text:
    Luther O. Thomas and James Canazza, complainants, v. Egg Harbor Brewery, defendant, and John M. Zerbey and Charles B. Roeller, petitioners, and Luther O. Thomas, defendant.
    [Decided May 1st, 1935.]

      Mr. William H. Smalhers, for the complainants.

      Mr. Urn arson Richards, tor the petitioners.
   Sooy, V. C.

On July 17th, 1934, this court confirmed a sale of property known as the Egg Harbor Brewery and on February 21st, 1935, Luther O. Thomas, the receiver of the Egg Harbor Brewery, filed a petition against the purchasers of the brewer}', seeking to compel them to comply with the terms and conditions of the sale so as aforesaid confirmed and, upon the failure of said purchasers to comply with the terms and conditions of sale, that the order of confirmation be vacated and declared null and void.

On March 5th, 1935, the purchasers, John M. Zerbey and Charles B. Roeller, filed a petition in this court against the receiver, praying that they be relieved from any obligation or liability under the order of confirmation aforesaid, that said order be revoked and canceled, that there be returned to them the sum of $5,000 paid to the receiver on account of said order, as well as other moneys advanced by them in connection with the deal.

The argument on the return of the order to show cause advised under each of said petitions was so arranged that the entire matter was argued at the same time and the court, not being satisfied with the proofs as contained in the affidavits, set the matter down for hearing on oral proofs in open court and at the hearing testimony was adduced in behalf of both sets of petitioners.

The filing of the two petitions was discussed with the court by counsel for both sets of petitioners at about the same time, so that the inference that might be drawn from the fact that the Zerbey and Roeller petition was filed after the Thomas petition and was, therefore, an after-thought, is not warranted.

Taking up the petition of Zerbey and Roeller, we find that they allege that they submitted a proposition of purchase on or about July 2d, 1934, and that they were induced so to do by representations that had been theretofore made to them by Thomas, the receiver, and that those representations were untrue; that they relied on them to their detriment and, therefore, have a right to rescind and, in fact, have advised the receiver that they have rescinded, with the result that the receiver is now in possession of the brewery property in its entirety.

The alleged false representations were made by Thomas, according to the petition, prior to July 17th, 1934, and were, generally, as follows:

(a) Thomas represented that there were one thousand five hundred barrels of good marketable beer upon the premises;

(b) That there were approximately nine hundred barrels (empties) on the premises belonging to the brewery;

(c) That there were on hand six hundred cases of beer bottle containers and that the receiver had purchased one thousand eight hundred new cases;

(d) That there were a large number of new bottles on hand;

(e) That the real estate of the brewery was in good condition, with the exception of very minor necessary repairs;

(f) That the plant was a going concern, capable of manufacturing a satisfactory commercial quality of beer;

(g) That the permits of the federal government and the state government could be transferred without additional expense to the petitioners.

Petitioners having set forth, as aforesaid, the alleged misrepresentations on the part of the receiver, say in paragraph 7 of their petition:

“Later on the same day or the following day [reference is to July 17th or 18th] petitioners began to find that the representations made to them were untrue and later they discovered that there were only two hundred barrels of marketable beer; that there were only a small number of barrels instead of the number represented, and a small number of cases; that ■the new bottles were not beer bottles and not suitable for the purpose; that the licenses or permits could not be transfered and that new permits would have to be obtained at a largely increased expense; and that the brewery was in a very dirty condition and that vital parts of the beer-making section of the building was infected so that it was impossible to manufacture beer; that the machinery was worn out and that an inventory of the personal property which had been previously shown to the petitioners was inaccurate and untruthful. On either July 17th or 18th, 1934, petitioners discovered that the receiver had diverted a large quantity of beer without having accounted to the state and federal authorities therefor; that this shortage amounted to approximately seven hundred barrels and that in order to conceal a part of such shortage water had been pumped into the storage vats to the amount of four hundred barrels. That this condition * * * resulted in the refusal of the state and federal authorities to grant a permit and as a consequence petitioners were compelled to operate the brewery as the agents of the receiver and to keep his employes in charge of the property although in their opinion such employes should not have been retained as they were concerned in the beer shortage.”

Taking the allegations of the petitioners as above set forth, we find that substantially all of the alleged misrepresentations relied upon by the petitioners, Zerbey and Roeller, were known to them within two days after they went into possession of the brewery and became bound by the terms of sale, yet we find, as stated in the petition, that they did not attempt to rescind the contract of sale prior to the last of January, 1935, when they say they rescinded the contract and demanded a return of the moneys theretofore advanced by them.

Not confining Zerbey and Roeller to the strict language of the petition, the evidence justifies the conclusion that these petitioners were in full possession of the knowledge of all the alleged misrepresentations long prior to October 1st, 1934.

Zerbey and Roeller say that they continued in an attempt to perform their contract between July 17th, 1934, and the last of: January, 1935, by reason of promises on the part of the receiver and of his representations that adjustments would be made that would be satisfactory to Zerbey and Roeller, and the receiver and his counsel, Judge Smathers, deny that Zerbey and Roeller ever complained of any alleged misrepresentations up until the time they attempted to evade their responsibility under the contract in January of 1935. The receiver admits, however, that the question of deposits made by customers on account of cases, bottles or goods was discussed between Zerbey and Roeller and the receiver and that Zerbey and Roeller attempted to procure an adjustment of this feature but that the receiver advised them that there would be no adjustment. The correspondence shows that the question of the deposit adjustment started sometime in the early part of August, 1934, and that the receiver very shortly thereafter refused to make any adjustment.

On the question as to whether or not Zerbey and Roeller continued in the premises for the period above related by reason of promises on the part of the receiver, as above set forth, in addition to the denials of the receiver and his counsel that there were any such promises, Zerbey and Roeller admit that they never, in writing, made any reference to the alleged misrepresentations of the receiver.

Zerbey and Roeller also say that the promises of the receiver were verified by promises of one Lewis P. Scott, who represented, through his association with Judge Smathers. the receiver, and that Scott repeatedly promised that adjustments would be made of the matters the subject of the alleged misrepresentations. Mr. Scott says that Zerbey and Roeller never discussed with him any alleged misrepresentations, so that I have on this important question, Zerbey and Roeller as against the receiver, Judge Smathers and Mr. Scott, and in addition to this, I must take into consideration whether or not it is reasonable to assume that Zerbey and Roeller, notwithstanding the seriousness of the alleged misrepresentations, would have continued to operate the brewery for the period of time above indicated without a “show down” long prior to the last of January, 1935, and without ever making any written complaint.

As to the reasonableness of the assertion of Zerbey and Roeller, we find that they say there was a representation of two thousand five hundred barrels of good marketable beer. This represented, in cash, upon the sale of the beer, more than the entire deposit paid by Zerbey and Roeller on account of the purchase price and the shortage was immediately discovered and, according to the evidence of Zerbey and Roeller, there were only approximately six hundred barrels of fairly good marketable beer left for them to operate with.

Again, according to the testimony of Zerbey and Roeller, it was very shortly discovered that none of the wooden vats were in good enough shape to properly store beer and yet with that condition they continued to operate to the extent that they marketed over $30,000 worth of their product.

Both Zerbey and Roeller say that the item of beer bottles, beer containers, &c., were more or less of a minor consideration and it may well be that they would have continued under a promise with respect to that item.

With respect to the alleged representation that the licenses to operate would be transferred without expense to Zerbey and Roeller, and testimony discloses that if any such representation was relied upon it was immediately discovered that such a result could not obtain, with the result that Zerbey and Koeller made application for their own permits.

With respect to the attempt to show as a reason for the non-granting of the government license which Zerbey and Roeller say was withheld because of the watered beer, it is sufficient to point out that there is no evidence in the case that would substantiate any such finding but that on the contrary, the evidence, as disclosed by the letters from Penningion, the United States agent, Indicate that the reason for the non-granting of the permit was delay on the part of Zerbey and Roeller in filing the proper papers with the government.

All of these things, together with many others, cast great suspicion on the allegation of Zerbey and Roeller that they continued in possession by virtue of promises on the part of Thomas and his representatives, as alleged by them, and I find the fact to be that there were no such promises and that Zerbey and Roeller continued in possession because they considered that they had purchased the brewery at a bargain and accepted conditions as they found them.

In this finding of fact I do not hold that Thomas did not advise Zerbey and Roeller that the contents of the vats, according to government figures, was approximately two thousand five hundred barrels. He says he so advised them and they both, in their testimony, say that Thomas approximated the quantity of beer, and I think that Thomas believed the beer, other than that which he advised was not good, was of marketable quality, but that Zerbey and Roeller were not relying on any representation of Thomas as to the quantity and quality of the beer is evidenced by their immediate inspection, by an expert, and his finding as to shortage of quantity and inferiority as to quality, and with this knowledge they continued to perform their contract.

There is no doubt but that the failure of the government to dump the vats containing watered beer inconvenienced Zerbey and Roeller but there is absolutely no proof that the receiver was in any way responsible for the delay and Zerbey and Roeller put up with the inconvenience until it was finally dumped in December, and I might add that there is no proof that the receiver knew of the watered beer until it was discovered by Zerbey and Roeller. Of course, the question as to whether Will, the brewmaster under the receiver, said that Thomas knew about it is not proof of the fact and was only offered for the purpose of contradicting Will.

Before adverting to the legal situation, based upon the allegation of the petition, as heretofore set forth, there is one other finding of fact that seems to be necessary.

Zerbey and Roeller say that they were never given possession of the brewery by Thomas but that they took over the management of the brewery as agents for Thomas. Thomas says that full possession was given to Zerbey and' Roeller and that he, Thomas, believing that Zerbey and Roeller would get their operating permits within a week or ten days, consented that they should operate under hi's permits. All of the circumstances indicate that Zerbey and Roeller went into actual possession of the brewery and operated it as their own or as the property of the new corporation, from the 18th day of July, 1934, until the latter part of January, 1935. They collected all the moneys that were earned from the sale of the product and actually marketed some $30,000 worth of their product, they hired and discharged employes, they made their own malt contracts, contracted for cooperage, bought a truck, opened up a separate bank account and assumed complete control, and I find as a fact that they were not operating the brewery as agents for Thomas.

