference to subdivision approval for the conversion of existing apartments into condominiums. It has been correctly asserted by the township that such an ordinance would be invalid in view of N. J. S. A. 46:8B-29 which has preempted this area. The statute states, in part, that:

All laws, ordinances and regulations concerning planning, subdivision or zoning shall be construed and applied with reference to tile nature and use of the condominium without regard to the form of ownership.

The presently existing apartments conform to the township zoning ordinance, and the proposed conversion represents nothing more than a change in the form of ownership. The use of the land will not be affected. Planning controls, including subdivision approval, cannot be employed by a municipality to exclude condominiums or discriminate against the condominium form of ownership, for it is use rather than form of ownership that is the proper concern and focus of zoning and planning regulation. The township does not contend otherwise. A municipality may impose subdivision controls upon a condominium apartment under the Municipal Planning Act (1953) only if it imposes the same controls on conventional landlord-owned apartment buildings.

In Bridge Park Co. v. Highland Park, 113 N. J. Super. 219 (App. Div. 1971), a substantially similar question was raised. There the owner of a garden apartment proposed a conversion to a condominium form of ownership but was informed that such did not conform to the town’s zoning ordinance which permitted garden-type apartments under single ownership. The Appellate Division pointed out that while N. J. 8. A. 40:55-30 allows municipalities to regulate the use or type of construction on real property, it does not grant power to regulate the ownership or types of tenancies permitted. Eurther, the court stated that “the word “use,’ as contained in the statute above [N. J. S. A. 40:55-30], does not refer to ownership but to physical use of lands and buildings. A building is not ‘used’ as a condominium for purposes of zoning.”

Therefore, the request that defendant be required to obtain subdivision approval must be denied since it is based on form of ownership rather than use.

Also at issue in this case is whether the proposed condominium sale should be regulated by the State of New Jersey, through the Department of Law and Public Safety, Bureau of Securities. Plaintiff contends that defendant is bound to comply with the filing and registration requirements embodied in the Real Estate Syndication Offerings Law, N. J. 8. A. 49:3-27 et seq. and/or the Uniform Securities Law (1967), N. J. 8. A. 49:3-47 et seq. However, an examination of these statutes will show that this proposed condominium conversion plan cannot be held to constitute a “security” cognizable within either of the securities acts. Both acts are intended to afford some protection to the public when making an investment in a security, with the first of the two acts aimed specifically at real estate securities.

To date there have not' been any New Jersey decisions dealing specifically with the question of what constitutes a security within the definition found in N. J. 8. A. 49:3-49 (m). Other jurisdictions generally require a finding of two basic elements prior to the finding of the existence of a security, viz., use of the investment by another and a profit motive. A few states, such as New York, require compliance with local securities regulation, but the New York condominium statute, Real Property Law, McKinney’s Consol Laws, c. 50, § 339(d) et seq., states in § 339 (ee) that condominiums “shall be deemed to be cooperative interests in realty within the meaning of section three hundred fifty-two-e of the general business law. [Real Estate Syndication Offerings Law].” It should be noted that the New York law preceded its New Jersey counterpart for which served as model, and the New Jersey act conspicuously does not include such a directive. Another finding which sheds some light upon the Legislature’s intent is the fact that when it enacted the Retirement Community Full Disclosure Act, N. J. S. A. 45:22A-1 et seq., it specifically mandated security-type regulations for “senior citizen” condominiums, requiring registration and offering statements. This further emphasizes the absence of any such legislative directive in the two acts here concerned, as regards regular (non-senior citizen”) condominiums.

Similarly, defendant’s proposed conversion does not constitute a “real estate security” within the meaning of V. J. 8. A. 49:3-27. The “offering statement” or “prospectus” required by this act is aimed principally at income-generating types of securities to be purchased as investments, and not merely to the purchase of real property for residential purposes. To place the purchase of an apartment, made for the purpose of serving as a personal residence, within the coverage of the act would be illogical. The reasoning is that there is no entrusting of investment capital to a third party for the purpose of management or investment thereof, for the purpose of income generation or capital gain. When purchasing a condominium the buyer is afforded personal control of his investment, as opposed to the securities investor whose investment may be controlled by third parties, e. g., corporate officers. Finally, it was stated in Contract Buyers League v. F. & F. Investment, 300 F. Supp. 210 (N. D. Ill. 1969) that:

To conclude that the natural desire of any purchaser that his purchase should appreciate in value makes a “security” of what has been purchased, is obviously to so muddle the term as to make it meaningless. [at 224]

It does not, therefore, appear to have been the intent of the Legislature that condominiums be regarded as securities within the scope of the Real Estate Syndication Offerings Law or the Uniform Securities Law (1967). The Attorney General in his brief does not contend otherwise.

In light of the disposition made of these issues, there is no basis for ordering or continuing any restraints in this matter. It is noted that counsel have, by consent, extended certain time limitations which the court assumes will prevail, and except to that extent, the interim relief sought is denied.


author: Young, J. C. C.

text:
    DOLORES COSTELLO, OTHERWISE DOLORES PORZELT, PLAINTIFF, v. WAYNE A. PORZELT, DEFENDANT.
    Superior Court of New Jersey Chancery Division (Matrimonial)
    Decided October 1, 1971.

      Mr. Isidore Hornstein for plaintiff (Messrs. Hornstein A Hornstein, attorneys).
   Young, J. C. C.

(temporarily assigned). This is a suit for annulment of a marriage on the grounds that concealment of heroin addiction is a premarital fraud which goes to the essentials of the marital relation. The suit is brought under the general equity jurisdiction of the Superior Court. There does not appear to be case law in New Jersey dispositive of the issues presented.

Defendant Wayne A. Porzelt did not answer or enter an appearance and proofs were taken ex parte on August 16, 1971. The proofs satisfactorily establish that following a courtship of less than a month, plaintiff Dolores Costello, a 25-year old hitherto unmarried woman, married defendant, age 24, on February 26, 1971. Shortly thereafter plaintiff noticed strange behavior in her husband and discovered objects missing from the apartment, including sterling silverware, an expensive bedspread and an electric can opener. Prolonged absences from the apartment were explained as job-hunting, but upon investigation plaintiff learned that her husband had been at the home of a friend. Upon further investigation she found a hypodermic needle and a package of heroin behind the light in the medicine cabinet in the bathroom.

Upon retiring one night plaintiff observed needle marks on defendant’s arms. He admitted his addiction, confessing that he had taken the household articles aforementioned and sold them for drugs. Plaintiff testified that she had no marital relations with her husband after that encounter early in April, her husband departing the apartment on April 11 and not having been heard from since that date. The wife testified that her suggestions that he seek treatment were rebuffed by her husband.

Plaintiff testified that if she had known that her husband was addicted to heroin at the time of the marriage she would not have entered into the union.

Corroboration was provided by plaintiff’s mother, who testified to the personal property missing from her daughter’s apartment and the nonratification upon discovery of the addiction.