I cannot condone the mistake made by Thomas in permitting the above condition of affairs to happen. lie should not have turned over possession and permitted the operation of the brewery under his permits, but this indiscretion on his part does not justify me in finding that Zerbey and Roeller acted as agents for the receiver, nor does the fact that Thomas signed the reports to the liquor control boards justify a finding that Zerbey and Roeller were his agents. The reports were made out at the brewery, based on data from the books of the brewery company, and brought to Atlantic City for Thomas to sign, and in so doing he was merely assisting Zerbey and Roeller in the operation of the brewery which they had taken over and for which they were endeavoring to get permits to operate.

Tinder the factual situation as heretofore outlined, if Zerbey and Roeller were induced to enter into the contract in question bj the alleged fraudulent misrepresentations on the part of the receiver, it was unquestionably their duty to either rescind the contract by reason of the fraud or, by continuing in a performance thereof, they will be held to have ratified it, unless they have been again misled by the receiver or his representatives in a continuation under the contract by promises of adjustments, &c. I have already found as a fact that Zerbey and Roeller were not induced to continue in the performance of the contract by representations on the part of the receiver or his representatives of an adjustment of the alleged false representations and it necessarily follows that there was a continued attempt at performance by Zerbey and Eoeller from the 18th day of July, 1934, until the latter part of January, 1935, during practically all of which time Zerbey and Eoeller were fully aware of the alleged false representations, and did nothing looking toward a rescission until a petition in bankruptcy was filed against their new brewery company when they notified the receiver that they rescinded, demanded their deposit back, plus other moneys, by way of damages.

In Dennis v. Jones, 44 N. J. Fq. 513, the court held:

“1. The defrauded party to a contract has but one election to rescind, which he must exercise with reasonable promptitude after the discovery of the fraud and when he once elects he must abide by his decision.

“2. Delay in the rescission of the contract, payments in pursuance of it, and continued dealing with it and with reference to the fraudulent transaction, after discovery of the fraud, may be shown as evidence of an election to treat a fraudulent contract as valid.

“3. Where, after knowledge of fraud in the sale of a skating rink, the purchasers, without complaint of the fraud which had been practiced upon them, paid portions of the purchase money and repeatedly promised to pay the remainder of it, dealt with the rink as their property, made changes in it and in the method of conducting its business, advertised it for sale, and negotiated for the disposition of it, they were held to have elected to abide by their contract.”

It is significant that during the latter part of the period during which Zerbey and Eoeller were attempting performance of their contract they endeavored to sell their interest in the plant and they endeavored to raise further moneys by way of a loan for the operation of the plant.

The case of Faulkner v. Wassmer, 77 N. J. Eq. 537, sets forth in full the legal principles under which relief must be refused to Zerbey and Eoeller, and further citations are unnecessary.

The result is that Zerbey and Eoeller having, as alleged in their petition, rescinded their contract, find themselves without right to relief, and the receiver finds himself again in possession of the brewery property abandoned by Zerbey and Boeder, and this court has given the mortgagee permission to foreclose the mortgage against the brewery property.

Zerbey and Boeder are not entitled to the equity which the prayer of the receiver’s petition accords them, i. e., a right at this late date and after rescission, to complete the terms of their purchase. On the other hand, if within ten days from the filing of this opinion, they, in writing addressed to the receiver, signify their desire so to do, the court will entertain their proposition so submitted, otherwise the receiver will be directed to offer the property for an immediate resale.


source: Caselaw Access Project

author: John C. Wegnek, Referee.

license: Public Domain

text:
    New Jersey Department of Labor, Workmen’s Compensation Bureau.
    LOUIS ZUGA, PETITIONER, v. FORD MOTOR COMPANY, RESPONDENT.
    Decided August 10, 1937.
    For the petitioner, James J. Skeffington.

    For the respondent, McCarter & English (by Herbert B. Baer).

   A formal petition for increased disability having been filed in this matter, and an answer having been filed thereto, and the matter coming on for regular hearing before John O. Wegner, referee, and a motion to dismiss the present petition on the grounds that this bureau was without jurisdiction to hear the matter, since same was res adjudicata, was made on behalf of the respondent. After carefully considering the arguments of counsel in respect thereto, I am satisfied, however, that this bureau has jurisdiction to reopen the matter, as provided by the statute and under the authority of the case of Rose v. Wagner, 2 N. J. Mis. R. 118. I originally sat in the trial of the first hearing of this matter and I feel quite satisfied that the case is one in which the bureau has jurisdiction, inasmuch as it was originally determined that the petitioner herein had suffered a compensable injury as a result of an accident arising out of and in the course of his employment and that the question of increased disability or incapacitation not having come before the bureau at that time, it is, of course, not res adjudicata.

As the Supreme Court pointed out in the case of Tucker v. Beltramo, Inc., 117 N. J. L. 72; 186 Atl. Rep. 821, the judgment of the bureau is final and conclusive as to all questions of law and fact thereby determined, including those involving jurisdiction, the right to compensation and the nature and extent of the existing disability, subject only to the continued jurisdiction to modify the award of compensation to agree with a subsequently occurring increase or diminution of the injury flowing from the established compensable injury. See, also, United Engineers and Constructors v. Thomas Anderson, 14 N. J. Mis. R. 799; 187 Atl. Rep. 363, where it was held that:

“Earlier adjudication in workmen’s compensation case held, only res adjudicata as to issues then determined but not on question of subsequent increased disability.”

The original determination in this ease established a compensable injury. The trauma or sprain caused an aggravation at the point of the kink of the ureter. I formerly was of the opinion that this aggravation was only of a temporary nature, subsequent developments have proven this conclusion to be incorrect. Instead of clearing up, as the physicians all hoped, the condition of the petitioner has gotten manifestly worse and his incapacity increased. The case is certainly one that should be reopened to carry out the beneficient purposes of the act. As Chief Justice Brogan, in the recent case of Fay v. John Waldron Corp., 117 N. J. L. 123; 187 Atl. Rep. 140 (at p. 142), said in part:

“It has been said time and again that the workmen’s compensation statute is a remedial law and it should be liberally and broadly construed (Jersey City v. Borst, 90 N. J. L. 454; 101 Atl. Rep. 1033; Schmidt v. Stanton Forging Co., 104 N. J. L. 471; 142 Atl. Rep. 4); that it is a wholesome and humane piece of legislation. Lazzio v. Primo Silk Co., 114 N. J. L. 450; 177 Atl. Rep. 251; Id. 115 N. J. L. 506; 180 Atl. Rep. 881.”

Considering the records and the testimony of the physicians at that time, since ail the records of that proceeding are before me as part of this proceeding, it is quite apparent that the physicians were hopeful that the operation which was intended to correct the physical disability and incapacity of the petitioner would work out successfully, but unfortunately it did not. On the contra^, the proofs adduced show that it has become necessary since the last hearing for the petitioner to receive treatment for the continued complaints of injury and pain to his back, and it has become necessary for him to receive increasingly frequent catherizations for the relief of his urethral difficulty.

I have carefully considered the testimony of Drs. Tyndall and Dr. Choffey, as well as the previous testimony of Dr. Kuoff, which establishes that the petitioner suffered a compensable injury to his back and to his right side at the time this accident occurred. I have further considered the testimony of Dr. Daly, the urologist who originally performed the operation upon the petitioner and who frankly testified at this hearing that the results had not been all that he expected, and that petitioner’s condition had become worse since the last hearing. I have considered the testimony of the petitioner and his wife with respect to the changed mental and physical attitude of the petitioner. I am definitely satisfied that his disability has become greater. I have considered the testimony of Dr. Dowd, Dr. Vanderhoof, and particularly Dr. Abels, physicians appearing on behalf of the respondent, and I feel that the testimony of Dr. Abels to a large extent substantiates the contention of the petitioner that the urethral condition from which he suffered has manifestly become worse. This condition is undoubtedly extremely painful and debilitating and in addition the frequent catherizations, all of which are excruciatingly painful, have had a detrimental effect upon the man’s general health and nervous system, to say nothing of the fact that the inflamed condition of the urethra, as testified to by the doctors, makes it apparent that the petitioner’s condition has steadily grown worse and that in all probability repeated periodic catherizations will be necessary to relieve the petitioner during the remainder of his life.

I feel, therefore, after carefully considering all the facts adduced before me, that the petitioner has sustained the burden of proving increased disability, and I feel satisfied that his existing permanent disability is fifteen per cent, of total.

* * s¡: * *

John C. Wegnek, Referee.


author: John C. Wegner, Referee.

text:
    New Jersey Department of Labor, Workmen’s Compensation Bureau.
    DOMENICO DE SANTIS, PETITIONER, v. TURNER CONSTRUCTION COMPANY, RESPONDENT.
    Decided August 11, 1937.
    For the petitioner, John Donadío.

    For the respondent, McDermott, Enright and Carpenter (by Carl B. Kuebler).

   In the case sub judice petition was filed under date of September 25th, 1935, alleging an increased disability.

A review of the case develops the fact that petitioner was originally paid on the basis of fifteen per cent, of total. Subsequently a petition was filed alleging that compensation paid on that basis was inadequate and that petitioner’s disability was one hundred per cent, of total. After several hearings being held and a careful consideration of the testimony of both doctors for the petitioner and respondent, I was of the opinion that petitioner’s disability was fifty per cent, of total and entered judgment accordingly signing determination and order to that effect July 31st, 1934.

At that time I had the opportunity to observe the petitioner while testifying as well as during the course of the trial. We had an individual injured in an accident, he presented himself at the trial, while testifying he was not alert or over intelligent, yet the fact remained he had the use of his arms and legs. His locomotion was good. He understood the questions propounded by both counsel, he had been a laborer all his life and I was of the opinion at that time that as a working unit he could perform work of some nature. True he had a disability and I found accordingly. Dr. Hinsie Leland Earl in his testimony of May 3d, 1934, marked R-l in evidence was of opinion as he stated “could putter around.”

We now find that circumstances have changed. Petitioner is confined to the Pilgrim State Hospital, Brentwood, Long Island, New York, where he has been confined since November, 1935. Dr. Louis Kiss, a physician stationed at that institution, testified that he had petitioner under his observation, saw him approximately twice each day and stated petitioner was suffering from a conversion neurosis, that he could do some work about the institution but could not mingle in society or carry out the usual pursuit of life unguarded.

Dr. Andrew Ruoff, who examined petitioner in 1934 and again in June, 1937, testified that petitioner’s disability both from a mental and physical standpoint was such as to prevent him from doing any work whatsoever. That there had been a change since his first examination, that his disability had increased and he was totally disabled.

Dr. Dowd, who testified for the respondent, was of the opinion that the man allegedly feigned the reaction to numerous tests he made. His diagnosis was that of conversion hysteria and malingering.

Dr. John Sheehan, who testified at the first hearing and. who examined the petitioner under date of May 10th, 1937, was most emphatic in his testimony that petitioner was a malingerer. He was o£ the opinion that petitioner should not be in the institution and that he could work. He admitted petitioner suffered from a conversion neurosis and further stated he was an unconscious malingerer and the condition was hysterical.

The fact remains the petitioner is institutionalized. He is unfit to mingle with his fellow men.

Petitioner is in institution for the reason that those in charge feel he is unfitted to enjoy the freedom of unrestriction regardless of whether or not he can perform certain duties about the institution he is still as a working unit totally disabled.

I am of the opinion that petitioner is totally disabled and entitled to compensation payable on that basis.

4* Hs $ H* $ &

If at the end of the payment of compensation on above basis petitioner is still totally disabled, he shall submit himself to such physical or educational rehabilitation as may be ordered by the rehabilitation commission of the state and if at that time it is determined it is impossible for him to obtain wages or earnings equal to those earned at the time of the accident, compensation shall be paid in accordance with paragraph B, section 11 of the Workmen’s Compensation Act.

John C. Wegner, Referee.


author: Barbour, C. C. J.

text:
    SUE KOVACS, EXECUTRIX OF THE ESTATE OF STEPHEN KOVACS, PLAINTIFF, v. JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY OF BOSTON, MASSACHUSETTS, A CORPORATION, DEFENDANT.
    Decided July 6, 1937.
    •For the plaintiff, David T. Wilentz and Abe S. Schwartz.

    For the defendant, Martin P. O’Connor.

   Barbour, C. C. J.

This action was tried by the court without a jury by consent of the parties on stipulation of facts.

On January 23d, 1925, the defendant issued its policy of life insurance on the life of Sophie Kovaes in the sum of $5,000 payable to her son, Stephen Kovaes, as beneficiary, an anuual premium of $217.60 being payable on the anniversary of the policy on January 23d of each year.

The premiums falling due on January 23d, 1929, and on January 23d, 1930, respectively, were paid by the application of dividends and by premium loans, the sum of $178.25 being borrowed for the purpose on January 30th, 1929, and the sum of $186.55 being borrowed for that purpose on April 3d, 1930, of which latter loan the sum of $9.80 was used to pay interest on the prior loan. On January 26th, 1931, the insured borrowed the sum of $320.20 executing a cash loan assignment therefor. At that time the total loan on the policy was $685.

The annual premium falling due on January 23d, 1931, was not paid, but on April 21st, 1931, a quarterly installment of the annual premium amounting to $56.05 was paid by applying a dividend of $42.40 and by borrowing from the defendant on the policy the sum of $13.65, thereby paying the policy up to the next quarterly due date, April 23d, 1931. The quarterly premium falling due on April 23d, 1931, was paid on July 27th, 1931, bj' a further loan on the policy of $22.70 and the payment of $33.35 in cash. The principal sum loaned on the policy was thereby increased to $721.35. It is to be noted that both of these quarterly installments of premium were paid after the period of grace had elapsed and presumably the policy was reinstated each time in accordance with the provisions thereof.

The premium loan assignment, in the form marked Exhibit A, attached to the stipulation, was executed for each premium loan made.

On July 23d, 1931, another quarterly premium of $56.05 became due on the policy which was not paid then or within the grace period provided by the policy or at any other time.

On July 23d, 1931, the loans made on such policy had reached the principal sum of $698.65 and the loan on July 27th, 1931, increased the principal sum to $721.35. The unpaid interest on the loan computed to July 23d, 1931, amounted to $20.89, bringing the total indebtedness on the policy, with interest computed to July 23d, 1931, including the loan made on July 27th, 1931, to the sum of $742.24, which if charged against the cash surrender value, would leave a balance thereof in the sum of twenty-six cents.

The policy of insurance provided for a grace of thirty-one days without interest, during which the policy should remain in force, “for the payment of premiums or regular installments thereof after the first.” The period of grace for the payment of premium falling due on July 23d, 1931, expired thirty-one days thereafter, that is, on August 23d, 1931.

On August 29th, 1931, Sophie Kovacs, the insured, died, On September 16th, 1933, Stephen Kovacs, the beneficiary, died, and on September 27th, 1933, letters testamentary were issued to Sue Kovacs, the plaintiff, on the estate of Stephen Kovacs, the deceased beneficiary under the policy. Proof of death of Sophie Kovacs, the insured, was filed with the defendant.

The policy provided for non-forfeiture options as follows:

“After two full annual premiums shall have been paid hereon, and if the payment of any subsequent premium or installment shall be in default more than thirty-one days, then:

“Option A. — -Without action on the part of the holder, the policy will be continued for its value in participating paid-up life insurance (without disability or double indemnity benefits) which will have a yearly increasing surrender value in no event less than that required by law; or

“Option B. — If the holder so elect, the policy will be terminated and the surrender value paid in cash with the written assent of the person to whom it is made payable; or

“Option C. — Upon written request by the holder filed at the Home Office of the Company within ninety days from the due date of the premium in default, the policy will be continued at its face amount including any outstanding additions and less any indebtedness to the Company hereon or secured hereby, for its value in participating extended term insurance (without loan privilege or disability or double indemnity benefits) dating from said due date. Such insurance will have a decreasing surrender value expiring with the extension term.

“Upon due request of the holder filed at the Home Office of the Company while no premium is in default under this policy, extended term insurance may be made the automatic non-forfeiture option by endorsement hereon.

“The surrender value under Option B will be the reserve on the policy and any outstanding additions, at the date of default in payment of premiums, less a surrender charge of one per centum of the faces amount of the policy at the end of the second year, one-half of one per centum of the face amount of the policy at the end of the third year, and thereafter the surrender value will be the full reserve at the nearest even dollar per thousand dollars of insurance, less any indebtedness to the Company hereon or secured hereby, but the Company may defer payment of any surrender value for a period not exceeding ninety days after the application therefor is made.

“The paid-up and extended insurance under Option A and C are computed upon the basis of the surrender value applied as a net single premium at the attained age of the Insured upon the mortality and interest basis adopted for the reserve computation hereunder.

“The legal reserve under this policy is computed upon the American Experience Table of Mortality, with interest at three and one-half per centum per annum.

“Values not stated in the table herein will be furnished on request.”

On September 15th, 1931, the beneficiary Stephen Kovacs, through Iris attorney, Hon. Elmer E. Brown, wrote to the defendant attempting to have the insurance continued under Option C, a copy of Mr. Brown’s letter being attached to the stipulation. Under date of September 18th, 1931, the company over the signature of Mr. F. E. Bartlett, manager of its claim division, replied to Mr. Brown, stating among other things: “No request was made by the insured during her lifetime to continue the policy as extended insurance, and paid-up insurance is the auiomatic feature of the contract. However, as above stated, the small balance of cash surrender value of twenty-six cents was insufficient to purchase even $1.00 of paid-up insurance” and offered to pay the balance of the cash surrender value of twenty-six cents.

The plaintiff, as executrix of the estate of the beneficiary Stephen Kovacs, instituted this action and by her amended complaint seeks to recover under the first count the face amount of the policy; under the second count for extended term insurance provided by Option C of the non-forfeiture options, on the theory that the policy had to its credit a cash surrender value of $21.15 sufficient to carry this tjrpe of insurance for a period of ninety-seven days from July 23d, 1931, a period expiring subsequent to August 29th, 1931, the date of tiie insured’s death; and on the third count on the theory that the total indebtedness, when increased by interest, reached the cash surrender value on or about July 26th, 1931, and that the company not having given notice to the insured as required by the policy in such event, the policy continued and was in force at the time of the insured’s death.

It was stipulated that if the plaintiff is entitled to extended term insurance judgment should be entered for her in the sum of $4,258 plus interest; that if there had been no indebtedness on the policy on the date of default (July 23d, 1931) and the effective non-forfeiture provision had been extended term insurance in accordance with the terms of the policy, a surrender value of $742.50 would have provided participating extended term insurance in the amount of $5,000 for a period of seven years, two hundred and three days, expiring on February 11th, 1939; that if the cash surrender value had been $21.15 (being the amount of the cash surrender value less the indebtedness with interest computed only to the last preceding anniversary of the policy) the term for which the policy under Option C would be extended would be ninety-seven days, expiring October 28th, 1931, in the amount of $4,279, subject of course to compliance with the terms, provisions and conditions of the policy; that if the interest on the indebtedness were computed and charged to July 23d, 1931, and the cash surrender value were thereby reduced to the sum of twenty-six cents it would have continued the policy as extended insurance for one day, and would have expired July 24th, 1931, in the amount of $4,258.