Another witness was Kenneth Calabrese, detective of the Jersey City Police Department assigned to the Narcotics Squad. This witness produced defendant’s arrest record, on the basis of which he testified that defendant was a narcotic addict as of the date of his marriage to plaintiff. At the time of the hearing defendant was a fugitive.

There is inherent jurisdiction in a court of equity to annul fraudulent contracts, including a contract of marriage. Lindquist v. Lindquist, 130 N. J. Eq. 11 (E. & A. 1941); T. v. M., 100 N. J. Super. 530 (Ch. Div. 1968). The fraud may consist of an affirmative false representation or the withholding of the truth when it should be disclosed. Gruber v. Gruber, 98 N. J. Eq. 1 (Ch. 1925); Turney v. Avery, 92 N. J. Eq. 473 (Ch. 1921). Putting it another way, the suppression of truth is equivalent to the expression of falsehood.

New Jersey courts have adhered to the distinction between consummated and unconsummated marriages, granting judicial annulment in the latter when infected by fraud of any kind whatsoever that would render a contract voidable, but demanding that the fraud go to the very essence of the marriage relationship when consummation is established. The leading case is Ysern v. Horter, 91 N. J. Eq. 189 (Ch. 1920), recognized and applied in Akrep v. Akrep, 1 N. J. 268, 270 (1949); Brown v. Brown, 34 N. J. Super. 261, 265 (Ch. Div. 1954).

The issues framed by the proofs in the present case are:

1. Does the physical and mental impact of addiction to narcotics (heroin) go to the essentials of the marriage relation?
2. Where addiction to narcotics at the time of the marriage is concealed, and upon disclosure after five weeks of marriage the wife refuses to ratify same, is consummation a bar to annul-men( ?

The decisional law of New Jersey has not defined what is meant by the “essentials” of the marital relation. In an early case, Carriss v. Carris, 24 N. J. Eq. 516 (E. & A. 1873), the court held that the wife’s concealment of her pregnancy by another man at the time of her marriage was an extraordinary fraud which went to the “essentials” of the marriage. The court abstained from a delineation of the expression, merely stating (at 524) that “One of the leading and most important objects of the institution of marriage under our laws is the procreation of children * *

The absence of judicial guidelines was noted by Vice-Chancellor Stevenson in Ysern v. Horter, supra: “The Carris Case held, in effect, that the court of chancery had jurisdiction to annul a marriage on the ground of fraud in respect to the 'common law essentials’ of the marriage when such decree 'would not be against sound consideration of public policy.’ ” 91 N. J. Eq. at 198. The vice-chancellor then addressed himself to the nature and quantum of fraud which would justify annulment of a consummated marriage, stating his conclusions in the following passage:

What is fraud in respect to the “essentials” of marriage, or, to use the broader term, what is “sufficient fraud,” I think remains to-day the subject of ascertainment in every case brought before this court in which the complaining spouse alleges that his or her consent to a marriage was induced by the defendant’s fraud, [at 198]

When the Garris court was called upon to grant an annulment because the wife had fraudulently concealed her pregnancy, there were no clear precedents which Mr. Justice Bedle could marshall in support of a decree upon such grounds. The court was cognizant of the paucity of authority, but nevertheless ordered the Chancellor, in the exercise of inherent general equity jurisdiction, to annul the marriage on the rationale in the excerpt which follows:

The apparent absence of direct adjudication on the point, may perhaps be accounted for by the meager character of the reports previous to 1809, * * *. At any rate, there is no indication in the text books against it, and if fraud, under any circumstances where the forms of consent have been gone through, is to be allowed as a ground of dissolution, it should, upon principle, be in this case. There ought always to be an indisposition in every court to weaken the force and sacredness of the marriage tie. That consideration should induce great carefulness, but should not deter us from advancing where principle leads us, although before, in our courts, the objective point has not been attained. The fraud in this case was so gross and far-reaching, as to avoid the consent, and for that reason the marriage must be declared null and void, ab initio. * * * [Garris v. Garris, 24 N. J. Eq. at 526.1

The principle thus established was that “consideration should induce great carefulness, but should not deter us from advancing where principle leads us, * * Eolio wing that rather vague standard, New Jersey courts have granted annulments, under general equity jurisdiction, when impotence has been concealed, declaring same to constitute a fraud, Steerman v. Snow, 94 N. J. Eq. 9 (Ch. 1922); suppression of knowledge of venereal disease, Crane v. Crane, 62 N. J. Eq. 21 (Ch. 1901); suppression of the fact that a spouse was afflicted with hereditary chronic tuberculosis, notwithstanding consummation of the marriage, Davis v. Davis, 90 N. J. Eq. 158 (Ch. 1919); concealment of a fixed determination not to have children, notwithstanding consummation, Williams v. Witt, 98 N. J. Super. 1 (App. Div. 1967); concealment of pregnancy by another man, notwithstanding consummation, B. v. S., 99 N. J. Super. 429 (Ch. Div. 1968).

The cases confirm the proposition that any physical or mental condition or behavior which strikes against the central purpose of marriage, namely its sexual aspect culminating in procreation, goes to the essence of the marital relation. The law assumes that persons who enter into marriage do not intend to frustrate these important objects of the union, but rather that they intend to bring those objects to normal fruition. Cf. Pisciotta v. Buccino, 22 N. J. Super. 114, 117-118 (App. Div. 1952).

There is an ever-expanding body of medical literature in support of the thesis that addiction to narcotic drugs strikes at the physical aspects of married life. Recently, Judge Consodine concluded that addiction created “an incapacity to discharge the marital duties within our definition of the statutory ground of extreme cruelty.” De Meo v. De Meo, 110 N. J. Super. 179, 180 (Ch. Div. 1970). In an earlier opinion, Melia v. Melia, 94 N. J. Super. 47 (Ch. Div. 1967), Judge Consodine granted a judgment of divorce on the ground of extreme cruelty when it was shown that voluntary and continued addiction to heroin over á period of years, by a dissipator, resulted in attrition of sexual powers and refusal of intercourse. The formidable medical authorities collated by Judge Consodine are here cited:

Authorities recording objective scientific observation generally confirm the relation between drug addiction and sexual indifference and rejection which plaintiff charges. There are only individual exceptions to the findings. See Maurer and Vogel, Narcotics and Narcotic Addiction, 72 (1954) (general tendency to reduce or obliterate sexual desire); Schur, Narcotic Addition in Britain & America, 127, 128 (1962) (inhibition of the. sexual function interferes seriously with normal marital relationship); Nyswander et al., The Drug Addict as a Patient, 46 (1956) (sexual difficulties invariably occur to the addict; there is a complete lack of interest in sex which frequently persists even when the addict is off drugs after a prison term of two or three years); Kron and Brown, Mainline to Nowhere—The Making of a Heroin Addict, 153 (1963) (marriage in the life of an addict— if it takes place at all—is a very transitory episode); Wilner and Kassebaum, Narcotics, 41 (1965), citing Eisenman, Fraser and Brooks, “Urinary Excretion and Plasma Levels of 17 Hydorxycortico-Steroids During a Cycle of Addiction to Morphine,” 132 J. Pharmacol., Exp. Therap., 226 (1961) (observations of biochemical change in the maintained addict demonstrate that the decline in sexual drive and activity consistently reported by addicts has a definite physiologic basis) ; Chein, Gerard, Lee and Rosenfeld, The Road to H, 357, 358, (1964) (“with regard to effects on sexuality, the effect of the opiates is to diminish, if not do away with, sexual appetite. The addict ‘loses his nature’ ”); Brown, The Enigma of Drug Addiction, 39 (1961) (the addict is possessed of only one fervent objective — the ways and means of obtaining his next shot of heroin); Kolb, “Drug Addiction, A Study of Some Medical Cases,” 20 Archives of Neurology & Psychiatry, 171, 183 (1928) (reduction or elimination of sexual desire tends to remove the opiate addict from the category of psychopathic sex offenders), [at 51-52]

Moreover, unlike diseases such as tuberculosis and syphilis, which may be arrested or cured, there is no known cure for heroin addiction. That heroin addiction is rarely curable was the profession opinion of Dr. Hans Freymuth, New Jersey Division of Narcotics, in remarks to the New Jersey Judges Conference, Cherry Hill, September 8-10, 1971. The literature supports this opinion. See the year-long study by Committee on Public Health of the New York Academy of Medicine, cited by Breun “Three Faces of Dangers from Drugs,” 42 N. Y. State Bar J., 612, 617 (1970); Drug Abuse: The Chemical Cop-Out, 27, a pamphlet published by the National Association of Blue Shield Plans (1969) (“* * * the end of his affair with drugs is more likely to be death, and not cure.”)

Surely, equity should not condition relief in the premises rrpon proof of actual manifestations of the mental and physical impact of heroin addiction as documented in the medical literature. Indeed, cohabitation following knowledge of the fraudulent concealment would operate to defeat plaintiff’s cause of action, inasmuch as nonratification upon disclosure is a prerequisite to the relief sought.

That drug addiction is a serious impediment to normal marital relations has been recognized by the New Jersey Legislature, as reflected in the new statute on marriage, divorce and annulment, L. 1971, c. 212, effective September 12, 1971. N. J. S. A. 2A:34-1 and 2. Voluntarily induced addiction or habituation to any narcotic drug is specifically mentioned as a cause for divorce from bond of matrimony. N. J. S. A. 2A:34-2(e).

Under the new annulment statute a judgment may be granted where the parties, or either of them, lacked capacity to marry due to want of understanding because of “the influence of intoxicants, drugs, or similar agents.” N. J. S. A. 2A:34-l(d).

But more significantly, the Legislature recognized that a party may freely consent to marry under a misapprehension of fact, such as the fraudulent misrepresentation of physical condition. The Legislature also recognized that it could not anticipate each and every possible fraudulent misrepresentation that may be made, and it wisely does no more than to include the phrase “or fraud as to the essentials of marriage.” N. J. 8. A. 2A:34-l(d). The Legislature, as if to leave no doubt on the matter, included subsection (f) providing that causes of judgments of nullity are allowable under the general equity jurisdiction of the Superior Court.”

The Final Report to the Governor and the Legislature of the Divorce Law Study Commission, May 11, 1970, confirms that the legislative intent was to make no change in the general equity jurisdiction of the Superior Court as to grounds for annulment. “Mo attempt is made to limit such equity jurisdiction.” (at 59)

The Legislature does not list concealment of venereal disease or tuberculosis, both judicially recognized instances of fraud sufficient to annual a marriage, as grounds for nullity. The legislative intent is to leave the specific grounds of annulment to the discretion of equity.

The decisional law of neighboring jurisdictions is divided on the issues presented in the instant case. The courts of Mew York have granted relief. See Lockwood v. Lockwood. 29 Misc. 2d 114, 220 N. Y. S. 2d 718 (Sup. Ct. 1961); O’Connell v. O’Connell, 201 App. Div. 338, 194 N. Y. S. 265 (App. Div. 1922). The courts of Delaware have denied relief. Husband v. Wife, 262 A. 2d 656 (Super. Ct. 1970); Husband v. Wife, 257 A. 2d 765 (Super. Ct. 1969).

I am satisfied that the uncontroverted proofs are of the character required by our decisional law, that is to say, the proofs are clear and convincing. Pisciotta v. Buccino, supra. I am also persuaded that concealment of narcotic addiction is not an “accidental quality” such as concealment of a criminal record, or misrepresentations of personal traits, or social and financial position.

Finally, I conclude that concealment of narcotic addiction is a fraud which goes to the essentials of the marriage, and that upon disclosure after five weeks of marriage attendant upon nonratification, consummation will not bar a declaration of nullity under the general equity jurisdiction.

A judgment may be entered.


author: Tumulty, J. S. C.

text:
    MARCUS J. WAGER, JR., PLAINTIFF, v. BURLINGTON ELEVATORS, INC., A CORPORATION OF NEW YORK, DEFENDANT-THIRD PARTY PLAINTIFF, v. CARL E. KEES AND HAZEL KIRK KEES, INDIVIDUALLY AND TRADING AS WILLIAM C. KIRK, KIRK ELEVATOR CO., INC., AND KIRK DUMBWAITER CO., INC., CORPORATIONS OF NEW JERSEY, THIRD-PARTY DEFENDANTS.
    Superior Court of New Jersey Law Division
    Decided October 12, 1971.

      Mr. Robert O. Gruhin for plaintiff.

      Mr. Joseph Colt for defendant-third party plaintiff {Mr. Edward E. Kuebler, attorney).

      Mr. George L. Sachs for third party defendants {Messrs. Sachs & Sachs, attorneys).

      Mr. James B. Moran for New Jersey Manufacturers Insurance Company {Messrs. Hughes, McElroy, Oonnell, Foley & Geiser, attorneys; Mr. William T. McElroy on the brief).
   Tumulty, J. S. C.

This matter came before the court on two motions which appear to raise a novel issue relative to N. J. S. A. 34:15-50. The first motion was by third-party defendants Carl E. Kees et al. (hereinafter Kees), for an order permitting them to pay into court the sum of $22,500 representing their share of the settlement of this suit. The second motion was by New Jersey Manufacturers Insurance Company, insurer of Wager’s employer, Montclair National Bank & Trust Company, for an order directing plaintiff, his attorney, third-party plaintiff Burlington and third-party defendants Kees to honor the workmen’s compensation lien held by the New Jersey Manufacturers Insurance Co. We deny third-party defendants’ motion to pay into court their share of the settlement suit and grant the motion of New Jersey Manfacturers Insurance Co. to have the workmen’s compensation lien honored, for the reasons set forth hereinafter.