No notice was mailed to the insured or beneficiary by the defendant that the indebtedness equaled the cash surrender value of the policy, but under date of August 15th, 1931, and before the period of grace had expired, notice was given to the insured (Exhibit G) that the grace would expire thirty-one days after the due date (that is, July 23d, 1931) and stating, “if the amount due shall not then have been paid the policy will become forfeited and void, except as to such rights to surrender value, paid up insurance, or extended term insurance as may exist under said policy, and before the payment can be accepted and the policy be reinstated evidence of insurability satisfactory to the company will be required,” and further stating that it was important to her interest “to make payment before the expiration of the grace period.”

Payment was not made before the expiration of the grace period, nor at any time since, and no application that the policy be reinstated was made. The insured died six days after the expiration of the period of grace.

When this matter came on to be heard the stipulation of facts was submitted to the court, lengthy oral argument had by counsel for both parties, and lengthy memoranda of law submitted by counsel for both parties. Por the purpose of the record the attorney for the plaintiff moved for a directed verdict on which the court reserved decision because it involved a determination of the various points of law submitted and dealt with in the memoranda of counsel. Por the purposes of the record I hereby deny such motion for a directed verdict to which an exception in behalf of the plaintiff is allowed in accordance with his request if I should deny such motion.

Counsel for the plaintiff in his brief submits that there are two questions, both being questions of law, as follows:

“1. Was the exercise of Option C by the beneficiary through his attorney, after the death of the insured but within the three months allowed for such exercise, legal, effective and binding upon the defendant?

“2. Assuming the option was exercised properly did the policy continue as extended term insurance at the date of her death?”

My answer to the first question being in the negative it becomes unnecessary to deal with the second question.

The policy having lapsed by reason of default in the payment of the premium falling due on July 23d, 1931, counsel for the plaintiff contends that because of the death of the insured within ninety days thereafter, the beneficiary was entitled to make an election of one of the non-forfeiture options.

It is to be noted that option A becomes automatically operative “without action on the part of the holder,” continuing the policy for its value in participating paid-up insurance, and that options B and C require affirmative election by the holder, in the case of option B, without limitation as to time, to terminate the policy and receive the surrender value in cash, with the written assent of the person to whom it is made payable, and in the case of option C, within ninety days of the due date of the premium in default, upon written request by the holder to have the policy continued at its face amount, including any outstanding additions and less any indebtedness to the company, for its value in participating extended term insurance, dating from said due date.

It is also to be noted that “upon the request of the holder filed at the Home Office of the Company while no premium is in default under this policy, extended term insurance, may be made the automatic non-forfeiture option by endorsement hereon.”

We, therefore, have two classes of options: One where no premium is in default and whereby term insurance may be made the automatic non-forfeiture option (which option was not exercised); and the other where a premium is in default. In the latter class option A becomes automatically operative and option B and C are at the election of the holder.

The question is: who is the “holder”?

Counsel for the plaintiff states that he has been unable to find any case in which this point has been passed upon in the State of New Jersey and cites decisions in other jurisdictions including the case of Veal v. Security Mutual Life Insurance Co. (Court of Appeals, Georgia), 65 S. E. Rep. 714, in which the court said among other things: “Counsel in their briefs have made a rather copious citation of cases, &e., but the fact is that the language adopted in their policies by the various insurance companies is so diverse that almost every case stands upon its own peculiar facts and is incapable of any great extension as precedent in other cases.” Therein lies the distinction between the case sub judice and the cases cited by counsel in most instances.

In the case of Knapp v. John Hancock Mutual Life Insurance Company of Boston, Massachusetts, 259 S. W. Rep. 862, an opinion by the St. Louis, Missouri, Court of Appeals, cited by the plaintiff, the policy apparently did not contain any provision which became automatically operative but gave the insured sixty days after default in payment of premium to elect as between extended term insurance, paid-up insurance, and receiving the surrender value, whereas in the case sub judice paid-up insurance automatically became operative. It is to be noted further that the United States Circuit Court of Appeals for the Eight Circuit, which includes the State of Missouri, disregarded the Knapp case in passing upon the same question in the case of Columbian National Life Insurance Co. v. Griffith, 73 Fed. Rep. (2d series) 244.

In the case of Jeske v. Metropolitan Life Insurance Co., (Pa.) 172 Atl. Rep. 172, cited by the plaintiff, it is to be noted that “neither state statute nor policy specifies the option to be compulsory in case insured dies within three months without having made application,” and that the law will enforce the option most advantageous to beneficiary. In the instant case the policy did specify the option to be compulsory in case of default although it is silent on the question of whether the insured dies within the period during which she might have in her lifetime exercised the option. In the Jeske case the automatic provision for paid-up insurance did not become operative unless the owner failed within three months from the due date of the premium in default to exercise his option and during such period there, therefore, was no insurance effective. In that case the court noticed the case of McDonald v. Columbia National Life Insurance Co., 253 Pa. 239, and distinguished it, stating that in the McDonald case the “state law provided automatically for a paid-up life insurance policy * * * without action by either of the parties * * * and the provision of the state law automatically applied,” adding, “we have not that situation here.” In the instant case, the provision of the contract of insurance is similar to the statutory provision in the McDonald case.

The case of Winchell v. John Hancock Mutual Life Insurance Co. (Federal Case No. 17866, Circuit Court, Massachusetts), cited by the plaintiff, dealt with the right to a paid-up policy holding that, the insured having the right to it, it was a right of property passing to the plaintiff. Such decision, however, does not apparently aid us in determining what is meant by the word “holder,” nor does the decision in Nielsen v. Provident Life Assurance Society, 73 Pac. Rep. 171, cited by the plaintiff.

In the case of New York Life Insurance Co. v. Nobel, 124 Pac. Rep. 615, there does not appear to have been any provision for automatic insurance, but it appears that the company of its own volition made a settlement which the court said was “the most disadvantageous settlement possible under the law and facts” and that “it had no such right.”

In the case of Veal v. Security Mutual Life Insurance Co. (Court of Appeals, Georgia), supra, the court said there likewise was no provision which operated automatically. This is likewise true of North Carolina Life Insurance Co. v. Terrell, 89 A. L. R. 1459; 150 So. Rep. 318, also cited by the plaintiff.

I am relying upon counsel’s citation of these cases and quotations therefrom, and assuming that if the policies in question in any of such cases did have provisions for automatic operation of any form of insurance he would have so stated.

Taking up cases cited by counsel for the defendant in his brief we find the case of Columbia National Life Insurance Co. v. Griffith, supra, in which the court said:

“The truth is that the insured in this case failed to take extended insurance when he lapsed his policy because like many other persons he did not know when he was going to die. Because he died at the time he did, the plaintiff wants extended insurance. If he had died later and at a time to which the value of the policy would not have extended his insurance, she would have insisted on paid-up insurance. What she requires is a statute providing that the owner of a lapsed policy may elect upon the death of the insured whether to take extended or paid-up insurance. The provision of the policy in suit for its commutation into paid-up insurance operated at the time of default. It was automatic at the moment of lapse.”

The court further said:

“The question to be determined is whether upon the lapse of the policy the net value or net reserve available for the purchase of paid-up or of extended insurance was under the terms of the policy and the statutes of Missouri to be applied to the purchase of paid-up insurance. It is certain that after lapse the insured did not have both extended and paid-up insurance; i. e., extended insurance if he died within a period during which his equity in the policy would have exercised it for its face value, and paid-up insurance for $450 if he lived beyond that period. * * * reduced to its lowest terms the question is whether the policy contained an automatic option for extended insurance or automatic option for paid-up insurance * * *. Section 5742 permits the Tegal holder of a policy’ to elect within sixty days from the beginning of extended insurance provided by Section 5741 to take in lieu thereof a paid-up policy.”

The policy in the case sub judice contained an automatic option for paid-up insurance.

In the case of Kelly v. New England Mutual Life Insurance Co., 32 Fed. Rep. (2d) (at p. 611), the court held:

“The plaintiff’s position in this case is that the words The holder of this policy,’ and The holder,’ in the non-forfeiture of this policy, mean the beneficiary, or, as she is called in this policy, the annuitant; that inasmuch as the forfeiture provision gives certain options in case of default in the payment of premium, if the right to such options were to be of any value, the beneficiary was entitled to receive notice of such default; and that, not having such notice, she is now, after the death of the insured, entitled to exercise the right of election between the options referred to. (1) A consideration of the policy makes it clear, however, that the plaintiff’s interpretation of the words the holder’ which is the basis of her whole case, cannot be sustained. The plaintiff does not contend, and could not successfully contend, that as beneficiary, she was entitled to notice of default in payment of premiums. New England v. Clinchfield Coal Corp. (C. C. A.), 9 Fed. Rep. (2d) 46, 51. Her rights, if any, in this respect, must depend upon whether she is included in the provisions of the non-forfeiture clause relating to the holder. But these words plainly refer to that person who at any particular time has an interest in the contract of insurance as distinguished from the proceeds: in other words, the person who is paying the premiums, or, more definitely, the insured or her assignee.”

The court further said:

“* * * The person paying the premiums at the time might be the insured or someone else. Obviously, ‘holder was adopted as an apt, a convenient word, to describe either of these persons who might be paying the premiums at that time.” (Italics mine.)

Continuing, the court said :

“Much of the plaintiff’s argument is directed to the point that the beneficiary of a policy of insurance has certain rights in the proceeds which vest at the time when the designation is made in accordance with the terms of the contract. There is no doubt about that proposition. The contract of insurance is in this respect sui generis, but the beneficiary’s rights do not in any sense make her the owner of the contract. In Chase National Bank et al. v. United States, 278 U. S. 327; 49 S. Ct. 126; 73 L. Ed., Mr. Justice Stone points out what the rights of the persons paying-the premiums are, and leaves no doubt that such person is the real owner of the contract. To such a person the word firolder’ may be more aptly applied than to one who has an interest in the proceeds, no matter how well fortified that interest may be.”

The case of Kelly v. New England Mutual Life Insurance Co., supra, was affirmed by the Circuit Court of Appeals for the Third Circuit, 52 Fed. Rep. (2d) (at p. 9), in which the court said:

“It will thus be seen that the single question involved in the case is the meaning of the word ‘holder’ in the clause quoted. On the question tile court below held with the insurance company that the word ‘holder’ meant Thomas Francis Kelly, the insured. Its views are expressed at length in an opinion reported in 32 Fed. Rep. (2d) 611, a reference to which would obviate present restatement.

“After due consideration had, we find ourselves in accord with the holding of the court below that the word ‘holder’ in the provisions quoted meant Thomas Francis Kelly, the insured.”

The Supreme Court, Appellate Division, of New York, in the case of Travelers Insurance Co. v. Healey, 49 N. 7. Supp. 29, held that:

“He who takes out a policy of life insurance and pays the premium is the policy holder, until after proper transfer when the transferee becomes the holder.”

In the case of Michigan Mutual Life Insurance Co. v. May-field’s Administrator, 90 S. W. Rep. 607, the Court of Appeals of Kentucky held that:

“As the paid-up insurance clause automatically went into force upon a default in the payment of the premium, the insured could not substitute the extended insurance in lieu thereof without making the election to which reference has been made. As the insured did not malee the election his personal representative cannot do so.” (Italics mine.)

The Supreme Court of Pennsylvania, in McDonald v. Columbian Life Insurance Co., 97 Atl. Rep. 1086, said:

“* * * By the policy, such options are given to the insured and, in our opinion, must be exercised by him, especially that with reference to the purchase of extended insurance on his life. It is no more possible to procure valid life insurance on a dead man than valid fire insurance on a burned building. And, as in this case, such extended insurance was neither sought for nor obtained during the life of the insured, it cannot be secured later. The option was personal to him, and. cannot be exercised after the rights and liabilities of the parties had been fixed by his death. Unless the insured elects to take extended insurance, the right thereto is lost. Michigan Mutual Life Insurance Co. v. Mayfield’s Administrator, 121 Ky. 839; 90 S. W. Rep. 607; Balthaser v. Illinois Life Insurance Co. (Ky.), 110 Id. 258. See, also, Sugg v. Equitable Life Assurance Soc., 116 Tenn. 658; 94 S. W. Rep. 936, and Blake v. National Life Insurance Co., 123 Cal. 170; 56 Pac. Rep. 101.”

The Superior Court of Penns3lvania (being the same court which determined the case of Jeske v. Metropolitan Life Insurance Co., supra, cited by the plaintiff) in a later decision on'October 2d, 1935, in the case of Brown v. John Hancock Mutual Life Insurance Co., 180 Atl. Rep. 746, said:

“It will be observed that it is provided by Option A that 'without action on the part of the holder’ the policy will be 'continued for its value in participating paid-up insurance.’ We believe the phrase 'without action’ as here used is the equivalent of 'in case of no action’ and that the death of the insured without an election by him left Option A automatically in effect. To hold otherwise would permit the beneficiary after death to choose the option most advantageous to her and correspondingly unfavorable to the insurer.

“The contention of the beneficiary that she was privileged after the death of the insured to make an election is directly contrary to the principles announced in the ease of McDonald v. Columbian Life Insurance Co., 253 Pa. 239; 97 Atl. Rep. 1086; L. R. A. 1916 F 1244.

“There, as here, there was involved a question as to the construction of options available to an insured after a default in the payment of premium, and insured had died before the exercise of an option. There was likewise there involved the right of parties between options providing for paid-up insurance and term insurance, but in the McDonald case the policy itself did not have the automatic feature that is contained in the policy we are considering. However, in that case, by the Massachusetts laws which there control, in the absence of 'any further stipulation or act, the' right to have paid-up insurance was automatic. In other words the facts in the two cases are parallel except that in the McDonald case the automatic provision was by virtue of a statute and here hy the terms of the contract, and here the option is given to the holder and there to the insured. Mr. Justice Walling, in the McDonald case, said (253 Pa. 239, 244; 97 Atl. Rep. 1086, 1087; L. R. A. 1916 F 1244) : By the policy, such options are given to the insured and in our opinion must be exercised by him, especially that with reference to the purchase of extended insurance on his life. It is no more possible to procure valid life insurance on a dead man than valid fire insurance on a burned building. And as in this case such extended insurance was neither sought for nor obtained during the life of the insured, it cannot be secured later. The option was personal to him and cannot be exercised after the rights and liabilities of the parties have been fixed by his death. Unless the insured elects to take extended insurance, the right thereto is lost.’ ”

Continuing the court said:

“In the recent case of Fisher, Fx’rx, v. Fidelity and Casualty Co., 316 Pa. 183; 173 Atl. Rep. 320, the claim was made that the insured’s personal representative might exercise an option that the insured, if he had lived, could have exercised. The claim was rejected as being obviously contrary to what the parties intended. It was pointed out that if the insured had lived he might or might not have elected the option which appeared after his death to be most advantageous to him; that until death a different article was operative.”

Continuing the court said :

“Looking at the contract in the case we are considering, the insured was in a position where he might elect to take either approximately $5 in cash or extended insurance for a term of two hundred and thirty-one days for approximately $800. If the beneficiary should be permitted to make an election after the death of the insured, she would then choose between $800 and $5 which, because of lack of proportion, would not Do a choice. It would be so one-sided that it is impossible to believe the parties intended that the right to choose after death should exist and be exercised by the [beneficiary] personal representative. Fisher v. Fidelity and Casualty Co., supra; 316 Pa. 183 (at p. 189); 173 Atl. Rep. 320, 322.

“Where the meaning of a word is ambiguous or capable of more than one meaning, we may refer to the context for the purpose of determining the matter. We are of the opinion that the word ‘holder’ here connotes insured or his assignee, and that under the options the election was required to be made during the life of the insured. Our conclusion is supported by a number of decisions in other jurisdictions: Kelly v. New England Mutual Life Insurance Co., supra; Ziegler v. Kansas Life Insurance Co., 120 Kan. 252; 243 Pac. Rep. 272; 44 A. L. R. 1367; Osborne v. Home Life Insurance Co., 123 Cal. 610; 56 Pac. Rep. 616; Denver Life Insurance Co. v. Crane, 19 Colo. App. 191; 73 Pac. Rep. 875; Travelers Insurance Co. v. Heasley, 25 App. Div. 53; 49 N. Y. S. 29, 30; Hilton v. New York Insurance Co., 113 Misc. 74; 184 N. Y. S. 2. The ease of Jeske v. Metropolitan Life Insurance Co., 113 Pa. Super. 118, 172, also relied on by the appellee is clearly distinguishable from the present case by the fact that none of the options in the Jeske case were automatic.”

The provisions in the policy in the Brown case appear to be identical with those in the case sub judice, and the reasoning therein aptly fits the policy we are now considering.

It is to be noted that the courts in passing upon policies which contain provisions which become automatically operative hold that the right to exercise an option for a different type of insurance does not pass to the beneficiary.

It is apparent from the decisions of the courts and the statutes of various states that it is considered improper for an insurance company to receive premiums over a period of years, building up a net value, without giving the insured, the holder, or the beneficiary, the benefit of such net value in event of default in premium payments.

In 1925 the legislature of New Jersey dealt with this question and required insurance policies to contain a provision for paid-up insurance.

“Paid-up Policy. Seventh. — A provision, which, in event of default of premium payments after premium shall have been paid for three years, shall secure to the owner of the policy a stipulated form of insurance, the net value of which shall be at least equal to the entire reserve held by the company on the policy [specifying the mortality table and rate of interest adopted for computing such reserve] less a specified percentage not more than three of the amount insured by the policy, including dividend additions thereto, if any, and less any outstanding indebtedness to the company oil the policy. The specified percentage referred to above need not be stated for the policy years included in the table of surrender values required by this act.” Supp. Comp. Slat. 1925-1930, p. 863, § 99-94.

The policy we are considering complied with this statute, being, however, more favorable to the insured by providing that the automatic paid-up features should become operative after two full annual premiums shall have been paid. It is apparent that the word “owner” in the statute is synonymous with the word “holder” in the policy.

The word “holder” does not mean insured and does not mean beneficiar}-. If the “insured” were the person referred to such word would have been used. If benefieiary” were meant such word would have been used. The word “holder” plainly refers to the person who at any particular time has an interest in the contract of insurance as distinguished from the proceeds; in other words, the person who is paying the premium, or, more definitely, the insured or her assignee.

The person paying the premium at the time might be the insured or someone else. Obviously “holder” was adopted as a convenient word to describe either of these persons who might be paying the premiums at the time. Kelly v. New .England Life Insurance Co., supra.

The interest of the beneficiary being only in the proceeds and not in the contract of insurance he was not the holder, and, therefore, was not entitled to exercise Option C of the non-forfeiture option.

The person having an interest in the contract of insurance is the one who determines the provision which he desires to make for the beneficiary. The beneficiary does not have his choice of the type of insurance being taken out on the life of the insured.

Provision being made for insurance in the form of paid-up insurance to become automatically operative in event of default in the payment of premium, this constituted an agreement between the parties for paid-up insurance in such event, subject to the holder’s right to elect extended term insurance or to surrender the policy and obtain the cash surrender value thereof. To hold that such option need not be exercised during the life of the insured but could be exercised by the beneficiary afterwards would be to permit the writing of insurance on a dead person.