Plaintiff was injured on February 23, 1967 while in the course of his employment with the Montclair National Bank & Trust Company when a Burlington elevator dropped, causing plaintiff to fall with the elevator and sustain personal injuries.

Plaintiff Wager sought workmen’s compensation against his employer, Montclair National Bank & Trust Company, by a claim petition filed November 28, 1967. This court’s docket reflects that plaintiff thereafter filed the instant civil suit on May 8, 1968. Both the workmen’s compensation petition and the present complaint were filed by the same attorney, who currently represents plaintiff.

The compensation matter came on for hearing before the Workmen’s Compensation Division on September 2, 1969, and judgment against plaintiff’s employer, Montclair National Bank & Trust Company, was formally entered September 22, 1969. Despite the pendency of the civil action, for some 16 months during and prior to the conclusion of the compensation matter, neither plaintiff nor his counsel advised the employer’s compensation carrier, New Jersey Manufacturers Insurance Co. (which was making the compensation payments), that plaintiff had such a civil suit in process. No attempt was ever made thereafter by plaintiff or his counsel to so advise the carrier. The carrier continued to pay the compensation due to plaintiff.

On December 9, 1969 the civil action was settled with Kees and Burlington for the total sum of $25,000. Of this figure, the third-party defendants (Kees) were to pay $22,500, and defendant-third party plaintiff (Burlington) was to pay $2,500.

Subsequent to the agreement to settle, but before any payment had been made, counsel for the third-party defendant (Kees), who apparently was aware of the compensation situation, requested closing papers of plaintiff’s counsel and, in particular, inquired as to the amount of the compensation lien.

On June 1, 1970 plaintiff’s counsel eventually forwarded to third-party defendant Kees general releases and stipulations of dismissal. Since no release of the compensation lien was among these papers, the attorney for the third-party defendant on June 3, 1970 wrote plaintiff’s attorney requesting such a release. Thereafter "several” letters and “a number” of telephone calls failed to produce any such paper.

The third-party defendants (Kees) filed a motion in the nature of an interpleader and gave due notice of same to the compensation carrier, which afterward filed a motion to have its lien honored. These are the motions now before the court.

Prior to the interpleader motion the compensation carrier finally received a notice of the pending civil suit against the tortfeasor. On July 27, 1971 New Jersey Manufacturers Insurance Company received an inquiry by letter from the insurance carrier of defendant Burlington Elevators, Inc. This letter caused the compensation carrier New Jersey Manufacturers Insurance Company to make inquiry, and as a result, on July 30, 1971, it sent notice of its lien by certified mail, return receipt requested, to all interested parties.

New Jersey Manufacturers Insurance Company also moves for an order of this court directing that its lien, statutory notice of which was given by it prior to any payment in the civil action, be honored.

New Jersey Manufacturers Insurance Company relies on N. J. 8. A. 34:15-40(d), the pertinent parts of which state:

* * * If at any time prior to tiie payment by the third person or his insurance carrier to the injured employee or his dependents, the employer or his insurance carrier shall serve notice, as hereinafter provided, upon such third person or his insurance carrier that compensation has been applied for by the injured employee or his dependents it shall thereupon become the duty of such third person or his insurance carrier, before malcmg any payment to the injured employee or his dependents, to inquire from such employer or his insurance carrier the amount of medical expenses incurred and compensation therefore paid to the injured employee as his dependents. * * * Thereafter, out of that part of any amount about to be paid in release or in judgment by such third person or his insurance carrier on account of his or its liability to the injured employee * * *, the employer or his insurance carrier shall be entitled to receive from such third person or his insurance carrier so much thereof as may be due the employer or insurance carrier pursuant to subparagraph (b) or (c) of this section. *' * * [Emphasis added]

Plaintiff, in opposition to New Jersey Manufacturers Insurance Company’s motion, relies on subparagraph (g) of the above cited statute which states:

If such employee or his dependents effect a settlement with the third person or his insurance carrier or institute proceedings against the third person prior to the service of notice upon the third person or his insurance carrier of the compensation obligation of the employer or his insurance carrier or prior to the institution of any proceedings against the third person by the employer or his insurance carrier for the injuries and loss sustained by such employee or his dependents, such employer or his insurance carrier is barred from instituting any action. * * *

In determining whether N. J. 8. A. 34:15-40(d) or 34:15-40(g) applies, our construction of these parts of the statute must be with reference to the leading idea or purpose of the whole statute. A statute is passed as a whole and not in parts or sections. Consequently, each part or section should be construed in connection with every other part or section, so as to produce a harmonious whole. See Sutherland on Statutory Construction, § 4703.

The purpose of the Workmen’s Compensation Act was stated in U. S. Casualty Co. v. Hercules Powder Co., 4 N. J. 157 (1950), which quoted from Prudential Insurance Co. of America v. Laval, 131 N. J. Eq. 23, 26 (Ch. 1942) :

There is to be perceived in the Workmen’s Compensation Act, * * *, a clear legislative intent to establish a scheme for the compensation of an injured employee or his surviving dependents by the employer or its insurance carrier on the one hand, and on the other to give the latter a right to reimbursement for the compensation so paid by them out of any damages which may be recovered from the third-party tort feasor liable for the employee’s injuries and resultant death. * * * This right is derived from what may be termed the employer’s or his insurance carrier’s “statutory subrogation,” under section 34:15-40 of this act, * * *.

Also, as stated in Larson on Workmen’s Compensation, §§ 71.10 and 71.20:

The concept underlying third party actions is the moral idea that the ultimate loss from wrongdoing should fall upon the wrongdoer.
* * » every mature loss-adjusting mechanism must look in two directions: it must make the injured .person1 whole and it must also seek out the true wrongdoer whenever possible.
It is equally elementary that the claimant should not be allowed to keep the entire amount both of his compensation award and his common law recovery. [Commissioners of State Insurance Fund v. Schell, 23 App. Div. 2d 556, 256 N. 7. S. 2d 638].
The obvious disposition of the matter is to give the employer so much of the negligence recovery as is necessary to reimburse him for his compensation- outlay, and to give the employee the excess.
The right of the claimant to keep the double recovery must not be confused with the right to collect the double recovery subject to the obligation to pay over to the. employer or carrier the amount of the latters compensation outlay. [Emphasis added]

Plaintiff relies on subparagraph (g) which he reads to bar the employer from recovering on his lien for failure to file timely notice of said lien before settlement. However, such a view misconstrues the underlying legislative policy as set forth above.

Subparagraph (g) merely prevents the employer from bringing subrogation-type actions against the negligent third party, when the employee has done so.

Instead, subparagraph (d) applies the Tule that an employer’s lien against the plaintiff and tortfeasor is not extinguished since he may recover his lien at any time prior to payment, providing proper statutory notice is given.

Subparagraph (d) deals with the relationship between the employer and the employee.

Subparagraph (g) deals with the relationship between the employer and a third-party tortfeasor.