Even though the insured died before the expiration of the period within which she was entitled to exercise one or the other of the options, to hold that such right passed upon her death to the beneficiary would be to write into the contract of insurance that which was clearly not contemplated by the parties.

“The law will not make a better contract for parties than they themselves have seen fit to enter into, or alter it for the benefit of one party and to the detriment of the other. The judicial function of a court of law is to enforce a contract as it is written.” Kupfersmith v. Delaware Insurance Co., 84 N. J. L. 271 (at p. 275); 86 Atl. Rep. 399.

I therefore hold that at the time of the death of the insured the provisions of Option A automatically operated and that, if entitled to anything, the insured was entitled to participating paid-up life insurance in accordance therewith.

Upon default in payment of premium and the continuing of such default beyond the period of grace, the policy lapsed and terminated as of the date of default, July 23d, 1931, at which time the cash surrender value was $742.50. Had the policy continued in effect the interest on the indebtedness would have been chargeable at the next anniversary date, but since the policy was terminated and lapsed, interest on the indebtedness should be computed to the date of such lapse. Therefore, the total indebtedness, with interest, as of July 23d, 1931, was $742.24, the value of the policy being the sum of twenty-six cents. It does not appear that the sum of twenty-six cents was sufficient to purchase even $1 of paid-up insurance. This is apparently copceded by counsel for the plaintiff because in his brief he says that, “if one or both questions are decided in the negative the defendant is to prevail and judgment is to be entered for the defendant as provided by the agreed state of facts,” although I do not find such provision in the agreed state of facts.

For the reasons given above I find the plaintiff is not entitled to recover, and find a verdict in favor of the defendant and against the plaintiff of “no cause for action.”


author: Case, J.

text:
    CAPITAL HOMES, INCORPORATED, A NEW JERSEY CORPORATION, PETITIONER, v. C. FRED DANDROW, BUILDING INSPECTOR, AND THE TOWNSHIP OF TEANECK, RESPONDENTS.
    Argued August 16, 1937
    Decided September 3, 1937.
    Before Justice Case, sitting as a single justice pursuant to the statute.
    For the petitioner, Thomas McNulty, Milton, McNulty & Augelli and George I. Marcus.

    For the respondents, Donald M. Waesche.

   Case, J.

This is the return of a rule to show cause why a peremptory writ of mandamus should not issue to compel the building inspector of the township of Teaneck and the township itself to issue a permit for the petitioner to erect a five-story apartment house. The building inspector, when the preliminary plans were placed in his hands, gave notice that the indicated construction, contrary to the township building code, was not fireproof, and that a permit therefor would not be granted. Thereupon petitioner applied to a board known as the township building committee for a modification of the requirements of the code. The modification was granted upon terms, and the petitioner, agreeing to the terms, applied anew to the inspector who again refused the permit. Respondents give divers reasons why the writ should be refused, among them certain ordinance provisions which were not effective at the time application for the rule was made and which therefore I think ought not to be controlling. But the outstanding fact is that the building code has, since its passage in 1921, required that apartment house construction consisting of more than four stories should be fireproof and that the building as designed would violate that requirement. To comply with the code, the floor girders should be of steel. The proposal is that they be of wood, with metal lathing below. Having in mind recurring fire tragedies, it appears to me that neither the requirement nor the demand by the township that the requirement be met may judicially be termed arbitrary.

Doubts of various sorts are cast about the capacity of the building committee to act. The committee is not a subcommittee of the council, as was the case in Burlington v. Dennison, 42 N. J. L. 165, cited by petitioner as authority for the committee procedure. It is composed of two members of council and a third appointive person who, so far as appears, has no other connection with township affairs. The subject-matter for determination by the committee was neither ministerial nor administrative. Foster v. Cape May, 60 N. J. L. 78; 36 Atl. Rep. 1089; Schwitzer v. Board, 79 N. J. L. 342; 75 Atl. Rep. 447; Kraft v. Board, 67 N. J. L. 512; 51 Atl. Rep. 483. The authorization for variance of ordinance provisions by an outside board or committee is not of legislative origin, as is the functioning of boards of adjustment under the Zoning act. Pamph. L. 1928, ch. 274; Supp. Comp. Btat. 1925-1930, § *136-4200J(1). However, the respondents do not urge that the council may not authorize a committee so appointed and composed to act. It is contended that there was necessity for some formality of induction into office — the taking of an oath and the like — which was not here conformed with. It is further said that the terms of the committee memberships had expired; also that the plans, when presented for original consideration, were not duplicated and did not bear the seal of a registered architect as required by the code. These defenses appear to be grounded in fact.

The only application for permit which is printed in the book is dated June 21st, 1937, subsequent to the proceedings conducted by the building committee. The first step disclosed as having been taken by petitioner was the writing of a letter, under date of May 4th, 1937, to the township council. This letter recognized that the proposed construction would be in violation of the code provision but asked that the council “recommend the erection” of the building. Council referred the matter to the township advisory board on growth, development and general welfare for opinion and was advised by that body that not only should the existing fire-proofing requirements be retained but that the building and zoning restrictions be further stiffened. Council proceeded to introduce and pass ordinances to accomplish these recommendations. The ordinances, against which the proposed construction offends in several respects, wore advanced contemporaneously with petitioner’s proceedings before the building inspector and the building committee. They were passed before the suing out of the present rule, but the advertising, perfected immediately thereafter, had not then been done. The council later passed a resolution reciting that, in its opinion, the building of apartment houses according to the filed plans would be detrimental to the best interests of the township and would create both a fire and a health hazard.

The code provision, at all times effective, is clear. Doubts rest upon the powers of the building committee. The issue has a direct bearing upon the hazards of fire and upon the safety of life and limb of home-dwellers. To warrant the issuing of a writ of mandamus, the right of the petitioner to it must be clear and the public duty sought to be enforced must be clear and specific. The writ is never granted in a doubtful case. Uszkay v. Dill, 92 N. J. L. 327; 107 Atl. Rep. 17.

I conclude that the peremptory writ should be denied, with costs to the respondents. If the petitioner wishes to take an appeal, the pleadings may be moulded into an alternative writ and a denial of relief thereunder.


author: Per Curiam.

text:
    CHANDLER N. CRAIG, PLAINTIFF-RESPONDENT, v. PAUL MORGENWECK AND BENJAMIN KRAMER, TRADING AS WHISTLE BOTTLING COMPANY, JOINTLY, SEVERALLY AND IN THE ALTERNATIVE, DEFENDANTS-APPELLANTS.
    Argued May 5, 1937
    Decided September 21, 1937.
    Before B bogan, Chief Justice, and Justices Teenchard and Parker.
    Por the defendants-appellants, Thompson é Hanstein (Wilbur G. Bishop, of counsel).
    Por the plaintiff-respondent, John B. Baratta.

   Per Curiam.

This is the appeal of the defendants below from a judgment entered upon a verdict for the plaintiff.

The appeal grows out of an accident which occurred on April 5th, 1934, about seven-fifteen p. m., at or near the intersection of Ninth street and Bay avenue on the outskirts of Ocean City, Cape May county.

On the evening in question, the plaintiff drove his automobile along Bay avenue. When he reached the intersection of Ninth street he brought his car to a full stop. It was an open country permitting an unobstructed view for three or four blocks in all directions. He looked about him and there was no one coming except he noticed the defendant ear coming from his left on Ninth street, about four blocks away, which later appeared was driven by the defendant Morgenweck, an employe of the defendant Kramer. Plaintiff then blew his horn, threw his car into second gear and proceeded to negotiate the right turn into Ninth street. When he had about completed his turn, and when at a point just beyond the intersection, the Morgenweck car struck the plaintiff’s car in the rear at the left. The impact was such that it whirled the plaintiff’s car around in its tracks, spun it to the left and out of its course, hurled the plaintiff therefrom upon the hard asphalt surface of Ninth street and sent the car careening to the other side before it came to rest. The defendant car bounded off to the right, skidded across the road, made a complete about turn, traveled some forty feet and there came to rest, its two front wheels up over the curb. The front end of the defendant car was mashed in, the frame and chassis were bent, the right rear tire blown out, the left front axle and wheel bent and the tire and tube torn off. As a result of the accident the plaintiff suffered severe injuries and damage, 'and the jury returned a verdict for him.

First, the appellants complain that the trial court erred in charging the jury on the question of “right of way,” in that it failed to take into consideration the exception provided for by section 12 (b), article VIII, of the Traffic act of 1928 and 1931, chapter 247, which exception relates solely to the rights and duties of drivers of vehicles entering or crossing "through streets.”

It is conceded that the trial judge correctly charged the general rule as to the right of way at street intersections. But the contention is that Ninth street, upon which defendant Morgenweck was driving, and which the plaintiff entered, was a “through street,” and that the law in such case should have been charged. But we believe there was no competent evidence that it was a through street in a legal sense at the time of the accident. The only evidence as to its being a “through street” was that it was such on November 24th, 1936, while this accident occurred on April 5th, 1934, and that evidence came from a witness who was not well qualified to speak on that subject, there being no proof by whose authority it became a through street, if and when it did.

But if we are wrong as to our belief that there was no competent evidence that Ninth street was a “through street,” we still think that there was no error prejudicial to the defendants in the failure to charge of which complaint is made.

The uneoutradicted testimony shows that the territory surrounding the scene of the accident for three or four blocks in all directions, was open, unobstructed country. The plaintiff’s lights were burning. He was in full, open and plain view of Morgenweck, who was a “good five hundred feet away,” when plaintiff, after stopping and looking, proceeded into the intersection. It was just beyond the intersection, on Ninth street, that the defendant car struck the plaintiff’s car in the rear at the left.

In this posture of the proofs it seems that no rule touching through streets could possibly have any bearing, and certainly the failure to charge respecting it was not prejudicial to the defendants and will not result in reversal.

The next point is that the judge erred in refusing to non-suit and to direct a verdict for the defendants.