In construing words with a common meaning, the correct statement of the rule is that in the absence of legislative intent to the contrary, common terms in a statute are presumed to have been used in their common sense. See Spano v. Western Fruit Growers, Inc., 83 F. 2d 150 (10 Cir. 1936); Fedi v. Ryan, 118 N. J. L. 516 (Sup. Ct. 1937); Newark v. Department of Civil Service, 68 N. J. Super. 416 (App. Div. 1961).

Guided by the principles of statutory construction we discern the obvious legislative policy against a double recovery, not only as to the employee but also as to the employer.

“Payment” is not synonymous with “settlement.” “Payment” means the act of paying, that is, to discharge indebtedness for; to make disposal of money; to make compensation for. See Webster’s Seventh New Collegiate Dictionary; also, 31A Words and Phrases 215, el seq. “Settlement” means to fix or resolve conclusively; to make or arrange for final disposition. See Webster, supra.; also 39 Words and Phrases 65 et seq.

The conclusion to be reached is apparent: subparagraph (d) allows the employer or his carrier to recover monies paid by him to his employee for injuries caused by the wrongful act of a third person, while at the same time protects the third person from paying double damages by requiring the employer or his compensation carrier to serve notice of the compensation lien on the tortfeasor before he pays the employee. This right is qualified to the extent that, in order for it to become operative, the employee must recover from the third person more than he received from the employer as compensation. N. J. 8. A. 34:15-40(b).

Subparagraphs (f) and (g) are consistent with this view. Subparagraph (f) allows the employer or his carrier to sue in place of the employee to recover for injuries sustained by the employee against the third person, if the employee fails to bring suit. Subparagraph (g) protects the third person in preventing the employer or his carrier from bringing suit or entering into any type of settlement once an employee has settled or instituted proceedings against him.

The court is also aware of Brenner v. Mount, 7 N. J. Misc. 35, 143 A. 868 (Sup. Ct. 1928), which permitted a double recovery to the injured employee. Here, notice was served prior to settlement, but voided because the contents of the notice itself was contrary to the statute which dictates the contents and the manner of service of notice. The statute provides:

If * * * the employer * * * shall serve notice, as hereinafter provided, upon such third person or his insurance carrier that compensation has been applied for by the injured employee or his dependents * *
* * * Service of notice, hereinbefore required to be made by the employer or his insurance carrier upon such third person or his insurance carrier, shall be by registered mail, return receipt * * *. IN. J. S. A. 34:15-40 (d) ]

The court in Brenner, supra., said:

* * * The only written notice given by the appellant to the third party prior to the date of settlement did not advise the third party of any agreement to pay compensation or of any award for compensation, but on the other hand, negatived by its own language the idea that there was an agreement to pay compensation or an award for compensation. * * *
* * * [I]n order to acquire a right against the third party to be reimbursed by the third party for the compensation paid that “such employer shall file with the third person or corporation so liable, at any time prior to payment, a statement of the compensation agreement or award between himself and his employee,” and therefore it was incumbent upon the employer (the appellant here) to follow that procedure, and that he did not do.

Therefore Brenner, properly viewed, supports the lienor’s claim since it supports the position of a lien attaching before payment, provided the proper statutory notice is given.

Since “payment” and “settlement" are not synonymous, common sense will dictate that payment could occur only after settlement, and the Legislature obviously intended that the workmen’s compensation lien would attach before the money was paid out by the tortfeasor. We must credit the Legislature with the knowledge of the common definition of words used in its own statute.

Based upon the foregoing analysis, it is unnecessary for the third-party defendants to pay the monies owed into court, and therefore we deny Kees’ motion since his contentions are moot. We grant New Jersey Manufacturers Insurance Company’s motion, and order that all parties to this action honor its compensation lien.


author: Meredith, J. C. C.

text:
    ELLA F. FILIPPONE AND JOHN J. LITTLE, PLAINTIFFS, v. GERTRUDE O’CONNOR, ALLAN A. SWENSON AND WILLIAM B. WAHL, DEFENDANTS.
    Superior Court of New Jersey Law Division
    Decided October 13, 1971.

      Frederick W. Engel, for plaintiffs {Mr.- John R. Miller, attorney).

      Graham T. Ross, for defendants {Messrs. Mott & Soriano, attorneys).
   Meredith, J. C. C.

t/a (temporarily assigned). This matter comes before this court on an order to show cause why plaintiffs should not be found to be duly elected and qaulified Republican municipal and county committeemen from their respective districts in the Township of Bernards in Somerset County.

The facts have been stipulated by the attorneys for their respective parties.

Primary elections were held on June 8, 1971 in the Township of Bernards. Uo persons had been nominated by petition for the position of Republican county committeewoman for District 3 or Republican county committeeman in District 2. On the above-mentioned date plaintiff Ella E. Eilippone was elected by write-in votes in District 3 and plaintiff John J. Little elected by write-in votes in District 2.

Little became aware of the results on June 8 and Mrs. Eilippone on June 9.

On or about June 10 the township clerk certified to the county clerk and to the county board of elections the names and ■ addresses of the persons elected as members of the Republican county committee.' By statute, N. J. 8. A. 19:5-2, members of the municipal committee of political parties shall consist of members of the county committee resident in the respective municipalities.

On June 11 defendant William B. Wahl, chairman for 1970-71 of the Republican municipal committee for the Township of Bernards, became aware of the results of the election. At some time between June 8 and June 14 he solicited acceptances and party certifications from all the successful write-in candidates except the two plaintiffs. He also notified all the others of the hour and place of the annual meeting of the municipal committee, which took place June 14 at the Thompson Realty office.

Nonetheless, Little attended that meeting but Mrs. Filippone was not present. Wahl informed Little that the two offices were considered vacant because plaintiffs had not tendered a written acceptance by the previous Saturday, June 12. The municipal committee elected defendants O’Connor and Swenson to fill the vacancies.

On June lo a certificate of election was issued to each of the plaintiffs, and before the Republican county committee met that evening both had filed a written statement of party affiliation with the secretary of that committee, as required by N. J. S. A. 19:23-54. Plaintiffs then placed their demand for their respective offices before this committee.

It is agreed that N. J. S. A. 19 :5—2 provides that the members of the municipal committee take office the first Saturday following the day of the election. The statute further states that members of the municipal committee make up the membership of the county committee. Defendants contend that the reason for the requirement that the municipal committee meet six days after the day of election is to determine the committee membership. This step, they say, is necessary so that the county committee meeting on the seventh day can properly elect its officers. Therefore, they argue, it follows that it is implicit from the statute that the municipal committee be properly notified of the acceptance of an elected official to an office in order that any vacancy can be filled at the official meeting of the committee.

The basic problem which confronts this court is one of interpretation and construction of the statutes involved.

The only affirmative duty on the part of a member-elect of a committee can be found in N. J. S. A. 19:23-54. This requires that after a certificate of election has been issued, a written statement must be filed by the member-elect with the secretary of the county committee certifying that he is a member of such a political party. There is no requirement in this statute or in any other statute that any statement of acceptance, oral or written, be tendered to the municipal committee at any time.

The certificate of election was issued to plaintiffs on Tuesday, June 15, 1971. Plaintiffs promptly filed their certification of membership in the Republican party with the secretary of the county committee. The meeting of this Committee was held that same evening. The required filing was within the proper time limitation.

Failure to execute a written declaration of party affiliation as required by statute was held a mere irregularity and insufficient to render a vote illegal in the case of Wene v. Meyner, 13 N. J. 185 (1953). The primary is a medium for expressing the preference of the popular will and of those united under the party standard. While protective legislative measures are to be enforced according to their spirit, a construction that would nullify votes cast by primary electors is to be avoided. Essentially, the question becomes one of fairness in the election.

We are cautioned in Kilmurray v. Gilfert, 10 N. J. 435 (1952), that election laws should not be so construed so “as to deprive the voters of their franchise or render an election void for technical reasons.” Furthermore, Sharrock v. Keansburg, 15 N. J. Super. 11 (App. Div. 1951), holds that:

The right of suffrage in a government of and by a free people must always be regarded with jealous solicitude. To overthrow the expressed will of voters for no fault of their own and solely because of some harmless irregularity would in many cases defeat the paramount object of the election laws.

N. J. 8. A. 19:5-2 requires that the outgoing municipal chairman notify each member elect of the hour and place of the annual meeting. The statute contains no words qualifying or limiting the words “member-elect,” although defendants would have added the words “who have accepted their positions within the required time limit.”

Although, historically, courts have been most reluctant to interfere in intraparty controversies in the absence of the violation of a controlling statute or the infringement of a clear legal right, Deamer v. Jones, 42 N. J. 516 (1964), in the opinion of this court plaintiffs’ legal rights have been clearly violated by the decision of the municipal committee to deny them the offices to which they were elected. The court declares that plaintiffs are the duly elected Eepublican committeeman and committeewoman of their respective districts in the Township of Bernards, and county committeeman and committeewoman of the county Eepublican committee. Consequently, defendants O’Connor and Swenson who have accepted these posts must be removed therefrom.


author: Harrison, J. C. C.

text:
    ROBERT SCELFO AND CHARLES O’CONNOR, PLAINTIFFS, v. RUTGERS UNIVERSITY, PETER GRUNTFEST AND LOUIS ZOCCA, DEFENDANTS.
    Superior Court of New Jersey Law Division
    Decided September 17, 1971.

      Mr. Thomas E. Durkin, Jr. for plaintiffs.

      Mr. Morris Stern for defendant Peter Gruntfest.

      Mr. Frank B. Ginquina for defendants Rutgers University and Louis Zocca {Messrs. Michels & Schwartz, attorneys).
   Harrison, J. C. C.

(temporarily assigned). This matter comes before the court on motion for summary judgment filed by defendant Peter Gruntfest against libel charges made by plaintiffs Robert Scelfo and Charles O’Connor, and as to both cross-complaints pending. Defendants Rutgers University and Dr. Louis Zocca move for an order granting summary judgment to them against all other parties to the action. The complaint filed by Scelfo and O’Connor, two Newark mounted policemen, against Rutgers, Gruntfest and Zocca alleges that defendants did willfully and maliciousty write and publish or cause to be written and published false and libelous statements in the Butgers Observer of November 13, 1968. Defendant Gruntfest in his answer alleged that his essay failed to identify plaintiffs; his essay was not the proximate cause of the alleged defamation in view of defendants Rutgers and Zocca control of the newspaper; the statements therein are not false or defamatory, and plaintiffs, who are public officials, do not allege nor establish actual malice. A cross-claim was filed by Rutgers and Zocca against Gruntfest for indemnification and contribution, alleging that they did not exercise control over the paper. Gruntfest filed a cross-claim for indemnification and contribution against Rutgers and Zocca, alleging their responsibility for the article as published with headline and photo.

The facts are essentially undisputed by the parties. On November 5, 1968, Election Day, some Rutgers University-Newark students participated in a public demonstration which included a march from Federal Square to Military Park. The demonstration was sponsored by the undergraduate “Students for a Democratic Society” chapter (hereinafter “SDS”). The undergraduate chapter of “Young Americans for Freedom” (hereinafter “YAF”) initiated a counter-demonstration. The confrontation between the two groups resulted in skirmishes, yelling and missile throwing. The SDS group retreated into the Campus Center building with YAF remaining outside. Plaintiffs, who were among six Newark mounted policemen assigned to the campus at the time, stood between the two groups at the Campus Center. Defendant Gruntfest, an undergraduate student present at the rally, wrote an essay describing his experiences and feelings on that day, which he submitted to the editorial staff of the Rutgers Observer, the weekly undergraduate newspaper. Gruntfest was not a member of the staff and did not see or hear of his essay again until it appeared in print in the paper on November 13, 1968, together with a photograph of two policemen mounted on horseback and with a headline, “YAF’s, Cops, Rightists: Racist Pig Bastards.”

In libel actions the preliminary question for the trial court is whether the words at issue are reasonably capable of a defamatory meaning. State v. Browne, 86 N. J. Super. 217 (App. Div. 1965); Neigel v. Seaboard Finance Co., 68 N. J. Super. 542 (App. Div. 1961); Sokolay v. Edlin, 65 N. J. Super. 112 (App. Div. 1961); Coleman v. Newark Morning Ledger Co., 29 N. J. 357 (1959); Mick v. American Dental Ass’n, 49 N. J. Super. 262 (App. Div. 1958); and Dressler v. Mayer, 22 N. J. Super. 129 (App. Div. 1952). Only where words are ambiguous in the sense of being reasonably subject to either a legally innocent as well as defamatory significance, as determined by the court, does the jury decide as a question of fact whether the readers or public understood the language in its defamatory sense. Hosier v. Whelan, 48 N. J. Super. 491 (App. Div. 1958), rev’d 28 N. J. 397 (1958); Herrmann v. Newark Morning Ledger Co., 48 N. J. Super. 420 (App. Div. 1958); Leers v. Green, 24 N. J. 239 (1957). The court has the duty to terminate the proceedings where in any reasonable view of the evidence the charge of libel has not been sustained. Leers, supra. Summary judgment is not to be denied if documents pertinent to the motion show palpably the absence of any material fact issue, although the allegations ol‘ the pleadings, standing alone, may raise such an issue. Judson v. Peoples Bank and Trust Co. of Westfield, 17 N. J. 67 (1954). In this case, examination of the depositions taken of plaintiffs and the affidavits furnished by defendant Gruntfest of other witnesses to the events of November 5, 1968, reveals that no material issue of facts has been raised. In accordance with the above criteria, we conclude that the article as published is not reasonably susceptible of defamatory interpretation and is thus not libelous as a matter of law.