As to that portion of defendants’ argument directed to the alleged negligence of the defendant Morgenweck, and the contributory negligence of the plaintiff, the evidence herein-above stated presents sufficient answer. They were jury questions.

As to the appellants’ argument that there was no proof that Morgenweck was the agent of Kramer at the time of the accident and engaged in his business, we think a jury question was presented.

It is admitted that at the time of the accident the car was being driven by the defendant Morgenweck, who was then and for some time prior thereto in the employ of the defendant Kramer as a salesman to solicit orders for the latter, who sold and distributed certain beverages. Morgenweck, by arrangement with the defendant Kramer, furnished his services and his car, and was paid therefor $25 a week, and was also paid for the upkeep and running expenses of the automobile. His territory was Atlantic City and various sections of Cape May county. He lived at Northfield (fairly convenient to his territory) where to the knowledge of his employer he kept his automobile used in the business. Kramer’s office was in Atlantic City, and Morgenweck used the automobile each day to and from his home and this office, to get his instructions daily or as often as needed. His custom was to depart from this office each day and make his rounds and return each day or the following morning with each day’s orders obtained in the coarse of his solicitations, to this office for attention. On the day of the accident he had been down into the Cape May territory soliciting orders in the course of his employment, and was returning to his home in Northfield along Ninth street in Ocean City (a direct route) when the accident occurred.

The foregoing facts bring the instant case squarely within Auer v. Sinclair Refining Co., 103 N. J. L. 372; 137 Atl. Rep. 555, and Demerest v. Guild, 114 N. J. L. 472; 176 Atl. Rep. 558. Thus in the Auer case a salesman was employed by the defendant to devote his entire time to the sale of defendant’s products in a specified territory, and was authorized to use in that work his own automobile. The defendant paid for the upkeep and running expenses of such automobile, besides his salary, and the defendant retained control and direction of the work by daily communication with him at or from defendant’s office, and it was therein held that such salesman was the servant of the defendant and therefore defendant was liable for injuries resulting solely from the negligence of such salesman in the performance of his duties, and that such salesman was acting within the scope of his employment when he hit the plaintiff a few minutes after six p. M., on a public highway within his territory at the end of his day’s work, as he was driving from the point of his last call to his home where he kept his car.

It therefore seems clear that in the present case it was open to the jury to find that Morgenweck was the agent of the defendant Kramer, and was engaged in the latter’s business at the time of the acc'de’'t.

But the defendant Kramer says that at the time of the accident Morgenweck was violating instructions to stay in Gape May county for three days, and therefore he is not responsible for Morgenweck’s acts.

It is interesting to note that Kramer testified regarding the alleged violation of which complaint is made, “1 didn’t consider it a violation.” But more to the point for present purposes we deem it sufficient to say that an examination of the testimony discloses that the question whether or not such instruction was in fact ever given depends upon the conclusion to be reached upon contradictory testimony involving discrepancies, and the credibility of witnesses, and we believe would not justify a direction of a verdict. The credibility of witnesses upon conflicting testimony is always for the jury.

Lastly it is argued that the trial court abused its discretion in refusing to grant a new trial on the ground of newly discovered evidence. We think not.

A court will not grant a new trial upon the ground of newly discovered evidence unless (among other things) it is shown that such evidence would probably have changed the result of the trial, and that it was unobtainable by the exercise of due diligence for use at the trial. Christie v. Petrullo, 101 N. J. L. 492; 128 Atl. Rep. 853. Tested by this rule we believe there was no abuse of discretion in the refusal to grant a new trial.

The judgment will be affirmed, with costs.


author: Wolbek, C. C. J.

text:
    WILLIAM B. HARLEY, PLAINTIFF, v. THE COUNTY OF PASSAIC, DEFENDANT.
    Decided July 31, 1937.

      For the plaintiff, Archibald Ereiger.

    For the defendant, Harry L. Bchoen.

   Wolbek, C. C. J.

This matter comes before me on an application for an order to strike out the answer filed in the above cause upon the following grounds: that the denial of the complaint and the first, second, third and fourth separate defenses are sham or frivolous.

In his complaint plaintiff sets forth that on April 1st, 1929, he was nominated and appointed by the governor, by and with the advice and consent of the senate of this state, and commissioned by the governor and thereafter accepted the office of judge of the Court of Common Pleas for the county of Passaic for the term of five years, as provided by law, and acted as such during his term; that on June 1st, 1931, in accordance with the statute, he elected to serve full time as such judge of the Court of Common Pleas, and by reason thereof was entitled to receive for his services the salary of $13,000 per year; that during the year 1933 and until April 1st, 1934, he was entitled to receive said salary of $13,000 per year; that during 1933 he was paid by defendant $9,750, and during the months of January, February and March, 1934, he was paid the sum of $2,437.50; that he has demanded payment of the balance of his compensation amounting to $4,062.50, but that the defendant, by its board of chosen freeholders, has neglected and refused to cause its county treasurer to pay the above mentioned balance of his salary to the plaintiff, which he was by law entitled to receive.

Plaintiff avers that there is duo and owing to him said sum of $4,062.50, together with interest to be computed on each monthly sum when the same became due and payable, and demands judgment, together with interest and costs.

In its answer, besides a general denial, the county sets forth in its first separate defense that the plaintiff, as a public officer receiving his salary from the county of Passaic, was well acquainted with the financial condition of the county of Passaic and its hardship in paying full salaries of its officers and employes, and that he did offer to help and assist the situation in which the defendant found itself on or about January 1st, 1933, and about said time consented and voluntarily donated and contributed twenty-five per cent, of his yearly salary back to the county. The payroll sheets of the county of Passaic, which were approved semi-monthly for payment by each department, show that from January 1st, 1933, until February 15th, 1933, the payroll sheets of the plaintiff’s department designate thereon the following stipulation: “Annual Salary, $13,000, Amount Due, $406.25. Less 25%, $135.42, donated.” The payroll sheets as approved semi-monthly by the plaintiff from February 15th, 1933, until March 31st, 1934, when the period of the plaintiff’s services in the county of Passaic terminated, designate thereon the following stipulation: “Annual Salary, $13,000, Amount Due, $406.25, Less 25%, $135.42, deducted in accordance with Par. 1, Chap. 17, Laws of 1933.” N. J. Slat. Annual 1933, § *136-1320A(10).

It further sets forth that the plaintiff received and approved his semi-monthly salary payment sheets from the treasurer of the county of Passaic, which bore a twenty-five per cent, voluntary donation of the plaintiff, and that thereafter he accepted from the county his semi-monthly salary checks, less the donation of twenty-five per cent. In this defense, the county further avers that it was the intention of the plaintiff, in relinquishing a portion of his salary, to help the county to rebuild its financial status during the period of economic stress, and that during his entire term of office no formal notice of dissent or disavowal from such intention of the parties was ever sent to the defendant, nor did the defendant, in any other way or at any other time, receive any notification of any protest or dissent to this agreement between the plaintiff and the county; that the plaintiff, having made this voluntary donation of twenty-five per cent, of his salary to the county, and it being the intention of the parties that such donation was made for the purpose of helping and aiding the defendant in its financial condition at the time, is now barred by law from recovering the same from the defendant.

The second separate defense sets up waiver and estoppel of any right of the plaintiff to recover any difference in his salary from the defendant.

The third separate defense relies upon the provisions of chapter 17 of the laws of 1933 (N. J. Slat. Annual 1933, § *136-1320A(10)) and chapter 446 of the laws of 1933 (N. J. Stat. Annual 1934, § *136-1320A(10)) for power and authority in the county to reduce plaintiff’s salary, by virtue of which it passed resolutions reducing the yearly salary of the plaintiff by twenty-five per cent.

The fourth separate defense sets up that the plaintiff accepted such reduction in salary without protest or disavowal, as a complete accord and full satisfaction of any salary due and owing to him from the county of Passaic.

Plaintiff submits an affidavit that he believes there is no defense to this action and substantiates the allegations of his complaint. He further says that on January 22d, 1937, the Court of Errors and Appeals in the case of Delmar v. Bergen County, 117 N. J. L. 377; 189 Atl. Rep. 75 (Case, J.), held that chapter 17 of the laws of 1933, supra, and subsequent legislation continuing that law was unconstitutional as applied to a Common Pleas judge of the county of Bergen, a county of the second class, and that the office formerly occupied by him was in the same class and category as that in the case mentioned; that on February 17th, 1937, he made a demand in writing upon the board of freeholders of Passaic county for the return of $4,062.50, having been illegally deducted from his salary because it was done under an unconstitutional statute.

The county has submitted no affidavits to support its defenses.

It will be observed that chapter 17 of the laws of 1933 was approved on February 4-th, 1933, and chapter 446 of the laws of 1933 was approved December 7th, 1933.

In Delmar v. Bergen Couniy, supra, the plaintiff, one of the Common Pleas judges of the county of Bergen, sued for accumulated arrears in salary, the amount of which was in dispute. The judge of the Bergen County Circuit Court, sitting without a jury, awarded judgment to the plaintiff for the amount found to be due after the allowance of a series of deductions imposed by the Bergen county board of freeholders. The plaintiff contended that he was entitled to the full statutory salary. Mr. Justice Case in that ease said (at p. 379) :

“There are two basic principles, one laid down in the language of our constitution, the other a judicial construction of that language, which must be observed in fixing the compensation of Common Pleas judges. The first is a portion of article IV, section VII, paragraph 11 of the constitution which provides that ‘the legislature shall not pass private, local or special laws in any of the following enumerated cases, that is to say: * * * regulating the internal affairs of towns and counties * * It is clear, for reasons presently to be stated, that that compensation is an ‘internal affair’ of the counties. The second, laid down in our cases, is, that a law regulating these salaries differently in the several counties must be predicated upon population, services rendered, or some other general principle applicable to the subject.”

Chapter 316 of the laws of 1931 (N. J. Stat. Annual 1931, § 50-112t(l)) a general act, which likewise applies to the instant case, fixed the classification for the judge’s salary. It remained the basic act upon which county deductions were calculated, and was made dependent upon county population.

Mr. Justice Magie in Skinner v. Collector (Supreme Court, 1880), 42 N. J. L. 407, said that the fixing of salaries of Common Pleas judges on the basis of county population was a resort to a criterion “reasonably likely to justify a distinction in respect to compensation,” and that it seemed “that such a classification is entirely proper.”

In the Delmar case the court held that while chapter 11 of the laws of 1933, supra, was general in its terms and potentially reached every county, its generality was apparent rather than real when applied to the salaries of Common Pleas judges, and that if the legislature, upon whom rests the duty of fixing their compensation, could not make salary distinction between courts and counties of the same class, its instrumentality, the county, could not do that by indirection which might not be done by it directly.

The court further held that nowhere in the history of this state until this legislation of 1933 did the several counties ever have aught to say regarding the compensation of Common Pleas judges, nor was there any common law prototype for such legislation. The legislature, and it alone, has always directly performed that duty. While the Courts of Common Pleas are not constitutional courts in the sense that the legislature may not alter or abolish them, they have had, since the adoption of the provincial constitution of 1116, constitutional attributes.

The Delmar case holds that a Common Pleas judge is a public officer, and that if either by original or delegated legislation, the plaintiff was thus prejudiced during his term of office apart from his fellows, the effective legislation is, as to him, special and unconstitutional.

The third separate defense must therefore be stricken as being frivolous.

The fourth separate defense of accord and satisfaction, not being supported by any facts in affidavit form, will be stricken as sham. Orlando v. County of Camden, unreported opinion of Palmer, C. C. J., June, 1931, Camden County Circuit Court.

It has been held that where the defendant fails to submit to the court upon a motion like this affidavits or other proofs as to the facts set forth in his answer, including the separate defenses, if the plaintiff’s affidavit fully sets out the facts upon ■which his cause of action is based and fully complies with rule 81 of the Supreme Court, the court must assume that the facts set forth in the plaintiff’s affidavit are true, and that the defendant cannot show such facts as would be sufficient to entitle him to defend. Hunt v. Gorenberg (Supreme Court, 1930, Ackerson, S. C. C.), 9 N. J. Mis. R. 463; 155 Atl. Rep. 881; Schiff v. Alexander (Supreme Court, 1925, per curiam, on opinion of Ackerson, S. C. C.), 3 N. J. Mis. R. 817; 130 Atl. Rep. 133; Lamer v. Montclair (Court of Errors and Appeals, 1923, per curiam), 99 N. J. L. 510; 123 Atl. Rep. 886; Pusatere v. New Amsterdam Casually Co. (Court of Errors and Appeals, 1936, per curiam), 116 N. J. L. 359; 184 Atl. Rep. 513.

In Doyle v. County of Warren (Warren County Circuit Court, 1937), 15 N. J. Mis. R. 434; 192 Atl. Rep. 390, Judge Lawrence held, where the county contended the officer was estopped, that public policy would intervene to invalidate any agreement to accept a compensation less than that fixed by law, notwithstanding in that particular case the stipulation showed that the officer protested to the salary reduction.

In Geddis v. Westside National Bank of West Paterson (Passaic County Circuit Court, Newman, S. C. C.), 7 N. J. Mis. R. 245; 145 Atl. Rep. 731; affirmed (Court of Errors and Appeals, 1929, on opinion below), 106 N. J. L. 238; 148 Atl. Rep. 917), it was held that the assignment of future earnings of a public officer in this state is declared to be void as against public policy, and that where the agreement was void ab initio, any conduct on the part of the plaintiff could not operate to make it valid, and thus frustrate the policy of the law.

In Kip v. Peoples Bank and Trust Co. (Court of Errors and Appeals, 1932), 110 N. J. L. 178; 164 Atl. Rep. 253, where the plaintiff notary made a contract with the bank to serve for a fixed compensation and accepted it in full satisfaction, and the bank collected and retained the notary fees, Mr. Justice Case (at p. 183) said:

“We think (hat a contract between a notary public and a bank that anticipates and authorizes such a procedure is to that extent contrary to public policy and void. And because the undertaking was contrary to public policy, subsequent conduct of the plaintiff that went no further than the naked carrying out of the bargain, even accepting the agreed compensation, did not accomplish full satisfaction or create an estoppel. We express no opinion on the power of the officer to waive or remit a fee if and after it shall have been earned. That question is not before us.”

In Weart v. First National Bank of Dunellen (Court of Errors and Appeals, 1935), 115 N. J. L. 128; 178 Atl. Rep. 758, Mr. Justice Case reviewed the cases of Geddis v. Westside National Bank of West Paterson, supra, and Kip v. Peoples Bank and Trust Go., supra. The facts in that case showed that the plaintiff notary was cashier of a country bank. He voluntarily and perfunctorily executed notarial papers, collected the notarial fees in the name of the bank, put them into its treasury, credited the fees as bank earnings, and reported them as such to the federal government and his board of directors. He further sat by as a director and participated in the acceptance of these moneys as bank earnings applicable to dividends, aided in the declaration of dividends therefrom, and as a stockholder acquiesced therein and received his pro rata share of the dividends. Mr. Justice Case held that he had estopped himself from thereafter claiming that the money should have been paid to him and was his property rather than that of the bank, and said (at p. 131) :

“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 to waive or remit a fee after it has been earned, to take such a position with respect to it that he may be held to have waived it. We find nothing contrary to public policy in the voluntary waiver by a notary public of his statutory fee for an accomplished service.”

As the second separate defense does not set forth facts to indicate a voluntary waiver of his unpaid salary by the plaintiff after it was earned, it is frivolous and must be stricken.

We will next consider the first separate defense which the pleader bases on a voluntary donation of the reduction of salary to aid the county in its financial distress. There are two cases recently decided by the Superior Court of Pennsylvania on March 10th, 1937, in which there is an interesting discussion of the subject of voluntary donation of salary by a public officer, namely, Taylor v. City of Philadelphia (Pa. Superior Court, 1937), 190 Atl. Rep. 663, and Patton v. City of Philadelphia (Pa. Superior Court, 1937), 190 Atl. Rep. 670.

.Tn the Taylor case, election registration commissioners formally protested the reduction. In the Patton case, the record 'showed a magistrate consented to the reduction of one year’s salary at a meeting called for that purpose by the magistrates for the city and county of Philadelphia, but failed to support a finding of voluntary relinquishment of his unpaid salary for the subsequent year.

In the Tajdor case, President Judge Keller said (at p. 669) :

“We know of no public policy of this commonwealth which prevents a municipal or state officer, in times of great public distress, from voluntarily donating to his city, county, or state such part of his salary or emoluments of office as he sees fit to give up for the relief of the municipality or state. While his salary may not be diminished during his term of office, he can do what he will with his own, and if he chooses to devote part of it to the relief of the city or state, and the latter accepts his voluntary donation, no public policy forbids it. Schuh v. City of Waukesha (1936), 220 Wis. 600; 265 N. W. Rep. 699. The transaction is most clearly exhibited by the municipality or state paying the officer his full salary and the latter then paying back, by check, so much thereof as he chooses to devote to the relief of city or state. But that is not the only way of accomplishing the desired result, and any form may be adopted which carries out the intention of the parties, provided it is established to be the voluntary act of the officer, and clearly and definitely proved to be such, and is to continue only so long as he wishes. No contract relative to the execution or continuance of such a gift or donation can be enforced. It must be wholly voluntary and remain so. It does not arise by waiver or estoppel.”

Judge Keller further held that the act of the officer must be his own individual, voluntary act, and it must be clearly and unequivocally established to be such. The mere receipt of part of what he was legally entitled to, without more, was not enough to establish his voluntary acceptance of the part for the whole. He further said that the municipality, in order to escape paying the plaintiff his full salary, was required to show some clear and unequivocal act by him evidencing his voluntary donation of the unpaid part of it to the city.

Even if I assume that the first separate defense sets forth a voluntary donation by the plaintiff of his reduction of salary after it was earned, the failure of the defendant to submit facts by affidavit showing a clear and unequivocal voluntary gift or donation to the county of this reduction, makes the defense sham, and it must therefore be stricken.

Defendant contends that interest should only be allowed on the claim, if at all, from the time of demand and refusal.

In Hudson County National Bank v. Bayonne (Supreme Court, 1934), 113 N. J. L. 258; 174 Atl. Rep. 241, Mr. Justice Perskie (at p. 264) laid down the following rule in a suit which involved an assigned claim for professional services rendered to a municipality, quoting from 19 R. C. L. 1048, 1049, f 337:

“It must be regarded as well settled that a claim against a municipality, although liquidated and due at a definite date, does not draw interest until demand has been made for its payment, unless it is otherwise agreed. This rule is independent of any statutory requirement such as the familiar one that notice of claim must be served on the municipality sometime before suit can be commenced thereon. It is based rather on the consideration that it would be inconvenient and burdensome for the officials of a municipality to seek its creditors and tender payment of their claims, and also that it would be oppressive and unjust to permit creditors of a municipality with good credit to turn claims into investments through omitting to present them and then collecting interest thereon.”

He also quoted from the opinion of Mr. Justice Dixon in Naar v. City of Trenton (Supreme Court, 1880), 42 N. J. L. 500, that where payment of the original debt of a municipality was demanded and refused, interest would then begin to accrue thereon, under our law, at six per cent, per annum.

Plaintiff’s claim for interest should commence as of February 17th, 1937, when he made his demand in writing upon the board of freeholders for the return of the amount illegally deducted from his salary, and any order for summary judgment should allow interest in conformity with that finding.

I will therefore sign an order striking the answer of the defendant, without costs.