The court reaches the foregoing conclusion because the essay, as written by defendant Gruntfest or inserted under headline and photograph in the article, failed to identify plaintiffs and thus cannot serve as a basis for a defamation action. An essential ingredient of a libel is that it must be “of and concerning” the plaintiff so that a third person could understand the communication to relate to said plaintiff. Gnapinsky v. Goldyn, 23 N. J. 243 (1957). In balancing the societal interest in free speech and press against the individual interest in reputation, courts have chosen not to limit the former except to prevent injury from defamatory statements reasonably susceptible of a definite application to a particular individual. Rosenblatt v. Baer, 383 U. S. 75, 86 S. Ct. 669, 15 L. Ed. 2d 597 (1966). Plaintiffs have not presented evidence for a finding that the article referred specifically to plaintiffs, or that it was reasonably believed by some person aware of the article that these plaintiffs were in fact intended ■— requirements which are explained in Gnapinsky v. Goldyn, supra. Extrinsic circumstances may serve to identify the persons allegedly defamed, but plaintiffs presented nothing of sufficient evidential force to warrant such a finding here.

In Mick v. American Dental Ass’n, supra, plaintiff alleged that publications circulated by defendant, although they did not identify or name plaintiff, were libelous due to defendant’s well-known public opposition to fluoridation. Defendant there suecesfully contended that such publications did not refer, either expressly or by implication, to plaintiff. The court in reaching its decision enunciated certain rules regarding group defamation, namely that when alleged defamatory words are directed at a group, plaintiff must show that the words applied to him. However, in the present case we do not have a sweeping charge leveled at the entire mounted police squad without exception, but a charge directed to certain unidentified members of the squad assigned to campus. There was no indication that the officers in the photograph were intended objects of criticism. The United States Supreme Court in Rosenblatt v. Baer, supra, supports this established point of law that an imputation regarding one or some of a small group that may cast suspicion on all is not actionable.

Only an explicit charge directed to particular plaintiffs or the entire force would allow any member of the identified group to recover. Such recovery is subject, however, to a showing of “actual malice” if plaintiff is deemed a “public official” within the meaning of New York Times Co. v. Sullivan, 376 U. S. 254, 84 S. Ct. 710, 11 L. Ed. 2d 686 (1964).

In a recent New Jersey case dealing with the issue of identity, Weller v. Home News Pub. Co., 112 N. J. Super. 502 (Law Div. 1970), plaintiffs advanced the theory that they were libelled because readers of defendant newspaper recognized a profile photograph of their mother, captioned as a charity patient but with a fictitious name. The factual issue for the court as to whether her identification as a charity patient was reasonably understood by an appreciable number of readers as damaging to plaintiffs’ reputation was decided in the negative. Our determination in this case is supported by that holding which was based upon a similarly unidentified photograph. No reference is made in the body of Gruntfest’s article to the photograph; no caption identifies the two men pictured as the specific mounted police mentioned; no evidence of crowds or other events on campus serve to associate the photograph with the described campus confrontation, and the profile shots were taken at enough distance to render the individual features of the two men indiscernible.

Defendant Gruntfest’s use of invective and other allegations in the essay do not defame plaintiffs because the words do not cause injury to their reputations or expose them to hatred, contempt, ridicule or disgrace, or to a loss of good will and confidence of the community, or to injury' in their profession. Mosler v. Whelan, supra. The general rule of construction is that the writing as a whole must be considered and not words or phrases out of context. Dorney v. Dairymen’s League Co-op Ass’n, 149 F. Supp. 615 (D. C. N. J. 1957). Neither the police force nor mounted police were termed “racists” or fibastards” in the body of the article. The court need only consider the defamatory nature of the term “pig” as used in the essay to refer to police, and not “Racists Pig Bastards” in the headline, since a reading of the article clearly shows that this refers to YAF only. And “derogatory imputations related to one’s political, economic or social views or philosophies have to be admeasured against the general current of public opinion at the time of publication in order to yield a realistic appraisal of their meaning and their capacity for damage to reputation.” Mosler v. Whelan, supra, 48 N. J. Super. at 500.

A consideration of the societal context at the time of the statements would reveal that the college community was to a degree polarized in its support of radical and conservative political views, and a substantial segment of the community would support the police for such behavior as described in the article. In our judgment, the statements referring to the mounted police would not suggest to the average reader that they were remiss in their duty or actually deserving of the invective, but that the author was angry, upset and resentful towards the police. Depositions taken of plaintiffs indicate that as a result of the publication of the article their reputations within the Newark Police Department and general community had not to their knowledge been affected. Plaintiffs not only failed to indicate any evidence of such injury but instead claimed that the mounted police force was accustomed to frequent abusive namecalling from Rutgers students.

Plaintiffs further stated that merchants on their duty beat to whom they showed the article found the epithets and allegations in the article outrageous and unbelievable, and that fellow members in the police department did not belieAre the allegations. Plaintiffs cannot claim injury to their reputation when they themselves brought attention to the article and solicited opinions. Plaintiffs’ subjective appraisal of the effect of the statements on others is of no evidential consequence in proving damages. The harm must be generated by a third person. Arturi v. Tiebie, 73 N. J. Super. 217 (App. Div. 1962). It is offensive to an elementary sense of justice to award judgment to plaintiffs for an alleged injury which they themselves invited by identifying themselves to others and attempting to focus attention upon themselves specifically where such focus did not exist in the article as published.

The common law lias long recognized that words of general abuse, regardless of how crude, uncouth or vexatious, unless defamatory within themselves, cannot serve as a basis for a defamation action in the absence of an allegation of special damages. [Dorney v. Dairymen’s League Co-op Ass’n, 149 F. Supp. supra, at 620]

Mr. Justice Eraucis speaking for our Supreme Court in Mosler v. Whelan, supra, 38 N. J. at 399, observed that “short tempers, injudicious language and sometimes indecorous insults, although much to be decried, are concomitants of such a [politically controversial] scene.”

Plaintiffs, two municipal policemen whose powers are constitutionally and statutorily derived, are “public officials” and as such fall squarely within the “actual malice” requirement of New York Times Co. v. Sullivan, supra. They neither pleaded nor presented any evidence of “actual malice” on the part of any of defendants, an essential element to be proved if plaintiffs are to prevail. As mounted policemen of the Newark police force plaintiffs perform governmental duties directly related to the public interest and “have, or appear to the public to have, substantial responsibility for or control over the conduct of governmental affairs.” Rosenblatt v. Baer, 86 S. Ct. at 676. The alleged defamatory statements made by defendant related to the discharge of official duties of patrolmen assigned to the demonstration. We make this finding in keeping with the United States Supreme Court’s continuing expansion of the meaning of “public official” in such cases as Garrison v. Louisiana, 379 U. S. 64, 85 S. Ct. 209, 13 L. Ed. 2d 125 (1964), which stated that anything touching on an official’s fitness for office, in that case a judge, is protected by the “actual malice” rule; Rosenblatt v. Baer, supra, involving an appointed supervisor of a county ski recreation area; Beckley Newspaper Corp. v. Hanks, 389 U. S. 81, 88 S. Ct. 197, 19 L. Ed. 2d 248 (1967), involving an elected county clerk of courts. Our own courts have held, in Theckston v. Triangle Publications, Inc., 100 N. J. Super. 452 (App. Div. 1966) that a clerk of a county district court is a “public official”, and in Eadie v. Pole, 91 N. J. Super. 504 (App. Div. 1966) that a city tax assessor is a “public official.”

Although no reported libel case in this State specifically deals with policemen, it is not a startling conclusion to hold policemen to be “public officials” in view of the criteria established in the above cases. These compel the finding that local law enforcement personnel fall within the category of those officials whom the public depend upon and should be free to criticize within the limits of the “actual malice” rule. The Supreme Court of Illinois applied the “public official” doctrine of New York Times to policemen as follows :

It is our opinion that tlie plaintiff is within the “public official” classification. Although as a patrolman he is “the lowest in rank of police officials” and would have slight voice in setting departmental policies, his duties are peculiarly “governmental” in character and highly charged with the public interest. It is indisputable that law enforcement is a primary function of local government and that the public has a far greater interest in the qualifications and conduct of law enforcement officers, even at, and perhaps especially at, an “on the street” level than in the qualifications and conduct of other comparably low-ranking government employees performing more proprietary functions. The abuse of a patrolman’s office can have great potentiality for social harm; hence, public discussion and public criticism directed towards the performance of that oflice cannot constitutionally be inhibited by threat of prosecution under State libel laws. [Coursey v. Greater Niles Township Publishing Corp., 40 Ill. 2d 257, 239 N. E. 2d 837, 841 (1968)]

The rule requiring proof of actual malice is thus applicable in this case to delimit a state court’s power to award damages for libel in actions brought by public officials against critics of their official conduct. Even if a publication is deemed defamatory, recovery is prohibited unless the statements were made with “actual malice,” i. e., “with knowledge that it was false or with reckless disregard oi whether it was false or not.” New York Times Co. v. Sullivan, supra, 376 U. S. at 280, 84 S. Ct. at 726. And “one seeking to prove actual malice * * * must do so with the convincing clarity which the constitutional standard demands.” Theckston v. Triangle Publications, Inc., supra., 100 N. J. Super. at 455. Defendant Gruntfest’s account of the events of November 5, 1968 does not exhibit such “reckless disregard” of the truth but is at least “substantially true,” as corroborated by affidavits of other witnesses to the events and by plaintiffs in their depositions. The essay, in conjunction with either the headlines in quotation marks or the photograph does not exhibit the essential malice. Plaintiffs fail to present any evidence that the allegedly false statements were made with the “high degree of awareness of their probable falsity” demanded by the New York Times case and Garrison v. Louisiana, supra, 379 U. S. at 74, 85 S. Ct. at 216. Plaintiffs have not established false publication relative to specific events. Even if the contents of the article were untrue in fact, as well as derogatory, plaintiffs could not recover because such qualities of the article in themselves do not constitute the actual malice required to support plaintifEs’ claim.

Por the foregoing reasons, the motions for summary judgment are granted in favor of defendants Gruntfest, Rutgers and Zocea against plaintiffs Seelfo and O’Connor. It follows that the cross-claims for indemnification or contribution, being made moot, are dismissed. An order for judgment accordingly will be entered.


author: Bryne, J. S. C.

text:
    THE STATE OF NEW JERSEY, PLAINTIFF, v. WALTER LEE WHITE, DEFENDANT.
    Essex County Court Law Division—Criminal
    Decided October 12, 1971.

      Mr. Joseph P. Miele, Assistant Prosecutor, for the State (Mr. Joseph P. Lordi, Prosecutor of Essex County).

      Mr. William P. Pies for defendant.
   Bryne, J. S. C.

(temporarily assigned). Defendant Walter Lee White has moved, prior to trial, to have this court withdraw the issue of capital punishment from consideration by the jury. The application requires an understanding of the impact of United States v. Jackson, 390 U. S. 570, 88 S. Ct. 1209, 20 L. Ed. 2d 138 (1968), on N. J. S. A. 2A:113-3, 4.

The Jackson case involved a federal kidnap statute. It held that a statutory design which allowed a defendant to escape the death penalty by waiving a jury trial suffered constitutional infirmity depriving a defendant of Fifth and Sixth Amendment rights.

The New Jersey Supreme Court had the opportunity to review N. J. S. A. 2A:113-3, 4 in the light of Jackson and concluded that the United States Constitution is not offended by our statute. State v. Forcella, 52 N. J. 263 (1968). In that case the United States Supreme Court granted certiorari and reversed it on an opinion, Funicello v. New Jersey, 403 U. S. 948, 91 S. Ct. 2278, 29 L. Ed. 2d 859 (1971), which reads in full as follows:

Facts and opinion, State v. Forcella, 52 N. J. 263, 245 A. 2d 181.
June 28, 1971. On petition for writ of certiorari to the Supreme Court of New Jersey. Motion for leave to proceed in forma pauperis granted. Petition for writ of certiorari granted. Judgment, insofar as it imposes the death sentence, reversed and case remanded to the Supreme Court of New Jersey for further proceedings. Witherspoon v. Illinois, 391 U. S. 510, 88 S. Ct. 1770, 20 L. Ed. 2d 776 (1968); Boulden v. Holman, 394 U. S. 478, 89 S. Ct. 1138, 22 L. Ed. 2d 433 (1969); Maxwell v. Bishop, 398 U. S. 262, 90 S. Ct. 1578, 26 L. Ed. 2d 221 (1970); and United States v. Jackson, 390 U. S. 570, 88 S. Ct. 1209, 20 L. Ed. 2d 138 (1968).

The State has sought reconsideration by the United States Supreme Court. The State makes no effort to hide the broad impact of the United States Supreme Court disposition while denying Funicello rests squarely on Jackson.

Jackson, applied to New Jersey, woitld force amendment of our statute to require either the elimination of capital punishment or the addition of the ability of the court to impose capital punishment despite a jury trial waiver. Perhaps any statutory scheme would run afoul of the United States Supreme Court or a growing public distaste for capital punishment, and perhaps Jackson and Funicello have effectively abolished capital punishment in New Jersey forever.

In any event, it is not left to a trial court to do anything more than to follow existing law. As of right now that law, as represented by the United States Supreme Court disposition of Funicello, supra, and the concession by defendant here that the death penalty provision of N. J. S. A. 2A:113-3, 4 is severable (his application being only to eliminate the death penalty from jury consideration), that application must be granted.

The selection of the jury will proceed under B. 1:8-3 as in cases where the death penalty is not involved, and this jury will be informed that the death penalty is not here involved.